Great Plains Gasification Associates, A Partnership, Transco Coal Gas Company, A Partner Other Than The Tax Matters Partner - Page 19

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          the project, as it was then structured, would generate                      
          insufficient cash to meet the partnership’s obligations under the           
          credit agreement and to enable the partners to recoup their                 
          equity contributions.  Upon receiving these notices, DOE publicly           
          expressed optimism that the project would represent a “valuable             
          national asset for the long-term energy security of this                    
          country”.  DOE also expressed willingness to continue disbursing            
          guaranteed funds so long as the partners continued financing                
          their portion of the project.                                               
          Partners and SFC Sign Letter of Intent                                      
               On April 26, 1984, SFC and the partnership reached a                   
          tentative agreement, memorialized by a letter of intent.  SFC               
          proposed to provide the partnership up to $790 million of                   
          financial assistance under a price guarantee agreement.  In                 
          return, pursuant to a profit-sharing arrangement, the partnership           
          would eventually pay SFC $1.58 billion out of the project’s                 
          operating profits, after first paying the entire amount of the              
          DOE-guaranteed debt.  In addition, under the tentative agreement,           
          the partners would reinvest in the project the dollar equivalent            
          of all tax benefits and profits obtained by the partnership for             
          the next 3-1/2 years; this provision would have amounted to an              
          additional equity contribution by the partners of about $690                

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