Great Plains Gasification Associates, A Partnership, Transco Coal Gas Company, A Partner Other Than The Tax Matters Partner - Page 23

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          that the partners could still terminate participation under the             
          partners consent and agreement, the standstill agreement provided           
          that the partners could furnish notice of termination of                    
          participation prior to noon on August 1, 1985, in which event               
          termination would be effective as of that date.  A notice of                
          termination pursuant to this provision would relieve the partners           
          of the obligation to make further equity contributions to the               
          Partnership and SFC Reach Price Support Agreement                           
               On July 16, 1985, the partnership reached a final agreement            
          with SFC for a $720 million price guarantee.13  The agreement               
          required the DOE Secretary’s approval.  It was not forthcoming.             
          DOE’s Rejection of Price Support Agreement                                  
               Notwithstanding DOE’s prior public support for the Great               
          Plains project and a price guarantee agreement, DOE rejected the            
          final agreement between SFC and the partnership in a 2-page                 
          letter, dated July 30, 1985, and signed by DOE Secretary                    

               13 Pursuant to this price guarantee assistance agreement, on           
          Aug. 1, 1985, the partnership would “default” on the payments due           
          FFB under the standstill agreement, and DOE would use an existing           
          $673 million reserve to “cure” that default on behalf of the                
          partnership; repayment of the remaining FFB indebtedness would be           
          rescheduled so that no significant burden for mandatory principal           
          payments would be incurred earlier than 1996; price guarantees              
          would be available.  Under this agreement, 80 percent of the                
          cashflow would be used to repay the DOE-guaranteed debt, and                
          after that debt was repaid, SFC would be paid.  Partners were to            
          make an additional equity investment of $190 million in the                 

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