Exhibit A-7
PARTNERSHIP AGREEMENT
Dated as of July 1, 1990
NORVARCO
(General Partner)
BANGOR VAR CO., INC.
(General Partner)
Creating
XXXXXXX SVC PARTNERSHIP
(a Maine General Partnership)
TABLE OF CONTENTS
Page
section 1. Formation and Name.................................................3
section 2. Definitions........................................................3
section 3. Conditions to Effectiveness........................................6
section 4. The Partnership; Purposes; Approval of
Principal Agreements; Best Efforts.................................6
4.1 Formation of the Partnership..........................................6
4.2 Purposes..............................................................6
4.3 Approval of Principal Agreements......................................6
4.4 Best Efforts..........................................................7
section 5. The SVC Facility, SVC Project and
Construction Budget and Schedule...................................7
5.1 Description...........................................................7
5.2 Construction Budget and Schedule......................................8
5.3 Purchase of SVC Work in Progress......................................8
section 6. Currency of Payment................................................9
section 7. Books and Inspection...............................................9
section 8. Management of the Partnership; Owners' Committee..................11
8.1 Owners' Committee....................................................11
8.2 Meetings of Owners' Committee........................................11
8.3 Delegation of Administrative Authority...............................12
section 9. Initial Resolution of the Owners' Committee.......................12
section 10. Actions Requiring Unanimous Approval of Owners' Committee.........13
section 11. Reimbursement for Services Provided
by a Partner, Parent or Affiliate.................................14
section 12. Capital Accounts, Etc.............................................15
12.1 Capital Accounts..................................................15
12.2 Definition of Profits and Losses..................................16
section 13. Allocations.......................................................16
section 14. Distributions.....................................................16
section 15. Transfer of Partnership Interests.................................17
15.1 No Transfer.......................................................17
15.2 Reorganizations...................................................17
15.3 Right of First Refusal............................................17
15.4 Further Requirements..............................................19
15.5 Distributions and Allocations in Respect to Transferred Interests.20
section 16. Term of Partnership; Dissolution..................................21
16.1 Term..............................................................21
16.2 Dissolution.......................................................22
16.3 Remedies Upon Default.............................................25
section 17. Winding Up of Partnership.........................................26
section 18. Nature of Relationship............................................27
section 19. Insurance and Indemnification ....................................27
section 20. Arbitration.......................................................29
20.1 General...........................................................29
20.2 Procedure.........................................................29
20.3 Costs.............................................................30
20.4 Enforcement.......................................................30
section 21. Governing Law.....................................................30
section 22. Communications....................................................30
section 23. Benefits; Assignment..............................................31
section 24. All Prior Agreements Superseded...................................32
section 25. Section Headings Not to Affect Meaning............................32
section 26. Severability of Provisions........................................32
section 27. Counterparts......................................................32
section 28. Amendments........................................................32
section 29. Proprietary Information...........................................33
Exhibit A Construction Budget - Xxxxxxx Facilities of Partnership
Exhibit B Unanimous Resolution of Owners' Committee
Exhibit C Description of Off-Site Facilities
Exhibit D Cost of SVC Facilities, Transmission Work and Off-Site Facilities
PARTNERSHIP AGREEMENT
PARTNERSHIP AGREEMENT, dated as of July 1, 1990, between NORVARCO, a Maine
corporation ("NORVARCO"), and BANGOR VAR CO., INC., a Maine corporation
("Bangor").
W I T N E S S E T H:
WHEREAS, NORVARCO and Bangor desire to form a general partnership (the
"Partnership") under the laws of the State of Maine to design, license,
construct, finance, manage, maintain, own and operate a static var compensator
facility (as more fully described in Section 5.1, the "SVC Facility"), to
provide the necessary transmission system reinforcements to support the
Hydro-Quebec HVDC Phase II ("Phase II") transmission line expansion currently
under construction for New England Hydro-Transmission Corporation ("New England
Hydro"); and
WHEREAS, the SVC Facility is to be constructed, among other reasons, for
the purpose of allowing the Phase II facilities to operate at their maximum
capability while Maine Electric Power Company, Inc. ("MEPCo") continues to
maintain its full operating capability on the MEPCo 345 kv line from New
Brunswick, Canada; and
WHEREAS, pursuant to the "Phase II Maine Electric Power SVC Facilities
Support Agreement," which became effective on October 1, 1988, as amended by
Amendment No. 1 dated as of January 1, 1990 (the "SVC Support Agreement"), MEPCo
has agreed to design, construct, operate and maintain the SVC Facility for New
England Hydro, acting in its capacity as constructor of the New Hampshire
portion of the Phase II facilities; and
WHEREAS, MEPCo has agreed, pursuant to and to the extent set forth in the
Assignment and Purchase and Sale Agreement dated as of July 1, 1990 (the
"Assignment Agreement"), to assign and delegate to the Partnership all of
MEPCo's rights and obligations under the SVC Support Agreement and to transfer
the SVC Facility to the Partnership; and
WHEREAS, the corporate Parents of the Partners are also two of the
principal shareholders of MEPCo; and
WHEREAS, New England Hydro has agreed to pay, via a monthly support
payment, the total supported costs of services related to the SVC Facility (such
support payments being designed to equal the monthly fixed costs plus the
monthly operating costs of the SVC Facility); and
WHEREAS, pursuant to the Principal Agreements (as defined below)
substantially all foreseeable business decisions relating to the operation of
the SVC Facility and the business of the Partnership have been established; and
WHEREAS, the parties believe that a partnership is the most desirable form
of entity to carry out the SVC Project (as defined below); and
WHEREAS, this Agreement and the transactions contemplated hereby have been
approved by the Boards of Directors of NORVARCO and Bangor; and
WHEREAS, the Partners intend to develop a financing plan, in connection
with structuring and obtaining financing for the SVC Facility; and
WHEREAS, the parties believe that the formation of the Partnership pursuant
to this Agreement is in their respective best interests and in the best
interests of carrying out the SVC Project;
NOW, THEREFORE, the parties hereto, acknowledging mutual consideration and
intending to be legally bound hereby, do hereby agree as follows:
SECTION 1. Formation and Name.
NORVARCO and Bangor hereby form and establish a general partnership under
the Maine Uniform Partnership Act (Title 31,ss.5281-323) to be conducted under
the terms and provisions set forth in this Agreement, provided that Section 298
of said Act shall be superseded in its entirety by this Agreement. The name of
the Partnership shall be "Xxxxxxx SVC Partnership". NORVARCO and Bangor shall
promptly prepare and file such certificates, notices and other documents and
shall take all such other action as may be required under Maine law to establish
and/or register such Partnership and the name thereof.
SECTION 2. Definitions.
For the purposes of this Agreement, unless otherwise expressly provided
herein or unless the context otherwise requires, the following terms shall have
the following respective meanings:
"ABB" shall mean ABB Power Transmission, Inc., a Delaware corporation.
"Affiliate" of any Person shall mean any other Person controlling,
controlled by, or under common control with, such Person. For purposes of this
definition, the term "control" (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of such Person, whether
through the ownership of voting securities or by contract or otherwise. Because
neither Partner controls the affairs of the Partnership, the Partnership is not
an Affiliate of either Partner, nor of the Affiliates of the Partners.
"Assignment of Construction Contract" shall mean the Assignment, Amendment
and Consent to Assignment of that name dated as of November 22, 1989, as amended
by Amendment to Assignment dated as of March 15, 1990 among the Partnership,
MEPCo, New England Hydro and ABB Power Transmission, Inc.
"Basic Operating Agreement" shall mean the agreement of that name dated as
of July 1, 1990 between the Partnership and MEPCo.
"Business Day" shall mean any date other than (a) a Saturday or Sunday and
(b) a day on which state or national banking institutions are authorized or
obligated by law or executive order to remain closed in the State of Maine.
"Construction Contract" shall mean that certain Agreement between ABB and
MEPCo, dated as of November 21, 1988, as amended.
"Ground Lease" shall mean the agreement of that name dated as of July 1,
1990 between the Partnership and MEPCo.
"Parent" shall mean, with respect to a Partner, an entity that owns,
directly or indirectly, either more than 50% of the outstanding voting stock of
a Partner or more than 50% of the value of the outstanding stock of all classes
of such Partner.
"Partners" shall mean each of NORVARCO and [B-H Sub].
"Person" shall mean any individual, partnership, corporation, trust,
unincorporated association or joint venture, a government or any department or
agency thereof, or any other entity.
"Principal Agreements" shall mean this Agreement, the Ground Lease, the
Basic Operating Agreement, the SVC Support Agreement, the Assignment of
Construction Contract and the Assignment Agreement.
"Prudent Utility Practice" shall at any particular time mean any of the
practices, methods and acts which, in the exercise of reasonable judgment in
light of the facts known at the time the decision was made, could have been
expected to accomplish the desired result at a reasonable cost consistent with
licensing and regulatory considerations, applicable law, environmental
considerations, reliability, safety and expeditiousness. "Prudent Utility
Practice" is not intended to be limited to the optimum practice, method or act,
to the exclusion of all others, but rather is a spectrum of possible practices,
methods and acts which could have been expected to accomplish the desired result
at a reasonable cost consistent with licensing and regulatory considerations,
applicable law, environmental considerations, reliability, safety and
expeditiousness.
"SVC' shall mean static var compensator.
"SVC Project" shall have the meaning set forth in Section 5.1.
References in this Agreement to sections, paragraphs and clauses are to
sections, paragraphs and clauses in this Agreement unless otherwise indicated.
SECTION 3. Conditions to Effectiveness. This Agreement shall be effective
(the "Effective Date") upon execution hereof by the Partners; provided, that, on
such date the SVC Support Agreement is in full force and effect.
SECTION 4. The Partnership; Purposes; Approval of Principal Agreements;
Best Efforts.
4.1 Formation of the Partnership. NORVARCO and Bangor have formed and
established the Partnership under the laws of the State of Maine. All real and
personal property owned by the Partnership shall be held in its name, and not in
the names of the Partners, and no Partner shall have any individual ownership in
such property except for its rights as a Partner in the Partnership. The
principal place of business of the Partnership shall be Edison Drive, Augusta,
Maine.
4.2 Purposes. The purpose of the Partnership is limited to the SVC Project.
4.3 Approval of Principal Agreements. The Principal Agreements are hereby
acknowledged by the Partners to be fair to the Partnership, and are hereby
approved by the Partnership and by the Partners.
4.4 Best Efforts. Each of the Partners agrees to take all reasonably
necessary and desirable actions, and to exercise its reasonable best efforts, to
accomplish the SVC Project.
SECTION 5. The SVC Facility, SVC Project and Construction Budget and
Schedule.
5.1 Description. The SVC Facility shall consist of the following:
(a) a substation which shall house equipment such as 345 kv line
disconnect switches, a 345 kv circuit breaker, 345/18 kv stepdown
transformers, a microwave tower, antenna, capacitor banks, cooling systems,
metal control house and other equipment all as further described in the
Construction Contract; and
(b) all property (real, personal and mixed, tangible and intangible)
related to the SVC Facility, acquired or created by the Partnership.
The SVC Project shall mean the activities contemplated by the terms and
conditions of this Agreement, the SVC Support Agreement and the Basic Operating
Agreement in connection with designing, licensing, constructing, financing,
managing, maintaining, owning and operating the SVC Facility, including, but not
limited to, the following:
(a) the selection and training of the staff to operate the SVC
Facility:
(b) the selection and procurement of all materials and supplies
necessary to construct the SVC Facility and to commence and maintain
commercial operation thereof;
(c) the operation and maintenance of the SVC Facility;
(d) all matters incidental to the foregoing which, consistent with
Prudent Utility Practice, should be done to prepare and maintain the SVC
Facility for commercial operation on a continuous basis; and
(e) any activities ancillary and reasonably related to the foregoing.
5.2 Construction Budget and Schedule. The Partners have agreed to the
Construction Budget and Schedule for the SVC Facility attached as Exhibit A
hereto.
5.3 Purchase of SVC Work in Progress. ABB has substantially completed
construction of the SVC Facility pursuant to the Construction Contract. In
addition, MEPCo has substantially completed certain transmission facilities and
interconnection facilities in MEPCo's 345 kv right of way adjacent to the SVC
Facility, consisting of two new transmission towers and lines connecting the 345
kv line to the SVC (the "Transmission Work"). MEPCo owns the work in progress
under the Construction Contract, the Transmission Work and certain other
off-site facilities being constructed by MEPCo relating to SVC Facility
microwave communication and control and other off site facilities, as described
in Exhibit C attached hereto (the "Off Site Facilities"). The Partners hereby
agree that the Partnership shall purchase such work in progress under the
Construction Contract and the Transmission Work, but not the Off Site
Facilities, from MEPCo in consideration of assumption of MEPCo's obligations to
reimburse New England Hydro under the SVC Support Agreement for costs of the SVC
Facility, and the Transmission Work, all as more fully set forth in Exhibit D.
In consideration of the Partnership's assumption of the obligation to reimburse
New England Hydro for costs of the Off Site Facilities, MEPCO shall, pursuant to
the Basic Operating Agreement, assume and agree to pay the Partnership any
amounts that the Partnership must pay to New England Hydro with respect to
advances to fund construction of the Off Site Facilities. All such
reimbursements (MEPCO to the Partnership and the Partnership to New England
Hydro) shall be simultaneous at closing of financing for the SVC Facilities.
SECTION 6. Currency of Payment. All amounts required to be paid or
contributed to the Partnership under this Agreement shall be payable in U.S.
dollars. Such payments or contributions shall be made by wire transfer to a bank
account designated by the Owners' Committee of the Partnership, or in such other
manner as is satisfactory to the Owners' Committee of the Partnership.
SECTION 7. Books and Inspection. The Partnership shall maintain at its
principal place of business accurate and complete books and records, on the
accrual basis, in accordance with generally accepted accounting principles
consistently applied, showing all costs, expenditures, sales, receipts, assets
and liabilities, and profits and losses, and all other records necessary,
convenient or incidental to recording the Partnership's business and affairs.
Each Partner or its designated representatives shall have the right of
inspection and verification of, and, for such purpose, shall at all reasonable
times have free access to, the books, accounts, records and all other supporting
records and documents of the Partnership for any year, or shorter accounting
period in such year, at any time within the twenty-four (24) month period
following the end of such year; provided, however, that the Partnership shall
not be required to make any adjustments, as to any Partner, unless and to the
extent that such Partner took written exception to the books and accounts and
made a claim upon the Partnership for any discrepancies disclosed by said audit
within such twenty-four (24) month period. The expenses of all such audits
conducted at the request of a Partner shall be borne solely by the Partner
requesting the audit.
The books, records and other documents of the Partnership shall be audited
at least annually by a nationally recognized firm of independent public
accountants selected by the Partners.
7.1 Records. As promptly as practicable and not later than one hundred and
twenty (120) days after the end of each fiscal year of the Partnership, the
Partnership shall furnish to each of the Partners an annual report which shall
include the Partnership's audited comparative statements of income, statement of
cash flows, balance sheets and statements of partnership equity for, and as of
the end of, the fiscal year then ended and any additional financial information
that any Partner may reasonably require. The Partnership shall make available to
each Partner, as they become available, regular reports and other relevant
information with respect to the cost of the SVC Project, the progress of
construction and all items affecting payments or contributions to be made by the
Partners or which such Partner may reasonably require.
Promptly after the end of each quarter of the Partnership's fiscal year,
the Partnership shall cause to be prepared a balance sheet showing the
Partnership's assets and liabilities as of the close of such quarter and a
statement of income and a statement of cash flows showing the results of its
operations for such quarter.
SECTION 8. Management of the Partnership; Owners' Committee.
8.1 Owners' Committee. The business of the Partnership shall be managed by
the Partners. The Partners shall act through an Owners' Committee consisting of
one (1) representative of each Partner, designated, from time to time, by each
Partner by resolutions of its respective board of directors. A Partner may
designate, from time to time, one or more alternates to serve as a member of the
Owners' Committee in the event of the absence or unavailability of the initial
designee of a Partner. Any member of the Owners' Committee may call a meeting of
said Committee.
8.2 Meetings of Owners' Committee. Regular meetings of the Owners'
Committee shall be held at least semi-annually, at such time and at such place
as the Owners' Committee shall determine, upon at least fourteen (14) days'
telephonic notice to all members. Special meetings of the Owners' Committee
shall be held on the call of any member at such time and at such place as the
Owners' Committee shall determine, upon at least seven (7) days' telephonic
notice to all members. Members may vote in person or by proxy. The Owners'
Committee may act without a meeting if the action taken is unanimously approved
in writing. The Owners' Committee may meet by telephone. The presence or
telephonic attendance of members of the Owners' Committee representing interests
in excess of 50% of the outstanding interests in the Partnership shall be
required to constitute a quorum, and, unless otherwise specified in this
Agreement, all actions of the Owners' Committee shall be taken by majority vote.
8.3 Delegation of Administrative Authority. The Owners' Committee may, by
majority vote, delegate to one of the Partners authority to carry out certain
administrative functions of the business of the Partnership for a time period
specified in a resolution of the Owners' Committee, and such resolution shall
remain in full force and effect for the time period specified therein unless
earlier revoked by a majority vote of the Owners' Committee.
SECTION 9. Initial Resolution of the Owners' Committee.
The Partners agree that they shall cause the Owners' Committee to adopt the
Initial Resolution attached hereto as Exhibit B on the Effective Date of this
Agreement.
SECTION 10. Actions Requiring Unanimous Approval of Owners' Committee. Each
of the following actions shall require the unanimous approval of the Owners'
Committee:
(a) Authorizing the borrowing of money, including obtaining the
initial long-term financing for the SVC Facility;
(b) Authorizing the Partnership to engage in any business other than
that referred to in Section 4.2 hereof;
(c) Authorizing the sale or disposition of any asset of the
Partnership that would materially impair or change the business of the
Partnership as contemplated by this Agreement;
(d) Authorizing contracts and transactions between the Partnership and
any Partners, Parents and Affiliates of Partners, (other than as
contemplated in the Principal Agreements) including renewals of the Basic
Operating Agreement;
(e) Authorizing any amendments to the Principal Agreements;
(f) Authorizing the Partnership to make or incur capital expenditures
in any fiscal year in excess of $100,000;
(g) Authorizing the Partnership to guaranty the indebtedness of any
Person;
(h) Authorizing the Partnership to enter into any security agreement
or mortgage encumbering assets of the Partnership;
(i) Approving an annual budget for the Partnership;
(j) Selecting or varying depreciation or accounting methods, or making
other decisions with respect to the treatment of various transactions for
state and/or federal income tax purposes, or other financial purposes not
otherwise specifically provided for herein, except with respect to matters
that under state and/or federal tax law are to be determined by the
election of partners rather than determined uniformly at the partnership
level for all partners; and
(k) Releasing any news release, interview or other publicity or
written document to any newspaper, radio, television, magazine or other
segment of the media, except as may be required of any Partner in order to
comply with state or federal securities laws or regulations or the rules
and regulations of any securities exchanges or other markets with respect
to any publicly traded securities of any Partner or Affiliate of a Partner.
If a Partner determines that such a release or public disclosure does not
require unanimous approval of the Owners' Committee by reason of this
subsection, such Partner shall inform the other Partner of the nature and
content of such release or public disclosure three (3) working days in
advance of such release or public disclosure.
SECTION 11. Reimbursement for Services Provided by a Partner, Parent or
Affiliate. Except as otherwise provided in the Basic Operating Agreement, any
employee of a Partner or any employee of its Parent or Affiliate who at the
request of the Owners' Committee, or its delegate under Section 8.3, provides
services to the Partnership shall be paid by the Partner, Parent or Affiliate by
which such employee is employed. The Partnership shall reimburse such Partner,
Parent or Affiliate for the cost of such employee's services (inclusive of
direct and indirect costs, properly allocable overhead, and the cost of any
equipment or supplies).
SECTION 12. Capital Accounts, Etc.
12.1 Capital Accounts. There shall be established for each Partner a
Capital Account. The Partners Capital Accounts shall be determined and
maintained in accordance with the capital account maintenance rules of Treasury
Regulation ss.1.704-1(b)(2)(iv), which are incorporated herein by reference, and
in general shall be increased by (i) the amount of money contributed by such
Partner, (ii) the fair market value of property contributed by such Partner (net
of liabilities secured by such contributed property that the Partnership is
considered to assume or take subject to), (iii) the amount of Profits allocated
to such Partner, and (iv) the amount of any Partnership liabilities assumed by
such Partner, and in general shall be decreased by (i) the amount of money
distributed to such Partner, (ii) the fair market value of property distributed
to such Partner (net of liabilities secured by such distributed property that
such Partner is considered to assume or take subject to), (iii) the amount of
Losses allocated to such Partner, and (iv) the amount of any liabilities of such
Partner assumed by the Partnership.
12.2 Definition of Profits and Losses For purposes of allocating Profits
and Losses to Capital Accounts, "Profits" and "Losses" mean, for each fiscal
year or other period, an amount equal to the Partnership's taxable income or
loss for such year or period for federal income tax purposes, as modified by the
capital account maintenance rules of Treasury Regulation ss.1.704-1(b)(2)(iv).
This Section 12.2 and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Treasury
Regulation ss.1.704-1(b) and shall be interpreted and applied in a manner
consistent with such Treasury Regulation. section 13. Allocations. For purposes
of maintaining Capital Accounts, Profits and Losses shall be allocated as
follows:
NORVARCO 50%
Bangor 50%
For federal income tax purposes, all items of income, gain, loss, deduction and
credit shall be allocated as follows:
NORVARCO 50%
Bangor 50%
SECTION 13. Allocations. For purposes of maintaining Capital Accounts,
Profits and Losses shall be allocated as follows:
NORVARCO 50%
Bangor 50%
For federal income tax purposes, all items of income, gain, loss, deduction and
credit shall be allocated as follows:
NORVARCO 50%
Bangor 50%
SECTION 14. Distributions. The amount of cash available for distribution to
the Partners shall be determined at the end of each year by the Partners. All
amounts distributed to the Partners shall be distributed 50% to NORVARCO and 50%
to Bangor. The Partners agree that to the extent available, the Partnership
shall at least make equitable and timely quarterly distributions, in equal
amounts to each Partner, to allow each Partner to pay such Partner's estimated
income tax liability (federal and state) resulting from such Partner's allocable
share of Partnership income.
SECTION 15. Transfer of Partnership Interests.
15.1 No Transfer. Except as authorized in this Section 15, no Partner shall
sell, transfer, assign or otherwise dispose of, or mortgage, pledge,
hypothecate, create a security interest in, or otherwise encumber, or permit or
suffer any encumbrance of (collectively, a "Transfer"), all or any part of its
Interest in the Partnership (hereinafter referred to as a "Partnership
Interest"), unless approved in writing by the other Partner, and any attempt to
do so without such approval shall be void.
15.2 Reorganizations. For the purposes of this Section 15, a transfer by a
Partner of its entire Partnership Interest to an Affiliate of a Partner shall
not be deemed a Transfer; provided, however, that: (a) the transferring Partner
(together with its Affiliate transferee) shall remain liable for its obligations
as a Partner under this Agreement, and (b) all of the requirements of
subsections 15.4(b) through 15.4(g) shall be satisfied in connection with such
transfer.
15.3 Right of First Refusal.
(a) Except as otherwise provided in Section 15.1 and 15.2 hereof, no
partner shall Transfer all or any part of its Partnership Interest, except
pursuant to a bona fide written offer for cash from a party that is ready,
willing and able to acquire the Partnership Interest after the expiration
of the periods for giving notices specified in clauses (c) and (d) of this
Section 15.3, and then only if an offer to Transfer the Partnership
Interest to the other Partner upon identical terms has first been made and
has not been accepted, as hereinafter provided.
(b) At least 6 months prior to its intended date of Transfer, and
after its receipt of a bona fide written offer of the type described in
clause (a) of this Section 15.3, the Partner desiring to Transfer its
Partnership Interest shall give written notice of its intention to do so to
the other Partner, which notice shall contain the name of the proposed
purchaser, the approximate date of the proposed Transfer, and the terms and
conditions of the bona fide written offer.
(c) The other Partner shall signify its intention to acquire the
entire Partnership Interest, or not acquire all thereof, by giving written
notice of its intention to the transferring Partner. Failure of a Partner
to serve such notice within 90 days after the date of the giving of notice
pursuant to clause (b) of this Section 15.3 shall be deemed conclusively to
be notice of its intention not to acquire the Partnership Interest.
(d) Any Transfer of the Partnership Interest to the other Partner
shall be fully consummated within 12 months following the date upon which
the last of the notices required to be given under this Section 15.3 has
been duly served, unless the Partner is then diligently pursuing
applications to appropriate regulatory authorities for required
authorizations to consummate the Transfer, in which case the time for such
consummation shall be extended until 30 days after the proceedings for such
authorizations are completed and such authorizations have been obtained and
have become final (i.e., the time for appeal therefrom has expired or
appeals therefrom have been completed).
(e) If the other Partner does not indicate, within the time periods
specified in this Section 15.3, an intention to acquire the entire
Partnership Interest, the Partner desiring to Transfer shall, subject to
the provisions of this Section 15, be free to Transfer all but not less
than all of the Partnership Interest to the party that made the bona fide
written offer upon the terms and conditions set forth in such offer.
15.4 Further Requirements. No Transfer of a part of the Partnership
Interest of a Partner shall be permitted, effective or binding on the
Partnership or the non-transferring Partner. No Transfer of all of the
Partnership Interest of a Partner shall be permitted, effective or binding on
the Partnership or the non-transferring Partner unless (a) the admission of the
transferee as a new Partner shall have been consented to in writing by the
non-transferring Partner, which consent shall not be unreasonably withheld, (b)
the transferee shall execute and acknowledge an instrument, in form and
substance reasonably satisfactory to the non-transferring Partner, whereby it
agrees to assume and be bound by all the covenants, terms and conditions of this
Agreement as the same may have been amended, including, but not limited to, the
financial and other obligations of its transferor hereunder, (c) a duplicate
original of each such instrument of Transfer and assumption, duly executed and
acknowledged in each case, is delivered to the non-transferring Partner, (d) the
transferor shall provide an opinion of counsel, satisfactory to the other
Partner, that the proposed Transfer would not cause the termination of the
Partnership for federal income tax purpose, unless the remaining Partner
consents to such a termination, (e) the transferee shall pay all reasonable
expenses in connection with its admission as a Partner, (f) all required
consents of mortgagees or other Persons to such transfer shall have been
obtained in writing and delivered to the non-transferring Partner, and (g) all
required consents thereto or approvals thereof, if any, of all governmental
authorities having jurisdiction shall have been obtained and have become final
and written notice thereof delivered to the non-transferring Partner.
15.5 Distributions and Allocations in Respect to Transferred Interests. If
any Partnership Interest in the Partnership is sold, assigned or transferred
during any accounting period in compliance with the provisions of this Section
15, Profits, Losses and all other items attributable to the transferred
Partnership Interest for such period shall be divided and allocated between the
transferor and the transferee by taking into account their varying interests
during the period in accordance with Code Section 706(d), using any conventions
permitted by law. Solely for the purposes of making such allocations and
distributions, the Partnership shall recognize such transfer not later than the
end of the calendar month during which it is given notice that such transfer has
been made, provided that if the Partnership does not receive notice stating the
date such interest in the Partnership was transferred and such other information
as the Owners' Committee may reasonably require within 30 days after the end of
the accounting period during which the transfer occurs, then all of such items
shall be allocated, and all distributions shall be made, to the person who,
according to the books and records of the Partnership, on the last day of the
accounting period during which the transfer occurs, was the owner of the
interest. Neither the Partnership nor the Administrative Agent shall incur any
liability for making allocations and distributions in accordance with the
provisions of this Section 15, whether or not the Owners' Committee or the
Partnership has knowledge of any transfer of ownership of any interest.
SECTION 16. Term of Partnership; Dissolution.
16.1 Term. The term of the Partnership shall commence on the date of
effectiveness of this Agreement as provided in Section 3 hereof. Subject to the
provisions hereof regarding dissolution, the term of the Partnership shall
continue until the earliest of: (a) sale or other disposition of the SVC Project
by the Partnership, (b) 55 years after the date hereof, or (c) five years after
termination of the SVC Support Agreement, and payment in full of all amounts due
from New England Hydro to the Partnership unless the Partners otherwise agree.
Neither Partner shall have the right voluntarily to dissolve or terminate the
Partnership at any time, including without limitation any rights under the laws
of the State of Maine to apply for judicial dissolution, and the only right of a
Partner unilaterally to withdraw from the Partnership shall be through a sale of
its entire interest in the Partnership in accordance with the provisions
contained in Section 15.
16.2 Dissolution. The Partnership may be dissolved as provided in this
Section 16 upon the occurrence of an Event of Default. Each of the following
shall constitute an Event of Default:
(a) The withdrawal of either Partner in contravention of the
provisions of this Agreement;
(b) The entry of a decree or order by a court having jurisdiction in
the premises adjudging a Partner or its Parent a bankrupt or insolvent, or
approving as properly filed an involuntary petition seeking reorganization,
arrangement, adjustment or composition of or in respect of a Partner or its
Parent under any bankruptcy, insolvency, or other similar law, state or
federal, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Partner or its Parent or of
any substantial part of the property of a Partner or its Parent under any
such law, or ordering the winding up or liquidation of the affairs of a
Partner or its Parent, and the continuance of any such decree or order is
unstayed and in effect for a period of 90 consecutive days; or
(c) the institution by a Partner or its Parent of bankruptcy
proceedings or other proceedings to be adjudicated as bankrupt or
insolvent, or the consent by a Partner or its Parent to the institution of
bankruptcy or insolvency proceedings against a Partner or its Parent, or
the filing of a petition or answer or consent by a Partner or its Parent
seeking reorganization or relief under any bankruptcy, insolvency, or other
similar law, state or federal, or the consent by a Partner or its Parent to
the filing of such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or similar official) of the
Partner or its Parent or of any substantial part of the property of a
Partner or its Parent under any such law, or the making by a Partner or its
Parent of an assignment for the benefit of creditors, or the admission by a
Partner or its Parent in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by a
Partner or its Parent in furtherance of any such action; or
(d) any part of the Partnership Interest of a Partner is seized by a
creditor of such Partner, and the same is not released from seizure or
bonded out within 60 days from the date of notice of seizure; or
(e) a Partner violates Section 15 hereof.
Upon the occurrence of an Event of Default with respect to a Partner, such
Partner shall be deemed to be in default hereunder and shall be referred to as
the "Defaulting Partner", and the other Partner shall be referred to as the
"Non-Defaulting Partner".
Upon the occurrence of any of the events specified in subsections (a)
through (e) of this Section 16.2, the Defaulting Partner shall provide the
Non-Defaulting Partner with prompt written notice of the occurrence of such
default; provided, however, that notwithstanding any failure of the Defaulting
Partner to provide such written notice, upon the occurrence and continuance of
any of the events specified in subsections (b), (c), or (d) of this Section
16.2, the Non-Defaulting Partner shall immediately, and without the necessity of
taking any further action, have the right to exercise the remedies set forth in
Section 16.3 hereof. Upon the occurrence and continuance of any of the events
specified in subsection (a) or (e) of this Section 16.2, the Non-Defaulting
Partner shall have the right to give the Defaulting Partner a "Notice of
Default", which shall be in writing, shall set forth the obligations which the
Defaulting Partner has not performed, or is in breach of, and shall set forth
the date by which such default must be cured, which date shall be at least 10
days after receipt of the Notice of Default if payment of money is required, or
at least 30 days after receipt of the Notice of Default for defaults other than
payments of money, or such shorter period as may be necessary in the good faith
judgment of such Non-Defaulting Partner to prevent a default under any agreement
for borrowed money to which the Partnership is a party or to avoid jeopardizing
their respective investments in the Partnership. If, within the period specified
in the Notice of Default, the Defaulting Partner cures such default, the Notice
of Default shall be inoperative and the Defaulting Partner shall lose no rights
hereunder. If, within such specified period, the Defaulting Partner does not
cure such default, any Non-Defaulting Partner, at the expiration of such period,
shall have the rights hereinafter specified.
16.3 Remedies Upon Default. If a Partner becomes a Defaulting Partner
pursuant to the provisions of Section 16.2 hereof and the default is not cured
within the specified, if any, period, then, in such event, the Non-Defaulting
Partner shall have the right, at its option, to proceed to either:
(a) dissolve the Partnership; or
(b) cure the default and the cost of such curing shall be recoverable
from the Defaulting Partner; provided that neither action under clause (a)
or clause (b) shall relieve the Defaulting Partner from liability for
damages sustained by the Partnership or by the Non-Defaulting Partner
SECTION 17. Winding Up of Partnership. Except as otherwise provided in this
Agreement, upon termination of the Partnership as provided in Section 16.1 or
dissolution of the Partnership as provided in Section 16.2-3, the assets of the
Partnership, after payment of liabilities, shall be distributed in accordance
with the respective capital accounts of the Partners, as adjusted for unrealized
gain or loss, in the following manner:
(a) All Partnership liabilities shall be paid and discharged, or
adequate funds set aside for the payment and discharge thereof, all out of
the Partnership's cash; if the amount thereof is not sufficient to provide
for such discharge of obligations, tangible personal property and real
property and other property (in that order to the extent feasible) shall be
sold in order to realize additional cash (with either Partner, other than a
Defaulting Partner, having the right of first refusal, for a period of not
more than 30 days from the receipt of a third party offer to purchase, to
purchase such assets at the same price and an the same terms and conditions
as such third party offer). If the Partnership retains reserves reasonably
required to provide for liabilities (contingent or otherwise) of the
Partnership or retains installment obligations owed to the Partnership,
liquidating distributions shall be made in the ratio of the Partners'
positive Capital Accounts, and such retained amounts shall be distributed
as soon as practicable and in the ratios of the Partners' positive Capital
Account balances. In the event that the liabilities of the Partnership
cannot be fully satisfied and discharged after the sale or sales of all
assets, the Partners shall assume and pay the excess in accordance with
their respective applicable allocation percentage for loss; provided,
however, that if the capital account of one or both of the Partners, as
adjusted for such sale or sales of all assets, shall be negative, such
Partner shall first contribute to the Partnership an amount equal to the
negative balance of its Capital Account. Any such payment will be credited
to such Partner's capital account. Notwithstanding anything herein to the
contrary, the provisions of this Subsection (a) are meant to define the
respective rights and duties of the Partners and shall not give any third
parties any rights against the Partners.
(b) The Partnership shall terminate when all property owned by the
Partnership shall have been disposed of and the net proceeds, after payment
or satisfaction of liabilities to Partnership creditors, shall have been
distributed to the Partners.
SECTION 18. Nature of Relationship. Nothing herein shall be construed to
constitute either Partner the agent or general partner of the other, except as
provided herein.
SECTION 19. Insurance and Indemnification.
19.1 The Partnership shall procure and maintain, at Partnership expense,
programs of insurance coverage, including but not limited to comprehensive
public liability, property damage, product liability, fidelity, theft, burglary,
workmen's compensation, and business interruption insurance, with such companies
and such terms, limits and deductibles as the Owners' Committee, or its delegate
under Section 8.3, from time to time shall determine. Both the Partnership and
the Partners shall be named insureds thereunder.
19.2 All claims, demands, actions, and rights of action of third parties
with respect to the business of the Partnership, and costs and fees incident to
the investigation, defense and settlement of the same, are hereinafter
collectively referred to as "loss." All loss sustained by the Partnership with
respect to which the Partnership is uninsured shall be borne by the Partnership.
In the event a loss on account of Partnership activities is sustained by either
Partner, it shall be entitled to reimbursement thereof and/or to being held
harmless by the Partnership; provided that such loss is not due to the gross
negligence, willful act or willful omission of such Partner or its employees, or
an act which is outside of the authority of such Partner pursuant to this
Agreement or which contravenes any of the provisions of this Agreement.
19.3 Each Partner shall notify the other promptly of the existence or
probable existence of any claim or demand or right of action against it and
shall give the other or the Partnership, as appropriate, a reasonable
opportunity to participate in the defense thereof, provided the failure to give
such notice shall not affect the right to such recovery except to the extent of
actual prejudice resulting therefrom.
SECTION 20. Arbitration.
20.1 General. All disputes, claims and other matters in question between or
among the Partners, shall be decided by arbitration as described in this
section. Unless the parties agree otherwise, the arbitration proceeding shall be
conducted before a three person arbitration panel. The arbitrators, all of whom
shall be neutral arbitrators, shall be appointed by the American Arbitration
Association ("AAA") upon application by any one of the Partners. All arbitrators
appointed shall be individuals experienced in the electric utility industry,
with particular reference to the matter in question to the extent possible. No
arbitrator shall be challenged except for cause. No more than one member of the
arbitration panel may be an attorney. The AAA may consult with the Edison
Electric Institute when selecting arbitrators.
20.2 Procedure. Notice of Demand for Arbitration shall be sent to the other
Partners by certified mail and a copy sent to the AAA. The arbitration
proceeding shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association as amended from time to time,
consistent with this Section 20.
During the course of the arbitration, the parties shall he permitted to
demand and receive from one another the documents one would be permitted to
obtain in a civil action in Superior Court. The parties shall also furnish
detailed reports of any outside expert witnesses whom they intend to call a
reasonable time in advance of the arbitration hearings. The arbitrators shall
enforce the provisions of this section as part of the agreement to arbitrate and
shall further have the authority to permit and require depositions of expert
witnesses. No dispute may be submitted to arbitration more than two years after
it arises, except by mutual agreement of the parties. The arbitration shall be
held in Augusta, Maine, unless otherwise agreed.
20.3 Costs. The Partners shall share equally the costs and fees of such
arbitration and further agree that said costs shall include compensation to the
arbitrators for their time spent in arriving at their determination.
20.4 Enforcement. The award rendered by the arbitrators shall be final and
binding and judgment may be entered upon the award in accordance with applicable
law in any court of competent jurisdiction. This agreement to arbitrate shall
survive termination of this Partnership Agreement.
SECTION 21. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Maine.
SECTION 22. Communications.
Except as otherwise provided herein or as the parties may otherwise agree,
any notice, request or other communication from one party to another, relating
to this Agreement or the rights, obligations or performance of the parties
hereunder, shall be in writing and shall be effective upon delivery to the other
party. Any such communication shall be considered as duly delivered when
delivered in person, when received by telex, telecopy or other wire transmission
or upon the lapse of 48 hours after mailing by registered or certified mail,
postage prepaid, to the address of the other party set forth below:
If to NORVARCO:
NORVARCO
c/o Central Maine Power Company
Xxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxx
Senior Vice President
If to Bangor:
Bangor Var Co., Inc.
c/o Bangor Hydro-Electric Company
00 Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxx
Any Partner may at any time by written notice to the other Partner change
the address to which notices or communications shall be sent.
SECTION 23. Benefits; Assignment.
The rights and obligations provided by this Agreement are for the mutual
benefit of the Partnership and the Partners, and shall not be deemed to be for
the benefit of, and may not be enforced by, any other Person. This Agreement
shall be binding upon and shall inure to the benefit of, and may be performed
by, the successors and assigns of the parties, except that no Transfer of this
Agreement or any right or obligation hereunder by any parties shall be effective
except as provided in Section 15.
SECTION 24. All Prior Agreements Superseded.
Upon the Effective Date, this Agreement represents the entire agreement
between the Partners relating to the subject matter hereof, and all previous
agreements, discussions, communications and correspondence between or among the
Partners with respect to the subject matter hereof are hereby superseded and are
of no further force and effect.
SECTION 25. 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.
SECTION 26. Severability of Provisions.
If any word, phrase, clause, article, or other provision of this Agreement
is or is deemed or adjudicated or otherwise found to be against public policy,
void or otherwise unenforceable, then said word, phrase, clause, article or
other provision shall be deleted or modified, in keeping with the express intent
of the parties hereto, as necessary to render all the remainder of the Agreement
valid and enforceable.
SECTION 27. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
SECTION 28. Amendments.
Any amendments to this Agreement shall be in writing and signed by all
Persons who are Partners of the Partnership at the time of the amendment
SECTION 29. Proprietary Information.
All information relating to the methods of operation, trade secrets,
technology or other matters proprietary to any Partner ("Proprietary
Information"), whether in the form of drawings, specifications, patent
applications, other documents or disclosed orally, which becomes known to the
other Partner in connection with the Partnership, shall be held in confidence by
such other Partner, and such Partner shall treat such information with the same
degree of care it accords its own secret, proprietary information. Information
shall not be deemed to be Proprietary Information where: (i) it is or becomes
public information or otherwise generally available to the public through no act
of the recipient; (ii) it is, prior to disclosure hereunder, already rightfully
in the possession of the recipient or its Affiliates and was not received by the
recipient directly or indirectly from the disclosing Partner or its Affiliates;
(iii) it is hereafter rightfully received by the recipient from a third person
who did not receive the same directly or indirectly from the disclosing Partner
or its Affiliates; or (iv) it is at any time independently developed by
employees or consultants of the Partner or its Affiliates who have not had
access to the Proprietary Information in the possession of the Partner or its
Affiliates. The recipient has the burden of proving that such employees or
consultants have not had access to the Proprietary Information. Specific
information shall not be deemed to be within the exceptions of subparts (i)-(iv)
merely because it is embraced by more general information within such
exceptions, nor shall a combination of features be deemed to be within such
exceptions merely because the individual features are within such exceptions.
The provisions of this section shall not apply to any Partner to the extent it
receives Proprietary Information from another Partner that is governed by a
separate Confidentiality Agreement between two or more Partners.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
respective officers thereunto duly authorized as of the date first above
written.
NORVARCO
By: Xxxxxx X. Xxxxx (signed)
____________________________
Name:
Title: President
BANGOR VAR CO., INC.
By: Xxxxxxx X. Xxx (signed)
____________________________
Name:
Title: President
EXHIBIT A TO PARTNERSHIP AGREEMENT
CONSTRUCTION BUDGET - XXXXXXX FACILITIES OF PARTNERSHIP
XXXXXXX SVC PROJECT
$ X 1000
W.O. # Description Current Cost Estimate
145 SVC Installation 27,420*
146 Microwave (Xxxxxxx) 151
138/149 Power Line Carrier 32
147 T-Line Tap 674
153 Aux. Pwr. Line 20
S. Total Project 28,297
Contingency 2,175
Total Before Bonus 30,472
Bonus Contingency 3,250
Total Before Interest 33,722**
* Excludes performance bonuses that may be earned after completion.
** Interest accrues at FRB monthly average one month commercial paper
rate on all costs advanced by NE Hydro (support Agreement ss.7)
EXHIBIT B TO PARTNERSHIP AGREEMENT
Unanimous Resolution of Owners' Committee
Xxxxxxx SVC Partnership
Pursuant to Sections 8 and 9 of that certain Partnership Agreement between
NORVARCO and [BH Sub], dated as of July 1, 1990, ("Partnership Agreement") the
undersigned duly authorized members of the Owners' Committee of Xxxxxxx SVC
Partnership hereby adopt the following resolutions:
RESOLVED: Subject to the terms of the Partnership Agreement and the terms
of the Basic Operating Agreement, NORVARCO is hereby designated to
administer the day-to-day business and operations of the Partnership.
Subject to the foregoing, NORVARCO shall:
(1) Operate the business of the Partnership in the ordinary course, in the
best interests of the Partners and in the exercise of reasonable business
judgment, and in compliance with all applicable Federal, state, local and
foreign laws, regulations, ordinances, rules and orders;
(2) Supervise the SVC Project;
(3) Employ, train supervise and, when deemed appropriate by NORVARCO,
discharge any or all employees of the Partnership and maintain all
personnel records relating thereto;
(4) Execute any and all documents, agreements or instruments of any kind
which NORVARCO may deem appropriate in conducting the day-to-day business
of the Partnership;
(5) Prosecute, defend, settle and compromise in such a manner as NORVARCO
may deem expedient any actions at law or in equity brought by or against
the Partnership (other than any action or proceeding brought by a Partner
to enforce NORVARCO'S obligations);
(6) Employ and pay for such professional or other assistance as NORVARCO
may deem desirable in the discharge of its duties;
(7) Prepare and file tax returns and deal with the auditors of the
Partnership in all respects;
(8) Establish Partnership bank accounts and authorize appropriate persons
to draw thereon; and
(9) Render invoices to New England Hydro-Transmission Corporation for
payments due the Partnership and make payments to Maine Electric Power
Company, Inc. under the Basic Operating Agreement.
Provided, however, that the authority of NORVARCO shall not extend to
matters within the responsibility of Maine Electric Power Company. Inc.
under the Basic Operating Agreement dated as of July 1, 1990, nor to
matters reserved to the unanimous action of this Committee under Section 10
of the Partnership Agreement; and further
RESOLVED: That this resolution shall remain in full force and effect for a
period of five years from the date hereof, unless earlier revoked or
modified by a majority vote of this Committee.
This resolution shall be filed with the minutes of the meetings of the Owners'
Committee.
Date: ______________, 19__ ________________________________________
________________________________________
EXHIBIT C TO PARTNERSHIP AGREEMENT
Description of Off-Site Facilities
1.0 Certain microwave communication improvements located at the following:
1. 1 Augusta
1. 2 Xxxxxx Mountain
1. 3 Blackcap Mountain
1. 4 Xxxxx Xxxx
1. 5 Xxxxxx'x Xxxx
1. 6 Mt. Agamenticus
1. 7 Orrington
1. 0 Xxxx Xxxxxx (Xxxxxx)
1. 9 Wytopitlock (Drew Plantation)
1.10 Skiff Lake, New Brunswick, Canada
2.0 Certain protective relaying improvements, located at Orrington
Substation, necessitated by the addition of the Xxxxxxx SVC Facility.
EXHIBIT D TO PARTNERSHIP AGREEMENT
Costs of SVC Facility, Transmission Work and Off-Site Facilities
Cost of SVC Facility:*
Amount Paid Accruals
Description as of 8/31/90 as of 8/31/90
ABB Construction Contract $25,187,544 $1,081,051**
Microwave Towers and Equip. 204,891 2,810
12.5kv Aux. Power Line 19,744
Organizational Costs 178,897 13,508
Power Line Carrier 77,341 4,895
Interest Accrued 1,469,709
Interest Earned (106,363)
Total $25,562,054 $2,571,973
========== =========
_________________________________
* Xxxxxxx assumes and agrees to pay the actual costs paid and accrued, plus
all pending invoices (i.e., work completed but not yet billed, or work not yet
completed), together with all interest thereon at the average rate for
commercial paper as published each month in the Federal Reserve Bulletin, as of
the effective date of the transfer of the assets from MEPCO to Xxxxxxx. These
amounts shall be determined by and from the financial records of MEPCO as soon
as reasonably possible after the close of the period ending October 31, 1990. In
addition, Xxxxxxx assumes and agrees to pay, when and to the extent the same
become due and payable, any completion or performance bonuses provided under the
Construction Contract.
** This amount includes $750,000 of disputed noise compliance holdback.
Cost of Transmission Work:*
Amount Paid Accruals
Description as of 8/31/90 as of 8/31/90
345kv Transmission Line $767,251 $57
Interest Accrued 43,894
Interest Earned (3,177)
------------ -----------
Total $764,074 $43,951
======= ======
_________________________________
* Xxxxxxx assumes and agrees to pay the actual costs paid and accrued, plus
all pending invoices (i.e., work completed but not yet billed, or work not yet
completed), together with all interest thereon at the average rate for
commercial paper as published each mouth in the Federal Reserve Bulletin, as of
the effective date of the transfer of the assets from MEPCO to Xxxxxxx. These
amounts shall be determined by and from the financial records of MEPCO as soon
as reasonably possible after the close of the period ending October 31, 1990.
Cost of Off-Site Facilities:*
Amount Paid Accruals
Description as of 8/31/90 as of 8/31/90
Microwave Towers & Equip. $830,102 $703
Microwave Buildings 117,532
Relaying Equip. at Orrington 170,686 5,497
Interest Accrued 65,699
Interest Earned (4,755)
------------ -----------
Total $1,113,565 $71,899
========= ======
_________________________________
* Xxxxxxx assumes and agrees to pay the actual costs paid and accrued, plus
all pending invoices (i.e., work completed but not yet billed, or work not yet
completed), together with all interest thereon at the average rate for
commercial paper as published each month in the Federal Reserve Bulletin, as of
the effective date of the transfer of the assets from MEPCO to Xxxxxxx. These
amounts shall be determined by and from the financial records of MEPCO as soon
as reasonably possible after the close of the period ending October 31, 1990.
Xxxxxxx also assumes the obligation of MEPCO to reimburse NEH for cash
provided by NEH to, and held, as of the time of said transfer of assets, by
MEPCO as an advance against expenses, together with interest thereon at the
average rate for commercial paper as published each mouth in the Federal Reserve
Bulletin; provided, however, that MEPCO shall retain, and shall be liable to
NEH, pursuant to the Basic Operating Agreement, with respect to, so much of said
cash as MEPCO shall use to pay expenses associated with the construction of
certain Off-Site facilities located at Skiff Lake. The balance of such cash,
together with all interest income from the investment of said amount, as the
same shall be determined by and from the financial records of MEPCO as soon as
reasonably possible after the close of the period ending October 31, 1990, shall
be transferred to Xxxxxxx by MEPCO as soon as reasonably possible after said
amount is so determined.
