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ASSIGNMENT AND ASSUMPTION AGREEMENT
The Prudential Insurance Company of America ("Prudential") and PERC Management
Company Limited Partnership, a Maine limited partnership ("PERC Management") are
entering into this Assignment and Assumption Agreement (this "Agreement"), as of
this 29th day of September, 1997.
Section 1. Recitals.
1.1 Prudential and Penobscot Energy Recovery Company, Limited Partnership,
a Maine limited partnership (the "Partnership") have entered into that
certain Capital Contribution Agreement dated as of May 16, 1986, as
amended by Consent Agreement and Amendment No. 1 to Capital Contribution
Agreement dated as of June 30, 1989, Amendment No. 2 to Capital
Contribution Agreement dated as of May 28, 1991, and Consent Agreement and
Amendment No. 3 to Capital Contribution Agreement dated as of June 14,
1991 (collectively, the "Equity Capital Contribution Agreement").
1.2 Morgan Guaranty Trust Company of New York (the "Equity Bank") has
issued Irrevocable Letter of Credit No. S-864556 (the "Equity Letter of
Credit") dated May 30, 1991, in the original stated amount of $6,071,430
(of which $3,571,430 is available as of the date hereof) for the account
of the Partnership in favor of the Agent and Mellon Bank, N.A., as Trustee
(the "Trustee") under the Trust Indenture of dated as of April 1, 1986, as
amended and supplemented (the "Indenture") between the Town of Orrington,
Maine and the Trustee.
1.3 The Partnership has assigned and granted a security interest in its
interests in the Equity Capital Contribution Agreement to the Equity Bank
pursuant to an Assignment of Capital Contribution Agreement dated as of
May 28, 1991 (the "Equity Assignment"), in order to secure its obligations
under the Reimbursement Agreement dated as of May 28, 1991 (the "Equity
Credit Agreement").
1.4 Key Bank of New York ("Key Bank") has issued to the Equity Bank a
letter of credit in the stated amount of $3,571,430 (the "Key Bank LOC")
and, in consideration of its receipt thereof, the Equity Bank has entered
into a First Amendment of Reimbursement Agreement dated the date hereof,
pursuant to which the Equity Bank has consented to this Agreement and
released Prudential from its obligations under the Equity Capital
Contribution Agreement upon the assumption thereof by PERC Management
pursuant to this Agreement.
1.5 The Partnership, PERC Management, Energy National, Inc. ("ENI"),
Bankers Trust Company, as Agent (the "Agent") and each of the financial
institutions parties thereto (the "Banks") have entered into a Credit
Agreement dated as of May 15, 1986, as amended (the "Credit Agreement").
1.6 PERC Management and Prudential have entered into that certain Purchase
and Option Agreement dated as of the date hereof (the "LP Purchase
Agreement"), pursuant
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to which PERC Management has purchased a portion of Prudential's limited
partnership interests in the Partnership (the "LP Purchase") and has
purchased an option to purchase the remainder of Prudential's limited
partnership interests in the Partnership (the "Option") and, in connection
therewith, Prudential agreed to assign to PERC Management, and PERC
Management agreed to assume, the rights and obligations of Prudential
under the Equity Capital Contribution Agreement.
1.7 In connection with the LP Purchase Agreement, the partnership
agreement of the Partnership has been further amended by a Second
Amendment to Second Amended and Restated Partnership Agreement of
Penobscot Energy Recovery Company dated as of the date hereof (the
"Partnership Agreement Amendment").
1.8 Under Sections 6.2(k) and 6.2(n) of the Credit Agreement, the
Partnership has agreed not to change its equity structure or permit the
transfer of a limited partnership interest in the Partnership except as
contemplated by Sections 10.2 or 10.5 of the partnership agreement of the
Partnership, or to amend, modify or assign the partnership agreement of
the Partnership or the Equity Capital Contribution Agreement, unless it
obtains the consent thereto of the Required Banks (as defined in the
Credit Agreement). The Partnership, PERC Management and Prudential have
requested that the Agent and the Banks consent to this Agreement, the
Partnership Agreement Amendment and the transfer of Prudential's limited
partnership interests in the Partnership in accordance with the LP
Purchase Agreement.
1.9 Capitalized terms used herein and not otherwise defined have the
meanings given them in the Credit Agreement.
Section 2. Assignment, Assumption and Release. Prudential hereby assigns
to PERC Management, and PERC Management hereby assumes, each of the rights and
obligations of Prudential in, under and to the Equity Capital Contribution
Agreement, and the Partnership hereby releases Prudential from any and all
obligations under the Equity Capital Contribution Agreement.
Section 3. No Termination of Partnership. PERC Management hereby
represents and warrants to Prudential, the Agent and each of the Banks that the
transaction contemplated or effected by the LP Purchase Agreement and this
Agreement with respect to the LP Purchase will not cause a termination of the
Partnership under Section 708(b) of the Internal Revenue Code of 1986, as
amended.
Section 4. Ratification of Equity Capital Contribution Agreement and
Acknowledgment of Equity Letter of Credit. In all other respects the Equity
Capital Contribution Agreement is hereby ratified and confirmed, and all
references in the Credit Agreement or the Indenture to the Equity Capital
Contribution Agreement shall mean the Equity Capital Contribution Agreement as
assigned and assumed pursuant to this Agreement and the LP Purchase Agreement,
and all references to Prudential with respect thereto contained therein shall
hereafter be to PERC Management, as assignee of Prudential under this Agreement.
The Equity Letter of Credit remains outstanding and unaffected hereby and the
parties hereto acknowledge
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that nothing in this Agreement is intended to or shall be interpreted as
modifying or amending the Equity Letter of Credit.
Section 5. Amendment of LP Purchase Agreement. PERC Management and
Prudential agree that they will not amend, supplement or otherwise modify the LP
Purchase Agreement without the consent of the Required Banks.
Section 6. Additional Representations and Agreements of PERC Management.
PERC Management hereby represents and warrants to the Agent and each of the
Banks that the Agent and the Trustee have been provided true and correct copies
of each of the agreements relating to the subject matter hereof, in the forms of
such agreements as executed and delivered, and that such agreements constitute
the entire understanding and agreement relating to the subject matter hereof and
of the LP Purchase Agreement, other than certain agreements relating to the
purchase by PERC Management of Prudential's limited partnership interests in
Orrington Waste Ltd., Limited Partnership. PERC Management hereby agrees that it
will pay the costs and expenses, including attorney's fees, of the Agent and the
Banks in connection with the preparation, review, consent and enforcement of
this Agreement; provided, however, that nothing herein shall otherwise affect or
cause to be waived the Agent's or Banks' rights, or the Partnership's
obligations under the Credit Agreement.
Section 7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 8. Governing Law. This Agreement shall be governed by the laws of
the State of New York without regard to principles of conflicts of law.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
PERC MANAGEMENT COMPANY LIMITED
PARTNERSHIP
By PERC, Inc.,
Its General Partner
By_______________________________
Its______________________________
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By_______________________________
Its______________________________
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Accepted and agreed to as of the date first set forth above.
PENOBSCOT ENERGY RECOVERY COMPANY,
LIMITED PARTNERSHIP
By PERC Management Company Limited
Partnership, A General Partner
By PERC, Inc.,
Its General Partner
By /s/ Martin J. Sergi
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Its: President
By Energy National, Inc.,
A General Partner
By /s/ Franklin D. Wareham
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Its: Vice President
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Acknowledged as of the date first set forth above.
MELLON BANK, N.A., as Trustee
By /s/ B. W. Schenler
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Title Vice President
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Accepted and agreed to as of the date first set forth above.
BANKERS TRUST COMPANY,
Individually and as Agent
By /s/ Allan M. Stewart
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Title Managing Director
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THE TORONTO-DOMINION BANK
By /s/ Eileen M. Spengler
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Title Vice President and Director
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CANADIAN IMPERIAL BANK OF COMMERCE
(NEW YORK)
By /s/ Christine M. Galler
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Title Vice President and Director
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FLEET BANK OF MAINE
By
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Title Authorized Signatory
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KEYBANK NATIONAL ASSOCIATION
By /s/ Richard A. McNaughton
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Title Vice President
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THE BANK OF NOVA SCOTIA
By /s/ Stephen Foley
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Title Authorized Signatory
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