EXHIBIT 2.8
AMENDMENT NO. 5
TO AGREEMENT AND PLAN OF
REORGANIZATION AND merger
BY AND AMONG U.S. ENERGY SYSTEMS, INC.,
USE ACQUISITION CORP. AND
▇▇▇▇▇▇ ALTERNATIVE POWER CORPORATION
This Amendment No. 5 to Agreement and Plan of Reorganization and Merger
(the "Amendment") is made as of the 30th day of April, 2001 by and among U.S.
Energy Systems, Inc. ("Parent"), USE Acquisition Corp. ("Merger Sub"), and
▇▇▇▇▇▇ Alternative Power Corporation (the "Company"). Unless indicated
otherwise, capitalized terms shall have the same meanings herein as they have in
the Merger Agreement (as defined below).
W I T N E S S E T H
WHEREAS, Parent, Merger Sub and the Company previously entered into (i)
that certain Agreement and Plan of Reorganization and Merger dated as of
November 28, 2000, (ii) that certain Amendment No. 1 to the Agreement dated as
of the 11th day of December, 2000, (iii) that certain Amendment No. 2 to the
Agreement dated as of the 19th day of December, 2000, (iv) that certain
Amendment No. 3 to the Agreement dated as of the 19th day of January, 2001 and
(v) that certain Amendment No. 4 to the Agreement dated as of the 23rd day of
February, 2001 (collectively, the "Merger Agreement"); and
WHEREAS, the Parent, Merger Sub and the Company now wish to further amend
the Merger Agreement.
NOW, THEREFORE, in consideration of $10.00 and other consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Section 1.02 of the Merger Agreement is hereby amended by deleting the
existing paragraph in its entirety and inserting in its place the following
paragraph:
As promptly as practicable after the satisfaction of the conditions
set forth in Article VII, the parties hereto shall cause the Merger to be
consummated by filing a certificate of merger required by the DGCL (the
"Certificate of Merger"), with the Secretary of State of the State of
Delaware (the date and time such filing is deemed effective pursuant to the
DGCL being referred to herein as the "Effective Date" and "Effective Time",
respectively); provided, however that notwithstanding anything to the
contrary in this Agreement, the Merger shall be deemed to be effective for
financial, accounting and tax purposes at 12:01 A.M. on May 1, 2001, which
shall be the date used for the Effective Date Balance Sheet and calculation
of the Working Capital Adjustment pursuant to Section 2.05.
2. The third sentence of Section 2.01(a) of the Merger Agreement is hereby
amended by deleting the existing sentence in its entirety and inserting in its
place the following sentence:
Of the Merger Consideration (i) (a) the Indemnification Escrow Shares
and (b) $400,000 in cash shall upon receipt be delivered by the Major
Shareholders to the Escrow Agent (as defined in the Escrow Agreement) to be
held in the Indemnification Escrow Fund (as defined in the Escrow
Agreement) pursuant to the Escrow Agreement, (ii) $500,000 in cash shall
upon receipt be delivered by the Major Shareholders to the Escrow Agent to
be held in the Additional Indemnification Escrow Fund (as defined in the
Escrow Agreement) pursuant to the Escrow Agreement and (iii) (a) the
Working Capital Escrow Shares and (b) $1,200,000 in cash upon receipt shall
be delivered by the Shareholders to the Escrow Agent to be held in the
Working Capital Escrow Fund (as defined in the Escrow Agreement) pursuant
to the Escrow Agreement.
3. Section 2.01(c) of the Merger Agreement is hereby amended by deleting
the existing paragraph in its entirety and inserting in its place the following
paragraph:
The "Average Parent Share Price" means the average of the closing
price per share of Parent Common Stock on the Nasdaq Market System, and if
the Parent Common Stock is not listed on such System, the average of the
last reported sale price per share of Parent Common Stock on the Nasdaq
Small Cap Market (in either case as reported in the Wall Street Journal)
for the twenty (20) consecutive trading days ending on the trading day
which is two (2) Business Days prior to the Effective Time; provided that
if the Effective Date is on or before May 11, 2001 the Average Parent Share
Price shall be $5.35.
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4. Section 2.04 of the Merger Agreement is hereby amended by deleting the
reference to "May 1, 2001" and inserting in its place "May 11, 2001".
5. Section 2.05(b)(A) of the Merger Agreement is hereby amended by deleting
the existing paragraph in its entirety and inserting in its place the following
paragraph:
(A) If the Ordinary Course Working Capital reflected on the Effective
Date Balance Sheet is less than zero by more than the sum of (i)
the cost of installing 11 ▇▇▇▇▇ at ▇▇▇, but in no case more than
$80,000 and (ii) $1,400,000 (any such amount by which such
Ordinary Course Working Capital is less than zero by more than
sum of (i) the cost of installing 11 ▇▇▇▇▇ at ▇▇▇, but in no case
more than $80,000 and (ii) $1,400,000 being the "Ordinary Course
Working Capital Deficit"), then the Merger Consideration shall be
reduced in accordance with Section 2.05(b)(ii) below by an amount
equal to the Ordinary Course Working Capital Deficit; or
6. Schedule 2.01(a) of the Merger Agreement is hereby amended by deleting
the existing Schedule in its entirety and inserting in its place Exhibit A
hereto;
7. Subparagraph (a) of Annex 1 to the Merger Agreement is hereby amended by
deleting the current definition of "Major Shareholders" and inserting in its
place the following definition.
"Major Shareholders" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Finova Mezzanine Capital
Corp., AJG, Environmental Opportunities Fund, ▇▇▇▇▇▇▇ ▇▇▇▇, M&R Associates,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and their heirs, successors and assigns.
8. Subparagraph (a) of Annex 1 to the Merger Agreement is amended by
deleting the current definition of "Ordinary Course Working Capital" and
inserting in its place:
"Ordinary Course Working Capital" means the net result, of (A) the sum of
all current assets incurred by the Company in the ordinary course of business
including unrestricted cash, shown on the Effective Date Balance Sheet as an
asset of the Company which has not been set aside or reserved for Construction
Projects, minus (B) the sum of all current liabilities (including without
limitation accounts payable and accrued) incurred by the Company in the ordinary
course of business, in each case as reflected on the Effective Date Balance
Sheet. In calculating the Ordinary Course Working Capital, current assets shall
include, among other items, any receivable originating from the sale of the
Company's property at ▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇
▇▇▇▇ and exclude (i) restricted cash associated with Construction Projects, (ii)
Illinois subsidy cash, (iii) payments made by AJG prior to the Effective Time in
connection with the YESCO Transaction and the Cinergy Transaction and (iv) any
fee or compensation paid by AJG or its Affiliates in connection with
transactions described in the Purchase and Sale Agreement by and among AIG Gas
LLC, AJG and Zapco dated as of December 22, 2000. In calculating the Ordinary
Course Working Capital, current payables shall include, among other items, (A)
the accrued bonuses and deferred salaries of Company personnel in an aggregate
amount not to exceed $200,000, and (B) any premiums for the D&O Insurance
incurred prior to the Effective Time but shall exclude (1) construction payables
covered by restricted cash described in clause (i) of this paragraph and (2) the
aggregate amount of any payables to the limited partners of ZFC Royalty Partners
that are cancelled by their acceptance, on or before June 30, 2001, of the
exchange offer made by the Parent. In the event the Ordinary Course Working
Capital reflected on the Effective Date Balance Sheet is less than zero, the
Effective Date Balance Sheet shall include a footnote confirming that the
current payables reflected on the Effective Date Balance Sheet do not include
any amounts declared or paid to the Company's stockholders other than the
accrued bonuses and deferred salaries of Company personnel in an aggregate
amount not to exceed $200,000. For purposes of this definition of Ordinary
Course Working Capital "ordinary course of business" shall consist of the
operation of the existing project portfolio, ongoing Construction Projects
(including outlays for such Projects), in-house costs associated with ongoing
development efforts and costs associated with the consummation of the Merger,
the YESCO Acquisition and the ABB Loan Agreement.
9. Annexed hereto as Annexes A and B are certain supplemental Company
Disclosure Schedules and Parent Disclosure Schedules, respectively, as of the
Effective Time, which supplemental Schedules shall qualify the representations
and warranties of the respective parties related to such Supplemental Company
Disclosure Schedules and Parent Disclosure Schedule as of the Effective Time but
which shall not be deemed to supercede the Disclosure Schedules attached to the
Merger Agreement with respect to any date prior to the date hereof. Except as
set forth in the Supplemental Disclosure Schedules attached hereto, the
Disclosure Schedules attached to the Merger Agreement shall qualify the
representations and warranties of the respective parties as of the Effective
Time.
10. Except as amended hereby, the Merger Agreement is as hereby ratified
and confirmed and, as so amended, remains in full force and effect on the date
hereof.
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above.
U.S. ENERGY SYSTEMS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and Chief
Operating Officer
USE ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇ ALTERNATIVE POWER CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
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