Exhibit 10-21
AGREEMENT AMENDING GLOBAL SETTLEMENT AGREEMENT
--------- -------- ------ ---------- ---------
Agreement entered into as of this 29th day of October, 1998, by and among
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Rochester Gas and Electric Corporation, a New York corporation ("RG&E"), General
Electric Capital Corporation, a New York corporation ("GE Capital"),
Kamine/Besicorp Allegany L.P., a Delaware limited partnership as debtor and
debtor in possession ("Debtor") and the other entities listed on the signature
page hereof ("Kamine Affiliates"), embodying an amendment to that certain Global
Settlement Agreement made and dated as of January 15, 1998, among the parties
hereto other than Besicorp Group Inc.(the "Global Settlement Agreement").
WITNESSETH
----------
WHEREAS, the parties hereto other than Besicorp Group Inc. ("BGI") are
parties to the Global Settlement Agreement/1/, a copy of which (without
exhibits) is annexed hereto as Exhibit A; and
WHEREAS, BGI desires to become a party to the Global Settlement
Agreement on the same terms and subject to the same conditions as the Kamine
Affiliates, except as to a claim that BGI has asserted against the Debtor as an
expense of administration claim in the amount of $352,700 (the "BGI Claim")
which claim is disputed and is to be resolved by the Bankruptcy Court; and
WHEREAS, the parties hereto other than BGI have agreed to amend the
Global Settlement Agreement to add BGI as a party thereto upon the terms and
subject to the conditions set forth below and upon no other terms and
conditions.
NOW, THEREFORE, for and in consideration of the foregoing recitals
which are
-----------------
/1/Capitalized terms that are used and that are not defined herein shall have
the same meanings herein that they have in the Global settlement Agreement.
incorporated in and are a part of this Agreement, and the mutual
promises and covenants herein contained and contained in the Global Settlement
Agreement, and in consideration of the agreement of BGI to withdraw its
objections to the Plan and the approval of the Global Settlement Agreement and
the Ammerlaan Settlement Agreement (each as modified to include BGI as a party
thereto), IT IS HEREBY AGREED by and among the parties hereto as follows;
1. The Global Settlement Agreement is hereby amended to include BGI
as a party thereto and the definition of the term "Kamine Affiliate" as
used therein shall include BGI unless otherwise specified herein.
2. Section 4(b) of the Global Settlement Agreement is hereby amended to
read as follows:
"Effective on the Effective Date, each party hereto other than
Debtor, GE Capital and BGI (the latter solely with respect to the
BGI Claim) hereby waives and relinquishes any and all Claims against
Debtor, the Estate of Debtor or property of Estate of Debtor,
including Claims arising from or related to the PPA, the Facility
and the Greenhouse, but excluding the
2
BGI Claim and each Kamine Affiliate other than BGI (solely with
respect to the BGI claim) agrees that it shall not receive or retain
any distribution or property under the Plan."
3. Section 8(a) of the Global Settlement Agreement is hereby amended
so that the first two lines thereof shall read as follows.
"Except for (i) obligations pursuant to this Settlement Agreement
and (ii) the claims of BGI against KBALP incorporated in the BGI
Claim (which Claim shall be preserved to BGI), on the Effective
Date, each of RG&E, ***"
4. Section 8(b) of the Global Settlement Agreement is hereby amended
to insert the phrase "other than with respect to the BGI Claim" immediately
after the third word of the sixth line thereof and after the word Estate in
the last line.
5. Section 16 of the Global Settlement Agreement is hereby amended to
delete the references to Xxxx X. Xxxxxxxxx, Esq. and Xxxxxxx Xxxxxxxxx, Esq.
on page 31 thereof and to insert in their place the name of A. Xxxxxxxx
Xxxxxx, Esq. and the firm of Xxxxxxxx Brog Leinwand Xxxxxx Xxxxxxxx & Xxxxx
P.C., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Fax No.
(000) 000-0000.
3
6. The signature pages of the Global Settlement Agreement shall be
amended in order to provide for the execution of the Global Settlement
Agreement by Besicorp Group, Inc. with the signature to be acknowledged by a
notary public.
7. The parties hereto agree, ratify and confirm that, except as
specifically provided herein, all other provisions of the Global Settlement
Agreement shall be and remain in fuIl force and effect in accordance with
their respective terms. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed
to be an original and all of which counterparts, taken together, shall
constitute but one and the same instrument.
4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the day and
year first above written.
Dated: November 3 1998 "RG&E"
------
ROCHESTER GAS AND ELECTRIC CORPORATION
By: s/ Xxxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxxx
Its: Senior Vice President and General Counsel
Dated: October 28, 1998 "GE Capital"
--- ----------
GENERAL ELECTRIC CAPITAL CORPORATION
By: s/ Xxxxxxx X. Xxxxxxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Its: Vice President
Dated: October 28, 1998 "DEBTOR"
---- ------
KAMINE/BESICORP ALLEGANY L.P.
By: KAMINE Allegany COGEN CO., INC.
Its: Managing Partner
By: s/ Xxxxxxx X. Xxxxxxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Its: President
"KAMINE AFFILIATES"
-------------------
5
Dated: October 28, 1998
---
KAMINE ALLEGANY COGEN CO., INC.
By: s/ Xxxxxxx X. Xxxxxxxxxxxx
--------------------------
Name Xxxxxxx X. Xxxxxxxxxxxx
Its: President
Dated: October 28, 1998
----
BETA ALLEGANY INC.
By: s/ Xxxxxxx X. Xxxxxxxxxxxx
---------------------------
Name: Xxxxxxx X Xxxxxxxxxxxx
Its: President
Dated: October 28, 1998
----
KAMINE DEVELOPMENT, L.P
By: Kamine Allegany Cogen Co., Inc.
Its: General Partner
By: s/ Xxxxxxx X. Xxxxxxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Its: President
Dated: October 1998
---
KAMINE DEVELOPMENT CORP.
By: s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
Its: President
Dated: October 30, 1998
---
BESICORP GROUP, INC.
By: s/ Xxxxxxx Xxxxx, E.V.P.
-------------------------
Name: Xxxxxxx Xxxxx
Its: Executive Vice-Pres / CFO
6
STATE OF NEW YORK )
:
COUNTY OF MONROE )
On the 3rd day of November in the year 1998 before me personally came
XXXXXXX X. XXXXXXX to me known, who, being by me duly sworn, did depose and say
that he resides in Honeoye, New York, that he is the Senior Vice President and
General Counsel of ROCHESTER GAS AND ELECTRIC CORPORATION, the corporation
described in and which executed the above instrument; that he knows the seal of
said corporation; and that he signed his name thereto by order of the board of
directors of said corporation.
s/Xxxxxxxxx X. Xxxxxx
---------------------
Notary Public
XXXXXXXXX X. XXXXXX
Notary Public, State of New York
Registration No. 01SA6015061
Genesee County
Commission Expires October 19, 2000
7
STATE OF CONNECTICUT )
: SS.:
COUNTY OF FAIRFIELD )
On the 28th day of October in the year 1998 before me personally came
XXXXXXX X. XXXXXXXXXXXX to me known, who, being by me duly sworn, did depose and
say that he resides in Fairfield, Ct; that he is the President of Kamine
Allegany Cogen Co. Inc., a New York corporation, the managing general partner of
Kamine/Besicorp Allegany L.P. and of Kamine Development, L.P., partnerships
described in and which executed the above instrument; that he knows the seal of
said corporation; and that he signed his name thereto by order of the board of
directors of Kamine Allegany Cogen Co., Inc.
s/Xxxxxxxx Xxxxxxxxx
--------------------
Notary Public
XXXXXXXX XXXXXXXXX
NOTARY PUBLIC
MY COMMISSION EXPIRES MAY 31, 2001
8
STATE OF CONNECTICUT )
: SS.:
COUNTY OF FAIRFIELD )
On the 28th day of October in the year 1998 before me personally came
XXXXXXX X. XXXXXXXXXXXX, to me known, who, being by me duly sworn, did depose
and say that he resides in Fairfield, Ct., that he is a Vice President of
General Electric Capital Corporation, the corporation described in and which
executed the above instrument; that he knows the seal of said corporation; and
that he signed his name thereto by order of the board of directors of said
corporation.
s/Xxxxxxxx Xxxxxxxxx
--------------------
Notary Public
XXXXXXXX XXXXXXXXX
NOTARY PUBLIC
MY COMMISSION EXPIRES MAY 31, 2001
9
STATE OF CONNECTICUT )
: SS.:
COUNTY OF FAIRFIELD )
On the 28th day of October in the year 1998 before me personally came
XXXXXXX X. XXXXXXXXXXXX to me known, who, being by me duly sworn, did depose and
say that he resides in that he resides in Fairfield, Ct.; and that he is the
President of each of Kamine Allegany Cogen Co., Inc.; and Beta Allegany Inc.
corporations described in and which executed the above instrument; that he knows
the seal of said corporations; and that he signed his name thereto by order of
the board of directors of said corporations.
/s/Xxxxxxxx Xxxxxxxxx
---------------------
Notary Public
XXXXXXXX XXXXXXXXX
NOTARY PUBLIC
MY COMMISSION EXPIRES MAY 31, 0000
00
XXXXX XX XXX XXXXXX )
: SS.:
COUNTY OF SOMERSET )
On the 2nd day of November in the year 1998 before me personally came
Xxxxxx X. Xxxxxx to me known, who, being by me duly sworn, did depose and say
that he resides in Lewsbury, New Jersey; that he is the President of Kamine
--------------------
Development Corp., the corporation described in and which executed the above
instrument; that he knows the seal of said corporation; and that he signed his
name thereto by order of the board of directors of said corporation.
s/Xxxxxxx Xxxxxxxx
------------------
Notary Public
XXXXXXX XXXXXXXX
Notary Public of New Jersey
Commission Expires 9/11/2002
00
XXXXX XX XXX XXXX )
: SS.:
COUNTY OF ULSTER )
On the 30th day of October in the year 1998 before me personally came
XXXXXXX XXXXX, to me known, who, being by me duly sworn, did depose and say that
he resides at c/o BESICORP GROUP, INC., 0000 Xxxxxxxx Xxxx, Xxxxxxxx, X.X., that
he is the Executive Vice President/CFO Besicorp Group, Inc., the corporation
described in and which executed the above instrument; that he knows the seal of
said corporation; and that he signed his name thereto by order of the board of
directors of said corporation.
s/Xxxxx X. Xxxxxxxxx
--------------------
Notary Public
XXXXX X. XXXXXXXXX
Notary Public, State of New York
Resident in and for Ulster County
Commission Expires 5/31/2000
12
Global Settlement Agreement
Settlement Agreement made and dated as of January 15, 1998, by and
among Rochester Gas and Electric Corporation, a New York corporation ("RG&E"),
General Electric Capital Corporation, a New York corporation ("GE Capital"),
Kamine/Besicorp Allegany L.P., a Delaware limited partnership as debtor and
debtor-in-possession ("Debtor") and the other entities listed on the signature
page hereof ("Kamine Affiliates"), embodying a global settlement of various
claims among the parties and the agreement of the parties to be implemented by a
Chapter 11 plan of liquidation to be proposed jointly by GE Capital and the
Debtor ("Plan")
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Debtor is the beneficial owner and operator of (i) a natural
gas fired electric generating facility located in the Town of Xxxx, New York
(the "Facility") which may be operated in conjunction with a 15-acre greenhouse
facility and related personal property ("Greenhouse"), as described in that
certain Ground Lease between Debtor and Allegany Greenhouse Inc., dated as of
June 1, 1993; and (ii) a water distillation plant and related equipment located
near the Facility; and
WHEREAS, RG&E entered into a Power Purchase Agreement dated July 20,
1990, with Debtor's predecessor-in-interest; and
WHEREAS, said Power Purchase Agreement, as amended on or as of
December 14, 1990 and June 30, 1993 ("PPA"), was duly assigned to and assumed by
Debtor by an Assignment and Assumption Agreement dated August 25, 1992; and
WHEREAS, on or about June 30, 1993, GE Capital and RG&E entered into a
certain Consent and Agreement of said date (the "Consent Agreement"); and
WHEREAS, disputes exist among RG&E, GE Capital and Debtor regarding
the rights and obligations of the parties under the PPA and the Consent
Agreement; and
WHEREAS, in September, 1994, RG&E commenced a state court civil action
to declare the PPA unenforceable, as against Debtor and Kamine Affiliates in New
York State Supreme Court, Monroe County, Index No. 8174-94 (the "NYS Action");
and
WHEREAS, on or about January 27, 1995, Debtor commenced an antitrust
action against RG&E in the United States District Court for the Western District
of New York, 95-CV-6405-L (the "WDNY Action"); and
WHEREAS, on November 13, 1995 (the "Filing Date"), Debtor filed a
voluntary petition for relief under Chapter
2
11 of Title 11, United States Code ("Bankruptcy Code") in the United States
Bankruptcy Court for the District of New Jersey (the "Bankruptcy Court"), which
case is pending as case No. 95-28703 (WFT) (the "Chapter 11 Case"); and
WHEREAS, on the Filing Date, Debtor commenced an adversary proceeding
against RG&E in the Bankruptcy Court ( A.P. No. 95-2909) (the "Adversary
Proceeding") by filing a complaint with the Clerk of the Bankruptcy Court; and
WHEREAS, on November 20, 1995, GE Capital moved to intervene in the
Adversary Proceeding as a party-plaintiff, which motion was granted by order
dated December 7, 1995; and
WHEREAS, on or about August 13, 1996, Debtor and GE Capital commenced
a second adversary proceeding against RG&E in the Bankruptcy Court (A.P. No. 96-
2559) (the "Second Adversary Proceeding") by filing a complaint (the Adversary
Proceeding and the Second Adversary Proceeding are sometimes collectively
referred to as the "Adversary Proceedings"); and
WHEREAS, the Facility has not produced electricity since mid-February,
1996; and
WHEREAS, as of the Filing Date, GE Capital was owed and has filed a
Secured Proof of Claim for the approximate amount of $91,644,771.41, which
indebtedness was
3
secured by a lien upon and security interest against all or substantially all of
the assets and property of Debtor; and
WHEREAS, GE Capital has made loans (the "DIP Loans") to Debtor under a
Debtor-in-Possession Credit Agreement during the Chapter 11 Case in order to
permit Debtor to meet the costs and expenses of administration, including those
relating to maintenance of the Facility; and
WHEREAS, the Bankruptcy Court has entered Orders approving DIP Loans
duly made by GE Capital to Debtor with an unpaid balance in the approximate
amount of 36,600,000 as of March 31, 1998; and
WHEREAS, on or about June 26, 1997, Defendants in the NYS Action filed
a Joint Notice of Removal of Action Under 28 U.S.C. (S) 1441 (b) (Federal
Question) and the NYS Action is now pending in the United States District Court
for the Xxxxxxx Xxxxxxxx xx Xxx Xxxx, 00-XX-0000-X; and
WHEREAS, on or about July 3, 1997, GE Capital commenced an antitrust
action against RG&E in the United States District Court for the Western District
of New York, No. 97-CV-6307-T (the "GE Capital Antitrust Action"); and
WHEREAS, the New York State Public Service Commission ("PSC")
instituted a proceeding to investigate whether the Debtor had complied with
certain legal
4
requirements relating to cogeneration facilities, Case No. 95-E-0447 (the "PSC
Proceeding"); and
WHEREAS, GE Capital and RG&E have had a series of meetings to discuss
and negotiate a global settlement of all matters in dispute by and among GE
Capital, RG&E, Debtor and the Kamine Affiliates; and
WHEREAS, the purpose of this agreement is, among other things, to
compromise, settle and resolve all disputes and claims by and among RG&E, GE
Capital, Debtor, the Estate of Debtor and Kamine Affiliates, including claims in
respect of the PPA, the Consent Agreement, the Facility, the Case and the
Adversary Proceedings, the NYS Action, the WDNY Action, the PSC Proceeding and
the GE Capital Antitrust Action and, in doing so, to provide for the release and
discharge of all such claims and resolve all such disputes amicably and without
further cost, expense or risk to the parties, all on the terms and subject to
conditions set forth below; and
WHEREAS, the parties hereto have agreed to the essential terms of an
asset sale pursuant to the Plan and as set forth in an Acquisition Term Sheet, a
copy of which is annexed hereto as Exhibit 1, in which (i) RG&E would purchase
the Purchased Assets (as hereinafter defined) for a cash price of $15 million or
such higher amount as RG&E may
5
bid for the Purchased Assets or (ii) another entity may purchase the Purchased
Assets for an amount in excess of RG&E's bid based upon a bid that conforms to
the alternative bidding procedures specified in section 12 of the Acquisition
Term Sheet (a "Competitive Bid"), as may be approved by the Bankruptcy Court, in
any case with such purchase price to be paid to GE Capital; and
WHEREAS, RG&E and GE Capital have agreed to a payment plan in the form
annexed hereto as Exhibit 2-A ("Payment Plan") to be evidenced by a promissory
note payable to the order of GE Capital in the form annexed hereto as Exhibit
2-B (the "RG&E Note"), in full settlement and final satisfaction of RG&E's
obligations under the PPA and the Consent Agreement;/1/ and
WHEREAS, Debtor desires to fully and finally resolve and settle any
and all claims of creditors against the Estate of Debtor pursuant to a Plan; and
WHEREAS, the parties hereto acknowledge it will be beneficial to them
and to all other creditors of the Estate
/1/ In the event there is a successful Competitive Bid, then the difference
between (i) the successful Competitive Bid and (ii) the sum of $15 million plus
interest on $15 million from July 1, 1998 through the Effective Date (as
hereinafter defined) calculated at the annual rate of 7%, shall be applied first
to reduce the $10 million cash payment due on the Effective Date, and then to
payments on the RG&E Note in direct order of maturity.
6
of Debtor and other parties in interest to permit the consummation of the
transactions contemplated herein and in the Acquisition Term Sheet upon the
terms and subject to conditions set forth below, and upon no other terms and
conditions.
NOW, THEREFORE, for and in consideration of the foregoing recitals
which are incorporated in and a part of this Settlement Agreement, and the
mutual promises and covenants herein contained, IT IS HEREBY AGREED by and among
the parties hereto that:
1. Pending Legal Proceedings.
------- ----- -----------
(a) As among the parties hereto, the NYS Action, the WDNY
Action, the Adversary Proceedings and the GE Capital Antitrust Action
(collectively "Pending Legal Proceedings") and the PSC Proceeding shall be
deemed still subject to the approval of the respective courts in which each such
proceeding is pending or the PSC. Each party shall use reasonable best efforts
(without incurring any significant expenses to do so) to achieve a stay of the
Pending Legal Proceedings, any other pending litigation and regulatory
proceedings, with such stays to remain in effect until the earlier of the
Effective Date (as hereinafter defined in Section 9(d)) or the date of
termination of this Settlement Agreement.
7
(b) The parties hereto shall refrain from commencing any new
litigation or regulatory proceeding, the outcome of which could have a
materially adverse effect on (i) the PPA, (ii) the Consent Agreement, or (iii)
this Settlement Agreement, or rights or obligations hereunder or thereunder;
provided, however, the obligations of the parties pursuant to this paragraph
--------- -------
shall be subject to the condition that no party shall be required to take any
action or suffer any inaction that would lead to forfeiture, loss of rights, or
otherwise cause a material adverse impact on such party with respect to any such
litigation or regulatory proceeding.
(c) Upon the occurrence of the Effective Date, each of RG&E, GE
Capital, Debtor and Kamine Affiliates shall, to the extent they are a party
thereto, dismiss, with prejudice and without costs or attorneys' fees, the
Pending Legal Proceedings and, in furtherance thereof, agrees to the immediate
and concurrent execution of Stipulations of Discontinuance in the forms annexed
hereto as Exhibits 3, 4, 5, 6/2/ and 7, which Stipulations shall be held in
escrow by Weil, Gotshal & Xxxxxx LLP and shall not be released from
-----------------
/0/ XX&X shall use reasonable best efforts to obtain from Allegany Cogeneration,
Inc. a stipulation of discontinuance in the form of Exhibit 6 in respect of the
NYS Action.
8
escrow or become effective, binding or enforceable unless and until the
Effective Date occurs or this Settlement Agreement is terminated in accordance
with its terms, and in the latter case such Stipulations shall be returned to
the respective plaintiff in the action relating to each such Stipulation.
2. Termination of PPA and Consent Agreement.
----------- -- --- --- ------- ---------
(a) On the occurrence of the Effective Date, the PPA shall be
terminated and of no further force or effect and all rights, powers, benefits,
duties and obligations of RG&E and Debtor under the PPA shall be terminated,
released and discharged.
(b) On the occurrence of the Effective Date, the Consent Agreement
shall be terminated and of no further force and effect and all rights, powers,
benefits, duties and obligations of RG&E or GE Capital under the Consent
Agreement shall be terminated, released and discharged.
3. Asset Sale and Transfers.
----- ---- --- ---------
(a) On the Effective Date, Debtor shall sell, assign, convey and
transfer to RG&E, or to such entity as RG&E shall designate as purchaser
("Purchaser"), unless there is a successful Competitive Bid by an entity other
than RG&E or its designee, all of Debtor's right, title and interest in (i) the
Facility and the Facility Property (as
9
defined in the Acquisition Term Sheet), (ii) certain contracts that are not
executory contracts (as that term is used in section 365 of the Bankruptcy Code)
related thereto which shall be designated in a Schedule of Contracts to be
furnished to GE Capital on or before April 30, 1998, and (iii) certain executory
contracts related thereto which shall be designated in a Schedule of Executory
Contracts to be furnished to GE Capital on or before April 30, 1998
(collectively, the contracts listed in the Schedules of Contracts and Executory
Contracts and the Facility and Facility Property, the "Purchased Assets") .
Neither the Schedule of Contracts nor the Schedule of Executory Contracts shall
include thereon any contract that is described as an Excluded Asset in Section 4
of the Acquisition Term Sheet.
(b) The Purchased Assets shall be conveyed free and clear of any
and all liens and encumbrances as well as Claims (as defined in Code (S)
101(5)), liabilities or legal obligations accrued up to the Effective Date and
that could necessitate payment by Purchaser or otherwise impair utilization of
the Purchased Assets. RG&E shall in no event assume or be liable for any such
Claim, liability or legal obligation.
10
(c) On the Effective Date, unless the Purchased Assets shall be
purchased by another entity that is not affiliated with RG&E, RG&E shall pay
(which payment may be made on RG&E's behalf by Purchaser) to GE Capital, by wire
transfer of immediately available funds, an amount equal to the purchase price
described in the Acquisition Term Sheet, which amount shall be applied by GE
Capital in partial satisfaction of Debtor's DIP Loan balance.
(d) On the Effective Date, Debtor and Kamine Affiliates shall
assign, transfer and convey to GE Capital (or its designee) all of their
respective right, title and interest in (i) the Greenhouse, (ii) that certain
Loan and Security Agreement, dated as of June 1, 1993, by and among Debtor,
Kamine Development Corp., Besicorp Group, Inc. ("BGI"), Allegany Greenhouse Inc.
("AGI") and XXX (as hereinafter defined), the Term Bond issued by AGI pursuant
thereto, and all related documents and instruments (collectively, the
"Greenhouse Mortgage Instruments") and (iii) all interests, rights, privileges,
claims, counterclaims, actions, causes of action and defenses of the Debtor
against AGI and, to the extent that the claims of Ammerlaan Agro-Projecten B.V.
("Ammerlaan") against the Debtor and the Greenhouse have not been compromised
and settled by a definitive written agreement in form and substance
11
satisfactory to Debtor and GE Capital ("Ammerlaan Settlement Agreement"),
Ammerlaan, including those arising under or relating to the Greenhouse and the
Greenhouse Mortgage instruments.
(e) On the Effective Date, GE Capital shall fund an escrow
account to be established by Debtor, on terms and conditions satisfactory to GE
Capital, Debtor, the Creditors' Committee and the Bankruptcy Court, with funds
in an amount sufficient to pay Debtor's obligations under the Plan, including
costs and expenses of administration that may be or have been incurred in the
Chapter 1 Case and statutory fees owing to the U.S. Trustee, when such
obligations become due and owing. None of GE Capital, RG&E or Kamine Affiliates
shall assume or be liable for any obligations under the Plan, except as
otherwise expressly provided herein or in the Acquistion Term Sheet
4. Parties to Cooperate with Asset Sale and
------- -- --------- ---- ----- ---- ---
Transfers and Support the Plan.
--------- --- ------- --- -----
(a) Each party hereto agrees to fully cooperate with each other
party, and to make reasonable best efforts to facilitate and further the
negotiation, documentation and implementation of the transactions contemplated
hereby and by the Acquisition Term Sheet and the Plan
12
(b) Effective on the Effective Date, each party hereto other than
Debtor and GE Capital hereby waives and relinquishes any and all Claims against
Debtor, the Estate of Debtor or property of Estate of Debtor, including Claims
arising from or related to the PPA, the Facility and the Greenhouse, and each
Kamine Affiliate agrees that it shall not receive or retain any distribution or
property under the Plan.
(c) Each party hereto other than Debtor hereby agrees to vote to
accept the Plan. Each party hereto hereby agrees to support confirmation and
consummation of the Plan and to make reasonable best efforts to implement and
effectuate those results.
5. Consent to Asset Sale and Settlement Agreement.
------- -- ----- ---- --- --------------------
(a) Debtor and Kamine Affiliates agree that the proposed sale of
the Purchased Assets in accordance with the terms set forth in the Acquisition
Term Sheet, to be implemented by the Plan, is in the best interests of Debtor's
creditors and other parties in interest, Debtor agrees that the sale or other
disposition of the Greenhouse and other assets of the Debtor in accordance with
the Plan is also in the best interests of the Debtor and its estate and Debtor
therefore agrees to be, become and remain a
13
co-proponent of, and to support the Plan. Debtor and Kamine Affiliates agree to
support any future application for authority to implement and effectuate the
transactions contemplated hereby and by the Acquisition Term Sheet and the Plan.
(b) The parties hereto acknowledge their intent to cooperate
with each other in their efforts to resolve their disputes with the other
parties in interest.
6. Non-Interference.
----------------
(a) Unless or until a party is in material breach of this
Settlement Agreement, (i) each Kamine Affiliate and Debtor agrees it will
cooperate with GE Capital and RG&E to complete a sale of the Purchased Assets
and the disposition of all other assets of Debtor as contemplated hereby and by
the Acquisition Term Sheet and the Plan; and (ii) the parties hereto agree they
will take no action in the Bankruptcy Court to oppose confirmation and
consummation of the Plan.
(b) In the event the Effective Date has not occurred prior to
August 31, 1998, RG&E, Debtor and GE Capital agree to meet and negotiate in good
faith in respect to revising the manner and/or timing of the transactions
contemplated hereby and by the Acquisition Term Sheet and the Plan. To the
extent requested jointly by GE Capital and
14
RG&E, each of the other parties hereto agrees to consent to any commercially
reasonable proposal for revising the manner and/or timing such transactions,
including any request or requests for one or more extensions of time to complete
confirmation and consummation of the Plan and the transactions contemplated
hereby, by the Acquisition Term Sheet and the Plan for a period ending on or
prior to December 31, 1998; provided, however, the Kamine Affiliates shall not
-------- -------
be requested to consent to any such proposal if it deprives them of the benefits
of Sections 1(a), 1(b) and 8(a) of this Settlement Agreement or imposes upon
them any significant expense.
7. Payments by RG&E to GE Capital.
-------- -- ---- -- -- -------
(a) On the Effective-Date, and in accordance with the Plan, RG&E
shall make a payment of $10 million/3/ to GE Capital and shall execute and
deliver to GE Capital the RG&E Note payable to the order of GE Capital
evidencing the Payment Plan providing for 64 payments to GE Capital in the
aggregate amount of $168.35 million, commencing on June 30, 1998 with a payment
of $3.5 million; continuing on September 30, 1998 through and including the last
business day of June, 1999, with four (4) quarterly payments each of $2.125
-----------------
/3/ See note 1 supra.
-----
15
million; and continuing on the last business day of September, 1999 and on the
last business day of each calendar quarter following the quarter ending
September 30, 1999 through and including March 31, 2014 with fifty-nine (59)
quarterly payments each of $2.65 million, by wire transfer of immediately
available funds to such bank accounts and in such amounts as shall be designated
in advance of the Effective Date by GE Capital. If RG&E is the purchaser of the
Purchased Assets and the Effective Date occurs after June 30, 1998, RG&E shall
pay interest from July 1 1998 on the purchase price for the Purchased Assets at
the annual rate of 7% to and excluding the Effective Date, such accrued interest
payment to be made on the Effective Date.
(b) RG&E shall have the right to prepay the entire outstanding
balance of all payments required to be made under the Payment Plan by paying to
GE Capital on the prepayment date an amount equal to the present value of such
payments. In the event such prepayment is financed in full by securitization of
a portion of RG&E assets related to stranded costs in a registered public
offering or private placement pursuant to enabling legislation of the New York
State Legislature or by executive or administrative order ("Securitization"),
the discount rate shall be 7.l0% per
16
annum; in all other instances, the discount rate shall be 7.0% per annum. Any
such prepayment shall be made by wire transfer to the account specified pursuant
to Section 7 (a). At least ten business days prior to any prepayment, RG&E shall
give GE Capital notice of the intended prepayment, the amount and date thereof,
and identify the scheduled payments which are to be prepaid; and upon delivery
of such notice, RG&E shall be unconditionally bound to effect such prepayment on
the date specified therein.
8. Agreement to Release.
--------- -- -------
(a) Except for obligations pursuant to this Settlement Agreement,
on the Effective Date, each of RG&E, GE Capital, Debtor and each Kamine
Affiliate shall mutually release, acquit and forever discharge each other and
its respective past or present officers, directors, partners, employees, agents
and attorneys (other than those persons that acted or were in such capacities
with respect to BGI) from any and all manner of Claims, claims or causes of
action with respect to any and all actions or inactions, however described,
whether in law or equity, whether known or unknown, that any party has or may
have against any othet party as of the Effective Date, for or by reason of any
cause, matter or thing whatsoever, to the extent, and only to the extent,
related to or in respect of Debtor, the
17
purchased Assets, the PPA, the Consent Agreement, the Pending Legal proceedings,
the PSC Proceeding or any transaction relating to any of the foregoing. Such
general releases shall be in the form of Xxxxxxxx 0, 0, 00 xxx 00 xxxxxxx
xxxxxx.
(x) Upon Bankruptcy Court approval of this Settlement Agreement
and confirmation of the Plan and effective on the Effective
Date, each Kamine Affiliate and RG&E shall waive and release
all respective obligations and indebtedness of the Estate of
Debtor to such Kamine Affiliate and RG&E, and each Kamine
Affiliate and RG&E shall have agreed that any and all Claims
held by such Kamine Affiliate and RG&E against the Estate or
property of the Estate shall be disallowed and expunged.
9. Conditions to Closing.
---------- -- -------
(a) The obligations of the parties hereto to consummate the
transactions contemplated hereby shall be subject to the satisfaction or waiver
of each of the following conditions (the "Closing Conditions")
(i) Entry of a Final Order (as defined herein) (which may be
the Confirmation Order) by the Bankruptcy Court approving this
Settlement Agreement, including the
18
compromise and settlement of the Pending Legal Proceedings;
(ii) the satisfaction or waiver of each of the Closing
Conditions set forth in the Acquisition Term Sheet and entry of a
Final Order by the Bankruptcy Court (which may be the Confirmation
Order) approving the sale of the Purchased Assets pursuant to the
Acquisition Term Sheet and the Plan;
(iii) entry of a Final Order by the Bankruptcy Court
confirming the Plan (the "Confirmation Order");
(iv) the release from escrow at the closing (for the purpose
of filing the same with the applicable court) of Stipulations of
Discontinuance in the form of Exhibits 3, 4, 5, 6, and 7 annexed
hereto dismissing, with prejudice and on the merits, all Pending
Legal Proceedings;
(v) entry of a Final Order or Orders by the New York State
Public Service Commission ("PSC") approving this Settlement
Agreement and the recovery of the associated cost and such other
transactions subject to PSC
19
jurisdiction as are required to implement this Settlement
Agreement or the transactions contemplated herein, coupled with a
finding of the prudence as to RG&E's entry into and performance of
this Settlement Agreement;
(vi) entry of a Final Order or Orders by the PSC approving the
Amended and Restated Settlement Agreement dated October 23, 1997
in Case 96-E-0898, the so-called Competitive Opportunities
Proceeding, providing for a recovery of the costs associated with
this Settlement Agreement and related transactions in rates for
electric service to RG&E customers in form acceptable to RG&E;
(vii) the execution and delivery in escrow, pending the
closing contemplated by this Settlement Agreement, by Debtor, GE
Capital, Kamine Affiliates and RG&E of Releases in the form of
Exhibits 9, 10, 11 and 12 annexed hereto;
(viii) entry of Final Orders (which may be the
Confirmation Order) as shall be required to enable the Debtor to
assume, assign and/or convey to GE Capital or its
20
designee(s), all of Debtor's interest in the Greenhouse;
(ix) all conditions to the effective date of the Plan have
been met or waived by the party or parties entitled to grant any
such waiver;
(x) such approvals, consents and agreements of the Allegany
County Industrial Development Agency ("XXX") as are required to
effectuate the transactions contemplated herein, in the
Acquisition Term Sheet and in the Plan, including those that would
enable RG&E or another purchaser of the Purchased Assets (and GE
Capital or its designee(s) with reference to the Greenhouse) to
use, occupy, operate and enjoy the benefits of ownership of such
assets in the same manner and for the same term as that to which
Debtor is entitled, assuming no default or event of default had
occurred prior to the date hereof; and
(xi) the execution and delivery in escrow, by RG&E, pending the
closing contemplated by this Settlement Agreement, of the
21
RG&E Note in form identical to Exhibit 2-B hereto.
b) As used herein, "Final Order" means an order from which the time to
appeal, petition for certiorari or move for reargument or rehearing has expired
----------
and as to which no appeal, petition for certiorari or move for reargument or
----------
rehearing shall then be pending or as to which any right to appeal, petition for
certiorari or motion for reargument or rehearing shall have been waived in
----------
writing in form and substance satisfactory to each of the parties or, in the
event that an appeal, petition for certiorari or motion for reargument or
----------
rehearing has been sought, such order shall have been affirmed by the highest
court to which such order was appealed, certiorari has been denied, or
----------
reargument or rehearing denied, and the time to take any further appeal,
petition for certiorari or move for reargument or rehearing shall have expired;
----------
provided, however, that RG&E and GE Capital shall have the sole and absolute
-----------------
right to jointly waive the requirement as to the finality of the orders
contemplated by clauses (i), (ii) and (iii), and the requirements of clauses
(iv), (ix) and (x) of Section 9 (a), RG&E shall have the sole and absolute right
to waive the requirement of the Final Orders contemplated by clauses (v) and
(vi) thereof, and GE Capital shall have the
22
sole and absolute right to waive the requirements of clause (viii) and (xi).
(c) The parties hereto agree to use prompt and reasonable best efforts
to obtain satisfaction of the Closing Conditions; provided, however, that any
--------- -------
further condition imposed by the PSC upon RG&E or the transactions contemplated
by this Settlement Agreement shall be subject to evaluation by RG&E in its sole
and absolute discretion.
(d) The simultaneous closing of all of the transactions contemplated
hereby and by the Acquisition Term Sheet and the Plan shall occur within five
business days following the date upon which the last Closing Condition is
satisfied or waived (such closing date, the "Effective Date") . The closing
shall be held at the offices of Nixon, Hargrave, Devans & Xxxxx LLP, 437 Madison
Avenue, New York, New York or at such other location as to which the parties may
agree.
10. Cooperation with respect to Bankruptcy Court Approvals.
----------- ---- ------- -- ---------- ----- ---------
(a) The parties hereto shall use reasonable best efforts to seek and
obtain approval of the Bankruptcy Court of this Settlement Agreement and the
Acquisition Term Sheet, together with all requisite documents and instruments
23
hereby contemplated and all of the transactions contemplated herein or therein.
(b) The parties hereto shall cooperate with each other in preparing
and filing any and all submissions to the Bankruptcy Court, other courts or to
regulatory agencies in respect of this Settlement Agreement.
11. Events of Termination.
------ -- -----------
This Settlement Agreement shall be terminated, and the transactions
contemplated hereby shall be abandoned:
(a) by the joint written consent of RG&E and GE Capital; or
(b) by RG&E or GE Capital, if there is a breach in any material
respect of any of the terms of this Settlement Agreement by another party and
such breach is not cured within fifteen (15) days after notice of such breach is
given to the party(ies) alleged to have breached; or
(c) on the occurrence of August 31, 1998 without the occurrence of the
Effective Date, unless, upon joint written consent only of RG&E, Debtor and GE
Capital, such date is extended to a date not later than December 31, 1998; or
(d) on the occurrence of December 31, 1998 without the occurrence of
the Effective Date.
24
(e) by the Kamine Affiliates, if the obligations incorporated in
Sections 1(a), 1(b) and 8(a) of this Settlement Agreement for their benefit are
breached in a material respect.
12. Reservation of Rights.
----------- -- ------
This Settlement Agreement is entered into for purposes of consensually
resolving and settling certain disputed matters without further cost, expense or
risk to any party hereto; neither this Settlement Agreement nor any documents
related to or arising out of this Settlement Agreement (including without
limitation documents which may be submitted to the Bankruptcy Court, the PSC,
the XXX or any other court or agency) may be used, admitted into evidence at any
trial, hearing or proceeding to the prejudice of any party hereto, except to
enforce any provision of this Settlement Agreement. In the event this
Settlement Agreement is terminated in accordance with its terms without the
occurrence of the Effective Date, each of the parties hereto expressly reserves
all its respective rights at law and equity with respect to any claims,
defenses, setoffs, counterclaims and cross-claims, that each such party may have
against any other party.
25
13. Bankruptcy Court Approval.
---------- ----- --------
This Settlement Agreement is made, in part, pursuant to
Rule 9019, Fed. R. Bankr. P. and is subject to, and conditioned upon, approval
by the Bankruptcy Court. This Settlement Agreement shall have no force or effect
and, except for Sections 1(a), 1(b), 4(a), 6 10, 11, 12, 13, 14, 15, 16(a), and
17 through 22, inclusive hereof, shall not be binding on the parties hereto
unless and until the compromise and settlement herein has been approved by a
Final Order of the Bankruptcy Court. The parties hereto shall exercise their
respective reasonable best efforts to obtain from the Bankruptcy Court an order
that approves such compromise and settlement.
14. Corporate Action; RG&E Representations.
--------- ------- ---- ---------------
(a) Each party hereto has obtained the requisite internal
approval(s) of this Settlement Agreement and the transactions contemplated
herein.
(b) RG&E represents and warrants that on and as of the
Effective date:
(i) RG&E will have full corporate power and authority to
execute and deliver the RG&E Note and to perform and observe the
provisions of the RG&E Note.
26
(ii) The execution, delivery and performance by RG&E of the
RG&E Note will have been duly authorized by all necessary
corporate action, and will not contravene any law or any
contractual restriction binding on or affecting RG&E or its
assets.
(iii) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body will be required for the due execution, delivery
and performance by RG&E of the RG&E Note.
(iv) The RG&E Note will be identical in form to Exhibit
2-B hereto and will be the legal, valid and binding obligation of
the RG&E, enforceable against the Obligor in accordance with its
terms.
(v) There will be no pending or threatened action or
proceeding affecting RG&E before any court, governmental agency
or arbitrator which will purport to affect the legality, validity
or enforceability of the RG&E Note.
15. Consideration; Informed Decision by Parties.
-------------- -------- -------- -- -------
This Settlement Agreement is entered into without force or
duress, in the free will of each party hereto and each acknowledges that the
settlement described
27
herein constitutes full and adequate consideration for its entering into this
Settlement Agreement and for the execution and delivery of the Releases and
other documents referred to in this Settlement Agreement. Each party hereto has
consulted with counsel regarding the transactions contemplated by this
Settlement Agreement and has resolved with counsel any questions it may have as
to the meaning, effect or interpretation of this Settlement Agreement and the
execution and delivery of the Settlement Agreement. The decision of each party
hereto to enter into this Settlement Agreement and the execution and delivery of
documents applicable to the Settlement Agreement is a fully informed decision,
and each is aware of all legal and other ramifications of such decision.
16. General Provisions.
------- ----------
(a) All references in this Settlement Agreement to sections,
captions, titles or articles refer only to sections, captions, titles or
articles in this Settlement Agreement and to no other document, unless expressly
stated otherwise, and shall not be deemed for any purpose to modify, explain or
aid in construction or interpretation of any of the terms or provisions of this
Settlement Agreement.
28
(b) Each party hereto agrees to perform such other and
further acts and to execute such other and further documents as may be
reasonably necessary to carry out the provisions or purposes of this Settlement
Agreement. Each party agrees that it will not take any action which wouinterfere
with the performance of this Settlement Agreement by any other party or which
would adversely affect any of the rights provided for herein.
(c) All notices required or permitted to be given hereunder
shall be in writing and shall be deemed given when sent via facsimile (with hard
copy to follow by mail), delivered personally on the day following deposit in a
nationally known overnight/delivery service addressed as follows:
If to GE Capital:
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx, Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxxxxx
FAX (000) 000-0000
with copies to:
Xxxxxx X. Xxxxx
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx, Xxxxx Xxxxx
Xxxxxxxx, XX 00000
FAX (000) 000-0000
and
29
Xxxx X. Xxxxxx, Esq.
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
FAX (000) 000-0000
If to RG&E:
Rochester Gas & Electric Corporation
00 Xxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
FAX (000) 000-0000
with copies to:
Xxxxxxx X. Xxxxxx, Xx., Esq.
Nixon, Hargrave, Devans & Xxxxx LLP
Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxx 00000
FAX (000) 000-0000
If to Debtor:
Kamine BesicorplAllegany L.P.
0000 Xxxxx 000
Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx Xxxxxxx
with copies to:
Xxxxxx Xxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx 00000
FAX (000) 000-0000
Attn: Xxxx Xxxxxxx, Esq. Xxxx Xxxx, Esq.
If to Kamine Affiliates:
Kamine Development Corp.
0000 Xxxxx 000, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Attn: President
FAX (000) 000-0000
30
with a copy to:
Xxxx X. Xxxxxxxxx, Esq.
Xxxx, Xxxxxxxxx & XxXxxx,LLP
Xxx Xxxx Xxxxx
Xxxx Xxx, XX 00000
FAX (000) 000-0000
17. Entire Agreement.
------ ---------
This Settlement Agreement and any and all agreements ancillary
hereto represent the entire agreement between the parties hereto, and supersede
all prior agreements and understandings with respect to the subject matter
hereof, whether written or oral. This Settlement Agreement and any and all
agreements ancillary thereto have been fully negotiated by all parties.
Accordingly, no prior drafts, memoranda or term sheet prepared by any party
shall be used to construe or interpret any provision hereof or of any related
document.
18. Submission to Jurisdiction.
---------- -- ------------
Without prejudice to their respective positions and decisions
previously entered in the Pending Legal Proceedings regarding jurisdiction and
venue, each party hereto consents to the exclusive jurisdiction and venue of the
Bankruptcy Court over any action or proceeding arising out of or relating to
this Settlement Agreement, and
31
otherwise arising out of or relating to the transactions contemplated hereby,
and, further, each party (i) agrees that all claims in respect of such action or
proceeding may be heard and determined to Final Order or Final Judgment by the
Bankruptcy Court, and (ii) hereby waives any objection on the basis of forum non
----- ---
conveniens to such action or proceeding.
----------
19. Governing Law.
-------------
This Settlement Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to its
principles of conflict of laws.
20. Waiver of Provisions.
------ -- ----------
No delay or failure on the part of any of the parties
hereto to exercise any rights under the terms of this Settlement Agreement shall
waive, exhaust, or impair such party's ability to thereafter exercise such
rights or any other rights given hereunder.
21. Amendments.
----------
This Settlement Agreement may not be altered, amended or
modified in any way whatsoever except by a writing duly executed by all of the
signatories to this Settlement Agreement.
32
22. Counterparts.
------------
This Settlement Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which counterparts of this Settlement Agreement, taken
together, shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Settlement Agreement to
be executed and delivered by their duly authorized officers as of the day and
year first above written.
33
Dated: May , 1998 RG&E
--- ----
ROCHESTER GAS AND ELECTRIC CORPORATION
By:
-----------------------
Name: Xxxxxxx X. Xxxxxxx
Its: Senior Vice President
and General Counsel
Dated: May , 1998 "GE Capital"
--- -- -------
GENERAL ELECTRIC CAPITAL CORPORATION
By:
-----------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Its: Vice President
Dated: May , l998 "DEBTOR"
--- --------
KAMINE/BESICORP Allegany L.P.
By: KAMINE Allegany COGEN CO., INC.
Its: Managing Partner
By:
-----------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Its: President
"KAMINE AFFILIATES
------ ----------
Dated: May , 1998 KAMINE ALLEGANY COGEN CO., INC.
---
By:
Name: Xxxxxxx X. Xxxxxxxxxxxx
Its: President
Dated: May , 1998 BETA ALLEGANY INC.
---
By:
-----------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Its: President
Dated: May , 1998 KAMINE DEVELOPMENT, L.P.
---
By: Kamine Allegany Cogen Co., Inc.
Its: General Partner
By:
-----------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Its: President
Dated: June , 1998 KAMINE DEVELOPMENT CORP.
---
By:
-----------------------
Name: Xxxxxx X. Xxxxxx
Its: President
STATE OF NEW YORK )
: SS.:
COUNTY OF MONROE )
On the _____ day of May in the year 1998 before me personally came XXXXXXX X.
XXXXXXX to me known, who, being by me duly sworn, did depose and say that he
resides in Honeoye, New York, that he is the Senior Vice President and General
Counsel of ROCHESTER GAS AND ELECTRIC CORPORATION, the corporation described in
and which executed the above instrument; that she knows the seal of said
corporation; and that she signed her name thereto by order of the board of
directors of said corporation.
______________________
Notary Public
STATE OF CONNECTICUT )
: SS.:
COUNTY OF FAIRFIELD )
On the _____ day of May in the year 1998 before me personally came
XXXXXXX X. XXXXXXXXXXXX to me known, who, being by me duly sworn, did depose and
say that he resides in Fairfield Ct; that he is the President of Kamine Allegany
Cogen Co. Inc., a New York corporation, the managing general partner of
Kamine/Besicorp Allegany L.P. and of Kamine Development, L.P., partnerships
described in and which executed the above instrument; that he knows the seal of
said corporation; and that he signed his name thereto by order of the board of
directors of Kamine Allegany Cogen Co., Inc.
______________________
Notary Public
STATE OF CONNECTICUT )
: SS.:
COUNTY OF FAIRFIELD )
On the _____ day of May in the year 1998 before me personally came
XXXXXXX X. XXXXXXXXXXXX, to me known, who, being by me duly sworn, did depose
and say that he resides in Fairfield, Ct., that he is a Vice President of
General Electric Capital Corporation, the corporation described in and which
executed the above instrument; that he knows the seal of said corporation; and
that he signed his name thereto by order of the board of directors of said
corporation.
______________________
Notary Public
STATE OF CONNECTICUT )
: SS.:
COUNTY OF FAIRFIELD )
On the _____ day of May in the year 1998 before me personally came
XXXXXXX X. XXXXXXXXXXXX to me known, who, being by me duly sworn, did depose and
say that he resides in that he resides in Fairfield, Ct.; and that he is the
President of each of Kamine Allegany Cogen Co., Inc.; and Beta Allegany Inc.
corporations described in and which executed the above instrument; that he knows
the seal of said corporations; and that he signed his name thereto by order of
the board of directors of said corporations.
______________________
Notary Public
STATE OF NEW JERSEY )
: SS.:
COUNTY OF SOMERSET )
On the _____ day of June in the year 1998 before me personally came
Xxxxxx X. Xxxxxx to me known, who, being by me duly sworn, did depose and say
that he resides in __________________________________ that he is the President
of Kamine Development Corp., the corporation described in and which executed the
above instrument; that he knows the seal of said corporation; and that he signed
his name thereto by order of the board of directors of said corporation.
______________________
Notary Public
EXHIBIT SCHEDULE
------- --------
1 Acquisition Term Sheet
2-A RG&E/GE Capital Payment Plan
2-B RG&E Note
3 Stipulation, Adversary Proceeding
4 Stipulation, Second Adversary Proceeding
S Stipulation, KBALP Antitrust Action
6 Stipulations, WDNY Action
7 Stipulation, GE Capital Antitrust Action
8 Release, RG&E
9 Release, GE Capital
10 Release, Debtor
11 Release, Kamine Affiliates
Acquisition Term Sheet
Subject to the terms and conditions herein and in the Global Settlement
Agreement, to which this is an Exhibit:
(1) On the Effective Date,/1/ Debtor shall sell, assign, convey and
transfer to RG&E, all of Debtor's right, title and interest in the Purchased
Assets, which shall by order of the Bankruptcy Court be free and clear of all
liens, encumbrances or other Claims under Code (S) 363(f). In furtherance
thereof, Debtor shall move or incorporate in the Plan the assumption and
assignment to RG&E as of the Effective Date of the Plan (or to any other
qualified assignee that RG&E may designate and, if so designated, such entity
shall be known as RG&E for purposes of designating the entity to which property
will be transferred, effective from and after such assumption and assignment)
all of Debtor's right, title and interest in the contracts identified by RG&E as
part of the Purchased Assets, such contracts to be designated in a Schedule of
Executory Contracts to be furnished to GE Capital prior to April 30, 1998, if
and to the extent they are executory contracts
-----------------
/1/ Capitalized terms shall have the same meanings in this Term Sheet that they
have in the Global Settlement Agreement unless otherwise defined herein.
pursuant to Code (S) 365(a). Prior to Xxxxx 00, 0000, XX&X shall also designate
and furnish to GE Capital a schedule of contracts that are not executory (as
that term is used in section 365 of the Bankruptcy Code) which shall be
designated a Schedule of Contracts. If within seven (7) business days of receipt
of said Schedules, GE Capital has not objected, then the Schedules shall be
deemed accepted. However, if GE Capital objects, then RG&E and GE Capital shall
meet and negotiate in good faith to reach a commercially reasonable solution to
such objection, provided, however, in respect of any solution none of RG&E, GE
-----------------
Capital or Kamine Affiliates shall be obligated to incur any significant
additional expense.
(2) The Purchase Price shall be $15 million plus interest at the
annual rate of 7% from July 1, 1998 or such higher amount as RG&E may bid
pursuant to the procedures described in paragraph 12 hereof, payable at closing,
by wire transfer to such bank accounts and in such amounts as shall be
designated in advance of the Effective Date by GE Capital.
(3) On the terms and subject to conditions of this Acquisition Term
Sheet, on the Effective Date, Debtor shall sell, assign, convey and transfer to
RG&E, all its right, title and interest in the following personal property
2
on an "AS IS, WHERE IS" basis, except as expressly otherwise provided elsewhere
in this Agreement (collectively, the "Facility Property"):
-------------------
All tangible and intangible personal property which is
owned by Debtor or any of the Kamine Affiliates, located on
or in or used in connection with the ownership, operation
and maintenance of the Facility or the business conducted
thereon and all such personal property owned by Debtor or
acquired for installation or use in connection therewith,
wherever located, including, without limitation: (a) all
equipment; (b) all inventory; (c) all security deposits; (d)
all warranties or service contracts and other agreements
relating thereto; (e) office furnishings and supplies; (f)
all intangible property to the extent transferrable by the
Debtor with or without Bankruptcy Court approval; (g)
laboratory and testing records; (h) all licenses and permits
to the extent transferrable by the Debtor with or without
Bankruptcy Court approval, if applicable and required by
law; (i) all utility, security and other deposits and
reserve accounts made (and any refunds thereof) as security
for the fulfillment of any obligation of Debtor; (j) all
books, records, files, reports, budgets, correspondence,
manuals, promotional materials, software and intellectual
property rights related to the use, development, operation,
management, service, maintenance and leasing of the
Facility; (k) all construction contracts and construction
guaranties, if any, and other assurances of performance; (1)
all telephone numbers and directory advertising agreements
related to or used in connection with the Facility; and (m)
all drawings, plans,
3
specifications, diagrams, reports, any other architectural
or engineering work product related to the Facility.
(4) It is expressly agreed and understood that certain properties and
assets of Debtor or in which Debtor has an interest, including the Greenhouse,
the water distillation plant and all equipment used in connection therewith, and
various executory contracts, including Debtor's natural gas agreement, Debtor's
natural gas transportation agreements, the ISDA Master Agreement (Project Swap
Agreement), dated as of August 6, 1993, between Debtor and GE Capital, the
Operation and Maintenance Agreement dated as of March 1, 1993, and amended,
between Debtor and Xxxxxxx & Xxxxxxxxx Operations, Inc. and all matured and
unmatured claims and causes of action of Debtor's Estate against (a) Kamine
Affiliates, AGI, BGI, Ammerlaan or GE Capital, (b) one or more of Debtor's,
Kamine Affiliates' or BGI's past or present agents, officers, directors,
partners or employees or (c) any other person or entity constituting avoidance
claims that may be asserted under or pursuant to subchapter III of Chapter 5 of
the Bankruptcy Code (collectively, the "Excluded Assets") shall not be sold or
assigned to RG&E, and shall be retained or released by Debtor or disposed of to
others on or after the Effective Date, as provided in the Global Settlement
4
Agreement and the Plan, Prior to Xxxxx 00, 0000, XX&X and GE Capital shall agree
on a Schedule of Excluded Assets.
(5) The tangible assets included in the Purchased Assets shall be
purchased "AS IS" and "WHERE IS", but RG&E shall have inspected and examined
those assets to determine their condition and to ensure that the Purchased
Assets are adequate and suitable in accordance with general industry practices
for the purpose currently used and intended to be used. RG&E shall have
completed any such inspection, examination or due diligence by not later than
5:00 P.M. (EDT) on April 30, 1998 (the "Due Diligence Date"). If by the Due
Diligence Date, GE Capital and the Debtor shall not have received written notice
of any deficiency, then RG&E shall be deemed to be satisfied with its
inspection, examination and due diligence findings. However, if GE Capital and
the Debtor by such time shall have received a written notice of deficiency, then
RG&E and GE Capital shall meet and negotiate in good faith to reach a
commercially reasonable solution to such deficiency. Debtor shall use its
reasonable best efforts to maintain, or cause to be maintained, the Purchased
Assets in their condition as of the execution and delivery of this Settlement
Agreement, ordinary wear and tear and any effect resulting from the operation of
the Facility at the request of RG&E excepted.
5
(6) Each of Debtor and Kamine Affiliates covenants it will promptly
furnish, or cause to be furnished, to RG&E and its representatives all data and
information relating to the Purchased Assets that may be reasonably requested
through the Effective Date. Debtor shall, through the Effective Date upon the
reasonable request of RG&E afford RG&E reasonable access to the Facility and the
Facility Property. Debtor shall, through the Effective Date upon the reasonable
request of RG&E, cooperate, consult with and assist RG&E and its representatives
with respect to any inspection, examination or review of the Purchased Assets.
At the request of RG&E and upon at least one business day advance notice,
through the Effective Date the Debtor will from time to time give or cause to be
given to RG&E and its representatives (a) access during normal business hours to
all of the Purchased Assets and related operations and (b) all information
concerning the Purchased Assets as RG&E may reasonably request.
(7) At closing, Debtor shall execute or use its reasonable best
efforts to obtain (as applicable), any written consents, approvals,
authorizations, assignments, deeds, bills of sale or other instruments of
conveyance (collectively "Consents and Instruments of Transfer") in
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form reasonably satisfactory to RG&E, to transfer to RG&E, and vest in RG&E good
and marketable title to all of the Debtor's right, title and interest in and to
the Purchased Assets, which shall by order of the Bankruptcy Court be free and
clear of liens, encumbrances or other Claims under Code (S) 363(f), and to
substitute RG&E as lessee of any Purchased Assets under lease to Debtor. It is
expressly understood and agreed that to the extent RG&E or its designee becomes
the owner, lessee or entity entitled to become the owner of the real property on
which the Greenhouse is situated under an installment sale agreement or other
agreement with the XXX, RG&E or such designee as owner of the real property
shall at the election of GE Capital subdivide and convey such real property or
(as lessee of the real property) shall enter into a lease thereof for a term to
be mutually agreed upon at a nominal rental, as applicable, for the benefit of
GE Capital and/or its designee-owner of the Greenhouse.
To the extent that RG&E reasonably determines, before or after the
closing, that any additional Consents and Instruments of Transfer are necessary
in order to vest all of Debtor's right, title and interest in the Purchased
Assets in RG&E, Debtor shall execute or use its reasonable best efforts to
obtain any such Consent or Instrument of Transfer. Such Consents and Instruments
of Transfer may not
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require any change in the terms and conditions of the Global Settlement
Agreement unless consented to by the parties. GE Capital and the Kamine
Affiliates shall use their respective reasonable best efforts (without incurring
any significant expenses to do so) to assist the Debtor in respect of the
performance of its obligations pursuant to paragraph 7 hereof.
(8) It is expressly agreed and understood that, RG&E shall not
assume, pay or discharge, or in any respect be liable for any liability,
obligation, commitment or expense of Debtor or of any Kamine Affiliate
attributable to the Purchased Assets including any federal, state or local sales
taxes, accrued up to closing or relating to the transfer of the Purchased
Assets. At or after the closing, at the request of RG&E and upon five business
days advance notice, GE Capital shall execute and deliver UCC-3 termination
statements and discharges and/or releases of liens of mortgages and other
instruments and documents, in form and substance satisfactory to RG&E and its
counsel evidencing the release, discharge and termination of all liens or
encumbrances held by GE Capital on the Purchased Assets. Debtor has paid or will
pay all taxes, levies and assessments required to be paid by Debtor as of the
Effective Date, the non-payment of which would result in the
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imposition of a lien or a charge against the Purchased Assets or RG&E as owner
of the Purchased Assets.
(9) Any item of Purchased Assets which includes a written or oral
obligation which arises or accrues after the Effective Date shall be set forth
on a separate schedule prior to closing. RG&E shall in no event assume or be
liable for any Claim, liability or legal obligation which accrues on or prior to
the Effective Date not specifically assumed in writing.
(10) Conditions To Closing.
The obligation of the parties hereto to the transactions
contemplated hereby shall be the satisfaction or waiver of each of
the conditions (the "Closing Conditions")
(i) the satisfaction or waiver of each of the Closing
Conditions set forth in the Global Settlement Agreement;
(ii) all of the Purchased Assets are owned by Debtor in fee
simple or are subject to an installment sale agreement with the XXX,
except for that which is leased to Debtor; and either any and all
rights of third parties to the Purchased Assets that are owned by
Debtor shall
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have been terminated or, in the case of the XXX, it has agreed to
amend the installment sale agreement with the Debtor to reflect terms
acceptable to RG&E and consented to the assignment of such agreement,
as amended, to RG&E;
(iii) absence of any material change in the condition of the
Purchased Assets (ordinary wear and tear from April 30, 1998 and
any effect from the operation of this facility prior to the Effective
Date at the request of RG&E excepted), including without limitation
any damage, destruction or loss, whether or not covered by insurance,
which has or will have a materially adverse effect on the Purchased
Assets; and
(iv) Debtor shall have delivered to RG&E the Consents and
Instruments of Transfer in form and substance reasonably satisfactory
to RG&E; and
The simultaneous closing of the transactions contemplated hereby and
by the Global Settlement Agreement and the Plan shall occur within five (5)
business days
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following the date on which the last Closing Condition is satisfied or waived
(the date of such closing being the "Effective Date") . The closing shall be at
the offices of Nixon, Hargrave, Devans & Xxxxx LLP, 437 Madison Avenue, New
York, New York or such other location as the parties may agree. Until closing,
Debtor shall bear the risk of loss from any damage or destruction of the
Purchased Assets.
(11) Related Transactions.
(a) Debtor shall convey its interest in the Greenhouse and all
equipment used in connection therewith to GE Capital or its designee. In
addition to the matters covered by the second sentence of Section 7 hereof, RG&E
shall in good faith provide GE Capital or its designee with such easements,
rights of way, permit rights, rights to water supply or other similar rights as
are reasonably necessary to have access to and operate the Greenhouse.
(b) Following the Effective Date, RG&E as the owner of the
Facility, shall have no obligation to supply thermal energy to the Greenhouse or
to operate the Facility; and nothing herein shall be deemed to be an implied
commitment to operate the Facility unless RG&E as owner, in its sole and
absolute discretion, from time to time, elects to do so.
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(c) Debtor may store the water distillation equipment at or
adjacent to the Facility without expense for 90 days following the Effective
Date. Such water distillation equipment shall be removed from the Facility
premises within 90 days following the Effective Date.
(12) Alternative Bidding Procedures.
The sale of the purchased Assets is subject to any Competitive Bid
made at or prior to the commencement of the hearing to consider approval of the
Disclosure Statement (the "Hearing"). Any such Competitive Bid must contain the
terms set forth in the Acquisition Term Sheet, with the exception of the terms
relating to the purchase price to be paid; must be in writing; and shall be
received by GE Capital and Debtor not later than the third business day
preceding the commencement of the Hearing.
Debtor shall not recommend a Competitive Bid unless. (a) the value of
the Competitive Bid is at least $1 million in excess of the Purchase Price; (b)
the competing bidder makes a deposit with Debtor of at least $1,600,000 upon
submission of a Competing Bid; (c) the Competitive Bid is accompanied by recent,
written financial statements or other financial disclosure which demonstrates
the capability and financial wherewithal of the competing bidder to close and
consummate the Competitive Bid; and (d) the transaction
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is not subject to or conditioned upon the obtaining of financing.
In the event a Competitive Bid is timely made which Debtor and GE
Capital jointly determine to be a higher and better offer, RG&E may improve its
initial bid at any time prior to the conclusion of the Hearing so as to match
the Competitive Bid. If so matched, then additional bidding procedures that are
not inconsistent with the foregoing may be determined by the Bankruptcy Court at
or before the Hearing.
In the event there is a successful Competitive Bid, then the
difference (i) between the successful higher bid and (ii) $15 million plus
interest on $15 million from July 1, 1998 to the Effective Date calculated at
the annual rate of 7%, shall be applied first to reduce the $10 million cash
payment dueon the Effective Date, and then to payments in the Payment Plan in
direct order of maturity.
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