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EXHIBIT 10.172
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of March 20, 1998
(this "Agreement"), is made by and between LS POWER CORPORATION, a Delaware
corporation (the "Assignor"), and COGENTRIX ENERGY, INC., a Delaware
corporation (the "Assignee") (unless otherwise defined herein, all
capitalized terms used herein shall have the meanings given them in the
Securities Purchase Agreement referenced below).
W I T N E S S E T H:
WHEREAS, the Assignor, Granite Power Partners, L.P., a Delaware
limited partnership ("Granite"), the Assignee, Cogentrix Mid-America, Inc.,
a Delaware corporation, Cogentrix Cottage Grove, LLC, a Delaware limited
liability company, and Cogentrix Whitewater, LLC, a Delaware limited
liability company, have entered into that certain Securities Purchase
Agreement dated as of March 6, 1998 (the "Securities Purchase Agreement"),
which provides for the sale by the Sellers, and the purchase by the
Purchasers, of all of the Securities in the Acquired Companies (the
"Acquisition");
WHEREAS, the Assignor is a party to certain management service
agreements with certain of the Acquired Companies listed on Exhibit A
hereto (the "Management Agreements");
WHEREAS, in connection with the Acquisition, the Assignor desires to
assign, and the Assignee desires to assume, all of the Assignor's right,
title and interest in the Management Agreements (the "Assignment"); and
WHEREAS, the Assignor and the Assignee have agreed that certain
management and personnel of the Assignor will be available to provide
services to the Assignee after the date hereof, subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Assignor and Assignee, the Assignor hereby assigns,
transfers and sets over to the Assignee all of the Assignor's rights and
interests in and to the Management Agreements, and Assignee hereby expressly
accepts such assignment and agrees to, and does hereby assume, and agrees
hereafter, to timely pay, perform or discharge each and every of the
obligations and liabilities of the Assignor under the Management Agreements.
The Assignee further agrees to indemnify and hold the Assignor harmless from
any claim or liability arising under or as a result of any obligations and
liabilities to be paid, performed or discharged pursuant to the Management
Agreements after the date hereof.
The Assignor further covenants and agrees that, at the reasonable
request of the Assignee and without further consideration, but at no
additional cost to the Assignor, the Assignor will execute such other
instruments of conveyance, transfer and assignment and take such further
action as may be reasonably required in order to grant, bargain, sell, assign,
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transfer, set over or deliver to Assignee, its successors and assigns, the
Management Agreements transferred hereunder.
This Agreement shall be binding upon, and shall inure to the benefit of,
the Assignee, the Assignor, and each of their successors and assigns, and
shall be subject to the terms and conditions of the Securities Purchase
Agreement.
From the date hereof through April 30, 1998 (the "Initial Period"), the
Assignor shall cause the appropriate members of its management to provide
Purchasers with reasonable assistance and cooperation to effect (i) the
timely and efficient transfer of management, records, files and other
documents and (ii) the preparation of required reports and filings for the
Acquired Companies. The assistance provided during the Initial Period shall
be at no cost to Purchasers other than reimbursement of reasonable
out-of-pocket expenses incurred by Assignor in providing such assistance.
In addition to the assistance provided under the preceding sentence, for the
11-month period following April 30, 1998 (the "Annual Period"), the Assignor
shall (i) cause its Principals (as defined below) to be available to provide
assistance and consulting to the Purchasers for no more than 10 hours per
month at no cost, other than reasonable out-of-pocket expenses to Purchasers
and (ii) cause its Management (as defined below) to reasonably consult with
representatives of the Purchasers concerning the management and operation of
the Acquired Companies and their respective businesses on and prior to
Closing, including without limitation with respect to (a) pending litigation,
claims and related matters, (b) supplier, manager, customer, personnel and
other business relationships, (c) regulatory, environmental, tax and other
governmental matters, (d) the EPC Contracts with Westinghouse Electric
Corporation and (e) the Operation and Maintenance Agreements with
Westinghouse Operating Services Company, Inc. The Assignee shall pay for
the assistance and consulting provided during the Annual Period by the
Management on an hourly basis at the commercially reasonable rates described
on Exhibit B hereto, and the Assignee agrees to reimburse the Assignor for
all reasonable out-of-pocket expenses incurred by the Assignor. For
purposes of this Agreement, the term "Principals" shall collectively mean
Mikhail Segal and Michael Liebelson, and the term "Management" shall
collectively mean Frank Hardenbergh, Mark Brennan and Kimberly Bonnell.
Upon no less than four days' advance notice, the Assignee will permit
representatives of the Assignor and its affiliates and a reasonable number
of guests to visit the respective properties of the Acquired Companies during
normal business hours; provided, however, that the Assignor agrees to, and
agrees to cause its guests to, hold all information regarding the properties
and their operations confidential.
Assignor represents and warrants to the Assignee that no Management
Fees (as defined in the Management Agreements) have been paid to the
Assignor pursuant to any of the Management Agreements for the period
beginning April 1, 1998, and that no Management Expenses (as defined in the
Management Agreements) and Reimbursable Management Costs (as defined in the
Management Agreements) have been paid to the Assignor pursuant to any of the
Management Agreements for the period beginning February 1, 1998. The
Assignor and the Assignee agree that all Management Fees payable to the
Assignor for services performed after April 1, 1998 and all Management
Expenses and Reimbursable Management Costs incurred by Assignor after
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February 1, 1998 shall be paid to the Assignee.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER
THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATION LAW OF THE
STATE OF NEW YORK).
The Assignee agrees that none of the Principals or Management shall
have any liability for any assistance or consulting provided in good faith
under this Agreement or otherwise in respect of any claim, demand, action,
suit or proceeding arising hereunder.
All notices, consents, calls, approvals, reports, designations,
requests, waivers, elections and other communications (collectively,
"Notices") authorized or required to be given pursuant to this Agreement
shall be given in writing and (i) personally served on the party to whom it
is given, (ii) mailed by registered or certified mail, postage prepaid or
(iii) sent by courier guaranteeing overnight delivery, in each case to the
addresses set forth in the Securities Purchase Agreement.
All Notices shall be deemed given when delivered. Any party may change
its address and/or telephone number for the receipt of Notices at any time
by giving Notice thereof to the parties hereto.
This Agreement shall become effective when it shall have been executed
by the parties hereto and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
The term of this Agreement shall be the period commencing as of the date
hereof and ending the date 13 months thereafter. This Agreement may be
executed in two or more counterparts, each of which shall constitute an
original but all of which when taken together shall constitute but one
contract.
Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by all of the parties hereto. Neither this Agreement nor any provision
hereof may be transferred or assigned to any other Person without the written
consent of the other party; provided, however, the Assignee shall have the
right to assign its obligations hereunder to any of its Affiliates.
This Agreement constitutes the entire contract between the parties
relative to the subject matter hereof. Any previous agreement between the
parties with respect to the subject matter hereof is superseded by this
Agreement. Nothing in this Agreement, expressed or implied, is intended to
confer upon any Person other than the parties hereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
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WITH THIS AGREEMENT. Each party hereto (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce
the foregoing waiver and (b) acknowledges that it and the other parties
hereto have been induced to enter into this Agreement and the transactions
contemplated hereby, as applicable, by, among other things, the mutual
waivers and certifications in this paragraph.
In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, effective as of the day and year
first above written.
ASSIGNOR:
LS POWER CORPORATION
By: /s/ Frank E. Hardenbergh
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Name: Frank E. Hardenbergh
Title: Vice President, General
Counsel and Secretary
ASSIGNEE:
COGENTRIX ENERGY, INC.
By: /s/ James R. Pagano
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Name: James R. Pagano
Title: Group Senior Vice President
Chief Financial Officer
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EXHIBIT A
Management Agreements
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1. Management Services Agreement between LS Power Corporation
and LSP-Whitewater Limited Partnership dated May 1, 1995.
2. Management Services Agreement between LS Power Corporation
and LSP-Cottage Grove, L.P. dated May 1, 1995.
3. Management Services Agreement between LS Power Corporation
and LSP-Whitewater I, Inc. dated May 1, 1995.
4. Management Services Agreement between LS Power Corporation
and LSP-Cottage Grove, Inc. dated May 1, 1995.
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EXHIBIT B
Management Rates
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1. Frank Hardenbergh - $175/hour
2. Mark Brennan - $125/hour
3. Kimberly Bonnell (Administrative Assistant) - $40/hour
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