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EXHIBIT 10.4
AMENDMENT NO. 3 TO
TRANSACTION AGREEMENT
THIS AMENDMENT NO. 3 TO TRANSACTION AGREEMENT ("AMENDMENT") is made
effective as of the 1st day of February 1999, between Enron Corp., an Oregon
corporation, Enron Capital & Trade Resources Corp., a Delaware corporation, RCM
Holdings, Inc., a Texas corporation (formerly Cogen Technologies, Inc.), Cogen
Technologies Camden, Inc., a Texas corporation, Cogen Technologies Capital
Company, L.P. and the XxXxxx Group Sellers and Minority Group Sellers listed on
the signature page hereto, with reference to the following background.
WHEREAS, the parties hereto are all of the parties to a Transaction
Agreement dated October 25, 1998, as amended by Amendment No. 1 to Transaction
Agreement effective as of November 6, 1998 and Amendment No. 2 to Transaction
Agreement effective as of November 13, 1998 (as so amended, the "TRANSACTION
AGREEMENT"); and
WHEREAS, the parties hereto wish to further amend the Transaction
Agreement on the terms set forth herein;
NOW THEREFORE, in consideration of the respective agreements contained
herein, the parties hereto agree as follows (capitalized terms used but not
defined herein have the meaning set forth in the Transaction Agreement):
SECTION 1. Amendments.
(a) Section 2.02 of the Transaction Agreement is hereby amended and
restated to read in its entirety as follows:
SECTION 2.02 Linden Acquisition. At the Closing, subject to
the terms and conditions of this Agreement:
(a) Purchase of Initial Interests.
(i) RCM Holdings will sell, assign, transfer and
convey (X) to Buyer Linden GP, 1.221% of the RCM Holdings
Initial Linden Interest, free and clear of all Liens, in
exchange for the delivery by Buyer Linden GP to RCM Holdings
of (i) $1,466,893.64 in cash, and (ii) a number of shares of
Parent Common Stock equal to $2,501,371.13 divided by the
Parent Stock Value, and (Y) to Buyer Linden LP, 98.779%
percent of the RCM Holdings Initial Linden Interest, free and
clear of all Liens, in exchange for the delivery by Buyer
Linden LP to RCM Holdings of (i) $118,671,815.72 in cash, and
(ii) a number of shares of Parent Common Stock equal to
$202,361,128.87 divided by the Parent Stock Value. The
foregoing assignments shall be evidenced by assignments in
substantially the form attached hereto as ANNEX 2.02-A with
such changes thereto necessary to reflect the division of the
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RCM Holdings Initial Linden Interest between Buyer Linden GP
and Buyer Linden LP as described herein.
(ii) CTLPJV will sell, assign, transfer and convey to
Buyer Linden LP the CTLPJV Initial Linden Interest, free and
clear of all Liens, in exchange for the delivery by Buyer
Linden LP to CTLPJV of (i) $26,470,247.09 in cash, and (ii) a
number of shares of Parent Common Stock equal to
$45,137,500.00 divided by the Parent Stock Value. The
foregoing assignment shall be evidenced by an assignment in
substantially the form attached hereto as ANNEX 2.02-B.
(iii) RCM Holdings and CTLPJV will execute such other
instruments and take all such further action as shall be
required to cause Buyer Linden GP and Buyer Linden LP to be
admitted as partners in Linden Ltd. in respect of the RCM
Holdings Initial Interest and the CTLPJV Initial Interest
purchased hereunder.
(iv) Notwithstanding the foregoing, no fractional
shares of Parent Common Stock shall be issued in connection
with the transactions contemplated by this Section 2.02. To
the extent the application of the conversion rate specified in
subparagraphs (i) and (ii) above would result in a fractional
number of shares of Parent Common Stock being issued to RCM
Holdings or CTLPJV, in lieu of issuing fractional shares, the
number of shares of Parent Common Stock issuable to such
entity shall be rounded up to the next whole number of shares
of Parent Common Stock.
(b) Redemption of Remaining Interests. Immediately following
the transactions contemplated in subsection 2.02(a) above:
(i) Linden Ltd. will borrow $289,391,043.55 from
Xxxxxx Xxxxxxx & Co. Incorporated (or another third party
lender reasonably acceptable to the parties) to be used in
connection with the redemption of the RCM Holdings Remaining
Linden Interest and the CTLPJV Remaining Linden Interest as
set forth below, pursuant to a subordinated loan agreement
substantially in the form attached as ANNEX 2.02-C. In the
event that Sellers are unable to cause Xxxxxx Xxxxxxx & Co.
Incorporated or another reasonably acceptable lender to make
such loan to Linden Ltd., Buyer shall have the right to obtain
such funds through a lender of its own selection.
(ii) Immediately following the transactions
contemplated by the foregoing paragraph, the parties shall
cause Linden Ltd. to redeem:
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(A) the RCM Holdings Remaining Linden
Interest in exchange for (1) the payment by Linden
Ltd. to RCM Holdings of $237,141,490.64 in cash, and
(2) the assignment by Linden Ltd. of an 81.945%
interest in the Linden Receivable as evidenced by an
assignment substantially in the form of ANNEX 2.02-D1
hereto; and
(B) the CTLPJV Remaining Linden Interest in
exchange for (1) the payment by Linden Ltd. to CTLPJV
of $52,249,552.91 in cash, and (2) the assignment by
Linden Ltd. of an 18.055% interest in the Linden
Receivable as evidenced by an assignment
substantially in the form of ANNEX 2.02-D2 hereto,
in each case in full satisfaction of all amounts owed by
Linden Ltd. in respect of such interests.
(iii) To effect the foregoing redemptions, RCM
Holdings, CTLPJV, Buyer Linden GP and Buyer Linden LP will
execute and deliver the agreements in substantially the form
set forth as ANNEX 2.02-E1 AND 2.02-E2.
(b) ANNEXES 2.02-C, 2.02-E2 AND 2.03 to the Transaction Agreement are
hereby amended and restated in their entirety to read as set forth on ANNEXES
2.02-C, 2.02-E AND 2.03 to this Amendment, respectively.
(c) It is agreed that, notwithstanding anything to the contrary in
Section 2.05 of the Transaction Agreement, all additional Consideration to be
paid to the Sellers pursuant to Section 2.05(b) shall be paid by the applicable
Buyer Entities 18.055% to CTLPJV and 81.945% to CTCI, and otherwise in the
manner contemplated by Section 2.05(c).
(d) It is agreed that at Closing, Buyer Acquisition shall pay to CT
Capital the sum of $265,500 in reimbursement for CT Capital's obtaining the
directors' and officers' liability insurance referred to in Section 7.03(c), in
full satisfaction of Buyer's obligations under Section 7.03(c).
(e) ANNEXES 7.04-B, 7.04-E1 and 7.04-E2 to the Transaction Agreement
are hereby amended and restated in their entirety to read as set forth on
ANNEXES 7.04-B, 7.04-E1 and 7.04-E2 to this Amendment, respectively.
(f) Section 7.05 of the Transaction Agreement is hereby amended and
restated to read in its entirety as follows:
SECTION 7.05 Buyer Insurance. The Buyer Entities
shall (i) cause to be put in place as of the Closing Date
insurance policies covering the Acquired Entities with
coverage amounts and containing terms and
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conditions that are sufficient to meet the obligations of the
Acquired Entities under their respective partnership
agreements and loan agreements, or (ii) shall cause the
insurance policies covering the Acquired Entities immediately
prior to Closing to be continued at the expense of the Buyer
Entities with coverage amounts and containing terms and
conditions that are sufficient to meet the obligations of the
Acquired Entities under their respective partnership
agreements and loan agreements.
(g) Section 7.06 of the Transaction Agreement is hereby amended and
restated to read in its entirety as follows:
SECTION 7.06 Bayonne Management Services Agreement.
The Buyer Entities acknowledge and agree that the Management
Services Agreement, dated September 1, 1989, among Cogen
Technologies Management Company, NJ Inc. and XxXxxx, as
assigned pursuant to the Assignment and Assumption Agreement,
dated January 1, 1994, among Cogen Technologies Management
Company, Cogen Technologies Management Services, L.P. (now
known as RCM Management Services L.P. ("RCM MANAGEMENT"), NJ
Inc. and XxXxxx, will continue in effect after the Closing and
that initially MESC (as successor to NJ Inc. in the MESC/NJ
Merger and as the successor managing venturer of NJ Venture)
will continue to perform the services under such agreement in
accordance with its terms, and RCM Management shall have no
further obligations thereunder but shall be entitled to
receive from MESC the fees set forth in accordance with the
terms and conditions of such agreement. Buyer agrees not to,
and agrees to cause the other Buyer Entities not to, take any
action that would cause NJ Venture to be terminated prior to
the scheduled expiration of the NJ Venture Partnership
Agreement, or MESC to cease being the managing venturer of NJ
Venture prior to the scheduled expiration of the NJ Venture
Partnership Agreement, without either making provision for the
continuation of the payment of such fees to RCM Management
through such scheduled expiration or otherwise reaching a
mutually agreeable settlement with respect to such fees with
RCM Management.
(h) The list of Transferred Employees set forth on ANNEX 9.01 is hereby
replaced with the list set forth on ANNEX 9.01 to this Amendment.
(i) Clause (i) of Section 9.01(b) of the Transaction Agreement is
hereby amended and restated to read in its entirety as follows:
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(i) except as specifically provided herein, they
shall be eligible to participate in Buyer's employee benefit
plans and programs, including but not limited to vacation and
sick time policies, on the same basis as similarly situated
employees of Buyer (provided that if any such employee benefit
plan or program precludes their participation thereunder, a
generally comparable plan or program shall be substituted
therefor) and their service with the Acquired Entities shall
be considered as service with Buyer for all purposes of such
employee benefit plans and programs save and except for
pension plan benefit accrual purposes and retiree medical
coverage eligibility purposes;
(j) Section 10.04 is hereby added to the Transaction Agreement to read
in its entirety as follows:
SECTION 10.04. Closing Conditions Relating to ISRA
Process. Notwithstanding any provision in this Article 10 to
the contrary, the conditions to closing set forth in Sections
10.02(d) or 10.03(e) of the Transaction Agreement shall be
deemed to be satisfied by the Buyer Entities and the Sellers
(i) as such conditions relate to the Bayonne Plant, by the
execution and delivery of a Remediation Agreement between the
NJDEP and Bayonne Industries, Inc. in the form attached hereto
as ANNEX 10.04 - A, so long as such agreement remains in full
force and effect and is not amended or otherwise modified
without the consent of the Buyer Entities and the Sellers, and
(ii) as such conditions relate to the Linden Plant, by the
receipt of a "remediation in progress" waiver letter from the
NJDEP in substantially the form of ANNEX 10.04 - B hereto, so
long as such letter remains in full force and effect and is
not amended or otherwise modified without the consent of the
Buyer Entities and the Sellers.
(k) It is agreed for purposes of Section 13.11 of the Transaction
Agreement that the Sellers Representatives' are authorized to certify at Closing
to Buyer's lenders on behalf of the Sellers that the conditions to the
obligations of Sellers to consummate the Contemplated Transactions have been
satisfied.
(l) Exhibit I to the Transaction Agreement is hereby amended to delete
therefrom the definitions of the terms "Linden Value" and "Receivable Amount."
(m) The references in Section III.03(a) of Exhibit III to "Buyer" shall
be deemed to refer to "Parent".
(n) Sections 1(b) and 1(d) of Amendment No. 1 to the Transaction
Agreement dated as of November 6, 1998 ("Amendment No. 1"), are hereby revoked,
so that:
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(i) The references in Section 2.07(a) of the original
Transaction Agreement dated October 25, 1998 to "negative
$4,932,952" are not changed as provided by Amendment No. 1;
and
(ii) Section 13.13 as added by Amendment No. 1 is deleted.
SECTION 2. Remainder of Agreement Not Affected. Except set forth in
Section 1 hereof, the terms and provisions of the Transaction Agreement remain
in full force and effect and are hereby ratified and confirmed.
SECTION 3. Authority. Each party represents that such party has full
corporate, partnership, trust or other power and authority to enter into this
Amendment, and that this Amendment constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its
terms.
SECTION 4. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 5. Governing Law. This Amendment shall be governed by Texas
law, without regard to the conflicts of laws principles thereof.
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The parties have caused this Amendment to be duly executed individually
or by their authorized representatives on the day and year first above written.
ENRON CORP.
By: /s/ XXXXXXX XXXXXXX
----------------------------------------------
Name: Xxxxxxx XxXxxxx
-----------------------------------------
Title: Senior Vice President
----------------------------------------
ENRON CAPITAL & TRADE RESOURCES CORP.
By: /s/ XXXXXXX X. XXXXXXX, XX.
----------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Vice President
RCM HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXXXXX, XX.
----------------------------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
Senior Vice President and Chief Financial
Officer
COGEN TECHNOLOGIES CAMDEN, INC.
By: /s/ XXXXXXX X. XXXXXXXX, XX.
----------------------------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
Senior Vice President and Chief Financial
Officer
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COGEN TECHNOLOGIES CAPITAL COMPANY, L.P.
By: Cogen Technologies GP Capital
Corporation, its General Partner
By: /s/ XXXXXXX X. XXXXXXXX, XX.
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: Senior Vice President and
Chief Financial Officer
THE XXXXXX GROUP SELLERS:
/s/ XXXXXX X. XXXXXX
-------------------------------------------------
Xxxxxx X. XxXxxx
/s/ XXXXXX XXXX XXXXXX, XX.
-------------------------------------------------
Xxxxxx Xxxx XxXxxx, Xx.
/s/ XXXXXX XXXXXXX XXXXXX
-------------------------------------------------
Xxxxxx Xxxxxxx XxXxxx
/s/ XXXXXX XXXX XXXXXX, XX.
-------------------------------------------------
Xxxxxx Xxxx XxXxxx, Xx.,
as Trustee of the Xxxxxx Xxxx XxXxxx, Xx.
Trust UTA dated 11/14/88, as amended
/s/ XXXXXX XXXXXXX XXXXXX
-------------------------------------------------
Xxxxxx Xxxxxxx XxXxxx,
as Trustee of the Xxxxxx Xxxxxxx XxXxxx Trust
UTA dated 11/14/88, as amended
/s/ XXXX XXXXXX XXXXX
-------------------------------------------------
Xxxx XxXxxx Xxxxx,
as Co-Trustee of the Xxxx XxXxxx Xxxxx Trust
UTA dated 11/14/88, as amended
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/s/ XXXXXXX XXXXXX XXXXXX REIGHERT
-------------------------------------------------
Xxxxxxx Xxxxxx XxXxxx Xxxxxxxx,
as Co-Trustee of the Xxxxxxx Xxxxxx XxXxxx Xxxxxx
Trust UTA dated 11/14/88, as amended
/s/ M. XXXXXX XXXXXXX
-------------------------------------------------
M. Xxxxxx Xxxxxxx
as Co-Trustee of (1) the Xxxx XxXxxx
Xxxxx Trust UTA dated 11/14/88, as
amended and (2) the Xxxxxxx Xxxxxx
XxXxxx Xxxxxx Trust UTA dated
11/14/88, as amended
THE MINORITY GROUP SELLERS:
COGEN TECHNOLOGIES LIMITED
PARTNERS JOINT VENTURE
By: /s/ X. XXXXXX VAN WART
----------------------------------------------
Name: X. Xxxxxx Van Wart
Title: General Partner
/s/ XXXXXXX X. XXXX
-------------------------------------------------
Xxxxxxx X. Xxxx, as Trustee of the Xxxxxxx X.
Xxxx Family Trust-A and the Xxxxxxx X. Xxxx
Family Trust-B under the Will of Xxxxxxx X. Xxxx
/s/ XXXXXX X. XXXXXX
-------------------------------------------------
Xxxxxx X. Xxxxxx
Evergreen Partnership Energy, Ltd.
By: /s/ H. XXXX XXXXXX
----------------------------------------------
Name: H. Xxxx Xxxxxx
Title: General Partner
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The 1989 Energy Trust
By: /s/ XXXXXX XXXX XXXXXX, XX.
----------------------------------------------
Xxxxxx Xxxx XxXxxx, Xx., Trustee
(and not in his individual capacity)
/s/ XXXXX X. XXXXXXX
----------------------------------------------
Xxxxx X. Xxxxxxx, Trustee
(and not in his individual capacity)
/s/ X. XXXXXX VAN WART
-------------------------------------------------
X. Xxxxxx Van Wart
Hansfam Three, a Trust
By:/s/ XXXX X. XXXXXX
----------------------------------------------
Xxxx X. Xxxxxx, Trustee
(and not in his individual capacity)
/s/ X. XXXXXX VAN WART
----------------------------------------------
X. Xxxxxx Van Wart, Trustee
(and not in his individual capacity)
/s/ XXXXX X. XXXXXX
-------------------------------------------------
Xxxxx X. Xxxxxx
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ANNEX 2.02-C
FORM OF XXXXXX XXXXXXX SUBORDINATED LOAN AGREEMENT
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ANNEX 2.02-E2
FORM OF REDEMPTION OF PARTNERSHIP INTERESTS AND
FOURTH AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP
OF
COGEN TECHNOLOGIES LINDEN, LTD.
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ANNEX 2.03
FORM OF BAYONNE SELLER NOTE
PROMISSORY NOTE
$_____________ ____________ __, 1999
REFERENCE IS MADE to the Transaction Agreement (the "Transaction
Agreement") dated as of October 25, 1998, as amended, among Enron Corp., an
Oregon corporation, Enron Capital & Trade Resources Corp., a Delaware
corporation ("ECT") (and certain Affiliates thereof described therein), RCM
Holdings, Inc., a Texas corporation (formerly Cogen Technologies, Inc.), Cogen
Technologies Camden, Inc., a Texas corporation, Cogen Technologies Capital
Company, L.P. and the XxXxxx Group Sellers and Minority Group Sellers defined
therein. This Note is one of the Bayonne Seller Notes referred to in the
Transaction Agreement.
FOR VALUE RECEIVED, XxXxxx Energy Services Corporation, a Texas
corporation (the "Borrower"), hereby promises to pay to the order of
___________________________ (the "Holder"), upon presentation and surrender of
this Note at the principal office of the Borrower, the principal sum of
__________________________________________________ AND __/100 DOLLARS
(_____________) (the "Loan") in lawful money of the United States of America and
in immediately available funds, on _____, 1999 [insert first Business Day after
Closing] (the "Due Date"). No interest shall be paid on the Loan if the Loan is
repaid in full on or prior to the Due Date.
IF ANY principal on the Loan is not paid on or before the Due Date,
then, except as provided below, from and after the Due Date, the Holder shall be
entitled to interest on the unpaid principal amount of the Loan, at such office,
in like money and funds, from the Due Date until the Loan shall be paid in full,
a rate per annum equal to the lesser of 17.9% or the maximum amount that may
lawfully be paid under applicable law ("Maximum Interest"); provided, however,
that if there shall have occurred any event having a material adverse effect on
the Bayonne Plant (as defined in the Transaction Agreement) as a result of which
Buyer (as defined in the Transaction Agreement) or its designee shall not have
obtained a loan or loans sufficient to repay this Note in full, then the Holder
shall not be entitled to Maximum Interest and shall not be entitled to declare a
default by reason of any failure to pay principal or interest on this Note, in
each case until after the date 10 Business Days after the Due Date, but shall be
entitled to interest on the unpaid principal amount of the Loan, at such office,
in like money and funds, for any period from and after the Due Date during such
10 Business Day-period until the Loan shall be paid in full, at a rate per annum
equal to ___% [insert Base Rate on second day prior to Closing plus 1%].
THE BORROWER AGREES that until such time as this Note has been paid, it
will not incur any additional debt, will not make any distributions to its
shareholders and will not repurchase any of its shares of stock.
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THE BORROWER MAY ASSIGN its obligations under this Note to [Buyer
Acquisition] or its designee and [Buyer Acquisition] or its designee by its
acceptance of such assignment shall assume Borrower's obligations under this
Note (except for the Borrower's obligations set forth in the immediately
preceding paragraph).
EFFECTIVE IMMEDIATELY UPON the acquisition by ECT of all of the
outstanding capital stock of the Borrower pursuant to the Transaction Agreement,
ECT will irrevocably and unconditionally guarantee the timely payment when due
of all of Borrower's financial obligations under this Note to the extent
Borrower fails to pay such obligations when due. The foregoing guarantee is
evidenced by the execution by ECT of this Note.
IF THIS NOTE is collected by suit or through the Probate or Bankruptcy
Court, or any judicial proceeding, or if this Note is not paid pursuant to its
terms and it is placed in the hands of an attorney for collection, then the
Borrower agrees to pay such attorney's reasonable attorneys fees.
THE BORROWER waives demand, presentment for payment, notice of
nonpayment, protest, notice of protest, and all other notice, filing of suit and
diligence in collecting this Note or enforcing any of the security herefor, and
agrees that it will not be necessary for any holder hereof, in order to enforce
payment of this Note by it, to first institute suit or exhaust its remedies
against the Borrower or to enforce its rights against any security herefor.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS.
XXXXXX ENERGY SERVICES CORPORATION
By:
---------------------------------------
Name:
Title:
For the purposes of the sixth paragraph
of this Note only:
ENRON CAPITAL & TRADE RESOURCES CORP.
By:
---------------------------------------
Name:
Title:
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ANNEX 7.04-B
AMENDMENT OF LIMITED PARTNERSHIP OF
COGEN TECHNOLOGIES LINDEN VENTURE, L.P.
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ANNEX 7.04-E1
MANAGEMENT FEE TERMINATION AGREEMENT
(CAMDEN COGEN)
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ANNEX 7.04-E2
MANAGEMENT FEE TERMINATION AGREEMENT
(CT CAMDEN)
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ANNEX 9.01
TRANSFERRED EMPLOYEES
EMPLOYEE
--------
1. Ain, Xxxx
2. Arlington, Xxxxxxxx
3. Avant, Xxxx X.
4. Xxxxx, Xxxxxxx X.
5. Xxxxxxxxx, Xxxxxx X.
6. Xxxxx, Xxxxxxx X.
7. Xxxxxxxx, Xxxxxx X.
8. Xxxxxxxx, Xxxxxx X.
9. Xxxxxxxx, Xxxx
10. Xxxxxx, Xxxx
11. Xxxxx, Xxxxxxxx X.
12. Xxxxxxxxx, Xxxxx
13. Xxxxx, X. Xxxxxx
14. Xxxxxx, Xxxxxx X.
15. Xxxxxx, Xxx X.
16. Xxxxxx, Xxxxxxxx X.
17. Xxxxxxx, Xxxxx
18. Xxxxxx, Xxxxxx
19. Xxxxx, Xxxx X.
20. Xxxxxx, W. Colin
21. Xxxxxxx, Xxxxxx
22. Xxxxxx, Xxxxxxx X.
23. Xxxxxxx, Xxxx
24. Xxxxxx, Xxxxxx X.
25. XxXxxxxxx, Xxxxxxxx
26. XxXxx, Xxxxx
27. Xxxxxxx, Xxxxxx
28. Xxxxxxx, Xxxxx X.
29. Xxxxxxxx, Xxxxxx X.
30. Xxxxx, Xxxx X.
31. Xxxxxx, Xxxxxxx X.
32. Xxxxxxxxxxx, Xxxxxx
33. Xxxxxxxx, Xxxxxxx X.
34. Xxxxxx, Xxxxxxx X.
35. Xxxxx, Xxx X.
36. Xxxx, Xxxxxx Xxxxx
37. Xxxxx, Xxxxxxx X.
38. Xxxxxx, Xxxxxxx
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ANNEX 10.04 - A
REMEDIATION AGREEMENT BETWEEN BAYONNE INDUSTRIES AND NJDEP (BAYONNE PLANT)
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ANNEX 10.04 - B
REMEDIATION IN PROGRESS LETTER (LINDEN PLANT)
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