1
EXHIBIT 10.2
SECOND AMENDMENT TO WARRANT PURCHASE AGREEMENT
This Second Amendment to Warrant Purchase Agreement is entered into as of
September 27, 1996, by and between Great Bay Power Corporation, a New Hampshire
corporation (the "Company"), and PECO Energy Company, a Pennsylvania corporation
(the "Purchaser").
WHEREAS, the Company and the Purchaser are parties to a Warrant Purchase
Agreement dated as of November 3, 1995, as amended by a First Amendment to
Warrant Purchase Agreement dated as of November 18, 1995 (the "Warrant Purchase
Agreement") in which the Company agreed to sell to Purchaser a warrant to
purchase 420,000 shares of the Company's Common Stock ("Warrant No. 1"); and
WHEREAS, the Purchaser purchased the Warrant No. 1 on February 14, 1996;
and
WHEREAS, since the date that the Purchaser purchased Warrant No. 1, the
Company has purchased certain of its own shares so that if the Purchaser
exercised Warrant No. 1., the Purchaser would own more than 5% of the issued and
outstanding shares of the Company; and
WHEREAS, the Company and the Purchaser desire that the Purchaser not own
more than 5% of the issued and outstanding shares of the Company;
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
hereby agree as follows:
1. In full and complete substitution of Warrant Xx. 0, Xxxxxxx Xx. 0 in the
form attached hereto as Exhibit A ("Warrant No. 2") shall be issued by the
Company to the Purchaser. For all purposes, Warrant No. 2 shall constitute the
Warrant Purchase Shares as used in the Warrant Purchase Agreement and the term
Warrant Purchase Shares as used in the Warrant Purchase Agreement shall mean and
refer to the 417,800 shares of the Company's Common Stock, $.01 par value per
share, which are the subject of Warrant No. 2. The Purchaser shall return the
original of Warrant No. 1 to the Company for destruction by the Company.
2. Except as modified hereby, the Warrant Purchase Agreement remains in
full force and effect.
PECO ENERGY COMPANY GREAT BAY POWER CORPORATION
By: Xxxxx X. Xxxxxxx By: J Xxxxxxxxxxx
Date: 9/27/96 Date: 9/27/96
1
2
EXHIBIT A
---------
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT ARE SUBJECT TO THE RESTRICTIONS
(INCLUDING RESTRICTIONS IMPOSED UNDER APPLICABLE SECURITIES LAWS)
ON TRANSFER SET FORTH IN SECTIONS 4 AND 11 OF THIS WARRANT. THIS
WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER APPLICABLE STATE SECURITIES STATUTES.
Warrant No. 2 Number of Shares: 417,800
(subject to adjustment)
Date of Issuance: September 27, 1996
GREAT BAY POWER CORPORATION
Common Stock Purchase Warrant
-----------------------------
(Void after September 30, 1996)
Great Bay Power Corporation, a New Hampshire corporation (the "Company"),
for value received, hereby certifies that PECO Energy Company, a Pennsylvania
corporation (the "Registered Holder"), is entitled, subject to the terms set
forth below and the terms of the Warrant Purchase Agreement, upon exercise of
this Warrant to purchase from the Company, at any time on or after the Approval
Date, as hereafter defined, and on or before the Warrant Expiration Date, as
hereafter defined, at not later than 5:00 p.m. (Boston, Massachusetts time),
417,800 shares of the Company's Common Stock .01 par value (the "Common Stock")
at a purchase price per share equal to the greater of (x) $9.75 (as adjusted
pursuant to Section 2, the "Fixed Component") and (y) the highest price at which
a share of the Company's Common Stock has traded on the National Association of
Securities Dealers National Market from the Approval Date to the date on which
the Warrant is exercised (as adjusted pursuant to Section 2, the "Variable
Component").
The shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to the provisions
of this Warrant, are hereinafter referred to as the "Warrant Shares" and the
"Purchase Price," respectively. This Warrant shall be of no further force and
effect, unless the Approval Date occurs on or before May 31, 1996. Approval Date
shall mean the date when an amendment to the Company's Certificate of
Incorporation is filed with the New Hampshire Secretary of State increasing the
number of the Company's authorized shares of Common Stock to a number of
sufficient to permit the Company to reserve the Warrant Shares for issuance
pursuant to this Warrant in the event of exercise by the Registered Holder.
For purposes of this Warrant, Warrant Expiration Date shall mean the
earliest to occur of the following: (1) September 30, 1996, if the Seabrook
Capacity Factor for the period from the Service Commencement Date through
September 15, 1995 is equal to or greater than 60%; (2)
2
3
December 31, 1996, if the Seabrook Capacity Factor for the period from the
Service Commencement Date through December 15, 1996 is equal to or greater than
60%; (3) two (2) business days following the first date after December 31, 1996
that the Seabrook Capacity Factor for the immediately preceding twelve months is
equal to or greater than 60%; or (4) December 31, 1997. Service Commencement
Date and Seabrook Capacity Factor shall have the respective meanings ascribed to
such terms in the Services Agreement dated November 3, 1995, between the Company
and the Registered Holder hereof.
1. Exercise.
--------
(a) This Warrant may be exercised by the Registered Holder, in whole
but not in part, by surrendering this Warrant, with the purchase form appended
hereto as EXHIBIT I duly executed by the registered Holder or by the Registered
Holder's duly authorized attorney, at the principal office of the Company, or at
such other office or agency as the Company may designate, accompanied by payment
in full, in lawful money of the United States, of the Purchase Price payable in
respect of the Warrant Shares, less $1,000,000.
(b) The exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company as provided in Section 1(a) above. At
such time, the person or persons in whose name or names any certificates for
Warrant Shares shall be issuable upon such exercise as provided in Section 1(c)
below shall be deemed to have become the holder or holders of record of the
Warrant Shares represented by such certificates.
(c) As soon as practicable after the exercise of this Warrant, the
Company, at its expense, will cause to be issued in the name of, and delivered
to, the Registered Holder, or as the Registered Holder (upon payment by the
Registered Holder of any applicable transfer taxes) may direct a certificate or
certificates for the number of full Warrant Shares to which the Registered
Holder shall be entitled upon such exercise plus, in lieu of any fractional
share to which the Registered Holder would otherwise be entitled, cash in an
amount determined pursuant to Section 3 hereof.
2. Adjustments.
-----------
(a) If outstanding shares of the Company's Common Stock shall be
subdivided into a greater number of shares or a dividend in Common Stock shall
be paid in respect of Common Stock, the Fixed Component of the Purchase Price in
effect immediately prior to such subdivision or at the record date of such
dividend shall, simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend, be proportionately reduced.
If outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Fixed Component of the Purchase Price in effect immediately prior to
such combination shall, simultaneously with the effectiveness such combination,
be proportionately increased. When any adjustment is required to be made in the
Fixed Component of the Purchase Price, the number of Warrant Shares purchasable
upon the exercise of this Warrant shall be changed to the number determined by
dividing (i) an amount equal to the number of shares issuable upon the exercise
of this Warrant immediately prior to such adjustment, multiplied by the Fixed
Component of the Purchase Price in effect immediately prior to such adjustment,
by (ii) the Fixed Component of the Purchase Price in effect immediately after
such adjustment. At the time of exercise of the Warrant, the Variable Component
of the Purchase Price shall equal
3
4
the highest of the Period High Prices, as adjusted pursuant to the last sentence
of this paragraph. Period High Prices means the highest price at which a share
of the Company's Common Stock has traded on the National Association of
Securities Dealers National Market for each of the following periods: (A) from
the Approval Date to the first adjustment of the Fixed Component; (B) each
period from an adjustment to the Fixed Component to the next such adjustment
following the first adjustment of the Fixed Component; and (C) the period from
the last adjustment to the Fixed Component immediately prior to the exercise of
the Warrant. Each Period High Price shall be adjusted in the same proportion as
the adjustment to the Fixed Component each time that the Fixed Component was
adjusted subsequent to the time that such Period High Price was in effect.
(b) If there shall occur any capital reorganization or
reclassification of the Company's Common Stock (other than a change in par value
or a subdivision or combination as provided for in Section 2(a) above), or any
consolidation or merger of the Company with or into another corporation, or a
transfer of all or substantially all of the assets of the Company, then, as part
of any such reorganization, reclassification, consolidation, merger or sale, as
the case may be, lawful provision shall be made so that the Registered Holder of
this Warrant shall have the right thereafter to receive upon the exercise hereof
the kind and amount of shares of stock or other securities or property which the
Registered Holder would have been entitled to receive if, immediately prior to
any such reorganization, reclassification, consolidation, merger or sale, as the
case may be, the Registered Holder had held the number of shares of Common Stock
which were then purchasable upon the exercise of this Warrant. In any such case,
appropriate adjustment (as reasonably determined in good faith by the Board of
Directors of the Company) shall be made in the application of the provisions set
forth herein with respect to the rights and interests thereafter of the
Registered Holder of this Warrant, such that the provisions set forth in this
Section 2 (including provisions with respect to adjustment of the Purchase
Price) shall thereafter be applicable, as nearly as is reasonably practicable,
in relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of this Warrant.
(c) When any adjustment is required to be made in the Purchase Price,
the Company shall promptly mail to the Registered Holder a certificate setting
forth the Purchase Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Such certificate shall also
set forth the kind and amount of stock or other securities or property into
which this Warrant shall be exercisable following the occurrence of any of the
events specified in Section 2(a) or (b) above.
3. FRACTIONAL SHARES. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the mean between the low bid and high asked
prices of the Warrant Shares on the over-the-counter market as reported by the
National Association of Securities Dealers Automated Quotations System or the
closing market price of the Warrant Shares on a national securities exchange or
the last reported sales price on the NASDAQ National Market on the trading day
immediately prior to the date of exercise, whichever is applicable, or if none
is applicable, then on the basis of the then market value of the Warrant Shares
as shall be reasonably determined in good faith by the Board of Directors of the
Company.
4. Requirements for Transfer.
-------------------------
4
5
(a) This Warrant may only be transferred to the extent permitted by
Section 9(b). The Warrant Shares shall not be sold or transferred unless either
(i) they first shall have been registered under the Securities Act, or (ii) the
Company first shall have been furnished with an opinion, in form and substance
satisfactory to the Company, of legal counsel satisfactory to the Company to the
effect that such sale or transfer is exempt from the registration requirements
of the Securities Act.
(b) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may
not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such securities are registered
under such Act or an opinion, in form and substance satisfactory
to the Company, of counsel satisfactory to the Company is
obtained to the effect that such sale or transfer is exempt from
the registration requirements of the Securities Act."
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the Registered representing any Warrant
Shares, at the request of the Registered Holder, at such time as they become
eligible for resale pursuant to Rule 144(k) under the Securities Act or upon
registration.
5. NO IMPAIRMENT. The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holder of
this Warrant against impairment.
6. Notices of Record Date, etc. In case:
---------------------------
(a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right; or
(b) of any capital reorganization of the Company, any reclassification
of the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the surviving entity), or any transfer of all or substantially
all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is
5
6
to be taken for the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up is to take place, and
the time, if any which is to be fixed, as of which the holders of record of
Common Stock (or such other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at
least ten (10) days, or if such advance notice is not practicable, then such
shorter period as may be practicable, prior to the record date or effective date
for an event specified in Section 6(a), (b) or (c).
7. RESERVATION OF STOCK. On and after the Approval Date the Company will at
all times reserve and keep available, solely for issuance and delivery upon the
exercise of this Warrant, such number of Warrant Shares and other stock,
securities and property, as from time to time shall be issuable upon the
exercise of this Warrant.
8. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
9. Transfers, etc.
--------------
(a) The Company will maintain a register containing the name and
address of the Registered Holder of this Warrant. The Registered Holder may
change its address as shown on the Warrant register by written notice to the
Company requesting such change.
(b) Subject to the provisions of Section 4 hereof, this Warrant and
all rights hereunder are transferable, in whole but not in part, solely to an
Affiliate, as such term is defined in Rule 12b-2 under the Security Exchange Act
of 1934, as amended, of the Registered Holder upon surrender of this Warrant
with a properly executed assignment (in the form of EXHIBIT II hereto) at the
principal office of the Company.
(c) Until any transfer of this Warrant is made in the Warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; provided, however, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
10. GIVING OF NOTICES, ETC. All notices and other communications from the
Company to the Registered Holder of this Warrant shall be in writing and shall
be delivered and effective in accordance with the terms of the Warrant Purchase
Agreement between the Company and Purchaser of even date.
6
7
11. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
12. CHANGE OR WAIVER. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
13. HEADINGS. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.
14. GOVERNING LAW. This Warrant will be governed by an construed in
accordance with the internal laws (and not the laws of conflicts) of the State
of New Hampshire.
15. NO THIRD PARTY BENEFICIARIES. This Warrant shall not confer any rights
or remedies upon any person other than the signatories hereto and their
respective successors and permitted assigns.
16. ENTIRE AGREEMENT. Except for the Warrant Purchase Agreement, this
Warrant constitutes the entire agreement among the signatories hereto and
supersedes any prior understandings, agreements or representations by or among
the signatories hereto, written or oral, that may have related in any way to the
subject matter hereof.
17. COUNTERPARTS. This Warrant may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
18. NOUNS AND PRONOUNS. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and
the singular form of names and pronouns shall include the plural and vice-versa.
19. SEVERABILITY. Any provision of this Warrant that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
[Corporate Seal] GREAT BAY POWER CORPORATION
ATTEST: By:
---------------------------------
Title: President
-------------------------------- Address: Cocheco Falls Millworks
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000-0000
AGREED AND ACCEPTED:
PECO ENERGY COMPANY
7
8
By:
---------------------------------
Title: Vice President
Address: PECO Energy Company - Power Team
0000 Xxxxxxxxxxx Xxxx.
Xxxx xx Xxxxxxx, XX 00000
8
