MUTUAL RELEASE AGREEMENT
EXECUTION COPY
This Mutual Release Agreement (the "Mutual Release Agreement" or "Agreement") is executed as of this 31st day of March 2003, by and between Florida Public Utilities Company, a corporation incorporated under the laws of the state of Florida (“FPUC”), Lake Worth Generation, LLC, a limited liability company organized under the laws of the State of Delaware (“LWG”), The City of Lake Worth, a municipality located within the State of Florida (the “City”) and The AES Corporation, a corporation incorporated under the laws of the State of Delaware (“AES”).
R E C I T A L S
WHEREAS, on July 21, 2000, FPUC and LWG entered into that certain Gas Transportation Agreement for the transportation by FPUC of natural gas (the “Transportation Agreement”); and
WHEREAS, as required by the Transportation Agreement, LWG secured the performance of certain of LWG’s obligations under the Transportation Agreement by causing the Fleet National Bank (“Fleet Bank”) to issue its letter of credit No. 1S1280134 dated July 6, 2001, as amended August 28, 2001, October 23, 2001 and December 13, 2002 (the “Letter of Credit”) in favor of FPUC; and
WHEREAS, pursuant to the terms of the Transportation Agreement, FPUC constructed certain pipeline facilities (the “LWG Lateral”) from its system to a delivery point designated by LWG; and
WHEREAS, the LWG Lateral was intended to supply natural gas, pursuant to the terms of the Transportation Agreement, to a power generation project being developed by LWG (the “Project”); and
WHEREAS, LWG informed FPUC that LWG would not be able to complete the development of the Project; and
WHEREAS, LWG initially proposed to assign the Transportation Agreement to the City and the City initially expressed interest in assuming such agreement, but such assignment did not ultimately occur; and
WHEREAS, on December 31, 2002, FPUC, LWG, and the City executed that certain forbearance agreement (the "Initial Forbearance Agreement"), in which FPUC agreed to forbear from terminating the Transportation Agreement and drawing on the Letter of Credit if the City and FPUC executed a new, modified natural gas transportation agreement (the "New Transportation Agreement") by February 21, 2003 (the “Initial Forbearance Date”); and
WHEREAS, the parties to the Initial Forbearance Agreement executed an amendment thereto as of February 19, 2003 (the Initial Forbearance Agreement, as amended, the "Forbearance Agreement"), in which, among other things, they established a revised forbearance date of March 31, 2003 (the "Forbearance Date"); and
WHEREAS, AES executed a letter dated February 25, 2003 stating that if certain events occurred pursuant to the Forbearance Agreement, AES would refrain from taking certain actions; and
WHEREAS, the Forbearance Agreement provided that in the event that a New Transportation Agreement was executed by the City and FPUC, the following would occur: (i) FPUC would make a partial draw on the Letter of Credit in the amount of $3,393,813.71; (ii) the balance of the Letter of Credit in the amount of $2,096,635.29 would be released; (iii) the parties to the Forbearance Agreement would recognize the termination of the Transportation Agreement; and (iv) the parties to the Forbearance Agreement and AES would execute this Mutual Release Agreement providing for the mutual release of all claims arising from the Transportation Agreement; and
WHEREAS, on the date hereof, the City and FPUC executed the New Transportation Agreement which conforms to and satisfies the terms of the Forbearance Agreement; and
WHEREAS, the Escrow Agent (as defined below) has agreed to execute the “Joinder by Escrow Agent” attached to this Agreement (the “Joinder Agreement”) to confirm the Escrow Agent's willingness to perform certain tasks set forth in section 3 of this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the parties, the parties agree as follows:
1. Recitals Adopted. All of the above recitals are incorporated herein by reference.
2. Acceptance of Procedure. FPUC, LWG, the City and AES agree and confirm that the procedure as specified in section 3 of this Agreement for accomplishing (i) the partial draw on the Letter of Credit by FPUC; (ii) the release of the balance of the Letter of Credit; and (iii) the return of the original Letter of Credit to Fleet Bank conforms to section 7 of the Forbearance Agreement.
3. Partial Draw on Letter of Credit and Return of Letter of Credit to LWG.
a.
FPUC and LWG agree that Xxxxxxx Xxxxx, Esquire of Xxxxx, Longman and Xxxxxx (hereafter the “Escrow Agent”) shall serve as escrow agent and the Escrow Agent hereby agrees to facilitate and coordinate the delivery of documents as described in this section 3.
b.
The parties agree that Xxxxxxx X. Xxxxxx, Esquire of Xxxxxxx & Xxxxxx, LLP, counsel for the City (the “City’s Counsel”), shall take and retain custody of all original copies of the New Transportation Agreement executed by FPUC and the City, including all counterparts, immediately upon execution, and that the City’s Counsel shall release an executed original copy of the New Transportation Agreement to each of FPUC and the City only after the Escrow Agent has confirmed to the City’s Counsel, in the manner described below, that the Escrow Agent has delivered the Termination Letter to Fleet Bank.
c.
Promptly upon the execution of this Agreement by FPUC, LWG, the City and AES and the Joinder Agreement by the Escrow Agent, FPUC shall deliver to the Escrow Agent (i) a drawing certificate executed by FPUC, authorizing a draw by FPUC on the Letter of Credit in the amount of $3,393,813.71 in the form prescribed by the Letter of Credit (except to the extent that any non-conformance has been waived by LWG), and as attached hereto as Exhibit “A” (the "Drawing Certificate"); (ii) a sight draft executed by FPUC as prescribed by the Letter of Credit in the amount of $3,393,813.71, in the form attached hereto as Exhibit "B" (the “Sight Draft”), (iii) a termination letter executed by FPUC providing notice of the termination of the Letter of Credit, in the form attached hereto as Exhibit "C" (the "Termination Letter"), and (iv) the original Letter of Credit. LWG waives any objection to the form of the Drawing Certificate resulting from the omission of the following sentence: “A drawing by the Company of the full stated amount of the letter of credit due to LWG's failure to extend the letter of credit five days prior to the expiration of the letter of credit .” and shall so notify Fleet Bank in writing.
d.
Once the Escrow Agent receives the documents enumerated in section 3(c) above, the Escrow Agent shall cause the hand delivery of the following on April 1, 2003: (i) the original executed Drawing Certificate, (ii) the original executed Sight Draft, (iii) a written request that Fleet Bank provide the Federal wire tracking number relating to the draw pursuant to the Drawing Certificate and the Sight Draft to both FPUC and the Escrow Agent as soon as it is available, in the form attached hereto as Exhibit D (the “Fleet Bank Letter”), and (iv) the original Letter of Credit, which Fleet Bank will stamp so as to reflect the partial draw and return to the Escrow Agent's designee pending receipt of the Termination Letter.
e.
The Escrow Agent shall hold the executed Termination Letter and the original Letter of Credit in escrow until he has received written confirmation from FPUC by a fax, delivered to a fax number that the Escrow Agent shall designate, that FPUC has received the funds requested pursuant to the Drawing Certificate and the Sight Draft (the “Confirmation”). Immediately upon receipt of the Federal wire tracking number from Fleet Bank as requested in the Fleet Bank Letter, FPUC shall contact its bank in order to obtain the Confirmation. Immediately upon receipt of the Confirmation, FPUC shall notify the Escrow Agent in writing, by a fax delivered to a fax number that the Escrow Agent shall designate, of such receipt. FPUC shall provide copies of the Confirmation to the City and LWG by fax. Immediately following receipt of a copy of the Confirmation, the Escrow Agent shall cause the original executed Termination Letter and the stamped original Letter of Credit to be delivered by hand to Fleet Bank. Immediately upon delivering the original Termination Letter and the stamped original Letter of Credit to Fleet Bank, the Escrow Agent shall furnish copies of (i) the stamped original Letter of Credit and (ii) the executed Termination Letter, to LWG, to City’s Counsel, and to FPUC by fax. Upon receipt of a copy of the executed Termination Letter from the Escrow Agent, the City’s Counsel shall release an original executed copy of the New Transportation Agreement to each of FPUC and the City.
4.
Effect of Receipt of Partial Draw and Termination of Transportation Agreement.
FPUC, LWG, the City and AES hereby acknowledge and agree that upon receipt by FPUC of the funds from Fleet Bank in FPUC’s account, in the amount of the partial draw requested pursuant to the Drawing Certificate and the Sight Draft, (i) FPUC shall have no further rights under or claims pursuant to the Letter of Credit, (ii) the Transportation Agreement shall be deemed terminated, and (iii) each of FPUC, LWG, and the City individually shall have no further obligations under said Transportation Agreement.
5.
Mutual Release. Subject only to the receipt by FPUC of the funds from the partial draw requested pursuant to the Drawing Certificate and the Sight Draft and the delivery to Fleet Bank of the executed Termination Letter and the original Letter of Credit, all as provided in section 3 above:
a.
FPUC does hereby unconditionally and irrevocably release, cancel, forgive and forever discharge LWG, the City, and AES from any and all actions, claims, demands, damages, obligations and liabilities, of any kind or nature whatsoever, whether known or unknown, which have arisen, or may have arisen, or shall arise by reason of the terms, conditions, rights, and obligations of the Transportation Agreement.
b.
LWG does hereby unconditionally and irrevocably release, cancel, forgive and forever discharge FPUC, the City, and AES from any and all actions, claims, demands, damages, obligations and liabilities, of any kind or nature whatsoever, whether known or unknown, which have arisen, or may have arisen, or shall arise, by reason of the terms, conditions, rights, and obligations of the Transportation Agreement.
c.
The City does hereby unconditionally and irrevocably release, cancel, forgive and forever discharge FPUC, LWG, and AES from any and all actions, claims, demands, damages, obligations and liabilities, of any kind or nature whatsoever, whether known or unknown, which have arisen, or may have arisen, or shall arise, by reason of the terms conditions, rights, and obligations of the Transportation Agreement.
d.
AES does hereby unconditionally and irrevocably release, cancel, forgive and forever discharge FPUC, the City, and LWG from any and all actions claims, demands, damages, obligations and liabilities, of any kind or nature whatsoever, whether known or unknown, which have arisen, or may have arisen, or shall arise by reason of the terms, conditions, rights, and obligations of the Transportation Agreement.
6.
Governing Law. The interpretation and performance of this Agreement shall be in accordance with the laws of the State of Florida without regard to the conflicts of law rules of such State. The Parties agree that the appropriate venue for the filing of any judicial action relating to claims arising from this Agreement shall be in Palm Beach County, Florida. The Parties agree to abide by all applicable anti-money laundering laws.
7.
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
8.
Miscellaneous.
a.
All documents to be delivered pursuant to this Agreement may be delivered either in person to a signatory hereto or via facsimile or established overnight courier service to the party’s address and/or fax number specified below:
For AES:
The AES Corporation
Attention: Xxxxxx X. Xxxxx, Esq.
0000 00xx Xxxxxx X
00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
For LWG:
Xxxxx X. Xxxxxxxx
The AES Corporation
00 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
For the City:
X.X. Xxx Xxxxx, Xx.
Assistant City Manager and Utilities Director
City of Lake Worth
0000 Xxxxxx Xxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Facsimile:
000-000-0000
For FPUC:
X. X. Xxxxx
Chief Operating Officer and Senior Vice President
Florida Public Utilities Company
000 Xxxxx Xxxxx Xxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Facsimile:
000-000-0000
For the Escrow Agent:
Xxxxxxx Xxxxx, Esquire
Xxxxx, Longman and Xxxxxx
0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
For the City’s Counsel:
Xxxxxxx X. Xxxxxx, Esquire
Xxxxxxx & Xxxxxx, LLP
Xxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Telephone:
000-000-0000
Facsimile:
561-655-8719
For Fleet Bank:
Xx. Xxxxxx X. Xxxxx
Fleet National Bank
Fleet Global Trade Operations/Energy
0 Xxxxx Xxx (Xxx X) Xxxxx 0
Xxxxxxxx, Xxxxxxxxxxxx 00000-0000
Telephone:
000-000-0000
Facsimile:
000-000-0000
b.
This Agreement contains the entire agreement of the parties. No agreement to modify this Agreement shall be effective unless in writing and executed by all parties hereto.
c.
This Agreement is binding on and inures to the benefit of the parties and their respective successors and authorized assigns. Whenever the context requires, the singular includes the plural, and the masculine includes the feminine and neuter.
d.
The headings in this Agreement are used for convenience of reference only, and shall not be used to interpret this Agreement.
e.
All fees and expenses associated with the services of the Escrow Agent will be shared equally by LWG and the City.
IN WITNESS WHEREOF, the parties hereto have executed, or caused this Mutual Release Agreement to be duly executed by their respective authorized officers or representative officials, as of the day and year first above written.
[SIGNATURES APPEAR ON NEXT PAGE]
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Signed, sealed and delivered
LAKE WORTH GENERATION, LLC
In our presence:
________________/s/_____________
By: ___________/s/_______________
Name: _________________________
Title: ___________________________
_______________/s/______________
Name: _________________________
FLORIDA PUBLIC UTILITIES COMPANY
______________/s/_______________
By: ______________/s/_____________
Name: _________________________
Title: ____________________________
______________/s/_______________
Name: _________________________
CITY OF LAKE WORTH
______________/s/_______________
By: _________________/s/__________
Name: _________________________
Xxxxxx X. Xxxxxx, Mayor
______________/s/______________
Name: _________________________
Attest:
/s/
_________/s/_______________________
Name:
Xxxxxx Xxxxx, City Clerk
____________/s/________________
Name: _________________________
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THE AES CORPORATION
______________/s/_______________
By: ___________/s/_______________
Name: _________________________
Title: ____________________________
STATE OF VIRGINIA
COUNTY OF _Arlington________
The foregoing instrument was acknowledged before me this _____________________, by ______________________________, of _____________________________________________, a ___________________ corporation, on behalf of the corporation. He/she is personally known to me or who has produced ______________________ as identification.
___________/s/__________________
Notary Signature
(Seal)
#
JOINDER BY ESCROW AGENT
The undersigned hereby joins in this Agreement for the purpose of accepting and consenting to the obligations of the Escrow Agent set forth in section 3 of this Agreement.
Witnesses:
______________/s/______________
_____________/s/_______________ ("Escrow Agent")
Name: ________________________
By: _________________________ Date: __________
______________/s/_______________
Name: _________________________
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Exhibit "A"
to
DRAWING CERTIFICATE
TO:
FLEET NATIONAL BANK
ATTN:
GLOBAL TRADE OPERATIONS - STANDBY UNIT
A.
THIS IS A DRAWING CERTIFICATE UNDER IRREVOCABLE LETTER OF CREDIT NO. IS1280134 (THE "LETTER OF CREDIT").
I, X. X. XXXXX, AN AUTHORIZED REPRESENTATIVE OF FLORIDA PUBLIC UTILITIES COMPANY AND ITS ASSIGN(S), (COLLECTIVELY THE "COMPANY"), DO HEREBY CERTIFY TO FLEET NATIONAL BANK, THAT: IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF (I) THAT CERTAIN GAS TRANSPORTATION AGREEMENT DATED AS OF JULY 21, 2000 BETWEEN THE COMPANY AND LAKE WORTH GENERATION LLC ("LWG") (THE "GAS TRANSPORTATION AGREEMENT"), THE AMOUNT DEMANDED HEREBY ON THE ATTACHED SIGHT DRAFT REPRESENTS THE AMOUNT THREE MILLION THREE HUNDRED NINETY-THREE THOUSAND EIGHT HUNDRED-THIRTEEN AND 71/100 U.S. DOLLARS (USD 3,393,813.71) DUE AND PAYABLE TO THE COMPANY BY LWG AS THE RESULT OF THE TERMINATION OF GAS TRANSPORTATION AGREEMENT AND LWG'S FAILURE TO PAY THE AMOUNTS DUE AND OWING TO THE COMPANY AS A RESULT OF SUCH TERMINATION. THIS DRAWING IS MADE PURSUANT TO IRREVOCABLE LETTER OF CREDIT NO. 1S1280134 ISSUED BY FLEET NATIONAL BANK TO THE COMPANY.
IN WITNESS WHEREOF, FLORIDA PUBLIC UTILITIES COMPANY HAS EXECUTED AND DELIVERED THIS DRAWING CERTIFICATE THIS 31st DAY OF MARCH, 2003.
FLORIDA PUBLIC UTILITIES COMPANY
ATTEST: __________________________
BY: ________________________________
NAME: __________________________
NAME: X. X. XXXXX
TITLE: ___________________________
TITLE: CHIEF OPERATING OFFICER
AND SENIOR VICE PRESIDENT
THIS DOCUMENT CONSISTS OF ONE PAGE.
Exhibit "B"
to
SIGHT DRAFT
DATE :
March 31, 2003
TO:
FLEET NATIONAL BANK
ATTN:
GLOBAL TRADE OPERATIONS - STANDBY UNIT
REFERENCE NO.:
1S1280134
RE: FLEET NATIONAL BANK, IRREVOCABLE LETTER OF CREDIT NO. 1S1280134
ON SIGHT
PAY TO THE ORDER OF FLORIDA PUBLIC UTILITIES COMPANY OR ITS ASSIGN(S) (COLLECTIVELY THE "COMPANY") IN IMMEDIATELY AVAILABLE FUNDS THREE MILLION THREE HUNDRED NINETY-THREE THOUSAND EIGHT HUNDRED-THIRTEEN AND 71/100 U.S. DOLLARS (U. S. $3,393,813.71) ON THE FOLLOWING BUSINESS DAY, IF THIS SIGHT DRAFT IS PRESENTED PRIOR TO 3:00 P.M. EASTERN STANDARD TIME ON THE IMMEDIATELY PRECEDING BUSINESS DAY, PURSUANT TO IRREVOCABLE LETTER OF CREDIT NO. 1S1280134 OF FLEET NATIONAL BANK, BY TRANSFER TO GENERAL ACCOUNT NUMBER 005488080210 MAINTAINED BY THE COMPANY AT BANK OF AMERICA, N.A., WEST PALM BEACH, FLORIDA, ABA #000000000.
FLORIDA PUBLIC UTILITIES COMPANY
BY:
NAME: X. X. XXXXX
TITLE: CHIEF OPERATING OFFICER
AND SENIOR VICE PRESIDENT
Exhibit "C"
to
(Florida Public Utilities Company letterhead)
March 31, 2003
VIA FAX (000) 000-0000 and VIA OVERNIGHT COURIER
Xx. Xxxxxx X. Xxxxx
Fleet National Bank
Fleet Global Trade Operations/Energy
0 Xxxxx Xxx (Xxx X) Xxxxx 0
Xxxxxxxx, XX 00000-0000
Phone: (000) 000-0000 Fax: (000) 000-0000
RE:
Request for LC Termination - LC# 1S1280134
Dear Xx. Xxxxx:
We acknowledge that LC# 1S1280134 issued by Fleet National Bank on July 6, 2001 (as amended August 28, 2001, October 23, 2001 and December 13, 2002) in favor of Florida Public Utilities Company is currently outstanding and was originally issued in relation to the obligations of Lake Worth Generation L.L.C. under the Gas Transportation Agreement between Lake Worth Generation L.L.C. and Florida Public Utilities Company dated as of July 21, 2000 (the “Existing LC”).
On March 31, 2003, FPUC transmitted to Fleet National Bank a Drawing Certificate and Sight Draft in the amount of $3,393,813.71 with respect to the Existing LC. On and from the date of this letter, the Existing LC is hereby terminated in its entirety and we shall not in any circumstances whatsoever have any rights to claim upon such Existing LC.
Yours faithfully,
FLORIDA PUBLIC UTILITIES COMPANY
BY: _____________________
NAME: X. X. XXXXX
TITLE: Chief Operating Officer and Senior Vice President
Exhibit “D” to Mutual Release Agreement
March 31, 2003
VIA HAND DELIVERY
Xx. Xxxxxx X. Xxxxx
Fleet National Bank
Fleet Global Trade Operations/Energy
0 Xxxxx Xxx (Xxx X) Xxxxx 0
Xxxxxxxx, XX 00000-0000
Phone: (000) 000-0000 Fax: (000) 00000000
RE: Partial Draw—LC#1S1280134
Dear Xx. Xxxxx:
In connection with a draw by Florida Public Utilities Company (“FPUC”) on the above-referenced Letter of Credit in the amount of USD $3,393,813.71, FPUC and Lake Worth Generation, LLC (“LWG”) have engaged me to serve as Escrow Agent. In that capacity, I am delivering to you a Drawing Certificate and a Sight Draft in that amount. I am also delivering the original Letter of Credit for you to stamp and return to my designee, _______________, by hand.
At the time the wire transfer specified in the Sight Draft is made, I respectfully request that you provide the Federal wire tracking number associated with such transfer of funds by Fax to FPUC (Attention: Xxxxxx Xxxxxx, Fax No. 000-000-0000) and to my designee, ____________________, by hand.
Thank you for your assistance.
Yours truly,
____________________________
Xxxxxxx Xxxxx, Esquire
