ML20065L240
| ML20065L240 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 04/14/1994 |
| From: | Polebaum M, Ritsher J HALE & DOOR, NORTH ATLANTIC ENERGY SERVICE CORP. (NAESCO), ROPES & GRAY |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| References | |
| NUDOCS 9404200351 | |
| Download: ML20065L240 (183) | |
Text
l 4
2 ROPES & GRAY ONE INTERNATIONAL PLACE
]
BOSTON, MASSACHUSETTS O2110-2624 30 MENNEDY PLAZA (617)951 7000 w
SLN i
S um PROviOENCE R i 02903 T E L ECoPI E R: (617) 9 51 + 705 0 wasa NoroN, o c 20o04 1
(4o,)455 440o T EL Ecop> E R: (409)455 440i I#0 6#6'3900 Writer's Direct Dial Numbers (617) 951-7322 l
April 14, 1994 l
4 U.
S.
Nuclear Regulatory Commission One White Flint North 11555 Rockville Pike Rockville, Maryland 20852 Attn: Document Control Desk Re:
(a)
Facility Operating License No. NPF-86, as amended, Docket No. 50-443 (the " Operating License");
(b)
Order Approving Transfer of License, dated August 16, 1993, Docket No. 50-443 (the " Order");
(c)
Letter, dated February 3, 1994, from Ropes & Gray to the Commission, requesting an extension of the Commission's Order; (d)
Order for Modification of Order Approving Transfer of License, dated February 15, 1994, Docket No.
50-443 (the " Extension Order").
Subject:
Great Bay Power Corporation (formerly EUA Power Corporation) Plan of Reorganization: Second Supplemental Status Report Gentlemen:
This Second Supplemental Status Report is filed by North Atlantic Energy Service Corporation (" North Atlantic"),, for itself and as agent for the Joint Owners of'Seabrook Station, Unit No.
1, and the Official Bondholders' Committee (the
" Committee") of Great Bay Power Corporation ("GBPC"), to keep the Commission informed on the progress of the GBPC bankruptcy proceeding and the Plan of Reorganization (the " Plan") sponsored by the Committee.
Backcround At the time of filing the Request for Extension of the Order (Ref. (a)), the Committee reported that the regulatory approval process with respect to the Plan had proceeded satisfactorily and that the sole remaining obstacle to final implementation of the Plan was the placement of the proposed $45 million credit facility (the "POR Facility").
It also reported that on
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Nuclear Regulatory April 14, 1994 Commission February 2, 1994, the day preceding the date of filing that Request, the Committee had reached an agreement in principal with Omega Advisors on a proposal for funds advised by Omega to invest
$35 million in exchange for 60% of GBPC's equity in lieu of the originally contemplated POR Facility.
The Extension Order was requested in order to provide adequate time for the approval and confirmation process on this modification (the " Modified Plan").
Interim Procress
)
Because this equity financing differed from the debt financing approach described in the original Disclosure Statement approved by the Bankruptcy Court, the Committee sought the Court's approval of the Modified Plan.
On March 11, 1994, the Bankruptcy Court entered into an order approving the Committee's Supplemental Disclosure Statement and directing the Committee to submit that statement to creditors for approval.
A confirmation hearing on the Modified Plan was also scheduled for May 13, 1994.
On April 7, 1994, the Committee mailed the Supplemental Disclosure Statement to all creditors of record.
A copy of those materials is enclosed herewith.
The Supplemental Disclosure Statement describes the modification of the Plan to substitute an equity financing for the originally contemplated POR Facility and the fact that the new equity funds will receive 60% of GBPC's equity and the bondholder creditors will receive 40% of GBPC's equity.
It also contains a copy of the Stock Purchase Agreement, dated April 7, i
1994 (see Exhibit A to the enclosed Modified Plan), entered into among GBPC and the several purchasers which sets forth the terms on which the several Omega entities and Elliott Associates, L.P.,
a New York limited partnership, will be acquiring an aggregate of 60% of GBPC's equity securities.
It also contains a copy of the Registration Rights Agreement, dated as of April 7, 1994 (see Exhibit C to the Modified Plan), among the same parties, which sets forth the purchasers rights to obtain registration of their GBPC stock at some future date.
The Committee is confident that the Modified Plan will be confirmed by the Bankruptcy Court at the May 13, 1994 confirmation hearing.
That should allow adequate time for the Modified Plan to become effective and be implemented within the time frame authorized by the Commission's Extension Order.
North Atlantic and the Committee will continue to keep the Commission infor=cd of important events and of the final implementation of the indirect transfer originally approved by the Commission's Order.
o ropes & GRAY U.
S.' Nuclear Regulatory April 14, 1994 Commission very-truly yours,.
NORTH ATLANTIC ENERGY SERVICE CORPORATION, for itself and as agent as aforesaid j
By its attorney, hn A.
Ritsher, Esq.
opes & Gray One International Place Boston, Massachusetts 02110 THE OFFICIAL BONDHOLDERS' COMMITTEE OF GREAT BAY POWER CORPORATION By its attorney, 1
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Mark N. Polebaum, Es9f Hale and Dorr 60 State Street Boston, Massachusetts 02109 JARNRC.NA
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HALE AND DORR I
CouNsaLtOss - Ar LA w 6o Srm STataT. BosTou, MASSACHU5 Err 5 02109 627 526-6000. rAx 6ty-526 000 5
April 7,1994 TO:
THE RECORD HOLDERS OF EUA POWER CORPORATION'S 171/2% SERIES B AND SERIES C SECURED NOTES RE:
EUA Power Corporation n/k/a Great Bay Power Corporation Chapter 11 Case No. 91 10525 -
Dear Sir / Madam:
t Enclosed please find solicitation materials related to the above-referenced Chapter 1! case. On March 11, 1994, the Bankruptcy Court entered an order (a) approving the Official Bondholders' Committee's Supplemental l
Disclosure Statement (the " Supplemental Disclosure Statement") Relating to the First Modification to the l
Committee's Fifth Amended Plan of Reorganization (the " Modified Plan"), (b) directing the Committee to mail a copy of the Supplemental Disclosure Statement, the Modified Plan and a ballot for changing a prior vote to all l
creditors on or before April 7,1994, and (c) scheduling a confirmation hearing on the Modified Plan for May 13.
1994.
in order to expedite the distribution process, the Committee through its solicitation agent. Logan and Company,Inc. (" logan"), contacted the brokers and other record holders directly to determine the requisite number of copies of the sohcitation materials needed for their respective beneficial holders.
Based upon information obtained by Logan, the Committee believes that your firm maintains client accounts for one or both of the Debtor's outstanding debentures listed below. Pursuant to an order of the Bankruptcy Court dated March 11,1994, you are required to forward copies of the enclosed solicitation materials to the beneficial holders of the debentures within five (5) days of your receipt of the materials.
Instrument Cusio No, EUA Power Corporation
- 171/2% Series B Secured Notes 269260-AC 9 171/2% Series C Secured Notes 269260-AB-1 If you have any questions concerning the solicitation materials, please contact Frank W. Getman Jr. at (617)526-6740. If you need more copies of the solicitation materials, please contact the Committee's solicitation agent directly at (201) 798-1031.
Very truly yours, THE OFFICIAL BONDHOLDERS
- COMMITTEE OF EUA POWER CORPORATION by its attomey,
/
^-
Mark N. Polebaum, Esq. '
Frank W. Getman Jr., Esq.
W ASHINGTON, DC B O STO N, MA M A ncusstra.
RA12 AND DORR IS A PARTNERSHIP INCLUDING PSOFt&SIONAL CORPORATTONS
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HALE AND DORR J
COuN s toon, AT LA w 6o STATE STREET, Boston, MASSACHUSETTS O21o9 617 320-600o. ru 627 326-520 April 7,1994 TO.
CREDITORS OF EUA POWER CORPORATION.
n/k/a GREAT B AY POWER CORPORATION The Official Bondholders' Committee (the " Committee") of EUA Power Corporation, n/k/a Great Bay Power Corporation (the " Debtor") is pleased to forward to you for your consideration the Committee's First Modificauon to the Fifth Amended Plan of Reorganization (the " Modified Plan"). Accompanying this letter is the Supplemental Disclosure Statement (the " Supplemental Disclosure Statement") which describes the Modified Plan. a ballot to vote on the Modified Plan. the Notice of Confirmation Hearing and the Order of the Bankruptcy Court approving the Supplemental Disclosure Statement.
The Modified Plan amends the Committee's previously confirmed Fifth Amended Plan by implementing plan of reorganization financing that is different from the financing contemplated by the Fifth Amended Plan. The Fifth Amended Plan anticipated the placement of a S45 million debt facility to cover the reorFanized Debtor's future projected operating losses. The Committee was unsuccessful in its efforts to place the debt facility on the terms desenbed in the Fifth Amended Plan. The Committee was successful. however, with the assistance of Lehman 3
Brothers. in placing S35 million in equity financing. The Committee believes that the equity financing will provide the reorganized Debtor with sufficient funds to cover projected future operating losses. Although not as favorable as the financing anucipated in the Fifth Amended Plan, the Committee believes that the equity financing desenbed in the Supplemental Disclosure Statement is the best plan financing presently available.
Pursuant to bankruptcy court procedures for modifying a plan that was previousiv confirmed, a creditor who previously voted may change its vote by completing and returning the enclosed ballot by the deadline stated below. If i
you do not wish to change your vote, you do not have to file a ballot. The Committee unanimously recommends that you continue to support the Modified Plan and not change your vote.
i The record date for determining the holders of claims entitled to change their vote to accept or reject the Modified Plan is February 22.1994. THE DEADLINE FOR SUBMITTING BALLOTS TO CHANGE YOUR VOTE IS 5:00 P.M., EASTERN STASVARD TIME, ON MAY 9,1994, unless such deadline is extended. The ballots, certain related matenals and a prepaid self-addressed return envelope are enclosed. PLEASE READ AND CAREFULLY CONSIDER THE MATTERS DESCRIBED IN THE SUPPLEMENTAL DISCLOSURE STATEMEST.
Please call either of the undersigned if you have any questions.
j Very truly yours, THE OFFICIAL BONDHOLDERS' COMMITTEE OF EUA POWER CORPORATION
/
by its attope s,
/.
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'%iark N. Polebfum,, Esq.
Frank W. Getman Jr., Esq.
W A SHINCTON. DC BOS T ON, NtA M A NCH ESTE R. NN PLALE AND DORR !$ A PAATNER3PCF LNCLUDINC PROFESSIONAL CORPOR.ATIONS
UNITED STATES BANKRU17CY COURT DISTRICT OF NEW HAMPSHIRE t
)
4 In Re:
)
)
Chapter 11 EUA POWER CORPORATION, n/k/a
)
Case No. 91 10525 GREAT BAY POWER CORPORATION,
)
)
- Debtor,
)
)
ORDER APPROVING SUPPLEMENTAL DISCLOSURE STATE 5fENT DATED FEBRUARY 11,1994 RELATING TO FIRST MODIFICATION TO BONDHOLDERS' COM511TTEE'S FIFTH AMENDED PLAN OF REORGANIZATION, FIXING TIME FOR CHANGING VOTE ON PLAN AND SCHEDULING HEARING ON CONFIRMATION OF FIRST MODIFICATION TO FIFTH AMENDED PLAN OF REORG ANIZATION COMBINED WITH NOTICE THEREOF i
l The Supplemental Disclosure Statement Dated February 11,1994 Relating To First Modification To l
l Bondholders' Committee's Fifth Amended Plan Of Reorganization (the " Supplemental Disclosure Statement") and
- he First Modification to Bondholders' Committee's Fifth Amended Plan of Reorganization dated February 11,1994 l
(the " Modified Plan") having been filed by the Official Bondholders Committee of EUA Power Corporation n/k/a Great Bay Power Corporation (the " Committee") on February 14,1994; and It having been determined after proper notice and a hearing on the Supplemental Disclosure St tement that the Supplemental Disclosure Statement contains adequate information, it is hereby ORDERED and notice is hereby given l
that i
1.
The Supplemental Disclosure Statement is approved.
2.
On or before April 7,1994, the Modified Plan, the Supplemental Disclosure Statement and a ballot conforming to Official Form No.14 shall be transmitted by mail to creditors, equity security holders and other parties as provided in Fed. R. Bankr. P. 3017(d) for the purposes of providing such parties with an opportunity to change their previous vote on the Fifth Amended Plan of Reorganization.
3.
The record date for determining which equity holders, bondholders and holders of Contingent Interest Certificates may vote on the Fifth Amended Plan shall be February 22,1994.
4.
May 13,1994 at 10:00 a.m. is fixed for the heanng on confirmation of the Modified Plan. The hearing shall be held before this Court at Norris Cotton Federal Building,275 Chestnut Street, Fourth Floor, Manchester, New Hampshire 03101.
5.
Pursuant to Fed. R. Bankr. P. 3020(b) objections to confirmation of the Modified Plan shall be in wnting and shall be filed with this Court by May 5,1994 at 4:30 p.m., with copies served upon counsel to the Committee, Mark N. Polebaum, Esquire, Hale and Dorr,60 State Street, Boston, Massachusetts 02109, and counsel to EUA Power Corporation, Alan L. Lefkowitz Dechert Price &
Rhoads,10 Post Office Square, Boston, Massachusetts 02109.
6.
Pursuant to 11 U.S.C. $ 1127(d) all ballots changing a previous vote must be retumed to counsel to the Committee, at the address set forth above, no later than 5:00 p.m. on May 9,1994, Any claim or interest holder who does not wish to change its vote is not required to retum a ballot.
7.
The Committee within three days after mailing the Modified Plan and Supplemental Disclosure Statement as required by this order shall file a certificate of such mailing with this Court accompanied by an attached copy of the Modified Plan and Supplemental Disclosure Statement as mailed. The Committee shall also submit for the personal use of the Judge, an extra copy of the foregoing certificate and attachment.
/s/
James E. Yacos Dated: March 11,1994 United States Bankruptcy Judge
i llY l
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(
UNITED STATES B ANKRUPTCY COURT j
DISTRICT OF NEW HAMPSHIRE -
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In Re:
)
)
Chapter 11 EUA POWER CORPORATION n/k/a
)
Case No. 91 10525 GREAT BAY POWER CORPORATION
)
)
Deotor.
)
BALLOT FOR CHANGING PRIOR VOTE ON OFFICIAL BONDHOLDERS' CONIN1ITTEE'S PLAN OF REORGANIZATION The undersigned, a creditor of EUA Power Corporation Ithe " Debtor')in the amount of S (if.
known), hereby changes its vote on the Bondholders' Committee's Fifth Amended Plan of Reorganization dated December 21,1992 and
[ Check only one box)
'1 ACCEPTS j
r ;
REJECTS
)
I
- ne First Stoci6 cation :o Boncholders' Commit:ee's Firlh Amended P!an et Reorganizauon dated Feoruary !!.1991
'the 'Ntod!6ed Pian 1.
I l
Name of Benede:al Holder 4picase pnnt) l l
l Signature and(if applicable) Title ANY CREDITOR WHO DOES NOT WISH TO CHANGE ITS VOTE IS NOT REQUIRED TO RETURN TIUS BALLOT. IF NO BALLOT IS SUBMITTED, YOU WILL BE DEESIED TO HAVE ACCEPTED OR REJECTED THE >!ODIFIED PLAN BASED ON YOUR PRIOR BALLOT THE OFFICIAL BONDHOLDERS' COMMITTEE UNANIMOUSLY RECOMMENDS THAT YOU CONTINUE TO SUPPORT THE MODIFIED PLAN AND NOT CHANGE YOUR VOTE.
THIS BALLOT MUST BE RECEIVED BY 5:00 P.M. ON MAY 9,1994 IN ORDER FOR YOUR CHANGED VOTE TO COUNT. IT SHOULD BE DELIVERED TO COUNSEL FOR THE OFFICIAL l
BONDHOLDERS' COMh0TTEE IN THE ENCLOSED,SELF ADDRESSED ENVELOPE.
The Plan referred to in this ballot can be confirmed by the Court and thereby made binding on you if it 's accepted by the holders of two-thirds in amount and more than one-half in number of claims in each class voting on the Plan and the holders of two-thirds in amount of equity interest holders in each class voting on the Plan. In the event the requisite acceptances are not obtained, the Court may nevertheless confirm the Plan if the Court finds that j
the Plan accords fair and equitable treatment to the class rejecting it and otherwise satisfies the requirements of i 1129(b) of the Code.
t
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y UNITED STATES BANKRUPTCY COURT 4
DISTRICT OF NEW HAMPSHIRE
)
In Re:
)
)
)
EUA POWER CORPORATION, n/k/a
)
Chapter 11 GREAT BAY POWER CORPORATION,
)
Case No. 91-10525 I
i Debtor.
)
i
)
i SUPPLEMENTAL DISCLOSURE STATEMENT DATED FEBRUARY 11, 1994 RELATING TO FIRST MODIFICATION TO BONDHOLDERS'-
COMMITTEE'S FIFTH AMENDED PLAN OF REORGANIZATION i
I.
INTRODUCTION The Official Bondholders' Committee (the " Committee") of the Debtor, Great Bay Power Corporation, formerly known as EUA j
j Power Corporation (the " Debtor"), provides this Supplemental Disclosure Statement to all known claim and interest holders of the Debtor pursuant to Section 1125 of the Bankruptcy Code.
The l
Committee is providing this Supplemental Disclosure Statement to 1
all of the known claim and interest holders of the Debtor in connection with its First Modification to Fifth Amended Plan of Reorganization.
A copy of the Fifth Amended Plan of Reorganization, as modified by the proposed First Modification is 4
attached to this Supplemental Disclosure Statement as Exhibit A
)
J and is referred to hereafter as the " Plan".
The Plan was filed by the Committee with the United States Bankruptcy Court for the District of New Hampshire (the
" Bankruptcy Court") on February 11, 1994.
The purpose of this Supplemental Disclosure Statement is to provide to the Debtor's e
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claim or interest holder to make a reasonably informed decision whether to change its vote previously filed with respect to the l
Fifth Amended Plan of Reorganization dated December 21, 1992 (the "Fifth Amended Plan").
The Fifth Amended Plan was confirmed by i
i the Bankruptcy Court on March 5, 1993.
Any claim or interest 1
j holder who does not wish to change its vote, as originally filed, i
i is not required to submit any ballot.
If no ballot is submitted, l
the claim or interest holder will be deemed to.have accepted or i
{
rejected the Plan based on its prior ballot.
TERMS DEFINED IN THE PLAN AND NOT DEFINED HEREIN SEALL 1
EAVE THE RESPECTIVE MEANINGS ASCRIBED TO THEN IN THE-PLAN.OR, IF NOT DEFINED IN THE PLAN, AS DEFINED IN THE BANKRUPTCY CODE OR THE 4
j FOURTE AMENDED DISCLCSURE STATEMENT DATED DECEMBER 21, 1992.
4 Each claim and interest holder should carefully review j
the Plan and Supplemental Disclosure Statement and determine i
whether or not to change its vote based on its independent j
[
evaluation and judgment.
In determining whether a plan of 1
reorganization has been accepted by the requisite majority of l
claim and interest holders, only those claim and interest holders who actually vote on the Plan are counted.
i THE COMMITTEE UNANIMOUSLY RECOMMENDS THAT YOU CONTINUE
~
TO SUPPORT THE PLAN AND NOT CHANGE YOUR VOTE.
The Committee does not warrant or make any representation as to accuracy of the'information obtained from the-Debtor or from public records nor does the committee warrant the i
l i
.. ~
2 k!i accuracy of the projected valuations, pro forma' financial data or conclusions of law set'out in the Supplemental Disclosure l
Statement.
The Committee has used reasonable' efforts and relied i
j upon the' views provided to it by its financial, management and legal advisors with respect to the accuracy of these' matters.
)
II.
OVERVIEW A.
Executive Summarv.
The Fifth Imended Plan was 1
j
. confirmed by the' Bankruptcy Court on March 5, 1993. 'The-Plan s.
j provided that it would become effective only-if necessary 5
J l
regulatory approvals and a $45,000,000 plan of reorganization j
J financing' facility for Reorganized EUAP were obtained.
The Fifth.
i l-Amended Plan proposed to obtain $45,000,000 of debt financing on.
terms which would require Reorganized EUAP to issue up to 15% of i
l its common' shares to the lender as an inducement to make the loan.
The financing also expected that the lender would require a first lien on all of the assets of Reorganized EUAP,-interest at as'much l
as prime plus'7% per year and other terms and conditions described I
i in the Fifth Amended Plan.
To date, the Nuclear Regulatory Commission ("NRC") and the New Hampshire Public Utility Commission ("NHPUC") have l
approved the Fifth Amended Plan.
The Federal Energy Regulatory
{
Commission ("FERC") withheld action pending receipt of the final terms of the plan financing facility.
The Committee expects that l'
FERC approval will be obtained upon submission of the financing j
proposed by the Plan.
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s In connection with confirmation of the Plan, the i
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Committee obtained Bankruptcy Court approval to retain the services of Lehman Brothers ("Lehman") to place the proposed debt j
financing.
Notwithstanding Lehman's best efforts to place that financing on the terms described in the Fifth Amended Plan, Lehman i
was unable to obtain the financing on the terms described in the s
Fifth Amended Plan.
i Lehman was, however, able to obtain plan of i
{
reorganization financing on terms different from those proposed in j
the Fifth Amended Plan.
Omega Advisors, Inc.
(" Omega"), a New 1
3 York-based hedge fund manager, on behalf of various funds which it manages, and I:lliott Associates, L.P.
("Elliott"), a private i
investment partnership, have agreed to invest $35,000,000 in Reorganized EUAP in exchange for 60% of the common stock of Reorganized EUAP -- 49% to Omega and lit to Elliott.
A copy of the commitment letter between Omega and the Committee is attached i
hereto as Exhibit B.
After the date of the Exhibit B committment j
letter, Elliott agreed t.o putchase its share of the Omega i
i Financing.
Solely for purposes of the definition of Omega Financing under the Plan, Elliott is deemed to be a designee of Omega and therefore a participant in the Omega Financing.
The i
Committee believes that the proposed $35,000,000 equity investment will provide Reorganized EUAP with more than sufficient cash resources to pay its operating costs until such time as its share i
of electricity and capacity from Seabrook can be sold on a 1 4 t
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long-term basis.
Furthermore, the $35,000,000 equity investment will provide Reorganized EUAP with a stronger capital structure than one which relies on debt.
Under the terms of the Fifth Amended Plan, the Committee has the authority to enter into plan of reorganization financing 4
on terms less favorable than those described in the Plan if the t
Committee concludes that such financing should be accepted.
While the Committee considered proceeding under this authority granted f
to it under the Fifth Amended Plan, the Committee concluded that because the Omega Financing requires the issuance of 60% of the common stock of Reorganized EUAP to the purchasers, the financing should be implemented through a modification to the Fifth' Amended Plan and that creditors should be provided with an opportunity to change their votes.
The Committee believes that the Omega Financing is the l
best available financing.
The Omega Financing places a higher value on the Debtor's business than other financing proposals considered by the Committee.
Moreover, because the Omega Financing is an all equity financing, the value of the remaining 40% of Reorganized EUAP available for distribution to Class One j
and Class Three creditors is enhanced.
The Committee also believes that implementation of the Plan will create more value for creditors than would the only other option available to the Committee -- liquidation of the Debtor.
i 1
l The Committee believes that implementation of the Plan
(
with the Omega Financing is the best alternative available to the'
[
creditors of the Debtor.
Because the Fifth Amended Plan was accepted by all creditors who submitted a vote, the_ Committee i
i recommends that no creditor submit a new vote with respect to the a
Plan.
Implementation of the Omega Financing will result in the Bondholders owning 40% of the common equity of Reorganized EUAP on j
a fully-diluted basis.
Reorganized EUAP will emerge from Chapter 11 without any debt obligations and_$35,000,000 of proceeds from the Omega Financing as working capital for~ future operations, less i
amounts required to pay principal and interest on the Third j
Stipulation (estimated at $9,160,000 as of June 30, 1994) and i
j administrative expenses and reorganization costs (estimated at
$4,500,000).
The $4,500,000 estimate for administrative expenses and
)
reorganization costs includes a $937,500 success fee payable to s
Lehman for services rendered by Lehman in connection with the j
placement and consummation of the Omega Financing.
The Committee f
and the Debtor have filed with the Bankruptcy Court a joint motion j'
to amend the retention of Lehman to reflect Lehman's involvement i
in placing the Omega Financing and to pay the $937,500 success a
j fee.
A copy of the motion to amend the retention of Lehman, which is scheduled to be heard by the Bankruptcy Court on May 13, 1994, 1
1
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is attached hereto as Exhibit E.
If the motion is allowed, Lehman's success fee will be paid _upon the consummation of the 1
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4 sale of Reorganized EUAP's common stock to Omega.
Pursuant to an order of the Bankruptcy Court dated March 11, 1994, the Debtor is also obligated to pay on a current basis the reasonable and necessary out-of-pocket costs and expenses incurred by Omega in connection with the Omega Financing, regardless of whether the Plan is confirmed or the Omega Financing is consummated, provided, however, that payment of such costs and expenses is subject to subsequent oversight by the Bankruptcy Court or objection by a party in interest at such time and in such matter as may be determined by the Bankruptcy Court.
The Committee has also agreed to file with the Bankruptcy Court a motion seeking authority to pay from the Debtor's estate the reasonable fees and expenses 1
incurred by Elliott in connection with the Omega Financing on the same terms as the order obligating the Debtor to pay Omega's reasonable fees and expenses.
Also, the Committee has filed a motion with the Bankruptcy Court seeking authority to pay from the i
Debtor's estate certain fees and expenses of the law firm of Skadden, Arps, Slate, Meagher & Flom ("Skadden") in the amount of
$116,600 for services rendered to Lehman relating to the placement of Plan financing in this case.
A copy of the motion for authority to pay Skadden's fees, which is scheduled to be heard by j
the Bankruptcy Court on May 13, 1994, is attached hereto as Exhibit F.
The Committee expects that the Effective Date of~the Plan should occur by June 30, 1994.
III.
SUPPLEMENTAL INFORMATION A.
Disclosure Statement Recuirements.
The Disclosure Statement requirements are listed in the Fourth Amended Disclosure which accompanied the Fifth Amended Plan.
Reference is made to the Fourth Amended Disclosure Statement for the references contained therein.
B.
Risk Factors.
The risk factors described in the Fourth Amended Disclosure Statement are the same risk factors 4
applicable to the Plan.
Since the Fourth Amended Disclosure Statement, the Committee has obtained plan of reorganization financing, a ten megawatt power contract referred to in paragraph 4 of Section C has in fact been signed and is in full force and effect and the necessary regulatory approvals for the Fifth Amended Plan becoming effective, except for FERC, were obtained.
C.
Debtor's Post-Petition Ooerations.
The information contained in the Disclosure Statement continues to describe accurately the Debtor's operations during the pendency of the Chapter 11 case.
In connection with confirmation of the Fifth Amended Plan, the Debtor, the Committee and the Participating Joint Owners entered into the Third Stipulation.
The Third Stipulation has provided the Debtor with adequate financing to continue its operations throughout the period from confirmation of the Fifth Amended Plan to date.
To date, the borrowings on the Third Stipulation have been in the range of $1,000,000 to $2,000,000.
The Debtor expects that $1,000,000 to $2,000,000 will continue to be the range of.
9
]
1 t,
borrowings until late March 1994 when Seabrook will be shut down I
l-for its regularly scheduled refueling.
That refueling is scheduled to last'for a period of approximately 60 days.
While i
the plant is being refueled, no electricity will be generated'and
{
i.
therefore the Debtor will have no revenues.
By early June 1994, I
the time by which Seabrook is expected to be back on line l
following the refueling, the Committee anticipates that the borrowings outstanding on the Third Stipulation will total ll approximately S8,700,000.
The Third Stipulation allows the Debtor 1
j to borrow up-to $20,000,000.
The Debtor is presently in default of the Third l
Stipulation because of the Committee's failure to obtain plan financing to effect the Fifth Amended Plan'and necessary i
i l
regulatory approvals by the dates required by the Third Stipulation.
While the Participating Joint Owners have taken no j.
action to enforce the defaults and have, in fact, continued to I
fund the Debtor's operations, the Participating Joint Owners have i
j not formally waived the defaults.
D.
Plan Modification.
The classification and i
treatment of claims set forth in the Fifth Amended Plan have been i
changed only to the extent required to implement the Omega Financing.
The Fifth Amended Plan contemplated a $45,000,000 l
l secured debt financing.
The Omega Financing is an all equity 1
a financing.
The Fifth Amended Plan contemplated issuance of up to 15% of the equity of Reorganized EUAP to the plan funder.
The 1
Omega Financing requires issuance of 60% of the equity of l 1 i
k.
~,
- ~.
J' Reorganized EUAP to Omega and Elliott but will not subject Reorganized EUAP to any debt obligations.
As a result of the Omega Financing, 40% of the equity of Reorganized EUAP is available for distribution to the holders of Class One and Class Three creditors.
The 40% available for Claes one and Class Three creditors will be split between those classes in the same proportion as provided for in the Fifth Amended Plan -
- 85% to Class One and 15% to Class Three.
As a result, the Plan provides that 34% and 6%, respectively, of the equity of Reorganized EUAP, determined on a fully diluted basis, will be distributed to Class One and Class Three creditors.
Under the Fifth Amended Plan, had the plan financing described therein been available, which it was not, 85% of the equity of Reorganized EUAP, on an undiluted basis, would have been available for distribution to holders of Class One and Class Three claims.
The Omega Financing does not provide for any breakup fee and the Committee is permitted to accept alternative plan financing if a more advantageous proposal is made.
The Committee does not expect to receive a more advantageous proposal.
E.
Alternatives to Omeca Financing.
In connection with confirmation of the Fifth Amended Plan, Lehman was retained as placement agent to place the then proposed $45,000,000 secured debt plan of reorganization financing facility.
Lehman first tried to place the facility with persons other than Bondholders.
Lehman contacted over 200 financial institutions and had serious discussions with a number of financial institutions to provide
- l this financing.
None of those efforts, which were made over a four month period from April 1993 through August 1993, resulted in financing commitments being obtained from any non-Bondholder.
Lehman then concentrated on trying to raise the $45,000,000 debt financing from the Bondholders.
Lehman was able to obtain commitments for $25,000,000 of debt financing from the Bondholders.
The Committee requested the Participating Joint Owners, the utilities who have been providing debtor-in-possession financing to the Debtor throughout the Chapter 11 case, to provide the remaining $20,000,000 of debt financing.
While the Participating Joint Owners were considering this request, Leucadia National ("Leucadia") and CNA Realty Corp.,
Continental Assurance company, on behalf of its separate account, and Continental Assurance Company Pension Investment Funds (collectively, "CNA") proposed a $45,000,000 financing consisting of a $25,000,000 equity investment for 45% of the equity of Reorganized EUAP and a $20,000,000 revolving line of credit which would require payment of a 1% origination fee, a 1% unused 4
commitment fee, an interest rate of prime plus 6%, 15% of the equity of Reorganized EUAP and three out of five seats on i
Reorganized EUAP's board of directors.
The Participating Joint Owners indicated that they were willing to provide $20,000,000 of revolving debt financing, provided $25,000,000 of Bondholder funds were invested as equity.
The Committee determined that the Bondholders willing to purchase,
e
i
$25,000,000 of equity would have required 45% of the equity of Reorganized EUAP for that investment.
In addition to being paid interest at a rate of prime plus 6%, the Participating Joint i
Owners required a default provision which provided that, if funds I
(
were drawn on the revolving debt facility and not repaid within I
one year, the Participating Joint Owners would be entitled to elect all of the members of Reorganized EUAP's board of directors.
The Participating Joint Owners also requested a seat on the. board i
of directors from the Effective Date and 51% of all proceeds from t
the sale of Debtor's interest in Seabrook over the revolving credit amount in the event of a default.
Of the three financing proposals finally. considered, the Committee concluded that the Omega Financing was superior.
The Omega Financing values Reorganized EUAP higher than the j
Leucadia/CNA proposal.
The financing proposed by the j
i Participating Joint Owners contained onerous and unacceptable control features.
The all-equity financing provided by Omega and Elliott will provide Reorganized EUAP with a much stronger capital base than either of the other proposals.and therefore increases-the.
likelihood that Reorganized EUAP will successfully realize the long-term value of its interest in Seabrook.
The Participating Joint Owners include the largest utility in New England.
As such, that utility is a competitor of Reorganized EUAP in the long term power' markets.
Providing such'a competitor with board representation, and under certain,
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circumstances complete control of the board, was in the judgment j
of the Committee an extremely onerous provision and was wholly i
unacceptable based on the availability of the Omega Financing.
)
)
After extensive marketing efforts by Lehman, the i
j marketplace has determined that the cost of financing the Plan is i
l 60% of Reorganized EUAP's equity.
The Committee believes, and has been advised by Lehman, that the Omega Financing is a fair financial transaction.
i F.
Means of Execution and Imolementation'of the Plan.
j As under the Fifth Amended Plan, the New Securities to be issued j
to the holders of Class one and Class Three claims will be issued pursuant to Section 1145 of the Bankruptcy Code.
The shares of Reorganized EUAP which are to be issued to
)
Omega and Elliott will be issued under private placement i
exemptions under the Securities Act of 1933, as amended, and j
applicable state and local securities laws.
Reorganized EUAP will enter into a registration rights j
agreements with Omega and Elliott and any other person who will u
i own 10% or more of the common stock of Reorganized EUAP as of the Confirmation Date.
The Committee expects that the registration
?
rights agreement will permit the holders to demand multiple registrations, provided that any demand must be for registration l
l of 5% or more of the total number of shares of Reorganized EUAP
]
t outstanding at the time of the demand and subject to.the right of l
the Reorganized EUAP board of directors to delay'the demand and registration on one occasion for up to ten (10) days only for J
k i
i l
l bonafide business reasons.
Reorganized EUAP will be responsible
{
l for the expenses of any registration under the registration rights I
i l
agreement.
The Committee intends to use good faith efforts to list the New Securities to be issued pursuant to the Plan on the NASDAQ i
l National Market System.
Reorganized EUAP will not meet the listing requirements for the NASDAQ National Market System, but the Committee believes that the listing requirements that are not satisfied will be waived.
There can be no assurance, however, that the Committee will be successful in listing the New Securities.
As with the Fifth Amended Plan, the Plan is subject to approval by the NHPUC, FERC and the NRC.
Approval by the Securities and Exchange Commission is not required because the Debtor has obtained the designated status of exempt wholesale generator pursuant to the Public Utility Holding Company Act of 1935, as amended.
There is the possibility that one or more of the investments proposed by Omega would be subject to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which requires that persons contemplating acquisitions meeting certain commerce and size tests file notification thereof with federal antitrust authorities and wait a specified period of time prior to consummation.
As part of the Committee's efforts to obtain consummation of the Fifth Amended Plan, requests for approval of the Fifth Amended Plan had been filed with each of the NHPUC, the.
FERC and the NRC.
The NHPUC and the NRC each separately approved the Fifth Amended Plan.
The FERC was waiting for the final 1
l details of the financing that would be used to implement the Plan before it made its' ruling.
The NRC approval required that the change of ownership occur by February 16, 1994, unless extended by i
further order of the NRC.
The Committee has requested the NRC to extend the deadline for consummating the change of ownership that will be accomplished pursuant to the Plan and will seek 1
confirmation of the NRC's prior approval.
The Debtor will amend its application to FERC and seek either confirmation of its prior I
approval or amended approval from the NHPUC.
The Committee believes the necessary regul-tory approvals will be obtained, i
although there can be no assurance that that will be the case.
The Third Stipulation, although presently in default, continues in effect and the Committee expects that the Participating Joint owners will continue to advance funds under 4
the Third Stipulation.
The Third Stipulation will provide 4
sufficient financing to the Debtor during the period between l
confirmation of the Plan and the time that the Plan becomes i
effective provided that the Participating Joint Owners continue to 1
J make funds available thereunder.
G.
Future Ooerations.
The Committee has updated the projections which were attached to the Fourth Amended Disclosure Statement.
The updated projections incorporate new revised estimates of the Debtor's share of the costs of operating Seabrook as well as updated revenue projections.
The Committee has i
i 1
a prepared two sets of projections:
'(1) the base case projection which contains the committee's best estimate of when long-term power contracts will be placed; and (2) the floor case projection j
I
]
j which assumes that longer-term power contracts'are further delayed l
j beyond the base case projection for an additional two years.
i Seabrook's revised expense projections anticipate that l
operating costs will be lower than previously forecasted and the 4
committee anticipates that unit availability will be higher than i
j previously forecasted.
In addition, the New Hampshire nuclear' facilities tax which was in dispute as of the time of the Fourth i
Amended Disclosure Statement has been resolved and has resulted in a substantial reduction in the Debtor's tax burden.
l The revised projections reflect a delay in the time by i
which the Committee had expected Reorganised EUAP to place substantial long-term power contracts.
As a result, the period when Reorganized EUAP will continue to sell its share of Seabrook
]
energy,and capacity in the spot market is longer than previously 4
j projected.
As a result, expected revenues will be lower.
The-f revised forecasts show that the funds raised from the Omega j
Financing are more than sufficient to finance operating-shortfalls J
through the date when long-term power contracts can be placed under both the base case and floor case projections.
Under the base case and floor case projections, Reorganized EUAP's year-end cash reserves will not dip below $16,000,000 and $7,500,000, respectively.
Also, because the Omega Financing is an all equity
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l financing, Reorganized EUAP might be able to borrow additional funds if actual results are worse than even the floor case and the need arises.
Since the Fourth Amended Disclosure Statement, the Debtor, through the request of the Committee, has retained UNITIL Resources, Inc. ("UNITIL") as its marketing agent.
UNITIL has 2
been responsible for selling the Debtor's share of energy and l
capacity of Seabrook since April 1, 1993.
In addition, the
^
Committee has entered into an agreement with UNITIL which will become effective on the Effective Date which will provide for UNITIL to act as Reorganized EUAP's managing agent.
UNITIL's status as marketing and managing agent is terminable on 90 days notice.
The information contained in the Fourth Amended 1
Disclosure Statement concerning the marketing strategy and the market for electricity continues to be the Committee's view on those matters except that the time when utilities will be prepared to enter into long-term power contracts on the economic terms similar to the Fourth Amended Disclosure Statement is now projected to be delayed until 1998 under the base case.
The updated projections for Reorganized EUAP's future operations are attached as Exhibits C (base case) and D (floor case).
The base case is the case which the Committee believes is the most reasonable set of assumptions of what is likely to' occur.
4
e based on the current information and conditions.
The floor case assumes that long-term power contracts at favorable long-term prices are not available until 1999.
These projections constitute the Committee's present i
view of the costs and expenses and revenues which it believes Reorganized EUAP is likely to incur and obtain.
However, like any projections, they are only good faith estimates of what might 1'
happen in the future.
There is no assurance that these projections will, in fact, be obtained.
In the Fourth Amended Disclosure Statement, the Committee's financial advisor estimated that the fair market value of the Debtor's interest in Seabrook was approximately
$130,000,000.
The estimate was based on a discounted cash flow i
analysis through 2029 at a 13% discount rate.
That estimate of value was made on a going concern basis by projecting the revenues j
that the Seabrook Interest would generate under prices established by a then current market contract for electrical capacity and i
energy, filed with the FERC on March 23, 1992, between United Illuminating as seller and UNITIL Power Corporation as buyer.
In the course of the Committee's attempts through Lehman j
to arrange Plan of Reorganization financing, the financial markets
^
have implicitly valued the Seabrook Interest at significantly less than $130,000,000.
The financial markets' lower valuation may reflect a number of considerations:
a different expectation of I
the magnitude and timing of future market prices; a higher
]
implicit discount rate than 13t; or a shorter valuation time i
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1 horizon.
Most importantly, the financial markets' lower implicit i
valuation is based on a pre-financing transaction in a distressed l
l situation, as opposed to a going concern analysis of the Seabrook Interest.
As a result of the terms upon which 60% of Reorganized EUAP will be sold to Omega and Elliott for $35,000,000, the overall value of Reorganized EUAP based on that investment is approximately $58,000,000.
However, that investment is being made j
in a distressed situation.
The Committee believes that in this distressed situation the pre-financing valuation is lower than the value which the market will apply after the' financing.
How the 1
market will value the securities being issued by Reorganized EUAP cannot be determined at this time.
Lehman has advised the Committee, however, that it is reasonable to expect that the securities issued pursuant to the Plan following the Effective Date may trade at a price higher than the price at which the Omega Financing is being consummated.
The Committee expects that the Effective Date of the Plan should occur by June 30, 1994.
H.
Certain Federal Income Tax Consecuences.
Except to the extent that the Disclosure Statement provides that the Bondholders will exchange their Notes for in excess of 85 percent of the equity in the Debtor, the Disclosure Statement continues to describe accurately the potential federal income tax consequences of the Plan to holders of claims.
Moreover, ex' cept as provided,.
~ - _..
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below, the Disclosure Statement continues to describe accurately the potential federal income tax consequences of the Plan to the Debtor.
1.
Amount and Utilization of Net Ooeratina Loss i
[.
Carrvforwards and Investment Tax Credits.. As of December 31, l
1993, the Debtor had unrestricted net operating loss carryforwards f
("NOLs") of approximately $105 million.
If not utilized, the-Debtor's NOLs are scheduled to expire between'2005 and 2008.
The i
j Debtor's investment tax credit carryforwards have been exhausted.
i.
Prior to February 5, 1993, the Debtor,.as a wholly-owned i
subsidiary of Eastern Utilities Associates ~("EUA"), was a member i
l of the group of corporations filing a consolidated tax return with
]
EUA (the "EUA Group").
On February 5, 1993,' pursuant to the EUA 1
j Settlement, the Debtor redeemed all of.its outstanding stock and i
4
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ceased to be a member of the EUA Group.
Nevertheless, as a result
]
of the Debtor's membership in the EUA Group through February 5, i
1993, the Debtor's NOLs could be reduced and possibly exhausted by 1
l the other members of the EUA Group if there were subsequent i
adjustments (by the Internal Revenue Service -(the " Service") ' or j
otherwise) to the taxable income of the EUA Group for the group's 1
pre-1994 consolidated return years, including the portion of the group's 1993 consolidated return year after the. Debtor departed
]
from the EUA Group.
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]l 2.
General Limitation on Utilization of NOLs i
Followine an Ownershio Chance.
Section 382 (in conjunction with 4
Section 383) of the Tax Code generally restricts a corporation's
]
utilization of its NOLs after the " Change Date" (Latu, the date on which the corporation undergoes an ownership change) by limiting the amount of income earned by the corporation after the ownership change that may be offset by NOLs that arose prior to the ownership change (the "Section 382 Limitation").
Although the l
matter is not free from doubt, the Committee believes that an ownership change, within the meaning of Section 382 of the Tax Code, may have occurred with respect to the-Debtor on or before
{
l l
February 5, 1993, the date on which the Debtor redeemed all of its outstanding stock.
i Moreover, pursuant to the Plan, Omega and Elliott, on l
behalf of various funds that they manage, will invest S35 million in the Debtor in exchange for 60 percent of the common stock of the Debtor.
Upon the consummation of the Omega Financing, which a
consummation is expected to occur on the Effective Date, an ownership change, within the meaning of Section 382 of the Tax Code, will occur with respect to the Debtor.
If the Omega Financing is consummated prior to the Effective Date, then the a
acquisition of New Securities by the Class One and Class Three creditors could cause (or contribute to causing) the Debtor to undergo a further ownership change on or after the Effective Date. 2
,~
(
In general, when an ownership change occurs, a corporation's utilization of its pre-Change Date NOLs for taxable periods following the Change Date (i e, its Section 382 Limitation) is limited to the annual amount of its NOLs equal to j
the product of (i) the value of the corporation immediately before the ownership change multiplied by (ii) the long-term tax-exempt rate on the date of the ownership change (as announced each month by the Treasury Department).
To the extent that the annual limitation is not utilized in any year, the annual limitation for i
the following year is increased on a cumulative basis.
The long-term tax-exempt rate for ownership changes occurring in March, 1994, is fixed at 5.15 percent.
As a general matter, the value of a corporation for purposes of calculating its Section 382 Limitation is equal to the value of the corporation's stock immediately before it undergoes its ownership change.
The application and/or applicability of this rule to the Debtor is uncertain, as the Debtor has had no stock outstanding since February 5, 1993.
The Committee believes, but cannot confirm, that in the absence of corporate stock, the j
i Debtor will be valued using alternative valuation methods, subject to the rules set forth below, and will not be assigned a value of zero.
Furthermore, in calculating the Section 382 Limitation, a special rule reduces the value of the corporation for any capital contribution received by the corporation as part of a plan a principal purpose of which is to avoid or increase the,
l corporation's Section 382 Limitation.
Except as provided in regulations, any capital contribution made during the two-year period ending on the Change Date is presumptively treated as part of a plan a principal purpose of which is to avoid or increase the corporation's Section 382 Limitation.
At present, no regulations have yet been promulgated which would explicitly allow for the inclusion of the Omega Financing in the valuation of the Debtor.
Yet, while no such regulations have been promulgated, the legislative history of Section 382 of the Tax Code indicates that Congress intended that such regulations, when promulgated, will allow for the inclusion of capital contributions made to continue basic operations of the corporation's business.
Accordingly, the Committee believes that, based on such legislative history, the Debtor may be permitted to include the Omega Financing in its valuation for purposes of calculating its Section 382 Limitation.
Because no regulations have actually been promulgated, however, there can be no assurance that the Debtor will, in fact, be 4
i permitted to include the Omega Financing in its valuation.
Also, as a general matter, if a redemption or other corporate contraction occurs in connection with an ownership change, the value of the corporation for purposes of calculating the Section 382 Limitation is determined after taking such redemption or other corporate contraction into account.
i Accordingly, if the Debtor is deemed to have undergone an a
ownership change as a result of its redemption of all of its outstanding stock, such redemption will be taken into account in valuing the Debtor at that time.
Finally, in the case of a corporation involved in proceedings under Chapter 11 of the Code that either (1) does not qualify'for the Bankruptcy Exception discussed in the Disclosure Statement or (ii) elects out of the Bankruptcy Exception, the value of the corporation for purposes of computing the Section 382 Limitation is adjusted to reflect any increase in the corporation's value as a result of any cancellation or surrender of claims of creditors in the transaction.
The Committee continues to believe that by electing out of the Bankruptcy Exception, and by utilizing the immediately foregoing rule, the Debtor can effect the most efficient use of its NOLs.
Due to-inherent uncertainties regarding, among other items, (i) the extent to which the Debtor's NOLs may be utilized by the EUA Group, (ii) the valuation of the Debtor for purposes of Section 382 of the Tax Code, and (iii) the fact that the Debtor will have had no stock outstanding prior to the consummation of the Omega Financing and the Effective Date, there can be no assurance with respect to the extent of the Debtor's ability to offset future income with its NOLs.
Further, due to uncertainties regarding the amount and timing of the Debtor's future income and future income tax rates, the value to the Debtor of utilizing its NOLs on such a restricted basis cannot be ascertained with any certainty.
INFORMATION WITH RESPECT TO THE DEBTOR WAS OBTAINED BY THE COMMITTEE FROM MANAGEMENT OF THE DEBTOR OR WAS PUBLICLY AVAILABLE, AND THE COMMITTEE MAKES NO REPRESENTATION AS TO THE ACCURACY OF SUCH INFORMATION.
DUE TO THE UNSETTLED AND COMPLEX NATURE OF SOME OF THE TAX ISSUES, AS WELL AS THE POSSIBILITY THAT DEVELOPMENTS SUBSEQUENT TO THE DATE HEREOF COULD AFFECT THE TAX CONSEQUENCES OF THE PLAN, THE FOREGOING DISCUSSION SHOULD NOT BE REGARDED AS DEFINITIVE OR AS COVERING ALL POSSIBLE TAX CONSEQUENCES.
ADDITIONALLY, THIS
SUMMARY
DOES NOT DISCUSS ALL ASPECTS OF FEDERAL i
INCOME TAXATION THAT MAY BE RELEVANT TO A PARTICULAR CREDITOR OR STOCKHOLDER IN LIGHT OF ITS PERSONAL INVESTMENT CIRCUMSTANCES OR TO CERTAIN PERSONS SUBJECT TO SPECIAL TREATMENT UNDER THE FEDERAL i
INCOME TAX LAWS (FOR EXAMPLE, INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS, BROKER-DEALERS, AND FOREIGN PERSONS) AND DOES NOT DISCUSS ANY ASPECT OF STATE, LOCAL, OR FOREIGN TAXATION.
1 4
CREDITORS AND STOCKHOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE PLAN, INCLUDING THE APPLICABILITY OF ANY STATE, LOCAL, AND FOREIGN TAX LAWS.
THE FOREGOING ANALYSIS IS BASED UPON THE TAX CODE, REGULATIONS, RULINGS AND DECISIONS IN EFFECT ON THE DATE HEREOF, AND UPON PROPOSED REGULATIONS, ALL OF WHICH ARE SUBJECT TO CHANGE (POSSIBLY WITH RETROACTIVE EFFECT) BY LEGISLATION, ADMINISTRATIVE ACTION, OR JUDICIAL DECISION.
MOREOVER, DUE TO A LACK OF-DEFINITIVE JUDICIAL OR ADMINISTRATIVE AUTHORITY AND INTERPRETATION, SUBSTANTIAL UNCERTAINTIES EXIST WITH RESPECT TO VARIOUS TAX CONSEQUENCES OF THE PLAN AS DISCUSSED HEREIN.
NO l
l RULINGS HAVE BEEN OR ARE EXPECTED TO BE REQUESTED Fh0M THE SERVICE
{
CONCERNING ANY OF THE TAX MATTERS DESCRIBED HEREIN, AND THERE CAN BE NO ASSURANCE THAT THE SERVICE WILL NOT CHALLENGE THE POSITIONS TAKEN WITH RESPECT TO ANY OF THE ISSUES ADDRESSED HEREIN OR THAT A COURT WOULD NOT SUSTAIN SUCH A CHALLENGE.
i I.
Ballots.
Accompanying this Supplemental Disclosure Statement is a ballot which you must complete and return to counsel to the Committee at the following address:
Frank W.
Getman Jr.,
Esquire, Hale and Dorr, 60 State Street, Boston, Massachusetts 02109 by May 9, 1994 if you wish to change your vote from the vote previously submitted.
If you do not wish to change your vote, it is not necessary to complete and return this ballot.
The Committee recommends that you not change your vote.
The.
e
I e
i hearing on confirmation of the Plan has been scheduled for
,i 3
May 13, 1994 at 10:00 a.m.
I j
THE OFFICIAL BONDHOLDERS' COMMITTEE OF EUA POWER CORPORATION 4
n/k/a GREAT BAY POWER CORPORATION i
l By Authorized Committee Member, s
4
/s/
j E.
Decker Adams, Vice President j
State Street Bank and Trust Company i
Of Counsel:
/s/
Mark N.
Polebaum, Esq.
(.NH 01615)
B Frank W. Getman Jr., Esq. (BNH 04234)
HALE AND DORR 60 State Street Boston, Massachusetts 02109 Dated:
February 11, 1994 4
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l s
EXHIBIT A UNITED STATES BANKRUPTCY COURT 4
DISTRICT OF NEW RAMPSHIRE
)
4 In Re:
)
l
)
Chapter 11 EUA POWER CORPORATION n/k/a
)
Case No. 91-10525 GREAT BAY POWER CORPORATION,
)
)
Debtor.
)
)
FIRST MODIFICATION TO BONDHOLDERS' COMMITTEE'S FIFTH AMENDED PLAN OF REORGANIZATION DATED FEBRUARY ll, 1994 The Official Bondholders' Committee (the " Committee") of Great Bay Power Corporation, f/k/a EUA Power Corporation (the " Debtor")
proposes the following First Modification To Fifth Amended Plan of Peorganization to all of the Debtor's claim and Interest holders pursuant to Section ll21(c) of the Bankruptcy Code.
ARTICLE I.
DEFINITIONS 1.1 For purposes of the Plan, the following terms shall have the respective meanings set forth below:
(a)
Allowed Amount means (a) the amount of any Claim that has been allowed by a Final Order; or (b) the amount of any claim that is timely filed with the Clerk of the Bankruptcy Court or that is listed by the Debtor in its Schedule of Assets and Liabilities filed with the Bankruptcy Court on April 5, 1991, as amended or supplemented from time to time in accordance with Federal Rule of Bankruptcy Procedure (the " Bankruptcy Rules")
as undisputed, noncontingent or liquidated and as to which claim (i) no objection to the allowance thereof has been filed with the Bankruptcy Court within any period of limitation fixed by the Bankruptcy Code, the Bankruptcy Rules or orders of the Bankruptcy Court or (ii) an objection has been timely filed with the Bankruptcy Court but has been withdrawn prior to entry of a Final Order with respect to the Claim, or (iii) an
objection has been filed, which objection is determined in favor of the claimant by a Final Order; or (c) the amount of'a claim for an administrative expense as to which (i) no objection has been filed'within any period of limitation fixed by the Bankruptcy Code, applicable Bankruptcy Rules or (ii) an objection has been timely-filed but withdrawn prior to entry of a Final Order on the Claim or (iii) as to which Claim a timely objection has been filed, which objection is determined in favor of the claimant by a Final Order or (iv) with respect to fees and expenses of Professional Persons, the amount of such' fees and expenses allowed by a Final Order; or (d) with respect to the Series B Notes and the Series C Notes, the principal amount of the Notes, together with accrued and unpaid interest at the rate provided for in the Indenture-through the Filing Date.
(b)
Bankruotev Case means In re EUA Power Corporation, n/k/a/ Great Bay Power Corporation, Case No. 91-10525-JEY pending before the Bankruptcy Court.
(c)
Bankruotev Code means the Bankruptcy Reform Act d
of 1978, 11 U.S.C. S5101 21 122, as it may be amended from time to time.
(d)
Bankruntev Court means the United States Bankruptcy Court for the District of New Hampshire or such other court as~may hereafter assume jurisdiction over the Debtor's Chapter 11 Case.
(e)
Bondholders means all holders of the Series B Notes and the Series C Notes as of the Record Date.
(f)
CICs means the Contingent Interest Certificates issued by the Debtor.
(g)
Clair means any claim, as that term is defined in the Bankruptcy Code, against the Debtor.
(h)
Committee means the Official Bondholders' Committee for EUA Power Corporation appointed by the United States Trustee on March 14, 1991, as modified by the addition or removal of members from time to time..
l l
l t
l l
l (i)
Confirmation Date means the date on which an order of the Bankruptcy Court confirming the Plan is entered on the docket of the Bankruptcy Court in the Bankruptcy Case.
(j)
Debtor means Great Bay Power Corporation, f/k/a EUA Power Corporation, the debtor-in-possession in Chapter 11 Case No. 91-10525.
(k)
Decommissionino Costs Guaranty means that certain Limited Guaranty dated May 4, 1990 pursuant to which EUA guaranteed the obligations and liabilities of the Debtor for Decommissioning Costs and Costs of Cancellation as defined in the Joint Ownership Agreement.
t l
(1)
Effective Date means the date designated in i
Article VIII.
(m)
E26 means Eastern Utilities Associates, a Massachusetts voluntary association.
l (n)
EUA Service means EUA Service Corporation, a Massachusetts corporation.
i (o)
EUA Settlement means that certain Settlement Agreement dated November 18, 1992 among the Debtor, EUA and the cernmittee approved by an
(
order of the Bankrbptcy Court dated December 8, 1992.
(p)
FERC means the Federal Energy Regulatory Commission.
(q)
Filino Date means February 28, 1991.
(r)
Final Order or Orders means an order or orders of a court or administrative agency of competent jurisdiction which shall not have been reversed or stayed, as duly entered on the docket of the case or proceeding in which the order is or orders are issued; the time to appeal which shall have expired, with no appeal or motion seeking rehearing, review or reconsideration pending, as a result of which, such order or orders shall have become final in accordance with applicable law.
l (s)
Final Confirmation Order means an order confirming the Plan which is entered by the Bankruptcy Court and duly entered on the docket of the Bankruptcy Court in the Bankruptcy Case l
1 with respect to which no stay has been entered 4
and the time for filing appeals has' expired with.
no appeals pending.
I (t)
'First Sticulation'means the Stipulation and, Consent Order.Under 11 U.S.C.
55.363, 364 and 365 j
-Concerning Advances by Participating Joint-Owners dated as of. August 29, 1991.
l (u).
Gao Period means the time period beginning on.the Confirmation Date and ending on the Effective l
Date.
(v)
Indenture means the Indenture of Trust. dated as I'
of November 15, 1986, as amended by:three i
supplemental indentures dated. February.24,~1987, j
May 1,.1988'and November 1, 1988, pursuant to j
which the Debtor issued the Series B Notes and j.
the Series.C Notes.
(w)
Indenture Trustee means the State Street Bank and-j Trust Company.
t (x)
Interest-means any equity security in the Debtor, j
as that term is. defined;in the Bankruptcy' Code.
j (y)
ID& means the State of New Hampshire Industrial.
Development Authority.
j' (z)
Joint Ownershio Acreement means the-Agreement >for l
Joint Ownership, Construction and Operation of j
New Hampshire NuclearLUnits dated May 1, 1973, as l
amended.
(aa)
Joint Owners means all current Participants (as defined in the Joint Ownership' Agreement)
)l (ab)
New Securities means the' shares of common stock issued by Reorganized EUAPLon the Effective Date, l
representing 100% of the equity in Reorganized j
EUAP, in accordance with the revised Articles of
~
Incorporation of Reorganized EUAP.
}
A (ac)
NHPUC means the New Hampshire Public Utilities Commission.
(ad)
NEC means the Nuclear Regulatory Commission.
i i
(ae)
Notes means the Series B Notes and the Series C Notes.
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1 (af)
Omeca Financino means the sale of 60% of the New Securities to Omega Advisors, Inc., or its l
designees, for an aggregate sale price of $35
~
million on the terms set forth in the Stock Purchase Agreement dated April 7, 1994, a copy of which is attached hereto as Exhibit A.
l (ag)
Particioatina Joint Owners means United l
Illuminating and Connecticut Light & Power.
(ah)
Plan means this plan of reorganization and the exhibits hereto, either in their present form or as they may be altered, amended, or modified from time to time.
(ai)
Plan Reculatory Acorovals means, to the extent reasonably deemed necessary by the Committee: (i) l a Final Order or Orders of the NHPUC approving the reorganization of the Debtor, the issuance of the New Securities by Reorganized EUAP, and granting any other necessary approvals with respect to the transactions contemplated hereby to occur by the Effective Date, (ii) a Final Order or Orders of FERC approving the reorganization of the Debtor and granting any other necessary approvals with respect to the transactions contemplated hereby to occur by the Effective Date, (iii) a Final Order or Orders of the NRC granting authorization for the transfer of the Seabrook license, and any necessary approvals with respect to the transactions contemplated hereby to occur by the Effective Date, or (iv) any other governmental approval or order reasonably deemed by the Committee to be necessary under applicable law with respect to the transactions contemplated hereby to occur by the Effective Date.
(aj)
Professional Persons means those attorneys, i
accountants, appraisers, financial advisors, auctioneers or other professional persons retained by the Debtor or the Committee or the Court, or other professionals authorized to be paid out of the assets of the Debtor's estate.
(ak)
Pro Rata means the same proportion that the l
Allowed Amount of a Claim in a particular class l
bears to the aggregate Allowed Amount of all Claims in such class.
(al)
PURCA means the Public Utility Holding Company Act of 1935, as amended. ;
1
(am)
Record Date means, (i) with respect LG voting on the Plan, the date fixed by the Bankruptcy Court as the record date for determination of the holders of Interests, CICs, and the Series B Notes and Series C Notes for the purpose of voting on the Plan or (ii) with respect to distributions under the Plan, the date fixed by the Bankruptcy Court as the record data for determination of the holders of Intr; rests, CICs, and the Series B Notes and Series C Notes for the purposes of making distribution,< under the Plan.
(an)
Reorcanized EUAP means the Debtor after the cancellation of the Debtor's existing Interests on and after the Effective Date.
(ao)
Seabrook means the Seabrook Nuclear Power Plant, Seabrook, New Hampshire.
(ap)
Seabrook Interest means all of Debtor's right, title and interest in and to its 12.1324%
interest in Seabrook.
(aq)
Second Sticulation means the Second Stipulation and Consent Order Under 11 U.S.C.
SS 363, 364 and 365 Concerning Advances By Participating Joint Owners.
(ar)
SEC means the Securities and Exchange Commission.
(as)
Series B Notes means the notes designated as "17X% Series B Secured Notes due May 15, 1993" issued pursuant to the Indenture and secured by a first lien on the Seabrook Interest.
(at)
Series C Notes means the notes designated as "174% Series C Secured Notes due November 15, 1992" issued pursuant to the Indenture and secured by a first lien on the Seabrook Interest.
(au)
Service Acreement means the agreement between the Debtor and EUA Service dated January 2,
- 1992, 1.2 Terms defined in the Bankruptcy Code or Bankruptcy Rules and not otherwise specifically defined in the Plan shall, when used in the Plan, have the meanings ascribed to them in the Bankruptcy Code or Bankruptcy Rules.
ARTICLE II.
ADMINISTPATIVE EXPENSES AND PRIORITY CLAIMS The Allowed Amount of all claims for administrative expenses and Claims entitled to priority in accordance with Section 507(a) of the Bankrup*cy Code, with the exception of Claims entitled to priority in accordance with Section 507(a)(7) of the Bankruptcy Code, including the Claims of Professional Persons, shall be paid in full in cash on the Effective Date, or upon the date on which the amount of each such Claim becomes an Allowed Amount, whichever i
shall be later.
All trade and service debts and obligations incurred in the normal course of business by the Debtor during the Debtor's Chapter 11 proceedings shall be paid in the ordinary course of business by the Debtor or, at the Debtor's option, in' full in cash on the Effective Date.
The Allowed Amount of all Claims entitled to priority in accordance with Section 507 (a) (7) of the Bankruptcy Code, if any, shall be paid, at the Debtor's option, in cash upon the Effective Date or in installments over six years.
If paid over six years, the principal amount of each such Claim shall bear interest at a rate determined by the Debtor and the holder of such claim or, if necessary, by the Bankruptcy Court, to be sufficient to provide that the deferred payments will have a value equal to the present value of the Allowed Amount of each such Claim.
ARTICLE III.
DESIGNATION OF CLASSES OF CLAIMS AND INTERESTS 3.1 All Claims against and Interests in the Debtor of i
whatever nature, whether or not scheduled, liquidated or unliquidated, absolute or contingent, including all Claims arising from the rejection of executory contracts, and all Claims or Interests arising from the past or present ownership or sale or purchase of the securities of the Debtor, including all administrative expense and priority Claims, shall be satisfied and I
discharged pursuant to and as provided in this Plan.
All Claims and Interests, excluding all administrative expense and priority Claims in accordance with Section ll23 (a) (1) of the Bankruptcy Code which are addressed in Article II hereof, are classified as follows:
(a)
Class One.
All Clains based upon the Notes and the Indenture to the extent of the value of the interest in the property of the Debtor granted to the holders of such Claims, or to the Indenture Trustee under the Indenture, to secure those Claims. 4 4
E l
(b)
Class Two.
All Claims arising prior to the Filing Date held by taxing authorities for unpaid real property taxes, which are secured by a lien on property of the Debtor.
Class Two shall include any claims of taxing authorities which may arise upon disgorgement by any taxing authority of funds received from the Debtor after the Filing Date without authority of the Bankruptcy Court in payment of taxes incurred prior to the Filing Date.
(c)
Class Three.
All Claims not included in Classes l
One, Two or Four, including the Claims based on the Notes and Indenture to the extent that such Claims exceed the value of the interest in the property of the Debtor granted to the holders of such Claims or to the Indenture Trustee under the Indenture to secure those Claims.
(d)
Class Four.
All Claims which are allowed in the amount of $25,000 or less, or which have been reduced to $25,000 at the election of the holder, which would otherwise have been classified in Class Three.
The Claims in this class may not exceed $500,000 after giving effect to any reductions to $25,000 and all reduced Claims will be excluded from this class if their inclusion would cause the aggregate amount of the Clains in this class to exceed $500,000.
(e)
Class Five.
All Interests as of the Record Date.
(f)
Class Six.
All CICs as of the Record Date.
ARTICLE IV.
TREATMENT OF CLASSES OF CLAIMS AND INTERESTS 4.1 Class One Claim.
The Class One Claims are impaired.
In full payment and satisfaction of the Class one Claims, each holder of an allowed Class One Claim shall receive a number of shares of New Securities equal to the holder's DI2 rata share of 34% of the issued and outstanding New Securities or such other percentage of the issued and outstanding New Securities as the Bankruptcy Court shall determine based on any objection which a holder of a Class Three Claim asserts to the allocation of the New Securities between Class One and Class Three.
Except to the extent otherwise specifically provided for in the Confirmation order, if no objection to the allocation of New Securities between Class One and Class Three is filed prior to the date set by the Bankruptcy Court for filing objections to the Plan, then the entry of the Confirmation Order shall constitute the Bankruptcy Court's order that the New Securities shall be allocated 34% to Class One and 6%
to Class Three.
The initial distribution of New Securities shall
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be made to the holders of Class Three Claims on the later of the i
Effective Date or-the date the Class Three Claim becomes an Allowed Amount.
Subsequent distributions of New Securities shall j
be made in accordance with the provisions of Section 6.6(b) of the Plan.
The'New Securities to be distributed to holders of Class One claims will be distributed to each holder EI2 ra.ta based on-the~ amount of that holder's Class One Claim relative to the amount of all Class One Claims.
4.2 Class Two claims.
The Class Two claims, if any, are impaired.
The holders of the Class Two claims shall receive payment _of the Allowed Amount of such Claims in three (3) equal annual installments of principal and interest, having a present value, as of the Effective Date, of not less than the value of the holder's lien on the Debtor's interest in the-property which secures such Claims.
The Allowed Amount of the Class MNn) Claim shall bear interest at the rate equal to the prevailing interest rate on two-year treasury notes, calculated on each anniversary of the Effective l
Date.
The first payment shall be due on the later of (a) the i
first day of the first full month after the Effective Date or (b) l the date the Class 1Nn) Claim is allowed'by final order of the j
Bankruptcy Court.
The remaining payments shall be due within thirty (30) days after the first two anniversaries of the Effective Date.
The holders of the Class Two Claims shall retain their liens until such Claims have been paid in full.
)
4.3 Class Three claims.
The Class Three Claims are impaired.
On the Effective Date, Reorganized EUAP shall issue New Securities equal to 6% of i
the New Securities issued under the Plan to holders of allowed Class Three Claims.
The New Securities to be distributed to 1
holders of Class Three claims will be distributed to each holder I
EI2 EELA based on the amount of that holder's Class Three-Claim relative to the amount of all Class Three Claims.
The initial distribution of New Securities shall be'made to the holders of Class Three Claims on the later of'the. Effective Date or the date the Class Three Claim becomes an Allowed Amount.
Subsequent distributions of New Securities shall be made in accordance with the provisions of Section 6.6(b) of the Plan.
4.4 Class Four Claims.
The Class-Four Claims are impaired.
On the later of the Effective Date or the date the Class Four Claim becomes an Allowed Amount, the holder of each Class Four~ Claim.shall receive cash in an amount equal to 50% of the Allowed Amount of such Claim.
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4.5 Class Five Interests.
Class Five Interests, if any, are impaired.
All Class Five Interests in the Debtor shall be cancelled as of the Effective Date and the holders of such Interests shall receive no distribution under the Plan.
4.6 Class Six Interests.
l Class Six Interests are impaired.
All outstanding CICs shall be cancelled as of the Effective Date and the holders of such Class Six Interests shall receive no distribution under the Plan.
ARTICLE V.
NEW SECURITIES 5.1 Descriotion Of New Securities.
The New Securities distributed to Class One and Class Three shall be issued by Reorganized EUAP pursuant to Section 1145 of the Bankruptcy Code and shall be freely tradeable under state and federal securities laws.
The New Securities distributed pursuant to the Omega Financing shall be issued by Reorganized EUAP through a private placement pursuant to Section 4(2) of the Securities Act of 1933, as amended (15 U.S.C. 77(e)) (the
" Securities Act"), and will therefore be restricted securities under state and federal securities laws.
Reorganized EUAP will use its good faith efforts to have the New Securities listed for trading on a national stock market.
The New Securities shall consist of a single class of common stock.
The terms and conditions of the New Securities shall be as provided in the Articles of Incorporation of Reorganized EUAP, as approved by the Committee prior to the Confirmation Date.
The Articles of Incorporation will authorize the issuance of a total of 8,000,000 shares of common stock, at
$.01 par value per share.
Such shares shall be issued to holders of Class One and Class Three Claims and pursuant to the Omega Financing as and to the extent provided in the Plan.
The New Securities to be issued under the Plan will be, when issued, fully paid and nonassessable.
Pursuant to Section 1145 of the i
Bankruptcy Code, Section 5 of the Securities Act and any state or local law requiring registration for offer of sale of a security or registration or licensing of an issuer of, underwriter of, or j
broker or dealer in, a security, shall not apply to the issuance of the New Securities to the holders of Class One and Class Three Claims, except to the extent a holder is an " underwriter" pursuant to Section ll45(b) of the Bankruptcy Code. j
ARTICLE VI.
MEANS OF EXECUTION AND IMPLEMENTATION OF THE PLAN 6.1 Articles of Incorooration of Reoraanized EUAP, i
As of the Effective Date, Reorganized EUAP shall adopt i
amended Articles of Incorporation complying with the requirements of this Plan.
A copy of the amended Articles.of Incorporation is attached hereto as Exhibit B.
6.2 Issuance Of New Securities.
On the Effective Date, the Debtor's existing Interests, if any, shall be cancelled and of no further force or effect,.
without any further action on the part of any entity.
Immediately subsequent to such cancellation, on the Effective Date, Reorganized EUAP shall issue the New Securities, representing 100%
of its issued and outstanding shares.
Such issuance of New Securities shall be made to the holders of Class One and Class Three Clains which have an Allowed Amount in exchange for debt i
pursuant to Section 1145 of the Bankruptcy Code and in the Omega Financing pursuant to Section 4(2) of the Securities Act.
l Upon the Effective Date, Reorganized EUAP will enter into a registration rights agreement, a copy of which is attached hereto as Exhibit C (the " Registration Rights Agreement"), with Omega or its designees and any other persons (or groups of holders who, under Section 240-13d-3 of thel regulations promulgated under the Securities Exchange Act of 1934, are deemed to be the beneficial f
owners of each other's New Securities) of 10% or more of the New Securities outstanding on the Effective Date, provided that such holders would have been holders of 10% or more of the New Securities if the New Securities had been distributed to those holders of the New Securities in exchange'for Series B or Series C Notes held by the holders on the Confirmation Date.
The Registration Rights Agreement will provide that such holders may demand multiple registrations, provided that any demand is~for registration of 5% or more of the total New Securities outstanding at the time of the demand and subject to the right of the Reorganized EUAP Board of Directors to delay the demanded L
registration for bona fide business reasons.
Reorganized EUA Power will be responsible for the expenses of any registration l
under the Registration Rights Agreement.
6.3 Calculation of Distribution Amounts of New Securities.
No fractional share of New Securities shall be issued.
Fractional shares or certificates shall be rounded to the next greater or next lower whole number of shares as follows:
(a) j fractions of 0.5 or greater shall be rounded to the next greater whole number, and (b) fractions of less than 0.5 shall be rounded
! l l
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to the next lesser whole number, orovided, however, that each holder of a Claim to which New Securities shall be distributed pursuant to the Plan shall receive at least one share of New Securities.
For purposes of the foregoing, all reference to holders of Claims herein shall refer to the beneficial owners of such claims, and all calculations relating to the rounding l
provisions or cash distribution of this section shall be made l
based on such beneficial ownership.
l 6.4 Ownershio and Oncoina Oneration of Seabrook Interest.
Reorganized EUAP shall succeed to ownership of the Seabrook Interest and the Debtor's rights and obligations under i
the Joint Ownership Agreement and the other agreements executed by the Joint Owners pertaining to the ownership and operation of Seabrook.
6.5 Financina.
(a)
Gao Period Financina.
During the Gap Period, the Debtor will be funded under a i
debtor-in-possession facility or in such other manner as the l
Committee directs.
On the Effective Date, all amounts owing under such a debtor-in-possession facility as shall be in place, if any, shall be paid in full in cash from the proceeds of the sale of New Securities in the Omega Financing.
(b)
Plan of Reoraanization Financina.
The Plan will be funded from the proceeds received by Reorganized EUAP from the sale of 60% of the New Securities in the Omega Financing for $35 million.
6.6 Distribution.
(a)
Disbursina Aagng.
Such entity or entities as may be designated by the Committee, including a stock transfer agent for the New Securities, shall act as Disbursing Agent under this Plan with respect to property to be distributed under this Plan.
The
)
Disbursing Agent may employ or contract with entities to assist in i
or perform the distribution of property to be distributed.
The l
Disbursing Agent shall maintain such accounts as may be authorized by the Debtor for the purposes of maintaining any reserve provided I
i for in this Plan or for such other purpose as may facilitate the I
i distributions contemplated by this Plan.
The Disbursing Agent l
shall serve without bond and shall receive reasonable fees and i
expenses from Reorganized EUAP, which may be paid in the ordinary course of business without obtaining an order from the Bankruptcy i
! )
i 1
T i
Court.
The Disbursing Agent, may retain counsel, which counsel shall be paid its reasonable fees and expenses, subject to the approval of the Bankruptcy Court, from Reorganized EUAP.
(b)
Discuted Claims or Interests.
l (i)
Reserve j
l Notwithstanding any other provision of this Plan, the i
Disbursing Agent shall withhold from the property to be distributed under this Plan to each class of Claims, and shall place in a separate reserve for such class a sufficient amount to 1
be distributed on account of the face amount or estimated amount, as the case may be, of each Claim that is disputed, contingent or unliquidated, and that does not have an Allowed Amount as of the date of initial distribution under this Plan, including without limitation, all disputed claims in respect of executory contracts rejected pursuant to the Plan.
For purposes of this provision (i) a claim which does not have an Allowed Amount shall constitute a
" disputed claim"; and (ii) the " face amount" of a claim shall be the amount set forth on the proof of such claim, or if no proof of such claim has been filed, the amount of such claim scheduled in the Debtor's Schedules of Assets and Liabilities filed with the Bankruptcy Court, as amended, plus any unpaid pre-Filing Date interest accrual.
In the case of a disputed claim in Class One or Class i
J Three, the property so withheld and placed in reserve shall i
consist of that number of shares of the New Securities which t
represents the same percentage of all New Securities to be issued to the holders of Class One or Class Three Claims, as the case may be, as the percentage which the dollar amount of the disputed l
Class One or Class Three Claim represents of the dollar amount of all Class One or Class Three Claims, as the case may be.
As to any unliquidated claim or contingent claim, the Bankruptcy Court shall, upon motion by the holder of the claim, or the Committee, estimate the maximum amount of such claim for purposes of allowance pursuant to Section 502(c) of the Bankruptcy Code.
Such estimation shall constitute the maximum amount in which such claim may ultimately become an Allowed Claim and shall be used in calculating the reserve in the immediately preceding paragraph.
To the extent practicable, the Disbursing Agent shall invest any cash in'the reserve in a manner that will yield a reasonable net return, taking into account the safety of the investment.
The Disbursing Agent shall also place in the same reserve any distributions received on any securities held in the reserve, including dividends (in stock or cash) received on shares of Reorganized EUAP common stock. a
1 (ii) Distribution The property in the reserve, including the allocable l
portion of the net return and any dividends, interest or other l
payments received thereon, shall be distributed on account of the disputed, contingent or unliquidated claims or interests as and to the extent that such claims or interests be.come Allowed Amounts.
Any property in reserves established for disputed Claims in Classes One and Three, remaining after the resolution of all disputes over the allowance or subordination of Claims in such classes, including the remaining net returns and dividends, interest or other payments received thereon, shall be distributed DIS rata to the holders of Claims in Allowed Amounts in Class one and Class Three in accordance with Sections 4.1 and 4.3 of this Plan, provided however, that if the amount remaining to be distributed does not exceed in value $250,000, then such property shall be turned over to Reorganized EUAP.
For the sake of efficiency and economy in connection with distributions, the making of the foregoing distributions may be withheld until a number of Final Orders respecting disputed Clains in a particular class have been entered, but such j
distributions shall be made not less frequently than once every six months.
(c)
Status of New Securities in Reserve, Any New Securities held in a reserve for disputed, contingent or unliquidated claims shall be treated as issued and outstanding Reorganized EUAP common stock for all purposes (including dividends).
The Disbursing Agent shall vote such shares in the same proportions as the vote, including abstentions and shares that were not voted, on all issued and outstanding shares of Reorganized EUAP Common Stock that are not held in a reserve.
(d)
Surrender of Securities.
As a condition to participation under this Plan (i) a holder of a Series B or Series C Note that desires to receive the property to be distributed on account of a Claim arising from that Series B or Series C Note shall surrender the Series B or Series C Note to the Disbursing Agent or its designee.
If a holder of a Series B or Series C Note is unable to surrender such note because it has been destroyed, lost or stolen, such holder may receive a distribution with respect to such note upon presenting to the Disbursing Agent, in a form acceptable to such agent:
(i) proof of such holder's title to such note, (ii) proof of the destruction or theft of such note, or an affidavit to the effect that the same has been lost and after,_
diligent search cannot be found; and (iii) such indemnification as may be required by the Disbursing Agent in its sole discretion to indemnify the Disbursing Agent, Reorganized EUAP, and all other persons deemed appropriate by the Disbursing Agent against any loss, action, suit or other claim whatsoever which may be made as a result of such holder's receipt of a distribution on account of such note under this Plan.
(e)
Unclaimed Procertv.
Any property which is unclaimed for one year after distribution thereof by mail (i) except as provided in (ii), to the latest mailing address filed of record with the Bankruptcy Court for the party entitled thereto or if no such mailing address has been so filed, the mailing address reflected in the Schedule of Assets and Liabilities filed by the Debtor, as amended, or (ii) in the case of the holder of Series B or C Notes to the latest mailing address maintained of record by the Indenture Trustee, shall become property of Reorganized EUAP.
(f)
Withholdino Taxes.
The Disbursing Agent shall withhold from any property distributed under this Plan any property which must be withheld for taxes payable by the person entitled to such property to the i
extent required by applicable law, i
1 (g)
Indenture Trustee.
Upon the Effective Date, the Disbursing Agent or Reorganized EUAP, at the direction of the Committee, shall reimburse the Indenture Trustee in cash for all reasonable and necessary fees and expenses incurred by the Indenture Trustee during the Chapter 11 case, including the fees and ezpenses of the Indenture Trustee's counsel.
6.7 Miscellaneous.
The Debtor and Reorganized EUAP shall execute such documents and take such other actions as are necessary to effectuate the transactions which, under this Plan, are contemplated to occur on the Effective Date.
6.8 Ooerations, a.
Gao Period Manacement.
During the GAP Period, the Debtor shall employ those agents designated by the Committee, which may include EUA Service as permitted under the EUA Settlement, to perform all functions currently performed or required to be performed by EUA Service pursuant to the Service Agreement, including, without limitation I
- l j
(i) a marketing agent to develop and update a strategy to maximize the value of Reorganized EUAP's assets based upon assessment of market conditions and appropriate contract terms and (ii) a i
I managing agent to attend meetings of the Joint Owners and otherwise manage and maintain the Debtor's business, in each case pursuant to written agreements approved by the Bankruptcy Court and any regulatory body with jurisdiction under applicable law.
During the Gap Period, the Debtor shall continue to own its assets and operate its business as a debtor in possession, except as l
otherwise provided for in the Plan or the Final Confirmation l
Order.
The Debtor shall seek such regulatory approval for its GAP Period management and marketing services as the Committee may reasonably direct.
Mr. Stevens and Mr. Samuels shall be entitled to the indemnification rights set forth in the.EUA Settlement.
l b.
Post-Effective Date Manacement i
Upon the Effective Date, all directors of the Debtor shall be deemed to have resigned without any further action on the l
part of any person or entity.
The new board of directors of l
Reorganized EUAP appointed by the Committee (the "New Board")
I shall take office upon the Effective Date.
The members of the New Board appointed pursuant to this Section 6.8(b) shall continue in office until they resign, are removed or their successors are elected pursuant to Reorganized EUAP's charter, as amended, or l
Reorganized EUAP's bylaws.
6.9 Decommissionino Costs Guarantv.
The Decommissioning Costs Guaranty shall remain enforceable and in full force and effect in accordance with its terms.
6.10 Litication.
The Committee.may commence and prosecute any claims, other than those resolved as part of, or as limited by, the EUA Settlement, and defend any claims made against the Debtor, including preference, fraudulent' conveyance or other bankruptcy claims in the name of and on behalf of the Debtor, Reorganized l
EUAP and/or the Bondholders.
Net proceeds of such litigation shall be used for working capital or general corporate purposes of Reorganized EUAP.
l 6.11 Vestino And Revestina.
Except as otherwise provided in any provision of this l
Plan or in the Final Confirmation Order, all property of the j
estate shall revest in Reorganized EUAP on the Effective Date, I
free and clear of all claims, liens and other interests of creditors and equity security holders.
Without in any manner limiting the scope of the foregoing, any claim or interest l l
l 1
belonging to the Debtor or to the estate shall be retained by and shall vest in Reorganized EUAP on the Effective Date and Reorganized EUAP may enforce, settle or adjust any such claim or interest.
As of the Effective Date, Reorganized EUAP may use acquire and dispose of property without supervision by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code, other than those restrictions expressly imposed by this Plan and the confirmation Order.
l 6.12 Continued Existence Of The Committee.
The Committee shall continue to exist as constituted by l
the United States Trustee, from time to time, with the powers and authorities provided for in Section 1104 of the Bankruptcy Code, provided for in the Plan and provided for in the Final Confirmation Order.
Upon the Effective Date, the Committee shall have no further responsibility for the direction or supervision of l
the management or conduct of affairs of Reorganized EUAP.
The i
Committee shall continue to exist after the' Effective Date only l
for the purposes of administering and closing the Chapter 11 case, and such other purposes as may be provided for in the Final i
Confirmation order.
6.13 Determination of Tax Assessment.
By the Plan, the Committee seeks a determination by the Bankruptcy Court, pursuant to Section 505 of the Bankruptcy Code.
of the tax liability of the Debtor for real estate taxes assessed against the Debtor's interest in the real property associated with its Seabrook Interest (the "Seabrook Property").
The Plan shall constitute the Committee's motion for a determination by the Bankruptcy Court that the assessed value of the Seabrook Property is substantially less than the value assessed by the relevant taxing authorities.
The Committee reserves the right to withdraw such an action under Section 505 of the Bankruptcy Code at its discretion.
6.14 Discharce.
Upon the Effective Date, all claims against and all debts and liabilities of the Debtor shall be discharged as provided in the Plan and Bankruptcy Code sections 524 and 1141.
ARTICLE VII.
l l
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIP.ED LEASES I
7.1 As of the Effective Date, Reorganized EUAP hereby I
rejects any and all executory contracts and unexpired leases of every name and nature, except those which (a) prior to the Effective Date, the Debtor shall have assumed with the consent of the Committee or (b) as of the Effective Date, are the subject of pending motions to assume, with the consent of the Committee or (c) as of the Effective Date, are designated by the Committee to be assumed pursuant to the Plan.
Any Claim arising from or as a result of the rejection of any executory contract or unexpired lease must be filed within twenty days after the Effective Date, and the Allowed Amount thereof shall be treated as a Class Three Claim, but nothing herein shall constitute a determination that any such rejection gives rise to or results in a Claim or
{
constitutes a waiver of any objections to such Claim by the i
Debtor, the Committee, or any party in interest.
7.2 The Plan shall constitute the Debtor's motion to assume the following contracts, agreements, purchase orders, leases, governmental permits, licenses and approvals with respect to the Seabrook Plant that have been entered into by the Debtor, or by an i
agent (including, without limitation, the New Hampshire Yankee j
division of PSNH, and North Atlantic Energy Service Corporation) i for or on behalf of the
Participants:
(i)
The Agreement for Joint Ownership, construction and Ownership of New Hampshire Nuclear Units, dated as of May 1, 1973, as amended (the " Joint Ownership Agreement");
(ii)
The Seventh Amendment to and Restated Amendment for Seabrook Project Disbursing Agent, dated as of November 1, 1990, as amended through and including the Second Amendment to the Seventh Amendment made as of the 29th day of June, 1992 by and among North Atlantic Energy Corporation and the other Participants; (iii)
The Transmission Support Agreement dated as of May l
1, 1973, as amended, by and among PSNH, New England Power 1
Company and the other Participants;
)
(iv)
Agreement of Settlement dated as of January 13, 1989 (" Comprehensive Settlement Agreement"), by and among PSNH, The United Illuminating Company, Canal Electric Company, The Connecticut Light and Power Company, EUA Power j
Corporation, Massachusetts Municipal Wholesale Electric j
Company, Montaup Electric Company, New England Power Company,
)
and Taunton Municipal Lighting Plant, Bangor Hydro-Electric Company, Central Maine Power Company, Central Vermont Public Service Corporation, Fitchburg Gas & Electric Light Company, j
and Maine Public Service Company, and Yankee Atomic Electric Company; (v)
Agreement of Compromise and Settlement dated as of November 1, 1991, among United Engineering & Constructors, Inc., The Participating Seabrook Joint Owners named therein and Yankee Atomic Electric Company; l
l
^
l l
t (vi)
Seabrook Project Managing Agent Operating l
Agreement, dated as of June 29, 1992, as amended, between i
North Atlantic Energy Service Corporation and the other Participants; and (vii)
Such other agreements which pertain to Seabrook and which have been entered by the Debtor or by or on behalf of 1
all Joint owners, a complete list of which shall be filed no l
later than ten days prior to the date scheduled for confirmation of the Plan.
l ARTICLE VIII.
CONDITIONS TO OCCURRENCE OF EFFECTIVE DATE The Effective Date of this Plan shall occur, and this Plan shall take effect, to the extent not implemented upon the Confirmation Order becoming a Final Order, on the day designated by the Committee which shall be as soon as is reasonably 1
practicable but not more than thirty days (as calculated in accordance with Bankruptcy Rule 9006(a)) after all the following conditions are satisfied or waived; provided that the Effective l
Date shall not be later than June 30, 1994 unless extended in accordance with Section 8.3 below:
l 8.1 The Confirmation Order shall have been entered and shall have become a Final Confirmation Order.
i l
8.2 Each of the following conditions shall have occurred or been waived pursuant to Section 8.3 below:
(a)
All Plan Regulatory Approvals shall have been obtained and shall be in full force and effect and shall not contain any provision or be subject to any condition reasonably unacceptable to the Committee.
(b)
All necessary consents of all entities, if any, who are parties to executory contracts or unexpired leases to be assumed pursuant to this Plan, or which were entered into by the Debtor after the date of commencement of the Bankruptcy Case and are reasonably deemed by the Committee to be material to the Debtor, shall have been obtained.
I (c)
The conditions to closing the Omega Financing shall have been satisfied other than the requirement that the Effective Date occur.
(d)
The revised Articles of Incorporation of Reorganized EUAP contemplated by Section 6.1 shall have been filed with the New Hampshire Secretary of State. l
l 8.3 Waiver of Conditions.
The Committee may waive any of the conditions to the Effective Date described in Article VIII of the Plan or extend or reduce, one or more times, any time period l
described in Article VIII, including, but not limited to, the date l
specified for the occurrence of the Effective Date above and in l
Section 8.4 below.
Any such waiver or extension shall become l
effective upon the filing with the Bankruptcy Court of a notice which states that the Committee has granted such waiver or extension.
No order of the Bankruptcy Court shall be required to make any such waiver or extension effective, i
8.4 Effect Of Nonoccurrence Of Conditions To The Effective l
Date.
If each of the conditions to the Effective Date has not occurred or been duly waived by June 30, 1994, or by such~1ater date as may be established in accordance with Section 8.3,
- then, l
upon motion by any party in interest made after the date for l
satisfying (or obtaining waivers of) the conditions to the Effective Date (as such date may be extended hereunder), and prior to the time that each of said conditions has occurred or been duly waived, the Confirmation Order may be vacated by the Bankruptcy Court.
Notwithstanding the foregoing, however, the Confirmation Order may not be vacated after each of the conditions to the Effective Date has either occurred or been waived.
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ARTICLE IX.
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RETENTION OF JURISDICTION Following Confirmation of this Plan and until the reorganization case is closed, the Bankruptcy Court shall retain such jurisdiction as is set forth in this Plan.
Without in any manner limiting the scope of the foregoing, the Bankruptcy Court shall retain jurisdiction for the following purposes:
To determine the allowability, classification, a.
priority or subordination of claims and interests upon objection, l
or to estimate pursuant to Section 502(c) of the Bankruptcy Code the amount of any claim which is or is anticipated to be unliquidated as of the Effective Date, or proceedings to subordinate claims or interests by Reorganized EUAP, or by any other party in interest with standing to bring such objection or l
proceeding which shall be deemed to include any proponent of this 9
Plan; b.
To construe and to take any action to enforce this Plan, issue such orders as may be necessary for the implementation, execution, and consummation of this Plan, including, without limiting generality of the foregoing, orders to expedite Plan Regulatory Approvals, orders implementing or relating to the plan for interim management referred to in Section l i l
i 6.8, all notwithstanding any otherwise applicable non-bankruptcy j
law; c.
To determine any and all applications for allowance
{
of compensation and expense reimbursement for periods on or before the Effective Date and to determine any other request for payment of administrative expenses; d.
To determine all matters which may be pending before the Bankruptcy Court on or before the Effective Date; e.
To resolve any dispute regarding the implementation or interpretation of this Plan which arises at any time before the Reorganization Case is closed; 1
l f.
To determine any and all applications pending on j
the Effective'Date for the rejection, assumption or assignment of executory contracts or unexpired leases ~and.the allowance of any claim resulting therefrom; 3
g.
To determine all applications, adversary proceedings, contested matters and other litigated matters pending j
on or before the Effective Date, including a determination of the Debtor's tax liability as provided in Section 6.13 hereof pursuant to Section 505 of the Bankruptcy Code; h.
To determine such other matters and for such other purposes as may be provided in the Confirmation Order; and i.
To modify this Plan pursuant to Bankruptcy Code 4
Section 1127, or to remedy any apparent nonmaterial defect or 4
omission in this Plan, or to reconcile.any nonmaterial inconsistency in the Plan so as to carry out its intent and i
purposes.
/
ARTICLE X.
2 CONFIRMATION REOUEST l
i The Committee, as proponent of this Plan, hereby requests I
confirmation of this Plan pursuant to Bankruptcy Code Section j
ll29(b) in the event that this Plan is not accepted by all classes of Claims and Interests entitled to vote; provided however, that J
4
}
]
1 i
1 1
I the Committee will-not seek to confirm the Plan unless the Plan is accepted by the Class One creditors.
.THE OFFICIAL. BONDHOLDERS' COMMITTEE OF EUA POWER CORPORATION By Authorized Committee. Member, 19/
E. Decker Adams, Vice President.
State Street. Bank and Trust Company Of Counsel:
~
/S/
Mark N.
Polebaum, Esq. (BNH 01615)
Frank W. Getman Jr.,
Esq. (BNH 04234)
HALE AND DORR-1155 Elm Street i
Manchester, NH 03101 (603) 627-7600 i
Dated:
February.11, 1994 i
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4 EXHIBIT A OMEGA STOCK PURCHASE AGREEMENT i
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9 STOCK AND SUBSCRIPTION AGREEMENT AMONG GREAT BAY POWER CORPORATION j
(f/k/a/ EUA POWER CORPORATION) and THE PURCHASERS SIGNATORIES HERETO Dated as of April 7,
1994 e
e
TABLE OF CONTENTS ARTICLE I DEFINITIONS 1
1.1.
Definitions 1
1.2.
Several Obligations 8
ARTICLE II PURCHASE AND SALE OF SHARES 9'
2.1.
' Agreement to Purchase and Sell 9
2.2.
Sale Closing 9
' ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY 10 l
3.1.
Corporate Organization 10 i
3.2.
Capitalization 10 3.3.
Subsidiaries 11 3.4.
Authorization 11 3.5.
Breach 12 3.6 Governmental Approvals 13 3.7.
Compliance with Applicable Law 13 3.8.
Litigation 13 3.9 Financial Condition' 14 3.10 No Undisclosed or Contingent Liabilities 14 3.11 Taxes 14 3.12 Employee Benefit Plans 15 j
3.13 Absence of Certain Changes _or Events 16 3.14 Environmental Matters 16 l
3.15 Material Contracts 16 i
3.16 Properties; Encumbrances _
17 3.17 Insurance 18 3.18 Employee Claims; Labor Matters 18 3.19 Disclosure Statement 19 3.20 Material Disclosure 19 3.21 Delivery of Documents 19 3.22 Securities Laws 20 3.23 Reorganization Case 20 3.24 Status 20 3.25 Exempt Wholesale Generator 21
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i ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS 22 4.1.
Organization; Authorization 22 4.2.
No Violation; Consents 22 4.3.
Status and Investment Intent 23 l
4.4.
1935 Act 24 ARTICLE V COVENANTS OF THE COMPANY 24 l
5.1.
Conduct of Business by the Company Pending the Closing 24 5.2.
Restructuring; Bankruptcy Cases 25 5.3.
No Solicitation of Transactions 26 i
5.4.
No Amendment of the Plan or Waiver of Discharge
- 27 5.5.
Disclosure Relating to Purchasers 27 i
ARTICLE VI ADDITIONAL AGREEMENTS OF THE PARTIES 27 6.1.
Investigation by the Purchasers 27 6.2.
Notification of Certain Matters 28 6.3.
Further Action; Reasonable Efforts 28 6.4.
Public Announcements 29 6.5.
Restrictive Legend 29 ARTICLE VII CONDITIONS TO CLOSING 30 7.1.
Conditions to Obligations of the Purchasers 30 7.2.
Conditions to Obligations of the Company 36 ARTICLE VIII TERMINATION AND ABANDONMENT 37 8.1.
Termination 37 8.2.
Effect of Termination 38 ARTICLE IX MISCELLANEOUS 39 9.1.
Notices 39 9.2.
Complete Agreement 40 9.3.
Binding Notice of Agreement; No Third Party Beneficiary 40 9.4.
Modifications, Amendments and Waivers 41 9.5.
Counterparts 41 9.6.
Expenses 42 9.7.
Nominee; Benefits 42
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9.8.
Governing Law 42 9.9.
Headings 42 9.10.
Severability 43
)
9.11.
Assignment 43 I
9.12.
Specific Performance 43 SCHEDULE 1.1 List of Purchasers SCHEDULE 3.5 Conflicts with other Agreements SCHEDULE 3.6 Governmental Approvals SCHEDULE 3.8 Litigation SCHEDULE 3.11 Taxes SCHEDULE 3.14 Environmental SCHEDULE 3.15 Material Contracts SCHEDULE 3.18 Employee Matters I
SCHEDULE 5.1-(e)
Employee Agreement EXHIBIT A Registration Rights Agreement e
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STOCK AND SUBSCRIPTION AGREEMENT STOCK AND SUBSCRIPTION AGREEMENT (the " Agree-ment"), dated as of April 7, 1994, by and.among Great Bay Power Corporation (f /k/a EUA Power Corporation), a corpo-ration and a debtor-in-possession under the Bankruptcy Code (the " Company") and the purchasers listed on the signature pages hereto (each a " Purchaser" and col-lectively, the " Purchasers").
WHEREAS, pursuant to or in connection with the Plan and Solicitation, the company intends to reorganize and desires to restructure its equity capitalization; 3
WHEREAS, in connection with the consummation of the Plan, the Company desires to issue and sell to the Purchasers a total of 4,800,000 shares of New Common Stock, representing 60% of the fully diluted common stock of the Company upon consummation of the Plan, for an aggregate purchase price of $35,000,000; and i
WHEREAS, the Purchasers desire to subscribe for and purchase such New Common Stock upon the terms and subject to the conditions specified herein (the " Sale Transaction").
NOW, THEREFORE, in consideration of the premis-es and the mutual covenants and agreements set forth herein, the parties hereto agree as follows:
ARTICLE I d
DEFINITIONS 1.1.
Definitions.
As used in this Agree-ment, the following terms shall have the following mean-ings:
" Additional Power Purchase Acreements" means
)
any contract or agreement (other than the UNITIL Power i
Purchase Agreements) having a term equal to or greater than one year entered into by the company and approved by i
FERC relating to the purchase or sale of electrical power generated by the Facility.
1
4
" Affiliate" has the meaning ascribed to it in Section (a) (1) of Rule 144 promulgated under the Securi-ties Act.
" Articles of Orcanization" means the Restated Articles of Incorporation of the Reorganized Company, filed with the Secretary of State of New Hampshire on the 4
Closing Date, substantially in the form of Exhibit A to this Agreement.
" Balance Sheet" means the balance sheet of the Company as of the Closing Date referred to in Section 7.1 (g) (ii) hereof.
"Bankruotev Code" means Title 11, Section 101 gi gag. of'the United States Code titled " Bankruptcy," as 4
amended from time to time, and any successor statute thereto.
"Bankruotev Court" means the United States Bankruptcy Court for the District of New Hampshire.
i
" Base Case Forecast" shall mean the financial projections satisfactory in form, substance and detail to the Purchasers delivered to the Purchasers pursuant to Section 7.1(1) relating to the company's operation of its Undivided Interest prepared by the Company and certified by the chief financial officer of the Company.
" Benefit Plan" means each bonus, deferred compensation, incentive compensation, stock severance or termination pay, purchase, stock option, hospitaliza-tion or other medical, life or other insurance, supple-mental unemployment benefits, profit-sharing, pension, or retirement plan, program, agreement or arrangement, and each other employee benefit plan, program, agreement or arrangement sponsored, maintained or contributed to or required to be contributed to by the Company or by any ERISA Affiliate, for the benefit of any employee or former employee of the Company or any ERISA Affiliate.
" Blue Sky Laws" means the securities and take-over laws of the applicable state or states.
"Closina Date" means the date on which the Sale closing occurs.
2
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" Code" means the Internal Revenue Code of 1986, as amended from time to time.
" Confirmation order" means the order entered by the Bankruptcy Court confirming the Plan pursuant to Section 1129 of the Bankruptcy Code.
" Disclosure Statement" means the Fourth Amended Disclosure Statement For Bondholders' Committee Fifth Amended Plan of Reorganization Dated December 21, 1992,
)
as amended by the Supplemental Disclosure Statement Dated February 11, 1994 Relating to First Modification to Bondholders' Committee's Fifth Amended Plan of Reorgani-zation of Great Bay Power Corporation filed with the Bankruptcy Court.
" Effective Date" shall have the meaning as-j cribed to such term in the Plan.
" Environmental Laws" means all federal, state, local and foreign laws and regulations relating to pollu-tion or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), including, without limitation, laws and regulations relating to emissions, discharges, re-leases or threatened releases of Materials of Environ-mental Concern, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, dis-posal, transport or handling of Materials of Environmen-tal Concern.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, together with the rules and regulations promulgated thereunder.
"ERISA Affiliates" means any trade or business, whether or not incorporated, that together with the Company would be deemed a " single employer" within the
,4 meaning of Section 4001(a) (14) of ERISA.
J "Existino Debt" shall mean the company's lia-bilities under its 17 1/2% Series B Notes due on May 15, 1993 and its 17 1/2% Series C Notes due on November 15, 1992.
3
" Facility" means Seabrook Nuclear Generating Station Unit 1, a nuclear-fuel electrical generating unit located in Seabrook, New Hampshire.
"FERC" means the Federal Energy Regulatory Commission.
"EEA" means the Federal Power Act.
"GAAP" means generally accepted accounting principles in the United States as in effect from time to time.
" Governmental Acoroval" shall mean any authori-zation, consent, approval, license, ruling, permit, certification, exemption, filing, variance, claim, order, judgment, decree, publication, notices to, declarations of or with or registration by or with any Governmental Entity.
" Governmental Entity" means any federal, state, local or foreign legislative body, court, government, department or instrumentality, or governmental, adminis-trative or regulatory authority or agency.
" Governmental Rule" shall mean any statute, law, regulation, ordinance, rule, judgment, order, de-cree, 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 Government Entity, whether now or hereafter in effect.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
" Joint Ownershio Acreement" means the Agreement for Joint Ownership, Construction and Operation of New Hampshire Nuclear Units, dated as of May 1, 1973, by and between the Original Participants (as defined therein),
as amended, supplemented or modified and in effect from time to time.
" Liens" has the meaning set forth in Section 3.15 hereof.
4
i 4
1 "Manacement Acreement" shall mean the manage-ment agent agreement to be dated as of the Effective Date and a letter agreement, dated as of August 26, 1993, each between the Company and UNITIL or a designated affiliate of UNITIL.
"Marketina Acreement" means the marketing agent agreement, dated April 1, 1993, between the Company and i
UNITIL or a designated affiliate of UNITIL.
" Material Adverse Effect" means (a) any change or effect that is materially adverse to the business, re-sults of operations, properties (including intangible properties), condition (financial or otherwise), pros-pects or assets or liabilities of the Company or (b) a material adverse effect on the Facility.
" Materials of Environmental Concern" means j
hazardous substances as defined under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
S 9601 21 gag. and hazardous wastes as defined under the Resource Conservation and Recovery Act, 42 U.S.C. S 6901, 21 gag. and petroleum and petroleum prod-ucts and such other chemicals, materials or substances as are listed as " hazardous wastes", " hazardous materials",
" toxic substances", or words of similar import under any similar federal, state, local or foreign laws.
)
"Multiemolover Plan" shall mean a multiemployer plan defined as such in Section 3 (37) of ERISA to which contributions have been made by the Company or any ERISA Affiliate and which is covered by Title IV of ERISA, J
"NHPUC" means the New Hampshire Public Utility Commission.
"EEE" means the Nuclear Regulatory Commission.
"New Common Stock" means the 8,000,000 shares j
of common stock, par value $.01 per share, of the Reorga-nized Company after the Articles of Organization are filed with the Secretary of State of New Hampshire.
"Omeca Entities" shall mean Omega Capital Partners L.P.,
Omega Institutional Partners L.P.,
Omega Overseas Partners L.P.,
Common Fund, Omega Overseas i
5 i
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l Partners II Ltd., Goldman Sachs & Co. Profit Sharing Master Trust and 88 Pine Street.
"PBGC" means the Pension Benefit Guaranty Corporation.
" Pension Plan" means any employee plan that is subject to the provisions of Title IV of ERISA and that is maintained by or to which contributions are made by the Company or any of its ERISA Affiliates other than a Multiemployer Plan.
" Plan" means the First Modification to Bondholders' Committee's Fifth Amended Plan of Reorgani-zation of Great Bay Power Corporation, dated February 11, 1994, as filed with the Bankruptcy Court.
"Proiect Documents," means, collectively, the UNITIL Documents, the Joint Ownership Agreement, the Transmission Agreement, and, at all times after the due execution and delivery thereof, each Additional Power Purchase Agreement.
"Procertv" means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
" Purchase Price" has the meaning set forth in Section 2.1 hereof.
"Recistration Richts Acreement" means the Registration Rights Agreement to be entered into on the Closing Date between the Reorganized Company and the Purchasers, substantially in the form attached hereto as Exhibit B.
I "Reorcanized Company" shall mean the Company, as reorganized pursuant to the Plan on and after the Effective Date.
"Restructurino" means all of the material
{
transactions contemplated by, or in connection with, the l
Plan, as described in the Disclosure Statement, includ-ing, but not limited to, (i) the filing of the Articles of Organization with the Secretary of State of New Hamp-shire, and (ii) the issuance and sale by the Reorganized 6
Company of 4,800,000 shares of New Common Stock to the Purchaser.
" Sale closina" has the meaning set forth in Section 2.2 hereof.
" Sale Transaction" shall have the meaning set forth in the recitals hereto.
" Egg" means the United States Securities and Exchange Commission.
" Securities Act" means the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder.
" Securities Exchance Act" means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.
" Solicitation" means the solicitation of accep-tances of the Plan pursuant to and in accordance with the l
terms of Sections 1125, 1126(b), 1127 and 1129 of the Bankruptcy Code by the Company from its creditors and l
equity interest holders whose claims or interests will be I
impaired under the Plan.
" Subsidiaries" means, with respect to any person, any corporation, partnership, joint venture or other legal entity of which such person (either alone or through or together with any other Subsidiaries) owns, directly or indirectly, 50% or more of the outstanding stock or other equity interest the holders of which are generally entitled to vote for the election of the board cf directors or other governing body of such corporation or other legal entity.
" Taxes" means all taxes, charges, fees, levies, duties or other assessments, including without limitation all net income, gross income, gross receipts, franchire, value added, sales, use, property, ad valorem, t rans'.e r,
withholding, profits, license, employee, payroll, social security, unemployment, excise, estimated, severance and any other taxes, duties, withholdings, fees, asses sments or charges of any kind whatsoever, including any inter-est, penalties or additional amounts attributable there-7 u_
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to, imposed by any federal, state, local or foreign taxing authority.
i
" Tax Return" means any report, return, informa-tion statement or other information required to be sup-plied to any federal,. state, local or foreign taxing i
authority, or any election permitted to be made, in i
connection with Taxes.
l i
" Transmission Acreement" means the Transmission j
Support Agreement dated as of May 1,.1973, as amended, by.
and between Public Service Company of New Hampshire, New England Power Company and the.other Participants.
j "UNITIL" means UNITIL Power Corp., a Delaware corporation.
i "UNITIL Documents" means the Marketing Agree-
. ment, the Management Agreement, the UNITIL' Power Purchase j
Agreements and the UNITIL Subordinated Mortgages.
i "UNITIL Power Purchase Aareements" means the j
Purchased Power Agreement,. dated as of April 26,.1993, and the Power Purchase option Agreement, dated as of April 26, 1993, each by and between the Company and i
UNITIL.
}
"UNITIL Subordinated Mortaaces" means the-
}
Second Mortgage and Security Agreement and the Third Mortgage and Security Agreement, each dated as of Decem-1
}
ber 22, 1993 by and among.the Company and UNITIL.
i
" Undivided Interest" means the Company's undi-j vided interest in the Facility, the percentage of which l
equals the Undivided Interest Percentage.
j
" Undivided Interest Percentaae" means 12.1324%.
j Section 1.2.
Several Oblications.
The obliga-tions of each Purchaser and the obligations of.the Compa-1 ny hereunder are subject to the execution and delivery of this Agreement by all Purchasers.
The obligations of i
each Purchaser shall be several and not joint, and no Purchaser shall be liable or responsible for the acts of
}
any other Purchaser.
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i ARTICLE II 4
PURCHASE AND SALE OF SKARES i
1 2.1.
Acreement to Purchase and sell.
Upon the terms and subject to the conditions hereinafter set i
forth, each purchaser hereby subscribes for.and agrees to purchase from the Company, and the Company agrees to i
issue and sell to each Purchaser, on the Closing Date, 8
the number of shares of New Common Stock specified oppo-i.
site such Purchaser's name on the attached Schedule 1.1 for the purchase price specified thereon (the " Purchase Price").
}
2.2.
Sale closine.
(a)
The closing of the purchase and sale of the New Common Stock pursuant to i
Section 2.1 hereof (the " Sale closing") shall take place I
as promptly as practicable following the satisfaction or waiver of the conditions set forth in Article VII hereof.
3 1
The Sale Closing shall be held at the offices of Skadden, i
{
Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York 10022, or at such other place as the parties j
l hereto shall mutually agree.
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(b)
At the Sale Closing, (i) the jl Company shall deliver to each Purchaser, against payment of its Purchase Price therefor, one or more certificates j
for the shares of New Common Stock, in definitive form i
and registered in the name of such Purchaser or its nomi-nee, which name shall be designated in writing at least j
two (2) business days prior to the Sale Closing, repre-l senting the New Common Stock being purchased by it, (ii) each Purchaser shall deliver to the Company against i
delivery of the certificate or certificates representing i
the New Common Stock, by wire transfer to such account as the Company shall designate in writing at least two (2) i business days prior to the Sale Closing, its Purchase Price payable in immediately available funds, and (iii)
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each party to this Agreement shall deliver to the others such other documents, instruments and writings as may be l
required to be delivered in accordance with this Agree-
- ment or as may be reasonably requested by such other j
party.
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i ARTICLE III REPRESENTATIONS AND WARRANTIEj OF THE COMPANY The Company hereby represents and warrants to each Purchaser as follows:
3.1.
Corocrate Orcanization.
The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorpora-tion, and, subject to the jurisdiction of the Bankruptcy Court, has all requisite corporate power and authority to own or lease and operate its properties and to carry on its business as now being conducted, and is duly quali-fled to do business and in good standing in each juris-diction in which the property owned, leased or operated by it or the nature of the business conduced by it makes such qualification necessary.
The Company has made available to each Purchaser or its agents complete and correct copies of its Articles of Organization and by-laws as in effect on the date hereof.
3.2.
Capitalization.
(a)
On the Closing Date, after giving effect to the Plan and the Restructur-ing, the authorized capital stock of the Reorganized Company will consist of 8,000,000 shares of New Common Stock, 4,800,000 shares of which will be sold to the Pur-chasers and when sold will be duly authorized and validly issued, fully paid and nonassessable and 3,200,000 shares of which will be reserved for issuance upon cancellation of the Company's Existing Debt.
(b)
On the Closing Date, after giving effect to the Plan and the Restructuring, except as set forth in Section 3.2 (a) above, the Reorganized Company will not have outstanding any capital stock or securities convertible into or exchangeable for any shares of capi-tal stock and there will be no options, warrants or other rights, agreements, arrangements or commitments of any e
character to which the Reorganized Company is a party or otherwise obligating the Reorganized Company to issue or sell, or, entitling any person to acquire from the Reor-ganized Company, and, the Reorganized Company will not be a party to any agreement, arrangement or commitment obligating it to repurchase, redeem or otherwise acquire, any shares of its capital stock or securities convertible 10
~
i i-into or exchangeable for any of its capital-stock.
i (c)
Upon delivery of the=certifi-cate(s) representing the New Common Stock, and payment of the Purchase Price. therefor, pursuant to the Sale Trans-j action in accordance with the terms of this Agreement, the Reorganized Company will. transfer to each Purchaser
. good and valid title to the New Common' Stock,-free and clear of any Lien, other-than Liens, if any, created'by j
such Purchaser.
i l
3.3.
Subsidiaries.
The Company has no, and never has had any, Subsidiaries and neither owns nor l
holds any interest in any corporation, partnership,. joint venture or other person except for the Company's owner-ship of the Undivided Interest.
}
3.4.
Authorization.
(a)' Subject to the entry i
j of the Confirmation order, the Company.has full corporate power and authority to execute and deliver this' Agreement i
I and the Registration Rights Agreement and to, consummate j
the transactions contemplated hereby and thereby in accordance with the terms hereof and thereof and other-l wise pursuant to the Restructuring.
Except for the i
approval of the Bankruptcy Court, no other' corporate pro-j ceedings on the part of the Company are necessary to j
approve and authorize the execution and delivery of this Agreement and the Registration Rights Agreement and the 1
i consummation of the transactions contemplated hereby and j
thereby in accordance with the terms hereof and thereof j
and otherwise pursuant to the Restructuring.
Upon the.
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approval by the Bankruptcy. court, each of this Agreement i
and the Registration Rights Agreement will constitute a valid and binding. agreement of the Reorganized Company, i
enforceable against the Reorganized Company, in accor-1 dance with its terms, except (a) to the extent-limited by l
(i) bankruptcy, insolvency, reorganization, fraudulent l
transfer, moratorium or other similar laws now or hereaf-ter in effect relating to creditors' rights generally and (ii) general principles of equity and- (b) the enforce-l ability of the rights to indemnity provided for in the Registration Rights Agreement may be limited by public j
policy considerations.
j (b)
The Company has or on the. Closing j
Date will have full corporate power and authority to-l effect the Restructuring in accordance with the terms i
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i thereof and otherwise pursuant to the Plan and to execute and deliver each agreement, instrument and document required to be executed by it in connection therewith and to consummate the transactions contemplated thereby.
The consummation of the Restructuring has or on the Closing
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Date will have been duly authorized or ratified by the Board of Directors of the Company, and no other corporate proceedings on the part of the Company will be necessary to approve and authorize the consummation of the Restruc-turing or the execution and delivery of the agreements, instruments and documents contemplated thereby in accor-4 dance with their terms.
As of their respective dates of j
execution and delivery, each agreement required to be executed by the Company, subject to approval by the Bankruptcy Court, or the Reorganized Company in connec-tion with the Restructuring will constitute a valid and j
binding agreement of the Company or the Reorganized Company as the case may be, enforceable against the Company or the Reorganized Company, as the case may be, in accordance with its terms, except, in the case of the l
Reorganized Company, to the extent limited by (i) bank-ruptcy, insolvency, reorganization, fraudulent transfer, moratorium or similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity.
3.5, Breach.
Neither the execution and deliv-ery of this Agreement by the Company, and each other agreement, instrument and document required to be execut-ed by the company or the Reorganized Company in connec-tion with Restructuring, nor the consummation of the transactions contemplated hereby or thereby, including i
the Restructuring, nor the compliance by the Company or the Reorganized Company with any of the provisions hereof i
or thereof, will, except as set forth on Schedule 3.5
)
hereto, (i) conflict with, violate or result in any breach of the certificate of incorporation, by-laws or other charter documents of the Company or the Reorganized Company, as the case may be, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default or give rise to any right of termination, cancellation or acceleration under, or result in the creation of any Lien on or against any of the Properties of the Company or the Reorganized Company, as the case may be, pursuant to any of the terms or conditions of any note, bond, mortgage, indenture, li-cense, agreement or other instrument or obligation to i
i 12 a
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~
which the Company or the Reorganized Company as the case may be is a party or by which any of them or any of their properties or assets may be bound, or (iii) subject to Bankruptcy Court approval, violate in any material re-spects any Governmental Rule binding on the Company or the Reorganized Company or any of its Properties.
3.6.
Governmental Acerovals.
All of the Government Approvals necessary for the Company to own, manage and operate its Undivided Interest as contemplated by the Project Documents are set forth in Schedule 3.6 and have been duly obtained, were validly issued and are in full force and effect, are not subject to appeal and are held in the name of the company.
The information set forth in each application submitted in connection with each such Government Approval is accurate and complete in all material respects.
Each Purchaser has received a true complete copy of each such Government Approval heretofore obtained or made by the Company.
3.7.
Compliance with Aeolicable Law.
The business of the Company is not being conducted in viola-tion of any material Governmental Rule.
The Company pos-sesses all domestic and to the knowledge of the Company, foreign governmental licenses, permits, authorizations and approvals and has made all registrations and given all notifications required under federal, state, local or, to the knowledge of the Company, foreign law to carry on in all respects its business as currently conducted, except as otherwise disclosed in writing by the company to the Purchasers on or prior to the date hereof and except to the extent that not having such items could not reasonably be expected to result in a Material Adverse Effect.
No investigation or review by any Governmental Entity is pending or, to the knowledge of the company, threatened against the Company or the Facility, other than those the outcome of which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
3.8.
Litication.
Except as set forth on Schedule 3.8 hereto, there is no claim, action or pro-ceeding (including any condemnation proceeding) pending or, to the best knowledge of the Company, threatened 3
against or relating to the company, its Undivided Inter-i est or any of its other Properties by or before any Gov-ernmental Entity that will not'be discharged in bank-13 i
i 3
j 3
l ruptcy, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator l
outstanding against the Company or any of its Properties that will not be discharged in bankruptcy.
To the best knowledge of the Company without independent investiga-tion, there is no action, suit or proceeding at law or in equity or by or before any Government Entity,. arbitral l
tribunal or other body, now pending or threatened against l
any party to any Project Document or any of their respec-i tive Properties which could reasonably be expected to j
result in a Material Adverse Effect.
I 3.9.
Financial Condition.
The financial j
statement.of the company to be delivered to the Purchas-ers pursuant to Section 7.1(g) (i) (including the.related 1
notes and schedules thereto) is complete and correct and fairly presents the financial' condition of the Company as at said date and the results of operations for the fiscal j
j period ended on said date, all in accordance with GAAP j
l applied on a consistent basis.
The Company does not have on said date any material contingent liabilities, liabil-4 l
ities for taxes, unusual forward or long-term commitments j
j-or unrealized or anticipated losses from any unfavorable a
commitments, except as referred to or reflected or pro-j-
vided for in said financial statement as at said date.
j Since the date of such financial statements, there has i
been no material adverse change in the business, opera-i tions, condition (financial or otherwise).or Property taken as a whole of the Company from that set forth in j
said financial statements as at said date.
3.10.
No Undisclosed or Contincent Liabili-ties.
Except as described in the Disclosure Statement,.
the Company owes no claims (including, but not limited i
to, any claims as defined in Section 101(5) of the Bank-ruptcy Code), liabilities or obligations of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due) that would be required to be reflected or reserved against-on the bal-1 ance sheet of the Company or disclosed in footnotes I
thereto, all in accordance with GAAP, except for-claims, j
liabilities or obligations reflected or reserved against on the Balance Sheet or disclosed in footnotes thereto.
1 3.11.
Taxes.
The Company has timely filed t
with the appropriate federal, state, local.and foreign i
taxing authorities all Tax Returns required to be filed 14 4
4 e
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. _. _... _ -. ~.,.. _ -...._
i
~
by or with respect to the Company.
The Company has paid or caused to be paid in full or has made or has caused to be made adequate provision for on its books and records (in accordance with GAAP) all Taxes shown to be due on such Tax Returns, (in accordance with GAAP) for all taxec payable by the Company.
The Company has not granted any waivers, consents or extensions which extend the statute of limitations to assess U.S.
federal income taxes of the Company to a date after the date hereof.
Schedule 3.11 hereto sets forth all material written deficiency notices or assessments from any federal, state, local or foreign taxing authority with respect to liability for Taxes of the Company that has not been fully paid or finally settled other than notices or assessments for Taxes that in the aggregate would not have a Material Adverse Ef-feet, and all such deficiency notices or assessments are being contested in good faith.
Schedule 3.11 hereto sets forth all Tax Returns of the Company that are currently (or proposed to be) the subject of any audit or other proceeding by (i) the U.S.
Internal Revenue Service or j
(ii) by any other tax authority whose audit or proceeding 3
singly or in the aggregate could reasonably be expected to involve an amount of Taxes that would have a Material Adverse Effect.
Except as set forth on Schedule 3.11 hereto, the statute of limitations to assess U.S.
federal 1
income taxes has expired for all taxable periods through I
the taxable year ended December 31, 1989 with respect to the Company.
Except as set forth on Schedule 3.11 here-to, there are no material Liens for Taxes upon the assets of the Company except for statutory liens for current Taxes that are not yet due or Taxes that ace being con-tested in good faith.
The Company has not filed a con-sent pursuant to section 341(f) of the Code or agreed to have section 341(f) (2) of the Code apply to any dispo-sition of a subsection (f) asset (as such term is defined in section 341(f) (4) of the Code) owned by the Company.
Except as set forth on Schedule 3.11 hereto, the Company is not a party to any written agreement providing for the allocation, sharing or indemnification of Taxes that would reasonably be expected to have a Material Adverse Effect.
1 3.12.
Emolovee Benefit Plang.
The Company and the ERISA Affiliates have no Pension Plans or Multiemployer Plans and are in compliance in all material respects with the presently applicable provisions of ERISA and the Code.
15 i
5 i
a 3.13.
Absence of Certain Chances or Events.
Except (a) as set forth in the Disclosure Statement and (b) for such changes contemplated by or provided for in the Plan, since January 1, 1994, (i) the Company has con-ducted its business, operations and affairs in the ordi-nary course of business consistent with past practice, except for such changes primarily occurring as a result of the Company operating as a debtor-in-possession during the pendency of the bankruptcy case; and (ii) there has not been any change, condition or event that, individual-ly or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.
3.14.
Environmental Matters.
(a) Except as set forth in Schedule 3.14, the Company has obtained all permits, licenses and other authorizations, and have made all registrations and given all notifications, that are required with respect to the operation of its business under all applicable Environmental Laws.
(b)
Except as set forth in Schedule 3.14, the company is in compliance in all material re-spects with all terms and conditions of the required permits, licenses and other authorizations referred to in paragraph (a) above, and is also in compliance in all material respects with any other limitations, restric-tions, conditions, standards, prohibitions, requirements, j
obligations, schedules and timetables contained in the Environmental Laws or contained in any regulation, code, plan, order, decree, judgment, injunction, settlement agreement, notice or demand letter issued, entered, promulgated or approved thereunder.
(c)
Except as set forth on Schedule 3.14, there is no civil, criminal or administrative ac-
)
tion, suit, demand, claim, hearing, notice of violation, i
investigation, proceeding, notice or demand letter (col-lectively " Actions") pending or, to the best knowledge of the company, threatened against the Company or the Facil-ity relating in any way to Environmental Laws or any regulation, code, plan, order, decree, judgment, injunc-tion, notice or demand letter issued, entered, promulgat-ed or approved thereunder.
3.15.
Material Contracts.
Except as set forth on Schedule 3.15, after giving effect to the Plan and the Restructuring, each material note, bond, mort-16
7 t '.
i i
i gage, indenture, license, contract, agreement or other instrument or obligation of the Company which is being assumed pursuant to the Plan will be in full force and l
effect and will constitute a legal, valid and binding obligation of the Company and, to the best knowledge of the company, each other party thereto, and will be en-i forceable against the parties thereto in accordance with l
its terms as modified, if applicable, under the Plan or i
pursuant to Bankruptcy Court order, and except to the extent that such enforceability is limited by (i) bank-
)
ruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity, and neither the Company I
nor, to'the knowledge of the Company,'any other party thereto is in violation or breach thereof or default thereunder.
3.16.
Properties; Encumbrances..On the j
Closing Date after giving effect to the Plan and the Restructuring, the Reorganized Company will have good and valid, and in the case of real property marketable, title l
to all material properties and assets which it purports j
to own (real, personal and mixed, tangible and intangi-I ble, including all forms of intellectual property and intellectual property rights), including, without limita-i tion, all the material properties and assets reflected on the Balance Sheet and all material properties and assets purchased by the company since the date of the Balance i
Sheet.
All material properties and assets of the Reorga-1 nized Company will be free and clear of all liens, mort-gages, claims (including, but not limited to, any claims as defined in Section 101(5) of the Bankruptcy Code),
i interests, charges, security interests or other encum-l brances or adverse interests of any nature whatsoever and other title or interest retention arrangements
(" Liens"),
i except (a) as reflected on the Balance Sheet, (b) statu-1 tory Liens of carriers, warehousemen, mechanics, workmen I
and materialmen for liabilities and obligations incurred in the ordinary. course of business consistent with past 1
practice that are not yet delinquent or are being con-i tested in good faith, (c) such defects, irregularities, j
encumbrances and other imperfections of title as normally exist with respect to property similar in character and that, individually or in the-aggregate together with all 1
other such exceptions, do not and would not have or j.
result in a Material Adverse Effect, (d) Liens for Taxes, 1
17 i
i 1
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1 i
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I l
(e) the rights of the joint owners pursuant to the Joint Ownership Agreement and (f) the UNITIL Subordinated Mortgages.
On the closing Date after giving effect to the Plan and Restructuring, the rights, properties and other assets owned, leased or licensed by the Reorganized company will include all rights, properties and other assets necessary to permit the Reorganized Company to conduct its business in all material respects in accor-dance with the Reorganized Company's business plan de-scribed in the Disclosure Statement.
3.17.
Insuraneg.
All current primary, excess and umbrella policies of insurance owned or held by or on behalf of or providing insurance coverage to the Company are in full force and effect.
With respect to all such insurance policies providing insurance coverage to the Company, no premiums are in arrears, no notice or cancel-lation or termination has been received with respect to any such policy, other than notices of cancellation or termination routinely sent at the end of a policy term, and all such insurance policies are valid, outstanding, collectible and enforceable policies.
The insurance coverage of the company is adequate and sufficient to cover claims in the ordinary course of business beyond applicable deductibles or self-insured retention amounts and, to the best knowledge of the company, is consistent with the coverage maintained by corporations of similar size and engaged in similar lines of business.
)
l 3.18.
Emolovee Claims; Labor Matters.
(a) i Except as set forth on Schedule 3.18, on the Closing Date, after giving effect to the Plan and the Restructur-l ing, there will be no claims or actions pending or, to t
the best knowledge of the Company, threatened between the l
Reorganized Company and any of its employees that would, or would be reasonably likely to, individually or in the aggregate, have a Material Adverse Effect.
Except as set forth in Schedule 3.18 hereto, (i) on the Closing Date, after giving effect to the Plan and the Restructuring, no current or former employee of the Company or the Reorga-nized Company owns any securities of the Reorganized Company and (ii) there will be no agreements, arrange-ments or understandings.between any employee of the Company on the one hand and the Reorganized Company on the other hand providing any such rights to any of such employees.
18
4 (b)
On the Closing Date, after giving effect to the Plan and the Restructuring, there will be no unfair labor practice complaints pending against the Reorganized Company before the National Labor Relations Board or any union representation questions involving J
i employees of the Reorganized Company that would, individ-ually or in the aggregate, have a Material Adverse Ef-fect.
The Company has no knowledge of any strikes, slowdowns, work stoppages or lockouts, or threats there-l of, by or with respect to any employees of the Company i
i that would, individually or in the aggregate, have a Material Adverse Effect.
^
3.19.
Disclosure Statement.
The Disclosure Statement and any supplements thereto taken as a whole will comply with the requirements of Section 1125 of the Bankruptcy Code.
3.20.
Material Disclosure.
This Agreement (including any Exhibit or Schedule hereto), the Plan and the Disclosure Statement, and any supplements thereto, and any written statements, documents or certificates i
furnished to any Purchaser by the Company, and as of the Closing Date, in connection with the transactions contem-plated hereby, taken as a whole, do not and will not contain any untrue statement of a material fact or omit 1
i to state a material fact required to be stated herein or therein or necessary to make the statements herein or i
therein, in light of the circumstances under which they were made, not misleading.
The pro forma financial pro-jections contained in the Base Case Forecast were made in good faith and the assumptions on which such projections were made were (when made) and are (as of the Closing Date) reasonable.
There is no fact known to the Company on the Closing Date that has not been disclosed in writ-ing to the Purchasers which has, or which could reason-ably be expected in the future to have, a Material Ad-l verse Effect.
3.21.
Delivery of Documents.
Each Purchaser 4
has received a true and complete copy of each Project Document as in effect on the date of this representation (including all exhibits, schedules and disclosure letters referred to therein or delivered pursuant thereto, if any).
Except as may be permitted from time to time pursuant to Secti 5.1 (1), none of the Project Documents has been amended,
>dified or terminated, and all of the 19 1
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)
e
\\ Project Documents are in full force and effect.
All conditions precedent to the effectiveness of the obliga-tions of the respective parties under the Project Docu-ments will have been satisfied or waived on or before the Closing Date.
All representations, warranties and other factual statements made by the Company, and, to the best knowledge of the Company without independent investiga-tion, made by each other Person in the Project Documents or documents furnished thereunder are true and correct in all material respect and do not omit to state any materi-al fact necessary to make such representations, warran-ties and other factual statements not misleading.
3.22.
Securities Laws.
The offer, sale and issuance of the New Common Stock by the Company pursuant i
to the Sale Transaction, and in accordance with the terms l
and conditions of the Plan, the Restructuring and this Agreement has not violated, and will not violate, the i
Securities Act or Blue Sky Laws.
4 3.23.
R;nraanization Case.
The Company has not taken any action, or failed to take any action, which action or failure would prevent, materially impede or result in the revocation of (i) entry of the Confirmation 4
order (as provided in Section 1129 of the Bankruptcy f
Code), (ii) a full and complete discharge of all material debts of the Company to the fullest extent possible under Section 1141(d) of the Bankruptcy Code and (iii) the vesting upon the entry of the Confirmation order of the property of the Company in the Company in its reorganized 4
form, free and clear of all Liens in accordance with Section 1141(b) and (c) of the Bankruptcy Code.
i 3.24.
Status.
The Company is exempt from all i
provisions of the Public Utility Holding Company Act of 1935, as amended.
None of the Purchasers, solely by virtue of the execution, delivery or performance of, and the consummation of the transactions, contemplated by, this Agreement and the Project Documents shall be or become (i) subject to regulation under the Public Utility Holding Company Act of 1935, as amended (ii) subject to regulation as a "public utility" under and as defined in the FPA, or (iii) subject to regulation as a "public utility" or "public service corporation" or the equiva-lent under the laws of the State of New Hampshire.
The Company is not an " investment company" or a company
" controlled" by an " investment company" within the mean-20 s
i
. -. ~
y
I l
ing of the Investment Company Act of 1940, or an " invest-ment advisor" within the meaning of the Investment Compa-ny Act of 1940.
3.25.
Exemnt Wholesale Generator.
The Compa-ny is an " Exempt Wholesale Generator" as such term is de-fined in Section 32 of the Public Utility Holding Company Act of 1935, as amended.
l l
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l 1
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS Each Purchaser hereby represents and warrants (in respect of itself only) to the Company as follows:
i 4.1.
Orcanization; Authorization.
It is a corporation or partnership, validly existing and in good standing under the laws of its jurisdiction of organiza-tion or formation and has full power and authority to execute and deliver this Agreement and the Registration Rights Agreement, and to consummate the transactions contemplated hereby and thereby in accordance with the terms hereof and otherwise pursuant to the Restructuring.
The execution and delivery of this Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated hereby and thereby have been duly authorized by such Purchaser, and no other proceed-ings on the part of such Purchaser are necessary to ap-prove and authorize the execution and delivery of this Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated hereby and thereby in accordance with the terms hereof and otherwise pursuant to the Restructuring.
This Agreement and the Registration Rights Agreement constitute valid and bind-i ing agreements of such Purchaser, enforceable against it in accordance with their terms, except to the extent limited by (1) bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or similar laws now or hereafter in effect relating to creditors' rights gener-l ally and (ii) general principles of equity.
l 4.2.
No Violation: Consents.
(a)
Neither i
the execution and delivery by such Purchaser of this Agreement and the Registration Rights Agreement nor the consummation by such Purchaser of the transactions con-templated hereby or thereby will (i) conflict with, violate or result in a breach of the certificate of incorporation, bylaws, partnership agreement or other governing document of such Purchaser, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default or give rise to any right of termination, cancellation or accel-eration under, or result in the creation of any Lien on or against any of the properties of such Purchaser pursu-22
l 1
ant to, any of the terms or conditions of any note, bond, j
mortgage, indenture, license, agreement or other instru-ment or obligation to which such Purchaser is a party or by which it or any of its properties or assets may be bound, or (iii) violate any statute, law, rule, regula-tion, writ, injunction, judgment, order or decree of any Governmental Entity, binding on such Purchaser or any of its properties or assets, excluding from the foregoing clauses (ii) and (iii) violations, breaches and defaults that individually or in the aggregate, would not prevent i
l or materially delay consummation of or justify rescission l
of the transactions contemplated hereby.
l (b)
No filing, consent, approval, per-l mit, authorization, notice, registration or other action of or with any Governmental Entity is required to be made or obtained by or with respect to such Purchaser in con-nection with the execution and delivery of this Agreement and the Registration Rights Agreement, or the consumma-l tion by such Purchaser of the transactions contemplated hereby and thereby, other than such filings, consents, l
approvals, permits, authorizations, notices or registra-tions the failure of which to make or obtain, individual-ly or in the aggregate, would not prevent or materially delay consummation of the transactions contemplated hereby.
I 4.3.
Status and Investment Intent.
(a)
It is an " accredited investor" as defined in Rule 501(a) under the Securities Act, and it is acquiring the New Common Stock hereunder for its own account for investment purposes only and (subject to its property being at all times within its control) not with a view to, or with any present intention of, resale, distribution or other disposition thereof except as is otherwise provided in this Agreement and pursuant to the Plan with respect to the New Common Stock or as permitted under applicable securities laws.
(b)
It has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its invest-ment in the New Common Stock and it is capable of bearing the economic risks of such investment, including a com-plete loss of its investment.
1 23 n
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l 4.4.
1935 Act.
It is not, and has no "affili-l ate" or " associate company" that is, an " electric utility i
company," as each of those terms are defined in the Public Utility Holding Company Act of 1935, as amended.
l l
ARTICLE V l
COVENANTS OF THE COMPANY l
l 5.1.
Conduct of Business by the comoany l
Pendino the Closino.
Except as contemplated by this Agreement or the Plan or as described in the Disclosure Statement, the company covenants and agrees that, during l
the period between the date of this Agreement and through i
and including the Closing Date, unless the Purchasers shall otherwise unanimously agree in writing, it will:
(a) conduct its business only, and not take any action except in the ordinary course of business and in a manner consistent with past practice or other-wise in connection with the Restructuring, and, subject to the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court and the Plan, shall use its reasonable efforts to preserve substantially intact the business organization of the Company to keep avail-able the services of the present consultants of the company and to preserve the present relationships of the Company with customers, suppliers and other persons with which the Company has significant business relations; (b) not amend either its Articles of Incorporation or by-laws; (c) not split, combine or reclassify
)
its outstanding capital stock or declare, set aside, make or pay any dividend or other distribution in respect of its capital stock (in cash or otherwise);
(d) except as provided for in the Plan, not to issue or sell (or agree to issue or sell) any of its respective shares of capital stock of any class or other equity interests, as the case may be, or any securities convertible into or exchangeable for such shares or interests, or any subscriptions, options, warrants, conversion or other rights, warrants, agree-arrangements or understandings of any kind obli-
- ments, 24
b l
l gating it to issue or sell any such shares or interests or any such convertible securities; (e) except as set forth in Schedule 5.1 (e), not (i) grant to any director or officer or to any consultant or employee any increase in compensation in any form, (ii) grant to any'such person any severance or termination pay or benefit, or (iii) make any loan or
' advance to, or enter into,: amend, modify, terminate or
]
renew any collective bargaining agreement or compensa-tion, benefit or employment agreement or arrangement with, any such person; (f) not adopt, enter into, amend, modify or terminate, or announce any intention to adopt, enter into, amend, modify or terminate any Benefit Plan or any other employee benefit plan, program or arrange-ment of general. applicability, except as required by applicable law and following prior notice to and consul-1 l-tation with the Purchasers; (g) not agree or'otherwise commit to take any of the actions' described in the foregoing para-graphs (b) through (f); and (h) not engage in any transactions which could result in a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section l
4975 of the Code; l
(i) not agree to amend the Joint Ownership Agreement or amend in any material respects any other Project Document; and (j) not enter into any Additional Power Purchase Agreements.
5.2.
Rest ructurina; Bankruotev Cases.
The Company shall use good faith reasonable efforts to effect the transactions contemplated hereby and the other Re-i i
structuring transactions contemplated hereby and the I
other Restructuring transactions pursuant to the Plan and the Solicitation.
Without. limiting the foregoing, (i) the Company shall use its good faith, reasonable efforts to cause confirmation of the Plan by the Bankruptcy Court using the acceptances of the Plan received pursuant to i
the Solicitation; (ii) the Company shall comply in all 25 1
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5 material respects with the Bankruptcy Code and other laws, rules, regulations, decrees and orders promulgated thereunder in connection with obtaining confirmation of l
the Plan; (iii) subject to (ii) above and except as l
otherwise permitted by Section 5.3 hereof, shall use its reasonable good faith efforts to obtain, and shall re-frain from knowingly taking any action that would be l
likely to prevent, materially impede or result in the revocation of, (A) the entry by the Bankruptcy Court of the Confirmation Order, (B) a full and complete discharge
}
of all debt of the company (to the fullest extent possi-ble under Section 1141(d) of the Bankruptcy Code) in accordance with the Plan and (C) the vesting upon the occurrence of the Effective Date of the property of the Company in the Company in its reorganized form, free and l
clear of all Liens in accordance with Sections 1141(b) and (c) of the Bankruptcy Code, except as'specifically set forth in the Plan; and (iv) the Company shall not consent to any change in the financial, economic or other i
terms or any other amendment or supplement to, or modifi-l cation of, the Plan or the Disclosure Statement without the prior written consent of the Purchasers.
5.3.
No Solicitation of Transactions.
Except as contemplated by this Agreement or the Plan, from the date hereof through and including the Closing Date, the Company shall not, directly or indirectly, through any officer, director, agent or otherwise, solic-it or initiate proposals or offers from any person relat-ing to any acquisition of all or a material part of the assets of the Company or any acquisition of the securi-ties of the Company, including, without limitation, any merger, consolidation, recapitalization or restructuring of the Company, or any similar transaction (an "Acquisi-tion"); orovided that if an Acquisition Proposal is made from any person, the Company and the Bondholders' Commit-tee shall be free to participate in any negotiations regarding or furnish to any other person any information with respect to, or otherwise cooperate in any way with, assist, facilitate or encourage, any effort or attempt by any other person to do or seek an Acquisition.
The Company shall promptly notify each Purchaser if it re-ceives a proposal or offer, or any inquiry or contact from any person, relating to a potential Acquisition, and~
shall, in any such notice to the Purchasers, indicate in reasonable detail the identity of the offeror and the terms and conditions of any such potential Acquisition.
26 e
4 l
5.4.
No Amendment of the Plan or Waiver of t
Discharce.
The Company shall not, at any time after the j
date hereof through and including the closing Date, (i) agree to any amendment or supplement to, or modification of the Plan or (ii) waive, the discharge of, or rein-state, or agree to the reinstatement of, or acknowledge or confirm, or reassume any debt which has been dis-charged by virtue of the confirmation of the Plan or any claim or interest extinguished with respect to the prop-erty vested in the Reorganized Company.
5.5.
Disclosure Relatino to Purchasers.
The Company shall not disclose any information with respect to any Purchaser or the Person for whom such Purchaser acts as nominee, including but not limited to the identi-ty of any Purchaser or such Person, in any document other than the disclosure approved by such Purchaser to be in-cluded in the Disclosure Statement except where such disclosure is (i) required by law or court order, (ii) required by the SEC, (iii) at the express direction of any government agency of the United States or of any state in which the company conducts business or (iv) approved by such Purchaser.
If such disclosure (other than under clause (ii) above) is required by law or court order, the company shall, to the extent it is reasonably able, notify the affected Purchaser prior to making such disclosure.
I ARTICLE VI ADDITIONAL AGREEMENTS OF THE PARTIES 4
6.1.
Investication by the Purchasers.
(a)
During the period from the date hereof until the Clcsing Date, the Company will provide each Purchaser and its representatives full access upon reasonable notice and at reasonable times to the personnel, properties and all books, records and other information concerning the Company and will furnish to each Purchaser and its repre-i sentatives such financial and operating data, including financial statements, and other information with respect to the business, assets, financial condition and opera-tions of the Company (including, without limitation, all filings with the Bankruptcy Court and other Governmental Entities) as such Purchaser or its representatives shall from time to time reasonably request.
27 4
4 j
(b)
No investigation pursuant to this Section 6.1 shall affect any representations or warran-ties of the company herein or the conditions to the obligations of each Purchaser hereto.
6.2.
Notification of Certain Matters.
(a)
The Company shall give prompt written notice to each Pur-chaser, and each Purchaser shall give prompt written notice to the Company, of (i) the occurrence or non-occurrence of any event the occurrence or non-occurrence of which would be likely to cause any representation or warranty contained in this Agreement to be untrue or 1
inaccurate and (ii) any failure of the Comphny or such j
i Purchaser, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; (b)
The Company shall give prompt written notice to each Purchaser of (i) the occurrence or l
existence of any Material Adverse Effect, and any event, occurrence, fact, condition, change or effect that has had or would reasonably be expected to have or result in a Material Adverse Effect or (ii) of any event, occur-i rence or state of facts that would cause any Schedule or i
any other written disclosure provided to such Purchaser by the company on or prior to the date hereof to not be true and correct in any material respect as of the Clos-ing Date, crovided that no such written notice shall affect the rights of any Purchaser or the obligations of the Company in respect of the representations, warranties or covenants of the Company contained in or made pursuant to this Agreement.
(c)
The delivery of any notice pursu-ant to this Section 6.2 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice.
6.3.
Further Action: Reasonable Efforts.
Upon the terms and subject to the conditions hereof, each of the parties hereto shall use all reasonable efforts to take or cause to be taken all appropriate action and to do or cause to be done all things necessary, proper or advisable under applicable laws and regulations to con-summate the transactions contemplated by this Agreement, including, without limitation, using all reasonable efforts to (i) obtain all licenses, permits, consents, 28
approvals, authorizations, qualifications and orders of Governmental Entities (including, without limitation, pursuant to any applicable requirements under or in connection with the HSR Act, the NRC, the NHPUC, the FERC and applicable foreign laws) and third parties and (ii) effect the execution and delivery of the Registration Rights Agreement.
6.4.
Public Announcements.
Except as may be otherwise required by law, each Purchaser and the Company shall consult with each other before issuing any press release or otherwise making any public statements with I
respect to this Agreement and shall not issue any such press release or make any such public statement prior to 4
such consultation, 6.5.
Restrictive Lecend.
Each certificate i
representing the New Common Stock purchased under the Agreement shall contain a legend relating to restrictions on resale arising under the Securities Act and Blue Sky i
laws substantially in the following form THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES OR
" BLUE SKY" LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT AND APPLICABLE STATE SECURITIES AND BLUE SKY LAWS OR AN EXEMPTION
~
FROM REGISTRATION IS AVAILABLE.
i i
b
}
i 29 i
4
ARTICLE VII i
CONDITIONS TO CLOSING 1
i 7.1.
Conditions to Oblications of the Purchasers.
The obligation of each Purchaser to purchase the New Common Stock hereunder pursuant to the Sale Transaction is subject to the satisfaction or waiver at, or prior to, the Sale Closing of the following condi-tions:
1 (a)
Reoresentations and Warranties; Acreements and Covenants.
(1)
The representations and warranties of the Company contained in this Agreement, the Registration Rights Agreement and in any certificate i
or agreement of the company delivered pursuant hereto or
~
thereto shall be true and correct in all respects as of the date hereof and as of the Closing Date, with the same force and effect as if made on the closing Date, (ii) the Company shall have performed or complied with in all material respects all agreements and covenants contained in this Agreement, the Registration Rights Agreement and in any certificate or agreement of the Company delivered pursuant hereto or thereto to be performed or complied with by the company at or before the Sale Closing, and (iii) each Purchaser shall have received a certificate of the Company, signed by the President or a Vice President thereof, on behalf of the Company, as to the fulfillment of the conditions set forth in the foregoing clauses (i) and (ii).
(b)
Confirmation of the Plan and Entry of the confirmation order.
The Plan shall have been con-firmed by the Bankruptcy Court and the Confirmation i
Order, in form and substance reasonably satisfactory to each Purchaser, shall have been entered.
The Confirma-tion Order shall not exclude from the scope of the dis-l charge granted to the Company any monetary liability for the litigation referred to in paragraph 2 of Schedule 3.8.
On the date upon which all other conditions prece-dent set forth in this Section 7.1 have been satisfied or waived, (x) any motion for rehearing or reconsideration of the Confirmation Order shall have been denied or with-4 drawn and (y) no request for revocation of the Confirma-tion Order under section 1144 of the Bankruptcy Code shall have been made or, if made, shall remain pending.
30 e
4 e-
i The time allowed for appeals (including the time to seek review or rehearing) of the Confirmation order shall have expired without any appeal having been taken or, if the Confirmation Order sacil have been appealed, either (i) the parties he.reto shall have tiled with the Bankruptcy Court a statement that such parties will consummate the transactions contemplated herein notwithstanding such appeal, (ii) no stay of the Confirmation Order shall be in effect, (iii) such appeal shall have been dismissed with prejudice, or (iv) if such a stay has been granted by the Bankruptcy Court. then (A) the stay shall have been dissolved or (B) a final order of the district court j
having jurisdiction to hear such appeal (or, in the case 1
of a request for review or rehearing, the Bankruptcy Court) shall have affirmed the Confirmation order and the time allowed to appeal from such affirmation or to seek review or rehearing thereof shall have expired and no further hearing, acpsal or petition for certiorari can be taken or granted.
?;he Confirmation Order shall not have been modified or amended or have been dissolved, revoked or rescinded, shall be in full force and effect on the 4
Closing Date and, without the necessity of any further i
action or proceedings by the company, the Bankruptcy l
court shall have (x) as of the date of the Confirmation order and as of the closing Date, effected a full and complete discharge and release of, and thereby extin-guished, all debts of the Company (to the fullest extent possible under Section 1141(d) (1) of the Bankruptcy Code) 1 except as specifically set forth in the Plan and (y) vested the property of the company in the Company in its reorganized form, free and clear of all Liens, to the extent contemplated by the Plan.
(c)
Litication.
Other than the Con-firmation Order, there shall have been no order or pre-liminary or permanent injunction entered in any action or proceeding before any Governmental Entity, nor other action taken by any Governmental Entity, nor any statute, rule, regulation, legislation, interpretation, judgment or order enacted, entered, enforced, promulgated, amend-ed, issued or deemed applicable to any Purchaser, the Company, the Plan, the Solicitation or the Restructuring by any Governmental Entity that shall have remained in effect and that shall have had the effect of:
(i) making illegal, materially delaying or otherwise directly or indirectly prohibiting or materially restraining or making materially more costly the Sale Transaction, the 31
i confirmation of the Plan or the consummation of any other aspect of the Restructuring; (ii) prohibiting or materi-ally limiting the ownership or operation by the Company of all or any material portion of its respective busi-nesses or assets, or compelling the Company to dispose of or hold separate all or any material portion of its business or assets, as a result of the Restructuring; (iii) imposing or confirming material limitations on the ability of any Purchaser to effectively exercise full 2
rights of ownership of the New Common Stock to be ac-quired pursuant to this Agreement, including, without j
limitation, the right to vote any New Common Stock on all matters properly presented to stockholders; (iv) requir-ing divestiture by any Purchaser of any of the New Common Stock; or (v) causing a Material Adverse Effect.
(d)
No Action or Proceedinc.
No 1
action, suit, claim or proceeding by or before any Gov-ernmental Entity shall have been commenced and be pending that seeks to have, or is reasonably likely to have, any of the effects described in clauses (i) through (v) of Section 7.1(c) above.
j (e)
Orcanizational Documents.
A copy of the Certificate of Incorporation or Articles of Orga-nization and by-laws of the Company, in each case as in effect on tht Closing Date, certified by the Secretary of j
State of its state of incorporation, and a certificate as to the good standing of, payment of franchise taxec by and charter documents filed by the company from cuch Secretary of State, dated as of a recent date, s; hall have been delivered to the Purchasers.
(f)
Officer's certificate.
A certifi-cate of an authorized officer of the Company, dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws of the Company as in effect on the date of such certificate, (B) that i
attached thereto is a true and complete copy of resolu-tions duly adopted by the board of directors of the Company ratifying the execution, delivery and performance of the Stock Purchase Agreement and Registration Rights Agreement, and that such resolutions have not been modi-fied, rescinded or amended and are in full force and i
effect, (C) that the Certificate of Incorporation or Articles of Organization and by-laws of the Company has not been amended since the date of the certification 32
l i
thereto furnished pursuar t to clause (e) above, and (D) as to the name, incumbency and specimen signature of each officer of the company executing the stock Purchase Agreement and Registration Rights Agreement and each other document to be delivered by the Company from time to time in connection therewith.
(g)
Financial Condition.
The Purchas-ers shall have received (i) copies of the financial statements of the company for the most recently completed i
fiscal year of the Company, together with a certificate dated the Closing Date from an authorized officer of the Company to the effect that (A) such financial statements are complete and correct and fairly present the financial
^
condition of the Company as at December 31, 1993 and the results of operations for the fiscal period ended on said date, all in accordance with GAAP applied on a consistent basis, DB) thers has been no change in its financial condition from the date of such financial statements to the Closing Date which (although af ter giving effect to 1
the fresh start accounting rules as of the Effective Date, the company's financial statements will be substan-i tially different from the financial statements delivered pursuant to this sub-subparagraph (i) of sub-paragraph (g)) could reasonably be expected to have a material adverse effect on its ability to perform its obligations under the Project Documents to which it is a party and (C) no other event affecting the Company shall have oc-curred since the date of such financial statements which could reasonably be expected to have a material adverse effect on its ability to perform its obligations under the Project Documents to which it is a party; (ii) copies i
of the pro forma balance sheet of the Reorganized Company as at the Closing Date, based on the most recent month-end statement of North Atlantic Energy Services Company j
relating to the Facility accompanied by the opinion of Arthur Anderson, or other ndependent public accountants of reorganized public standing, that such pro forma balance sheet was prepared in accordance with GAAP ap-plied on a consistent basis and otherwise reasonably ac-ceptable to each Purchaser and certified by the chief financial officer or treasurer of the Company as complete and correct and fairly presenting the financial cordition of the Company as at the Closing Date in accordance with GAAP and (iii) if the Company is required to file 'egular periodic reports with the Securities and Exchange Commis-sion, the most recent such report so filed.
4 33 1
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l (h)
Government Acerovals.
All Govern-mental Approvals required to be made or obtained with respect to the Company or the Reorganized Company in connection with the Project Documents, the Restructuring er the consummation of the transactions contemplated hereby and thereby are in full force and effect and are not subject to appeal; crovided that if (i) the FERC has determined that judicial review of determinations by the
,FERC of exempt wholesale generator status is provided under Section 25 of the 1935 Act, 15 U.S.C.
S 79y, and (ii) Section 25 of the 1935 Act does not provide a time limit for obtaining judicial review, then FERC's determi-nation of the Company's exempt wholesale generator status may be subject to review.
Originals (or copies ' certified by an authorized officer of the Company to be true cop-ies) of all such Government Approvals and such other Gov-ernment Ap,rcovals as any Purchaser may reasonably request and which, in the opinion of special counsel to the Purchasers, are necessary under applicable Government Rules in connection with the transactions contemplated by the Project Documents and the Restructuring and certified copies of all material correspondence referred to in such Government Approvals and all applications for such Gov-ernment Approvals.
(i)
Certain Proiect Documents.
Evi-dence delivered to the Purchasers that each of the Pro-ject Documents, including any amendments, supplements and 1
waivers, has been duly executed and delivered by each Person that is intended to be a party thereto, that the j
conditions to the effectiveness of such documents have i
been satisfied or waived and that each of such documents are in full force and effect; and the Purchasers shall have received a true and correct copy of each such Pro-ject Document, certified as such by an authorized officer i
of the Company; crovided that evidence of the due execu-tion and delivery by the other parties to the Joint Ownership Agreement and the Transmission Agreement shall not be required to be delivered hereunder.
(j)
Recistration Richts Acreement.
The Registration Rights Agreement shall have been duly executed and delivered by the Reorganized Company and the' other parties thereto other than the Purchasers.
(k)
Insurance.
Evidence of all insur-ance maintained by or on behalf of the Company has been 34
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(
delivered to the Purchasers, in form and substance rea-sonably satisfactory to the Purchasers.
l (1)
Proiections.
The Base Case Fore-cast shall have been delivered to the Purchasers.
(m)* Material Adverse Chance.
No change, condition or event shall have occurred that has l
had, or would be reasonably likely to have, a Material Adverse Effe~t.
c (n)
Documentation.
All documentation relating to the Restructuring and the Plan shall be i
reasonably satisfactory in form and substance to the Purchasers.
(o)
Consummation of Plan.
All condi-tions precedent to the consummation of the Plan (other than the closing of the transactions contemplated hereun-der) shall have been met and all conditions precedent to
)
the occurrence of the Effective Date (other than the i
closing of the transactions contemplated hereunder) shall have occurred pursuant to the terms and conditions there-i of.
i (p)
Ooinion of Comoany Counsel.
The i
Purchasers shall have received a written opinion, dated the Closing Date, from Hale and Dorr, special counsel to, j
and New Hampshire counsel to, the Company, in form and substance (including qualifications) reasonably satisfac-tory to the Purchasers.
j (q)
PURCA Ooinion.
The Purchasers shall have received a written opinion, dated on or before the Closing Date, from Skadden, Arps, Slate, Meagher &
Flom, special counsel to the Purchasers, or such other counsel reasonably acceptable to the Purchasers, in form and substance satisfactory to the Purchasers to the effect that the Purchasers will not be subject to regula-tion under the Public Utility Holding Company Act of 1935, as amended, solely by virtue of the consummation of the transactions contemplated herein.
(r)
Other Purchasers.
Each other Purchaser shall simultaneously pay its Purchase Price and the Company shall simultaneously deliver to each of the 35 1
I
other Purchasers one or more certificates for its shares of New Common Stock.
(s)
Other Documents.
Such other documents, instruments or opinions any Purchaser or counsel to the Purchasers may reasonably request.
7.2.
Conditions to Oblications of the Company.
The obligation of the Reorganized Company to issue and sell the New Common Stock hereunder pursuant to the Sale Transaction is subject to the satisfaction or waiver at, or prior to, the Sale Closing of the following condi-1 tions:
(a)
Reoresentations and Warranties, Acreements and Covenants.
(i) The representations and warranties of each Purchaser contained in this Agreement, the Registration Rights Agreement and in any certificate or agreement of any Purchaser delivered pursuant hereto and thereto shall be true and correct in all material re-spects as of the date hereof and as of the Closing Date, except for changes specifically set forth in the Plan and the Restructuring, with the same force and effect as if made on the Closing Date, (ii) each Purchaser shall have l
performed or complied with in all material respects all agreements and cove.nants contained in this Agreement, the Registration Rights Agreement and in any certificate or agreement of any Purchaser delivered pursuant hereto or thereto to be performed or complied with by such Purchas-er, at or before the Sale Closing, and (iii) the Company shall have received a certificate of each Purchaser, signed by a duly authorized officer of such Purchaser, as to the fulfillment of the conditions set forth in the foregoing clauses (i) and (ii).
(b)
Confirmation of the Plan and Entry of the confirmation Order.
The Plan shall have been con-firmed by the Bankruptcy Court and the Confirmation Order, in form and substance satisfactory to the Company, shall have been entered.
Any motion for rehearing or reconsideration of the Confirmation Order shall have been denied or withdrawn.
The time allowed for appeals (in-s cluding the time to seek review or rehearing) of the l
Confirmation order shall have expired without any appeal having been taken or, if the Confirmation order shall have been appealed, either (i) no stay of the Confirma-tion order shall be in effect, (ii) such appeal shall 36 1
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have been dismissed, or (iii) if such a stay has been granted by the Bankruptcy Court, then (A) the stay shall have been dissolved or (B) a final order of the district court having jurisdiction to hear such appeal (or, in the case of a request for review or rehearing, the Bankruptcy Court ) shall have affirmed the Confirmation order and the l
time allowed to appeal from such affirmation or to seek review or rehearinc thereof shall have expired and no further hearing, appeal or petition for certiorari can be taken or granted.
(c)
Litication.
Other than the Con-firmation order, there shall have been no order or pre-1 liminary or permanent injunction entered in any action or proceeding before any Governmental Entity, nor other action taken by any statute, rule, regulation, legisla-tion, interpretation, judgment or order enacted, entered, enforced, promulgated, amended, issued or deemed applica-ble to the Company, the Plan, the Solicitation or the Restructuring, by any Governmental Entity that shall have
)
remained in effect and that shall have had the effect of making illegal, materially delaying or otherwise directly or indirectly prohibiting or materially restraining or making materially more costly the Sale Transaction, the confirmation of the Plan or the consummation of any other aspect of the Restructuring.
I (d)
Consummation of Plan.
All condi-tions precedent to the consummation of the Plan (other than the closing of the transactions contemplated hereun-der) shall have been met and all conditions precedent to the occurrence of the Effective Date (other than the closing of the transactions contemplated hereunder) shall have occurred pursuant to the terms and conditions there-of.
ARTICLE VIII TERMINATION AND ABANDONMENT 8.1.
Termination.
Notwithstanding the fact that acceptances may have been received pursuant to the Solicitation to confirm the Plan, this Agreement may be terminated, or, in the case of clause (b) below, will be terminated, and the transactions contemplated hereby abandoned at any time prior to the closing Date, 37 s
1 e
r
(a) by written agreement of the Pur-chasers and the Company duly authorized by their respec-tive Boards of Directors; (b) automatically and without any i
further action on the part of the Purchasers, on the one l
hand, or the company, on the other hand, if the closing Date shall not have occurred on the later of August 31, 1994 or within 60 days of the date of confirmation of the Plan, provided that the Plan shall have been con-l firmed on or before July 31, 1994; (c) by the Purchasers, on the one hand, or the Company, on the other hand, if any condition to such party's obligations hereunder becomes incapable of fulfillment other than as a result of such party's material breach of any provision of this Agreement which breach is not waived in accordance with the provisions of i
Section 9.5 hereof; (d) by any Purchaser if the Bondholders' Committee of the Company shall have with-drawn or modified its approval of the Plan or the Re-structuring or shall have approved any Acquisition or proposed Acquisition or if the Company shall have sought to amend or modify the Plan with respect to the financial or economic terms in a manner that would have an adverse effect on the value of the New Common Stock to such Purchaser or in any material respect as to any other aspect of the Plan or withdraw the Plan without the prior written approval of such Purchaser.
8.2.
Effect of Termination.
(a)
In the Event of termination and abandonment of this Agreement pursuant to Section 8.1 hereof, this Agreement shall, subject to Section 9.1 hereof, forthwith become void and have no l
further effect and, except as set forth in Sections
- 8. 2 (b) and 9.7 hereof, there shall be no liability on the part of any party hereto.
I (b)
Notwithstanding any other provi-sion of this Agreement (including Section 8.2(a)), no termination of this Agreement shall release any party hereto from liability for any willful breach hereof.
38 i
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ARTICLE IX j
MISCELTANEOUS 9.1.
Notices.
Any notices or other communica-tions required or permitted hereunder shall be given in writing and shall be delivered or sent in person,-by facsimile, telex or telegram or by certified or regis-tered mail, postage prepaid, to the following addresses:
If to the Purchasers:
Omega. Advisors, Inc.
Wall Street Plaza 88 Pine Street 31st Floor New York, New York 10005 Fax No.: (212) 495-5236 Attention: Charles Leeds and Elliott Associates, L.P.
712 Fifth Avenue 36th Floor New York, New York 10019 Fax No.: (212) 974-2092 Attention:
John Levin Copy to:
l Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue 18th Floor New York, New York 10176 Fax No.: (212) 986-8866 Attention:
Stephen Schultz Copy to:
Skadden, Arps, Slate, Meagher & Flom 919 Third Avenue New York, New York 10022 Fax No.:
(212) 735-2001 Attention:
Harold F. Moore, Esq.
39
l
\\
I If to the Company.
j i
Great Bay Power Corporation c/o John Tillinghast i
20 Ladd Street j
Portsmith, New Hampshire 03801 i
l Fax No.: (603) 433-8645 Copy to:
Hale and Dorr 60 State Street Boston, Massachusetts 02109 Fax No.: (617) 526-5000 Attention:
Mark Polebaum or to such other address as shall be furnished in writing by such party, and any such notice or communication shall be deemed to have been duly given an the date of receipt if delivered by hand or overnight courier service or sent by telex, graphic scanning or other telegraphic communi-l cations equipment of the sender, or on the date two Business Days after dispatch by certified or registered mail, if mailed, in.each case delivered, sent or mailed (properly addressed) to such party as provided in this Section or in accordance with the latest unrevoked direc-tion from such party given in accordance with this Sec-tion.
9.2.
Comolete Acreement.
This Agreement contains the entire understanding of the' parties with respect to the transactions contemplated hereby and supersedes all prior agreements, arrangements or under-standings with respect thereto.
There re no restric-tions, agreements, promises, representations, warranties, covenants or undertakings by or on behalf of any party hereto with respect to the transactions contemplated hereby, other than those expressly set forth herein.
9.3.
Bindina Notice of Acreement: No Third Party Beneficiarv.
This Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and permitted assigns.
Nothing herein express or implied is intended to or shall be construed to confer' l
upon or give to any person, corporation, group or other entity (of any nature) other than the parties hereto, 40 4
e 4
their successors or permitted assigns any rights or remedies under or by reason of this Agreement.
9.4.
Modifications, Amendments and Walvers.
Subject to applicable provisions of the Bankruptcy Code, except with respect to the provisions of Section 8.1(b) hereof, at any time prior to the closing Date, (i) the parties hereto may modify, amend or supplement any term or provisions of this Agreement, but only by written agreement executed by such parties, and (ii) any term or provision of this Agreement may be waived by the party which is entitled to the benefits thereof.
No waiver shall be deemed to have been made Ly any party hereto of any of its rights hereunder or any provision or term hereof unless the same shall be in writing and is signed on its behalf by its authorized officer or representa-tive.
Any such waiver or extension shall constitute a l
waiver or extension only with respect to the specific matter described in such writing and shall in no way impair the rights of the party granting such waiver in any other respect or any other time.
No delay on the l
part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof.
The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any party may otherwise have in law or equity.
The rights and remedies of any party based upon, arising out of or otherwise in respect of any inaccuracies in or breach of any representation, warranty, covenant or agreement contained in this Agreement shall in no way be limited by the fact that the act, omission, occurrence or other i
state of fact upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement contained in this Agreement as to which there is no 4
inaccuracy or breach.
The representations and warranties of the Company contained in this Agreement shall not be affected or deemed waived by reason of any investigation made by or on behalf of any Purchaser or its representa-tives or by reason of the fact that any Purchaser or such representatives knew or should have know that any such representation or warranty is or might be inaccurate.
9.5.
Countercarts.
This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and each of which shall be deemed an original.
41 1
w--
9 9.6.
Excenses.
Subject to the order of the 4
Bankruptcy Court, dated March 11, 1994, the Company will 4
pay the Omega Entities' reasonable out-of-pocket costs and expenses incurred by the Omega Entities related to this Agreement and the Registration Rights Agreement (whether incurred before or after execution of this Agreement and the Registration Rights Agreement) (includ-ing, without limitation, the fees and expenses of Skadden, Arps, Slate, Meagher & Flom, counsel to the Omega Entities), accountants, and other experts, addi-tional counsel and consultants reasonably retained in connection with the transactions contemplated hereby.
Such reimbursement shall be made whether the transactions contemplated by this Agreement are consummated or the Agreement is terminated.
Subject to the order of the Bankruptcy Court, dated March 11, 1994, upon either termination of this Agreement or consummation of the transactions contemplated hereby, the Company or the Reorganized Company, as the case may be, shall make any required reimbursements in cash by wire transfer of immediately available funds promptly after receipt by the Company or the Reorganized Company, as the case may be, of an itemized statement of such costs and expenses, e
together with reasonably satisfactory supporting documen-tation.
The Company shall seek approval of the Bankrupt-cy Court by appropriate pleadings filed on or before April 11, 1994 to pay the reasonable fees and expenses of 4
Elliott Associates, L.P. on the same terms on which it has been authorized to pay the fees and expenses of the Omega Entities,
9.7. Nominee
Benefits.
All references to any Purchaser in this Agreement shall include the Person for whom such Purchaser is a nominee, and the benefits of and rights and obligations under the Agreement shall accrue to such Person or Persons which have a beneficial inter-est in the New Common Stock being acquired hereunder and for whom such Purchaser is a nominee.
9.8.
Governino Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to applicable principles of conflicts of law thereof.
9.9.
Headinos.
The descriptive headings of
]
the several Articles and Sections of this Agreement are 42
i l
4 5
inserted for convenience only and do not constitute a part of this Agreement.
i 9.10.
Severability.
Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be j
prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such i
prohibition or invalidity, without invalidating the remainder of this Agreement, except to the extent that such prohibition or invalidity would constitute a materi-al change in the terms of this Agreement taken as a i
whole.
9.11.
Assionment.
The Purchaser may assign i
i its rights hereunder to any of its Affiliates, provided that such assignment shall not release the Purchaser from its obligations hereunder.
9.12.
Soecific Performance.
The parties hereto agree that irreparable damage would occur in the event any of the provisions of this Agreement were not to
)
be performed in accordance with the terms hereof and that l
the parties shall be entitled to specific performance of i
the terms hereof, in addition to any other remedy at law j
or equity.
4 l
9.13.
This Agreement is being executed on behalf of the Company by John R. Stevens, who serves as its president and sole director, at the request, and subject to the direction, of the Official Bondholders' Committee duly constituted in the Company's pending Chapter 11 proceeding.
Neither Mr. Stevens nor any i'
officer, director, employee or agent of Eastern Utilities l
Associates ("EUA"), of which Mr. Stevens is president, or of any affiliate of EUA, has participated in the negotia-tions or preparation of this Agreement, or makes any warranty. representation or covenant under this Agree-1 ment.
Mr. Stevens has executed this Agreement at the request of the Bondholders' Committee.
No Purchaser under this Agreement and no person or entity at any time acquiring an interest in the New Common Stock of the 1
Reorganized Company shall have any claim against Mr.
Stevens, EUA or any affiliate of EUA, or any officer, i
director, employee of EUA or of any affiliate of EUA on account of any provision of this Agreement or the Regis-43 i
tration Rights Agreement.
The Company and the Reorga-nized Company have agreed to indemnify Mr. Stevens with respect to the assertion of any such claim by instrument dated December 29, 1992.
Nothing herein is intended to release the Company from its liabilities and obligations under this Agreement.
1 44 i
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l:
i.
1 i
l IN WITNESS hi.EREOF, the parties hereto have
- caused this Agreement to be executed as of the day and year first above written.
4 GREAT BAY POWER CORPORATION 2
1 j
By:/s/ John R.
Stevens
Title:
President 4
i OFFICIAL BONDHOLDERS' COMMITTEE OF EUA POWER CORPORATION n/k/a GREAT BAY POWER l
CORPORATION i
j By their attorneys:
i i
]
/s/ Mark N.
Polebaum Mark N.'Polebaum, Esq. (BNH 01615)
Frank W.
Getman Jr.,
Esq.
(.NH 04234)
B I'
HALE AND DORR f
60' State Street Boston, Massachusetts- 02109 i
(617) 526-6000 5
5 i '
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4
- m.. _.. _,.
._,__....__....,..,._-,.,r,....
i OMEGA CAPITAL PARTNERS L.P.
l By: /s/ Charles A.
Leeds. Jr.
Name:
Charles A.
Leeds, Jr.
Title:
Partner OMEGA INSTITUTIONAL PARTNERS L.P.
j By: /s/ Charles A.
Leeds, Jr.
l Name:
Charles A.
Leeds, Jr.
Title:
Partner I
1 l
OMEGA OVERSEAS PARTNERS L.P.
l By: /s/ Charles A.
Leeds. Jr.
1 Name:
Charles A. Leeds, Jr.
Title:
Partner COMMON FUND l
i By: /s/ Charles A.
Leeds,-Jr.
Name:
Charles A.
Leeds, Jr '.
Title:
Partner OMEGA OVERSEAS PARTNERS II LTD.
By: /s/ Charles A.
Leeds. Jr.
Name:
Charles A.
Leeds, Jr.
Title:
Partner 4 f,
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4 GOLDMAN SACHS & CO. PROFIT SHARING l
GOLDMAN.SACHS & CO.,
POOLED IRA 2 i
1 By: /s/ Charles A.
Leeds. Jr.
3 3
Name:
Charles A.
Leeds, Jr.
l
Title:
' Partner l
88 PINE STREET I
By: /s/ Charles A'.
Leeds. Jr.
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Name:
Charles A.
Leeds, Jr.
Title:
Partner l
ELLIOTT ASSOCIATES, L.P.
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By: /s/ Paul Sincer Name:
Paul Singer
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Title:
General ~ Partner 1
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Schedule 1.1 l
l Number of Shares of Common Stock Purchase Name of Purchaser to be Purchased Price Omega Capital Partners L.P.
1,215,200 8,860,833 i
Omega Institutional ~ Partners L.P.
1,136,800 8,289,166.
Omaga Overseas Partners L.P.
1,019,200 7,431,'666 l
Common Fund 196,000 1,429,166 Omega Overseas Partners II Ltd.
156,800 1,143,333
~
Goldman Sachs & Co. Profit Sharing Master Trust 78,400 571,666 88 Pine Street' 117,600 857,500 Elliott Associates, L.P.
880,000 6.416.670 4,800,000 35,000,~000 l
I 0060533 01-New Yort $srver 3s Drah Apnl 6.19W 715 pm l-
. _.. - ~. _ _.. _...... _..., _
STOCK AND SUBSCRIPTION AGREEMENT AMONG GREAT BAY POWER CORPORATION AND THE l
PURCHASERS LISTED IN THE ATTACHED SCHEDULE A schedule 3.5 1.
The change in ownership to be effected pursuant to the Restructuring is subject to approval by the NRC, the NHPUC, and the FERC.
2.
The liens and mortgages' securing the Existing Debt and the debter-in-possession loans made by the Participating Joint owners are encumbrances on assets of the' Company which will be paid and satisfied in accordance with the Plan and will not be liens and mortgages on the assets of the Reorganized l
Company.
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STOCK AND SUBSCRIPTION AGREEMENT AMONG GREAT BAY POWER CORPORATION Aht THE PURCHASERS LISTED IN THE ATTACHED SCHEDULE A W
i Schedule 3.6 i
The Company has obtained approvals from the SEC, the NRC, the l'
NHPUC and the FERC to manage and operate its Undivided Interest in the Facility.
The Reorganized Company will need to obtain the regulatory approvals referred to in Schedule 3.5.
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STOCK AND SUBSCRIPTION AGREEMENT AMONG GREAT BAY PCWER CORPORATION AND THE PURCHASERS LISTED IN THE ATTACHED SCMEDULE A schedula 3.B 1.
In January 1991, the SEC's Division of Corporation Finance ccmmenced a review of the Company's Annual Report on Form 10-k for the year ended December 31, 1989 and subsequent quarterly reports.
The company submitted written responses to all of the inquiries made by the Division of Corporate. Finance.
In May 1991, the SEC's Division of Enforcement commenced an informal review with respect to certain issues addressed by the Division of Corporate Finance, principally relating to the accounting for the capitalized financing costs related to the Company's investment in Seabrook Unit 1.
The Company completed its responses to the Division of Enforcement's inquiries in July l
l 1991 and the Company has received no communications from the l
Division of Enforcement since that time.
2.
On January 8, 1992, the Massachusetts Municipal Wholesale Electric Cooperative and its member municipalities, all of which are members of the New England Power Pool ("NEPOOL"), filed a suit in Massachusetts Superior Court against the investor-owned l
utilities that are also members of NEPOOL.
The suit alleges damages by NEPOOL's establishment of minimum size requirements for generating units designated as pool-planned generating units.
The suit na=es as defendants members of NEPOOL, including the Cocpany.
l The Company ca.nnot predict the ultimate outcome of this proceeding at this time.
The Co=mittee takes the position that any liability of the Reorganized Company in the Massachusetts litigation will he discharged upon the Effective Date of the Plan.
3.
The FERC initiated an action after certain participants in
/ the Facility, including the Company, filed an amendment to the NEPOOL Agreement with the FERC that concerns many of the issues raised in the Massachusetts litigation.
The plaintiffs in the i
Massachusetts litigation and one other participant objected to the amendment, seeking to prevent or delay its effectivaness.
The FERC has not yet determined whether or when it will hold hearings on this matter.
The Company cannot predict the ultimate outcome of this proceeding at this time.
i
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=,a STOCK AND SUBSCRIPTION AGREEMENT AMONG GREAT BAY POWER CORPORATION AND THE PURCHASERS LISTED IN "HE ATTACHED.SCF.EDULE A Schedule 3.11 None.
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STOCK AND SUBSCRIPTION AGREEMENT AMONG.
GREAT BAY POWER CORPORATION AND THE PURCHASERS LISTED IN THE ATTACHED SCHEDULE A l
Echadula 3.14 l
l None.
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1 Acc 04 '94 01:57 t
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1 STOCK AND SUBSCRIPTION AGREEMENT AMONG GREAT SAY POWER CORPORATION AND THE l
PURCHASERS LISTED IN THE ATTACHED SCHEDULE A l
Schedule 3.15 l
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None.
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30 34 '94 01:5.-Pt e,-
STCCK AND SUBSCRIPTION AGRED2NT AMONG GREAT BAY PCWER CORPOPATION AND THE PURCHASERS LISTED IN THE ATTACHED SCHEDtKE A schedule 3.18 None.
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,:a-F.a Schedule 5.le l
l Memorandum CONFIDENTIAL i
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To:
GreatBayPower CommitreaMembers i
From:
Decker Adams l
Dase:
April 1.1, J993
Subject:
Preadent of Gene Bay Poui:r Corporaton In our negociadons with Ken Buckfre over the POR &nancing he has stated that he feels that more lenders would be interested in partici;;uing if they knew who was going to oversee the day to day agairs of the Company. In this resa:d Mark Polebaum has talked with John Tillinghast about scang as Premdent John has indicat:d that he would be interested in doing so. Bus, j
Mark asked me to negotiate a compensation package with John.
i John and I have agreed on the followsng, st.bject to your approva! which will be sought on our 1
j Wednesday conference call:
One year contract from the.:feceve dae.
t
$95,000.00 annual salary, ni) additional Dkectors fees l
Stock apprecution rights (or opoon) to the increase in price of 17,500 shares from the effective date to the datii Sve years therenner. Paid within 30 days after each l
aruuversary data as follows 100% of the appreciation during the Arst year,100%
f of the appreciation during tlw second year,75% of the apprecianon during the j
third year, 50% of the apprisistion during the fourth year and 25% of the i
appreciation during the fifW year. If there is a dactine in any year, then no additional compensation wil be due. (see attached schedule).
i D 4 0 insurance and by laws indarnony provide satista.-tory coverage in John's and his assorney's opinions.
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John will have the opportunity to pruapprove the third Director.
j Jole may have a couple of conadong clients or serve as a director of other i
corporations to the sanent that such duties do not conflict wnh Great Bay Power Corporation's time require:nonts or mterest.s.
1 I recommend approval of this package.
The package was arrived at by my irst trying to estimate the number ofhours that John weuld j
have en out in. These hours are shown en the attached schedule. If we were to continue his I-cent.:!!i. g fee of $200 00 per hour, he w.)uld earn between 370,000 and 5140,000. However. I j
bel: ve that the responsibilities are greatet as an Of5 car than as a consultant. Thus, my ini.:2 l
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i thoughts were in the 590 to $125,000 range It thould be noted that smca John would now be an i
employee, he would not normally receive Dircetors fees. Thus Iincluded eenmated ames for such duties in my schedule. I asked John if here were any bene 6ts that he would want. Other j
than D & O insurance thers were none. We also established that this would be the compensanon j
package for the drst year only. De Board of Directors will establish any package after the Arst i
year and may supp1=*at this package if the time estimates are wrong, there are enraordmar-demand on his time due to litigation or othe" unexpected event, or ifJohn has an exceptional year i
j Since it is likely that John will not serve a number of years in tMs capacity, I felt that it would be i
appropnate to encourage him to look at long term access er the Company rasher than just his
{
term. Thus, I suggested that part of his sab ry consist of stock appro:iation rights (or options) j payable over multiple years. This also offei John the opportunity to adBacdvely defer some of his
- income
- John had had the earne idea. I maggested 10,000 shares and he was thinkmg 25,000, thus we halved the didBrance Ifyou have any questions, please give me a can at 617 985-3020.
}
John has asked that any reference in the Offering Circular to his acting as President note that it :s j
subject ici his satisfactory review of the D & O policy, by laws indammacation and third Director i
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GREAT BAY POWER CORPORATION Estimated Mours for President Laast#
Most #
Man &h 134 QGaurj OfHours 1
Review Marketing Actiwties 8
16 Review Management Activities 8
16 Review Seabrook activities 2
4 Oversee, revww and axecute 10Q 4
8 4
Oversee, revww and execute 8K & FERC Filing 2
ReviewMarketing Aedvmes 8
16 ReviewManagement Activmes 8
16 Rassw Seabrook Actiwties 2
4 Prepare for and hold Board of Direc tors Meeting 12 Overnos, rewsw and anscute 8K & 4.RC Filing 4
4 3
ReviewMarketing Actrvicios 8
16 ReviewManagsmaat Activides 8
16 Renew Seabrook Activities 2
4 Prepare for and hold Board of Direisors Masung 12 4
Oversee, review and execute 8K & FERC Filing J
Tak with providers of finances 4
RaviewMarkating Acuvides 8
16 Raview Managsmant Acuvities 8
16 Review Seabrook Activices 2
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Oversee, review and execute 10Q 4
8 Overses, review and execuse &K & FERC Filing 4
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12 l
Prepare for & hold Board of Directors Mesung 5
Review Marketing Activities 8
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8 16 l
Rswsw Management Activmes Rewsw Seabrook Activities 2
4 4
Oversee, review & smacuts SK & IRC Filing 8
16 6
Revww Marksdas ActMties 1
J,my
, e Review Management Activities 8a"3*"?:$4.1.id)t Acdvttias 2
4 Prepare ibt and hold Board of Dir stors meedng 12 12 4
4 Oversee, revww A anscute 8K & !TRC Fihog Talk with financing providers 2.
__L TOTAL HOURS FOR SDCMONTHS 155 298 FOLLOWDiG SDCMOhTHS 155 098 16 32 Oversee, review & cxacute 10K A. Annual Raport 16 56 Unanticicated Prepare and run AnnualMeeting
,_,1,
_16_
TOT AL ANNUAL HOL*RS 350 700 t
,y
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STOCK APTRECIATION RJGICS Assu.-3 that the stock appreciates at 10% per annum Emi ofPeriod Cumulanvs Shares Prics Value Incr:24e
%Due
$ Due t 7,5c0
'10.00 e $1T5,000 17,500
- 1.00 = 172,500
$17,$00 100
$17,500 5 17,500 17,500 12.10 = 211,750 19;50 100 19,250 36,750 17,500 13.31 - 232,925 21.175 75 15,881 52,631 17,500 14.64 = 256,200 23, 75 50 11,637 M,268 17,500 16.10 = 281,750 25,150 25 6,388 70,656 Assume u.u sock hinm.
17,500
$10.00 = $175,000 17.500 12.50 - 218,750 543 750 100 543,750
$ 43,7f 0 17,500 12.25 = 214.375 0-100 0-43,750 19,250*
12,10 = 232,025 15.250 75 13,912 57,663 19,250 11.90 = 229,073 0-50 4
57,663 19,250 12.00 = 231,000 1,925 25 481 58,144 k
- 10% stock sput Note. cents dropped
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l EXHIBIT B AMENDED ARTICLES OF INCORPORATION OF REORGANIZED EUA l
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STATE OF NEW HAMPSHIRE
.i k
Filing fee:
$35.00 Form No. 16-A
+ License fee:
(See Section 1.31)
RSA 293-A:10.07 Total fees Use black print or type.
Leave 1" margins both sides RESTATED ARTICLES OF INCORPORATION
{
INCLUDING DESIGNATED AMENDMENT (S) i i
PURSUANT TO THE PROVISIONS OF THE NEW HAMPSHIRE BUSINESS 1
CORPORATION ACT, THE UNDERSIGNED CORPORATION, PURSUANT TO A RESOLUTION DULY ADOPTED BY ITS BOARD OF DIRECTORS, HEREBY ADOPTS THE FOLLOWING RESTATED ARTICLES OF INCORPORATION, INCLUDING DESIGNA1ED AMENDMENT (S).
l FIRST:
The name of the Corporation is:
Great Bay Power Corporation.
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SECOND:
The period of its duration is perpetual.
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THIRD:
Deleted 9
i FOURTH:
The aggregate number of shares which the Corporation i
shall have authority to issue is:
i No. of Shares j,
Class Par Value Authorized Common Stock
$.01 8,000,000 j
FIFTH:
The capital stock will be sold or offered for sale within the meaning of RSA 421-B (New Hampshire Securities Act).
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SIXTH:
Deleted.
J SEVENTH:
Provisions for the regulation of the internal affairs of the Corporation are:
See Attachment 7A.
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J EIGHTH:
Provision eliminating or limiting personal liability j
of directors or officers:
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see Attachment SA.
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4 NINTH:
The address of the registered office of the j
Corporation-is:
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1 i-TENTH:
The name and address of each incorporator is:
HAmt Address 1
l Mary Karlin 1850 Elm Street 4
Manchester, New Hampshire 03105 The name of its. registered agent at such address is:
Except for the Designated Amendment (s) to Article (s) THIRD, FOURTH, SIXTH, SEVENTH, EIGHTH and NINTH, the Restated Articles of Incorporation correctly set forth without change the corresponding provisions of the Articles of Incorporation as previously amended, and the Restated Articles of Incorporation together with the Amendment (s) designated herein supersede the original Articles of Incorporation and all amendments to the Articles.
FIRST:
(Check one)
_xxx_
The restated articles contain amendment (s) adopted by the board of directors and did not require shareholder approval.
The restated articles contain amendment (s) which required shareholder approval.
SECOND:
The amendmant(s) were adopted on (date)
THIRD:
the amendment (s) were approved by the shareholders as follows:.
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If any voting group is entitled to vote separately, give respective information for each voting group.
I Number of votes Designation Number of Number of indisputably of voting shares votes entitled represented at crouc outstandina to be cast the meetina Not Applicable i
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Designation Total number of of voting Total number of votes cast:
QB undisputed arouD EQB AGAINSI votes cast foe l
Not Applicable l
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FOURTH:
The number cast for the amendment (s) by each voting group was sufficient for approval.
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- Dated 1994 GREAT BAY POWER CORPORATION By Signature of its i
Print or type name i
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5 1.
Articles of Incorooration.
Notwithstanding any other provisions of law, these Articles or the By-Laws of the-1 Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at i
least seventy-five percent (75%) of the shares of capital stock issued and outstanding and entitled to vote shall be required to i
amend or repeal, or to adopt any provision inconsistent with, i
these Articles.
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2.
Bv-Laws..The Board of Directors is expressly authorized to adopt, amend or repeal the By-Laws of the Corporation to the extent permitted by law, provided, however,.that the affirmative i
vote of the holders of at least seventy-five percent (75%) of the j
shares of the capital stock of the Corporation issued and l
outstanding and entitled to vote shall be required to amend or repeal, or.to adopt any provision inconsistent with, Section 1.10, j
Section 1.11, Section 1.13, Article 2 or Article 6.of the By-Laws.
2 3.
Removal'of Directors.
Directors of the Corporation may i
be removed only for cause by the~ affirmative vote of the holders j
of at least two-thirds of the shares of the capital stock of the j
Corporation issued and outstanding and entitled to vote.
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Attachment BA Article A a
Except to the extent that the New Hampshire Business Corporation Act prohibits the elimination or limitation of liability of directors or officers, or both, for breaches of fiduciary duty, no director, officer, or both, of the Corporation shall be personally liable to the Corporation or its shareholders for monetary damages for any action taken, or any failure to take action, as a director of officer, or both, notwithstanding any provision of law imposing such liability.
No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any director, officer, or both, of the Corporation for or with respect to any acts or omissions of such director, officer, or both, occurring prior to such amendment.
Article _B 1.
Action. Suits and Proceedinas other than by or in the Richt of the Corcoration.
The Corporation shall indemnify each person who was or is a party or is threatened to be made a party d
to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or 1
investigative and whether formal or informal (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or har agreed to serve, at the request of the Corporation, as a director, officer, i
J partner, trustee, employee or agent of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan) (all such persons being referred to hereafter as an " Indemnitee"), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such action, suit or proceeding and any appeal therefrom, if (1) he or she acted in good faith and (2) he or she reasonably believed:
(a) in the case of conduct in his or her official capacity with the Corporation, that his o,r her conduct was in its best interests; and (b) in all other cases, that his or her conduct was at least not opposed to its best interests, and, (3) with respect to any criminal action or proceeding, the Indemnitee had no reasonable cause to believe his or her conduct.
b
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q was unlawful.
The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of B212 contendere or its equivalent, is not, of itself, determinative that the person did not meet the standard of conduct described in this Section.
Notwithstanding anything to the contrary in this Article B, except as set forth in Section 6 below, the Corporation shall not indemnify an Indemnitee seeking indemnification (1) in connection with a proceeding (or part thereof) initiated by the Indemnitee unless the initiation thereof was approved by the Board of Directors of the Corporation, or (2) in connection with a proceeding charging improper personal benefit to him or her, whether or not involving action in such person's official capacity, in which he or she was adjudged liable on the basis that personal benefit was improperly received by him or her.
2.
Actions or Suits by or in the Richt of the Cornoration.
The Corporation shall indemnify any Indemnitee who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer, partner, trustee, employee or agent of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan), or by reason of any action alleged to have been taken or omitted in such capacity, against reasonable expenses (including attorneys' fees) if (1) he or she acted in good faith and (2) he or she reasonably believed:
(a) in the case of conduct in his or her official capacity with the Corporation, that his or her conduct was in its best interests; and (b) in all other cases, that his or her conduct was at least not opposed to its best interests, and, (3) with respect to any criminal action or proceeding, the Indemnitee had no reasonable cause to believe his or her conduct was unlawful, except that ne indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation.
The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of D212 contendere or its equivalent, is not, of itself, determinative that the person did not meet the standard of conduct described in this Section.
3.
Indemnification for Excenses of Successful Party and Court-Ordered Indemnification.
Notwithstanding the other provisions of this Article B, to the extent that an Indemnitee has 1
been wholly successful, on the merits or otherwise, in defense of any action, suit or proceeding referred to in Sections 1 and 2 of I
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this Article B, or in defense of any claim, issue or matter therein, or on appeal from any such action, suit or proceeding, he or she shall be indemnified against reasonable expenses (including attorneys' fees) incurred by him or her or on his or her behalf in
)
connection therewith.
Without limiting the foregoing, if any j
action, suit or proceeding is disposed of, on the merits or 1
otherwise (including a disposition without prejudice), without l
(i) the disposition being adverse to the Indemnitee, (ii) an adjudication that the Indemnitee was liable to the Corporation, l
(iii) a plea of guilty or n212 contendere by the Indemnitee, j
(iv) an adjudication that the Indemnitee did not act in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with 2
respect to any criminal proceeding, an adjudication that the i
Indemnitee had reasonable cause to believe his or her conduct was j
unlawful, the Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto, a
4.
Notification and Defense of Claim.
As a condition precedent to his or her right to be indemnified, the Indemnitee must notify the Corporation in writing as soon as practicable of any action, suit, proceeding or investigation involving him or her for which indemnity will or could be sought.
With respect to any action, suit, proceeding or investigation of which the Corporation f
is so notified, the Corporation will be entitled to participate therein at its own expense and/or to assume the defense thereof at i
its own expense, with legal counsel reasonably acceptable to the i
Indemnitee.
After notice from the Corporation to the Indemnitee of its election so to assume such defense, the Corporation shall not be liable to the Indemnitee for any legal or other expenses t
j subsequently incurred by the Indemnitee in connection with such 3
claim, other than as provided below in this Section 4.
The i
i Indemnitee shall have the right to employ his or her own counsel j
in connection with such claim, but the fees and expenses of such j
I counsel incurred after notice from the Corporation of its i
assumption of the defense thereof shall be at the expense of the Indemnitee unless (i) the employment of counsel by the Indemnitee l
has been authorized by the Corporation, (ii) counsel to the j
Indemnitee shall have reasonably concluded that-there may be a conflict of interest or position on any significant issue between the Corporation and the Indemnitee in the conduct of the defense j
of such action or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, in each of 4
which cases the fees and expenses of counsel for the Indemnitee shall be at the expense of the Corporation, except as otherwise expressly provided by this Article.
The Corporation shall not be entitled, without the consent of the Indemnitee, to assume the i
defense of any claim brought by or in the right of the Corporation or as to which counsel for the Indemnitee shall have reasonably
}
made the conclusion provided for in clause (ii) above.
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i 5.
Advance of Excenses, Subject to the provisions of Section 6 below, in the event that the Corporation does not assume the defense pursuant to Section 4 of this Article B of any action, suit, proceeding or investigation of which the Corporation receives notice under this Article, any expenses (including attorneys' fees) incurred by an Indemnitee in defending a civil or criminal action, suit, proceeding or investigation or any appeal therefrom shall be paid by the Corporation in advance of the final disposition of such matter, orovided, however, that the payment of such expenses incurred by an Indemnitee in advance of the final disposition of such matter shall be made only upon (1) receipt of an undertaking executed by or on behalf of the Indemnitee to repay all amounts so advanced if it is ultimately determined that the Indemnitee is not entitled to be indemnified by the j
Corporation as authorized in this Article, (2) receipt of a written affirmation of the Indemnitee's good faith belief that he or she has met the standards of conduct required by this Article, j
and (3) a determination that, based on the facts then known, 4
indemnification would not otherwise be precluded by the standards of conduct set forth in Sections 1 or 2.
Such determination shall be made in the manner specified in Section 6 of this Article B.
4 6.
Procedure for Indemnification.
In order to obtain indemnification or advancement of expenses pursuanc to Section 1, i
2, 3 or 5 of this Article, the Indemnitee shall submit to the Corporation a written request, including in such request such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to i
what extent the Indemnitee is entitled to indemnification or advancement of expenses and including, with respect to advancement of expenses, the undertaking to repay and the affirmation of good faith required by Section 5.
Any such indemnification or advancement of expenses shall be made (1) with respect to requests under Sections 1, 2 or 5, only upon a determination by the Corporation that the Indemnitee has met the applicable standards of conduct set forth in Sections 1 or 2, as the case may be, and (2) with respect to a request under Section 3, within 60 days after receipt by the Corporation of the written request of the Indemnitee.
The determination required under clause (1) of the preceding sentence shall be made in each instance within 60 days of the date of Indemnitee's written request by (a) a majority vote of a quorum of the directors of the Corporation consisting of persons who are not at that time parties to the action, suit or proceeding in question
(" disinterested directors"), (b) if no such quorum is obtainable, a majority vote of a committee of two or more disinterested directors, (c) a majority vote of a quorum of the outstanding shares of stock entitled to vote for directors, which quorum shall consist of shareholders who are not at that 4
time parties to the action, suit or proceeding in question, or 1
(d) special legal counsel (who may be regular legal counsel to the.
d
d Corporation) selected by the Board of Directors or its committee, or (e) a court of competent jurisdiction.
i 7.
Remedies.
The right to indemnification or advances as granted by this Article shall be enforceable by the Indemnitee in any court of competent jurisdiction if the Corporation denies such request, in whole or in part, or if no disposition thereof is made within the 60-day period referred to above in Section 6.
Unless otherwise provided by law, the burden of proving that the i
Indemnitee is not entitled to indemnification or advances of i
expenses under this Article shall be on the Corporation.
Neither the failure of the Corporation to have made a determination prior 3
to the commencement of such action that indemnification is proper in the circumstances because the Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation pursuant to Section 6 that the Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct.
The Indemnitee's reasonable expenses (including attorneys' fees) incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the Corporation.
1 8.
Subsecuent Amendment.
No amendment, termination or repeal of this Article or of the relevant provisions of the Business Corporation Act of New Hampshire or any other applicable l
laws shall affect or diminish in any way the rights of any Indemnitee to indemnification under the provisions hereof with 3
respect to any action, suit, proceeding or investigation arising l
out of or relating to any actions, transactions or facts occurring prior to the final adoption of such amendment, termination or repeal.
9.
Other Richts.
The indemnification and advancement of expenses provided by this Article shall not be deemed exclusive of 1
any other rights to which an Indemnitee seeking indemnification or j
advancement of expenses may be entitled under any law (common or statutory), agreement or vote of shareholders or disinterested directors or otherwise, both as to action in his or her official 2
capacity and as to action in any other capacity while holding office for the Corporation, and shall continue as to an Indemnitee j,
who has ceased to be a director or officer, and shall inure to the 4
benefit of the estate, heirs, executors and administrators of the Indemnitee.
Nothing contained in this Article shall be deemed to prohibit, and the Corporation is specifically authorized to enter 1
into, agreements with officers and directors providing indemnification rights and procedures different from those set forth in this Article.
In addition, the Corporation may, to the extent authorized from time to time by its Board of Directors,
grant indemnification rights to other employees or agents of the Corporation or other persons serving the Corporation and such rights may be equivalent to, or greater or less than, those set forth in this Article.
10.
Partial Indemnification.
If an Indemnitee is entitled under any provision of this Article to indemnification by the Corporation for some or a portion of the expenses (including attorneys' fees), judgments, fines or amounts paid in settlement i
actually and reasonably incurred by him or her or on his or her behalf in connection with any action, suit, proceeding or investigation and any appeal, therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify the Indemnitee for the portion of such expenses (including attorneys' fees), judgments, fines or amounts paid in settlement to which the Indemnitee is entitled.
11.
Insurance.
The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan) against any expense, liability or loss incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Business Corporation Act of New Hampshire.
12.
Mercer or Consolidation.
If the Corporation is merged into or consolidated with another corporation and the Corporation is not the surviving corporation, the surviving corporation shall assume the obligations of the Corporation under this Article B with respect to any action, suit, proceeding or investigation arising out of or relating to any actions, transactions or facts occurring prior to the date of such merger or consolidation.
13.
Savinas Clause.
If this Article B or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each Indemnitee as to any expenses (including attorneys' fees) judgments, fines and amounts paid in settlement in connection with any action, suit, proceeding or investigation, whether civil, criminal or administrative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article that shall not have been invalidated and to the fullest extent permitted by applicable law..
- =..
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l 14.
Subsecuent Lecislation, If the Business Corporation Act l
of New Hampshire is amended after adoption of this Article to expand further the indemnification permitted to Indemnitees, then the Corporation shall indemnify such persons to the fullest extent j
permitted by the Business Corporation Act of New Hampshire, as so i
amended.
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EXHIBIT C 1
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l REGISTRATION RIGHTS AGREEMENT 4
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REGISTRATION RIGHTS AGREEMENT AMONG GREAT BAY POWER CORPORATION (f/k/a/EUA POWER CORPORATION) and THE PURCHASERS SIGNATORIES HERETO REGISTRATION RIGHTS AGREEMENT Dated as of April 7,1994
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1.
Introduction.................................
1 i
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l 2.
Registration under Securities Act, etc.......................
1 2.1 Registration on Request 1
j-(a)
Request...
I j
(b)
Registration Statement Forrn...,....,.....
2 (c)
Expe nses............................... 2 (d)
Effective Registration Statement..
2
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(e)
Selection of Underwriters..................... 3 i
(f)
Priority in Requested Registrations 3
'2.2 Incidental Registration 4
s.
(a)
Right to Include Registrable Securities............. 4 (b)
Priority in Incidental Registrations 4
j 2.3 Registration Procedures........................... 5 i
2.4 Underwritten Offerings........................
10 i
j (a)
Requested Underwritten Offerings...............
10 i
(b)
Incidental Underwritten Offerings................ I1 j
(c)
Participation in Underwritten Offerings
............I1 i
j_
2.5 Preparation; Reasonable Investigation.,...............
12 4
l 2.6 Rights of Requesting Holders...................... 12 1
a i
2.7 Indemnification...............................
13 (a) Indemnification by the Compmy
.................13 (b) Indemnification by the Sellers.........
14
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(c) Notices of Claims etc.
...................15 (d) Other Indemnification........................
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Section Eags 1
(e) Indemnification Payments......................
15 (f) Contribution.................
16 2.8 Adjustments Affecting Registrable Securities..............
17 3.
De finitions......................................
17 l
4.
Rules 144 and 144 A.......,........................
19 i
5.
Amendments and Waivers
...........................20 6.-
Liquidated Damages................................ 21 l
7.
Nominees for Beneficial owners 22 1
i 8.
Not ices.................................
...... 22 9.
Assignment
. 23 10.
Descriptive Headings
...............................23 11.
Governing Law...,..........................
.. 23 12.
Counterparts..................................... 2 3 13.
Entire Agreement.................................
24
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l' 14.
Submission to Jurisdiction 24 l
15.
Severability
.................................... 24 l
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i REGISTRATION RIGHTS AGREEMENT i
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REGISTRATION RIGHTS AGREEMENT, dated as of April 7,1994, among Great Bay Power Corporation (f/k/a/EUA Power Corporation), a New
{
Hampshire corporation (the " Company"), and certain stockholders of the Company j
signatories hereto (the " Stockholders").
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1.
Jntroduction. The Company is a party to the separate Stock and Subscription Agreement (the _" Stock Purchase Agreement"), dated April 7,1994, i
with the Stockholders, pursuant to which the Company has agreed, among other j
things, to issue _4,800,000 shares of its common stock, par value $.01 per share (the
" Common Stock"), to the Stockholders. This Agreement shall become effective 4
upon the issuance of such securities to such parties pursuant to the Stock Purchase Agreement. Certain capitalized terms used in this Agreement are def'med in section l
3 hereof; references to sections shall be to sections of this agreement.
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i 2.
Esnistration under Securities Act. etc.
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2.1 Renistration on Reauest.
I (a)
Reauest. At any time or from time to time after the j
date hereof, upon the written request of one or more Initiating Holders, requesting i
that the Company effect the registration under the Securities Act of all or part of i
the Registrable Securities held by such Initiating Holder or Holders, and specifying j
the intended method of disposition thereof, the Company will promptly give written l
notice of such requested registration to all registered holders of Registrable Securities, and thereupon the Company will, subject to the terms of this Agreement,'
effect the registration under the Securities Act of:
j i
(i) the Registrable Securities which the i
Company has been so requested to register by such Initiating Holders'for disposition in accordance with the intended method of disposition stated in l
such request; and (ii) all other Registrable Securities the
}
holders of which shall have made a written request to the Company for i
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's registration thereof within 30 days after the giving of such written notice by 1
the Company (which request shall specify the intended method of disposition of such Registrable Securities).
all to the extent requisite to permit the disposition (in accordance with the intended methods thereof as aforesaid)~ of the Registrable Securities so to be registered, orovided that the Company shall not be required to effect any registration of Registrable Securities pursuant to this section 2.1 unless a single holder of Registrable Securities has requested the registration.of a number of shares of Registrable Securities held by such holder which is equal to or greater than 5% of the shares of Common Stock at the time outstanding.
(b).
Registration Statement Form. Registrations under this section 2.1 shall be on such appropriate registration form of the Commission (j) as shall be selected by the Company and the holders of more than 50% (by number of shares) of the Registrable Securities so to be registered and (ij) as shall permit the disposition of such Registrable Securities in accordance with the intended method or methods of disposition specified in their request for such registration.
If,in connection with any registration under section.2.1 which is proposed by. the Company to be on Form S-3 or any similar short form registration statement which is a successor to Form S-3, the managing underwriters, if any, shall advise the Company in writing that in their opinion the use of another permitted form is of i
material importance to the success of the offering, then such registration shall be on such other permitted form.
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(c)
Exoenses. The Company will pay all Registration f
Expenses in connection with any registration requested pursuant to this section 2.1 by any Initiating Holders of Registrable Securities prior to the time at which three such registrations shall have been effected in which all of the Registrable Securities requested to be included in such registration by any holders of Registrable Securities j
shall have been registered pursuant to this section 2.1. The Registration Expenses (and underwriting discounts and commissions and transfer taxes, if any) in connection with each other registration requested under this section 2.1 shall be allocated Era tala among all Persons on whose behalf securities of the Company are included in such registration, on the basis of the respective amounts of the securities then being registered on their behalf.
(d)
Effective Registration Statement. A, registration re-quested pursuant to this section 2.1 shall not be deemed to have been effected (i) unless a registration statement with respect thereto has become effective, orovided 2
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that a registration which does not become effective after the Company has filed a registration statement with respect thereto solely by reason of the refusal to proceed of the Initiating Holders (other than a refusal to proceed based upon the advice of the single counsel to the Initiating Holders, if any, relating to a matter with respect to the Company) shall be deemed to have been effected by the Company at the request of such Initiating Holders unless the Initiating Holders shall have elected to pay all Registration Expenses in connection with such registration, (ii) if, after it has become effective, such registration becomes subject to any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason, or (iii) the conditions to closing specified in the purchase j
agreement or underwriting agreement entered into in connection with such registration are not satisfied, other than by reason of some act or omission by such Initiating Holders.
(e)
Selection of Underwriters. If a requested registration pur;uant to this section 2.1 involves an underwritten offering, the underwriter or underwriters thereof shall be selected by the holders of at least a majority (by numbei of snares) of the Registrable Securities as to which registration has been i
requested and shall be acceptable to the Company, which shall not unreasonably 4
withhold its acceptance of any such underwriters.
(O Priority in Reauested Recistrations. If a requested registration pursuant to this section 2.1 involves an underwritten offering, and the managing underwriter shall advise the Company in writing (with a copy to each holder of Registrable Securities requesting registration) that, in its opinion, the number of securities requested to be included in such registration exceeds the number which can be sold in such offering within a price range acceptable to the holders of a majority of the Registrable Securities requested to be included in such registration, the Company will include in such registration, to the extent of the number which the Company is so advised can be sold in such offering, Registrable Securities requested to be included in such registration by the holder or holders of Registrable Securities, pig ting among such holders requesting such registration on the basis of the number of such securities requested to be included by such holders.
In connection with any registration subject to this Section 2.1(0, no securities other than Registrable Securities shall be covered by such registration.
(g)
If, at the time of a requested registration pursuant to this section 2.1, the Company is engaged in any other activity which, in the good faith determination of the Company's Board of Directors, would be adversely affected by the requested registration to the material detriment of the Company, then 3
J 4
the Company may at it option direct that such request be delayed for period not in excess of 10 days from the date of such request, j
2.2 Incidental Registration.
(a)
Rieht to Include Registrable Securities. If the Company at any time proposes to register any of its securities under the Securities Act (other than pursuant to section 2.1), whether or not for sale for its own account, it will cach such time give prompt written notice to all holders of Registrable Securities of its intention to do so and of such holders' rights under this section 2.2. Upon the written request of any such holder made within 30 days after the receipt of any such notice (which request shall specify the Registrable Securities intended to be disposed of by such holder), the Company will, subject to the terms of this Agreement, effect 4
the registration under the Securities Act of all Registrable Securities which the l
Company has been so requested to register by the holders thereof, to the extent requisite to permit the disposition of the Registrable Securities so to be registered, by inclusion of such Registrable Securities in the registration statement which covers the securities which the Company proposes to register, provided that if, at any time after giving written notice of its intention to register any securities and prior to the i
effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason either not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to each holder of Registrable Securities and, thereupon, (j) in the case of a determination not to register, shall be relieved of its obligation to 4
register any Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of any holder or holders of Registrable Securities i
entitled to do so to request that such registration be effected as a registration under section 2.1, and (ii) in the case of a determination to delay registering, shall bc permitted to delay registering any Registrable Securities, for the same period as the delay in registering such other securities. No registration effected under this section 2.2 shall relieve the Company of its obligation to effect any registration upon request under section 2.1, nor shall any such registration hereunder be deemed to have been effected pursuant to section 2.1. The Company will pay all Registration Expenses in connection with each registration of Registrable Securities requested pursuant to this section 2.2.
(b)
Priority in Incidental Registrations. If(i) a registration pursuant to this section 2.2 involves an underwritten offering of the securities so being registered, whether or not for sale for the account of the Company, to be 4
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j distributed (on a firm commitment basis) by or through one or more underwriters -
l of recognized standing under underwriting terms appropriate for such a transaction, li -
(ii) the Registrable Securities so requested to be registered for sale for the account of holders of Registrable Securities are not also to be included in such underwritten offering (either because the Company has not been requested so to include such Registrable Securities pursuant to section 2.4(b) or, if requested to do so, is not l
obligated to do so under section 2.4(b)), and (iii) the managing underwriter of such i
underwritten offering shall inform the Company and holders of the Registrable Securities requesting such registration by letter of its belief that the number of
{.
securities requested to be included in such registration exceeds the number which can i
be sold in (or during the time of) such offering, then the Company will include in l
such registration, to the extent of the number which the Company is so advised can -
i be sold in (or during the time of) such offering, securities proposed by the Company to be sold for its own account and Registrable Securities requested to be included in j
such registration pig Iala on the basis of the number of shares of such securities so j
proposed to be sold and so requested to be included.
l 2.3 Resistration Procedures. If and whenever (a) the Company is required to effect the registration of any Registrable Securities under the Securities Act as provided in sections 2.1 and 2.2 or (h) there is a Requesting Holder in j
connection with any other proposed registration by the Company under the Securities l
Act, the Company shall, as expeditiously as possible:
i (i) prepare and (within 60 days after the end of the f
period within which requests for registration may be given to the Company j
or in any event as soon thereafter as possible) file with the Commission the i
requisite registration statement to effect such registration (including such audited financial statements as may be required by the Securities Act or the rules and regulations promulgated thereunder) and thereafter cause such l
registration statement to become and remain effective, orovided however that i
the Company may discontinue any registration of its securities which are not Registrable Securities (and, under the circumstances specified in section j
2.2(a), its securities which are Registrable Securities) at any time prior to the effective date of the registration statement relating thereto, orovided further i
that before filing such registration statement or any amendments thereto, the L
Company will furnish to the single counsel selected by the holders of Regis-l trable Securities which are to be included in such registration, if any, copies of all such documents proposed to be filed, which documents will be subject l
to the review of such counsel;
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I (ii) prepare and file with the Commission such amendments and supplements to such registration statement and the pro-spectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the i
Securities Act with respect to the disposition of all securities covered by such j
registration statement until such time as all of such securities have been j
disposed of in accordance with the intended methods of disposition by the j
seller or sellers thereof set forth in such registration statement; i
l (iii) furnish to each seller of Registrable Securities covered by such registration statement and each Requesting Holder such -
number of conformed copies of such registration statement and of each such l
amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any j
other prospectus filed under Rule 424 under the Securities Act, in conformity
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with the requirements of the Securities Act, and such other documents, as j
such seller or Requesting Holder may reasonably request I
(iv). use its best efforts. to register or qualify all i
Registrable Securities and other securities covered by such registration state-ment under such other securities laws or blue sky laws of such jurisdictions i
as any seller thereof and any Requesting Holder shall reasonably request, to keep such registrations or qualifications in effect for so long as such regis-l tration statement remains in effect, and take any other action which may be i
reasonably necessary or advisable to enable'such seller to consummate the disposition in suchjurisdictions of the securities owned by such seller, except that the Company shall not for any such purpose be required to qualify j
generally to ao business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this subdivision (iv) be obligated to be so qualified or to consent to general service of process in any such jurisdiction; (v) use its best efforts to cause all Registrable Secu-rities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Registrable Securities; 6
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(vi) at the request of any holder of Registrable i
Securities representing 5 % or more of the Common Stock at the time outstanding (a "5% Holder") furnish to each seller of Registrable Securities and each Requesting i
Holder a signed counterpart, addressed to such seller, such Requesting Holder and the underwriters, if any, of:
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(x) an opinion of counsel for the Company, dated the effective date of such registration statement (or, if such registration includes an underwritten public offer-ing, an opinion dated the date of the closing under the underwriting agreement),
reasonably satisfactory in form and substance to such seller, and (y) a " comfort" letter (or, in the case of any such Person which does not satisfy the conditions for receipt of a " comfort" letter specified in Statement on Auditing Standards No. 72, an " agreed upon procedures" letter), dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter of like kind dated the date of the closing under the underwriting agreement), signed by the independent public accountants who have certified the Company's financial statements included in such registration statement, covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of the accountants' letter, with respect to events subsequent to the date of such financial statements, as are customarily' covered in opinions of issuer's counsel and in accountants' letters delivered to the underwriters in under-written public offerings of securities (with, in the case of an " agreed upon procedures" letter, such modifications or deletions as may be required under Statement on Auditing Standards No. 35) and, in the case of the accountants' letter, such other financial matters, and, in the case of the legal opinion, such other legal matters, as such seller or such Requesting Holder (or the under-writers, if any) may reasonably request; (vii) notify the sellers of Registrable Securities, each Requesting Holder and the managing underwriter or undetwriters, if any, promptly and confirm such advice in writing promptly thereafter:
(a) when the registration statement, the prospectus or any prospectus supplement related thereto or post-effective amendment to the registration statement has been filed, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective; i
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(b) of any request by the Commission for amendments or supplements to the registration statement or the prospectus or for additional information; (c) of the issuance by the Commission of any stop order i
suspending the effectiveness of the registration statement or the initiation of any proceedings by any Person for that purpose;
(
l-(d) if at any time the representations and warranties 'of the l
Company made as contemplated by section 2,4 below cease to be true and correct; l
(e) of the receipt by the Company of any notification with respect to the suspension of the qualification'of any Registrable Securities for sale j
under the securities or blue sky laws of any jurisdiction or the initiation or threat of any proceeding for such purpose; and l
(viii) notify each seller of Registrable Securities.
i covered by such registration statement and each Requesting Holder, at any i
time when a prospectus relating thereto is required to be delivered under the
{
Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as l
then in effect, includes an untrue statement of a material fact or omits to state l
any material fact required to be stated therein or necessary to make the state.
l ments therein not misleading in the light of the circumstances under which j
they were made, and at the request of any such seller or Requesting Holder promptly prepare and furnish to such seller or Requesting Holder and each i
underwriter, if any, a reasonable number of copies of a supplement to or an l
amendment of such prospectus as may be necessary so that, as thereafter f
delivered to the purchasers of such securities,; such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not i
misleading in the light of the circumstances under which they were made;
)
(ix) make every reasonable effort to obtain the with-i drawal of any order suspending the effectiveness of the registration statement at the earliest possible moment; i
(x) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security hc'ders, as soon as reasonably practicable, an earnings statement 8
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j covering the period of at least twelve months, but not more than eighteen months, beginning with the first full calendar month after the effective date i
of such registration statement, which earnings statement shall satisfy the j
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, and will furnish to each such seller and each Requesting Holder at least five business days prior to the filing thereof a copy of any amendment or j
supplement to such registration statement or prospectus and shall not file any 1
thereof to which any such seller or any Requesting Holder shall have reasonably objected on the grounds that such amendment or supplement does l
not comply in all material respects with the requirements of the Securities l
Act or of the rules or regulations thereunder;.
2 i
(xi) provide and cause to be maintained a transfer i
agent and registrar for all Registrable' Securities covered by such registration
]
statement from and after a date not later than the effective date of such registration statement;
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(xii) enter into such agreements and take such other actions as sellers of such Registrable Securities holding 51% of the shares so l
to be sold shall reasonably request in order to expedite or facilitate the j
disposition of such Registrable Securities; (xiii) use its best efforts to list all Registrable Secu-rities covered by such registration statement on any securities exchange on j
which any of the Registrable Securities are then listed; and I
(xiv) use its best efforts to provide a CUSIP number i
for the Registrable Securities, not later than the effective date. of the j
registration statement.
4 l
The Company may require each seller of Registrable Securities as to.which any j
registration is being effected to furnish the Company such information regarding j
such seller and the distribution of such securities as the Company may from time to j
time reasonably request in writing.
l The Company will not file any registration statement or amendment thereto or any prospectus or any supplement thereto (including such documents incorporated by reference and proposed to be filed after the initial filing of the j
registration statement) to which the holders of at least a majority of the Registrable i
Securities covered by such registration statement or the underwriter or underwriters, 4
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1 if any, shall reasonably object, orovided that the Company may file such document j
in a form required by law or upon the advice of its counsel, i
Each holder of Registrable Securities agrees by acquisition of such Registrable Securities thati upon receipt of any notice from the Company of the i
occurrence of any event of the kind described in subdivision (viii) of this section 2.3, j
such holder will forthwith discontinue such' holder's disposition of Registrable i
Securities pursuant to the registration statement relating to such Registrable i
Securities until such holder's receipt of the copies of the supplemented or amended prospectus contemplated by subdivision (viii) of this section 2.3 and, if so directed i
by the Company, will deliver to the Company (at the Company's expense) all copies, j
other than permanent file copics, then in such holder's possession of the prospectus relating to such Registrable Securities current at the time of receipt of such notice.
If any such registration statement refers to any holder of Registrable Securities by name or otherwise as the holder of any securities of the Company, then j
such holder shall have the right to require (i) the insertion therein of language, in i
form and substance satisfactory to such holder, to the effect that the holding by such j
holder of such securities is not to be c.onstrued as a recommendation by such holder of the investment quality of the Company's securities covered thereby and that such j-holding does not imply that such holder will assist in meeting any future financial requirements of the Company, or (D)in the event that such reference to such holder i
by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the reference to such holder, i
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2.4 Underwtinen Offerines.
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(a)
Reauested Underwritten Offerines. If requested by the underwriters for any underwritten offering by holders of Registrable Securities l
pursuant to a registration requested under section 2.1, the Company will enter into l
an underwriting agreement with such underwriters for such offering, such agreement to be satisfactory in substance and form to the Company, each such holder and the -
underwriters, and to contain such representations and warranties by the Company and such other terms as are generally prevailing in agreements of this type,
)
including, without limitation, indemnities to the effect and to the extent provided in l-section 2.7.-
The holders of the Registrable Securities will cooperate with the
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j' Company in the negotiation of the underwriting agreement and will give consid-
]
eration to the reasonable suggestions of the Company regarding the form thereof, j
orovided that nothing herein contained shall diminish the foregoing obligations of the Company. The holders of Registrable Securities to be distributed by such under-t 10 i
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wrkers shall be parties to wch underwriting agreement and may, at their option, l
require that any or all of the representations and warranties by, and the other agree-ments on the part of, the Com;rmy to and for the benefit of such underwriters shall j
also be made to and for the beneSt of such holders of Registrable Securities and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precrJent to the obligations of such J
holders of Registrable Securities. Any such holdec of Registrable Securities shall nct be required to make any representations or wawanties to or agreements with the Company or the underwriters other than represerdations and warranties contained in a writing furnished by such holder expressly for use in such registration statement or agreements regarding such holder, such holder's Registrabic Securities and such holder's intended method of distribution and raiy other representation required by j
law.
(b)
Incidental Un4gIw_f.tten Offermgs If the Company at l
any time proposes to register any of its securities under the Securities Act as
{
contemplated by section 2.2 and such securities are to be distributed by or through one or more underwriters, the Company will, if requested by any holder of
)
Registrable Securities as provided in section 2.2 and subject to the provisions of section 2.2(b), use its best efforts to arrange for such underwriters to include all the Registrable Securities n, be offered and sold by such holder among the securi'.ies to be distributed by such underwriters. The holders of Registrable Securities to be distributed by such underwriters riall be parties to the underwriting agreeme9t between the Company and such underwriters and may, at their option, reci tr re.at any or all of the representations and warranties by, and the other agre.: men,s e, the part of, the Company to and for the benefit of such underwriters shall ako 1,e inade to and for the benefit of such holders of Registrable Securities and (nat any or all of 1
the conditians precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligatiors of such holders of Registrible Securities. Any such holder of Registrable Sec'arities shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such holder, such holder's Registrable Securities and such holder's intended method of distribution and any other representation required by law.
(c)
Participation in Underwruten Offerines. No Person may participate in any underwritten offering hereunder unless such Person (i) agrees to sell such Person's securities on the basis provided in any underwriting arrange-ments approved, subject to the te: ns and conditions hereof, by the Company and the holders of a majority of Registrable Securities to be included in such underwritten 11
offering and (ii) completes and executes all questionnaires, indemnities, underwriting agreements and other documents (other than powers of attorney) required under the terms of such underwriting arrangements. Notwithstandmg the foregoing, no under-writing agreement (or other agreement in connection with such offering) shall require any holder of Registrable Securities to make any representations or warranties to or agreements with the Company or the underwriters other than representations and warranties contained in a writing furnished by such holder expressly for use in the related registration statement or agreements regarding such holder, such holder's Registrable Securities and such holder's intended method of distribution and any other representation required by law.
2.5 Preparation
Reasonable Investication. In connection with the preparation and filing of each registration statement under the Securities Act pursuant to this Agreement, the Company will give the holders of Registrable Securities registered under such registration statement, their underwriters, if any, each Requesting Holder and their respective counsel and accountants, the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed wi:h the Commission, and eac. unendment thereof or supplement thereto, and will give each of them such access to its books and records and such opponunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of such holders' and such underwriters' respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act.
2.6 Richts of Reauestine Holders. The Company will not file any registration statement under the Securities Act (other than by a registration on Form S-8), unless it shall first have given to each holder of Registrable Securities at the time outstanding (other than any such Person who acquired all such securities held by such Person la a public offering registered under the Securities Act or as the direct or indirect m cree of shares initially issued in such an offering), at least 30 days prior written wa thereof. Any such Person not participating in a registration pursuant hereto holding 5% or more of the Common Stock at the time outstanding who shall so request within 30 days after such notice (a " Requesting Holder") shall have the rights of a Requesting Holder provided in sections 2.3,2.5 and 2.7 In addition, if any such registration statement refers to any Requesting Holder by name or otherwise as the holder of any securities of the Company, then such holder shall have the right to require (g) the insertion therein of language, in form and substance satisfactory to such holder, to the effect that the holding by such holder of such securities does not necessarily make such holder a " controlling person" of the 12 1
d i
4 Company within the meaning of the Securities Act and is not to be construed as a recommendation by such holder of the investment quality of the Company's debt or equity securities covered thereby and that such holding does not imply that such holder will assist in meeting any future financial requirements of the Company, or (h) in the event that such reference to such holder by name or othenvise is not required by the Securities Act or any rules and regulations promulgated thereunder, the deletion of the reference to such holder.
2.7 Indemnification.
(a)
Indemnification by the Company. In the event of any registration of any securities of the Company under the Securities Act, the Company will, and hereby does agree to, indemnify and hold harmless (j) in the case of any 3
registration statement filed pursuant to section 2.1 or 2.2, the holder of any Registrable Securities covered by such registration statement, its directors and officers, each other Person who panicipates as an underwriter in the offering or sale of such securities and each other Person, if any, who controls such holder or any such underwriter within the meaning of the Securities Act, and (ii) in the case of any registration statement of the Company, any Requesting Holder, its directors and officers and each other Person, if any, who controls such Requesting Holder within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such holder or Requesting Holder or any such director or officer or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions
)
or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untme statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company q
will reimburse such holder, such Requesting Holder and each such director, officer, underwriter and controlling person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding, orovided that the Company shall not be liable in any such case to a holder of Registrable Securities or a Requesting Holder to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, 13
amendment or supplement in reliance upon and in confonnity with written information furnished to the Company through an instrument duly executed by such holder or Requesting Holder, as the case may be, specifically stating that it is for use in the preparation thereof and, provided further that the Company shall not be liable to any Person who participates as an underwriter in the offering or sale of Registrable Securities or to any other Person, if any, who controls such underwriter within the meaning of the Securities Act, in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of such Person's failure to send or give a copy of the final prospectus, as the same may be then supplemented or amended, within the time required by the Securities Act to the Person asserting the existence of an untrue statement or alleged untme statement or omission or alleged omission at or prior to the written 4
confirmation of the sale of Registrable Securities to such Person if such statement or omission was corrected in such final prospectus. Such indemnity shall remain in d
full force and effect regardless of any investigation made by or on behalf of such holder or such Requesting Holder or any such director, officer, underwriter or controlling person and shall survive the transfer of such securities by such holder.
(b) Indemnification by the Sellers.
The Company may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to section 2.3, that the Company shall have received an undertakmg satisfactory to it from the prospective seller of such Registrable Securities, to indemnify and hold harmless (in the same manner and to the same extent as set forth in subdivision (a) of this section 2.7) the Company, each director of the Company, each officer of the Company and each other person, if any, who controls the Company within the meaning of the Securities Act, with respect to any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, if such statement or alleged statement or omission or alleged omissioa was made in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such seller specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement. Any such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer of such securities by such seller.
(c) Notices of Claims. etc.
Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding 14
i i
! I t
i
( :.
4 involving a claim referred to in the preceding subdivisions of this section 2.7, such j
indemnified pany will, if a claim in respect' thereof is to be made against an
]
indemnifying pany, give written notice to the latter of the commencement of such action, orovided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying pany of its obligations under the preceding, I
subdivisions of this section 2.7, except to the extent that the indemnifying party is l
actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified pany,' unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist j
in respect of such claim, the indemnifying party shall be entitled to panicipate in and to assume the defense thereof, jointly with any other indemnifying party similarly -
l notified, to the extent that the indemnifying party may wish, with counsel reasonably j
satisfactory to such indemnified party, and after notice from the indemnifying pany to such indemnified pany of its clection so to assume the defense thereof, the l
indemnifying party shall not be liable to such indemnified pany for any legal or other expenses subsequently incurred by the latter in connection with the defense l
thereof other than reasonable costs of investigation. No indemnifying party shall, j
without the consent of the indemnified party, consent to entry of any judgment or l
enter into any settlement of any such action which does not inclu3e as an uncondi-tional term thereof the giving by the claimant or plaintiff to such indemnified party j
i of a release from all liability, or a covenant not to sue, in respect to such claim or' litigation. No indemnified pany shall consent to entry of any judgment or enter into -
j l
any settlement of any such action the defense of which has been assumed by an indemnifying party without the consent of such indemnifying pany.
J (d) Other Indemnification. Indemnification similar to that specified in the preceding subdivisions of this section 2.7 (with appropriate modifica-l tions) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under.any Federal or state law or regulation of any governmental authority, other than the i
Securities Act.
l (e) Indemnification Payments. The indemnification required i
by this section 2.7 shall be made by periodic payments of the amount thereof during l
the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred.
j (f) Contribution. If the indemnification provided for in the l
preceding subdivisions of this section 2.7 is unavailable to an indemnified party in respect of any expense, loss, claim, damage or liability referred to therein, then each j
jl 15 4
1 i
i 9
i l
k i
i f
i l
indemnifying pany, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified pany as a result of such expense, loss, claim, damage or liability (i) in such proponion as is appropriate to reflect the -
relative benefits received by the Company on the one hand and the holder or underwriter, as the case may be, on the other from the distribution of the Registrable Securities or (ii) if the allocation provided by clause (i) above is not permitted by.
applicable law, in such proportion as is appropriate to reflect not only the relative.
benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the holder or underwriter, as the case may be, on the other in connection with the statements or omissions which resulted in such expense, loss, damage or liability, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the holder or underwriter, as the case may be, on the other in connection with the distribution of the Registrable Securities shall be deemed to be in the same proponion as the total net proceeds received by the Company from the initial sale of the Registrable Securities by the Company. to the purchasers pursuant to the Stock Purchase Agreement bear to the gain, if any, realized by the selling holder or the underwriting discounts and commissions received by the underwriter, as the case may be. The relative fault of the Company on the one hand and of the holder or underwriter, as the case may be, on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission to state a material fact relates to information supplied by the Company, by the holder or by the underwriter and the panies' relative intent, knowledge, access to informa--
tion and oppormnity to correct or prevent such statement or omission, orovided that the foregoing contribution agreement shall not inure to the benefit of any indemnified pany if indemnification would be unavailable to such indemnified party by reason of the provisions contained in the first sentence of subdivision (a) of this section 2.7, and in no event shall the obligation of any indemnifying pany to contribute under this subdivision (f) exceed the amount that such indemnifying pany would have been obligated to pay by way of indemnification if the indemnification provided for under subdivisions (a) or (b) of this section 2.7 had been available under the circumstances.
The Company and the holders of Registrable Securities agree that it woJd not be just and equitable if contribution pursuant to this subdivision (f) were determined by gtg rata allocation (even if the holders, Requesting Holders and any underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the' immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to - the 16
i 4
limitations set forth in the preceding sentence and subdivision (c) of this section 2.7, any legal or other expenses reasonably incurred by such indemnified party in 4
connection with investigating or defending any such action or claim.
j Notwithstanding the provisions of this subdivision (f), no holder of Registrable Securities or underwriter shall be required to contribute any amount in excess of the amount by which (i) in the case of any such holder, the net proceeds received by such holder from the sale of Registrable Securities or (ii) in the case of
]
an underwriter, the total price at which the Registrable Securities purchased by it and distributed to the public were offered to the public exceeds, in any such case, the amount of any damages that such holder or underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(0 of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
4 2.8 Adiustmer.ts Affectine Registrable Securities. The Company will j
not effect or permit to occur any combination or subdivision of shares which would adversely affect the ability of the holders of Registrable Securities to include such Registrable Securities in any registration of its securities contemplated by this section l
2 or the marketability of such Registrable Securities under any such registration.
i j
- 3. Definitions. As used herein, unless the context otherwise requires, I
j the following terms have the following respective meanings:
i 2
Commission: The Securities and Exchange Commission or any other l
Federal agency at the time administering the Securities Act.
4 l
Common Stock: As dermed in section 1.
5 Comnany: As defined in the introductory paragraph of this Agree-ment.
Exchance Act: The Securities Exchange Act of 1934, or any similar i
Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. Reference i
to a particular section of the Securities Exchange Act of 1934 shall in-4 clude a reference to the comparable section, if any, of any such '
similar Federal statute.
j 17 A
N 4
.s e
- 4 1
o Initiatine Holders: Any holder or holders of Registrable Securities holding at least 5% of the Common Stock (by number of shares at the time issued and outstanding), and initiating a request pursuant to section 2.1 for the registration of all or part of such holder's or holders' Registrable Securities.
Person A corporation, an association, a partnership, an organization, business, an individual, a governmental or political subdivision thereof or a governmental agency.
Registrable Securities: Any shares of Common Stock issued to the Stockholders pursuant to the Stock Purchase Agreement and any securities issued or issuable with respect to any Common Stock referred to above by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. As to any partic-ular Registrable Securities, once issued such securities shall cease to be Registrable Securities when (a) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (b) they shall have been distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, (g) they shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subse-quent disposition of them shall not require registration or qualification of them under the Securities Act or any similar state law then in force, (d) they shall have become eligible for sale pursuant to Rule 144(k) under the Securities Act, or (g) they shall have ceased to be outstanding.
Reeistration Exnenses:
All expenses incident to the Company's performance of or compliance with section 2, including, without limitation, all registration, filing and NASD fees, all stock exchange listing fees, all fees and expenses of complying with securities or blue sky laws, all word processing, duplicating and printing expenses, messenger and delivery expenses, the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of any special audits or " cold comfort" letters required by or incident to such performance and compliance, the fees 18
i :
and disbursements of any a single counsel and accountants retained by the holder or holders of more than 51% of the Registrable Securities, Securities Act liability insurance (if the Company so desires such l
insurance) and any fees and disbursements of underwriters customari-ly paid by issuers or sellers of securities, but excluding underwriting discounts and commissions and transfer taxes, if any, providd that, in any case where Registration Expenses are not to be borne by the Company, such expenses shall not include salaries of Company personnel or general overhead expenses of the Company, auditing fees, premiums or other expenses relating to liability insurance required by underwriters of the Company or other expenses for the l
preparation of financial statements or other data normally prepared by the Company in the ordinary course of its business or which the Company would have incurred in any event.
Reauestine Holder: As defined in section 2.6.
l Securities Act: The Securities Act of 1933, or any similar Federal l
statute, and the rules and regulations of the Commission thereunder, all as of the same shall be in effect at the time. References to a particular section of the Securities Act of 1933 shall include a reference to the comparable section, if any, of any such similar Federal statute.
Stock Purchase Agreement: As defined in section 1.
- 4. Rules 144 and 144A.
So long as the Company shall not have filed a registration statement pursuant to section 12 of the Exchange Act or a registration statement pursuant to the requirements of the Securities Act, the Company shall, at any time and from time to time, upon the request of any holder of at least 5% of the Registrable Securities (by number of shares at the time issued and outstanding) and upon the request of any Person designated by such holder as a prospective purchaser of at least 5% of the Registrable Securities (by number of shares at the time issued and outstanding), furnish in writing to such holder or such prospective purchaser, as the case may be, a statement as of a date not earlier than 12 months prior to the date of such request of the nature of the business of the Company and the products and services it offers and copies of the Company's most recent balance sheet and profit and loss and retained earnings statements, together with similar financial statements for such part of the two preceding fiscal years as j
the Company shall have been in operation, all such financial statements to be audited l
19 i
t to the extent audited statements are reasonably available, provided that, in any event the most recent financial statements so furnished shall include a balance sheet as of a date less than 16 months prior to the date of such request, statements of profit and loss and retained earnings for the 12 months preceding the date of such balance sheet, and, if such balance sheet is not as of a date less than 6 months prior to the i
i date of such request, additional statements of profit and loss and retained earnings for the period from the date of such balance sheet to a date less than 6 months prior to the date of such request. In addition, the Company shall take such other action as is necessary to comply with 144A of the Securities Act. If the Company shall have filed a registration statement pursuant to the requirements of section 12 of the Ex-change Act or a registration statement pursuant to the requirements of the Securities Act, the Company shall timely file the reports required to be filed by it under the I
i Securities Act and the Exchange Act (including but not limited to the reports under sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c) of Rule 144 adopted by the Commission under the Securities Act) and the rules and i
regulations adopted by the Commission thereunder (or, if the Company is not required to file such reports, will, upon the request of any holder of Registrable Securities, make publicly available other information) and will take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities
{
without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission.
Upon the request of any holder of Registrable Securities, the Company will deliver to such holder a written statement as to whether it has complied with the requirements of this Section 4.
S. Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless th: Company has obtained the written consent of each 5%
Holder (as defined in Section 2.3(vi)). Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter which relates exclusively to the rights of holders of Registrable Securities whose securities are being sold pursuant to a Registration Statement and which does not directly or indirectly affect the rights of other holders of Registrable Securities may be given by holders of at least a majority in aggregate principal amount of the Registrable Securities, being sold by such holders, provided that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence.
20
. -=
E
- 6. Liauidated DAmagts.
l (a) If the Company fails to file a registration statement complying with the requirements of this Agreement within 60 days of the written request of the Initiating Holder (s) or if such registration statement has not become effective within 180 days of such written request.(the elapsing of such number of days in either case being referred to herein as a " Failure to Register"), the Initiating Holder (s) and all other holders who have requested inclusion (collectively, the " Included Holders")
shall have, in addition to and without limiting any other rights they may have at law,
-i in equity or under this Agreement (including the right to specific perfonnance), the right to receive, as liquidated damages, the payments set forth in paragraph (b) of l
this section.
1
-(b)
The payments referred to in paragraph (a) of this section shall
. be payable to the Included Holders in cash, monthly and in arrears, on the last day of the applicable month, and shall be equal to (x) the applicable percentage (as set forth in paragraph (c) of this section) times (y) the "value" of such Included Holder's Registrable Securities requested to be registered pursuant to. the' applicable registration statement times (z) the number of such Included Holder's such l
Registrable Securities. The "value" of the Registrable Securities shall be the greater j
of (A) the market price on the date of the Initiating Holders' request for registration or (B) the market price on the date occurring 3 trading days prior to the last day of the month for which such payment is to be made, with " market price" being deter-mined as follows:
(i)
If the Registrable Securities are listed on a national securities exchange in the United States, they shall be valued at their last reported sales price on the date of determination on the national securities' exchange on which they are principally traded, or, if there are no sales on such date on such ex-change, at the mean between the " bid" and " asked" prices, at the close of trading on :,uch date on such exchange.
(ii)
If the Registrable Securities are not traded on a recognized securities exchange but traded over the counter, they shall be valued at the mean between the last " bid" and " asked" prices on the date of detennination, as reported by NASDAQ, the l
National Quotation Bureau, Inc. or any other nationally recognized source selected by the Company.
21
i l
(c)
The applicable percentage referred to in paragraph (b) of this section shall be as follows (i)
For the first four (4) months following the Failure to Register, one percent (1%);
(ii)
For the fifth through and including the eighth month following the Failure to Register, one and one-half percent (1.5%); and l
(iii)
For the eighth through and including the twelfth month follow-l ing the Failure to Register, two percent (2%).
(d)
The Company acknowledges that its failure to register the Registrable Securities in accordance with this Agreement will cause the Stockholders l
to suffer damages in an amount that will be difficult to ascenain. Accordingly, the l
parties agree that it is appropriate to include in this Agreement a provision for liquidated damages. The parties acknowledge and agree that the liquidated damages i
provisions set fonh above represent the parties' good faith effort to quantify such damages and, as such, agree that the form and amount of such liquidated damages are reasonable and will not constitute a penalty.
- 7. Nominees for Beneficial Owners. In the event that any Registrable Securities are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its election, be treated as the holder of such Registrable Securities for purposes of any request or other action by any holder or holders of Registrable Securities pursuant to this Agreement or any determination of any number or percentage of shares of Registrable Securities held by any holder or holders of Registrable Securities contemplated by this Agreement. If the beneficial owner of any Registrable Securities so elects, the Company may require assurances reasonably satisfactory to it of such owner's beneficial ownership of such Registrable Securities.
8.
Notices. Except as otherwise provided in this Agreement, all notices, requests and other communications to any Person provided for hereunder shall be in writing and shall be given to such Person (a) in the case of a party hereto other than the Company, addressed to such party in the manner set fonh in the Stock Purchase Agreement or at such other address as such party shall have furnished to the Company in writing, or (h) in the case of any other holder of Registrable Secu-rities, at the address that such holder shall have furnished to the Company in writing, or, until any such other holder so furnishes to the Company an address, then 22
fi E
li.
i i
to and at the address of the last holder of such Registrable Securities who has j
furnished an address to the Company, or (q) in the case of the Company, at 20 Ladd Street, Suite 202, Portsmouth, New Hampshire 03801-4080, to the attention of its l
President, or at such other address, or to the attention of such other officer, as the Company shall have furnished to each holder of Registrable Securities at the time l-outstanding. Each such notice, request or other communication shall be effective (i) i if given by mail,72 hours8.333333e-4 days <br />0.02 hours <br />1.190476e-4 weeks <br />2.7396e-5 months <br /> after such communication is deposited in the mails with
{
first class postage prepaid, addressed as aforesaid or (ii)if given by any other means (including, without limitation, by air courier), when delivered 'at the address j
specified above, orovided that any such notice, request or communication to any l
holder of Registrable Securities shall not be effective until received.
i 9.
Assignment. This Agreement shall be binding upon and inure
{
to the benefit of and be enforceable by the parties hereto and their respective succes-l sors and assigns. In addition, and whether or not any express assignment shall have j
been made, the provisions of this Agreement which are for the benefit of the parties hereto other than the Company shall also be for the benefit of and enforceable by i
any subsequent holder of any Registrable Securities, subject to the provisions i
respecting the minimum numbers or percentages of shares of Registrable Securities j
required in order to be entitled to certain rights, or take certain actions, contained i
herein.
I 10.
Descriotive Headines. The descriptive headings of the several sections and paragraphs of this Agreement are inserted for reference only and shall j
not limit or otherwise affect the meaning hereof.
A i
11.
GOVERNING LAW. THIS AGREEMENT SHALL BE CON-l STRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF i
THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF l
NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS i
OF LAWS, i
l 12.
Countemarts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all
[
such counterparts shall together constitute one and the same instrument,
)
13.
Entire Anreement.
This Agreement embodies the entire agreement and understanding between the Company and each other pany hereto relating to the subject matter hereof and supersedes all prior agreements and a
i understandings relating to such subject matter.
k i
23 2
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. =.
a i
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14.
SUBMISSION TO JURISDICTION. ANY LEGAL ACTION i
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY _OF THIS AGREEMENT, THE i
COMPANY HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS j
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS AND APPELLATE COURTS FROM ANY l
THEREOF. THE COMPANY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF TO THE COMPANY BY REGISTERED OR CERTIFIED MAIL, POSTAGE l
PREPAID, RETURN RECEIPT REQUESTED, TO THE COMPANY AT ITS l-ADDRESS SPECIFIED IN SECTION 7. THE COMPANY HEREBY IRREVO-CABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY. OBJECTION TO THE LAYING OF VENUE OR BASED ON THE l
GROUNDS OF FORUM F_QN CONVENIENS, WHICH IT MAY NOW OR i
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR
}
PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
15.
Severability. If any provision of this Agreement, or the application of such provisions to any Person or circumstance, shall be held invalid,
{
the remainder of this Agreement, or the application of such provision to Persons or j
circumstances other than those to which_it is held invalid, shall not be affected j
thereby.
l l
l 24
\\
s i
l IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their respective officers thereunto duly authorized as of the date first above written.
. GREAT BAY POWER CORPORATION i
By:/s/ John R. Stevens l
Title:
President i
l OFFICIAL BONDHOLDERS' COMMITTEE OF EUA l
POWER CORPORATION n/k/a GREAT BAY POWER
{
CORPORATION l;
By their attorneys:
i
/s/ Mark N. Polebaum Mark N. Polebaum, Esq. (BNH 01615)
Frank W. German Jr., Esq. (BNH 04234)
HALE AND DORR
- l 60 State Street 1
Boston, Massachusetts 02109 (617) 526-6000 4
l, E
I i
)
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4
}
25 i
1 1
4 w
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i OMEGA CAPil AL PARTNERS L.P.
By: /s/ Charles A. Leeds. Jr.
Name: Charles A. Ixeds, Jr.
Title:
Partner i
i l
i OMEGA INSTITUTIONAL ~ PARTNERS L.P.
l By: /s/ Charles A. leeds. Jr.
i Name: Charles A. Ieeds, Jr.
Title:
Partner OMEGA OVERSEAS PARTNERS L.P.
By: /s/ Charles A. Leeds. Jr.
Name: Charles A. Leeds, Jr.
Title:
Partner COMMON FUND By: /s/ Charles A. Leeds. Jr.
Name: Charles A. Leeds, Jr.
Title:
Partner OMEGA OVERSEAS PARTNERS 11 LTD.
l By: /s/ Charles A. Leeds. Jr.
Name: Charles A. Leeds, Jr.
Title:
Partner 26 i
l
... _.,. _ - ~... - - _ -, -.
i s,
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GOLDMAN SACHS & CO. PROFIT SHARING i
MASTER TRUST j
GOLDMAN SACHS & CO., POOLED IRA 2 By: /s/ Charles A.12eds. Jr.
Name: Charles A. Leeds, Jr.
Title:
Partner i
88 PINE STREET By: /s/ Charles A.12eds. Jr.
Name: Charles A.12eds, Jr.
Title:
Partner ELLIOTT ASSOCIATES, L.P.
By: /s/ Paul Singer Name: Paul Singer
Title:
General Partner 27
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EXP! BIT B_
OY) ed February 1,1994 Confidential Mr. Kenneth A. Buckfin lehman Brothers 18th Floor 200 Vesey Street New York, NY l
Dear Ken:
Omega Advisors, Inc. (" Omega") on behalf of thme limited parmerships and five managed accounts which collectively have equity in excess of 53 billion, is pleased to propose the following terms for an investment in Great Bay Power Corporation (" Great Bay"). Omega is willing to purchase 60% of the fully diluted common stock outstanding upon consummation of Great Bay's plan of reorganization for $35 million. Our willingness to make this investment is condinoned upon (i) receipt of all necessary approvals from all relevant governmental authorities and the UA Bankruptcy Coun, (ii) receipt of appropriate opinions from counsel, (iii) sata >: tion with the initial composition of the Great Bay's Board of Directors (which initially shall be composed of three members). Ou a satisfactory Registration Rights Agreement, and (v) satisfactory legal due diligence. We expect that Great Bay will reimburse us for all out of pocket expenses (including the expense of retaining outaide counsel), which we will endeavor to keep at a minimum.
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Mr, Kenneth A. Buckfire j
February 1,1994 Page Two i
i We understand that the Bondholder Committee is considering alternative financin proposals which involve less equity and a standby revolving credit facility. Our prop
)
assumes no revolving credit facility. However, if you believe that some facility is required, we are wilhng to permit Great Bay to arrange a facility so long as it is on term wholly acceptable to us.
We are looking forward to working with you to bring Great Bay out of bankr 3
quicidy as possible. We would appreciate an indication a soon as practicable that th
}
Bondholder Committee is prepared to accept our pW. We are prepared to issue i
~
commitment letter in form and substance acceptable to the U.S. Bankruptcy jurisdiction in this case as quickly as you deem necessary.
4 4
j Very truly yours, I /e.
Charles A. Leeds Jr.
I General Partner j
CAUmdb i
4 SUBJECT TO BANKRUPTCY COURT APPROVAL:
1 Accepted By Official Bondholders' i
Committee Of Great Bay Power Corporation f/k/a EUA Power Corporation, I
/
.By its counsel,
_ /
/
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? ark N.'Polebaum Esquire j!
FIALE AND DORR 60 State Street i
Boston, Massachusetts 02100 (617) 526-6000 Dated: I
/
4 m
..., m c,
l ExttibiLC Great Bay Power Corporation Base Case Scenario Cash Flow Schedule (5 milhons. except as noted) 1994 1995 1996 1997 1998 1999 2000 2001 2002 4
}
C pacity Factor (a) 67.6%
73.9 %
89.3 %
73.9 %
73 9 %
89.3 %
74.1 %
73 9 %
8 9. 3'.
1 Operating Revenues
]'
Total Spot Revenues 17.15 20.47 11.16 0.00 0.00 0.00 0 00 0 00 Spot Pnce (c/kWh) 2.54 2.62 2.67 0.00 0.00 0.00 0.00 0 00 i
Niche Pnce (c/kWh) 2.75 3.00 3.20 3.50 3.90 4.40 5.00 0.00 Niche Sales 2.67 4.71 5.18 6.80 9.15 8.57 9.71 0.00 UNITIL Contract Pnce (c/kWh) 5.16 5.27 5.39 5.51 5.74 5 74 5 74 5.74 UNITIL Contract Revenues 3.34 4 14 3.49 3.57 4.49 3 73 3 72 4 49 LT Contracts Pnce (c/kWh) 2.75 3.15 3.65 4.25 5.00 6 20 6 41 6 62 j
Total LT Revenues 1.78 2 47 9 45 27.38 38 93 40.10 41.28 67 07 Tgtal Operating Revenues (a) 21.69 24.94 31.78 29.27 37.74 52.57 52.40 54.71 71.56 Oth r Receipts 0 07 0 06 0 06 0.06 0.06 0 06 0 06 0 06 0 06 Tctil Receipts 21.76 25.01 31.84 29.33 37.80 52.63 52.46 54.77 71.63 Operating Disbursements i
Fuel Costs 2.49 5.30
'6 19 1.74 6.66 1.84 7.06 1.95 7 49 j
Operating 17.30 17.74 15.08 18.61 19.10 16.47 20.34 20 87 18.00 Transmission Expenses 1.00 1.00 1.00 1.00 1 00 1.00 1.00 1.00 1.00 Service Contract Expense 1.04 0.82 0 88 0.86 0.88 0.94 0.97 1.03 1.15 Decommessioning 0.93 0.92 0.96 1.00 1.03 1.07 1.11 1.15 1.19 4
Seabrook Tax 0.91 0 91 0.91 0 91 0.91-0.91 0.91 0 91 0.91 Property Taxes 3.73 2.60 2.68 2.76 2.84 2.93 3.01 3.10 3 20 Reorganization Costs (b) 4.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 00 e
Miscellaneous 0 57 0.18 (0 06)
(0.07)
(0.01)
(0.01)
(0 01)
(0.01)
(0 011 1
Tetil Operating Disbursements (a) 32 47 29 48 27.64 26.81 32.41 25 15 34.40 30.C t 32.93 Op: rating Cash Flow (1 0.71)
(4.47) 4.20 2.53 5.39 27.48 18.06 24.76 38.69 i
Operating Deposit (0.59) 0.24 0.19 (0.80) 0.38 0.25 (0.80) 0.40 0 40 Capital Accrtions 2.62 2.79 2.47 1.95 1.82 1.88 1.93 1.99 2 05 Cssh Flow Before Interest (12.74)
(7.50) 1.55 1.38 3.19 25.35 16.93 22.37 36 24 I
intsrest on DIP Loan 13.0%
0.41 0.00 0.00 0.00 0.00 0.00 0 00 0 00 0 00 Interest income 3.0%
0.33 0.59 0.51 0.58 0.66 1.12 1.79 2 45 3 42 4
t Cash Flow After interest (12.82)
(6.91) 2.06 1.95 3.85 26.4 7 10.72 24.81 39.66 Equity Contribution 35.00i i
Beginning Cash Balance (c) 0.86 23.05 16.13 18 20 20.15 24 00 50.47 69 19 94 01 Ending Cash Balance 23.05 16.13 18.20 20.15 24.00 50 47 69.19 94 01 133 66 I
Beginning DIP Loan Balance 0.00 Additional Borrowings through July 1 8.75 DIP Pnncipal Repayment on July 1 (8.75)
Enting Loan Balance at July 1 0.00 d
ta) Figures reflect unplanned outage dunng January. February 1994 (b) includes bankruptcy costs due dihgence costs. Lehman Brothers fees and estimated legal fees.
(c) 1994 beginning casn balance reflects receipt of December 1993 revenues; ongoing annual revenues are reflected in year sold a'
i
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i :
ExhiblLD Great Bay Power Corporation 1
Floor Case Scenario Cash Flow Schedule 4
i i
(5 millions except as noted) 1994 1995 1996 1997 1998 1999 2000 2001 2002 4
i C:pacity Factor (a) 67.6 %
73.9 %
89.3 %
73 9 %
73.9 %
89.3 %
74.1 %
73 9 %
89.3 %
i j
Operating Revenues Spot Pnce (c/kWh) 2.54 2.62 2,67 2.74 2.85 0.00 0.00 0.00 Total Spot Revenues 21.26 26.64 22.40 22.98 15.47 0.00 0.00 0.00 i
Niche Pnce (c/kWh) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 00
}
Niche Sales 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 00 l
UNITIL Contract Pnce (c!kWh) 5.16 5 27 5.39 5.51 5.74 5.74 5.74 5 74 UNITIL Contract Revenues 3.34 4.14 3.49 3.57 4 49 3.73 3.72 4 49 e
}
LT Contracts Pnce (c/kWh) 0 00 0.00 0.00 0.00 5.00 6.20 6 41 6 62 Total LT Revenues 0.00 0 00 0.00 0.00 2347 52.18 53.73 67 07 Tetil Operating Revenues (a) 21.69 24.60 30.77 25.88 26.55 43.43 55.91 57.44 71.56 l
Other Receipts 0.07 0.06 0.06 0 06 0.06 0.06 0.06 0.06 0 06
}
Tttal Receipts 21.76 24.66 30.83 25.95 26.61 43.49 55.97 57.50 71.63 Operating Disbursements J
Fuel Costs 2.49 5 30 6.19 1.74 6.66 1.84 7.06 1.95 749 Operating 17.30 17.74 15.08 18.61 19.10 16.47 20.34 20.87 18.00 Transmission Expenses 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
, 1.00 g
S:rvice Contract Expense 1.04 0.82 0.88 0.78 0.79 0.96 1.19 1.24 1.30 Decommissoning 0.93 0.92 0.96 1.00 1.03 1.07 1.11 1,15 1 19 Stabrook Tax 0.91 0 91 0 91 0.91 0.91 0.91 0.91 0.91 0 91 Property Taxes 3.73 2.60 2.68 2.76 2.84 2.93 3.01 3.10 3.20 j
Reorganizaten Costs (b) 4.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Miscellaneous 0.57 0.18 (0 06)
(0.07)
(0 01)
(0 01)
(0 01)
(0 01) to 01)
Tctil Operating Disbursements (a) 32.47 29 47 27.64 26.72 32 32 25.17 34 61 30 22 33 09 l
Operating Cash Flow (10.71)
(4.81) 3.20 (0.78)
(5.71) 18.32 21.36 27.28 38.54 j
operating Deposit (0.59) 0.24 0.19 (0.80) 0.38 0.25 (0.80) 040 040 j
Ctpitti Additions 2.62 2.79 2.47 1.95 1.82 1.88 1.93 1.99 2.05 i
C:sh Flow Before Interest (12.74)
(7.85) 0.54 (1.93)
(7.91) 16.20 20.23 24 89 36 09 4
intersst on DIP Loan 13.0%
0.41 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 00 interest income 3.0%
0.33 0.58 0.49 0.48 0.35 0.48 1.05 1.77 2 76 i
Cash Flow After Interset (12.82)
(7.26) 1.03 (1.45)
(7.56) 16.68 21.20 26.66 38.84 J
Equity Contribution 35.00!
l G2 ginning Cash Balance (c) 0.86 23.05 15.78 16.81 15.37 7.81 24 49 45.77 72 43 j
Ending Cash Balance 23.05 15.78 16 81 15.37 7.81 24.49 45.77 72,43 111 27 Beginning DIP Loan Balance 0.00 Ad@t:onal Borrowings through July 1 8.75 DIP Pnncipal Repayment on July 1 (8.75)
Ending Loan Balance at July 1 0.00 4
1 i
(a) Figures reflect unplanned outage cunng January. February 1994 (D) includes bankruptcy costs, due diligence costs. Lehman Brothers fees and est: mated legal fees.
1 (c) 1994 beginning cash Dalance reflects receipt of Decameer 1993 revenues; ongoing annual revenues are reflected in year sold.
E
!+
1 EXHIBIT E
?
UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW HAMPSHIRE i
1
)
i In Re:
)
)
Chapter 11 EUA POWER CORPORATION n/k/a
)
Case No. 91-10525 GREAT BAY POWER COIPORATION,
)
Hearing Date: May 13, 1994
)
Hearing Time: 10:00 a.m.
Jebtor.
)
)
JOINT MOTION OF DEBTOR AND OFFICIAL BONDHOLDERS' i
COMMITTEE TO AMEND RETENTION OF LEHMAN BROTHERS AS i
PLAN FINANCING PLACEMENT AGENT t
EUA Power Corporation n/k/a Great Bay Power Corporation (the
' Debtor") and the Official Bondholders' Committee for the Debtor i
(the " Committee") request that this Court enter an order 5
l*
authorizing the Debtor to amend its retention of Shearson Lehman I
i Brothers, Inc. ("Lehman") as plan financing placement agent.
In j
support of this motion, the Debtor and the Committee state as j
follows:
1.
The Debtor commenced this case on February 28, 1991 by I
j filing a voluntary petition under Chapter 11 of Title 11 of the i
United States Code, 11 U.S.C. 5 101, at Egg (the " Bank'ruptcy 4
l Code").
The Committee represents the holders of $294,000,000 in i
Series B and Series C secured notes issued by the Debtor (the i
j
" Bondholders").
The Bondholders' claims represent substantially j
all of the claims against the Debtor.
2.
The Committee's Fifth Amended Plan of Reorganization (the "Fifth Amended Plan") was confirmed by an order of this Court I
1 j
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l dated March 5, 1993.
The Fifth Amended Plan provided that it would become effective only if the necessary regulatory approvals and c. $45,000,000 plan of reorganization debt financing facility (the " Debt Financing Facility") for the Debtor were obtained.
3.
Pursuant to an engagement letter dated February 25, 1993 1
j (the " Engagement Letter") and an order of this Court dated i
j March 5, 1993, the Debtor retained Lehman to act as the Debtor's a
I placement agent for the Debt Financing Facility.
The Debt Financing Facility was to be funded upon the effective date of the l
Fifth Amended Plan.
i 4.
Following confirmation of the Fifth Amended Plan, Lehman i
i a
first tried to place the Debt Financing Facility with persons l
other than Bondholders.
Lehman contacted over 200 financial 1
{
institutions and had serious discussions with a number of
!i j
financial institutions to provide this financing.
None of those efforts, which were made over a four month period from April, 1993 4
through August, 1993, resulted in financing commitments being l
obtained from any non-Bondholder, j
5.
Lehman then concentrated on trying to raise the
$45,000,000 debt financing from the Bondholders.
Lehman was able to obtain commitments for $25,000,000 of debt financing from I
certain Bondholders, but, notwithstanding Lehman Brothers' best l
efforts to place the Debt Financing Facility on the terms i
described in the Fifth Amended Plan, Lehman was unable to complete i
the financing on the terms described in the Fifth Amended Plan, i
-2 4
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6.
Lehman was, however, able to obtain plan of reorganization financing on terms different from those proposed in the Fifth Amended Plan.
Lehman was successful in obtaining a commitment from Omega Advisors, Inc.
(" Omega"), a New York-based hedge fund manager, to invest $35,000,000 in the reorganized Debtor in exchange for 60% of the common stock of the reorganized Debtor (the " Omega Financing").
i 7.
The letter agreement among the Debtor, the Committee and' 1
Lehman amending certain terms of the Engagement Letter is attached hereto as Exhibit A (the " Amendment").
The Amendment provides for the retention of Lehman by the Debtor on an exclusive basis to provide financial advisory services to the Debtor related to the Omega Financing.
Under the terms of the Amendment, Lehman's engagement is extended for six months from the date of approval of the Amendment by this Court and is modified to cover placement of 4
equity securities.
8.
As compensation for the services rendered by Lehman to the Debtor in connection with the placement and consummation of 4
the Omega Financing, the Debtor agrees to pay Lehman a success fee of $937,500, payable upon the sale of the reorganited Debtor's common stock to Omega.
The fee is calculated based on the amount payable under the Engagement Letter.
Pursuant to the Amendment, the Debtor will pay less than 3% of the amount of the Omega Financing as a success fee.
This amount is reasonable under the.
k e
8 t
t l
circumstances and is lower than the percentage customarily paid to i
investment-banks for raising equity financing.
The proposed success fee is in lieu of all other fees or other compensation owed to Lehman by the Debtor under the Engagement Letter, other 4
1 j
than the initial $75,000 fee previously paid at the time the Engagement Letter was initially approved by this Court.
9.
John R.
Stevens, the President of Great Bay Power l
Corporation, serves at the request, and subject to the direction f
3 of the Committee and.under those circumstances has executed (or l
will execute) the Amendment to the Engagement Letter (Exhibit A i
j hereto).
Mr. Stevens did not participate at all in the selection l
of Lehman as a placement' agent or in negotiating _the terms of the i
original Engagement Letter or the amendment thereto (Exhibit A).
i
{
Mr. Stevens has no knowledge as to whether or not any financial l
advisory services of Lehman are_necessary or desirable in placing i
j
$35 million of common stock, and if such services are necessary or I
l desirable, whether $937,500 is appropriate compensation as a
success fee."
In no event shall Mr. Stevens, EUA, any of EUA's v
)
corporate affiliates, or any officer, trustee or director of EUA or any of its affiliates, incur any liability on account of any services rendered or omitted by Lehman and the fee paid therefor, or be required to furnish any indemnification as provided in the Engagement Letter..
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PHOTOGRAPHIC SCIENCES CORPORATION V~
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V P.O. BOX 338 WEBSTER, NEW YORK 14580 4
(716) 265-1600
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P.O. BOX 338 WEBSTER, NEW YORK 14580
'8 (716) 265-1600
WHEREFORE, the Debtor and the Committee request that the Court authorize the Debtor to execute, deliver and perform under the Amendment attached hereto as Exhibit A.
EUA POWER CORPORATION n/k/a THE OFFICIAL BONDHOLDERS' GREAT BAY POWER CORPORATION COMMITTEE OF EUA POWER CORPORATION n/k/a GREAT BAY "OWER CORPORATION By its attorneys, By its attorneys, J
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Alan L. Lefkowitz (SNH 03348)
Mark N. Polebaum', Esq. (BNH 01615)
DECHERT PRICE & RHOADS Frank W. Getman, Jr.,
Esq. (BNH 04234)
Ten Post Office Square, South HALE AND DORR Boston, PA 02109 60 State Street (617) 728-7100 Boston, PA 02109 (617) 526-6000 Dated:
February 15, 1994 1
EXF.!MT A 4
LEHMAN BROTHERS February 10,1994 Orcar Bay Power Corporation f/k/a EUA Power Corporation Forty Stark Street P.O. Box 326 M~k r,NewHampshire 03!05 Gentlemen:
This will serve as an amendment to the engagement lecer dated February 25,1993 (the
" February Leuer") by and between Lehman Brothers Inc., the successor to the Lehman Brothe Division of Shearson Lehman Brothers Inc. ("Lehman Brothers"), and Great Bay Power Corporation, f/k/a EUA Power Corporation (the " Company") as follows:
1.
[Amma Brothers is hereby engaged on an exclusive basis to provide fmancial advisor services to the Company conceming the placement of $35 million of common stock (the
" Common Stock") to finance the Company's working capital requirements. Such services shall include advice with respect to the structure and pricing of the Common Stock sale and assisting the Company with any amendments.to the Disclosure Document.
2.
As compensation for the services rendered by L*kman_ Brothers hereunder, the Compan shall pay Lehman Brothers a success fee of $937,500, payab!c upon sale of the Common Stock.
3.
The Term of Lehman Brothers's engagement, and all terms and conditions of the February Leuer, shall be extended for six months from the date of approval by the Bankruptcy Court of this Am+a4ent.
If the foregoing correctly sets forth the understanding and agreement between Lehman Brothers and the C-a-ny, please so indicate in the space provided for that ptupose below, whereupon this Ad**t shall constitute a binding agreement as of the date first above wrinen.
LEHMAN BROTHERS INC.
By:
Gordoni Pads
~ #
Managmg Director wow.neneu c.
a woaLO FDeW CDtTI& W3W YORE Ift Wtd8
~
l
- Orcs BayPowerCorporation February 10,1994 Page 2 AGREED:
OREAT BAY POWER CORPORATION AT THE DIRECTION OF THE OFFICIAL BONDHOLDERS By:
COMMTITEE OF EUA POWERCORPORATION CONSENED TO:
N OFFICIAL BONDHOLDERS COMMITTEE OF EUA P N/K/A GREAT BAY POWER CORPORATION By:_
e
- - - - ' - - - ~ - - _ _.. _ _ _ _ _ _ _
Q EXHIBIT F UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW HAMPSHIRE
)
In Re:
)
)
EUA POWER CORPORATION n/k/a
)
Chapter 11 GREAT BAY POWER CORPORATION,
)
Case No. 91-10525
)
Hearing Date: May 13, 1994 Debtor.
)
Hearing Time: 10:00 a.m.
)
NOTION OF BONDHOLDERS' COMMITTEE FOR AUTHORIZATION TO PAY FEES AND EXPENSES OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM RELATED TO PLAN OF REORGANIZATION FIFAmrCING The Official Bondholders' Committee (the " Committee") of EUA Power Corporation n/k/a Great Bay Power Corporation (the " Debtor")
hereby moves this Court to enter an order authorizing the Debtor to pay certain fees and expenses of the law firm of Skadden, Arps, Slate, Meagher & Flom ("Skadden") in the amount of $116,600 for services rendered to the Debtor's placement agent relating to the placement of plan of reorganization financing for the Debtor in this case.
In support of this motion the Committee states as follows:
1.
The Debtor filed its Chapter 11 petition on February 28, 1991.
2.
The Bondholders' Committee's Fifth Amended Plan of Reorganization for the Debtor (the "Fifth Amended Plan") was confirmed by an order of this Court dated March 5, 1993.
The Fifth Amended Plan provided that it would become effective only if l
the necessary regulatory approvals and a $45 million plan of l
e
?
S reorganization debt financing facility for the Debtor were obtained.
3.
By an order of this Court dated March 5, 1993, the Debtor retained Shearson Lehman Brothers ("Lehman") to act as its I
agent in placing the $45 million plan financing facility.
As described more fully in the supplemental disclosure statement filed on February 14, 1994, Lehman made extensive efforts to place the facility on the terms described in Fifth Amended Plan.
l I
Lehman's efforts included contacting over 200 financial institutions, entering serious discussions with a number of financial institutions, preparing a private placement memorandum and negotiating with existing bondholders of the debtor and other joint owners of Seabrook over possible plan financing.
4.
Notwithstanding its best efforts, Lehman was unable to place the debt financing facility on the terms described in the Fifth Amended Plan.
Lehman was, however, able to obtain a commitment for $35,000,000 in new equity financing, from omega Advisors, Inc.
(" Omega").
The $35,000,000 equity investment will provide the reorganized Debtor with more than sufficient cash
{
l resources to pay its operating expenses and a stronger capital l
I structure than the one proposed by the Fifth Amended Plan.
l S.
The Committee filed the First Modification to the Fifth Amended Plan (the " Modified Plan") on February 12, 1994 to reflect the new equity financing.
The confirmation hearing on the _
v.
Modified Plan is currently scheduled for May 13, 1994 at 10:00 a.m.
6.
As part of its efforts as the Debtor's placement agent, Lehman retained skadden as its counsel and counsel to potential lenders to assist with the placement of the plan financing facility.
Skadden represented Lehman and assisted potential lenders with respect to various matters, including regulatory issues, drafting and revising proposed term sheets, drafting an extensive credit agreement and security agreement and performing due diligence related to the Debtor's operations and the proposed financing.
The Committee anticipated and the disclosure statement disclosed that the Debtor would be obligated to pay the lender's counsel's fees and expenses.
l 7.
Skadden incurred $151,600 in fees and expenses in connection with Lehman's efforts to raise the $45 million plan financing.
8.
The engagement letter between Lehman and the Debtor
{
l setting forth the terms of Lehman's retention, which was attached as an exhibit to the motion to retain Lehman, provides, inter alia, that the Debtor is obligated to reimburse Lehman on demand for its reasonable expenses, including professional fees and disbursements, up to a maximum of $75,000.
The Debtor is obligated to reimburse Lehman for such expenses regardless of whether or not the $45 million debt facility is established. _____-__
s V
9.
To date, the Debtor has reimbursed Lehman $37,971 for miscellaneous out-of-pocket expenses and $35,000 for legal fees incurred by Skadden in its representation of Lehman.
After application of the $35,000, there is approximately $116,600 in outstanding fees and expenses owed to Skadden.
10.
The services provided by Skadden were an essential and integral element of Lehman's efforts to obtain plan financing for the Debtor.
Skadden's services directly benefitted the Debtor's estate as Lehman was ultimately successful in obtaining plan financing.
11.
Skadden performed its services in good faith with the reasonable expectation, which expectation was shared by the Committee, that it would be paid for such services at the time the debt financing was closed.
The Committee believes that the payment of Skadden's fees and expenses is in the best interests of the Debtor and its estate.
12.
The background work and diligence already performed by Skadden places it in the best position to assist Omega in finalizing the new equity financing.
Omega and its designees have retained Skadden to represent them in the closing of the equity financing.
The entities providing the equity financing will be the source of the funds which will be used to repay all administrative expenses.
Those entities support allowance of this motion.
_4-
n t,
t s
l.*-
WHEREFORE, the Committee respectfully requests that the Court enter an order authorizing the Debtor to pay the fees and expenses of Skadden in the amount of $116,600.
l I
OFFICIAL BONDHOLDERS' COMMITTEE OF EUA l
POWER CORPORATION n/k/a GREAT BAY POWER 1
CORPORATION, l
By their attorneys, l
Mark N.
Polebaum, Esq. (BNH 01615)
Frank W.
Getman Jr.,
Esq. (BNH 04234)
HALE AND DORR 60 State Street Boston, Massachusetts 02109 l
(617) 526-6000 l
t Dated:
April 5, 1994 l
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