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EXHIBIT 3
ADDENDUM TO THE AGREEMENT AND PLAN OF MERGER
This Addendum to the Agreement and Plan of Merger by and among Black
Hills Corporation, Black Hills Energy Capital, Inc., Indeck Capital, Inc.,
Xxxxxx X. Xxxxxxxx, Xxxxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxxx,
Xxxxxxx X. Xxxxxxxx, and Xxxx X. Xxxxxx, Xx. (the "Addendum"), is entered into
by and among Black Hills Corporation, Black Hills Energy Capital, Inc., Indeck
Capital, Inc., Xxxxxx X. Xxxxxxxx, Xxxxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx
Xxxxxxx, Xxxxxxx X. Xxxxxxxx, and Xxxx X. Xxxxxx, Xx. (collectively referred to
as the "Parties"), and is an addendum to that certain Agreement and Plan of
Merger by and among Black Hills Corporation, Black Hills Energy Capital, Inc.,
Indeck Capital, Inc., Xxxxxx X. Xxxxxxxx, Xxxxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx,
Xxxxxx Xxxxxxx, Xxxxxxx X. Xxxxxxxx, and Xxxx X. Xxxxxx, Xx. dated as of January
1, 2000, as amended to date (the "Agreement").
RECITALS
The purpose of this Addendum is to modify certain terms, conditions, and
obligations of the respective parties pursuant to the Agreement (including the
schedules, exhibits, annexes and documents delivered thereto). Only those terms,
conditions and obligations of the Agreement which are identified and modified by
this Addendum shall be changed; and all other terms, conditions, and obligations
shall remain as originally stated in the Agreement. In the event of a conflict
between the Addendum and the Agreement (including the schedules, exhibits,
annexes and documents delivered thereto), the terms of the Addendum shall
control.
NOW, THEREFORE, the Parties hereto agree as follows:
1. The final paragraph of Section 2.1 of the Agreement shall be deleted in its
entirety and replaced with the following:
The "Closing Shares" shall consist of: (i) an aggregate of One Million
Five Hundred Thirty Six Thousand Seven Hundred Fifty One (1,536,751) shares of
Parent Common Stock (the "Parent Closing Common Shares"), and (ii) an aggregate
of 4,000 shares of Series 2000-A No Par Preferred Stock, all as adjusted for any
stock splits, reverse stock splits, stock dividends and recapitalizations prior
to the Closing Date.
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2. The following shall be added to the Agreement as Section 2.1(c):
(c) Ninety Thousand (90,000) shares of Parent Common Stock (as
adjusted for any stock splits, exchanges, or similar transactions from and after
the date hereof) if, within two years following the Closing Date, Newco has
successfully concluded transactions on terms which are reasonably satisfactory
in form and substance to Parent, for the restructuring of the purchase power
agreements for the Xxxxxx Falls and South Glens Falls projects. Payment of such
90,000 shares of Parent Common Stock shall be made on the first day in which all
such agreements are in full force and effect, payable to each Stockholder in
accordance with their respective ownership percentages set forth on Annex A to
the Agreement.
3. Section 5.21 shall be deleted in its entirety and replaced with the
following:
5.21 Xxxxxx Falls and South Glens Falls. As of the date hereof and as of
the respective date, if any, of the restructuring (each a "Restructure Date") of
the power purchase agreements associated with the facilities located at Xxxxxx
Falls and South Glens Falls, each of the Xxxxxx Falls and South Glens Falls
facilities (the "Subject Projects") is a "qualifying small power production
facility," as defined in 18 C.F.R. 292.203 (1996) and has been at all times
during the Company's ownership of the same through the applicable Restructure
Date.
4. The following shall be added to the Agreement as Section 8.3(v):
(v) Otter Creek. The Company shall have organized an entity for
the purpose of owning and operating the Otter Creek project ("Otter Creek
L.L.C."). Following its formation, the Company shall transfer title to such
assets as are reasonably necessary for the transfer of the Otter Creek project
to Otter Creek L.L.C.
5. The following shall be added to the Agreement as 8.3(w):
(w) Adirondack Projects. The Company shall have transferred: (i)
its entire interest in each of the Middle Falls Limited Partnership, Sissonville
Limited Partnership, and NYSD Limited Partnership; and (ii) one-half of its
interest, including any right to an automatic increase in that interest due to
"Flip-Up LP Interests" (as defined in the Amended and Restated Limited
Partnership Agreement of Northern Electric Power Co., L.P., dated February 15,
1994, and the Amended and Restated Limited Partnership Agreement of South Glens
Falls Limited Partnership, dated March 18, 1993), in each of the Warrensburg
Hydro Power Limited Partnership, Otter Creek L.L.C., Northern Electric Power
Co., L.P., and South Glens Falls Limited Partnership to an entity agreed upon by
the parties hereto and in consideration for a secured promissory note in form
and substance reasonably satisfactory to Parent.
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6. The following provision shall be added to the existing definition of Adjusted
Net Income, (as that term is defined in the Agreement and as supplemented in the
Supplemental Agreement Regarding Contingent Merger Consideration dated as of
January 1, 2000):
(3) any net earnings resulting from the acceleration of revenue
recognition generated from agreements for the restructuring of the Xxxxxx Falls,
South Glens Falls, New York State Dam, Middle Falls, Sissonville, Warrensburg,
and/or Otter Creek purchase power agreements (each considered individually) with
Niagara Mohawk exceeding net earnings that would have been generated if revenue
recognition acceleration relating to the restructuring of these purchase power
agreements (each considered individually) would have been recognized on a
straight-line basis over the following number of years: i) if agreements for the
restructuring of the purchase power agreements (each considered individually)
which result in the acceleration of revenue recognition occur before January 1,
2001, then eight (8) years; ii) if agreements for the restructuring of the
purchase power agreements (each considered individually) which result in the
acceleration of revenue recognition occur between January 1, 2001 and January 1,
2002, then six (6) years; and iii) if agreements for the restructuring of the
purchase power agreements (each considered individually) which result in the
acceleration of revenue recognition occur between January 1, 2002 and December
31, 2003, then three (3) years.
7. The following provision shall be added to the Agreement as Section 2.2(c):
(c) In addition to all Earn-Out Consideration earned during the
Earn-Out Period pursuant to Section 2.2, if agreement(s) for the restructuring
of the purchase power agreements relating to the Xxxxxx Falls, South Glens
Falls, New York State Dam, Middle Falls, Sissonville, Warrensburg and/or Otter
Creek projects (each considered individually) occur between January 1, 2003 and
December 31, 2003, and such restructuring(s) result in a change in Adjusted Net
Income, then Parent shall pay to the Stockholders thirty-five percent (35%) of
one- third of the net income resulting from the acceleration of revenue
recognition attributable to such restructuring(s), with such payment occurring
within five (5) business days of January 1, 2005, and the calculation of the
number of shares of Parent Common Stock to be paid to the Stockholders being
calculated in accordance with the methodology of Section 2.2(a), herein. For
purposes of any calculation made pursuant to this Section 2.2(c), the average
closing sales price of Parent Common Stock shall based upon calendar year 2004.
8. The following provision shall be added to the Agreement as Section 7.15(a):
(a) Newco covenants and agrees, and Parent covenants and agrees
to cause Newco, to use its reasonable best efforts to cause the power purchase
agreements associated with the Xxxxxx Falls and South Glens Falls projects to be
restructured as promptly as possible. Parent reserves the right to approve or
disapprove of such restructuring agreements in its reasonable discretion.
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9. The following provisions shall be deleted from the Agreement and shall be
without force or effect:
Section 8.2(h)
Section 8.3(d)
Section 8.3(g)
10. Section 5.14(k) shall be stricken in its entirety and replaced with the
following:
(k) The Stockholders represent, warrant and covenant that in the
event that the debt associated with the facilities located at New York State
Dam, Sissonville and Middle Falls is restructured after the Closing Date as
contemplated in Section 2.1(c), that it will not result in any Tax liability to
Parent or the Company due to the cancellation of debt, income recognition,
excess loss account income recognition or any related income recognition. Parent
agrees that it will not, directly or indirectly, take or fail to take (and will
use reasonable best efforts to prevent any of its affiliates from taking or
failing to take) any action contrary or inconsistent with the foregoing
position.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the Parties have executed this Addendum as of this
6th day of April, 2000.
BLACK HILLS CORPORATION
By: /s/ Xxxx Xxxxx
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Xxxx X. Xxxxx
Senior Vice President and Chief Financial
Officer
BLACK HILLS ENERGY CAPITAL, INC.
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
President and Chief Operating Officer
INDECK CAPITAL, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: President
/s/ XXXXXX X. XXXXXXXX
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XXXXXX X. XXXXXXXX
/s/ XXXXXXXX X. XXXXXXX
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XXXXXXXX X. XXXXXXX
/s/ XXXXXX XXXXXXXX
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XXXXXX XXXXXXXX
/s/ XXXXXX XXXXXXX
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XXXXXX XXXXXXX
/s/ XXXXXXX X. XXXXXXXX
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XXXXXXX X. XXXXXXXX
/s/ XXXX X. XXXXXX
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XXXX X. XXXXXX
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