___________________________________________
EQUITY AGREEMENT
BATH COUNTY PUMPED STORAGE PROJECT
____________________________________________
EQUITY AGREEMENT, entered into this 17th day of June,
1981, among Monongahela Power Company, an Ohio corporation
("Mon"0, The Potomac Edison Company, a Virginia and Maryland
corporation ("PE"), West Penn Power Company, a Pennsylvania
Corporation ("WPP") (Mon, PE and WPP hereinafter sometimes
called a "Company" and collectively sometimes called the
"Companies"), and Allegheny Generating Company, a Virginia
corporation ("AGC").
WHEREAS, each of the parties hereto has entered into
the Basic Agreements with Virginia Electric and Power
Company, a Virginia corporation ("VEPCO"), concurrently with
this Agreement, setting forth the details of the obligations
and rights of VEPCO and AGC relating to the ownership,
construction, replacement, retirement, control, management,
operation and maintenance of the Project, and
WHEREAS, it is the intent and purpose of each of the
Companies to participate in the ownership through AGC of
undivided interests in the Project which AGC may purchase
from VEPCO and in the financing of such interests, and
WHEREAS, the parties desire to enter into this
Agreement for the purposes, among others, of providing for
the respective equity participations of the Companies in
AGC.
NOW, THEREFORE, in consideration of the premises and
the mutual convenants herein set forth, the parties agree as
follows:
1. Definitions. Except as otherwise expressly provided or
unless the context otherwise requires, the following terms,
whenever used in this Agreement, shall have the following
respective meanings:
"Agreement" means this Equity Agreement as it may from
time to time be amended or supplemented.
"Approvals Date", "Basic Agreements", "Initial Purchase
Date" and "Project" have the respective meanings assigned to
them in the Purchase Agreement.
"Common Stock" means the Common Stock, par value $1 per
share, of AGC or stock of any class or classes resulting
from any reclassification or reclassifications thereof.
"Equity Participation Ratio" of a Company at any time
means that fraction the numerator of which is the number of
shares of Common Stock owned by such Company at such time
and the denominator of which is the number of shares of
Common Stock issued and outstanding at such time.
"Event of Default" has the meaning set forth in Section
5(a)
"Purchase Agreement" means the Project
Construction and Purchase Agreement, dated June 17, 1981,
between VEPCO, on the one hand, and the Companies and AGC,
on the other hand, as such agreement may from time to time
be amended or supplemented.
2. Equity Participation. (a) Each of the Companies
agrees that it will use its best efforts to obtain
appropriate authorizations, to the extent required, from all
governmental agencies having jurisdiction in the premises
necessary to permit it to acquire shares of capital stock of
AGC and contribute equity capital to AGC as contemplated by
this Agreement. Upon the receipt of all appropriate
authorizations, AGC shall issue and sell to the Companies,
and the Companies shall purchase severally and not jointly
from AGC, at a purchase price of $10 per share, the
following respective numbers of shares of Common Stock:
Mon........270
PE.........280
WPP........450
(b) As soon as practicable after the Approvals Date
but prior to the Initial Purchase Date, the Companies shall
contribute to AGC, in proportion to their respective Equity
Participation Ratios, equity capital in an aggregate amount
to be determined by AGC but not to exceed $65,000,000.
Thereafter, each of the Companies will furnish its share, in
proportion to its Equity Participation Ratio or as may be
otherwise agreed to by the Companies subject to any
regulatory approvals which may be required, of equity
capital (in the form of cash payments for shares of Common
Stock, capital contributions or otherwise, as AGC shall
determine) to AGC from time to time in such amounts as shall
be determined by the Companies to be necessary or desirable
to satisfy AGC's obligations under the Basic Agreements and
to conduct the business of AGC.
(c) In the case of each issuance of Common Stock under this
Agreement AGC will deliver to each Company purchasing
shares, against payment of the purchase price, certificates
for such shares in such denominations and registered in such
names as such Company requests.
3. Transfer and Issuance of Shares. (a) Each Company
hereby agrees that it shall not transfer its shares of
Common Stock to any person, other than to another Company,
without the written consent of the remaining Companies.
(b) AGC hereby agrees that it shall issue Common Stock to
the Companies only in proportion to their Equity
Participation Ratios, unless otherwise agreed by all the
parties hereto.
4. Voting as to Charter Amendments. Each Company hereby
agrees that it shall not vote its shares of Common Stock to
amend the Articles of Incorporation of AGC unless each of
the other Companies agrees to vote its shares of Common
Stock in favor of such amendment.
5. Events of Default. (a) Any of the following shall
constitute an "event of Default" as to any Company, only
insofar as it relates to such Company:
(i) default in the payment or performance of any liability
or obligation or covenant of such Company hereunder, and the
continuance of such default for a period of 60 days after
notice to such defaulting Company from any non-defaulting
Company or from AGC, except that any such payment or
performance which is being contested in good faith by
appropriate proceedings shall not constitute an Event of
Default;
(ii) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of
such Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order
adjudging such Company a bankrupt or
insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustments or
composition of or in respect of such Company under any
applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of such Company
or of any substantial part of its property, or ordering
the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or
any such other decree or order unstrayed and in effect
for a period of 60 consecutive days;
(iii) the commencement by such Company of a
voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization
or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for
relief in respect of such Company in an involuntary
case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or
State law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of such Company or of any
substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the failure by
it generally to pay its debts as they become due, or the
taking of corporate action by such Company in furtherance of
any such action; or
(iv) any indebtedness of such Company shall not be paid
at the maturity thereof or an event of default as defined in
any mortgage, indenture or instrument under which there may
be issued, or by which there may be secured or evidenced,
any indebtedness of such Company, whether such indebtedness
now exists or shall hereafter by created, shall happen and
shall result in any such indebtedness becoming due and
payable prior to the date on which it would otherwise become
due and payable.
(b) Upon the occurrence and during the
continuance of any Event of Default as to any Company, each
non-defaulting Company may in its discretion, at the same or
different times, take one or more of the following actions;
(i) proceed by appropriate proceedings, judicial,
administrative or otherwise, at law or in equity or
otherwise, to enforce performance or observance by the
defaulting Company, of the applicable provisions of
this Agreement or to recover from the defaulting
Company damages (other than consequential damages) for
any breach thereof;
(ii) subject to the receipt of all necessary
approvals, purchase from the defaulting Company, and
each Company, if it is the defaulting Company, hereby
agrees to sell, and to use its best efforts to obtain
all necessary approvals to sell, such shares of AGC
owned by the defaulting Company as the non-defaulting
Companies desire (if more than one non-defaulting
Company selects this remedy, such shares shall be
divided between the non-defaulting Companies in
proportion to their Equity Participation Ratios as of
the time of such default or as the non-defaulting
Companies shall otherwise agree) upon the payment to
the defaulting Company of the
book value of such shares calculated as of the most
recent practicable date prior to such sale; or
(iii) at the expense of the defaulting Company, take any
action as may be necessary to cure such default.
The rights and remedies herein provided in case of an
occurrence of an Event of Default shall not be deemed to be
exclusive but shall, to the extent permitted by law, be
cumulative and in addition to all other rights and remedies
existing at law, inequity or otherwise. No delay or
omission of any non-defaulting Company to exercise any right
or remedy accruing upon any occurrence of an Event of
Default shall impair any such right or remedy or constitute
a waiver of such Event of Default or an acquiescence
therein. Every right and remedy given by this Agreement or
by law to any non-defaulting Company may be exercised from
time to time, and as often as may be deemed expedient, by
such non-defaulting Company.
6. Benefits of Agreement. Nothing in this
Agreement, express or implied, shall give to any person,
other than the parties hereto and their successors
hereunder, any benefit or any legal or equitable right,
remedy or claim under or by reason of this Agreement.
7. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
Commonwealth of Virginia.
8. Regulatory Approvals. This Agreement, as well
as all the transactions contemplated herein, is subject to
the receipt of all necessary approvals and consents from the
Federal Energy Regulatory Commission, the Securities and
Exchange Commission, the Virginia State Corporation
Commission and all other regulatory agencies having
jurisdiction over the transactions contemplated herein or
over the parties to this Agreement.
9. Section Headings Not to Affect Meaning. The
descriptive headings of the various Sections of this
Agreement have been inserted for convenience of reference
only and shall in no way modify or restrict any of the terms
or provisions hereof.
10. Severability. In the event that any provision of
this Agreement, or the application of any such provision to
any person or circumstance, shall be held invalid or
unenforceable, the remainder of this Agreement, or the
application of such provision to persons or circumstances
other than those as to which it is held invalid or
unenforceable, shall not be affected thereby.
11. Waiver. Any waiver at any time, by any party hereto,
of any of its rights with respect to any other party, or
with respect to any default or other matter arising in
connection with this Agreement, shall not be considered a
waiver
of any other rights or with respect to any subsequent
default of matter.
12. Amendment. Any amendment or supplement of
this Agreement shall be in writing and signed by the
Chairman of the Board or the President or a Vice President
of each of the respective parties hereto.
13. Counterparts. This Agreement may be executed
in separate counterparts, and by the different parties
hereto on different counterparts, each of which when so
executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same
agreement.
IN WITNESS WHEREOF, Mon, PE, WPP and AGC have
caused this Agreement to be duly executed by their
respective officers thereunto duly authorized on the date
first above written.
MONONGAHELA POWER COMPANY
By X. X. XXXXXX
Vice President
THE POTOMAC EDISON COMPANY
By XXXX XXXXX
Vice President
WEST PENN POWER COMPANY
By XXXXX XXXXXXX
Vice President
ALLEGHENY GENERATING COMPANY
By Xxxxxx X. Xxxx
Incorporator
