EXHIBIT X-0
Xxxxxx 00, 0000
Xxxxxxxxx Power & Light Company
000 Xxxx Xxxxxxxxxx Xxxxxx
P. O. Xxx 000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxx
Gentlemen:
Re: Wisconsin River Power Company Capital Stock
This letter is intended to set forth our understanding
respecting the ownership of Wisconsin River Power Company ("WRPCO"). As you are
aware, Wisconsin Public Service Corporation ("WPSC") is proposing to enter into
an Agreement for Purchase and Sale of Stock dated as of August 24, 2000 with
Consolidated Water Power Company ("CWPCO") to purchase all of the shares of
capital stock of WRPCO presently owned by CWPCO, (the "WRPCO Stock Purchase
Agreement"). If WPSC completes this purchase, it is willing to sell one-half of
those shares to Wisconsin Power and Light Company ("WP&L") at the same price and
on the same terms as are applicable to WPSC's purchase of the shares from CWPCO
under the WPRCO Stock Purchase Agreement. Accordingly WPSC hereby grants to WP&L
the option to purchase (the "Option") one-half of the shares of capital stock of
WRPCO which WPSC purchases from CWPCO (the "Option Shares") subject to the
following conditions:
1. Option Price. WP&L agrees to pay the same per share price
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for the Option Shares upon exercise of the Option as WPSC
pays to CWPCO for the Option Shares under the WRPCO Stock
Purchase Agreement, and the purchase shall be subject to
the same payment terms as are applicable to the purchase
of the WRPCO shares by WPSC from CWPCO under the WRPCO
Stock Purchase Agreement.
2. Option Term. The option granted hereunder will be
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exercisable commencing on the closing date for the
purchase of the WRPCO shares by WPSC from CWPCO under the
WRPCO Stock Purchase Agreement and ending on March 31,
2001 at which time the option will expire (the "Option
Term"), provided, however, if at March 31, 2001 WP&L, for
reasons beyond its control, has not obtained all required
regulatory approvals for its purchase of the Option Shares
and the applications for such approvals are still pending,
the Option Term shall be extended until 10 days after all
such approvals have been obtained or until a final denial
of such approvals has been made but in no event shall the
Option be exercisable after August 31, 2001.
3. Conditions Precedent to Option Exercise.
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(a) WPSC consummates the purchase of all of the shares of
WRPCO presently owned by CWPCO;
(b) WP&L receives all required governmental approvals to
purchase the Option Shares from WPSC.
WPSC and WP&L agree that WPSC will be the operator of the
WPRCO facilities and will advise and consult with WP&L with respect to operating
and financial matters relating to WRPCO and its facilities until WPSC and WP&L
reach a definitive agreement with respect to WRPCO operating and financial
matters (the "WRPCO Operating Agreement").
WPSC agrees that pending execution of an WRPCO Operating
Agreement by WPSC and WP&L, WPSC will not cause WRPCO to pay any dividends other
than (i) normal dividends in accordance with past practice and (ii) any amounts
distributed to CWPCO (or to WPSC for payment to CWPCO) in payment of the
deferred portion of the purchase price for the WRPCO shares pursuant to Section
1.1(b) of the WRPCO Stock Purchase Agreement.
WP&L agrees that it will promptly apply for all regulatory
approvals which it requires for the purchase by it of the Option Shares.
WP&L agrees that at or prior to the Closing under the WRPCO
Stock Purchase Agreement, it will (i) join with WPSC, CWPCO and WRPCO in
amending the Amended and Restated Power Purchase Agreement made as of September
1, 1985 by and among CWPCO, WP&L, WPSC and WRPCO in accordance with the
requirements of Sections 1.3(f) and 1.4(f) of the WRPCO Stock Purchase
Agreement; (ii) join with WPSC in terminating as to CWPCO the WRPCO stockholder
agreement among CWPCO, WP&L and WPSC as provided in Sections 1.3(d) and 1.4(d)
of the WRPCO Stock Purchase Agreement; and (iii) execute and deliver the Interim
Services Agreement substantially in the form attached as Exhibit A to the WRPCO
Stock Purchase Agreement.
If you are in agreement with the foregoing, please so indicate
on the enclosed copy of this letter and return it to the undersigned.
WISCONSIN PUBLIC SERVICE CORPORATION
By
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Wisconsin Power & Light Company agrees to and accepts the
foregoing on the terms stated.
WISCONSIN POWER & LIGHT COMPANY
By
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