Exhibit 10.6
OPTION AGREEMENT
This Option Agreement, dated as of January 20, 1997, is among Earth Sciences,
Inc. ("ESI"), ESI Resources Limited, an Alberta corporation, and Earth Sciences
Extraction Company, an Alberta limited partnership (collectively referred to as
the "ESI Group") on the one hand and Yankee Atomic Electric Company and Vermont
Yankee Nuclear Power Corporation (such latter two companies are herein referred
to as "Yankee") on the other.
WHEREAS, the parties hereto have previously entered into a Production Purchase
Agreement dated August 4, 1978, which such agreement has been amended on three
occasions (the "PPA");
WHEREAS, the parties are willing, under the terms and conditions set forth
herein, to terminate the PPA and all related liens and mortgages;
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and
other good and valuable consideration, the receipt of which is hereby
acknowledged by each of the parties, the parties hereto hereby agree as follows:
Section 1. Payment for Option. ESI will, simultaneously with the execution and
delivery of this Agreement, wire transfer U.S. $100,000 in immediately available
federal funds to Yankee's bank account at Bank of New York, One Wall Street, New
York, New York (ABA #021-000-018). Such payment amount shall be nonrefundable
and shall constitute consideration for the option granted in Section 2 below.
Section 2. Option. Yankee hereby grants ESI on behalf of the ESI Group the
option, exercisable on or before the close of business in Denver on October 20,
1997, to terminate the PPA without further liability to any party thereto by
delivering to Yankee (i) the sum of U.S. $1,150,000 in immediately available
federal funds and (ii) an assignment, executed by the ESI Group, of a 10% net
profits interest in the form attached hereto as Exhibit A. If ESI exercises such
option, then Yankee will forthwith take all steps necessary or desirable to
release all liens, mortgages and other encumbrances it may have which burden any
asset of the ESI Group, such releases to be in the form attached hereto as
Exhibit B.
Section 3. The ESI Group's Representations and Warranties. The ESI Group
represents and warrants:
(a) Organization, Good Standing Related Matters. Each member of the ESI Group
has been duly incorporated or formed and is validly existing in good standing
under the laws of its state or province of formation. Each member of the ESI
Group is duly qualified to do business in any other jurisdictions in which such
qualification is required except where failure to so qualify would not have a
material adverse effect on the ESI Group or its business. Each member of the ESI
Group has all requisite power and authority to own its properties and conduct
its business as presently being conducted.
(b) Authorization. The execution, delivery and performance by each member of the
ESI Group of this Agreement has been duly authorized by all necessary corporate
action.
(c) Binding Obligation. This Agreement has been duly executed and delivered by
each member of the ESI Group and constitutes a legal, valid and binding
obligation of each member of the ESI Group, enforceable in accordance with its
terms except as limited by bankruptcy, insolvency, moratorium, and other laws of
general application affecting the enforcement of creditors' rights and by
general principles of equity.
(d) No Conflicts. The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein will not (i) conflict with
or result in a breach of any of the terms, provisions or conditions of any
material contract, note, lease, agreement or other instrument or obligation to
which any member of the ESI Group is a party or (ii) violate any law, order,
judgment, rule or regulation applicable to any member of the ESI Group.
(e) Approvals and Consents. No approval, consent or authorization of any natural
person, firm, corporation, court or federal, state or provincial governmental
authority is necessary for the execution or delivery of this Agreement or for
the performance by any member of the ESI Group of any of the terms or conditions
hereof.
(f) Litigation. There is no action, proceeding, or investigation pending or, to
the best knowledge of any member of the ESI Group, threatened against any member
of the ESI Group before any court or administrative agency, nor any writ, order
or judgment of any court or administrative agency, that questions the validity
of this Agreement or the right of any member of the ESI Group to enter into such
agreement, or to consummate the transaction contemplated hereby or thereby, or
that might result in the aggregate in any material adverse change in the
business, prospects, condition, affairs, operations, properties, or assets of
the ESI Group or in any material liability on the part of the ESI Group.
(g) Compliance with Law. Each member of the ESI Group, to the best of its
knowledge after reasonable investigation, is in compliance with all applicable
statutes, laws, regulations and executive orders of the United States of America
and all states, foreign countries, and other governmental bodies and agencies
having jurisdiction over its business or properties, and no member of the ESI
Group has received notice of any material violation of such statutes, laws,
regulations or orders which has not been remedied prior to the date hereof.
(h) Agreements, Contracts. No member of the ESI Group has breached, nor does any
member of the ESI Group have knowledge of any claim or threat that it has
breached, any of the terms or conditions of any material agreement, contract,
lease, license, instrument or commitment that in the aggregate could have a
material adverse effect on the business, properties, financial condition or
results of operations of the ESI Group. The execution, delivery and performance
of and compliance with this Agreement, have not resulted and will not result in
any violation of, or conflict with, or constitute a default under any of the
foregoing, or result in the creation of any mortgage, pledge, lien, encumbrance
or charge upon any of the properties or assets of any member of the ESI Group.
To the knowledge of each member of the ESI Group, no party to any of its
material contracts is in material default of any such contract.
Section 4. Yankee's Representations and Warranties. Yankee represents and
warrants:
(a) Organization, Good Standing and Related Matters . Yankee has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its state of formation. Yankee is duly qualified to do business as a
foreign corporation in any other jurisdictions in which such qualification is
required except where failure to so qualify would not have a material adverse
effect on Yankee or its business. Yankee has all requisite power and authority
to own its properties and conduct its business as presently being conducted.
(b) Authorization. The execution, delivery and performance by Yankee of this
Agreement has been duly authorized by all necessary action.
(c) Binding Obligation. This Agreement has been duly executed and delivered by
Yankee and constitutes a legal, valid and binding obligation of Yankee,
enforceable in accordance with its terms except as limited by bankruptcy,
insolvency, moratorium, and other laws of general application affecting the
enforcement of creditors' rights and by general principles of equity.
(d) No Conflicts. The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein will not (i) conflict with
or result in a breach of any of the terms, provisions or conditions of any
material contract, note, lease, agreement or other instrument or obligation to
which Yankee is a party or (ii) violate any law, order, judgment, rule or
regulation applicable to Yankee.
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(e) Approvals and Consents. No approval, consent or authorization of any natural
person, firm, corporation, court or federal or state governmental authority is
necessary for the execution-or delivery of this Agreement or for the performance
by Yankee of any of the terms or conditions hereof.
(f) Litigation. There is no action, proceeding, or investigation pending or, to
the best knowledge of Yankee, threatened against Yankee before any court or
administrative agency, nor any writ, order or judgment of any court or
administrative agency, that questions the validity of this Agreement or the
right of Yankee to enter into such agreement, or to consummate the transaction
contemplated hereby or thereby, or that might result in the aggregate in any
material adverse change in the business, prospects, condition, affairs,
operations, properties, or assets of Yankee or in any material liability on the
part of Yankee. Yankee does not currently intend to initiate any legal action
against any other person or entity.
(g) Execution of Agreement, et al. The execution, delivery and performance of
and compliance with this Agreement, have not resulted and will not result in any
violation of, or conflict with, or constitute a default under any material
agreement, contract, lease, license, instrument or commitment that in the
aggregate could have a material adverse effect on the business, properties,
financial condition or results of operations of Yankee, or result in the
creation of any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of Yankee. To Yankee's knowledge no party to any of its
material contracts is in material default of any such contract.
Section 5. Miscellaneous.
(a) Waiver and Amendment. Any term hereof may be amended, and the observance of
any term hereof may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent of the
parties hereto.
(b) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid, but if any provision of
this Agreement shall be held to be prohibited by or invalid, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
(c) Colorado Law Applicable. This Agreement shall be governed by and construed
under the laws of the State of Colorado without regard to its conflicts of law
rules.
(d) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(e) Notices. Any notice required under this Agreement shall be given in writing
and shall be deemed effectively given upon personal delivery or sent by
facsimile to the number set forth below to the party to be notified or upon
deposit with the United States Post Office by registered or certified mail,
postage prepaid (or with an equivalent independent postal service) and addressed
to the party at the address set forth below or at such other facsimile number or
address as may be designated by a party by written notice to the other party:
To ESI Group:
c/o Earth Sciences, Inc.
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel. No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
To Yankee:
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c/o Yankee Atomic Electric Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel. No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
(f) No Implied Waiver. Failure to insist upon strict compliance with any
provision hereof shall not be a waiver of such provision or any other provision
hereof. Further, the waiver by either party hereto of a breach of any provision
hereof by the other party shall not be construed to waive any subsequent breach
by such party.
(g) Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties and supersedes all prior understandings, agreements
or representations by or between the parties, whether oral or written, with
respect to the Option.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year hereinabove first written.
Earth Sciences, Inc.
By /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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President
ESI Resources, Limited
By /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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President
Earth Sciences Extraction Company
by ESI Resources Limited, general partner
By /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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President
Yankee Atomic Electric Company
By /s/▇. ▇. ▇▇▇▇▇▇
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Authorized Officer
Vermont Yankee Nuclear Power Corporation
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Authorized Officer
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EXHIBIT A
ASSIGNMENT OF NET PROFITS
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INTEREST
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KNOW ALL MEN BY THESE PRESENTS, THAT:
THIS ASSIGNMENT, dated as of the Effective Date as herein defined, is executed
by Earth Sciences, Inc., a Colorado corporation, ESI Resources Limited, an
Alberta corporation, and Earth Sciences Extraction Company, an Alberta limited
partnership, whose mailing address is c/o Earth Sciences, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (collectively, the "Assignor"), to Yankee Atomic Electric
Company and Vermont Yankee Nuclear Power Corporation, jointly, whose mailing
addresses are c/o Yankee Atomic Electric Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (collectively, the "Assignee"). Capitalized terms shall have
the meaning set forth above and in Article VIII hereof.
ARTICLE I CONVEYANCE
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Assignor, for and in consideration of the sum of One Hundred Dollars ($100.00)
and other good and valuable consideration in hand paid by Assignee to Assignor,
the receipt and sufficiency of which are hereby acknowledged, has GRANTED,
BARGAINED, SOLD, CONVEYED, ASSIGNED and DELIVERED, and by these presents does
hereby GRANT, BARGAIN, SELL, CONVEY, ASSIGN and DELIVER, the Net Profits
Interest unto ASSIGNEE.
TO HAVE AND TO HOLD the Net Profits Interest, together with all and singular the
rights and appurtenances thereunto, subject, however, to the terms and
provisions of the Permitted Agreements and Burdens and this Conveyance; and
Assignor does by these presents bind and obligate itself, its successors and
assigns, to WARRANT and FOREVER DEFEND, all and singular the Net Profits
Interest unto the Assignee, its successors and assigns, against every person
whomsoever, lawfully claiming or to claim the same or any part thereof, by,
through or under the Assignor, but not otherwise.
ARTICLE II RECORDS AND REPORTS
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2 01. Books and Records. The Assignor shall at all times maintain true and
correct books and records sufficient to determine the Net Profits Interest,
including, but not limited to, accounts to which Gross Revenues and Costs and
Expenses are credited and charged and from which Net Income is determined. Such
books and records shall be maintained in accordance with GAAP.
2.02. Inspections. The books and records referred to in Section 2.01 shall be
open for inspection, copying and audit at the offices of ESI Resources Limited,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ during normal business hours.
2.03. Annual Statements. Within ninety (90) days next following the close of
each calendar year, Assignor shall deliver to the Assignee, together with any
payment due under Section 3.01 below, a detailed statement showing the
computation of Net Income attributable to such year, accompanied by a
certificate of the chief financial officer of ESI stating that such statement
has been prepared in accordance with this Agreement and that such person does
not know of any inaccuracy therein. The statement will be accompanied by an
audit report on Earth Science, Inc.'s year end financial statement prepared by
Earth Science, Inc.'s independent certified public accountants.
2.04. Assignee's Exceptions to Annual Statements. If Assignee shall take
exception to any item or items included in the annual statements rendered by
Assignor, Assignee shall notify Assignor in writing within two (2) years after
the receipt of thereof, setting forth in such notice the specific charges
complained of and to which exception is taken or the specific credits which
should have been made and allowed, and with respect to such complaints and
exceptions as are justified, adjustment shall be made. If Assignee shall fail to
give Assignor notice of such
complaints and exceptions prior to the expiration of such two year period, then
the statements as originally rendered by Assignor shall be deemed to be correct
as rendered.
ARTICLE III PAYMENT
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3.01. Payment. On or before the last Business Day in the month of March in each
year commencing in 1998, Assignor shall pay to Assignee (except as otherwise
provided in Article VII) an amount equal to the Net Profits Interest for the
prior calendar year or pro rata part thereof less Net Profits Taxes paid or
payable by Assignor and/or its Affiliates or other Person on behalf of the
Assignee. Such payment shall be accompanied by the statement and certificate
required under Section 2.03 hereof. All payments shall be in U.S. dollars.
3.02. Interest on Past Due Payments. Any amount not paid by Assignor to Assignee
when due shall bear, and Assignor will pay, interest at the rate of 18% per
annum, but not in excess of the maximum amount allowed by law.
3.03. Overpayment. If at any time Assignor inadvertently pays Assignee more than
the amount due, Assignee shall not be obligated to return such overpayment, but
the amount or amounts otherwise payable for any subsequent period or periods
shall be reduced by such overpayment, without interest.
ARTICLE IV NON-LIABILITY OF ASSIGNEE
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In no event shall Assignee be liable or responsible in any way for any Costs and
Expenses or other costs or liabilities incurred by Assignor in connection with
the Facility.
ARTICLE V OPERATION OF FACILITY
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5.01. Prudency Standard. Assignor agrees that it will conduct or cause to be
conducted, the development, maintenance and operation of the Facility with
reasonable and prudent business judgment and in accordance with good practices.
5.02. Abandonment of Facility. Nothing herein contained shall obligate Assignor
to continue to maintain or attempt to maintain the Facility when, in Assignor's
sole opinion, the Facility is incapable of producing a profit to the Assignor.
5.03. Insurance. Assignor shall maintain, or cause to be maintained, insurance
in such amounts and covering such risk as is usually carried by companies
engaged in similar business and owning similar properties. All insurance
required by this Section 5.03 shall be maintained with responsible and reputable
insurance companies or associations, and may contain such deductibles as
Assignor deems appropriate.
ARTICLE VI ASSIGNMENTS
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6.01. Assignment by Assignor. Assignor shall not have the right to assign, sell,
transfer, convey, mortgage or pledge any interest in the Facility unless made
expressly subject to the Net Profits Interest and the terms and provisions of
this Conveyance.
6.02. Assignment by Assignee. Assignee has the right to assign the Net Profits
Interest in whole or in part. However, no such assignment will affect the method
of computing Net Income, and if more than one Person becomes entitled to
participate in the Net Profits Interest, Assignor may withhold the furnishing of
any information provided for in ARTICLE II from such other Person until Assignor
is furnished a recordable instrument executed by or binding upon all Persons
interested in the Net Profits Interest designating one Person who is to receive
such information.
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6.03. Change in Ownership. No change of ownership or right to receive payment of
the Net Profits Interest, or of any part thereof, however accomplished, shall be
binding upon Assignor until notice thereof shall have been furnished by the
Person claiming the benefit thereof, and then only with respect to payments
thereafter made.
Notice of sale or assignment shall consist of a certified copy of the recorded
instrument accomplishing the same; notice of change of ownership or right to
receive payment accomplished in any manner (for example by reason of incapacity,
death or dissolution) shall consist of certified copies of recorded documents
and complete proceedings legally binding and conclusive of the rights of all
parties. Until such notice shall have been furnished to Assignor as above
provided, the payment or tender of all sums payable on the Net Profits Interest
may be made in the manner provided herein precisely as if no such change in
interest ownership or right to receive payment has occurred. The kind of notice
herein provided shall be exclusive, and no other kind, whether actual or
constructive, shall be binding on Assignor.
6.04. Rights of Mortgagee or Trustee. If the Assignee shall at any time execute
a mortgage or deed of trust covering all or part of the Net Profits Interest,
the mortgagee(s) or trustee(s) therein named or the holder of any obligation
secured thereby shall be entitled, to the extent the mortgage or deed of trust
so provides, to exercise all the rights, remedies, powers and privileges
conferred upon the Assignee by the terms of this Conveyance and to give or
withhold all consents required to be obtained hereunder by the Assignee, but the
provisions of this Section 6.04 shall in no way be deemed or construed to impose
upon the Assignor any obligation or liability undertaken by the Assignee under
such mortgage or deed of trust or under the obligation secured thereby.
ARTICLE VII REPURCHASE OPTION
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Assignor shall have the option to repurchase the Net Profits Interest from the
Assignee or its successors and assigns at any time prior to the termination of
the Net Profits Interest by paying the Assignee or its successors and assigns
the sum of (a) $3,000,000 plus (b) an additional $50,000 for each January 1st
following the date of this Conveyance. In addition, Assignor shall pay Assignee
on March 30 of the calendar year following the year in which this repurchase
option is exercised an amount equal to (a) the Net Profits for the preceding
calendar year multiplied by (b) a fraction equal to the numeric equivalent of
the month in which the repurchase option is exercised divided by 12.
Notwithstanding anything in this Article to the contrary, the Assignor shall
never be required to pay Assignee and its successors and assigns more than
$3,250,000 to repurchase the Net Profits Interest.
ARTICLE VIII DEFINITIONS
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The following words, terms or phrases have the following meaning when used in
this Agreement:
"Affiliate" means as to any Person, any Person controlling, controlled by or
under common control with such Person, with the concept of control in such
context meaning the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of another, whether
through the ownership of voting securities, by contract or otherwise.
"Assignee" means the Assignee while it owns an interest in the Net Profits
Interest, and any other Person or Persons who subsequently acquire legal title
to-all or any portion of the Net Profits Interest.
"Assignor" means the Assignor while it owns all or part of the Facility other
than a royalty or profits interest, and any other Person or Persons who acquire
all or any part of the Facility other than a royalty or profits interest.
"Business Day" means any day which is not a Saturday, Sunday or other day in
which national banking institutions in the City of Denver, Colorado are closed
as authorized or required by law.
"Conveyance" means this Assignment of Net Profits Interest.
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"Costs and Expenses" means the sum of the following amounts related to the
Facility determined in accordance with GAAP from and after the Effective Date
(which shall be counted only once even though they may be covered by more than
one of the subparagraphs or clauses of this definition):
(1) all actual cash expenditures and reasonable accruals by the Assignor or its
Affiliates in connection with the operation of the Facility, including by way of
example and not limitation, all costs for any materials, processing, production,
haulage, storage, rentals, assessments, testing, selling, general and
administrative costs directly relating to the Facility, supplies, materials and
maintenance, all payments of any kind to Western Cooperative Fertilizers
Limited, all taxes directly related to the Facility or the production therefrom
except income taxes, all costs of employees utilized on or for the direct
benefit of the Facility and operations thereof, including wages, plans of
deferred compensation, other employee contributions, and all additional benefits
such as insurance, retirement and services calculated on a cost (no profit and
including only those bonuses that are reasonable and customary in the industry)
basis to Assignor and/or its Affiliates, including appropriate overhead charges,
all costs of professional consultants, accounting and legal services or
independent contractors insofar as they relate directly to the Facility;
insurance; utilities, including power and water, and all other costs of the
Assignor and/or its Affiliates in connection with the preservation and operation
of the Facility;
(2) Production Taxes related to the Facility;
(3) any amounts paid or accrued by the Assignor and/or its Affiliates, whether
as refund, interest or penalty, to a purchaser because the amount initially
received by the Assignor and/or its Affiliates as sales price was more, or
allegedly more, than permitted by the terms of any applicable contract, statute,
regulation, order, decree or other obligations related to the Facility; and
(4) amounts paid by the Assignor and/or its Affiliates on and in accordance with
any Permitted Agreements and Burdens, interest paid by the Assignor to third
parties on indebtedness incurred in connection with the Facility and
depreciation and amortization at a rate no greater than a straight line basis of
or related to the Facility.
"Effective Date" means 12:01 a.m., Calgary time on the first day of the next
succeeding month after exercise by ESI of the option described in the Option
Agreement, dated as of ______________ to which Earth Sciences, Inc. and Yankee
are, among others, parties.
"Facility" means the Assignor's solvent extraction facility located in Calgary,
Alberta, the legal description of which is as follows:
MERIDIAN 4 RANGE 29 TOWNSHIP 23
SECTION 16
THAT PORTION OF THE NORTHEAST QUARTER WHICH LIES TO THE SOUTH AND WEST OF THE
ROADWAY ON PLAN 5170EZ AND TO THE SOUTH AND EAST OF THE LAND COMPRISED WITHIN
6460AR CONTAINING 53.7 HECTARES (132.67 ACRES) MORE OR LESS EXCEPTING THE
STREET WIDENING ON PLAN 8311428 CONTAINING 0.164 HECTARES (0.41 ACRES) MORE
OR LESS EXCEPTING THEREOUT ALL MINES AND MINERALS; and PLAN ▇▇▇▇▇▇ ▇▇▇▇▇ "X"
AND BLOCK "Y" EXCEPTING OUT OF SAID BLOCK "Y" THE RIGHT OF WAY ON PLAN RW543
CONTAINING 0.526 HECTARES (1.30 ACRES) MORE OR LESS EXCEPTING THEREOUT ALL
MINES AND MINERALS AND THE RIGHT TO WORK THE SAME.
"GAAP" means generally accepted accounting principles.
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"Gross Revenues" means the sum of the following amounts determined in accordance
with GAAP from and after the Effective Date (which items shall be counted only
once even though they may be covered by more than one of the subparagraphs or
clauses of this definition):
(1) An amount equal to all sales of products from the Facility after the
Effective Date recognized under GAAP by the Assignor and/or its Affiliates;
(2) The income from all insurance less costs of collection, judgments and claims
(including settlements thereof), recognized by the Assignor and/or its
Affiliates involving the Facility to the extent such income is not actually used
or committed for use in repairing, rebuilding or replacing any property, the
loss, damage, taking or condemning of which gave rise to such judgment or claim;
and
(3) All other monies and things of value recognized as income by the Assignor
and/or its Affiliates by virtue of the ownership of the Facility, except that
the income from the sale by the Assignor and/or its Affiliates of any interest
in the Facility shall not be included in Gross Revenues in the event that the
Assignor and/or its Affiliates should hereafter sell any part of its interest in
the Facility subject to the Net Profits Interest herein assigned.
"Net Income" for any period means the excess of Gross Revenues recognized during
such period over the Costs and Expenses recognized during such period.
"Net Loss " at any calendar year end date means an amount equal to the excess of
Costs and Expenses over Gross Revenues for such period. Net Loss will not carry
forward or carry back.
"Net Profits Interest" means 10% of the Net Income.
"Net Profits Taxes" means all windfall profit taxes, state severance taxes,
excise taxes, ad valorem taxes, income taxes and all other taxes or governmental
charges which are attributable to the Net Profits Interest, to Net Income
derived by the Assignee therefrom, or to both and as to which the Assignor
and/or its Affiliates is required to withhold and pay over or otherwise account
to any taxing authority.
"Non-Affiliate" means, as to the party specified, any Person who is not an
Affiliate of such party.
"Permitted Agreements and Burdens" means all agreements,
whenever entered into, relating to the borrowing of monies for use at or in
connection with the Facility; and, if consented to by the Assignee, all other
agreements entered into after the Effective Date.
"Person" means any individual, corporation, partnership, trust, estate or other
entity or organization.
"Production Taxes" means (a) all windfall profit taxes, state, provincial and
local severance taxes and all other taxes, excluding income taxes, and (b) all
ad valorem taxes and other taxes, excluding income taxes, imposed on the
Facility or Assignor and/or its Affiliates' interest therein.
ARTICLE IX MISCELLANEOUS
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9.01. Term. This Conveyance shall remain in force and effect until the earliest
of (i) the tenth anniversary following the Effective Date; (ii) payment by the
Assignor of a total of $4,850,000 pursuant to the terms hereof or by prepayment;
or (iii) the date on which the repurchase option described herein is exercised.
9.02. Further Assurances. Should any additional instruments of assignment and
conveyance be required to describe more specifically any interests subject
hereto, Assignor and Assignor agree to execute and deliver the same. Also, if
any other or additional instruments are required in connection herewith in order
to comply with applicable laws or regulations, Assignor and Assignee will
execute and deliver the same.
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9.03. Notices. All notices, statements, payments and communications between the
parties hereto shall be deemed to have been sufficiently given and delivered if
enclosed in a post paid wrapper and deposited in the United States mails
directed, or if personally delivered or telecopied, to the party to whom the
same is directed or to be furnished or made at the respective address, as
follows:
ASSIGNOR:
c/o Earth Sciences, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel. No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
ASSIGNEE:
c/o Yankee Atomic Electric Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel. No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Either party or the successors or assignees of the interest or rights or
obligations of either party hereunder may change its address or designate a new
or different address or addresses for the purposes hereof by a similar notice
given or directed to all parties interested hereunder at the time.
9.04. Binding Effect. This Conveyance shall bind and inure to the benefit of the
successors and assigns of Assignor and Assignee.
9.05. Governing Law. The validity, effect and construction of this Conveyance
shall be governed by the laws of Colorado.
9.06. Headings. Article and Section headings used in this Conveyance are for
convenience only and shall not affect the construction of this Conveyance.
9.07. Substitution of Warranty. This instrument is made with full substitution
and subrogation of Assignee in and to all covenants of warranty by others
heretofore given or made with respect to the Facility or any part thereof or
interest therein.
9.08. Counterpart Execution. This Conveyance is being executed in multiple
original counterparts, all of which are identical. Every counterpart of this
Conveyance shall be deemed to be an original for all purposes and all such
counterparts together shall constitute one and the same Conveyance.
IN WITNESS WHEREOF, the parties have caused this Conveyance to be executed in
their respective names and their corporate seals to be affixed hereto and
attested by their proper signatory officers thereunto authorized, in multiple
originals, as of the Effective Date.
Earth Sciences, Inc.
By_________________________
President
6
ESI Resources Limited
By________________________
President
Earth Sciences Extraction Company
by ESI Resources Limited, general partner
By_________________________
President
Yankee Atomic Electric Company
By_________________________
Authorized Officer
Vermont Yankee Nuclear Power Corporation
By__________________________
Authorized Officer
STATE OF COLORADO )
) ss.
COUNTY OF JEFFERSON )
The foregoing instrument was acknowledged before me this day of , 1997, by ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇ as President of Earth Sciences, Inc.
Witness my hand and official seal.
My Commission Expires:
------------------------------
Notary Public
Name:
------------------------
Address:
----------------------
STATE OF COLORADO )
) ss.
COUNTY OF JEFFERSON )
The foregoing instrument was acknowledged before me this day of , 1997, by ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇ as President of ESI Resources Limited on its own behalf and as
general partner of Earth Sciences Extraction Company.
Witness my hand and official seal.
My Commission Expires:
---------------------------------
Notary Public
Name:
----------------------------
Address:
------------------------
COMMONWEALTH OF MASSACHUSETTS )
) ss.
COUNTY OF WORCESTER )
The foregoing instrument was acknowledged before me this day of , 1997, by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as President of Yankee Atomic Electric Company.
Witness my hand and official seal.
My Commission Expires:
------------------------------
Notary Public
Name:
-------------------------
Address:
----------------------
7
STATE OF VERMONT )
) ss.
COUNTY OF ▇▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this day of , 1997 by ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, as President of Vermont Yankee Nuclear Power Corporation.
Witness my hand and official seal.
My Commission Expires:
---------------------------
Notary Public
Name:
---------------------
Address:
-------------------
8