On Black Hills Corporation Letterhead]
Exhibit
10.1.6
[On
Black
Hills Corporation Letterhead]
October
3, 2007
Xxxxxxx
Xxxxxxx
Chairman
and Chief Executive Officer
Great
Plains Energy Incorporated
0000
Xxxxxx Xxxxxx
Kansas
City, Missouri 64106
Xxxxxxx
X. Xxxxx
Chairman,
President and Chief Executive Officer
Aquila,
Inc.
00
Xxxx
0xx
Kansas
City, Missouri 64105
Dear
Xx.
Xxxxxxx and Xx. Xxxxx:
In
connection with the Agreement and Plan of Merger, the Asset Purchase Agreement
and the Partnership Interests Purchase Agreement, each dated as of February
6,
2007, by and among Aquila, Inc. and its wholly-owned subsidiary Aquila Colorado,
LLC (together “Aquila”), Great Plains Energy Incorporated and its
wholly-owned subsidiary, Xxxxxxx Acquisition Corp. (together “Great
Plains”), and Black Hills Corporation (“Black Hills”), the parties,
in an attempt to clarify certain issues that have arisen under such agreements,
hereby agree as follows:
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1)
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With
respect to the office building located at 0000 Xxxxxxx Xxxxxx, Xxxxx,
Xxxxxxxx, upon closing of the transactions contemplated by the Asset
Purchase Agreement, Aquila shall assign to Black Hills, and Black
Hills
shall assume, the Office Lease dated June 15, 1987, as amended, between
Aquila and MZ Nebraska Partners, and any subleases relating to such
leased
office space, as a part of the Purchased Assets and Assumed Obligations
(as those terms are defined in the Asset Purchase
Agreement). Aquila shall retain all of its equity interests in
its subsidiary, UtilCo Group Inc., a general partner in MZ Nebraska
Partners.
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2)
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With
respect to an approximately fourteen mile long, 12” pipeline known as the
“Linc Line” or “PNG pipeline,” which is an intrastate natural gas pipeline
connecting from an interstate natural gas pipeline to the Lincoln,
Nebraska gas distribution system, at the closing of the transactions
contemplated by the Asset Purchase Agreement, Aquila shall cause
its
subsidiary that owns such pipeline to wind-up and dissolve, and Aquila
shall assign to Black Hills all of its right, title and interest
in and to
the PNG pipeline and all related easements, rights-of-way, franchises
and
equipment as a part of the Purchased Assets and Assumed Obligations
(as
those terms are defined in the Asset Purchase
Agreement).
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3)
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With
respect to Natural/Peoples Limited Liability Company, a Wyoming limited
liability company owning a compressed natural gas fueling station
in
Castle Rock, Colorado in which Aquila has a 50% interest, at the
closing
of the transactions contemplated by the Partnership Interests Purchase
Agreement, Aquila shall cause such interest to be assigned as part
of the
Purchased Assets and Assumed Obligations (as those terms are defined
in
the Partnership Interests Purchase
Agreement).
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4)
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With
respect to approximately $2.8 million in insurance proceeds available
to
Aquila from AEGIS for the reimbursement of future costs of remediation
of
environmental impacts relating to certain manufactured gas plants
currently or formerly owned by Aquila (or its predecessors in interest),
including manufactured gas plant sites to be acquired by Black Hills
and
Great Plains, each of Black Hills and Great Plains hereby acknowledges
receipt of a SEC 96-1 Estimated Costs of MGP Liability as of 12/31/06
of
Aquila (“MGP Spreadsheet”). Based on the probable costs
identified for each site listed in such MGP Spreadsheet, Aquila and
Great
Plains agree to maintain and make available $980,000 of such amount
for
reimbursement of remediation costs, if any, incurred by Black Hills
after
the date of closing of the Asset Purchase Agreement associated with
the
manufactured gas plants identified in the MGP Spreadsheet and located
in
Kansas or Iowa. This amount would be reduced by any spending on
the sites in these two states that is submitted to and paid by AEGIS
prior
to closing. Any contributions from other potentially
responsible parties received prior to the date of closing of the
Asset
Purchase Agreement for remediation costs for the manufactured gas
plants
identified in the MGP Spreadsheet shall be allocated to, and paid
to,
Black Hills, if located in Nebraska, Kansas or Iowa, and allocated
to, and
retained by, Aquila, if located in Missouri, upon the date of closing
of
the Asset Purchase Agreement. Any contributions from other
potentially responsible parties received after the date of closing
of the
Asset Purchase Agreement for the sites in Nebraska, Kansas or Iowa,
shall
be allocated to, and paid to, Black Hills, and for the sites in Missouri,
shall be allocated to, and retained by,
Aquila.
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5)
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With
respect to certain software applications for which Aquila holds licenses
from third parties, and without waiving or releasing any claims that
any
of the parties may have under the Asset Purchase Agreement or Partnership
Interests Purchase Agreement, Black Hills, Aquila and Great Plains
agree
to work collaboratively to identify the software applications subject
to
licenses with third parties, and to use commercially reasonable efforts
(which shall not, however, require Great Plains, Black Hills or Aquila
to
make any payments to licensors) to obtain the consent or approval
of the
licensors of such software applications toenable transfer at closing
of
the Asset Purchase Agreement of licenses from Aquila to Black Hills
that
are not contemplated to be utilized by Great Plains after the closing
of
the Asset Purchase
Agreement.
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* * *
If
the
foregoing meets with your approval, please indicate your acceptance and
agreement by signing and returning the accompanying copy of this
letter.
Very
truly yours,
BLACK
HILLS CORPORATION
/s/
Xxxxxx X. Xxxxxxx
Xxxxxx
X.
Xxxxxxx
Signature
Page to October 3, 2007 Letter Agreement
ACCEPTED
AND AGREED:
GREAT
PLAINS ENERGY INCORPORATED
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By:
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/s/
Xxxxx Xxxxxxx
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Name:
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Xxxxx
Xxxxxxx
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Title:
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Executive
Vice President - Finance and Strategic Development and
CFO
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XXXXXXX
ACQUISITION CORP.
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By:
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/s/
Xxxx X. Xxxxxxx
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Name:
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Xxxx
X. Xxxxxxx
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Title:
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Secretary
and Treasurer
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AQUILA,
INC.
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By:
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/s/
Xxxxxxx X. Xxxxx
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Name:
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Xxxxxxx
X. Xxxxx
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Title:
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Chairman
and Chief Executive Officer
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AQUILA
COLORADO, LLC
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By:
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/s/
Xxxx Xxxx
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Name:
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Xxxx
Xxxx
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Title:
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President
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