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EXHIBIT 10.2
AMENDED AND RESTATED PARENT AGREEMENT
RELATING TO AMERICAN REF-FUEL COMPANY
Dated as of December 5, 1997
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AMENDED AND RESTATED PARENT AGREEMENT
RELATING TO AMERICAN REF-FUEL COMPANY
TABLE OF CONTENTS
Page
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ARTICLE I
Transfer
Section 1.1. Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.2. General Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.3. Transfers to Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE II
Options to Buy or Sell
Section 2.1. Buy-Sell Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.2. Option to Purchase in the Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.3. Closing of Purchases Under Sections 2.1 and 2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.4. Project Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.5. No Waiver of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.6. Non-Competition After Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.7. No Regulatory Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE III
Transfers and Right of First Offer
Section 3.1 Right of Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.2 Right of First Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE IV
Restrictions on Subsidiaries
Section 4.1. Single Purpose Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.2. Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE V
Performance of Partnership Obligations
Section 5.1. Parents' Performance Under Partnership Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.2. Obligations of Duke Capital and UAE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VI
Certain Services; Competition
Section 6.1. Services to Partnership Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.2. Preferred Vendor Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VII
Possible Formation of Limited Partnerships
Section 7.1. Good Faith Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VIII
Confidentiality
Section 8.1. Agreement to Disclose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.2. Agreement to Keep Confidential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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Section 8.3. Termination of Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IX
Disputes
Section 9.1. Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.2. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.3. Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE X
Miscellaneous
Section 10.1. Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 10.2. Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 10.3. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.4. CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.5. Binding Effect; Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.6. Multiple Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.7. Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.8. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.9. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.10. Headings, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.11. Obligations of Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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AMENDED AND RESTATED PARENT AGREEMENT
RELATING TO AMERICAN REF-FUEL COMPANY
This Agreement, dated as of December 5, 1997, is among Duke
Capital Corporation, a Delaware corporation ("Duke Capital") having its
principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ American Energy Corp., a New York corporation ("UAE"), having
its principal place of business at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Duke/UAE Ref-Fuel LLC, a Delaware limited liability company
("Duke/UAE Ref-Fuel") having its principal place of business at ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Industries,
Inc., a Delaware corporation ("BFI") having its principal place of business at
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Duke Capital and UAE collectively hold 100% of the
membership interests in Duke/UAE Ref-Fuel;
WHEREAS, a wholly owned subsidiary of Duke/UAE Ref-Fuel,
Duke/UAE Ref-Fuel Management LLC ("Duke/UAE Sub"), is a partner holding a 49.9%
general partnership interest in American Ref-Fuel Company, a Delaware general
partnership (the "Partnership") existing under an Amended and Restated
Partnership Agreement, dated as of the date hereof (the "Partnership
Agreement");
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WHEREAS, Duke/UAE Ref-Fuel wholly owns, directly or
indirectly, various entities which were formed solely for the purposes of being
a partner or other equity participant in the Project Companies (as defined in
Section 1.5 of the Partnership Agreement) (the "Duke/UAE Project
Subsidiaries");
WHEREAS, a wholly owned subsidiary of BFI, BFI Ref-Fuel, Inc.
("BFI Sub"), is a partner holding a 50% general partnership interest in the
Partnership;
WHEREAS, BFI Sub and Duke/UAE Sub are sometimes referred to
herein as the "Partnership Subsidiaries";
WHEREAS, BFI wholly owns, directly or indirectly, various
entities which were formed solely for the purposes of being a partner or other
equity participant in the Project Companies (the "BFI Project Subsidiaries")
(the Duke/UAE Project Subsidiaries and the BFI Project Subsidiaries are
sometimes referred to herein as the "Project Subsidiaries");
WHEREAS, Duke/UAE Ref-Fuel and BFI are each, directly or
through their respective wholly owned Project Subsidiaries, the owner of a
49.9% and a 50% interest, respectively, in the Partnership and each of the
Project Companies (other than American Ref-Fuel Company of Southeastern
Connecticut in which Duke/UAE Ref-Fuel and BFI are each, through their
respective wholly owned subsidiaries, the owner of a 50% interest);
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WHEREAS, Duke/UAE Sub holds certain option rights to acquire
from Air Products Ref-Fuel, Inc. ("AP Sub") an additional 0.1% interest in the
Partnership, which upon exercise will cause Duke/UAE Sub to hold a 50% general
partnership interest in the Partnership; and the Duke/UAE Project Subsidiaries
hold option rights to acquire (i) additional 0.1% interests in each of the
Project Companies (other than American Ref-Fuel Company of Southeastern
Connecticut) and (ii) the Niagara Gross Income Interest as such term is defined
in the Niagara Option Agreement dated as of the date hereof between Air
Products Ref-Fuel of Niagara, Inc. and Duke/UAE Niagara LLC;
WHEREAS, each of such option rights to acquire an additional
0.1% interest and any such interest acquired pursuant to the exercise of such
rights are referred to collectively herein as the "Base Interest";
WHEREAS, Duke/UAE Ref-Fuel and BFI are sometimes referred to
herein as the "Parents" of their respective subsidiaries; and
WHEREAS, Duke Capital, UAE, Duke/UAE Ref-Fuel and BFI desire
to fully set forth their agreement with respect to, among other things, the
transferability of the interests of Duke/UAE Ref-Fuel and BFI Ref-Fuel in their
respective subsidiaries.
NOW THEREFORE, Duke Capital, UAE, Duke/UAE Ref-Fuel and BFI
agree as follows:
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ARTICLE I
Transfer
Section I.1. Restrictions. (1) Except as hereinafter
provided, BFI will not cause or permit any shares in BFI Sub or any of the BFI
Project Subsidiaries, or any of BFI Sub's interest in the Partnership or any of
the BFI Project Subsidiaries' interests in any Project Company (such shares and
interests being referred to herein as the "BFI Interests") to be issued, sold,
assigned, transferred, pledged or otherwise encumbered or disposed of, directly
or indirectly, by sale, merger or otherwise.
(2) Except as hereinafter provided, Duke/UAE Ref-Fuel
will not cause or permit any interests in Duke/UAE Sub or any of the Duke/UAE
Project Subsidiaries, or any Duke/UAE Sub's interest in the Partnership or any
of the Duke/UAE Project Subsidiaries' interests in any Project Company (such
interests being referred to as the "Duke/UAE Interests"; the BFI interests and
the Duke/UAE interests are sometimes referred to herein as "Interests") to be
issued, sold, assigned, transferred, pledged or otherwise encumbered or
disposed of, directly or indirectly, by sale, merger or otherwise. For the
avoidance of doubt, the indirect rights and obligations of Duke/UAE with
respect to the Base Interest and the Niagara Gross Income Interest shall, prior
to the exercise of option rights with respect thereto, be deemed "Interests" of
Duke/UAE under this Agreement; and, upon any purchase by Duke/UAE, the Base
Interest and the Niagara Gross Income Interest shall likewise constitute
"Interests" of Duke/UAE subject to all the terms and conditions of this
Agreement.
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Notwithstanding the foregoing, the Duke/UAE Interests may be pledged and
assigned to, and encumbered by the security interests for the benefit of, Duke
Capital.
(3) Duke Capital will not cause or permit any of its
direct or indirect interest in Duke/UAE Ref- Fuel or in any Duke/UAE Interests
in which Duke Capital has a security interest to be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of, directly or
indirectly, by sale, merger or otherwise unless (i) such action does not reduce
Duke Capital's aggregate direct and indirect interest in Duke/UAE Ref-Fuel and
in the Duke/UAE Interests, in either case, to less than 51% and (ii) UAE or its
Affiliates directly or indirectly hold the remaining interest in Duke/UAE
Ref-Fuel and the Duke/UAE Ref-Fuel Interests.
(4) Notwithstanding the foregoing (i) a Parent may sell
or permit the sale of its Interests if (A) it has received the prior written
consent of the other Parent, which consent shall not be withheld unreasonably,
and (B) the additional conditions set forth in Section 1.2 are satisfied or
waived and (ii) Interests in the Partnership or in Project Subsidiaries may be
sold if and to the extent permitted pursuant to Article II, III or VII of this
Agreement or pursuant to applicable provisions, if any, of a partnership
agreement of a Project Company.
Section I.2. General Conditions. A Parent shall not sell,
assign, transfer, pledge, encumber, or otherwise dispose of or permit the sale,
assignment, transfer, pledge, encumbrance, or other disposition of any
Interests unless the following conditions are met (or are waived in writing by
the other Parent):
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(1) There is not pending a "Buy-Sell" procedure initiated
pursuant to Article II;
(2) The transaction does not result in a violation of, or
trigger materially greater regulatory obligations under, any applicable law,
rule or regulation, including but not limited to the Federal Power Act, the
Public Utility Holding Company Act of 1935, as amended ("PUHCA") (including
specifically a loss of an exemption under Section 3(a)(2) of PUHCA), the Public
Utility Regulatory Policies Act of 1978, as amended ("PURPA"), all other
federal laws and all state laws regulating the cogeneration, generation,
transmission, distribution, sale, marketing or trading of electrical energy or
capacity, all antitrust laws and all securities laws;
(3) Neither the transferee nor any of its Affiliates is a
competitor of the other Parent or its Affiliates that engages in a principal
line of business which is (i) the business of burning Municipal Solid Waste and
generating electricity or any other phase of the waste handling and disposal
business in the case of a transfer of Interests held directly or indirectly by
Duke/UAE Ref-Fuel or (ii) the business of generating, distributing,
transmitting, selling, marketing or trading electrical energy or capacity in
the case of a transfer of Interests held directly or indirectly by BFI;
(4) The senior unsecured debt, if any, of the transferee
is rated by Standard & Poor's or Moody's as investment grade, or, if the
transferee has no senior unsecured debt
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rated by Standard & Poor's or ▇▇▇▇▇'▇, the financial condition of the
transferee is reasonably satisfactory to the other Parent (for illustrative
purposes, an investment grade rating means (i) with respect to ▇▇▇▇▇'▇
Investors Service, Inc., a long-term credit rating which is at least equal to
"Baa" (or equivalent) without regard to any refinement or gradation of such
rating by a numerical modifier; and (ii) with respect to Standard & Poor's
Ratings Group, a long-term credit rating which is at least equal to "BBB" (or
equivalent) without regard to any refinement or gradation of such rating by a
numerical modifier);
(5) The transaction does not and will not, with or
without the giving of notice or the lapse of time, or both, conflict with, or
result in any breach of, or in any right to accelerate or the creation of any
lien, charge or encumbrance pursuant to any Project Agreement or any agreement
or other instrument or obligation to which the Partnership, any Project
Company, the transferor or any Affiliate of the transferor is a party, or by
which any of them or any of their properties or assets may be bound or
affected, or any judgment, order, decree or law applicable to any of them;
(6) All outstanding borrowings by the transferor's
subsidiaries from the Partnership or any Project Company shall have been repaid
in full;
(7) Each transferee has agreed to be bound by the
provisions of this Agreement, and this Agreement has been appropriately amended
to reflect the transfer in a
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manner reasonably satisfactory to the transferee and all entities that will
continue to be parties to this Agreement; and
(8) The transfer will not cause a termination of the
Partnership within the meaning of I.R.C. Section 708(b); provided, however,
the parties shall cooperate in good faith to structure any transaction so as
not to cause such a termination.
For the purposes of this Agreement, (a) "Affiliate" shall mean
(i) with respect to BFI-Sub, BFI and any Person controlling, controlled by or
under common control with BFI-Sub or BFI, (ii) with respect to Duke/UAE, Duke
Capital and UAE and any Person controlling, controlled by or under common
control with Duke/UAE, Duke Capital, UAE or Duke/UAE Sub, (iii) with respect to
AP Sub, APCI and any Person controlling, controlled by or under common control
with AP Sub or APCI and (iv) with respect to any other Person, any Person
controlling, controlled by or under common control with such Person; (b)
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that Person, whether
through the ownership of voting securities or partnership, membership or other
ownership interests, or by contract or otherwise; (c) "Person" shall mean an
individual, partnership, corporation (including a business trust), limited
liability company, joint stock company, trust, unincorporated association,
joint venture or any other legal entity; and (d) "Municipal Solid Waste" shall
mean normal waste of the type customarily collected by
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municipalities, including durable goods, containers, packaging, food waste,
yard waste and miscellaneous inorganic waste, but excluding industrial waste,
agricultural waste, sewage sludge, tires and all categories of hazardous waste,
including batteries and medical waste.
For the avoidance of doubt, it is acknowledged and agreed that
ownership of 50% of the outstanding voting securities or other equity interests
of an entity in which an unrelated third party owns an equal interest shall be
deemed not to constitute control of that entity and that therefore such entity
shall not be considered an Affiliate of either party owning such securities or
other equity interests.
Section I.3. Transfers to Affiliates. Notwithstanding the
provisions of Section 1.1, a Parent may at any time transfer or permit the
transfer of all, but not less than all, of the Interests it holds in its
Partnership Subsidiary or the Interests it holds in any of its Project
Subsidiaries to any corporation, limited liability company or other entity that
is wholly owned, directly or indirectly, by that Parent, or that owns, directly
or indirectly, more than 50% of the outstanding voting securities or equity
interests of that Parent; provided that the conditions set forth in paragraphs
(b), (c), (e), (h) and, if and to the extent that the other Parent may so
reasonably request, (f) and (g) of Section 1.2 are met; provided, however, that
if a "Buy-Sell" procedure has been initiated pursuant to Article II hereof, the
Interests being transferred pursuant to this Section 1.3 shall remain subject
to such "Buy-Sell" procedure, notwithstanding any transfer pursuant to this
Section 1.3.
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ARTICLE II
Options to Buy or Sell
Section II.1. Buy-Sell Provision. (1) Each Parent shall be
entitled to initiate the "Buy-Sell" procedure described below at any time,
subject to the conditions set forth below.
(2)(1) The Parent desiring to initiate the "Buy-Sell"
procedure (the "initiating party") shall give to the other Parent (the
"receiving party") at least 30 days' prior written notice that it intends to
submit the offers described below. During such 30-day period the initiating
party shall enter in good faith into such discussions as the receiving party
shall reasonably request regarding the circumstances that gave rise to the
initiating party's decision to initiate the "Buy-Sell" procedure. If Duke/UAE
Ref-Fuel is the initiating party, during such 30-day period BFI shall furnish
to Duke/UAE Ref-Fuel the Statement described in Section 2.1(b)(2)(b). Within
45 days after the expiration of such 30-day period, the initiating party may,
at its option, submit to the receiving party two offers in writing, the first
of which shall be an offer to purchase the Interests of the receiving party and
the second shall be an offer to sell to the receiving party the Interests of
the initiating party, such offer to be made at the same price. If BFI is the
initiating party, its submission of the two offers shall be accompanied by the
Statement described in Section 2.1(b)(2)(b). If Duke/UAE Ref-Fuel is the
initiating party, its submission of the two offers shall include its
irrevocable election whether or not to accept the arrangements contemplated by
such Statement (which must be accepted in their entirety or not at all). Such
offers shall be irrevocable except as expressly provided in
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Section 2.1(e) or 2.3. If the initiating party elects not to submit such
offers within such 45-day period, its 30-day notice shall be deemed withdrawn
and it may not again initiate the "Buy-Sell" procedure unless it has given a
new 30-day notice in accordance with the first sentence of this Section
2.1(b)(1).
(b)(2)(a) Following the submission of the offers, BFI shall,
if so requested by Duke/UAE Ref-Fuel, continue to work in good faith with
Duke/UAE Ref-Fuel in an effort to develop terms and conditions that would apply
if Duke/UAE Ref-Fuel were to buy BFI's Interests pursuant to the offers and
under which BFI would supply solid waste and provide ash and by-pass disposal
capacity and services and transportation services to Projects that, at the date
the offers are submitted, are Development Projects. If terms and conditions
for those activities have, prior to the submission of the Offers, been offered
by BFI to the Partnership or the relevant Project Company, then the terms and
conditions to be offered by BFI shall be consistent with those previously
offered, subject to appropriate changes to reflect changed circumstances.
(b)(2)(b) In accordance with Section 2.1(b)(1), BFI shall
furnish Duke/UAE Ref-Fuel a Statement that shall apply if Duke/UAE Ref-Fuel
were to buy BFI's Interests pursuant to the offers and that shall set forth the
terms and conditions on which BFI would make disposal capacity available to
Projects that are initiated by Duke/UAE Ref-Fuel or its Affiliates after the
date the offers are submitted, but excluding Development Projects that are
covered by Section 2.1(b)(2)(a). Such disposal capacity would be made
available, at the
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posted market rate at the site in question, on an unreserved basis to such
Projects owned, operated or controlled by Duke/UAE Ref-Fuel and its Affiliates,
in solid waste landfills which are owned, operated or controlled by BFI or its
Affiliates. The Statement shall also set forth the price, terms and conditions
of a Site Option Agreement under which BFI would ▇▇▇▇▇ ▇▇▇▇/UAE Ref-Fuel an
exclusive option for a minimum term of three years to purchase, lease or
sublease lands that are owned or leased by BFI or its Affiliates and are
located on or adjacent to solid waste landfill facilities owned, operated or
controlled by BFI or its Affiliates. Except as specified above in this Section
2.1(b)(2)(b), the terms and conditions to be set forth in the Statement shall
be determined solely by BFI. If Duke/UAE Ref-Fuel purchases BFI's Interests,
and has elected to accept the arrangements contemplated by the Statement, then,
at the closing of such purchase, the appropriate parties shall enter into
definitive agreements regarding those arrangements. Duke/UAE Ref-Fuel's rights
under such agreements shall be assignable to and enforceable by successors to
Duke/UAE Ref-Fuel's Interests.
(b)(3) A Parent may not submit the offers described in
Section 2.1(b)(1) if prior to such submission there has occurred and at the
time of such submission there is continuing any event or condition which with
or without the lapse of time or giving of notice, or both, would constitute a
Terminating Act (as defined in Section 2.2(b)) of such Parent, its Partnership
Subsidiary or one of its Project Companies pursuant to Section 2.2(a)(1).
(b)(4) Upon due submission of the offers, neither Parent
shall thereafter have the right to submit other offers pursuant to this Section
2.1(b) (unless and until the closing
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under the offers previously duly submitted fails to occur on the closing date
therefor as defined in Section 2.3, by reason of any failure on the part of
only one of the Parents to perform one or more of its obligations under this
Section and Section 2.3, in which event the Parent not so failing may, if
otherwise so entitled, submit other offers). During the pendency of the
offers, the Parents shall cause the Partnership and the Project Companies to be
operated in the ordinary course in accordance with prior practice and in the
best interest of the Partnership and the Project Companies and with due regard
to the fiduciary obligations among partners.
(3) The price to be contained in the offer to purchase
shall be an amount of cash as the initiating party shall determine, subject to
adjustment as provided in Section 2.1(f), plus the undertaking described below.
The price to be contained in the offer to sell shall be the same amount of cash
as is contained in the offer to purchase, subject to adjustment as provided in
Section 2.1(f), plus the undertaking described below. The undertaking shall be
as follows: Duke/UAE Ref-Fuel or BFI, whichever shall be the buyer, the Parent
of the buyer, or the assignor of the right to buy the Interests being sold,
shall undertake at the closing of the purchase, subject to the provisions of
Section 2.5, (i) to assume, and indemnify the other Parent and its Affiliates
against, all obligations under the Company Support Agreements, (ii) to
indemnify the other Parent and its Affiliates against, but not to assume, all
other Project Liabilities, and (iii) to use its reasonable business efforts to
have the other Parent and its Affiliates released from all Project Liabilities.
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(4) Within 180 days after submission of the irrevocable
offers, the receiving party on behalf of itself, an Affiliate or a third party
must accept in writing one such offer (the acceptance of one such offer to
constitute a rejection of the other). If the receiving party has not accepted
in writing one of the offers within such 180-day period, the receiving party
shall be deemed to have accepted on the last day of such period the offer to
sell its Interests for the specified price. The receiving party may not reject
both offers. If Duke/UAE Ref-Fuel is the receiving party and elects to
purchase BFI's Interests, its notice of acceptance shall be accompanied by a
statement of its irrevocable election whether it will accept the arrangements
contemplated by the Statement (which must be accepted in their entirety or not
at all).
(5) The foregoing provisions of this Section 2.1 to the
contrary notwithstanding, if, at any time after the offers to purchase
described in Section 2.1(b)(1) have been submitted and prior to the closing of
any purchase resulting from such offers to purchase, either party becomes
unable to meet the conditions set forth in Section 2.1(b)(3) for submitting the
offers described in Section 2.1(b)(1), then the non-defaulting party shall have
the right, upon notice to the defaulting party prior to the closing referred to
in Section 2.3, unilaterally to rescind and invalidate such offers, and any
acceptance thereof made or deemed to have been made, whereupon such offers and
acceptance shall be deemed to have no further force or effect.
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(6) The purchase price to be paid pursuant to this
Section 2.1 is intended to be the amount that would be paid if each entity that
is being purchased (a "Sold Company") had no assets or liabilities other than
its direct or indirect interests in the Partnership or one or more Project
Companies and if the collective value of all of the Interests and Sold
Companies were equal to one-half of the value of the Partnership and the
Project Companies. Although a Sold Company would have been restricted in its
activities as provided in Section 3.1, the Parents recognize that a Sold
Company may have acquired additional assets or liabilities, primarily because
of its cash management policy and because of its income and franchise tax
obligations. Accordingly, at the closing of a purchase under Section 2.1,
Duke/UAE Ref-Fuel or BFI, whichever is the Parent of each Sold Company, shall
indemnify the buyer and its Affiliates, pursuant to an indemnity reasonably
satisfactory to the buyer, against all liabilities of such Sold Company and its
Affiliates, other than Project Liabilities (as defined in Section 2.4) that the
buyer or, if the buyer is an Affiliate of a Parent, Parent is assuming or
indemnifying against pursuant to the undertaking described in Section 2.1(c),
and at or prior to the closing the Parent of such Sold Company may withdraw
from such Sold Company and its subsidiaries any assets other than the Parent's
direct or indirect interests in the Partnership and the Project Companies. In
addition, if for any reason all of the Interests and Sold Companies immediately
prior to the closing constitute collectively more or less than a one-half
direct or indirect interest in the Partnership and each of the Project
Companies, the purchase price shall be proportionately adjusted. The amount of
such adjustment shall be determined in accordance with the procedures set forth
in Section 2.2(d) (the second through the eighth sentences thereof) except that
the fair value shall be determined as of the date of the submission of the
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irrevocable offers described in Section 2.1(b)(1) and the parties shall have 20
days after a request for valuation is made in which to attempt to agree on the
selection of one nationally recognized investment banking firm.
(7) Neither Parent shall be entitled to initiate or
consummate the "Buy-Sell" procedure described in this Section 2.1 if at such
time either Parent is legally prohibited from acquiring any of the other
Parent's Interests or under any law or regulation such acquisition would result
in the imposition of substantial limitations on the ability of any Project
Subsidiary to operate or produce an economic return substantially similar to
that produced prior to such acquisition.
Section II.2. Option to Purchase in the Event of Default.
(1) Each of the following circumstances shall constitute an "event of default"
for purposes of this Section 2.2:
(1) A Parent, its Partnership Subsidiary or any of its
Project Subsidiaries shall commit any Terminating Act;
(2) A Parent, its Partnership Subsidiary or any of its
Project Subsidiaries shall fail to pay when due any amounts owing
pursuant to this Agreement, the Partnership Agreement, a Project
Company Partnership Agreement, a Parent Agreement, shareholders
agreement or similar agreement for a Project Company, a Company
Support Agreement or any other Project Agreement (but, in the case of
such
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other Project Agreement, solely to the extent that such failure under
such other Project Agreement results in a breach of a Company Support
Agreement or a guaranty agreement entered into by a Parent in lieu of
a Company Support Agreement) and such failure is not cured within 60
days after written notice thereof from the other Parent referring to
this Section 2.2(a)(ii) and specifying such failure;
(3) It shall be finally determined by binding arbitration
or by a court of competent jurisdiction in a ruling which is subject
to no further appeals that (i) a Parent, its Partnership Subsidiary or
any of its Project Subsidiaries shall have failed in any material
respect to observe, perform or comply with any material agreement,
condition or obligation required by this Agreement, the Partnership
Agreement, a Project Company Partnership Agreement, a Parent
Agreement, shareholders agreement or similar agreement for a Project
Company, a Company Support Agreement or any other Project Agreement
(but, in the case of such other Project Agreement, solely to the
extent that such failure under such other Project Agreement results in
a breach of a Company Support Agreement or a guaranty agreement
entered into by a Parent in lieu of a Company Support Agreement) other
than a failure to make a payment specified in Section 2.2(a)(ii) which
failure shall be governed by Section 2.2(a)(ii), (ii) such failure was
still continuing at the time of the initiation of such proceeding and
had continued for a period of at least 30 days after written notice
thereof from the other Parent referring to this Section 2.2(a)(iii)
and specifying such failure, and (iii) steps to cure
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such failure have not commenced, or, if commenced, have not continued
with all due diligence;
(4) A Parent, directly or through Affiliates, shall have
sold its direct or indirect equity interests in at least two Project
Companies to the other Parent or its Affiliates pursuant to options to
purchase because of the occurrence of an Event of Default under the
applicable Project Company Partnership Agreement (or the Parent
Agreement of the Project Company).
(2) A Terminating Act by an entity shall consist of:
(1) the commencement by such entity of any proceeding
under any applicable bankruptcy or insolvency law, or its consent to
the commencement of any such proceeding against it, or the entry
against it of a decree or order of a court having jurisdiction over it
adjudicating it a bankrupt or insolvent or approving a petition
seeking its reorganization under any applicable bankruptcy or
insolvency law, if such decree or order shall have continued
undischarged or unstayed for a period of 90 days or more;
(2) the assignment by such entity for the benefit of its
creditors of all or any substantial part of its property or the
winding up or liquidation of its affairs, its admission in writing of
its inability to pay its debts generally as they become due or its
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consent to the appointment of a receiver, liquidator, trustee, curator
or assignee of all or any substantial part of its properties, which
appointment shall not have been vacated;
(3) the acquisition, pursuant to court order or
otherwise, by a creditor of such entity (other than any such
acquisition by Duke Capital upon foreclosure of security interests
permitted in the Duke/UAE Interests) of any rights with respect to its
interest (if any) in its Partnership Subsidiary, the Partnership, any
Project Subsidiary, a Project Company or any property or activities
arising therefrom, and such condition continues uncured for more than
the shorter of 30 days or the period, if any, available to avoid
having such acquisition constitute a breach of any Company Support
Agreement or any other Project Agreement; or
(4) the Board of Directors or other committee or group
performing similar functions of such entity taking formal action for
the dissolution or the winding up of its affairs.
(3) If an event of default shall occur at any time and be
continuing, then the Parent that is not affiliated with the defaulting entity
(the "buyer") shall have the right to purchase Interests as follows: if the
defaulting entity (the "seller") is the other Parent or the other Parent's
Partnership Subsidiary, the option shall apply to all, but not less than all,
of the outstanding Interests of the defaulting Parent; or, if the buyer so
elects, of the other Parent's Partnership Subsidiary and each of its Project
Subsidiaries; and if the defaulting entity is a
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partner, shareholder or member in a Project Company, the option shall apply to
all, but not less than all, of the Seller's interests in the defaulting entity.
In each case, the price shall be equal to 90% of the fair value of the
Interests to be purchased (except that in the case of an event of default that
is specified in clause (i) of Section 2.2(a) and that relates to a Terminating
Act described in clause (i), (ii) or (iii) of Section 2.2(b), the percentage
shall be 100%), plus (B) an undertaking by the buyer, subject to the provisions
of Section 2.5, (i) to assume, and indemnify the seller and its Affiliates
against, all obligations under the Company Support Agreement (or, if
applicable, the guaranty agreement entered into in lieu of the Company Support
Agreement), (ii) to indemnify the seller and its Affiliates against all Project
Liabilities (as defined in Section 2.4), and (iii) to use its reasonable
business efforts to have the seller and its Affiliates released from all
Project Liabilities, except that if only the Interests of a partner in the
Partnership or in a Project Company are being sold, the indemnity shall be
against only those Project Liabilities that arise out of the Partnership or the
Project Company. The financial benefit conferred by this right to purchase at
90% of fair value shall be considered liquidated damages, and not a penalty, in
respect of the event of default, it being agreed that it would be impracticable
or extremely difficult to fix the actual damages, and shall be exclusive of any
other right to damages in respect of the event of default. The right of
purchase provided in this Section 2.2(c) shall be inapplicable if there has
occurred and is continuing any event of default described in this Section
2.2(c) on the part of the buyer or its Affiliates.
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(4) The right to purchase under Section 2.2(c) shall be
exercisable by the buyer giving written notice to the seller, on or before the
ninetieth day after such event of default has occurred, of its intention to
exercise such right. The fair value of the capital stock of a corporation or
of the interests in a limited liability company shall be deemed to be 50% of
the fair value of the Partnership and Project Companies (such percentage to be
appropriately adjusted if there are outstanding any minority equity interests
in those entities), and shall be determined, as of the most recent practicable
date prior to the delivery of the initial report referred to below, by a
nationally recognized investment banking firm selected by agreement of the
buyer and the seller or, if they fail to select such firm not later than 20
days after the giving of the notice by the buyer, then each of them shall
within 10 days thereafter select, at its own expense, a nationally recognized
investment banking firm. Such firms shall be instructed to attempt to agree on
the fair value within 30 days after their selection or, failing such agreement,
to select, within such 30 days, a third nationally recognized investment
banking firm who shall alone determine the fair value. For the purposes of
this Section 2.2, fair value of the Partnership shall mean the purchase price
therefor that would, as of the date of valuation, be agreed to in an arm's
length transaction between an informed and willing buyer and an informed and
willing seller under no compulsion to sell. In determining such fair value,
the investment banking firm or firms shall take into account the value of the
obligations of the Parents and Affiliates under the Company Support Agreements,
the effect of any minority equity interests that may be outstanding pursuant to
Article VII and all other factors as such firm or firms deem relevant;
provided, however, that such firm or firms shall not discount or otherwise
adjust fair value because of the actual or asserted lack of
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marketability of the Interest being sold or because the Interests being sold
are only a minority interest in the Partnership and may not confer control of
the Partnership. Where the fair value is being determined by only one firm, as
promptly as practicable, such firm shall deliver to the buyer and the seller an
initial report of its determination of fair value. The buyer and the seller
shall then have 20 days in which to submit to such firm their objections, if
any, to the report. Thereafter, as promptly as practicable, such firm shall
deliver to the buyer and the seller its final report. The determination of
fair value in accordance with the foregoing procedures shall be final,
conclusive and binding on the buyer and the seller for the purposes of this
Section 2.2. However, the buyer shall have the right, at its election, to
rescind its notice of intention to purchase by so notifying the seller within
10 days after receipt of notice of the fair value as so determined. The fees
and expenses of a firm selected by agreement of the buyer and the seller or by
agreement of two firms shall be borne equally by the buyer and the seller,
except that if the buyer elects to rescind its notice of intention to purchase
pursuant to the proviso in the preceding sentence, those fees and expenses
shall be borne solely by the buyer.
(5) In the event that any entity is being sold, the
purchase price to be paid pursuant to this Section 2.2 is intended to be the
amount that would be paid if each entity that is being sold (a "Sold Company")
had no assets or liabilities other than the Interest owned directly or
indirectly by the Sold Company and if the value of such Sold Company were equal
to the relevant percentage of the value of the Project Companies evidenced by
such Interests. Although each Sold Company would have been restricted in its
activities as provided in
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Section 4.1, the Parents recognize that a Sold Company may have acquired
additional assets or liabilities, primarily because of its cash management
policy and because of its income and franchise tax obligations. Accordingly,
at the closing of a purchase under this Section 2.2, the Parent of each Sold
Company shall indemnify the buyer and its Affiliates, pursuant to an indemnity
reasonably satisfactory to the buyer, against all liabilities of such Sold
Company and its Affiliates, other than Project Liabilities (as defined in
Section 2.4 hereof) that the buyer or, if the buyer is an Affiliate of a
Parent, its Parent, is assuming or indemnifying against pursuant to the
undertaking described in Section 2.2(c) hereof, and at or prior to the closing
the Parent of such Sold Company may withdraw from such Sold Company any assets
other than its interest in the Partnership.
(6) If the Partnership Agreement, Parent Agreement or any
other agreement for a particular Project Company contains an option to purchase
in the event of default, and the provisions of such other option are
inconsistent with the provisions of Sections 2.2 through 2.6 of this Agreement,
then the applicable provisions of this Agreement shall be controlling unless
the provisions of such other option specifically state that they shall be
controlling.
Section II.3. Closing of Purchases Under Sections 2.1 and
2.2. (1) The closing of any purchase made pursuant to either of the offers
provided for in Section 2.1 or pursuant to the option to purchase provided for
in Section 2.2 shall be held at the principal office of the Partnership on the
closing date or such other location as shall be mutually agreeable. Such
closing date shall be the date, which shall be not less than 20 days nor more
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than 60 days after the date upon which acceptance of the offer is made or
deemed to be made or the notice of intention to exercise the right to purchase
is given (the "Acceptance Date"), as the case may be, designated by written
notice by the buyer to the seller; provided, however, that if a dispute exists
as to the right of a party to purchase or sell, or if an interest is to be
valued, the closing shall be held not more than 45 days after the resolution of
such dispute or the determination of such value; provided further that if there
is any litigation or governmental requirement relating to such purchase and
sale, the closing date shall be postponed until a date not more than 30 days
after the termination of such litigation or satisfaction of all governmental
requirements, and the parties shall use their reasonable business efforts to
satisfy such requirements promptly; provided further that if the closing date
shall be delayed more than 180 days after the Acceptance Date, either party,
unless it has acted in bad faith in substantially contributing to the delay,
shall, at its election, have the right to terminate the Buy-Sell or option
procedure and the offers, and any acceptance thereof, shall have no further
force or effect.
(2) At such closing the buyer shall receive from the
seller the certificates representing the capital stock or limited liability
company Interests being purchased, duly endorsed in blank and with all
appropriate transfer and documentary stamps, if any, affixed and shall deliver
to the seller (i) funds, by bank or certified check or wire transfer of
immediately available funds, in the amount of the purchase price, and (ii) the
undertaking, in accordance with Section 2.1 or 2.2, or 2.3, whichever is
applicable, regarding Project Liabilities, all in such form as shall be
reasonably requested by the seller. Such stock or
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interest shall be conveyed free and clear of any claims, pledges, liens or
encumbrances. In addition, at the closing, there shall be paid in full any
debts between (x)(i) a Sold Company, and (ii) the Partnership, and any debts
between (y)(i) a Sold Company and (ii) the seller or any of its Affiliates,
except in each case to the extent that such debts are already appropriately
reflected in the purchase price. Any party's right or obligation to purchase
at the closing may be exercised or discharged by any Affiliate of that party or
any assignee, as provided in this Section 2.3.
(3) At the closing, the Parent of each Sold Company shall
indemnify the buyer and its Affiliates, pursuant to an indemnity reasonably
satisfactory to the buyer, against all liabilities of such Sold Company and its
Affiliates, other than Project Liabilities (as defined in Section 2.4) that the
buyer is assuming or indemnifying against pursuant to the undertaking described
in Section 2.1, 2.2(c) or 2.3, whichever is applicable, and at or prior to the
closing the Parent of such Sold Company may withdraw from such Sold Company any
assets other than the Interests held by such Sold Company.
Section II.4. Project Liabilities. For the purposes of this
Article II, "Project Liabilities" shall mean: (a) all liabilities, obligations
and commitments of the Parents or their Affiliates under or arising out of this
Agreement, the Partnership Agreement, any Project Company Partnership
Agreement, the Company Support Agreements or any other Project Agreements, and
(b) all liabilities, obligations and commitments incurred or assumed by the
Partnership or any Project Company, except that Project Liabilities to be
assumed or
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indemnified by a buyer shall not include liabilities, obligations and
commitments that are specifically intended to apply to the Parent of the seller
or its Affiliates following a sale of its Interests pursuant to this Article II
or the dissolution or termination of the Partnership or a Project Company (such
as obligations under the Site Option Agreement or obligations regarding
maintaining confidentiality of information or refraining from competition with
the Partnership or a Project Company), or that are incurred by the Parent of
the seller or its Affiliates in providing to the Partnership or a Project
Company services described in the second sentence of Section 2.2(f) of the
Partnership Agreement, or any liabilities for income or franchise taxes.
Section II.5. No Waiver of Defaults. Nothing contained in
this Article II shall be construed as a limitation upon, and no action, or
transaction in pursuance of this Article II shall be deemed a satisfaction,
waiver or discharge of, any rights, claims or causes of action of either Parent
or its Affiliates against the other Parent or its Affiliates, whether for
damages or other relief, arising out of or by virtue of (i) breach of this
Agreement, the Partnership Agreement, any Project Company Partnership Agreement
or any other Project Agreement, theretofore or thereafter committed, by the
other Parent or its Affiliates or (ii) any other event of default, theretofore
or thereafter arising on the part of the other Partner or its Affiliates, and
the undertakings provided for in Sections 2.1 and 2.2 shall not be construed to
include or relate to any such rights, claims or causes of action, or any
liability incident thereto, except, in each case, as and to the extent that
such default or breach is taken into account in any computation, adjustment or
payment made pursuant to this Article II, it being acknowledged
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and agreed, however, that upon the closing of a purchase pursuant to Section
2.2 there shall be no other liability as a result of the event of default
triggered by such right to purchase and upon the closing of a purchase pursuant
to Section 2.3 there shall be no other liability as a result of the failure to
make a capital contribution triggering such right to purchase.
Section II.6. Non-Competition After Sale. For a period of
three years following the sale of its Interests pursuant to Section 2.1 or 2.2,
except as set forth in this Section 2.6, neither the selling Parent nor any of
its Affiliates shall, within the Territory, provide an equity interest in,
provide financing to, or enter into a service contract having a term of more
than one year with a Project (a "Competing Project") which, in the reasonable
judgment of the Chief Executive Officer of the Partnership, is in competition
with any Development Project or Project in Operations owned by a Project
Company, in any case as of the date of such sale, without the express written
consent of the other Parent. Notwithstanding the foregoing, the selling Parent
and any of its Affiliates may enter into such a service contract with a
Competing Project in accordance with the following procedure: The selling
Parent shall deliver to the other Parent notice of the proposed terms and
conditions of services to any Competing Project or any Project which the
selling Parent reasonably believes would be a Competing Project, and the
selling Parent or its Affiliate shall offer to the Project Company with which
the Competing Project is in competition the same services, on the same terms
and conditions, proposed for the Competing Project, and such Project Company
shall have 90 days after delivery of such notice to accept such offer. If the
proposed terms and conditions of the services offered to the Competing Project
are amended in any material respect, the selling
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Parent shall give notice to the other Parent and such Project Company shall
have an additional ten days to consider whether to accept the services, as
amended. In addition, such Selling Parent and its Affiliates shall not violate
the provisions of the DBA License or the confidentiality provisions of Article
VIII herein.
Section II.7. No Regulatory Violations. In no event shall
there be any purchase pursuant to either of the offers provided for in Section
2.1 or pursuant to the option to purchase provided for in Section 2.2 if such
purchase would violate, or trigger substantially greater regulatory obligations
under, the Federal Power Act, PUHCA, PURPA, or any other federal law or any
state law regulating the cogeneration, generation, transmission, distribution,
sale, marketing or trading of electrical energy or capacity.
ARTICLE III
Transfers and Right of First Offer
Section III.1 Right of Transfer. Either Parent may transfer
all or substantially all but not less than all or substantially all of its
Interests in accordance with the following provisions of this Article III.
Section III.2 Right of First Offer. (1) A Parent desiring to
transfer its Interests (the "transferring party") shall give to the other
Parent (the "non-transferring party") written notice of the transferring
party's desire to transfer such Interests, which notice shall (i) set forth the
minimum price at which the transferring party is willing to sell or transfer
its
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Interests (the "Minimum Price") and (ii) constitute an irrevocable offer by the
transferring party to sell such Interests to the non-transferring party at the
Minimum Price. The non-transferring party shall then have a period of sixty
(60) days from receipt of such notice to accept or reject the offer (the
"Notice Period") or assign its right to the irrevocable offer to a third party;
provided, however, that (i) such assignment shall not be made to a third party
that is not reasonably expected to be capable of satisfying the conditions
specified in Section 1.2 and this Article III and (ii) such assignee shall not
purchase such Interests unless at the closing of such purchase the conditions
specified in Section 1.2 and this Article III are satisfied or waived; and
provided, further, that if a closing does not occur and the non-transferring
party is obligated to make a payment pursuant to Section 3.2(e), the original
non-transferring party shall remain liable for such payment if and to the
extent it is not made by the assignee.
(2) If the non-transferring party desires to accept the
offer during the Notice Period, the procedures set forth in Section 3.2(d) and
(e) shall apply.
(3) If the non-transferring party rejects the offer or
fails to respond during the Notice Period, the transferring party may negotiate
with third parties to sell its Interests. If the transferring party reaches
agreement with a bona fide third party to sell its interests at a price equal
to or higher than the Minimum Price and such transfer satisfies the conditions
specified in Section 1.2 (or such conditions are waived by the non-transferring
party), the transferring party may sell its interests to such third party at
any time on or prior to the date twelve months after the last day of the Notice
Period. If the transferring party reaches
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agreement with a bona fide third party to sell its interests at a price lower
than the Minimum Price (the "Third Party Price"), the transferring party shall
give the non-transferring party written notice of the Third Party Price, which
notice shall constitute an offer to sell the Interests to the non-transferring
party at the Third Party Price. The non- transferring party shall then have
sixty days to accept or reject the offer (the "Second Notice Period"). If the
non- transferring party rejects the offer or fails to respond during the Second
Notice Period, the transferring party may proceed with the transaction with the
third party at the Third Party Price in accordance with the second sentence of
this Section 3.2(c). If the non-transferring party desires to accept the
offer, the procedures set forth in Section 3.2(d) shall apply.
(4) If the non-transferring party desires to accept the
offer during the Notice Period or the Second Notice Period, such
non-transferring party shall notify the transferring party in writing of such
acceptance and shall have a period equal to 120 days plus the number of days
remaining in the Notice Period or the Second Notice Period to consummate the
transaction (the "Closing Period"). Closing of the sale shall be in accordance
with the provisions of Section 2.3. If the non-transferring party fails to
consummate the transaction within the Closing Period, the transferring party
shall be permitted to sell its interests to a third party without further
restriction by this Article III.
(5) If (i) a non-transferring party fails to close during
the Closing Period after accepting an offer to purchase during the Notice
Period or the Second Notice Period, (ii) the reason for such failure to close
was reasonably foreseeable at the time the offer to
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purchase was accepted and (iii) the transferring party completes the sale of
the Interests to a bona fide third party during the twelve month period after
the expiration of the Closing Period at a purchase price less than the Minimum
Price or the Third Party Price, as the case may be, the non-transferring party
shall pay to the transferring party an amount equal to the lesser of (x) fifty
percent of the difference between the Minimum Price or the Third Party Price,
as the case may be, and the purchase price actually paid by the bona fide third
party or (y) $15 million.
(6) In the event of a transfer pursuant to this
Agreement, the non-transferring party shall cooperate in good faith with
respect to such issues as amendments to the Partnership Agreement and this
Agreement, as well as any required regulatory and third party consents.
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ARTICLE IV
Restrictions on Subsidiaries
Section IV.1. Single Purpose Subsidiaries. It is the
intention and agreement of each Parent that at all times it will own and
operate BFI Sub, or Duke/UAE Sub, as the case may be, solely for the purpose of
holding interests, directly or through wholly-owned Project Subsidiaries, in
the Partnership or the Project Companies and will not permit them to acquire
any assets or incur any liabilities not reasonably necessary to such purpose,
and each of its Project Subsidiaries that participates in a Project that is
being actively pursued will be wholly owned, directly or indirectly, by the
Parent, will be owned and operated solely for the purpose of such participation
and will not acquire any assets or incur any liabilities not reasonably
necessary to such purpose, except as may be specifically permitted by this
Agreement or the Partnership Agreement.
Section IV.2. Transfer Restrictions. It is the intention and
agreement of each Parent that at all times its Partnership Subsidiary and
Project Subsidiaries will each be wholly owned, directly or indirectly, by it,
and that it will, directly or indirectly, own such Parent's Interests, except
for transfers expressly permitted by this Agreement, the Partnership Agreement
or the applicable Project Agreement.
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ARTICLE V
Performance of Partnership Obligations
Section V.1. Parents' Performance Under Partnership
Agreement. If and to the extent that the Partnership Agreement for the
Partnership, or the Partnership Agreement, shareholders' agreement or similar
agreement for any Project Company, provides for obligations of Duke/UAE
Ref-Fuel or BFI or their Affiliates that are not parties to such Agreement,
Duke/UAE Ref-Fuel and BFI shall each perform the obligations provided for it,
and shall cause its Affiliates to perform the obligations provided for them
therein. Without limiting the generality of the foregoing, each Parent hereby
agrees to be bound by Section 1.7 of the Partnership Agreement and guarantees
the payment on demand of any borrowings by its Affiliates (other than the
Partnership) pursuant to Section 7.4 of the Partnership Agreement or the
comparable provisions of any Partnership Agreement for any Project Company.
Such guarantee is absolute, unconditional, present and continuing and is in no
way conditional or contingent upon any event or circumstance, action or
omission that might in any way discharge a guarantor or surety.
Section V.2. Obligations of Duke Capital and UAE. Duke
Capital joins in the execution of this Agreement to evidence the liability of
Duke Capital to perform and pay each and every obligation of Duke/UAE Ref-Fuel
under this Agreement as fully and to the same extent as if Duke Capital were
named as a Parent in lieu of and in substitution for Duke/UAE Ref-Fuel. If
Duke Capital and UAE each so elect in writing, Duke Capital and UAE shall have
joint and several liability for the obligations specified in the prior
sentence. In
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furtherance of the foregoing, and not by way of limitation, Duke Capital hereby
covenants and agrees, for the benefit of BFI, that Duke/UAE Ref-Fuel and its
Affiliates will perform the covenants set forth in Sections 1.7, 1.8, 7.4 and
12.1 of the Partnership Agreement.
ARTICLE VI
Certain Services; Competition
Section VI.1. Services to Partnership Projects. (1) If a
particular Project shall be designated as a Development Project by the
Partnership, BFI, if selected as the vendor in accordance with Section 6.2,
will use its reasonable business efforts to cause one or more of its Affiliates
to (a) provide or attempt to arrange through contracts with others to provide,
adequate quantities of solid waste to the Project to the extent such solid
waste is not being provided by the client or others that are under contract to
the client or to the Project, (b) provide for the conceptual design of and
operate, to the extent consistent with the Project, any stand-alone solid waste
transfer stations or stand-alone recycling facilities that may be established
as part of a particular Project, and (c) to the extent consistent with the
Project, attempt to dispose of, if required (or provide for the disposal of),
ash, bypass waste and other solid waste residues from the Projects, including
undertaking to provide for the site for such disposal.
(2) If a particular Project shall be designated as a
Development Project by the Partnership, Duke Capital and/or UAE, if selected a
vendor in accordance with Section 6.2, will use its reasonable business efforts
to cause one or more of its Affiliates to
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provide certain services to the Project including, but not limited to, the
marketing or trading of electrical energy or capacity or engineering services.
Section VI.2. Preferred Vendor Status. (1) It is the
intention of BFI and Duke/UAE Ref-Fuel that the Partnership, or an appropriate
Project Company, will construct, own and operate, at competitive prices, terms
and conditions, any waste-to-energy plants which would be required by BFI for
its sole or principal use as a provider of waste. BFI, in its capacity as the
vendee of the services of the Partnership or a Project Company and Duke/UAE
Ref-Fuel and BFI, each acting through its subsidiary that is a partner in the
Partnership or the appropriate Project Company, will employ reasonable business
efforts to achieve this goal. Accordingly, the Partnership and the Project
Companies will be the preferred vendor to BFI for all procurement by BFI of
waste-to-energy plant services of the types then being offered by them. The
status of the Partnership and the Project Companies as the "preferred vendor"
shall mean that BFI and its Affiliates will not, so long as the Partnership is
at least 45% owned by BFI (whether directly or through Affiliates), purchase
any such services from any unaffiliated third party unless BFI or its
Affiliates has determined in the exercise of its reasonable business judgment
that the overall value, in terms of price, terms and conditions, quality,
documentation, service and other matters, of such services available from the
Partnership and the Project Companies is not competitive with that available
from such other party, in which event BFI and its Affiliates may purchase such
services from such other party; provided, however, that BFI and its Affiliates
shall be excused from the foregoing obligation if, upon written notice to the
Partnership, BFI or its Affiliates advises that
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(i) the Partnership has failed to respond within a reasonable period of time to
a request by BFI (or its Affiliates) for a price quotation or other terms or
information with respect to such services or has failed to commit to deliver
such services within the time period in which BFI (or its Affiliates) shall
have required such services to be delivered, which time period, in either case,
shall not be substantially shorter than the time period that would have been
required from or allowed to an unaffiliated third party; or (ii) in BFI's
reasonable business judgment, it is not appropriate for the Partnership or a
Project Company to furnish the particular service in light of the Partnership's
expertise and experience; provided further that nothing in this Section 6.2
shall authorize BFI or its Affiliates to take any action that would result in a
breach of the DBA License. If at any time in accordance with this Section 6.2
BFI determines not to use the services of the Partnership or a Project Company,
BFI shall give a full and prompt report to the Management Committee of the
Partnership giving the rationale for this decision. The foregoing shall not
authorize BFI or any of its Affiliates to provide such services on their own in
lieu of purchasing them from unaffiliated third parties or the Partnership.
(2) It is the intention of BFI and Duke/UAE Ref-Fuel that
BFI and its Affiliates will supply certain of its traditional services to the
Partnership and the Project Companies at competitive prices, terms and
conditions, including, without limitation, those services specified in Section
6.1. BFI, in its capacity as service provider, and Duke/UAE Ref-Fuel and BFI
and its Affiliates, each acting through its subsidiary that is a partner in the
Partnership or the appropriate Project Company, will employ reasonable business
efforts to
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achieve this goal. Accordingly, BFI and its Affiliates will be a preferred
vendor to the Partnership and each Project Company for all services of the
types then being offered by BFI (directly or through its Affiliates) in the
Territory. The status of BFI and its Affiliates as the "preferred vendor"
shall mean that neither the Partnership nor any Project Company will, so long
as it is at least 45% owned by BFI (whether directly or through its
Affiliates), purchase any such services from any one other than BFI and its
Affiliates unless the Chief Executive Officer of the Partnership (the "CEO")
has determined in the exercise of his reasonable business judgment that the
overall value, in terms of price, terms and conditions, quality, documentation,
service and other matters, of such services available from BFI and its
Affiliates is not competitive with that available from such other party, in
which event the vendee may purchase such services from such other party;
provided, however, that the vendee shall be excused from the foregoing
obligation if upon written notice to BFI, the vendee advises that (i) BFI (or
its appropriate Affiliate) has failed, in the reasonable business judgment of
the CEO, to respond within a reasonable period of time to a request by the
vendee for a price quotation or other terms or information with respect to such
services or has failed to commit to deliver such services within the time
period in which the vendee shall have required such services to be delivered,
which time period, in either case, shall not be substantially shorter than the
time period that would have been required from or allowed to an unaffiliated
third party; or (ii) in the reasonable business judgment of the CEO, it is not
appropriate for BFI and its Affiliates to furnish the particular service in
light of the expertise and experience of BFI and its Affiliates or the stated
preference of the vendee's customers regarding the selection of service
providers. If at any time in accordance with this Section 6.2(b) the vendee
elects not to use the services of BFI or its Affiliates for any contract
involving the expenditure greater
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than $250,000, the CEO shall give a full and prompt report to the Management
Committee of the Partnership giving the rationale for this decision.
(3) It is the intention of BFI and Duke/UAE Ref-Fuel that
Duke Capital and its Affiliates will supply engineering and power marketing
services to the Partnership and the Project Companies at competitive prices,
terms and conditions. Duke Capital and its Affiliates, in its capacity as
service provider, and Duke/UAE Ref-Fuel and BFI, each acting through its
subsidiary that is a partner in the Partnership or the appropriate Project
Company, will employ reasonable business efforts to achieve this goal.
Accordingly, Duke Capital and its Affiliates will be preferred vendors to the
Partnership and each Project Company for all such services then being offered
by Duke Capital (directly or through its Affiliates) in the Territory. The
status of Duke Capital and its Affiliates as the "preferred vendor" shall mean
that neither the Partnership nor any Project Company will, so long as it is at
least 45% owned by Duke/UAE Ref-Fuel (whether directly or through its
Affiliates), purchase any such services from any one other than Duke Capital
and its Affiliates unless the Chief Executive Officer of the Partnership (the
"CEO") has determined in the exercise of his reasonable business judgment that
the overall value, in terms of price, terms and conditions, quality,
documentation, service and other matters, of such services available from Duke
Capital or its Affiliates is not competitive with that available from another
party, in which event the vendee may purchase such services from such other
party; provided, however, that the vendee shall be excused from the foregoing
obligation if upon written notice to Duke Capital, the vendee so advises that
(i) Duke Capital (or its appropriate Affiliate) has failed, in the reasonable
business judgment of the CEO, to respond within a reasonable period of time to
a request by the vendee
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for a price quotation or other terms or information with respect to such
services or has failed to commit to deliver such services within the time
period in which the vendee shall have required such services to be delivered,
which time period, in either case, shall not be substantially shorter than the
time period that would have been required from or allowed to an unaffiliated
third party; or (ii) in the reasonable business judgment of the CEO, it is not
appropriate for Duke Capital and its Affiliates to furnish the particular
service in light of the expertise and experience of Duke Capital and its
Affiliates or the stated preference of the vendee's customers regarding the
selection of service providers. If at any time in accordance with this Section
6.2(c) the vendee elects not to use the services of Duke Capital or its
Affiliates for any contract involving the expenditure greater than $250,000,
the CEO shall give a full and prompt report to the Management Committee of the
Partnership giving the rationale for this decision.
ARTICLE VII
Possible Formation of Limited Partnerships
Section VII.1. Good Faith Negotiations. The Parents
recognize that one or both of them may desire to organize or reorganize Project
Companies as limited partnerships, or to organize limited partnerships that
would hold interests in Projects, and arrange for the sale of limited
partnership interests to investors in order to reduce the financial commitments
of the parties, while at the same time maintaining control of their interests
in the Project Companies. The Parents agree that, following the submission of
any such proposal by either
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Parent or an Affiliate, they, or their Affiliates, as appropriate, shall
negotiate in good faith regarding such proposal and will not withhold their
approval unreasonably.
ARTICLE VIII
Confidentiality
Section VIII.1. Agreement to Disclose. The Parents shall
disclose or cause to be disclosed to the Partnership, the Project Companies and
to each other and their respective Affiliates all information which in the
collective judgment of the Parents is required for fulfillment of the business
purpose of the Partnership and the Project Companies.
Section VIII.2. Agreement to Keep Confidential. Each Parent
and its Affiliates will receive in confidence, will not use except in
accordance with any applicable agreements, including the DBA License, and
except for permitted purposes (as hereinafter defined), and will disclose only
to third parties under obligations of confidentiality and non-use acceptable to
the other Parent, without the prior written consent of the other Parent, any
information disclosed to a Parent or its Affiliates by the other Parent or its
Affiliates in writing, or orally or by demonstration and reduced to writing
within 15 days of disclosure, and identified as confidential at the time of
such disclosure. "Permitted purposes" shall mean (a) purposes consistent with
the business purposes of the Partnership and its affiliated Project Companies
and (b) for the purpose of providing information to any third party that is
reasonably being considered as a potential purchaser of any Interest as
permitted by Section 1.2. The care exercised by each Parent and its Affiliates
in maintaining such information in confidence shall
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be the care exercised by that Parent with respect to its own information that
it considers confidential.
Section VIII.3. Termination of Confidentiality. The
obligations set forth in Section 8.2 shall automatically terminate five years
from and after the dissolution and winding up of the Partnership and all
Project Companies or at such earlier time to the extent that information
required to be treated as confidential pursuant to Section 8.2:
(1) has become available to the public through no fault
of the receiving Parent or its Affiliates;
(2) is already known to the receiving Parent or its
Affiliates at the time of disclosure;
(3) is received by the receiving Parent or its Affiliates
from a third party without obligation of confidentiality or non-use;
or
(4) is subsequently developed by employees or consultants
of the receiving Parent or its Affiliates independently of disclosure
hereunder;
provided, however, that any disclosure of such information may be made as
otherwise required by law in the opinion of counsel to the receiving
(including, without limitation, pursuant to any federal or state securities or
public utility laws or regulations or pursuant to any legal, regulatory or
legislative proceeding) or as contemplated by the following sentence (the
"Legal
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Exception"). In the event that a receiving Parent or its Affiliates receives a
request to disclose all or any part of such information under the terms of a
valid and effective subpoena, order, civil investigative demand or similar
process or other written request issued by a court of competent jurisdiction or
by a federal, state or local, foreign or domestic, governmental or regulatory
body or agency, such receiving Parent or its affiliates agrees to the extent
practicable to (i) promptly notify the other Parent of the existence, terms and
circumstances surrounding such request, (ii) consult with the other Parent on
the advisability of taking legally available steps to resist or narrow such
request, and (iii) only disclose the information requested after complying with
clauses (i) and (ii) and exercising reasonable effort (if so requested by the
other Parent and at the other Parent's sole expense) to obtain, to the extent
practicable, an order or other reliable assurance that confidential treatment
will be accorded to such portion of any disclosed information as the other
Parent may designate.
ARTICLE IX
Disputes
Section IX.1. Dispute Resolution. The parties shall endeavor
in good faith to resolve any controversies or claims arising out of or relating
to this Agreement, the Partnership Agreement or any Partnership, Parent,
shareholders' or other similar agreement for any Project Company without resort
to litigation or arbitration. To that end, if either party gives the other
written notice (the "Notice") of a claim or controversy (a "Dispute"), they
shall promptly engage in good faith discussions in an effort to resolve the
Dispute and, if either party so requests, they shall select a mutually
acceptable expert (the "Expert") to participate in the discussions, evaluate
the respective positions of the parties and advise the parties of the
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Expert's opinion as to the merits of the Dispute. Such opinion shall be
advisory only and shall not be binding on the parties. If by means of this
procedure the parties are unable to resolve the Dispute within the 60-day
period beginning when the Notice was given, then either party may commence
litigation or, if the parties so agree or if binding arbitration is mandated by
the applicable agreement, arbitration pursuant to Section 9.2. Time shall be
of the essence, and each party shall in good faith proceed with the discussions
contemplated herein. Each party shall be entitled to utilize the services of
advisers and experts in connection with those discussions. The fees and
expenses of the Expert will be borne equally by the parties. The provisions of
this Section 9.1 shall not apply where a party believes it requires a temporary
restraining order, injunction or order for specific performance issued by a
court in order to protect its interests, and time does not permit the party to
comply with the procedures and the 60-day waiting period specified in this
Section 9.1 without the risk of substantial detriment to that party. In that
event the party may apply for such judicial relief without such compliance. If
any controversy or claim is submitted to arbitration or litigation, all
counterclaims arising out of the same subject matter shall be asserted and
resolved in that arbitration or litigation.
Section IX.2. Arbitration. If the parties to a controversy
or claim arising out of or relating to this Agreement agree to submit the
matter to arbitration, then, unless the parties specify otherwise, the
following procedures will apply. The controversy or claim shall be settled by
arbitration in Houston, Texas in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. The parties shall agree on one
arbitrator or, if they are unable to agree within 60 days after an arbitrator
has first been proposed, then each
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party shall select one arbitrator, and the two arbitrators so selected shall
together select the third arbitrator. Any arbitration shall be subject to the
following:
(1) Any award pursuant to such arbitration shall be
accompanied by the written opinion of a majority of the arbitrators giving
their reasons therefor and rendered within 30 days of the date of closing of
the arbitration hearing.
(2) The arbitrators shall be selected by mutual consent
of the parties from a list of arbitrators knowledgeable about the operation of
resource recovery facilities prepared by the American Arbitration Association,
but if the parties cannot so agree within 20 days of the date of request for
arbitration, the selection shall be made pursuant to the rules of such
Association.
(3) The award rendered by the arbitrators shall, solely
with respect to the particular dispute, difference or alleged breach of this
Agreement which was submitted to arbitration, be conclusive and binding upon
the parties hereto and judgment on the award may be entered in any court of
proper jurisdiction; provided, however, that nothing herein shall give the
arbitrators any authority to amend, alter or delete any term, condition or
provision of this Agreement.
(4) Each party shall pay its own expenses of arbitration
and the expenses of the arbitrators shall be equally shared; except that if any
matter or dispute raised by a party or any defense or objection thereto was
unreasonable, the arbitrators may assess, as part of the
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award, all or any part of the arbitration expenses (including reasonable
attorneys' fees) of the other party or parties and of the arbitrators against
the party raising such unreasonable matter or dispute or defense or objection
thereto.
(5) The arbitrators shall fix the time and place in
Houston, Texas, for the arbitration hearing, which shall be held within 45 days
after appointment of the arbitrators. Notice of such hearing shall be given by
the arbitrators to the parties at least 20 days in advance, unless the parties
by mutual agreement waive such notice.
(6) The parties shall submit all documents and proof upon
which they intend to rely within 30 days after the appointment of the
arbitrators. All parties shall be afforded a reasonable opportunity to examine
such documents and proof prior to any hearing.
(7) The arbitrators, when authorized by law to subpoena
witnesses or documents, may do so upon their own initiative or upon the request
of any party. All evidence shall be taken in the presence of the arbitrators
and all of the parties, except when any of the parties is absent in default, or
has waived the right to be present.
(8) Any party may be represented by counsel. A party
intending to be so represented shall notify the other party or parties and the
arbitrators of the name and address of counsel at least three days prior to the
date set for the hearing at which counsel is first to appear. When an
arbitration is initiated by counsel, or where any attorney replies for another
party, such notice is deemed to have been given by such party.
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(9) The parties may modify any period of time by mutual
agreement. The arbitrators for good cause may extend any period of time
established by this Agreement, except the time for making the award. The panel
shall notify the parties of any such extension of time and its reason therefor.
(10) The scope of discovery allowed with respect to the
arbitration proceeding shall be the same as that allowed under the Federal
Rules of Civil Procedure.
(11) If a controversy or claim that is to be settled by
arbitration pursuant to this Agreement also arises under the Partnership
Agreement or a Partnership Agreement, Parent Agreement, shareholders' agreement
or similar agreement for any Project Company or any Project Agreement, the
matter shall, to the extent permitted by the applicable agreements, be resolved
in one combined arbitration proceeding, with each Parent and its Affiliates
acting as only one party.
Section IX.3. Specific Performance. The parties acknowledge
that the failure of either party to substantially perform its material
obligations and covenants under this Agreement may result in a significant
frustration of the respective business objectives of the parties under this
Agreement and that the remedies at law may be inadequate to protect the rights
and interests of the other party. Accordingly, the parties, in addition to the
remedies otherwise available under the law for the enforcement of this
Agreement and in view of Section 10.1, expressly consent to an order for
specific performance of such obligations and
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covenants of a party or an order granting other substantially equivalent
equitable remedies calculated to require performance of any such covenants or
obligations.
ARTICLE X
Miscellaneous
Section X.1. Damages. A Parent and its Affiliates shall not
be entitled to recover from the other Parent or its Affiliates special or
consequential damages, or damages for anticipated future profits, loss of
business opportunities or other similar speculative damages for breach of any
covenant or understanding set forth in this Agreement or the Partnership
Agreement, and shall only be entitled to seek reimbursement for the actual
out-of-pocket costs and expenses incurred by the non-breaching party as a
direct result of the conduct of the breaching party (except as provided in
Section 2.2(c) for a right of liquidated damages).
Section X.2. Representations, Warranties and Covenants. (1)
Each party represents and warrants, as of the date hereof (the "Execution
Date"), as follows:
(1) It is a corporation duly incorporated or limited
liability company duly formed and validly existing in good standing
under the laws of the State of its formation, and is duly authorized,
qualified, permitted and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to carry on
its business in the places and in the manner as now conducted (except
where failure to be so authorized, qualified, permitted and licensed
would not have a material adverse effect
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on the business, operations, properties, assets or financial condition
of such corporation or limited liability company).
(2) It is not a party to any contract, agreement or other
commitment or instrument or subject to any charter or other corporate
restriction or subject to any restriction or condition contained in
any permit, license, judgment, order, writ, injunction, decree or
award which would prevent or restrict its ability to enter into and
perform its obligations under this Agreement or which materially and
adversely affects or in the future is expected (as far as such party
can, as of the Execution Date, reasonably foresee) to materially and
adversely affect its business operations, properties, assets or
conditions (financial or otherwise) considered as a consolidated
enterprise.
(3) Its execution and delivery of this Agreement and the
performance of the transactions contemplated herein have been duly and
validly authorized by any necessary corporate action and this
Agreement will be, when executed and delivered, its legal, valid and
binding obligation.
(2) BFI represents and warrants that it is not a public
utility or public utility holding company as such terms are used in the Federal
Power Act, PUHCA, PURPA or any other federal law or state law regulating the
cogeneration, generation, transmission, distribution, sale, marketing or
trading of electrical energy or capacity.
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(3) Duke/UAE Ref-Fuel represents and warrants that its
purchase of the Interests will not (i) violate, or substantially increase the
regulatory obligations of the Partnership or any Project Company under, the
Federal Power Act, PUHCA, PURPA or any other federal law or any state law
regulating the cogeneration, generation, transmission, distribution, sale,
marketing or trading of electrical energy or capacity, or (ii) cause any
electric generating facility owned or operated by a Project Company to lose its
status as a qualifying facility under PURPA.
(4) Each party covenants and agrees that it shall not
take any action or enter into any agreement that would (i) violate, or
substantially increase the regulatory obligations of the Partnership or any
Project Company under, the Federal Power Act, PUHCA, PURPA or any other federal
law or any state law regulating the cogeneration, generation, transmission,
distribution, sale, marketing or trading of electrical energy or capacity, or
(ii) cause any electric generating facility owned or operated by a Project
Company to lose its status as a qualifying facility under PURPA.
Section X.3. Notices.
(1) Any notice required or permitted to be given pursuant
to this Agreement shall be in writing and shall be sufficient if personally
delivered or sent by air courier, or by certified or registered mail (return
receipt requested) properly stamped and addressed, or by telecopy, as follows:
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(1) If to Duke/UAE Ref-Fuel, addressed to Duke/UAE
Ref-Fuel LLC, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, marked for
the attention of the Secretary (telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇).
(2) If to BFI, addressed to, in the case of mail
delivery, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or, in the case of
other delivery, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, in either case
marked for the attention of the Secretary, with a copy sent to the
same address marked for the attention of the Chairman, American Ref-
Fuel Company (telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇).
(20 Either party may change its address by giving written
notice of its new address to the other party.
SECTION X.4. CHOICE OF LAW. THIS AGREEMENT AND ALL RIGHTS
AND LIABILITIES OF THE PARTIES SHALL BE SUBJECT TO AND GOVERNED BY THE LAWS OF
THE STATE OP DELAWARE.
Section X.5. Binding Effect; Amendments. This Agreement
shall be binding upon and shall inure to the benefit of the parties and their
respective legal representatives, successors and permitted assigns. The
written agreement of both Parents is required for any amendment to this
Agreement. Nothing in this Agreement shall be deemed to create any right in
any third party and this Agreement shall not be construed in any respect to be
a contract in whole or in part for the benefit of any third party, except as
expressly provided herein.
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Section X.6. Multiple Counterparts. This Agreement may be
executed in multiple counterparts, each of which shall be an original hereof
for all purposes, and shall be binding upon the party so signing, irrespective
of whether or not both parties executed each counterpart, but all of which
shall be and constitute one instrument.
Section X.7. Gender and Number. Whenever the context
requires, the gender of all words used herein shall include the masculine,
feminine or neuter, and the number of all words shall include the singular and
plural.
Section X.8. Definitions. Capitalized terms used herein but
not specifically defined shall have the meanings ascribed to them in the
Partnership Agreement.
Section X.9. Severability. If any provision of this
Agreement, or the application thereof, shall, for any reason and to any extent,
be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the maximum extent
permissible under applicable law. The Parents shall negotiate in good faith
regarding amendments to this Agreement that would, to the maximum extent
permissible under applicable law, effectuate the intent of any provision
determined to be invalid or unenforceable.
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Section X.10. Headings, etc. Captions and headings contained
in this Agreement are for ease of reference only and do not constitute a part
of this Agreement.
Section X.11. Obligations of Affiliates. Whenever this
Agreement provides for obligations of an Affiliate of a Parent, the failure of
the Affiliate to perform those obligations shall be deemed a breach of this
Agreement by that Parent, but shall not give rise to any cause of action
against the Affiliate pursuant to this Agreement (although a cause of action
regarding such failure may arise pursuant to an agreement to which the
Affiliate is a party). For the avoidance of doubt, the Partnership shall not
be considered an Affiliate of either Parent.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be executed as of the date first above written.
DUKE CAPITAL CORPORATION
By:
------------------------------
Name:
Title:
UNITED AMERICAN ENERGY CORP.
By:
------------------------------
Name:
Title:
DUKE/UAE REF-FUEL LLC
By:
------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ INDUSTRIES, INC.
By:
------------------------------
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