OYSTER CREEK AGREEMENT
This Oyster Creek Agreement (this "Agreement"), effective as of February
17, 1997, is by and among Destec Energy, Inc. ("Destec"), a Delaware
corporation, The Dow Chemical Company ("Dow"), a Delaware corporation and NGC
Corporation ("NGC"), a Delaware corporation.
WITNESSETH:
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WHEREAS, Oyster Creek Limited (the "Partnership"), a Texas
limited partnership, which was formed pursuant to an Agreement of Limited
Partnership, dated May 28, 1991, as amended and restated by the Amended and
Restated Agreement of Limited Partnership (the "Restated Partnership
Agreement"), dated September 9, 1992, by and among OCG CoGen, Inc. ("DGP"), a
Delaware corporation, Oyster Creek CoGen ("DLP"), a Delaware corporation
(collectively referred to in this Agreement as the "Destec Partners"),
Transco Oyster Creek Company, a Delaware corporation and TEVCO Cogeneration
Company, a Delaware corporation, has entered into that certain Ground Lease
and Agreement (the "Ground Lease"), dated as of August 31, 1992, by and
between Dow and the Partnership; and
WHEREAS, pursuant to the Ground Lease the Partnership has constructed a
cogeneration facility upon certain leased premises located within Dow's
manufacturing complex at or near Oyster Creek, Texas (the "Project"); and
WHEREAS, DGP and DLP are each a wholly owned subsidiary of Destec, the
majority of the voting securities of which are owned by Dow; and
WHEREAS, NGC desires to acquire Destec pursuant to an Agreement and Plan
of Merger, dated February 17, 1997, by and among Destec, Dow, NGC and NGC
Acquisition Corporation II (the "Acquisition"); and
WHEREAS, pursuant to an Option Agreement, dated August 31, 1992 (the
"Original Option Agreement"), DGP and DLP granted Dow various rights,
including without limitation, an option to purchase, on the terms and
conditions set forth therein, the partnership interests of DGP and DLP (the
"Original Option"), as such interests are restated pursuant to the Restated
Partnership Agreement (the "Subject Interests"); and
WHEREAS, pursuant to the Original Option Agreement, upon the
consummation of the Acquisition, Dow has the right to exercise the Original
Option and purchase from DGP and DLP the Subject Interests; and
WHEREAS, in order to induce Dow to waive its right
to exercise the Original Option upon the consummation of the Acquisition, the
parties are entering into this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the receipt and sufficiency of which are
mutually acknowledged, the parties agree as follows:
1. Upon the consummation of the Acquisition, Dow hereby waives its
right to exercise its option under Section 1(a) of the Original Option
Agreement (but no other rights under the Original Option Agreement).
2. NGC and Destec agree that, from and after the closing of the
Acquisition, Destec shall not, directly or indirectly, sell or transfer any
or all of the stock of the Destec Partners (the "Partners Stock") other than
to an affiliate of Destec (which shall then be bound by this Agreement)
unless Destec has given Dow a right of first refusal with respect to the
Partners Stock on the following terms:
(a) Prior to presenting Dow with a specific proposal from a party
not affiliated with Destec to purchase the Partners Stock, Destec shall give
Dow at least 14 days written notice that Destec is considering a sale of the
Partners Stock and the identity and address of the prospective buyer or
buyers (collectively referred to as, the "Prospective Buyer"). The
Prospective Buyer must have sufficient financial resources to consummate a
transaction.
(b) At any time after the period described in subparagraph (a), if
Destec has received a bona fide written proposal to purchase the Partners
Stock which is not subject to financing conditions from a Prospective Buyer
which Destec wishes to accept, Destec shall furnish Dow with a copy of such
proposal and shall offer to sell the Partners Stock to Dow on substantially
the same terms and conditions as set forth in such proposal. Destec's offer
to sell the Partners Stock to Dow is referred to herein as the "Offer". Dow
shall then have 14 days in which to decide to accept such Offer. If Dow does
not accept such Offer within that 14-day period, Destec shall have the right,
for the next 90 days, to sell the Partners Stock to the Prospective Buyer on
terms no more favorable to the Prospective Buyer than those set forth in the
Offer.
(c) Destec shall not present Dow with more than two Offers in any
12-month period.
3. Any notice, request, or other communication given or made pursuant
to this Agreement shall be effective when received and shall be in writing
and shall be hand delivered or sent by mail, courier, or facsimile or other
electronic communication, addressed as follows:
NGC
NGC Corporation
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
DESTEC
0000 XxxxXxxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
THE DOW CHEMICAL COMPANY
Texas Operations - Legal Department
APB Building
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxx 00000-0000
Attention: Division Counsel
Facsimile: (000) 000-0000
or in each case to such other person or address or addresses as one party may
notify in writing to the other.
4. The parties to this Agreement agree that Section 13.1(b) of the
Restated Partnership Agreement shall not be amended without the prior written
consent of Dow.
5. This Agreement shall not be construed to modify or eliminate rights
of the parties contained in other agreements, including without limitation
the Ground Lease or the Original Option (other than Dow's rights to exercise
its option under Section 1(a) of the Original Option Agreement upon the
consummation of the Acquisition).
IN WITNESS WHEREOF, the parties to this Agreement have executed multiple
copies of this Oyster Creek Agreement to be effective as of the date first
above written.
THE DOW CHEMICAL COMPANY
By: /s/ X.X. Xxxxxxxxx
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Name: X.X. Xxxxxxxxx
Title: Corporate Director,
Mergers & Acquisitions
DESTEC ENERGY, INC.
By:
/s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
NGC CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Senior Vice President
and General Counsel
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