UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Date of Report: April 6, 1998;
Date of Earliest Event Reported: March 20, 1998)
Commission File Number: 33-95928
LS Power Funding Corporation
(Exact name of registrant as specified in its charter)
Delaware 81-0502366
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1105 North Market Street, Suite 1108, Wilmington, Delaware 19801
(Address, including zip code, of principal executive offices)
(302) 427-8494
(Registrant's telephone number, including area code)
LSP-Cottage Grove, L.P.
LSP-Whitewater Limited Partnership
(Exact name of registrant as specified in its charter)
Delaware 81-0493289
Delaware 81-0493287
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1105 North Market Street, Suite 1108, Wilmington, Delaware 19801
1105 North Market Street, Suite 1108, Wilmington, Delaware 19801
(Address, including zip code, of principal executive offices)
(302) 427-8494
(302) 427-8494
(Registrant's telephone number, including area code)
<PAGE>
Item 1. Changes in Control of Registrant
On March 6, 1998, LS Power Corporation, a Delaware corporation ("LS
Power") and general partner of Granite Power Partners, L.P., a Delaware
limited partnership ("Granite"), entered into a Securities Purchase
Agreement (the "Securities Purchase Agreement"), by and among LS Power and
Granite (collectively, the "Sellers"), Cogentrix Mid-America, Inc., a
Delaware corporation, Cogentrix Cottage Grove, LLC, a Delaware limited
liability company and Cogentrix Whitewater LLC, a Delaware limited liability
company (collectively, the "Purchasers") and Cogentrix Energy, Inc.,
("Cogentrix Energy"), which controls each of the Purchasers.
On March 20, 1998, pursuant to the Securities Purchase Agreement, the
Sellers sold all of the Sellers' capital stock of FloriCulture, Inc., a
Delaware corporation ("FloriCulture"), LSP-Cottage Grove, Inc., a Delaware
corporation ("LSP-CG Inc.") and LSP-Whitewater I, Inc., a Delaware
corporation ("LSP-WW Inc."), and all of the Sellers' limited partnership
interests in LSP-Cottage Grove, L.P., a Delaware limited partnership
("LSP-CG") and LSP-Whitewater Limited Partnership, a Delaware limited
partnership ("LSP-WW"), to the Purchasers.
In consideration therefor, the Purchasers paid to the Sellers a total
of $174.7 million, $16.7 million of which represented the pre-funding of a
distribution to the Sellers. The Purchasers will be entitled to the
distribution of $16.7 million in 1998. The Purchasers paid the consideration
from funds provided by Cogentrix Energy. Cogentrix Energy provided these
funds from corporate cash balances and the incurrence of $50.0 million of
indebtedness under its existing revolving credit agreement with Australia and
New Zealand Banking Group Limited.
As a result of the transaction described above, Cogentrix Mid-America,
Inc. now owns all of the capital stock of FloriCulture, as well as a 100
percent ownership interest in each of Cogentrix Cottage Grove, LLC and
Cogentrix Whitewater, LLC. Cogentrix Cottage Grove, LLC now owns all of the
capital stock of LSP-CG Inc., the general partner of LSP-CG, as well as a
72.22 percent limited partnership interest in LSP-CG for a combined total
ownership interest of approximately 73 percent in LSP-CG. Cogentrix
Whitewater, LLC now owns all of the capital stock of LSP-WW Inc., the general
partner of LSP-WW, as well as a 73.17 percent limited partnership interest in
LSP-WW for a combined total ownership interest of approximately 74 percent in
LSP-WW. LSP-CG and LSP-WW, in turn, each own 50 percent of the outstanding
stock of the registrant, LS Power Funding Corporation.
In addition, LS Power and Cogentrix Energy have entered into an
Assignment and Assumption Agreement, by the terms of which LS Power has
assigned, and Cogentrix Energy has assumed, all of the rights and obligations
under certain Management Services Agreements between LS Power and each of
LSP-CG Inc., LSP-CG, LSP-WW Inc. and LSP-WW.
Item 7(c). Exhibits.
Exhibit
Number Description
------ -----------
2 Securities Purchase Agreement, dated March 6, 1998,
by and among LS Power Corporation, a Delaware
corporation, Granite Power Partners, L.P., a
Delaware limited partnership (collectively, the
"Sellers"), Cogentrix Mid-America, Inc., a Delaware
corporation, Cogentrix Cottage Grove, LLC, a
Delaware limited liability company and Cogentrix
Whitewater LLC, a Delaware limited liability company
(collectively, the "Purchasers") and Cogentrix
Energy, Inc.
2
<PAGE>
_______________________________________
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
LS POWER FUNDING CORPORATION
(Registrant)
Date: April 6, 1998 /s/ JAMES R. PAGANO
-------------------------
James R. Pagano
Managing Director and Treasurer
3
SECURITIES PURCHASE AGREEMENT
Dated as of March 6, 1998
by and among
GRANITE POWER PARTNERS, L.P.,
LS POWER CORPORATION,
COGENTRIX ENERGY, INC.,
COGENTRIX MID-AMERICA, INC.,
COGENTRIX COTTAGE GROVE, LLC
and
COGENTRIX WHITEWATER, LLC
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I CERTAIN DEFINED TERMS; RULES OF CONSTRUCTION 1
SECTION 1.1 Certain Terms 1
ARTICLE II AGREEMENT TO PURCHASE; THE CLOSING; ALLOCATION OF
PURCHASE PRICE 4
SECTION 2.1 Agreement to Sell; Agreement to Purchase 4
SECTION 2.2 Time and Place of Closing 4
SECTION 2.3 Purchase Price; Terms of Payment 5
SECTION 2.4 Allocation of Purchase Price 5
ARTICLE III CONDITIONS TO CLOSING 7
SECTION 3.1 Conditions Precedent to Obligations of
the Purchaser 7
SECTION 3.2 Conditions Precedent to Obligations of
the Sellers 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS 10
SECTION 4.1 Representations and Warranties of the Sellers 10
SECTION 4.2 Financial Statements 14
ARTICLE V REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF
THE PURCHASERS 14
SECTION 5.1 Representations and Warranties of the Purchasers 14
SECTION 5.2 Agreements of the Purchaser 16
ARTICLE VI COVENANTS 16
SECTION 6.1 Implementing Agreement. 16
SECTION 6.2 Preservation of Business. 17
SECTION 6.3 Exclusivity. 17
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER 17
SECTION 7.1 Termination 17
SECTION 7.2 Effect of Termination 17
ARTICLE VIII MISCELLANEOUS 18
SECTION 8.1 Notices 18
SECTION 8.2 Binding Effect; Survival 19
SECTION 8.3 Applicable Law 19
SECTION 8.4 Waivers; Amendments 19
SECTION 8.5 Entire Agreement 19
SECTION 8.6 Waiver of Jury Trial 19
SECTION 8.7 Severability 19
SECTION 8.8 Counterparts 20
SECTION 8.9 Headings 20
SECTION 8.10 Expenses 20
SECTION 8.11 Confidentiality 20
SECTION 8.12 Further Assurances 20
<PAGE>
EXHIBITS AND SCHEDULES
Exhibit 1.1A - Form of Consent, Waiver and Amendment
No. 2 of LSP-Cottage Grove, L.P.
Exhibit 1.1B - Form of Consent, Waiver and Amendment
No. 1 Of LSP-Whitewater Limited
Partnership
Exhibit 3.1(f)(i) - Form of Pledge Agreements
Exhibit 3.1(f)(vii)(A) - Form of Opinion of Skadden, Arps,
Slate, Meagher & Flom LLP
Exhibit 3.1(f)(vii)(B) - Form of Opinion of Brown, Olsen & Wilson
Exhibit 3.1(f)(vii)(C) - Form of Opinion of DeWitt, Ross &
Stevens, SC
Exhibit 3.1(f)(vii)(D) - Form of Opinion of Leonard, Street
and Deinard
Exhibit 3.1(h) - Form of Assignment and Assumption
Agreement
Exhibit 3.2(b)(iii)(A) - Form of Opinion of Fennebresque, Clark,
Swindell & Hay
Exhibit 3.2(b)(iii)(B) - Form of Opinion of Van Ness Feldman
Schedule 3.1(e) - Financial Statements
Schedule 3.1(f)(ii) - Resignations
Schedule 3.1(j) - UCC-1 Filings to be Released
Schedule 4.1(a) - Authority to Conduct Business
Schedule 4.1(c) - Securities of the Acquired Companies
Schedule 4.1(d)(i) - Consents, Filings and Approvals
Schedule 4.1(d)(ii) - No Defaults under Governmental Rule or
Governmental Approval
Schedule 4.1(g) - Litigation
Schedule 4.1(k)(i) - Material Contracts
Schedule 4.1(k)(ii) - No Defaults under Material Contracts
Schedule 4.1(l) - Absence of Certain Changes
ii
<PAGE>
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT dated as of March 6, 1998 (this
"Agreement") is made by and among Granite Power Partners, L.P., a Delaware
limited partnership ("Granite"), LS Power Corporation, a Delaware
corporation ("LS Power"), Cogentrix Energy, Inc., a North Carolina
corporation, Cogentrix Mid-America, Inc., a Delaware corporation, Cogentrix
Cottage Grove, LLC, a Delaware limited liability company, and Cogentrix
Whitewater, LLC, a Delaware limited liability company.
W I T N E S S E T H:
WHEREAS, Granite owns, directly and indirectly, certain securities of
LSP-Whitewater Limited Partnership, a Delaware limited partnership,
LSP-Cottage Grove, L.P., a Delaware limited partnership, LSP-Whitewater I,
Inc., a Delaware corporation, LSP-Cottage Grove, Inc., a Delaware
corporation, and LS Power Funding Corporation, a Delaware corporation
("Funding");
WHEREAS, LS Power is the general partner of Granite;
WHEREAS, LS Power owns all of the outstanding capital stock of
FloriCulture, Inc., a Delaware corporation ("FloriCulture"); and
WHEREAS, Granite and LS Power now desire to sell to the Purchasers
(as defined below) the Securities (as defined below), and the Purchasers
desire to purchase the Securities, all upon the terms, and subject to the
conditions, set forth herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINED TERMS; RULES OF CONSTRUCTION
SECTION 1.1 Certain Terms. The following terms shall, except where
the context otherwise requires, have the following meanings.
"Acquired Companies" collectively means LSP-Whitewater Limited
Partnership, LSP-Cottage Grove, L.P., LSP-Whitewater I, Inc., LSP-Cottage
Grove, Inc., Funding and FloriCulture.
"Affiliate" means, with respect to any Person, another Person directly
or indirectly controlling, controlled by or under common control with such
first Person. The term "control", with respect to any Person, means
possession, direct or indirect, 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.
<PAGE>
"Agreement" has the meaning set forth in the preamble hereto.
"Bond Financing" means that certain offering of $332,000,000 Senior
Secured Bonds of LS Power Funding Corporation governed by the Trust Indenture
dated as of May 1, 1995 between LS Power Funding Corporation and IBJ
Schroder Bank & Trust Company, the Trust Indenture dated as of May 1, 1995
between LSP-Cottage Grove, L.P. and IBJ Schroder Bank and the Trust
Indenture dated May 1, 1995 between LSP-Whitewater Limited Partnership and
IBJ Schroder Bank.
"Closing" means the consummation of the transactions contemplated by
the Transaction Documents.
"Closing Date" has the meaning set forth in Section 2.2.
"Credit Agreements" collectively means the Credit Bank Documents as
defined under the Bond Financing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time or any successor statute.
"FERC" means the Federal Energy Regulatory Commission.
"FloriCulture" has the meaning set forth in the preamble hereto.
"FloriCulture Stock" means all of the outstanding capital stock of
FloriCulture, Inc.
"Funding" has the meaning set forth in the preamble hereto.
"GAAP" means generally accepted United States accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board that are
applicable to the circumstances as of the date of determination.
"Governmental Approval" means any action, authorization, consent,
approval, license, lease, ruling, permit, tariff, rate, certification,
exemption, filing, variance, claim, order, judgment, decree, publication,
notices to, declarations of or with or registration by or with any
Governmental Authority.
"Governmental Authority" means any Federal, state or local or other
governmental department, commission, board, bureau, authority, agency, court,
instrumentality or judicial or regulatory body or entity.
2
<PAGE>
"Governmental Rule" means any statute, law, regulation, ordinance, rule,
judgment, order, decree, permit, concession, grant, franchise, license,
agreement, directive, guideline, policy, requirement, or other governmental
restriction or any similar form of decision of or determination by, or any
interpretation or administration of any of the foregoing by, any Governmental
Authority.
"Granite" has the meaning set forth in the preamble hereto.
"Law" means, with respect to a Person, (i) the articles or certificate
of incorporation, formation, organization, partnership or operating
agreements and bylaws or other organizational or governing documents of such
Person and (ii) any law, treaty, rule, regulation, right, privilege,
qualification, license or franchise or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject or pertaining to any or all of the transactions
contemplated or referred to herein.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement
of any kind or nature whatsoever.
"LSP-Cottage Grove, Inc. Stock" means all of the outstanding capital
stock of LSP-Cottage Grove, Inc.
"LSP-Cottage Grove, L.P. Interests" means the 72.22% limited partnership
interests in LSP-Cottage Grove, L.P.
"LS Power" has the meaning set forth in the preamble hereto.
"LSP-Whitewater I, Inc. Stock" means all of the outstanding capital
stock of LSP-Whitewater I, Inc.
"LSP-Whitewater Limited Partnership Interests" means the 73.17% limited
partnership interests in LSP-Whitewater Limited Partnership.
"Management Budgets" shall collectively mean the operating plans,
operating budgets and three-year projections prepared by LS Power for (i)
LSP-Cottage Grove, L.P. pursuant to Sections 6.1(g) (iii) and (iv) of the
Trust Indenture dated as of May 1, 1995 between LSP-Cottage Grove, L.P. and
IBJ Schroder Bank & Trust Company and (ii) LSP-Whitewater Limited Partnership
pursuant to Sections 6.1(g)(iii) and (iv) of the Trust Indenture dated as of
May 1, 1995 between LSP-Whitewater Limited Partnership and IBJ Schroder Bank
& Trust Company.
"Material Contracts" has the meaning set forth in Section 4.1(k).
"Notices" has the meaning set forth in Section 8.1.
3
<PAGE>
"Offering Circular" means the Offering Circular dated June 26, 1995
prepared and distributed in connection with the Bond Financing.
"Partnership Agreement Amendments" means collectively (i) the Consent,
Waiver and Amendment No. 2 to the Amended and Restated Partnership Agreement
of LSP-Cottage Grove, L.P. dated as of the Closing Date by and among TPC
Cottage Grove, Inc., Cogentrix Cottage Grove, LLC and LSP-Cottage Grove,
Inc., substantially in the form of Exhibit 1.1A hereto and (ii) the Consent,
Wavier and Amendment No. 1 to the Amended and Restated Partnership Agreement
of LSP-Whitewater Limited Partnership dated as of the Closing Date by and
among TPC Whitewater, Inc., Cogentrix Whitewater, LLC and LSP-Whitewater I,
Inc., substantially in the form of Exhibit 1.1B hereto.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
"Purchase Price" shall mean $174,655,268.
"Purchasers" means collectively Cogentrix Mid-America, Inc., Cogentrix
Cottage Grove, LLC and Cogentrix Whitewater, LLC.
"Securities" means collectively the LSP-Whitewater I, Inc. Stock, the
LSP-Whitewater Limited Partnership Interests, the LSP-Cottage Grove, Inc.
Stock, the LSP-Cottage Grove, L.P. Interests, the Funding Stock and the
FloriCulture Stock.
"Sellers" means collectively LS Power and Granite.
"Third Party Offer" has the meaning set forth in Section 6.7.
"Transaction Documents" collectively means this Agreement, the
Partnership Agreement Amendments, the Assignment and Assumption Agreement,
any pledge agreements and any stock powers executed by any of the parties
hereto.
"WEPCO" has the meaning set forth in Section 3.1(d).
4
<PAGE>
ARTICLE II
AGREEMENT TO PURCHASE; THE CLOSING;
ALLOCATION OF PURCHASE PRICE
SECTION 2.1 Agreement to Sell; Agreement to Purchase. In reliance on
the representations, warranties and agreements contained herein, and subject
to satisfaction of the terms and conditions set forth herein, (a) Granite
agrees to sell, and Cogentrix Cottage Grove, LLC agrees to purchase, the
LSP-Cottage Grove, Inc. Stock and the LSP-Cottage Grove, L.P. Interests,
(b) Granite agrees to sell, and Cogentrix Whitewater, LLC agrees to purchase,
the LSP-Whitewater I, Inc. Stock and the LSP-Whitewater Limited Partnership
Interests and (c) LS Power agrees to sell, and Cogentrix Mid-America, Inc.
agrees to purchase, the FloriCulture Stock.
SECTION 2.2 Time and Place of Closing. Subject to Article VII, the
Closing shall occur at 10:00 a.m., New York City time, on the third business
day following receipt by the Purchasers from LS Power and Granite of the
certificate and other documents described in Section 3.1(g) (the "Closing
Date") at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third
Avenue, New York, New York, or at such other place or time as Granite, LS
Power and the Purchasers shall agree.
SECTION 2.3 Purchase Price; Terms of. On the Closing Date and as
described in Section 2.1, upon satisfaction of the conditions precedent
specified in Article III, each of the Purchasers shall purchase, and each of
the Sellers shall sell, the Securities for the Purchase Price. Payment of
the Purchase Price shall be made by the Purchasers on the Closing Date in
immediately available funds by wire transfer to such account or accounts as
shall be specified by the Sellers in writing not less than five business
days prior to the Closing Date.
SECTION 2.4 Allocation of Purchase Price. The Purchasers and Sellers
agree that the Purchase Price will be allocated as follows: (a) $1,000 will
be allocated to the FloriCulture Stock; (b) $940,580 will be allocated to
the LSP-Cottage Grove, Inc. Stock; (c) $76,799,680 will be allocated to
LSP-Cottage Grove, L.P. Interests; (d) $1,223,647 will be allocated to the
LSP-Whitewater I, Inc. Stock; and (e) $95,690,361 will be allocated to the
LSP-Whitewater Limited Partnership Interests. The amounts allocated to the
LSP-Cottage Grove, L.P. Interests and the LSP-Whitewater Limited Partnership
Interests pursuant to (c) and (e) above, increased (in the case of the
LSP-Cottage Grove, L.P. Interests) by Cogentrix Cottage Grove LLC's share of
the liabilities of LSP-Cottage Grove, L.P. and increased (in the case of the
LSP-Whitewater Limited Partnership Interests) by Cogentrix-Whitewater LLC's
share of the liabilities of LSP-Whitewater Limited Partnership, in each case
as determined under Section 752 of the Internal Revenue Code, will be further
allocated based upon the following agreed values:
(i) the aggregate fair market value of the assets of
LSP-Cottage Grove, L.P. on the Closing Date is
equal to (A) the excess of the amount set forth
in (c) above over the amount expected to be
distributed to Cogentrix Cottage Grove, LLC
pursuant to Section 6.1(b) of the Amended and
Restated Limited Partnership Agreement of LSP-
5
<PAGE>
Cottage Grove, L.P. dated as of June 30, 1995
among LSP-Cottage Grove, Inc., Granite and TPC
Cottage Grove, Inc., as amended, divided by
.7222 plus (B) the aggregate liabilities of
LSP-Cottage Grove, L.P. on the Closing Date
plus (C) the amount expected to be distributed
to Cogentrix Cottage Grove, LLC pursuant to 6.1(b)
of the Amended and Restated Limited Partnership
Agreement of LSP-Cottage Grove, L.P. dated as of
June 30, 1995 among LSP-Cottage Grove, Inc., Granite
and TPC Cottage Grove, Inc., as amended;
(ii) any cash, demand deposits, certificates of deposits,
U.S. Treasury obligations, readily marketable stocks
and securities, accrued but unpaid receivables and
other current assets (hereinafter, "cash equivalents")
held by LSP-Cottage Grove, L.P. on the Closing Date
having a value equal to their respective fair market
values on the Closing Date;
(iii) the Funding Stock held by LSP-Cottage Grove, L.P. on
the Closing Date has a value of $1,000;
(iv) the real and tangible personal property of LSP-Cottage
Grove, L.P. on the Closing Date has a value equal to
the amount determined in (i), less the amount determined
in (ii) and (iii), less $50,000,000, such value being
allocated among the various real and tangible personal
property assets held by LSP-Cottage Grove, L.P. on the
Closing Date in the proportion that the book value of
each of such assets on December 31, 1997, as determined
pursuant to GAAP, bears to the sum of their book values
on such date;
(v) the goodwill of LSP-Cottage Grove, L.P. on the Closing
Date has a value equal (i), less (ii), less (iii)
and less (iv);
(vi) the aggregate fair market value of the assets of
LSP-Whitewater Limited Partnership on the Closing Date
is equal to (A) the excess of the amount set forth in
(e) above over the amount expected to be distributed to
Cogentrix Whitewater, LLC pursuant to Section 6.1(b)
of the Amended and Restated Limited Partnership Agreement
of LSP-Whitewater Limited Partnership dated as of June
30, 1995 among LSP-Whitewater I, Inc., Granite and TPC
Whitewater, Inc., as amended, divided by .7317 plus (B)
the aggregate liabilities of LSP-Whitewater Limited
Partnership on the Closing Date plus (C) the amount
expected to be distributed to Cogentrix Whitewater, LLC
pursuant to Section 6.1(b) of the Amended and Restated
Limited Partnership Agreement of LSP-Whitewater Limited
Partnership dated as of June 30, 1995 among LSP-Whitewater,
Inc., Granite and TPC Whitewater, Inc., as amended;
6
<PAGE>
(vii) any cash equivalents held by LSP-Whitewater Limited
Partnership on the Closing Date having a value equal
to their respective fair market values on the Closing Date;
(viii) the Funding Stock held by LSP-Whitewater Limited
Partnership on the Closing Date has a value of $1,000;
(ix) the real and tangible personal property of
LSP-Whitewater Limited Partnership on the Closing
Date has a value equal to the amount determined in
(vi), less the amount determined in (vii) and (viii),
less $60,000,000, such value being allocated among
the various real and tangible personal property
assets held by LSP-Whitewater Limited Partnership
on the Closing Date in the proportion that the
book value of each of such assets on December 31,
1997, as determined pursuant to GAAP, bears to the
sum of their book values on such date; and
(x) the goodwill of LSP-Whitewater Limited Partnership
on the Closing Date has a value equal (vi), less
(vii), less (viii) and less (ix).
The Purchasers and Sellers agree that (other than for depreciation recapture
and accrued but unpaid receivables relating to goods sold or services
rendered prior to the Closing Date) none of the assets of the LSP-Whitewater
Limited Partnership or of LSP-Cottage Grove, L.P. consists of "Section 751
property." The Purchasers and Sellers further agree that each will file all
forms and returns with Governmental Authorities in a manner consistent with
the allocations contained in this Section 2.4.
ARTICLE III
CONDITIONS TO CLOSING
SECTION 3.1 Conditions Precedent to Obligations of the Purchasers.
The obligations of the Purchasers to purchase the Securities shall be
subject to the fulfillment to the satisfaction of or waiver by the
Purchasers on or prior to the Closing Date of the following conditions
precedent:
(a) Representations and Warranties True and Correct.
The representations and warranties of the Sellers contained herein
shall have been accurate, true and correct in all material respects on
and as of the date of this Agreement, and shall also be accurate, true
and correct in all material respects on and as of the Closing Date with
the same force and effect as though made by the Sellers on and as of the
Closing Date.
7
<PAGE>
(b) Compliance with Agreements and Covenants. Each of the
Sellers shall have performed and complied with all of their respective
covenants, obligations and agreements contained in this Agreement to be
performed and complied with by each of them on or prior to the Closing
Date.
(c) Consents, Permits and Approvals. The Purchasers shall have
received written evidence reasonably satisfactory to the Purchasers
that all consents, filings, permits and approvals required (i) for the
consummation of the transactions contemplated hereby and (ii) for the
acquisition by the Purchasers of the Acquired Companies and their
respective businesses have been obtained and/or made, including those
set forth on Schedule 4.1(d)(i) other than consents, filings, permits
and approvals described as items Schedule 17 and 18 on such schedule.
(d) Intentionally Omitted.
(e) Financial Information. Granite shall have provided the
Purchasers with (i) the financial statements listed on Schedule 3.1(e)
and (ii) the most recent Management Budgets and the Purchasers
acknowledge receipt of the same as of the date hereof.
(f) Delivery of Closing Documents. On the Closing Date, in
addition to any other documents, certificates or agreements required
under this Agreement, the Sellers shall deliver, or cause to be
delivered, to the Purchasers originals of the following:
(i) Certificates evidencing (A) all of the FloriCulture
Stock which certificates shall be duly endorsed in blank or
accompanied by duly executed stock powers and (B) all of the
LSP-Cottage Grove, Inc. Stock and the LSP-Whitewater I, Inc.
Stock which shall be duly endorsed in blank or accompanied by duly
executed stock powers and shall be simultaneously pledged by the
respective Purchasers to the collateral agent under the Bond
Financing pursuant to pledge agreements substantially in the form
attached hereto as Exhibit 3.1(f)(i);
(ii) The resignations of the persons listed in Schedule
3.1(f)(ii) as directors and officers of the Acquired Companies;
(iii) Evidence, in form reasonably satisfactory to the
Purchasers, that all consents and approvals referred to in
Schedule 4.1(d)(i) have been obtained other than those items
specifically described in such schedule to be delivered after
closing;
(iv) A certificate dated the Closing Date of each of the
Sellers certifying as to the respective compliance by each of the
Sellers with Sections 3.1(a), (b) and (c);
(v) The certificates of incorporation, limited partnership
or similar instruments, as amended, of each of Granite, LS Power
8
<PAGE>
and the Acquired Companies certified by the Secretary of State or
equivalent Person of the jurisdiction of incorporation or
organization of each of Granite, LS Power and the Acquired
Companies, and bylaws, partnership agreements or similar
instruments, as amended, of each of Granite, LS Power and the
Acquired Companies, certified by the respective secretaries of
each of Granite, LS Power and the Acquired Companies;
(vi) Certificates of good standing for each of Granite, LS
Power and the Acquired Companies from the State of Delaware and
the states where such Persons have their respective principal
places of business;
(vii) (A) An opinion addressed to the Purchasers, the agent
under the Credit Agreements and the trustee under the Bond
Financing, dated the Closing Date, of Skadden, Arps, Slate,
Meagher & Flom LLP, regulatory and corporate counsel for LS Power,
Granite and the Acquired Companies, substantially in the form
attached hereto as Exhibit 3.1(f)(vii)(A), (B) an opinion addressed
to the Purchasers, the agent under the Credit Agreements and the
trustee under the Bond Financing, dated the Closing Date, of
Brown, Olsen & Wilson, regulatory counsel for LS Power, Granite
and the Acquired Companies, substantially in the form attached
hereto as Exhibit 3.1(f)(vii)(B) and (C) opinions addressed to the
Purchasers, the agent under the Credit Agreements and the trustee
under the Bond Financing, dated the Closing Date, of each of
DeWitt Ross & Stevens SC, Wisconsin counsel to the Sellers, and
Leonard, Street and Deinard, Minnesota counsel to the Sellers,
substantially in the forms attached hereto as Exhibit 3.1(f)(vii)
(C) and Exhibit 3.1(f)(vii)(D), respectively; and
(viii) A certificate from the respective secretaries of each
of Granite, LS Power and the Acquired Companies certifying and
attaching copies of resolutions of the board of directors and
general partners of Granite, LS Power and the Acquired Companies
approving the Transaction Documents and the transactions
contemplated hereby and thereby (together with an incumbency and
signature certificate regarding each of the officers signing on
behalf of such persons).
(g) The Purchasers shall have received from each of the Sellers
no less than three business days prior to closing (i) a certificate that
each has, or will have as of the date three business days thereafter,
fulfilled their respective obligations set forth in this Section 3.1 and
(ii) copies of all documents to be executed and/or delivered by each of
the Sellers to the Purchasers as of the Closing Date pursuant to this
Section 3.1.
(h) LS Power and Cogentrix Energy, Inc. shall have executed and
delivered the Assignment and Assumption Agreement substantially in the
form attached hereto as Exhibit 3.1(h).
(i) The ownership registers for LSP-Cottage Grove, L.P. and
LSP-Whitewater Limited Partnership shall have been revised to reflect
9
<PAGE>
the legal and beneficial ownership of the LSP-Cottage Grove, L.P.
Interests and the LSP-Whitewater Limited Partnership Interests by
Cogentrix Cottage Grove, LLC and Cogentrix Whitewater, LLC, respectively.
(j) On or prior to the Closing Date, the Sellers shall have caused
the UCC-1 Financing Statements listed on attached Schedule 3.1(j) to be
terminated by the filing of UCC-3 Termination Statements in the
jurisdictions set forth on such schedule.
(k) The Sellers shall have resolved the matters relating to the
mechanic's liens and materialmen's liens filed of record with respect
to the LSP-Whitewater Limited Partnership project to the reasonable
satisfaction of the Purchasers.
SECTION 3.2 Conditions Precedent to Obligations of the. The obligation
of the Sellers to sell the Securities to the Purchasers shall be subject to
the fulfillment to the satisfaction of or waiver by the Sellers on or prior
to the Closing Date of the following conditions precedent:
(a) Representations and Warranties True and Correct.
The representations and warranties of the Purchasers contained herein
shall have been accurate, true and correct in all material respects on
and as of the date of this Agreement, and shall also be accurate, true
and correct in all material respects on and as of the Closing Date with
the same force and effect as though made by the Purchasers on and
as of the Closing Date.
(b) Delivery of Closing Documents. On the Closing Date, in
addition to any other documents or agreements required under this
Agreement, the Purchasers shall deliver, or cause to be delivered, to
the Sellers the following:
(i) The certificate of incorporation, formation or similar
organizational instrument, as amended, of each of the Purchasers
certified by the Secretary of State of the State of Delaware, and
the bylaws, operating agreements or similar instruments, as
amended, of each of the Purchasers, certified by the respective
secretaries of the Purchasers;
(ii) Certificates of good standing for each of the Purchasers
from the State of Delaware;
(iii) (A) An opinion addressed to the Sellers, the agent
under the Credit Agreements and the trustee under the Bond
Financing, dated the Closing Date, of Fennebresque, Clark, Swindell
& Hay, corporate counsel for the Purchasers, substantially in the
form attached hereto as Exhibit 3.2(b)(iii)(A), and (B) an opinion
addressed to the Sellers, the agent under the Credit Agreements and
the trustee under the Bond Financing, dated the Closing Date, of
Van Ness Feldman, regulatory counsel for the Purchasers,
substantially in the form attached hereto as Exhibit 3.2(b)(iii)
(B); and
(iv) A certificate from the respective secretaries of each
10
<PAGE>
of the Purchasers certifying and attaching copies of resolutions
of the board of directors or board of managers of each of the
Purchasers approving the Transaction Documents and the transactions
contemplated hereby and thereby (together with an incumbency and
signature certificate regarding each of the officers signing on
behalf of such persons).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
SECTION 4.1 Representations and Warranties of the Sellers. In order
to induce the Purchasers to enter into this Agreement and to purchase the
Securities, each of the Sellers, jointly and severally (but LS Power solely
as to representations and warranties with respect to itself, FloriCulture
and the FloriCulture Stock), represents and warrants to the Purchasers, as
of the date hereof and as of the Closing Date, the following:
(a) Each of Granite, LS Power and the Acquired Companies is a
limited partnership or corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and is duly
licensed or qualified to do business and is in good standing (where the
concept of "good standing" is applicable) as a foreign corporation or
entity in each jurisdiction where the nature of the properties owned,
leased or operated by it and the business transacted by it require such
licensing or qualification except where the failure to be so qualified to
do business would not reasonably be expected to have or result in a
material adverse effect on such Persons or the transactions contemplated
hereby or as set forth on Schedule 4.1(a). Each of Granite, LS Power
and the Acquired Companies has all requisite power and authority to
conduct its business as currently conducted and as proposed to be
conducted and to own or lease its properties except where the failure
to have such requisite power and authority would not reasonably be
expected to have or result in a material adverse effect on such Persons
or the transactions contemplated hereby or as set forth on Schedule
4.1(a).
(b) Upon the execution and delivery of this Agreement by each of
the Sellers (and the payment of the Purchase Price and the occurrence
of the Closing Date pursuant hereto) and each of the Partnership
Agreement Amendments by Granite and assuming the execution and delivery
of each of the Partnership Agreement Amendments by each of TPC
Whitewater, Inc. and TPC Cottage Grove, Inc., (i) the only partners of
LSP-Cottage Grove, L.P. will be Cogentrix Cottage Grove, LLC,
LSP-Cottage Grove, Inc. and TPC Cottage Grove, Inc., (ii) the only
partners of LSP-Whitewater Limited Partnership will be Cogentrix
Whitewater LLC, LSP-Whitewater I, Inc. and TPC Whitewater, Inc. and
(iii) none of the Sellers or any of their respective Affiliates will
have any direct or indirect interest in any of the Acquired Companies
or in any tangible or intangible property used in the business of the
Acquired Companies.
(c) Except as set forth on Schedule 4.1(c), there are no
securities (whether or not such securities have voting rights) of the
11
<PAGE>
Acquired Companies issued or outstanding or any subscriptions, options,
warrants, calls, rights, convertible securities or other agreements,
contractual obligations or commitments of any character obligating any
of the Acquired Companies, or obligating Granite or any of its
Affiliates to cause any of Granite or the Acquired Companies to issue,
transfer or sell, or cause the issuance, transfer or sale of, any
securities (whether or not such securities have voting rights) of any of
the Acquired Companies.
(d) Except as set forth on Schedule 4.1(d)(i), no consent,
authorization or approval of, filing or registration with, or
cooperation from, any Governmental Authority or any other Person not a
party to this Agreement is necessary in connection with the execution,
delivery and performance by any of LS Power, Granite and the Acquired
Companies of this Agreement, any of the Transaction Documents or the
consummation of the transactions contemplated hereby or thereby.
Except as set forth on Schedule 4.1(d)(ii) and disclosed in the
Offering Circular under the captions "Risk Factors - Projects and
Related Risks - Regulations - Wisconsin Utility Statute" and "-
Environmental Matters", to the knowledge of LS Power or Granite, none
of LS Power, Granite or any of the Acquired Companies is currently in
breach of, or is in default in any material respect under, any
Governmental Rule or Governmental Approval binding on or affecting LS
Power, Granite or any of the Acquired Companies or their respective
properties.
(e) Granite is the legal and beneficial owner of (i) all of the
issued and outstanding capital stock of LSP-Cottage Grove, Inc., the
sole general partner of LSP-Cottage Grove, L.P., (ii) all of the issued
and outstanding capital stock of LSP-Whitewater I, Inc., the sole
general partner of LSP-Whitewater Limited Partnership, (iii) a 72.22%
limited partnership interest in LSP-Cottage Grove, L.P., as such
interest may be adjusted in accordance with the applicable partnership
agreement subsequent to the date hereof, and which constitutes Granite's
entire limited partnership interest in LSP-Cottage Grove, L.P. and
(iv) a 73.17% limited partnership interest in LSP-Whitewater Limited
Partnership, as such interest may be adjusted in accordance with the
applicable partnership agreement subsequent to the date hereof, and
which constitutes Granite's entire limited partnership interest in
LSP-Whitewater Limited Partnership. LSP-Cottage Grove, Inc. is the
legal and beneficial owner of a 1% general partnership interest in
LSP-Cottage Grove, L.P., which represents all of the general partnership
interests of LSP-Cottage Grove, L.P. LSP-Whitewater I, Inc. is the
legal and beneficial owner of a 1% general partnership interest in
LSP-Whitewater Limited Partnership, which represents all of the general
partnership interests of LSP-Whitewater Limited Partnership.
LSP-Cottage Grove, L.P. is the legal and beneficial owner of 50 shares
of common stock of Funding, which represents 50% of all of the issued
and outstanding capital stock of Funding. LSP-Whitewater Limited
Partnership is the legal and beneficial owner of 50 shares of common
stock of Funding, which represents 50% of all of the issued and
outstanding capital stock of Funding. None of the foregoing is subject
to any Lien, except those Liens incurred pursuant to or permitted under
the Bond Financing. Except as described in this Section 4.1(e) none of
the Acquired Companies is the legal or beneficial owner of any
securities or ownership interests of any other Person other than
Permitted Investments (as defined in the Bond Financing). LS Power is
12
<PAGE>
the legal and beneficial owner of all of the issued and outstanding
capital stock of FloriCulture, free and clear of all Liens.
Immediately after the consummation of the transactions contemplated by
the Transaction Documents, neither LS Power nor Granite will own any
securities or interests in the Acquired Companies.
(f) Subject to the consents required to be obtained or waived
listed on Schedule 4.1(d)(i), each of LS Power, Granite and the
Acquired Companies has full power and authority to enter into each of
the Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby. Each of LS Power and
Granite has duly and validly executed and delivered this Agreement.
As of the Closing Date, each of LS Power, Granite and the Acquired
Companies will have duly and validly executed and delivered each of the
other Transaction Documents to which it is a party. This Agreement
constitutes, and when executed and delivered by each of LS Power,
Granite and the Acquired Companies (and assuming the execution and
delivery by the other parties thereto), each of the other Transaction
Documents to which each of LS Power, Granite and the Acquired Companies
is a party will constitute, a legal, valid and binding obligation of
such party, in each case, enforceable in accordance with their
respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or similar laws in effect which affect the
enforcement of creditors' rights generally and by equitable limitations
on the availability of specific remedies.
(g) Except as set forth on Schedule 4.1(g), there is no action,
suit, investigation or proceeding pending or, to the knowledge of the
Sellers, threatened against any of LS Power, Granite or the Acquired
Companies by or before any court, arbitrator, governmental body,
department, commission, board, bureau, agency or instrumentality, which
would materially adversely affect their respective abilities to perform
their respective obligations under any of the Material Contracts or
the Transaction Documents.
(h) None of the Sellers or the Acquired Companies is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended. None of the Sellers or the Acquired Companies or any of their
respective subsidiaries, or any of their upstream owners or their
subsidiaries, is an "electric utility" or an "electric utility holding
company" for purposes of the ownership restrictions set forth in 18
C.F.R. Section 292.206 as implemented by the FERC.
(i) The assignments, endorsements, stock powers and other
instruments of transfer delivered by the Sellers to the Purchasers on
the Closing Date will be sufficient to transfer each Seller's entire
right, title and interest, legal and beneficial, in each Seller's
respective Securities. Each of the Sellers has, and on the Closing
Date will have, full power and authority to convey good and marketable
title to all of the Securities, and upon transfer to the Purchasers of
the certificates representing such Securities, the Purchasers will
13
<PAGE>
receive good and marketable title to such Securities, free and clear of
all Liens except those Liens incurred pursuant to or otherwise permitted
by the Bond Financing.
(j) The execution, delivery and performance by each of LS Power,
Granite and the Acquired Companies of each of the Transaction Documents
to which it is a party do not, and will not: (i) to the Seller's
knowledge, contravene any Law applicable to any of LS Power, Granite
and the Acquired Companies; (ii) to the Seller's knowledge, contravene
any contractual restriction or provision of any Material Contract, any
Governmental Approval or any Governmental Rule binding on or affecting
LS Power, Granite or any of the Acquired Companies except as set forth
on Schedule 4.1(d)(i); (iii) require the consent or approval of, or
filing with or notice to, any Governmental Authority except as set
forth on Schedule 4.1(d)(i); or (iv) result in, or require, the
creation or imposition of any Lien on any properties of any of LS Power,
Granite or the Acquired Companies under any Material Contract.
(k) Except for the items listed on Schedule 4.1(k)(i) (the
"Material Contracts"), none of LS Power, Granite or the Acquired
Companies is a party to any contract, lease, agreement, indenture,
mortgage, note, bond, instrument, permit or license that is material to
any of the Acquired Companies' respective businesses, operations,
assets, liabilities, results of operations, prospects or financial
condition. Except as set forth on Schedule 4.1(k)(ii), to the Seller's
knowledge, none of the Acquired Companies nor, to the Sellers'
knowledge, any of the other parties thereto is in default in any
material respect under, or has given notice of termination of, any of
the Material Contracts, and no such default or termination is currently
threatened. The Sellers have delivered to the Purchasers true, correct
and complete copies of all of the Material Contracts and all amendments
and supplements thereto.
(l) Except as described on Schedule 4.1(l), since December 31,
1997, each of the Acquired Companies has conducted its business in the
ordinary course and consistent with past practice, and none of the
Acquired Companies has: (i) sold, transferred, conveyed, assigned or
otherwise disposed of any of its assets or properties; (ii) made any
distributions to the equity holders (whether in cash, stock or property
or any combination thereof) in respect of its capital stock or
partnership interests, or redeemed or otherwise acquired any securities
of any of the Acquired Companies; (iii) made any loans, advances or
capital contributions to, or investments in, any other Person; or
(iv) terminated, modified, amended or otherwise altered or changed any
of the terms or provisions of any Material Contract, or paid any amount
not required by law or by any Material Contract.
(m) None of LS Power, Granite or the Acquired Companies has
engaged or dealt with any broker, finder or other Person entitled to
receive a commission, finder's fees or other payment in connection with
this Agreement or the consummation of the transactions contemplated
hereby.
14
<PAGE>
SECTION 4.2 Financial Statements. The financial statements of the
Acquired Companies listed on Schedule 3.1(e) for the periods described
therein furnished to the Purchaser are complete and accurate in all material
respects and fairly present, in accordance with GAAP, the financial
condition of the Acquired Companies listed on Schedule 3.1(e) as of the
respective dates set forth therein.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE PURCHASERS
SECTION 5.1 Representations and Warranties of the Purchasers. In
order to induce each of the Sellers to enter into this Agreement and sell
the Securities, each of the Purchasers, jointly and severally, represents
and warrants to Granite and LS Power the following:
(a) Each of the Purchasers is a corporation or limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Delaware and is duly qualified to do business in
all jurisdictions in which the conduct of its business or the ownership
or leasing of its properties requires such qualification except where
the failure to be so qualified to do business would not reasonably be
expected to have or result in a material adverse effect on such Person
or the transactions contemplated hereby. Each of the Purchasers has all
requisite power and authority to conduct its business as currently
conducted and as proposed to be conducted and to own or lease its
properties except where the failure to have such requisite power and
authority would not reasonably be expected to have or result in a
material adverse effect on such Persons or the transactions contemplated
hereby.
(b) None of the Purchasers is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. None of the Purchasers or
any of their subsidiaries, or any of their upstream owners or their
subsidiaries, is an "electric utility" or an "electric utility holding
company" for purposes of the ownership restrictions set forth in
18 C.F.R. Section 292.206 as implemented by the FERC.
(c) There is no action, suit, investigation or proceeding pending
or, to the knowledge of the Purchasers, threatened against any of the
Purchasers, by or before any court, arbitrator, governmental body,
department, commission, board, bureau, agency or instrumentality, which
would materially adversely affect its ability to perform its obligations
under the Transaction Documents to which it is a party.
(d) Each of the Purchasers has duly and validly executed and
delivered this Agreement. As of the Closing Date, each of the
Purchasers will have duly and validly executed and delivered the other
Transaction Documents to which it is a party. The execution, delivery
and performance by each of the Purchasers of the Transaction Documents
to which it is a party are within such Purchaser's power, have been
duly authorized by all necessary action on the part of such Purchaser
15
<PAGE>
and do not (i) to the Purchasers' knowledge, contravene any Law
applicable to such Purchaser; (ii) to the Purchasers' knowledge,
contravene any contractual restriction, any Governmental Approval or
any Governmental Rule binding on or affecting any of the Purchasers;
(iii) require the consent or approval of, or filing with or notice to,
any Governmental Authority binding on or affecting any of the
Purchasers except as set forth on Schedule 4.1(d)(i); or (iv) result
in, or require the creation or imposition of, any Lien on any of the
respective Purchasers' properties under any indenture, mortgage or
agreement to which such Purchaser is a party.
(e) This Agreement constitutes, and when executed and delivered
by the Purchasers (and assuming the execution and delivery by the other
parties thereto), each of the Transaction Documents to which each of
them is a party will constitute, a legal, valid and binding obligation
of the such Purchaser, enforceable against such Purchaser in accordance
with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting the
enforcement of creditors' rights generally, and general principles of
equity and the availability of equitable remedies.
(f) Each of the Purchasers is an "accredited investor" within the
meaning of Rule 501(a) promulgated under the Securities Act of 1933, as
amended, and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of its
purchase of the Securities. The Securities are being acquired under
this Agreement for each of the respective Purchasers' own account, for
investment, and not with a present view to, or for sale in connection
with, any distribution thereof.
(g) None of the Purchasers is acquiring the Securities with funds
of a pension plan subject to ERISA, and the acquisition of the
Securities does not result in or create a prohibited transaction under,
or result in Granite becoming a "party in interest" as defined in
Section 3(14) of ERISA, or otherwise result in any of Granite or the
assets of Granite being subject to the provisions of such statute.
(h) The Purchasers have (i) received copies of the Material
Contracts and other information they have requested and (ii) reviewed
and assumed the risks and other information contained in the Offering
Circular and the subsequent filings by the registrants thereunder with
the Securities and Exchange Commission pursuant to the Exchange Act in
connection with their respective evaluations of the merits and risks of
their respective purchases of the Securities.
(i) None of the Purchasers has engaged or dealt with any broker,
finder or other Person entitled to receive a commission, finder's fee
or other payment in connection with this Agreement or the consummation
of the transactions contemplated hereby.
(j) Each of the Purchasers is, or is controlled by, a Person that
is, reasonably experienced in the business of owning and operating
cogeneration facilities similar to those owned and operated by the
16
<PAGE>
Acquired Companies. Each of the Purchasers is indirectly wholly-owned
subsidiary by Cogentrix Energy, Inc.
SECTION 5.2 Agreements of the Purchasers.
(a) In connection with each of the Purchasers' evaluation of its
purchase of the Securities, each of the Purchasers has been provided
with certain estimates and projections relating to the Acquired
Companies. Each of the Purchasers acknowledges that there are
uncertainties inherent in attempting to make such estimates and that
each of the Purchasers is taking full responsibility for making its own
estimates and projections and the evaluation of the adequacy and
accuracy of all such estimates and projections.
(b) Each of the Purchasers hereby agrees with Granite and LS
Power that (i) no partner, shareholder, officer, director, employee or
agent of Granite, LS Power or any Affiliate of Granite or LS Power and
(ii) no Affiliate of LS Power or Granite (other than LS Power as a
Seller under and a party to this Agreement and in its capacity as the
general partner of Granite) shall become obligated or incur any
liability whatsoever hereunder or under any of the Transaction
Documents, or in respect of any claim, demand, action, suit or
proceeding arising hereunder or thereunder, except to the extent
resulting from the fraud or willful misconduct of any such shareholder,
officer, director, employee, agent or other Affiliate.
ARTICLE VI
COVENANTS
SECTION 6.1 Implementing Agreement. Subject to the terms and
conditions hereof, each party hereto shall use commercially reasonable
efforts to take all action required of it to fulfill its obligations under
the terms of this Agreement and to facilitate the consummation of the
transactions contemplated hereby. Each of the Sellers agrees that unless
this Agreement is terminated in accordance with the provisions of Section
7.1, each of the Sellers will not encumber the Securities, will not sell the
Securities to any Person other than to the Purchasers (or Affiliate(s) of
the Purchasers) and will not take any other action which would have the
effect of preventing or disabling each of the Sellers' respective
performance of its obligations under this Agreement.
SECTION 6.2 Preservation of Business. From the date of this Agreement
until the Closing Date, each of the Sellers shall cause each of the Acquired
Companies to operate only in the ordinary and usual course of business and
consistent with past practice.
SECTION 6.3 Exclusivity. From the date of this Agreement until the
earlier of its termination or the Closing Date, none of LS Power or Granite
or any of their respective directors, officers, employees, representatives,
investment bankers, attorneys, accountants, agents or Affiliates shall, or
shall permit any of the Acquired Companies to, directly or indirectly,
solicit, initiate, encourage, respond favorably to, permit or condone
inquiries or proposals from, or provide any confidential information to, or
participate in any discussions or negotiations with, any Person (other than
17
<PAGE>
the Purchasers, and their respective directors, officers, employees,
representatives, agents or Affiliates) concerning (i) any merger, sale of
assets not in the ordinary course of business, acquisition, business
combination, change of control or other similar transaction involving LS
Power, Granite or any of the Acquired Companies, or (ii) any purchase or
other acquisition by any Person of the Securities, or (iii) any sale or
issuance by LS Power, Granite or any of the Acquired Companies of its
securities (collectively, a "Third Party Offer"). Each of LS Power, Granite
and the Acquired Companies will immediately cease and cause to be terminated
any contacts or negotiations currently pending with respect to Third Party
Offers, if any.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual written consent of the Purchasers and the Sellers;
(b) by the Purchasers if the Closing shall not have been
consummated by 5:00 p.m. New York City time on the tenth business day
following the date of this Agreement; or
(c) by the Sellers if the Closing shall not have been consummated
by 5:00 p.m. New York City time on the 45th business day following the
date of this Agreement.
SECTION 7.2 Effect of Termination. If this Agreement is terminated as
provided in Section 7.1, this Agreement shall become void and there shall be
no liability or further obligation on the part of any party hereto or any of
their respective shareholders, officers or directors, except (a) that nothing
herein and no termination pursuant hereto will relieve any party from
liability for any breach of this Agreement and (b) the provisions of any
confidentiality agreements between or among the parties hereto will survive
such termination.
18
<PAGE>
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices.
(a) All notices, consents, calls, approvals, reports, designations,
requests, waivers, elections and other communications (collectively,
"Notices") authorized or required to be given pursuant to this Agreement
shall be given in writing and (i) personally served on the party to whom it
is given, (ii) mailed by registered or certified mail, postage prepaid or
(iii) sent by courier guaranteeing overnight delivery, in each case addressed
as follows (without regard to telephone number):
If to Granite or LS Power:
Granite Power Partners, L.P.
c/o LS Power Corporation
402 East Main Street
Bozeman, MT 59715
Attention: Michael Liebelson
Telephone: (406) 587-1612 (office)
Fax: (406) 587-8678
Granite Power Partners, L.P.
c/o LS Power Corporation
Two Tower Center
10th Floor
East Brunswick, NJ 98816
Attention: Mikhail Segal
Telephone: (908) 545-6611 (office)
Fax: (908) 545-6653
If to the Purchasers:
Cogentrix Mid-America, Inc.
Cogentrix Cottage Grove, LLC
Cogentrix Whitewater, LLC
c/o Cogentrix Energy, Inc.
9405 Arrowpoint Boulevard
Charlotte, NC 28273
Attention: General Counsel
Telephone: (704) 525-3800
Fax: (704) 529-1006
(b) All Notices shall be deemed given when delivered. Any party
may change its address and/or telephone number for the receipt of Notices at
19
<PAGE>
any time by giving Notice thereof to the parties hereto.
SECTION 8.2 Binding Effect; Survival. This Agreement shall become
effective when it shall have been executed by Granite, LS Power and the
Purchasers and thereafter shall be binding upon and inure to the benefit of
Granite, LS Power and the Purchasers and their respective successors and
assigns. No representation or warranty contained herein shall survive
beyond the Closing Date.
SECTION 8.3 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401
OF THE GENERAL OBLIGATION LAW OF THE STATE OF NEW YORK).
SECTION 8.4 Waivers; Amendments.
(a) No waiver of any provision of this Agreement or consent to any
departure therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
No Notice or demand on Granite, LS Power or the Purchasers in any case shall
entitle it to any other or further Notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by all of the parties hereto.
SECTION 8.5 Entire Agreement. This Agreement constitutes the entire
contract between the parties relative to the subject matter hereof. Any
previous agreement between the parties with respect to the subject matter
hereof is superseded by this Agreement. Nothing in this Agreement, expressed
or implied, is intended to confer upon any Person other than the parties
hereto any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
SECTION 8.6 Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. Each party hereto (a)
certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and
(b) acknowledges that it and the other parties hereto have been induced to
enter into this Agreement and the transactions contemplated hereby, as
applicable, by, among other things, the mutual waivers and certifications
in this Section 8.6.
SECTION 8.7 Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
20
<PAGE>
the remaining provisions contained herein shall not in any way be affected
or impaired thereby. The parties shall endeavor in good faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 8.8 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall
become effective as provided in Section 8.2.
SECTION 8.9 Headings. Articles and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to effect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 8.10 Expenses. Each party hereto shall be responsible solely for
its own costs and expenses incurred in connection with the execution and
delivery of this Agreement and the transactions contemplated hereby and shall
have no obligation under any circumstances to pay any such costs or expenses
of the other party hereto.
SECTION 8.11 Confidentiality. None of the parties hereto will issue
any press release or otherwise make any public statement with respect to the
transactions contemplated hereby without the prior consent of the other,
except as may be required by applicable Law.
SECTION 8.12 Further Assurances. Upon the reasonable request of the
Purchasers and at Purchasers' reasonable costs, each of the Sellers will on
and after the Closing Date execute and deliver to the Purchasers such other
documents, releases, assignments and other instruments as may be required to
effectuate completely the transfer and assignment to the Purchasers of, and
to vest fully in the Purchasers title to, the Securities and to otherwise
carry out the purposes and transactions contemplated by the Transaction
Documents, including without limitation changes in the signatories to bank
accounts of the Acquired Companies.
[Remainder of page intentionally left blank.]
21
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers.
SELLERS:
GRANITE POWER PARTNERS, L.P.
By: Its general partner
LS POWER CORPORATION
By: /s/ Michael Liebelson
----------------------
Michael Liebelson
Managing Director
LS POWER CORPORATION
By: /s/ Michael Liebelson
-----------------------
Michael Liebelson
Managing Director
22
<PAGE>
PURCHASERS:
COGENTRIX MID-AMERICA, INC.
By: /s/ James R. Pagano
---------------------
James R. Pagano
President
COGENTRIX COTTAGE GROVE, LLC
By: Its Manager
COGENTRIX MID-AMERICA, INC.
By: : /s/ James R. Pagano
--------------------
James R. Pagano
President
COGENTRIX WHITEWATER, LLC
By: Its Manager
COGENTRIX MID-AMERICA, INC.
By: /s/ James R. Pagano
---------------------
James R. Pagano
President
Cogentrix Energy, Inc. by its signature below, hereby
irrevocably and unconditionally guaranties the Purchasers'
obligations under Section 2.1 and Section 2.3 hereunder,
subject to the terms and conditions set forth in such
sections.
COGENTRIX ENERGY, INC.
By: /s/ Mark F. Miller
--------------------
Mark F. Miller
President
23
<PAGE>
EXHIBIT 1.1A
FORM OF CONSENT, WAIVER AND AMENDMENT NO. 2
OF LSP-COTTAGE GROVE, L.P.
[attached]
<PAGE>
CONSENT, WAIVER AND AMENDMENT NO. 2
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
LSP-Cottage Grove, L.P.
This CONSENT, WAIVER AND AMENDMENT NO. 2 dated March 20, 1998 (this
"Agreement") to that certain AMENDED AND RESTATED LIMITED PARTNERSHIP
AGREEMENT dated as of June 30, 1995 by and among LSP-Cottage Grove, Inc.
("LSP-CG"), a Delaware corporation, as the general partner, and Granite
Power Partners, L.P. ("Granite"), a Delaware limited partnership and TPC
Cottage Grove, Inc. ("TPC"), a Delaware corporation as the limited partners
(as amended by Amendment No. 1 dated as of June 18, 1996, the "Partnership
Agreement"), is made by each of LSP-CG, Granite, TPC and Cogentrix Cottage
Grove, LLC ("Cogentrix CG"), a Delaware limited liability company.
Capitalized terms used herein and not defined shall have the meaning set
forth for such terms in the Partnership Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Securities Purchase Agreement dated
as of March 20, 1998 by and among Granite, LS Power Corporation, Cogentrix
Mid-America, Inc., Cogentrix CG and Cogentrix Whitewater, LLC, Granite
desires to sell to Cogentrix CG all of the capital stock of LSP-CG and all
of its Interest in the Partnership (such transaction, the "Sale");
WHEREAS, TPC Funding LLC, a Delaware limited liability company and an
affiliate of TPC ("TPC Funding"), intends to enter into a bridge loan and
subsequent Rule 144A financing transaction which will require that, among
other things, TPC pledge its Interest in the Partnership as collateral
security to one or more financial institutions as agent(s) or collateral
agent(s) for the benefit of such institutions and one or more creditors
(such transaction, the "Tomen Financing");
<PAGE>
WHEREAS, the terms and conditions of the Partnership Agreement provide
for certain consents and approvals in connection with transactions such as
the Sale and the Tomen Financing; and
WHEREAS, the parties hereto desire to grant certain consents, waivers
and amendments in order (i) to permit the Sale and to admit Cogentrix CG as
a Partner upon consummation of the Sale and (ii) to permit TPC's pledge in
connection with the Tomen Financing;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree, effective
as of the date first written above, as follows:
ARTICLE I
WAIVERS AND CONSENTS
Section 1.1 Right of First Offer. Notwithstanding Section 7.8 of
the Partnership Agreement, each of TPC, LSP-CG and Granite hereby
unconditionally and irrevocably waives its respective right of first offer
with respect only to the Sale as described herein and consents to the Sale.
Section 1.2 Transfers of Partnership Interests--the Sale.
Pursuant to, and notwithstanding the terms of, Article VII of the Partnership
Agreement, including without limitation, Sections 7.1(b), 7.1(c)(iv), 7.2
and 7.7 thereof, LSP-CG, Granite and TPC each hereby waive any prohibitions
to the Sale contained therein and hereby consent to the Sale in all respects,
including without limitation (i) the admission of Cogentrix CG as a Limited
Partner and substitution of Cogentrix CG for Granite for all purposes of the
Partnership Agreement on identical terms and conditions as Granite and
(ii) the fact that Cogentrix CG, pursuant to the Sale, shall own 100% of the
capital stock of the General Partner. In connection therewith, the General
Partner hereby acknowledges that it has received adequate assurances, and
Cogentrix CG hereby renders assurance to the General Partner and to TPC that,
as required under the Partnership Agreement, Cogentrix CG, by virtue of and
as of the date of execution of this Agreement, agrees to be bound by all of
the terms and conditions of the Partnership Agreement.
Section 1.3 Transfers of Partners Interests--the Tomen Financing.
Pursuant to, and notwithstanding the terms of, Article VII of the
2
<PAGE>
Partnership Agreement, including without limitation Section 7.1 thereof,
as of the date of execution of this Agreement, LSP-CG and Cogentrix CG each
hereby waive any prohibitions to the Tomen Financing contained therein and
hereby consent to the pledge of all or any portion of the Interest by TPC
pursuant to the Tomen Financing including but not limited to a collateral
assignment of TPC's rights to receive distributions relating to the TPC
Interest from the Partnership from time to time and an irrevocable direction
by TPC instructing the General Partner to pay over all such distributions to
one or more financial institutions as agent(s) or collateral agent(s) for the
benefit of such institutions and one or more creditors; provided, however,
that notwithstanding any provision of this Agreement, no pledge, assignment,
direction or other action by TPC of or relating to its Interest under this
Section 1.3 shall violate or result in a violation of Section 7.1(c) of the
Partnership Agreement. TPC acknowledges and agrees that LS Power is
assigning the Management Services Agreement to Cogentrix Energy, Inc.
Section 1.4 Cooperation in Tomen Financing. Each of LSP-CG,
Granite and Cogentrix CG, for itself and as agent on behalf of its
Affiliate, Cogentrix Mid-America, Inc., acknowledges and agrees that it
will provide such reasonable cooperation, assistance and information to TPC
as TPC may reasonably request from time to time in connection with the Tomen
Financing.
Section 1.5 Name Change. Each of Granite and TPC acknowledge,
agree and consent to the change of the name of the Partnership and LSP-CG to
"Cogentrix-Cottage Grove, L.P." and "Cogentrix-CG, Inc." respectively
(or other similar derivations thereof) which shall occur on or before 180
days after the closing of the Sale. TPC, for itself and as agent on behalf
of its Affiliate, TPC Funding, acknowledges and agrees that it will provide
such reasonable cooperation, assistance and information to Cogentrix CG as
Cogentrix CG may reasonably request from time to time in connection with the
name change contemplated by this Section 1.5.
Section 1.6 Community Contributions. Cogentrix CG agrees that it
shall cause the General Partner of the Partnership in good faith to work to
establish a program whereby the Partnership shall apply funds representing
the annual difference between (i) $500,000 and (ii) the (x) real estate
taxes, (y) personal property taxes and (z) sales taxes which may be levied
upon any construction equipment purchased under the Second Amended and
Restated Turnkey Construction Agreement dated as of April 11, 1995 between
the Partnership and Westinghouse Electric Corporation, as amended (all as
may be due and payable by the Partnership), towards certain expenditures or
projects which inure to the good of the local Cottage Grove community. TPC
hereby acknowledges and agrees that the establishment of such a program is
within the authority of the General Partner of the Partnership, does not
require any consent of TPC under the Partnership Agreement and TPC does not
have, and hereby waives, the right to make any objections or require consent
in the future with respect thereto.
3
<PAGE>
ARTICLE II
AMENDMENTS
Section 2.1 Exhibit A. Exhibit A (Partners' Percentage Interest)
to the Partnership Agreement is hereby deleted in its entirety and replaced
with Exhibit A attached hereto.
Section 2.2 Section 2.1(c)(i)--Conversion to Achievement of a
14.0 Percent Return. The parties hereto agree that no adjustment to the TPC
Cottage Grove, Inc. Partnership Interest is necessary and that no such
adjustment has been or shall be made.
Section 2.3 Section 2.1(c)(iii)--Following Achievement of a
Fourteen Percent (14.0%) Return. Section 2.1(c)(iii) of the Partnership
Agreement is hereby amended by deleting "or" in the next to last line of
such section and inserting "and (iii) if a Refinancing shall have occurred,"
in lieu thereof.
Section 2.4 Notices. Section 10.1 of the Partnership Agreement
is hereby amended by deleting the notice address for the Partnership and
LSP-CG in the second paragraph and inserting the following in lieu thereof:
LSP-Cottage Grove, Inc.
c/o Cogentrix Cottage Grove, LLC
c/o Cogentrix Energy, Inc.
9405 Arrowpoint Boulevard
Charlotte, NC 28273
Attention: General Counsel
Telephone: (704) 525-3800
Fax: (704) 529-1006
Section 2.5 Confidentiality. Section 10.22 of the Partnership
Agreement is hereby deleted in its entirety and replaced by the following:
Confidentiality. Each Partner agrees to treat in a confidential manner
all information it receives from the Partnership concerning the Partnership
and shall not disclose such information to any Person other than (i) to
4
<PAGE>
its employees, attorneys or agents and then only to the extent such
disclosure, in the good faith determination of such Partner, is necessary
for the performance of the duties or responsibilities of such Persons,
(ii) in connection with any action, litigation or proceeding arising out of
or in connection with the Partnership Agreement or the other documents
delivered hereunder or the enforcement hereof or thereof (provided, however,
no information concerning the Partnership received by such Partner hereunder
may be used or furnished in connection with any other contemplated
litigation, proceeding or any governmental investigation, except as
permitted by subsections (iii) and (iv) of this Section 10.22), (iii) to
any banking, governmental or regulatory body having jurisdiction over it,
(iv) as may be required by law, applicable regulation or subpoena, in which
case such Partner, to the extent practicable and permitted by law, shall
notify promptly the Partnership of such disclosure (other than disclosure
made by any Partner pursuant to subsection (iii) above), (v) to the extent
any such information is in or becomes part of the public domain otherwise,
or (vi) as may be reasonably necessary in connection with a financing
transaction to be entered into by a Partner or any Affiliate thereof.
ARTICLE III
MISCELLANEOUS
Section 3.1 Entire Agreement. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject hereof.
Section 3.1 Modification. This Agreement may be modified only upon
the prior written consent of each party hereto.
Section 3.2 Severability. If any provision of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 3.4 Further Assurances. Each party shall execute such
deeds, assignments, endorsements, evidences of Transfer and other
instruments and documents and shall give such further assurances as shall
be reasonably necessary to perform its obligations hereunder.
5
<PAGE>
Section 3.5 Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Delaware
and without reference to any conflict of law or choice of law principles of
the State of Delaware that might apply the law of another jurisdiction.
Section 3.6 Counterparts. This Agreement may be executed in any
number of counterparts or with counterpart signature pages, each of which
shall be deemed an original, but all of which shall constitute one and the
same instrument.
Section 3.7 Limitation on Rights of Others. No Person other than
a Partner and its successors and permitted assigns is, nor is it intended
that any such other Person be treated as, a direct, indirect, intended or
incidental third party beneficiary of this Agreement for any purpose
whatsoever, nor shall any other Person have any legal or equitable right,
remedy or claim under or in respect of this Agreement.
Section 3.8 Gender; Number. As used in this Agreement, the
masculine, feminine or neuter gender, and the singular or plural number,
shall be deemed to be or include the other genders or number, as the case
may be, whenever the context so indicates or requires.
Section 3.9 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 3.10 Exhibits. All exhibits referenced in this Agreement
shall be incorporated herein by such reference and shall be deemed to be a
integral part hereof.
Section 3.11 Certain Remedies. Each Partner and the Partnership
shall be entitled to all remedies at law and equity for breach of this
Agreement. Each Partner further acknowledges that specific performance is
an appropriate remedy for breach of any obligation hereunder.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
GENERAL PARTNER:
LSP-COTTAGE GROVE, INC.
By: /s/ Michael Liebelson
---------------------
Name: Michael Liebelson
Title: Managing Director
LIMITED PARTNERS:
GRANITE POWER PARTNERS, L.P.
by its general partner
LS POWER CORPORATION
By: /s/ Michael Liebelson
----------------------
Name: Michael Liebelson
Title: Managing Director
TPC COTTAGE GROVE, INC.
By: /s/Masahiro Ishii
--------------------
Name: Masahiro Ishii
Title: Executive Vice President
COGENTRIX COTTAGE GROVE, LLC
By: /s/ James R. Pagano
-----------------------
Name: James R. Pagano
Title: President
<PAGE>
EXHIBIT A
PARTNERS' PERCENTAGE INTEREST
Percentage
Partner Interest
------- ----------
General Partner
---------------
LSP-Cottage Grove, Inc. 1%
Limited Partners
----------------
Cogentrix Cottage Grove, LLC 72.22%
TPC Cottage Grove, Inc. 26.78%
-------
Total 100.00%
8
<PAGE>
EXHIBIT 1.1B
FORM OF CONSENT, WAIVER AND AMENDMENT NO. 1
OF LSP-WHITEWATER LIMITED PARTNERSHIP
[attached]
<PAGE>
CONSENT, WAIVER AND AMENDMENT NO. 1
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
LSP-Whitewater Limited Partnership
This CONSENT, WAIVER AND AMENDMENT NO. 1 dated March 20, 1998
(this "Agreement") to that certain AMENDED AND RESTATED LIMITED PARTNERSHIP
AGREEMENT dated as of June 30, 1995 by and among LSP-Whitewater I, Inc.
("LSP-WW"), a Delaware corporation, as the general partner, and Granite
Power Partners, L.P. ("Granite"), a Delaware limited partnership and TPC
Whitewater, Inc. ("TPC"), a Delaware corporation as the limited partners, is
made by each of LSP-WW, Granite, TPC and Cogentrix Whitewater, LLC
("Cogentrix WW"), a Delaware limited liability company. Capitalized terms
used herein and not defined shall have the meaning set forth for such terms
in the Partnership Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Securities Purchase Agreement
dated as of March 20, 1998 by and among Granite, LS Power Corporation,
Cogentrix Mid-America, Inc., Cogentrix WW and Cogentrix Cottage Grove, LLC,
Granite desires to sell to Cogentrix WW all of the capital stock of LSP-WW
and all of its Interest in the Partnership (such transaction, the "Sale");
WHEREAS, TPC Funding LLC, a Delaware limited liability company and
an affiliate of TPC ("TPC Funding"), intends to enter into a bridge loan and
subsequent Rule 144A financing transaction which will require that, among
other things, TPC pledge its Interest in the Partnership as collateral
security to one or more financial institutions as agent(s) or collateral
agent(s) for the benefit of such institutions and one or more creditors
(such transaction, the "Tomen Financing");
<PAGE>
WHEREAS, the terms and conditions of the Partnership Agreement
provide for certain consents and approvals in connection with transactions
such as the Sale and the Tomen Financing; and
WHEREAS, the parties hereto desire to grant certain consents,
waivers and amendments in order (i) to permit the Sale and to admit
Cogentrix WW as a Partner upon consummation of the Sale and (ii) to permit
TPC's pledge in connection with the Tomen Financing;
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby
agree, effective as of the date first written above, as follows:
ARTICLE I
WAIVERS AND CONSENTS
Section 1.1 Right of First Offer. Notwithstanding Section 7.8 of
the Partnership Agreement, each of TPC, LSP-WW and Granite hereby
unconditionally and irrevocably waives its respective right of first offer
with respect only to the Sale as described herein and consents to the Sale.
Section 1.2 Transfers of Partnership Interests--the Sale.
Pursuant to, and notwithstanding the terms of, Article VII of the Partnership
Agreement, including without limitation, Sections 7.1(b), 7.1(c)(iv), 7.2
and 7.7 thereof, LSP-WW, Granite and TPC each hereby waive any prohibitions
to the Sale contained therein and hereby consent to the Sale in all respects,
including without limitation (i) the admission of Cogentrix WW as a Limited
Partner and substitution of Cogentrix WW for Granite for all purposes of the
Partnership Agreement on identical terms and conditions as Granite and
(ii) the fact that Cogentrix WW, pursuant to the Sale, shall own 100% of the
capital stock of the General Partner. In connection therewith, the General
Partner hereby acknowledges that it has received adequate assurances, and
Cogentrix WW hereby renders assurance to the General Partner and to TPC that,
as required under the Partnership Agreement, Cogentrix WW, by virtue of and as
of the date of execution of this Agreement, agrees to be bound by all of the
terms and conditions of the Partnership Agreement.
Section 1.3 Transfers of Partners Interests--the Tomen Financing.
Pursuant to, and notwithstanding the terms of, Article VII of the Partnership
2
<PAGE>
Agreement, including without limitation Section 7.1 thereof, as of the date
of execution of this Agreement, LSP-WW and Cogentrix WW each hereby waive any
prohibitions to the Tomen Financing contained therein and hereby consent to
the pledge of all or any portion of the Interest by TPC pursuant to the Tomen
Financing including but not limited to a collateral assignment of TPC's
rights to receive distributions relating to the TPC Interest from the
Partnership from time to time and an irrevocable direction by TPC instructing
the General Partner to pay over all such distributions to one or more
financial institutions as agent(s) or collateral agent(s) for the benefit of
such institutions and one or more creditors; provided, however, that
notwithstanding any provision of this Agreement, no pledge, assignment,
direction or other action by TPC of or relating to its Interest under this
Section 1.3 shall violate or result in a violation of Section 7.1(c) of the
Partnership Agreement. TPC acknowledges and agrees that LS Power is
assigning the Management Services Agreement to Cogentrix Energy, Inc.
Section 1.4 Cooperation in Tomen Financing. Each of LSP-WW,
Granite and Cogentrix WW, for itself and as agent on behalf of its Affiliate,
Cogentrix Mid-America, Inc., acknowledges and agrees that it will provide
such reasonable cooperation, assistance and information to TPC as TPC may
reasonably request from time to time in connection with the Tomen Financing.
Section 1.5 Name Change. Each of Granite and TPC acknowledge,
agree and consent to the change of the name of the Partnership and LSP-WW to
"Cogentrix-Whitewater, L.P." and "Cogentrix-WW, Inc." respectively (or other
similar derivations thereof) which shall occur on or before 180 days after
the closing of the Sale. TPC, for itself and as agent on behalf of its
Affiliate, TPC Funding, acknowledges and agrees that it will provide such
reasonable cooperation, assistance and information to Cogentrix WW as
Cogentrix WW may reasonably request from time to time in connection with the
name change contemplated by this Section 1.5.
ARTICLE II
AMENDMENTS
Section 2.1 Exhibit A. Exhibit A (Partners' Percentage Interest)
to the Partnership Agreement is hereby deleted in its entirety and replaced
with Exhibit A attached hereto.
3
<PAGE>
Section 2.2 Section 2.1(c)(i)--Conversion to Achievement of a
14.0 Percent Return. The parties hereto agree that no adjustment to the TPC
Whitewater, Inc. Partnership Interest is necessary and that no such
adjustment has been or shall be made.
Section 2.3 Section 2.1(c)(iii)--Following Achievement of a
Fourteen Percent (14.0%) Return. Section 2.1(c)(iii) of the Partnership
Agreement is hereby amended by deleting "or" in the next to last line of
such section and inserting "and (iii) if a Refinancing shall have occurred,"
in lieu thereof.
Section 2.4 Notices. Section 10.1 of the Partnership Agreement
is hereby amended by deleting the notice address for the Partnership and
LSP-WW in the second paragraph and inserting the following in lieu thereof:
LSP-Whitewater, Inc.
c/o Cogentrix Whitewater, LLC
c/o Cogentrix Energy, Inc.
9405 Arrowpoint Boulevard
Charlotte, NC 28273
Attention: General Counsel
Telephone: (704) 525-3800
Fax: (704) 529-1006
Section 2.5 Confidentiality. Section 10.22 of the Partnership
Agreement is hereby deleted in its entirety and replaced by the following:
Confidentiality. Each Partner agrees to treat in a confidential manner
all information it receives from the Partnership concerning the Partnership
and shall not disclose such information to any Person other than (i) to
its employees, attorneys or agents and then only to the extent such
disclosure, in the good faith determination of such Partner, is necessary
for the performance of the duties or responsibilities of such Persons,
(ii) in connection with any action, litigation or proceeding arising out of
or in connection with the Partnership Agreement or the other documents
delivered hereunder or the enforcement hereof or thereof (provided, however,
no information concerning the Partnership received by such Partner hereunder
may be used or furnished in connection with any other contemplated
litigation, proceeding or any governmental investigation, except as
permitted by subsections (iii) and (iv) of this Section 10.22), (iii) to
any banking, governmental or regulatory body having jurisdiction over it,
4
<PAGE>
(iv) as may be required by law, applicable regulation or subpoena, in which
case such Partner, to the extent practicable and permitted by law, shall
notify promptly the Partnership of such disclosure (other than disclosure
made by any Partner pursuant to subsection (iii) above), (v) to the extent
any such information is in or becomes part of the public domain otherwise,
or (vi) as may be reasonably necessary in connection with a financing
transaction to be entered into by a Partner or any Affiliate thereof.
ARTICLE III
MISCELLANEOUS
Section 3.1 Entire Agreement. This Agreement supersedes all
prior agreements and understandings among the parties hereto with respect
to the subject hereof.
Section 3.2 Modification. This Agreement may be modified only
upon the prior written consent of each party hereto.
Section 3.3 Severability. If any provision of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 3.4 Further Assurances. Each party shall execute such
deeds, assignments, endorsements, evidences of Transfer and other
instruments and documents and shall give such further assurances as shall
be reasonably necessary to perform its obligations hereunder.
Section 3.5 Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Delaware
and without reference to any conflict of law or choice of law principles of
the State of Delaware that might apply the law of another jurisdiction.
Section 3.6 Counterparts. This Agreement may be executed in any
number of counterparts or with counterpart signature pages, each of which
shall be deemed an original, but all of which shall constitute one and the
same instrument.
5
<PAGE>
Section 3.7 Limitation on Rights of Others. No Person other than
a Partner and its successors and permitted assigns is, nor is it intended
that any such other Person be treated as, a direct, indirect, intended or
incidental third party beneficiary of this Agreement for any purpose
whatsoever, nor shall any other Person have any legal or equitable right,
remedy or claim under or in respect of this Agreement.
Section 3.8 Gender; Number. As used in this Agreement, the
masculine, feminine or neuter gender, and the singular or plural number,
shall be deemed to be or include the other genders or number, as the case may
be, whenever the context so indicates or requires.
Section 3.9 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 3.10 Exhibits. All exhibits referenced in this Agreement
shall be incorporated herein by such reference and shall be deemed to be a
integral part hereof.
Section 3.11 Certain Remedies. Each Partner and the Partnership
shall be entitled to all remedies at law and equity for breach of this
Agreement. Each Partner further acknowledges that specific performance is
an appropriate remedy for breach of any obligation hereunder.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
GENERAL PARTNER:
LSP-WHITEWATER I, INC.
By: /s/ Michael Liebelson
-----------------------
Name: Michael Liebelson
Title: Managing Director
LIMITED PARTNERS:
GRANITE POWER PARTNERS, L.P.
by its general partner
LS POWER CORPORATION
By: /s/ Michael Liebelson
------------------------
Name: Michael Liebelson
Title: Michael Liebelson
TPC WHITEWATER, INC.
By: /s/ Masahiro Ishii
-----------------------
Name: Masahiro Ishii
Title: Executive Vice President
COGENTRIX WHITEWATER, LLC
By: /s/ James R. Pagano
------------------------
Name: James R. Pagano
Title: President
<PAGE>
EXHIBIT A
PARTNERS' PERCENTAGE INTEREST
Percentage
Partner Interest
------- ----------
General Partner
---------------
LSP-Whitewater I, Inc. 1%
Limited Partners
----------------
Cogentrix Whitewater, LLC 73.17%
TPC Whitewater, Inc. 25.83%
-------
Total 100.00%
<PAGE>
EXHIBIT 3.1(h)
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
[attached]
<PAGE>
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of March 20, 1998
(this "Agreement"), is made by and between LS POWER CORPORATION, a Delaware
corporation (the "Assignor"), and COGENTRIX ENERGY, INC., a Delaware
corporation (the "Assignee") (unless otherwise defined herein, all
capitalized terms used herein shall have the meanings given them in the
Securities Purchase Agreement referenced below).
W I T N E S S E T H:
WHEREAS, the Assignor, Granite Power Partners, L.P., a Delaware
limited partnership ("Granite"), the Assignee, Cogentrix Mid-America, Inc.,
a Delaware corporation, Cogentrix Cottage Grove, LLC, a Delaware limited
liability company, and Cogentrix Whitewater, LLC, a Delaware limited
liability company, have entered into that certain Securities Purchase
Agreement dated as of March 6, 1998 (the "Securities Purchase Agreement"),
which provides for the sale by the Sellers, and the purchase by the
Purchasers, of all of the Securities in the Acquired Companies (the
"Acquisition");
WHEREAS, the Assignor is a party to certain management service
agreements with certain of the Acquired Companies listed on Exhibit A
hereto (the "Management Agreements");
WHEREAS, in connection with the Acquisition, the Assignor desires to
assign, and the Assignee desires to assume, all of the Assignor's right,
title and interest in the Management Agreements (the "Assignment"); and
WHEREAS, the Assignor and the Assignee have agreed that certain
management and personnel of the Assignor will be available to provide
services to the Assignee after the date hereof, subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Assignor and Assignee, the Assignor hereby assigns,
transfers and sets over to the Assignee all of the Assignor's rights and
interests in and to the Management Agreements, and Assignee hereby expressly
accepts such assignment and agrees to, and does hereby assume, and agrees
hereafter, to timely pay, perform or discharge each and every of the
obligations and liabilities of the Assignor under the Management Agreements.
The Assignee further agrees to indemnify and hold the Assignor harmless from
any claim or liability arising under or as a result of any obligations and
liabilities to be paid, performed or discharged pursuant to the Management
Agreements after the date hereof.
The Assignor further covenants and agrees that, at the reasonable
request of the Assignee and without further consideration, but at no
additional cost to the Assignor, the Assignor will execute such other
instruments of conveyance, transfer and assignment and take such further
action as may be reasonably required in order to grant, bargain, sell, assign,
<PAGE>
transfer, set over or deliver to Assignee, its successors and assigns, the
Management Agreements transferred hereunder.
This Agreement shall be binding upon, and shall inure to the benefit of,
the Assignee, the Assignor, and each of their successors and assigns, and
shall be subject to the terms and conditions of the Securities Purchase
Agreement.
From the date hereof through April 30, 1998 (the "Initial Period"), the
Assignor shall cause the appropriate members of its management to provide
Purchasers with reasonable assistance and cooperation to effect (i) the
timely and efficient transfer of management, records, files and other
documents and (ii) the preparation of required reports and filings for the
Acquired Companies. The assistance provided during the Initial Period shall
be at no cost to Purchasers other than reimbursement of reasonable
out-of-pocket expenses incurred by Assignor in providing such assistance.
In addition to the assistance provided under the preceding sentence, for the
11-month period following April 30, 1998 (the "Annual Period"), the Assignor
shall (i) cause its Principals (as defined below) to be available to provide
assistance and consulting to the Purchasers for no more than 10 hours per
month at no cost, other than reasonable out-of-pocket expenses to Purchasers
and (ii) cause its Management (as defined below) to reasonably consult with
representatives of the Purchasers concerning the management and operation of
the Acquired Companies and their respective businesses on and prior to
Closing, including without limitation with respect to (a) pending litigation,
claims and related matters, (b) supplier, manager, customer, personnel and
other business relationships, (c) regulatory, environmental, tax and other
governmental matters, (d) the EPC Contracts with Westinghouse Electric
Corporation and (e) the Operation and Maintenance Agreements with
Westinghouse Operating Services Company, Inc. The Assignee shall pay for
the assistance and consulting provided during the Annual Period by the
Management on an hourly basis at the commercially reasonable rates described
on Exhibit B hereto, and the Assignee agrees to reimburse the Assignor for
all reasonable out-of-pocket expenses incurred by the Assignor. For
purposes of this Agreement, the term "Principals" shall collectively mean
Mikhail Segal and Michael Liebelson, and the term "Management" shall
collectively mean Frank Hardenbergh, Mark Brennan and Kimberly Bonnell.
Upon no less than four days' advance notice, the Assignee will permit
representatives of the Assignor and its affiliates and a reasonable number
of guests to visit the respective properties of the Acquired Companies during
normal business hours; provided, however, that the Assignor agrees to, and
agrees to cause its guests to, hold all information regarding the properties
and their operations confidential.
Assignor represents and warrants to the Assignee that no Management
Fees (as defined in the Management Agreements) have been paid to the
Assignor pursuant to any of the Management Agreements for the period
beginning April 1, 1998, and that no Management Expenses (as defined in the
Management Agreements) and Reimbursable Management Costs (as defined in the
Management Agreements) have been paid to the Assignor pursuant to any of the
Management Agreements for the period beginning February 1, 1998. The
Assignor and the Assignee agree that all Management Fees payable to the
Assignor for services performed after April 1, 1998 and all Management
Expenses and Reimbursable Management Costs incurred by Assignor after
2
<PAGE>
February 1, 1998 shall be paid to the Assignee.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER
THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATION LAW OF THE
STATE OF NEW YORK).
The Assignee agrees that none of the Principals or Management shall
have any liability for any assistance or consulting provided in good faith
under this Agreement or otherwise in respect of any claim, demand, action,
suit or proceeding arising hereunder.
All notices, consents, calls, approvals, reports, designations,
requests, waivers, elections and other communications (collectively,
"Notices") authorized or required to be given pursuant to this Agreement
shall be given in writing and (i) personally served on the party to whom it
is given, (ii) mailed by registered or certified mail, postage prepaid or
(iii) sent by courier guaranteeing overnight delivery, in each case to the
addresses set forth in the Securities Purchase Agreement.
All Notices shall be deemed given when delivered. Any party may change
its address and/or telephone number for the receipt of Notices at any time
by giving Notice thereof to the parties hereto.
This Agreement shall become effective when it shall have been executed
by the parties hereto and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
The term of this Agreement shall be the period commencing as of the date
hereof and ending the date 13 months thereafter. This Agreement may be
executed in two or more counterparts, each of which shall constitute an
original but all of which when taken together shall constitute but one
contract.
Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by all of the parties hereto. Neither this Agreement nor any provision
hereof may be transferred or assigned to any other Person without the written
consent of the other party; provided, however, the Assignee shall have the
right to assign its obligations hereunder to any of its Affiliates.
This Agreement constitutes the entire contract between the parties
relative to the subject matter hereof. Any previous agreement between the
parties with respect to the subject matter hereof is superseded by this
Agreement. Nothing in this Agreement, expressed or implied, is intended to
confer upon any Person other than the parties hereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
3
<PAGE>
WITH THIS AGREEMENT. Each party hereto (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce
the foregoing waiver and (b) acknowledges that it and the other parties
hereto have been induced to enter into this Agreement and the transactions
contemplated hereby, as applicable, by, among other things, the mutual
waivers and certifications in this paragraph.
In the event any one or more of the provisions contained in this
Agreement should be held 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. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
[Remainder of page intentionally left blank.]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, effective as of the day and year
first above written.
ASSIGNOR:
LS POWER CORPORATION
By: /s/ Frank E. Hardenbergh
---------------------------
Name: Frank E. Hardenbergh
Title: Vice President, General
Counsel and Secretary
ASSIGNEE:
COGENTRIX ENERGY, INC.
By: /s/ James R. Pagano
-------------------------
Name: James R. Pagano
Title: Group Senior Vice President
Chief Financial Officer
5
<PAGE>
EXHIBIT A
Management Agreements
---------------------
1. Management Services Agreement between LS Power Corporation
and LSP-Whitewater Limited Partnership dated May 1, 1995.
2. Management Services Agreement between LS Power Corporation
and LSP-Cottage Grove, L.P. dated May 1, 1995.
3. Management Services Agreement between LS Power Corporation
and LSP-Whitewater I, Inc. dated May 1, 1995.
4. Management Services Agreement between LS Power Corporation
and LSP-Cottage Grove, Inc. dated May 1, 1995.
6
<PAGE>
EXHIBIT B
Management Rates
----------------
1. Frank Hardenbergh - $175/hour
2. Mark Brennan - $125/hour
3. Kimberly Bonnell (Administrative Assistant) - $40/hour
7
<PAGE>
SCHEDULE 4.1(d)(i)
CONSENTS, FILINGS AND APPROVALS
1. LS Power Corporation ("LS Power") must obtain the consent of Chase
Manhattan Capital Corporation ("Chase") and the trust created by that
certain Trust Agreement dated December 3, 1991 with Joseph Cogen,
trustee (the "Cogen Trust") prior to causing the sale of Granite Power
Partners, L.P. ("Granite") interests in the Acquired Companies.
- Second Amended and Restated Limited Partnership Agreement of Granite
dated January 31, 1996 among LS Power, Chase and the Cogen Trust
(see Section 4.04(b)).
2. Granite must obtain a waiver from TPC Whitewater, Inc. and
LSP-Whitewater I, Inc. of their right of first offer to purchase
Granite's limited partnership interests in LSP-Whitewater Limited
Partnership being sold to Cogentrix Whitewater, LLC ("Cogentrix
Whitewater").
- Amended and Restated Limited Partnership Agreement dated as of June
30, 1995 among LSP-Whitewater I, Inc., Granite and TPC Whitewater,
Inc. (see Section 7.8)
3. Granite must obtain the consent of TPC Cottage Grove, Inc. prior to
transferring its limited partnership and the stock of the owner of the
general partnership interests in LSP-Cottage Grove, L.P. to Cogentrix
Cottage Grove, LLC ("Cogentrix Cottage Grove"). Furthermore, Granite
may only transfer these interests if it provides the general partner,
LSP-Cottage Grove, Inc., with instruments stating that the transferee
agrees to be bound to the terms of the Partnership Agreement and
pursuant to which each transferee makes certain representation
representations and warranties.
- Amended and Restated Limited Partnership Agreement dated as of June
30, 1995 among LSP-Cottage Grove, Inc., Granite and TPC Cottage
Grove, Inc. (see Section 7.1(b)(ii))
4. Granite must obtain the consent of TPC Whitewater, Inc. prior to
transferring its limited partnership interest and the stock of the
owner of the general partnership interests in LSP-Whitewater Limited
Partnership to Cogentrix Whitewater. Furthermore, Granite may only
transfer these interests if it provides the general partner,
LSP-Whitewater, Inc., with instruments stating that the transferee
agrees to be bound to the terms of the Partnership Agreement and
pursuant to which each transferee makes certain representations and
warranties.
- Amended and Restated Limited Partnership Agreement dated as of June
30, 1995 among LSP-Whitewater, Inc., Granite and TPC Whitewater,
<PAGE>
Inc. (see Section 7.1(b)(ii)).
5. Granite must obtain a waiver from TPC Cottage Grove, Inc. and
LSP-Cottage Grove, Inc. of their right of first offer to purchase
Granite's limited partnership interests in LSP-Cottage Grove, L.P.
being sold to Cogentrix Cottage Grove.
- Amended and Restated Limited Partnership Agreement dated as of June
30, 1995 among LSP-Cottage Grove, Inc., Granite and TPC Cottage
Grove, Inc. (see Section 7.8)
6. LSP-Cottage Grove, L.P. must obtain the consent of Northern States
Power ("NSP") prior to the transfer of the LSP-Cottage Grove, L.P.
partnership interests to Cogentrix Cottage Grove.
- Power Purchase Agreement between NSP and LSP-Cottage Grove, L.P.
dated May 9, 1994. (see Section 6.6)
7. LS Power must obtain the prior written consent from each of
LSP-Whitewater Limited Partnership, LSP-Cottage Grove, L.P.,
LSP-Whitewater I, Inc. and LSP-Cottage Grove, Inc. to assign to
Cogentrix the Management Services Agreements listed below:
- Management Services Agreement between LS Power Corporation and
LSP-Whitewater Limited Partnership dated May 1, 1995
(see Section 18.2)
- Management Services Agreement between LS Power Corporation and
LSP-Cottage Grove, L.P. dated May 1, 1995 (see Section 18.2)
- Management Services Agreement between LS Power Corporation and
LSP-Whitewater I, Inc. dated May 1, 1995 (see Section 18.2)
- Management Services Agreement between LS Power Corporation and
LSP-Cottage Grove, Inc. dated May 1, 1995 (see Section 18.2)
8. Partnership Agreement Amendments. LS Power will obtain assurances
from the Trustee, the Collateral Agent, the Depositary Agent or the
Funding Corporation Trustee prior to amending or modifying any
provisions of the LSP-Cottage Grove, L.P. Limited Partnership
Agreement and LSP-Whitewater Limited Partnership Agreements relating
to (a) voting rights of the Partners, (b) withdrawal of the General
Partner, (c) transfer of partnership interests and (d) dissolution of
the Partnership. If such assurance is not obtained and any of the
Trustee, the Collateral Agent, the Depositary Agent or the Funding
Corporation Trustee determines that such amendment or modification is
detrimental to their rights under the Collateral Documents or
otherwise adverse to the interests of the Secured Parties, such
amendment or modification would constitute an Event of Default under
the Partnership Trust Indentures.
- Trust Indenture dated as of May 1, 1995 between LSP-Whitewater
<PAGE>
Limited Partnership and IBJ Schroder Bank and Trust Company, as
Trustee (see Section 8.1(o)(i))
- Trust Indenture dated as of May 1, 1995 between LSP-Cottage Grove,
L.P. and IBJ Schroder Bank and Trust Company, as Trustee
(see Section 8.1(o)(i))
9. Partnership Agreement Amendments. Each of LSP-Whitewater Limited
Partnership and LSP-Cottage Grove, L.P. must present an Officer's
Certificate to the Trustee prior to amending or modifying any other
provision of either of their respective Partnership Agreements
stating that such amendment or modification would not be reasonably
expected to result in a Material Adverse Change.
- Trust Indenture dated as of May 1, 1995 between LSP-Whitewater
Limited Partnership and IBJ Schroder Bank and Trust Company, as
Trustee (see Section 8.1(o)(ii))
- Trust Indenture dated as of May 1, 1995 between LSP-Cottage Grove,
L.P. and IBJ Schroder Bank and Trust Company, as Trustee
(see Section 8.1(o)(ii))
10. In order to qualify as a Permitted Party under the Partnership Trust
Indentures, the Purchasers and each of LSP-Whitewater Limited
Partnership and LSP-Cottage Grove, L.P. must deliver opinions of
counsel stating that as a result of the acquisition each of the
Partnerships will not be in violation of any Law necessary for such
Partnership to conduct its business or to maintain a Plant's
certification as a Qualifying Facility. Furthermore, each Partnership
must provide a certificate stating that, as a result of the acquisition,
there will be no Event of Default and no Material Adverse Change.
- Trust Indenture dated as of May 1, 1995 between LSP-Whitewater
Limited Partnership and IBJ Schroder Bank and Trust Company, as
Trustee (see Sections 8.1(p) and 8.1(q) and the definition of
"Permitted Party")
- Trust Indenture dated as of May 1, 1995 between LSP-Cottage Grove,
L.P. and IBJ Schroder Bank and Trust Company, as Trustee
(see Sections 8.1(p) and 8.1(q) and the definition of "Permitted
Party")
11. In order to qualify as a Permitted Party under the Partnership Trust
Indentures, the Purchasers must give the Collateral Agent a pledge
of and Lien upon shares of capital stock of the General Partners so
acquired in accordance with the Collateral Documents.
- Trust Indenture dated as of May 1, 1995 between LSP-Whitewater
Limited Partnership and IBJ Schroder Bank and Trust Company, as
Trustee (see Sections 8.1(p) and 8.1(q) and the definition of
"Permitted Party")
- Trust Indenture dated as of May 1, 1995 between LSP-Cottage Grove,
L.P. and IBJ Schroder Bank and Trust Company, as Trustee
<PAGE>
(see Sections 8.1(p) and 8.1(q) and the definition of "Permitted
Party")
12. In order to qualify as a Permitted Party under the Partnership Trust
Indentures, each of the Partnerships must deliver letters from
Moody's Investor Service, Inc. and Standard & Poor's Ratings Group
to the Trustee confirming that the ratings of each rating agency in
effect immediately prior to the proposed acquisition for each series
of bonds outstanding will not be downgraded nor withdrawn as a result
of the acquisition.
- Trust Indenture dated as of May 1, 1995 between LSP-Whitewater
Limited Partnership and IBJ Schroder Bank and Trust Company, as
Trustee (see Section 8.1(p) and the definition of "Permitted Party")
- Trust Indenture dated as of May 1, 1995 between LSP-Cottage Grove,
L.P. and IBJ Schroder Bank and Trust Company, as Trustee
(see Section 8.1(p) and the definition of "Permitted Party")
13. Management Services Agreements. Prior to amending, modifying or
terminating any Non-Material Agreement such that the Partnership
would be reasonably expected to have monetary obligations exceeding
$2,000,000 per year, the Partnership shall deliver an Officer's
Certificate to the Trustee certifying that such amendment,
modification or termination is not reasonably expected to result in a
Material Adverse Change. Furthermore, the Officer's Certificate
should be accompanied by written confirmation from the Independent
Engineer that no Material Adverse Change is expected.
- Trust Indenture dated as of May 1, 1995 between LSP-Whitewater
Limited Partnership and IBJ Schroder Bank and Trust Company, as
Trustee (see Section 6.20(b))
- Trust Indenture dated as of May 1, 1995 between LSP-Cottage Grove,
L.P. and IBJ Schroder Bank and Trust Company, as Trustee
(see Section 6.20(b))
14. FloriCulture Right of First Offer
- Employment Agreement dated February 14, 1997 between FloriCulture
and Rob Holder
- Employment Agreement dated February 14, 1997 between FloriCulture
and Jim Boyd
15. Amendments to pledge, security and other collateral documents
required under the Bond Financing
16. Qualifying Facility filings to the FERC (to be performed post-closing)
17. Minnesota filings LSP-Cottage Grove, L.P.: Any notice, administrative
amendment or other filing or approval required under the applicable
<PAGE>
rules, regulations or policies of the Minnesota or Federal regulatory
agencies having jurisdiction (to be performed post-closing)
18. Wisconsin filings LSP-Whitewater Limited Partnership: Any notice,
administrative amendment or other filing or approval required under
the applicable rules, regulations or policies of the Wisconsin or
Federal regulatory agencies having jurisdiction (to be performed
post-closing)
19. Notification of material change in ownership to the FERC by the
Acquired Companies and the Purchasers (to be performed post-closing)
20. Form 8-K filings by Funding and Cogentrix with the Securities and
Exchange Commission (to be performed post-closing)
21. Consents, filings or approvals from the agent as may be required
under any items hereunder with respect to the Credit Agreements
