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Exhibit: 10.11.4
FIRST AMENDMENT
TO THE STOCK PURCHASE AGREEMENT
AMONG
GAS ENERGY, INC., GAS ENERGY COGENERATION INC.,
THE BROOKLYN UNION GAS COMPANY
AND
CALPINE EASTERN CORPORATION AND CALPINE CORPORATION
Dated August 22 1997;
As Amended
on December 19, 1997
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FIRST AMENDMENT, dated December 19, 1997, among Gas Energy Inc., a New York
corporation ("GEI"), Gas Energy Cogeneration Inc., a Delaware corporation
("GECI," and together with GEI, the "Companies"), The Brooklyn Union Gas
Company, a New York corporation (the "Seller"), Calpine Eastern Corporation, a
Delaware corporation (the "Purchaser"), and Calpine Corporation, a Delaware
corporation (the "Guarantor"), to the Stock Purchase Agreement, dated August 22,
1997 (the "Original Agreement"), among the Companies, the Seller, the Purchaser
and the Guarantor.
The Companies, the Seller, the Purchaser and the Guarantor entered into
the Original Agreement relating to the sale to the Purchaser of all of the
outstanding stock of each of the Companies.
The parties desire to amend the Original Agreement in certain respects as
hereinafter set forth.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Original Agreement. References to "the
Agreement" or "this Agreement" contained in the Original Agreement and this
Amendment shall mean the Original Agreement as amended by this Amendment.
In consideration of the mutual benefits to be derived from this Amendment
and of the agreements and promises contained herein and other good and valuable
consideration, the parties agree as follows:
1. Section 1.2(a) of the Original Agreement shall be deleted in its
entirety and replaced with the following:
"(a) The purchase price (the "Purchase Price") for the Shares shall
be cash in the amount of $100,899,927 (of which $100,699,927 shall be
consideration for the Shares and $200,000 shall be consideration for the
put options set forth in Sections 3.9 and 3.10), subject to adjustment in
accordance with paragraph (b) below, payable by wire transfer in
immediately available funds, to one or more bank accounts of the Seller.
Such bank accounts shall be designated by the Seller in writing not later
than one business day prior to the Closing Date."
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2. The first sentence of Section 1.2(b)(i) of the Original Agreement
shall be deleted in its entirety and replaced with the following:
"(b) (i) No later than January 12, 1998, the Seller shall deliver
to the Purchaser a statement (the "Net Working Capital Statement") setting
forth the Net Working Capital of the Companies as of the Closing Date (the
"Final Net Working Capital"), prepared by a Vice President of the Seller."
3. Schedules 2.2(f) and 2.2(k)-2 are hereby amended by adding thereto
the items set forth on Annexes A-1 and A-2, respectively.
4. Section 3.6(c) of the Original Agreement shall be deleted in its
entirety and replaced with the following:
"(c) Each of the Seller and the Purchaser hereby agree to reflect
the allocation of the Aggregate Deemed Sale Price (as defined under
applicable Treasury Regulations promulgated pursuant to the Code) of the
assets of the Company as set forth in Schedule 3.6(c) hereto in all
applicable tax returns filed by either of them, including the Section 338
Forms. Neither the Seller nor the Purchaser shall take a position
inconsistent with such allocation unless and to the extent required to do
so pursuant to a determination (as defined in Section 1313(a) of the
Code)."
5. Schedule 3.6(c), which is attached as Annex B to this Amendment,
shall be added as a Schedule to the Agreement.
6. Section 3.9(b) of the Original Agreement shall be deleted in its
entirety and replaced with the following:
"(b) It shall be a condition precedent to the Purchaser's right to
exercise the Put Right that, on the date of exercise of the Put Right and
on the Put Closing Date (as defined in paragraph (c)), (i) TEC then owns
all of the assets it owns at the time of the Closing free and clear of all
Claims (other than Claims which exist at the time of the Closing) and (ii)
since the time of the Closing, TEC shall not have issued or made any
commitment to issue any additional shares of capital stock."
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7. Section 3.9(e) of the Original Agreement shall be deleted in its
entirety and replaced with the following:
"(e) On the BFM Put Closing Date, the Purchaser shall provide a
certificate of its Chief Financial Officer, in form and substance
reasonably satisfactory to the Seller, stating that the information set
forth in the Exercise Notice Certificate is true and correct as if
provided on and as of the Put Closing Date. Contemporaneously with such
provision and conveyance, the Seller shall deliver the adjusted BFM Put
Price by wire transfer of immediately available funds to the Purchaser."
8. Section 3.10 of the Original Agreement shall be deleted in its
entirety and replaced with the following:
"3.10. BFM Put Right. (a) Subject to the conditions set forth in
paragraph (b), at any time in the period (the "BFM Put Exercise Period")
between the Closing Date and the earlier of (i) the date which is 90 days
after the Closing Date and (ii) the latest of (A) the date on which the
transactions contemplated by the Makowski Stock Purchase Agreement (as
defined below) are consummated, (B) the date on which the transactions
contemplated by the GE Purchase Agreement (as defined below) are
consummated, (C) the date on which the Purchaser receives from Northrup
Grumman Corporation (formerly known as Grumman Aerospace Corporation)
("Grumman") the Grumman Consent (as defined below) and (D) the date on
which the Grumman Amendments (as defined below) are executed, the
Purchaser shall have the right (the "BFM Put Right") on one occasion, in
its sole discretion, to require the Seller, or an affiliate of the Seller
designated by the Seller, to purchase from the Purchaser all, but not less
than all, of the Purchaser's right, title and interest in the shares of
capital stock of Bethpage Fuel Management Inc. ("BFM"), currently owned by
GEI (the "BFM Shares"), at a price of $5,813,230 (the "BFM Put Price"), as
adjusted in accordance with the next succeeding sentence. The BFM Put
Price shall be reduced by the amount of all payments from the Seller to
any Indemnified Person (as defined in Section 5.3) pursuant to Section 5.1
from the Closing Date to the BFM Put Closing Date, to the extent such
payments arise from, are by
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reason of, or are in connection with, breaches of representations and
warranties or covenants of the Seller herein relating to BFM. During the
BFM Put Exercise Period, the Purchaser and the Guarantor shall use all
commercially reasonable efforts to obtain from Grumman the Grumman Consent
and the Grumman Amendments. Upon request by the Seller during the BFM Put
Exercise Period, the Purchaser shall provide the Seller with a progress
report or reports on its efforts to obtain the Grumman Consent and the
Grumman Amendments. As used in this Agreement, (i) "Makowski Stock
Purchase Agreement" shall mean the Stock Purchase Agreement by and between
J. Makowski Company, Inc. and Purchaser, dated as of December 19, 1997,
(ii) "GE Purchase Agreement" shall mean the Purchase Agreement by and
between Purchaser, GE Power Funding Corporation and General Electric
Company, dated as of December 19, 1997, (iii) "Grumman Consent" shall mean
the consent of Grumman required pursuant to Section 17.9 of the Grumman
Energy Purchase Agreement (as defined in Schedule 2.2(d)-1) for TBG Cogen
Partners to contract for fuel supply and management with an entity other
than the Seller or an affiliate thereof and (iv) "Grumman Amendments"
shall mean amendments entered into after the Closing Date amending the
Grumman Energy Purchase Agreement and the other agreements between TBG
Cogen Partners and Grumman on terms and conditions satisfactory to the
Purchaser in its sole discretion.
(b) It shall be a condition precedent to the Purchaser's right to
exercise the BFM Put Right that, on the date of exercise of the BFM Put
Right and on the BFM Put Closing Date, (i) all agreements to which BFM is
a party which are listed on Schedule 2.2.(k)-1 (other than the BFM Credit
Agreement (as defined in Schedule 2.2(c)-3)) (collectively, the "BFM
Contracts") remain in full force and effect, without any amendment or
supplement thereto, or waiver of rights thereunder, in each case from and
after the Closing, and none of the BFM Contracts shall be subject to any
Claims (other than Claims which exist at the time of the Closing), (ii)
BFM is not then in default under any BFM Contract as a result of any act
or omission of BFM or the Purchaser from and after the Closing Date and
(iii) since the time of the Closing, BFM shall not have issued or made any
commitment to issue any additional shares of capital stock.
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(c) If the Purchaser wishes to exercise the BFM Put Right, it
shall give the Seller written notice thereof within the BFM Put Exercise
Period (the "BFM Put Exercise Notice") together with a certificate of its
Chief Financial Officer, in form and substance reasonably satisfactory to
the Seller, (i) certifying the amounts, if any, which reduce the BFM Put
Price under the second sentence of paragraph (a) and (ii) stating that the
conditions set forth in paragraph (b) have been satisfied as of the date
of such certificate (the "BFM Put Exercise Notice Certificate"). The
purchase and sale of the BFM Shares shall be consummated within five
business days following the receipt by Seller of the BFM Put Exercise
Notice (the "BFM Put Closing Date").
(d) In order to confirm the information set forth in the BFM Put
Exercise Notice Certificate, between the date of the receipt of the BFM
Put Exercise Notice by Seller and the BFM Put Closing Date, the Purchaser
shall permit, and shall cause BFM to permit, the Seller and its agents and
representatives to have access to the Purchaser and BFM, and each of their
respective officers, auditors, books and records, upon reasonable notice
and during normal business hours. All information so furnished to the
Seller shall be held in strict confidence by the Seller.
(e) On the BFM Put Closing Date, the Purchaser shall provide a
certificate of its Chief Financial Officer, in form and substance
reasonably satisfactory to the Seller, stating that the information set
forth in the BFM Put Exercise Notice Certificate is true and correct as if
provided on and as of the BFM Put Closing Date. Contemporaneously with
such provision and conveyance, the Seller shall deliver the adjusted BFM
Put Price by wire transfer of immediately available funds to the
Purchaser."
9. The following Section 3.11 shall be added after Section 3.10 of the
Agreement:
"3.11 Amendment of TBG Balancing Agreement. The Purchaser hereby
acknowledges, and confirms its agreement with, the amended gas
transportation arrangements for TBG Cogen Partners as set forth in Exhibit
D hereto."
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10. Exhibit D, which is attached as Annex C to this Amendment, shall be
added as an Exhibit to the Agreement.
11. Section 4.1(c) of the Original Agreement shall be deleted in its
entirety and replaced with the following:
"(c) Consents and Waivers. The Purchaser shall have received
copies of all duly executed and delivered waivers and consents
contemplated by Section 2.2(d) and Schedule 2.2(d)-1 (except the
Grumman Consent), all in form and substance reasonably satisfactory
to the Purchaser. Any applicable waiting period under the HSR Act
relating to the transactions contemplated hereby shall have expired
or been duly terminated."
12. Section 4.1(i) and (j) of the Original Agreement shall be deleted in
their entirety and replaced with the following:
"(i) [Intentionally omitted].
(j) [Intentionally omitted]."
13. Section 4.2(c) of the Original Agreement shall be deleted in its
entirety and replaced with the following:
"(c) Consents and Waivers. The Seller shall have received copies of
all duly executed and delivered waivers and consents contemplated by
Section 2.2(d) and Schedule 2.2(d)-1 (except the Grumman Consent), all in
form and substance reasonably satisfactory to the Purchaser. Any
applicable waiting period under the HSR Act relating to the transactions
contemplated hereby shall have expired or been duly terminated."
14. Section 4.2(h) and (i) of the Original Agreement shall be deleted in
their entirety and replaced with the following:
"(h) [Intentionally omitted].
(i) [Intentionally omitted]."
15. Section 6.2 of the Original Agreement shall be deleted in its
entirety and replaced with the following:
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"6.2. Aggregate Liability. The aggregate liability of the Seller
under Article V or for any claim for any breach or violation of any
provision of this Agreement shall not exceed (i) the Purchase Price (as
adjusted pursuant to Section 1.2) minus (ii) the sum of the Put Price, if
any, and the BFM Put Price, if any, paid by the Seller or the Seller's
designee upon the exercise of the Put Right or the BFM Put Right."
16. The second to last sentence of Section 6.7 is hereby amended by
adding a reference to "3.11" immediately after the reference to "3.10" therein
and before the reference to "5.2" therein.
17. Except as provided herein, all provisions of the Agreement remain
unmodified and in full force and effect.
18. This Amendment may be executed in any number of counterparts, and
each such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement.
19. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed and delivered as of the day and year first above written.
GAS ENERGY INC.
By:__________________________________
Name:
Title:
GAS ENERGY COGENERATION INC.
By:__________________________________
Name:
Title:
THE BROOKLYN UNION GAS COMPANY
By:__________________________________
Name:
Title:
CALPINE EASTERN CORPORATION
By:___________________________________
Name:
Title:
CALPINE CORPORATION
By:___________________________________
Name:
Title: