EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PPL SUNDANCE ENERGY, LLC
AS SELLER
AND
ARIZONA PUBLIC SERVICE COMPANY
AS PURCHASER
DATED AS OF JUNE 1, 2004
TABLE OF CONTENTS
ARTICLE I DEFINITIONS; CONSTRUCTION................................................................... 1
Section 1.1 Definitions................................................................................. 1
Section 1.2 Construction................................................................................ 1
ARTICLE II PURCHASE AND SALE........................................................................... 2
Section 2.1 Purchase and Sale........................................................................... 2
Section 2.2 Excluded Assets............................................................................. 3
Section 2.3 Assumed Liabilities......................................................................... 3
Section 2.4 Excluded Liabilities........................................................................ 4
ARTICLE III PURCHASE PRICE; CLOSING..................................................................... 5
Section 3.1 Purchase Price.............................................................................. 5
Section 3.2 Proration................................................................................... 5
Section 3.3 Closing..................................................................................... 7
Section 3.4 Closing Deliveries by Seller to Purchaser................................................... 7
Section 3.5 Closing Deliveries by Purchaser to Seller................................................... 8
Section 3.6 Allocation of Purchase Price................................................................ 9
Section 3.7 Minimum Inventory Amount Adjustment......................................................... 10
Section 3.8 Adjustment Disputes......................................................................... 10
Section 3.9 Change in Name.............................................................................. 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER.................................................... 11
Section 4.1 Organization, Standing and Power............................................................ 11
Section 4.2 Authority................................................................................... 12
Section 4.3 No Conflicts................................................................................ 12
Section 4.4 Business.................................................................................... 13
Section 4.5 Subsidiaries................................................................................ 13
Section 4.6 Legal Proceedings........................................................................... 13
Section 4.7 Compliance with Laws and Orders............................................................. 13
Section 4.8 Liabilities................................................................................. 14
Section 4.9 Absence of Certain Changes or Events........................................................ 14
Section 4.10 Taxes ...................................................................................... 14
Section 4.11 Regulatory Status........................................................................... 14
TABLE OF CONTENTS
Section 4.12 Contracts................................................................................... 15
Section 4.13 Real Property............................................................................... 17
Section 4.14 Personal Property........................................................................... 20
Section 4.15 Permits..................................................................................... 21
Section 4.16 Environmental Matters....................................................................... 21
Section 4.17 Insurance................................................................................... 22
Section 4.18 Intellectual Property....................................................................... 22
Section 4.19 Related Persons............................................................................. 22
Section 4.20 Brokers..................................................................................... 22
Section 4.21 Employees................................................................................... 23
Section 4.22 Employee Benefits........................................................................... 23
Section 4.23 Improvements................................................................................ 23
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER................................................. 24
Section 5.1 Corporate Existence......................................................................... 24
Section 5.2 Authority................................................................................... 24
Section 5.3 No Conflicts................................................................................ 24
Section 5.4 Legal Proceedings........................................................................... 25
Section 5.5 Compliance with Laws and Orders............................................................. 25
Section 5.6 Brokers..................................................................................... 25
Section 5.7 Financial Resources......................................................................... 25
ARTICLE VI COVENANTS................................................................................... 25
Section 6.1 Regulatory and Other Approvals.............................................................. 25
Section 6.2 Access of Purchaser......................................................................... 27
Section 6.3 Certain Restrictions........................................................................ 28
Section 6.4 Further Assurances.......................................................................... 29
Section 6.5 Employee and Employee Benefit Matters....................................................... 29
Section 6.6 Insurance................................................................................... 31
Section 6.7 Seller's Covenants and Closing Conditions................................................... 31
Section 6.8 Purchaser's Covenants and Closing Conditions................................................ 32
Section 6.9 Exclusivity................................................................................. 32
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TABLE OF CONTENTS
Section 6.10 Risk of Loss................................................................................ 32
Section 6.11 Current Evidence of Title................................................................... 34
Section 6.12 Transition Plan............................................................................. 36
Section 6.13 Updating.................................................................................... 37
Section 6.14 Records..................................................................................... 38
Section 6.15 Synthetic Lease Transaction................................................................. 39
ARTICLE VII TAX MATTERS................................................................................. 40
Section 7.1 Proration................................................................................... 40
Section 7.2 Cooperation................................................................................. 40
Section 7.3 Transfer Taxes.............................................................................. 41
ARTICLE VIII PURCHASER'S CONDITIONS TO CLOSING........................................................... 41
Section 8.1 Representations and Warranties.............................................................. 41
Section 8.2 Performance................................................................................. 41
Section 8.3 Deliveries.................................................................................. 41
Section 8.4 Orders and Laws............................................................................. 41
Section 8.5 Consents and Approvals...................................................................... 42
Section 8.6 Seller Material Adverse Effect.............................................................. 42
Section 8.7 Approvals of Governmental Authorities....................................................... 42
Section 8.8 Transferred Permits......................................................................... 43
Section 8.9 Title Insurance............................................................................. 43
Section 8.10 Environmental Diligence..................................................................... 43
Section 8.11 Legal Opinion............................................................................... 43
ARTICLE IX SELLER'S CONDITIONS TO CLOSING.............................................................. 44
Section 9.1 Representations and Warranties.............................................................. 44
Section 9.2 Performance................................................................................. 45
Section 9.3 Deliveries.................................................................................. 45
Section 9.4 Orders and Laws............................................................................. 45
Section 9.5 Consents and Approvals...................................................................... 45
Section 9.6 Purchaser Material Adverse Effect........................................................... 45
Section 9.7 Approvals of Governmental Authorities....................................................... 45
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TABLE OF CONTENTS
Section 9.8 Legal Opinion............................................................................... 45
ARTICLE X TERMINATION................................................................................. 46
Section 10.1 Termination................................................................................. 46
Section 10.2 Effect of Termination....................................................................... 48
ARTICLE XI INDEMNIFICATION, LIMITATIONS OF LIABILITY, WAIVERS AND ARBITRATION.......................... 48
Section 11.1 Indemnification............................................................................. 48
Section 11.2 Waiver of Remedies.......................................................................... 51
Section 11.3 Survival and Time Limitation................................................................ 52
Section 11.4 Waiver of Other Representations; Limitations of Liability................................... 52
Section 11.5 Procedure for Indemnification - Third-Party Claims.......................................... 53
Section 11.6 Arbitration................................................................................. 54
ARTICLE XII MISCELLANEOUS............................................................................... 56
Section 12.1 Notices..................................................................................... 56
Section 12.2 Entire Agreement............................................................................ 57
Section 12.3 Expenses.................................................................................... 57
Section 12.4 Public Announcements........................................................................ 57
Section 12.5 Confidential Information.................................................................... 58
Section 12.6 Disclosure.................................................................................. 59
Section 12.7 Waiver; Remedies Cumulative................................................................. 60
Section 12.8 Amendment................................................................................... 60
Section 12.9 No Third Party Beneficiary.................................................................. 60
Section 12.10 Assignment; Binding Effect.................................................................. 60
Section 12.11 Headings.................................................................................... 60
Section 12.12 Invalid Provisions.......................................................................... 60
Section 12.13 Counterparts; Facsimile..................................................................... 60
Section 12.14 Governing Law; Venue; and Jurisdiction...................................................... 61
Section 12.15 Attorneys' Fees............................................................................. 61
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TABLE OF CONTENTS
APPENDIX I DEFINITIONS................................................................................. 1
EXHIBIT A FORM OF ASSUMPTION OF CERTAIN LIABILITIES................................................... 1
EXHIBIT B FORM OF AFFIDAVIT OF PROPERTY VALUE......................................................... 1
EXHIBIT C FORM OF SPECIAL WARRANTY DEED............................................................... 1
EXHIBIT D FORM OF XXXX OF SALE AND ASSIGNMENT OF CONTRACT RIGHTS...................................... 1
EXHIBIT E FORM OF CERTIFICATION OF NON-FOREIGN STATUS................................................. 1
EXHIBIT F FORM OF GUARANTY AGREEMENT.................................................................. 1
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") dated as of June 1,
2004 (the "AGREEMENT DATE") is made and entered into by and between PPL SUNDANCE
ENERGY, LLC, a Delaware limited liability company ("SELLER"), and ARIZONA PUBLIC
SERVICE COMPANY, an Arizona corporation ("PURCHASER").
RECITALS
Seller owns a generating plant in Pinal County, Arizona, having a
nominal generating capacity of 450 megawatts.
Seller desires to sell and assign to Purchaser, and Purchaser desires
to purchase and assume from Seller, the Purchased Assets and the Assumed
Liabilities (each as hereinafter defined) on the terms and subject to the
conditions set forth herein.
STATEMENT OF AGREEMENT
Now, therefore, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.1 DEFINITIONS. Capitalized terms used in this Agreement have the
meanings given to them in Appendix I to this Agreement.
1.2 CONSTRUCTION.
(a) In this Agreement, unless expressly provided
otherwise:
(i) Unless otherwise specified, all article, section,
subsection, schedule, exhibit and appendix references used in
this Agreement are to articles, sections, subsections,
schedules, exhibits and appendices to this Agreement. The
exhibits, schedules and appendices attached to this Agreement
constitute a part of this Agreement and are incorporated
herein for all purposes.
(ii) If a term is defined as one part of speech (such
as a noun), it shall have a corresponding meaning when used as
another part of speech (such as a verb). Unless the context of
this Agreement clearly requires otherwise the singular shall
include the plural and the plural shall include the singular
wherever and as often as may be appropriate, and words
importing the masculine gender shall include the feminine and
neutral genders and vice versa. The words "includes" or
"including" shall mean "including without limitation," the
words "hereof," "hereby," "herein," "hereunder" and similar
terms in this Agreement
shall refer to this Agreement as a whole and not any
particular section or article in which such words appear and
any reference to a Law shall include any amendment thereof or
any consolidation, amendment, reenactment, extension,
replacement or successor thereto and any rules and regulations
promulgated thereunder. References to "or" shall be deemed to
be disjunctive but not necessarily exclusive (i.e., unless the
context dictates otherwise, "or" shall be interpreted to mean
"and/or" rather than "either/or"). Currency amounts referenced
herein, unless otherwise specified, are in U.S. Dollars.
(iii) A reference to (A) a day (other than a Business
Day) is a reference to a calendar day, (B) a month is a
reference to a calendar month and (C) a year is a reference to
a calendar year. A reference to a time is a reference to the
time in effect in Phoenix, Arizona on the relevant date. When
a period of time is specified to run from or after a given day
or the day of an act or event, it is to be calculated
exclusive of such day; and where a period of time is specified
as commencing on a given day or the day of an act or event, it
is to be calculated inclusive of such day. Whenever this
Agreement refers to a number of days, such number shall refer
to calendar days unless Business Days are specified. Whenever
any action must be taken hereunder on or by a day that is not
a Business Day, then such action may be validly taken on or by
the next day that is a Business Day. A reference to a day
(other than a Business Day) is a reference to a period of time
commencing at midnight Phoenix time and ending the following
midnight Phoenix time. A reference to a Business Day is a
reference to a period of time commencing at 9:00 a.m. Phoenix
time on a Business Day and ending at 5:00 p.m. Phoenix time on
the same Business Day.
(iv) All accounting terms used herein and not
expressly defined herein shall have the meanings given to them
under GAAP.
(b) Time is of the essence in this Agreement.
(c) Each Party acknowledges that it and its attorneys have
been given an equal opportunity to negotiate the terms and conditions of this
Agreement and that any rule of construction to the effect that ambiguities are
to be resolved against the drafting Party or any similar rule operating against
the drafter of an agreement shall not be applicable to the construction or
interpretation of this Agreement.
ARTICLE II
PURCHASE AND SALE
2.1 PURCHASE AND SALE. On the terms and subject to the conditions set
forth in this Agreement, at the Closing, Seller shall sell, assign, convey,
transfer and deliver to Purchaser, and Purchaser shall purchase and acquire from
Seller, free and clear of all Liens (except for Permitted Liens, including the
Permitted Liens set forth on Schedule 2.1), all of Seller's right, title and
interest in, to and under the real and personal property, tangible or
intangible, constituting the Purchased Assets.
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2.2 EXCLUDED ASSETS. Notwithstanding any provision herein to the
contrary, the Purchased Assets shall not include the following (collectively,
the "EXCLUDED ASSETS"):
(a) except for Prepayments, any cash, cash equivalents,
certificates of deposit, bank deposits, commercial paper, securities, rights to
payment, accounts receivable, rights to refunds, credits, offsets, in-kind or
exchange arrangements, income, sales, payroll or other tax receivables, and any
similar rights arising from or relating to the ownership or operation of the
Business or the Project with respect to any period of time prior to the Closing;
(b) all claims, causes of action, rights of recovery, rights
of set-off, rights to refunds and similar rights of any kind in favor of Seller
or any other Person arising from or relating to the ownership or operation of
the Business or the Project with respect to any period of time prior to the
Closing, including any refund of Taxes paid prior to the Closing (including
refunds of Taxes received after the Closing) and described in SECTION 2.2(d)
below, except for (i) any of the foregoing that relate to Assumed Liabilities
and (ii) the Warranty Rights;
(c) any rights of Seller or any other Person in the names
"PPL" and "PPL Sundance Energy" or any other trade names, trademarks, service
marks or logos;
(d) any refund, credit penalty payment, adjustment or
reconciliation (i) related to real property taxes, personal property taxes or
other Taxes paid prior to the Closing Date in respect of the Purchased Assets or
relating to the Business or the Project, whether such refund, adjustment or
reconciliation is received as a payment or as a credit against future Taxes
payable, or (ii) arising under the Transferred Contracts and relating to any
period before the Closing Date;
(e) the rights under any insurance policy arising out of and
relating to events or periods prior to the Closing or which is not related to
the Business or the Project, except to the extent such policy insures for events
or occurrences that are included in the Assumed Liabilities;
(f) the contracts, leases and other agreements set forth on
Schedule 2.2(f) and any other contracts, leases or other agreements of Seller or
any other Person not used or useful in, or related primarily to or necessary
for, the Business or the Project (the "EXCLUDED CONTRACTS");
(g) all books and records of Seller or any other Person other
than the Books and Records;
(h) the rights and assets described in Schedule 2.2(h) as not
part of the Purchased Assets (the "EXCLUDED ITEMS"); and
(i) the rights of Seller under this Agreement and the
Ancillary Agreements.
2.3 ASSUMED LIABILITIES. On the Closing Date, Purchaser shall execute
and deliver in favor of Seller the Assumption Agreement, pursuant to which
Purchaser shall assume and agree to pay, perform and discharge when due the
following Liabilities of Seller, whether direct or indirect, known or unknown
(except as otherwise provided in SECTION 11.1(c) of this Agreement with respect
to Environmental Liabilities and Tort Liabilities), absolute or contingent,
accrued, fixed or otherwise, or whether due or to become due, solely to the
extent such Liabilities accrue
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or arise from and after the Closing (except as otherwise specifically provided
in SECTION 11.1(c) of this Agreement with respect to Environmental Liabilities
and Tort Liabilities), other than Excluded Liabilities (as defined below), in
accordance with the respective terms and subject to the respective conditions
thereof (collectively, but excluding the Excluded Liabilities, the "ASSUMED
LIABILITIES"):
(a) all Liabilities of Seller under the Transferred Contracts,
the Transferred Permits and the Transferred Intellectual Property, in each case
in accordance with the terms thereof, except to the extent that such
Liabilities, but for a breach or default by Seller, would have been paid,
performed or otherwise discharged on or prior to the Closing Date or to the
extent the same arise out of any such breach or default or out of any event
which after the giving of notice would constitute a default by Seller;
(b) any and all Liabilities associated with Continued
Employees, to the extent provided in SECTION 6.5;
(c) any Liability of Seller described on Schedule 2.3(c);
(d) any Liability for Real Property and other Taxes
attributable to the Purchased Assets, except to the extent of the proration
provided for in SECTION 3.2;
(e) subject to SECTION 11.1(c), any and all Environmental
Liabilities, except for the Excluded Environmental Liabilities; and
(f) subject to SECTION 11.1(c), any and all Tort Liabilities,
except for the Excluded Tort Liabilities.
2.4 EXCLUDED LIABILITIES. Except for the Assumed Liabilities, Purchaser
shall not assume by virtue of this Agreement, the Assumption Agreement or any
other Ancillary Agreement, or the transactions contemplated hereby or thereby,
or otherwise, and shall have no liability for, any Liabilities of Seller (the
"EXCLUDED LIABILITIES"), including any of the following Liabilities:
(a) any Liabilities of Seller in respect of any Excluded
Assets or other assets of Seller that are not Purchased Assets;
(b) any Liabilities in respect of Taxes attributable to the
Purchased Assets for taxable periods ending on or before the Closing Date,
except to the extent of the proration provided for in SECTION 3.2;
(c) any Liabilities of Seller (i) arising from the violation,
breach or default by Seller, prior to the Closing Date, of any Transferred
Contract, Transferred Permit or Transferred Intellectual Property or (ii) in
respect of any other contract, agreement, personal property lease, permit,
license or other arrangement or instrument entered into by Seller;
(d) subject to SECTION 3.2, any payment obligations of Seller,
including accounts or notes payable, accruing or arising prior to the Closing
Date;
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(e) any fines and penalties imposed by any Governmental
Authority resulting from any act or omission by Seller or its Affiliates that
occurred prior to the Closing Date;
(f) any income Taxes attributable to income received by
Seller;
(g) any Liability of Seller arising as a result of its
execution and delivery of this Agreement or any Ancillary Agreement, the
performance of its obligations hereunder or thereunder, or the consummation by
Seller of the transactions contemplated hereby or thereby;
(h) any Liability of Seller based on Seller's acts or
omissions after the Closing;
(i) any and all Environmental Liabilities to the extent
accruing, arising or occurring during the period of Seller's (or any of its
Affiliates') ownership of the Real Property or operation of the Project, and any
and all other Environmental Liabilities to the extent accruing, arising or
occurring prior to the Closing and within Seller's Knowledge prior to the
Closing (the "EXCLUDED ENVIRONMENTAL LIABILITIES"); and
(j) any and all Tort Liabilities to the extent accruing,
arising or occurring during the period of Seller's (or any of its Affiliates')
ownership of the Real Property or operation of the Project, and any and all
other Tort Liabilities to the extent accruing, arising or occurring prior to the
Closing and within Seller's Knowledge prior to the Closing (the "EXCLUDED TORT
LIABILITIES").
ARTICLE III
PURCHASE PRICE; CLOSING
3.1 PURCHASE PRICE. At the Closing, Purchaser agrees to pay to Seller
the sum of One Hundred Eighty-Nine Million Five Hundred Thousand and No/100
Dollars ($189,500,000.00), subject to adjustment pursuant to SECTION 3.7 and
SECTION 10.1(g) (the "PURCHASE PRICE").
3.2 PRORATION.
(a) Purchaser and Seller agree that, except as otherwise set
forth in this Agreement, all of the items normally prorated, including those
listed below, relating to the Business and the Purchased Assets shall be
prorated as of the effective time of the Closing on the Closing Date, with
Seller liable to the extent such items relate to any time period through the
effective time of the Closing on the Closing Date, and Purchaser liable to the
extent such items relate to any time period subsequent to the effective time of
the Closing on the Closing Date:
(i) any rent, Taxes and other items payable by or to
Seller under any of the Transferred Contracts to be assigned
to and assumed by Purchaser hereunder;
(ii) any permit, license or registration fees with
respect to any Transferred Permit; and
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(iii) charges for water, telephone, electricity and
other utilities.
(b) Purchaser and Seller agree that Property Taxes with
respect to the Business or the ownership and the operations of the Purchased
Assets or the Project shall be prorated as follows:
(i) Seller shall be liable for and shall pay when due
all Property Taxes having a lien date in the year before the
calendar year of the Closing Date.
(ii) Seller shall be liable for and shall pay when
due all Property Taxes having a lien date in the same calendar
year as the Closing Date; and
(iii) Property Taxes having a lien date in the
calendar year following the year of the Closing Date shall be
paid by Purchaser; however, such Property Taxes shall be
prorated with (A) Seller being liable for that portion of the
Property Taxes calculated by multiplying (1) the final
determined Property Tax liability by (2) the number of days
beginning with January 1 in the year of Closing up to and
including the Closing Date divided by three hundred sixty-five
(365) days, and (B) Purchaser being liable for that portion of
the Property Taxes calculated by multiplying (1) the final
determined Property Tax liability by (2) the number of days
after the Closing Date up to and including December 31 in the
year of Closing divided by three hundred sixty-five (365)
days. Schedule 3.2(b) illustrates the operation of this
SECTION 3.2(b). After each payment of Property Taxes referred
to in this SECTION 3.2(b)(iii) by Purchaser, Purchaser shall
notify Seller in writing of the total amount of Property Taxes
paid and, as to that payment, the prorated amount for which
Seller is liable. Seller shall reimburse Purchaser such
prorated amount within fifteen (15) days after receipt of the
notice from Purchaser.
(c) In the event that actual figures are not available at the
Closing Date, prorations required by SECTION 3.2(a) shall be calculated as
follows:
(i) Such proration shall be based upon the actual
fee, cost or amount of the specific item for the most recent
preceding year (or appropriate period) for which an actual
fee, cost or amount paid is available.
(ii) Upon the request of either Seller or Purchaser,
made within sixty (60) days of the date that any actual amount
previously estimated in accordance with SECTION 3.2(c)(i)
becomes available (the "REQUEST DATE"), the Parties shall (A)
calculate the prorated amounts using the actual available
amounts (the "ACTUAL PRORATED AMOUNTS"), (B) calculate the
difference between the originally estimated prorations (the
"ESTIMATED PRORATED AMOUNTS") and the Actual Prorated Amounts
(the "PRORATED DIFFERENCE"), and (C) the Party that at Closing
paid less than the Actual Prorated Amount due from such Party
based upon the Estimated Prorated Amounts shall pay the
Prorated Difference to the other Party within sixty (60) days
of the Request Date.
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3.3 CLOSING. The Closing shall take place in Phoenix at the offices of
Moyes Storey at 10:00 A.M. Phoenix time, on the third Business Day after the
conditions to Closing set forth in ARTICLES VIII and IX (other than actions to
be taken or items to be delivered at Closing) have been either satisfied or
waived by the Party entitled to waive such conditions, or on such other date and
at such other time and place as Purchaser and Seller mutually agree in writing.
All actions scheduled in this Agreement for the Closing Date shall be deemed to
occur simultaneously at the Closing. Subject to the provisions of ARTICLE X,
failure to consummate the purchase and sale provided for in this Agreement on
the date determined pursuant to this SECTION 3.3 will not result in the
termination of this Agreement and will not relieve any Party of any obligation
under this Agreement. The Closing shall be effective for all purposes as of
11:59:59 P.M. Phoenix time on the Closing Date.
3.4 CLOSING DELIVERIES BY SELLER TO PURCHASER. At the Closing (or, in
the case of clause (j) below, simultaneously with the execution and delivery
hereof), Seller shall deliver, or shall cause to be delivered, to Purchaser the
following:
(a) the Deed, duly executed by and acknowledged on behalf of
Seller and in recordable form;
(b) the Xxxx of Sale and Assignment of Rights, duly executed
by Seller;
(c) the Affidavit of Property Value, duly executed by and
acknowledged on behalf of Seller;
(d) the FIRPTA Affidavit, duly executed by and acknowledged on
behalf of Seller;
(e) a certificate of an officer of Seller, dated as of the
Closing Date, setting forth and attesting to (i) the resolutions of the board of
directors of the sole member of Seller authorizing the execution, delivery and
performance of this Agreement and the Ancillary Agreements and the consummation
of the transactions contemplated hereby and thereby, (ii) the incumbency and
signature of the officer(s) of Seller executing this Agreement and the Ancillary
Agreements and (iii) the Original Cost and the Accumulated Provision for
Depreciation and Amortization for the Purchased Assets as of the Closing Date;
(f) a certificate of an officer of Seller, dated as of the
Closing Date, as to the matters set forth in SECTIONS 8.1 and 8.2;
(g) a complete copy of the certificate of formation (and all
amendments thereto) of Seller, certified by the Secretary of State of Delaware
as of a date not more than five (5) Business Days prior to the Closing Date, and
a complete copy of the Charter Documents (and all amendments thereto) of Seller
as in effect on the Closing Date, certified by an officer of Seller;
(h) certificates from appropriate Governmental Authorities,
dated no earlier than five (5) Business Days prior to the Closing Date, as to
the good standing and legal existence of Seller in the State of Delaware and as
to the good standing and qualification to do business by Seller in the State of
Arizona;
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(i) the consents, waivers, authorizations and approvals set
forth on Schedules 4.3(b) and 4.3(c), in form and substance reasonably
satisfactory to Purchaser;
(j) a duly executed unconditional guaranty of Seller's
obligations under ARTICLE X, ARTICLE XI and SECTION 12.15 in the form attached
hereto as Exhibit F (the "GUARANTY AGREEMENT") from PPL Energy Supply;
(k) a tax clearance certificate from the Arizona Department of
Revenue, dated no earlier than five (5) Business Days prior to the Closing Date,
with respect to Seller; and
(l) such other documents as Purchaser may reasonably request
to carry out the purposes of this Agreement.
3.5 CLOSING DELIVERIES BY PURCHASER TO SELLER. At the Closing,
Purchaser shall deliver to Seller the following:
(a) a wire transfer of immediately available funds (to such
account as Seller shall have notified Purchaser of at least two (2) Business
Days prior to the Closing Date) in the amount equal to the Purchase Price (plus
or minus any prorated amounts calculated pursuant to SECTION 3.2(c));
(b) the Affidavit of Property Value, duly executed by and
acknowledged on behalf of Purchaser;
(c) an assumption agreement (the "ASSUMPTION AGREEMENT"), in
the form attached hereto as Exhibit A, evidencing the assumption by Purchaser of
the Assumed Liabilities, duly executed by Purchaser;
(d) a certificate of an officer of Purchaser, dated as of the
Closing Date, setting forth and attesting to (i) the resolutions of the board of
directors of Purchaser authorizing the execution, delivery and performance of
this Agreement and the Ancillary Agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby, and (ii) the
incumbency and signature of each officer of Purchaser executing this Agreement
and the Ancillary Agreements to which it is a party;
(e) a certificate of an officer of Purchaser, dated as of the
Closing Date, as to the matters set forth in SECTIONS 9.1 and 9.2;
(f) a complete copy of Purchaser's articles of incorporation
(and all amendments thereto), certified by the ACC as of a date not more than
five (5) Business Days prior to the Closing Date, and a complete copy of the
bylaws (and all amendments thereto) of Purchaser, certified by an officer of
Purchaser;
(g) a certificate from the ACC, dated no earlier than five (5)
Business Days prior to the Closing Date, as to the good standing and legal
existence of Purchaser in Arizona; and
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(h) such other documents as Seller may reasonably request to
carry out the purposes of this Agreement.
3.6 ALLOCATION OF PURCHASE PRICE.
(a) Seller and Purchaser agree that prior to the Closing, the
Purchase Price shall be allocated among the Purchased Assets in accordance with
an allocation schedule (the "PURCHASE PRICE ALLOCATION SCHEDULE") agreed upon by
Purchaser and Seller, which shall be prepared in a manner required by Section
1060 of the Code and any other applicable Law and delivered by Purchaser to
Seller prior to the Closing. Seller and Purchaser each shall prepare a mutually
acceptable and substantially identical IRS Form 8594 "Asset Acquisition
Statements Under Section 1060" consistent with the Purchase Price Allocation
Schedule which the Parties shall use to report the transactions contemplated by
this Agreement to the applicable Taxing Authorities. Each of Seller and
Purchaser agrees to provide the other promptly with any other information
required to complete IRS Form 8594. Each Party agrees that it shall not, without
the consent of the other Party, take a position on any Tax Return, or before any
Taxing Authority in connection with the examination of any Tax Return or in any
subsequent judicial proceeding, that is in any manner inconsistent with the
terms of the Purchase Price Allocation Schedule. In recognition of Seller's
status as a disregarded entity for U.S. federal and Arizona income tax purposes,
Purchaser agrees that Seller's responsibilities and obligations under this
SECTION 3.6(a) shall be satisfied by Seller cooperating with its sole member
with respect to such responsibilities and obligations.
(b) If Purchaser and Seller are unable to agree upon the
Purchase Price Allocation Schedule within fifteen (15) days prior to the
scheduled Closing Date, Purchaser and Seller shall refer the matter to
Independent Accountants, which shall determine the Purchase Price Allocation
Schedule (including any valuations) in accordance with the provisions set forth
in this SECTION 3.6(b). The Independent Accountants shall be instructed to
deliver to Purchaser and Seller a written determination of the Purchase Price
Allocation Schedule within ten (10) days from the date of referral thereof to
the Independent Accountants. For purposes of this SECTION 3.6(b) and whenever
the Independent Accountants are retained to resolve a dispute between the
Parties under this Agreement, the Independent Accountants may determine the
issues in dispute following such procedures, consistent with the provisions of
this Agreement, as they deem appropriate in the circumstances and with reference
to the amounts in issue. The Parties do not intend to impose any particular
procedures upon the Independent Accountants, it being the desire of the Parties
that any such disagreement shall be resolved as expeditiously and inexpensively
as reasonably practicable. The Independent Accountants shall have no liability
to the Parties in connection with such services except for acts of bad faith,
willful misconduct or gross negligence, and the Parties shall provide such
indemnities to the Independent Accountants as they may reasonably request.
Except in the case of fraud or manifest error, the finding of the Independent
Accountants shall be final and binding on the Parties. Purchaser and Seller
shall share equally the fees and disbursements of the Independent Accountants in
connection with resolving the dispute.
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3.7 MINIMUM INVENTORY AMOUNT ADJUSTMENT.
(a) The Purchase Price will be increased on a
dollar-for-dollar basis to the extent that the Post-Closing Inventory Amount
Determination (as defined below) is greater than the Minimum Inventory Amount
(provided that such increase shall in no event exceed $100,000) and decreased on
a dollar-for-dollar basis to the extent that the Post-Closing Inventory Amount
Determination is less than the Minimum Inventory Amount.
(b) At least five (5) Business Days prior to the execution and
delivery hereof, Seller shall have provided Purchaser with a certificate
containing a description, part number, quantity on hand, average unit cost and
extended value (quantity times average unit cost) with respect to each class of
inventory as of the last day of each calendar month between January 1, 2003 and
December 31, 2003. During the Interim Period, Purchaser will be entitled to
conduct onsite test counts of the spare parts inventory in accordance with
SECTION 6.2.
(c) Within sixty (60) days after the Closing Date, Purchaser
will deliver to Seller written notice (the "INVENTORY ADJUSTMENT NOTICE") of
Purchaser's post-Closing determination of the spare parts in inventory as of the
Closing Date (the "POST-CLOSING INVENTORY AMOUNT DETERMINATION"), as derived
from Purchaser's physical review of the spare parts in inventory, the records
(financial and otherwise) relating to such spare parts, and the Transferred
Contracts. The Inventory Adjustment Notice will contain reasonable detail as to
how the Post-Closing Inventory Amount Determination was determined by Purchaser.
Within twenty (20) days after Seller's receipt of the Inventory Adjustment
Notice, Seller will notify Purchaser in writing of Seller's acceptance or
rejection of the Post-Closing Inventory Amount Determination as set forth in the
Inventory Adjustment Notice. Any notice of rejection by Seller must include the
reasons for such rejection and, if appropriate, Seller's proposed calculation of
the Post-Closing Inventory Amount Determination. If (i) by written notice to
Purchaser, Seller accepts the Post-Closing Inventory Amount Determination as set
forth in the Inventory Adjustment Notice, or (ii) Seller fails to deliver any
notice of acceptance or rejection of the Post-Closing Inventory Amount
Determination within the prescribed twenty (20)-day period (which failure will
result in Seller being deemed to have irrevocably accepted and agreed with the
Post-Closing Inventory Amount Determination), the Post-Closing Inventory Amount
Determination as set forth in the Inventory Adjustment Notice will be final and
binding on the Parties.
3.8 ADJUSTMENT DISPUTES.
(a) If Seller delivers written notice to Purchaser under
SECTION 3.7(c) of rejection of the Post-Closing Inventory Amount Determination
as set forth in the Inventory Adjustment Notice, Seller and Purchaser will
promptly (and in any event within ten (10) Business Days after the date of
delivery of Seller's notice of rejection to Purchaser) cause their respective
representatives to confer with each other with a view to resolving any such
matter. If such Parties' representatives are unable to resolve any such matter
within thirty (30) days after the date of delivery of Seller's notice of
rejection to Purchaser, Seller and Purchaser will refer the dispute to
Independent Accountants for review and final determination of the Post-Closing
Inventory Amount Determination. The Independent Accountants shall be instructed
to deliver to Purchaser and Seller a written determination of the Post-Closing
Inventory Amount Determination within ten (10) Business Days from the date of
referral thereof to the Independent
10
Accountants. The Independent Accountants may request of Seller or Purchaser such
documents and information as may be necessary or appropriate for proper
determination of any such matter, and such Parties will cooperate to promptly
satisfy any such request. Except in the case of fraud or manifest error ,the
determination by the Independent Accountants of the Post-Closing Inventory
Amount Determination will be final and binding on the Parties. Seller and
Purchaser will equally share the fees and disbursements of the Independent
Accountants in undertaking such review and determination.
(b) Within five (5) Business Days after the final agreement of
Seller and Purchaser, the final determination by the Independent Accountants or
the deemed acceptance by Seller (as the case may be) of the Post-Closing
Inventory Amount Determination, either:
(i) Purchaser will pay to Seller, by wire transfer of
immediately available funds, the amount (if any) by which the
Post-Closing Inventory Amount Determination exceeds the
Minimum Inventory Amount (provided that such adjustment shall
in no event exceed $100,000), or
(ii) Seller will pay to Purchaser, by wire transfer
of immediately available funds, the amount (if any) by which
the Post-Closing Inventory Amount Determination is less than
the Minimum Inventory Amount.
3.9 CHANGE IN NAME. Not more than ten (10) Business Days after the
Closing Date, Purchaser shall remove all signs or other indications of ownership
at the Project or on the Purchased Assets that reference Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
The representations and warranties contained in this ARTICLE IV are
qualified by the disclosure made with respect to such representations and
warranties in the Schedules attached hereto, to the extent that such disclosure
specifically identifies, or that it is reasonably apparent that such disclosure
relates to, the subsections that it qualifies. This ARTICLE IV and the Schedules
shall be read together as an integrated provision. Subject to the foregoing,
effective as of the Agreement Date and the Closing Date, Seller hereby
represents and warrants to Purchaser that, except as disclosed in the Schedules:
4.1 ORGANIZATION, STANDING AND POWER. Seller is a limited liability
company duly formed, validly existing and in good standing under the Laws of
Delaware and has all requisite power and authority to conduct its business as it
is now being conducted and to own, lease and operate the Business and the
Purchased Assets. Seller is duly qualified or licensed to do business in each
jurisdiction in which the ownership or operation of the Purchased Assets or the
nature of the business conducted by it make such qualification or licensing
necessary, except in those jurisdictions where the failure to be so qualified or
licensed would not reasonably be expected to result in a material adverse effect
on Seller's ability to perform its obligations hereunder. Seller has made
available to Purchaser true, correct and complete copies of Seller's Charter
Documents.
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4.2 AUTHORITY. Seller has all requisite limited liability company power
and authority to execute and deliver this Agreement and each of the Ancillary
Agreements to which it is a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by Seller of this Agreement and each Ancillary
Agreement to which Seller is a party, and the performance by Seller of its
obligations hereunder and thereunder, have been duly and validly authorized by
all necessary limited liability company action. This Agreement and each of the
Ancillary Agreements to which Seller is a party have been duly and validly
executed and delivered by Seller and constitute the legal, valid and binding
obligation of Seller enforceable against Seller in accordance with their
respective terms, except that the enforcement hereof and thereof may be limited
by bankruptcy, insolvency, reorganization, arrangement, moratorium or other
similar Laws relating to or affecting the rights of creditors generally, or by
general equitable principles.
4.3 NO CONFLICTS. The execution, delivery and performance by Seller of
this Agreement and each of the Ancillary Agreements to which Seller is a party
and the completion of the transactions contemplated hereby and thereby do not
and will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the Charter Documents of Seller;
(b) assuming the notices, consents and waivers set forth on
Schedule 4.3(b) (the "SELLER CONSENTS") have been made or obtained:
(i) violate, result in a breach of, constitute (with
due notice or lapse of time or both) a default or cause any
obligation, penalty, premium or right of termination,
cancellation or acceleration to arise or accrue under, any
Contract to which Seller is a party or by which it or any of
the Purchased Assets may be bound, except for any such
defaults or consents (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents
have been obtained or which would not, individually or in the
aggregate, reasonably be expected to have a Seller Material
Adverse Effect;
(ii) result in the creation or imposition of any Lien
upon any of the Purchased Assets;
(iii) result in the cancellation, modification
(except as contemplated by this Agreement), revocation or
suspension of any Transferred Contract, Transferred Permit or
Transferred Intellectual Property;
(iv) require the consent, approval, or notification
of, or registration or filing with, any third party; or
(v) cause Purchaser, any of its Affiliates, or any of
the Purchased Assets to become subject to, or liable for the
payment of, any Tax relating to the operation of Seller, the
Purchased Assets or the Business for any period ending or
deemed to end on or before the Closing Date; and
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(c) assuming all required filings, approvals, consents,
authorizations and notices set forth on Schedule 4.3(c) (collectively, the
"SELLER APPROVALS") have been made, obtained or given, (i) conflict with or
result in a violation or breach of any term or provision of any Law or writ,
judgment, order or decree applicable to Seller or its Assets, or (ii) require
the consent, approval, or notification of, or registration or filing with, any
Governmental Authority under any applicable Law.
4.4 BUSINESS. The Business is the only business operation carried on by
Seller. Except for the Excluded Items, the Purchased Assets are sufficient to
operate the Business as currently operated and constitute all the assets and
rights that are used by Seller or any of its Affiliates in connection with the
operation of the Business. All equipment included in the Purchased Assets (other
than spare parts and other equipment not currently in service) and all
buildings, structures and fixtures constituting part of the Project have been
maintained by Seller in accordance with Good Operating Practices, except for
ordinary wear and tear. There are no pending or, to Seller's Knowledge,
threatened proceedings or governmental actions to condemn or take by power of
eminent domain all or any part of the Purchased Assets. For purposes of this
Agreement, "SELLER'S KNOWLEDGE" means the actual knowledge of the individuals
named on Schedule 4.4, who Seller represents to be the persons generally
responsible for the subject matters to which such knowledge is pertinent.
4.5 SUBSIDIARIES. Seller does not have any subsidiaries or own equity
interests in any Person.
4.6 LEGAL PROCEEDINGS.
(a) Neither Seller nor any of its Affiliates has been served
with notice of any Claim, and, to Seller's Knowledge, none has been threatened
against any such Person, that (i) affects Seller or the Purchased Assets and
would, individually or in the aggregate, if pursued or resulting in a judgment
against Seller, reasonably be expected to have a Seller Material Adverse Effect
or (ii) seeks a writ, judgment, order or decree restraining, enjoining or
otherwise prohibiting or making illegal any of the transactions contemplated by
this Agreement. Seller does not have any Knowledge of any facts that would
reasonably be expected to form the basis for any such Claim, writ, judgment,
order or decree.
(b) Schedule 4.6(b) lists all of the currently pending legal
proceedings before any Governmental Authority relating to the Project or the
Business (but not, however, including any such legal proceedings that apply
generically to the electric power industry or any segment thereof, or to
participants within such industry or any such segment). To Seller's Knowledge,
all currently effective filings relating to the Project or the Business
heretofore made by Seller with any Governmental Authority were made in
compliance with the Laws then applicable thereto and the information contained
therein was true and correct in all material respects as of the respective dates
of such filings.
4.7 COMPLIANCE WITH LAWS AND ORDERS. Seller is in compliance with all
Laws and orders applicable to it, except where any such non-compliance would
not, in the aggregate, reasonably be expected to have a Seller Material Adverse
Effect; provided that this SECTION 4.7
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does not address (a) Real Property, which is exclusively addressed by SECTION
4.13, or (b) Environmental Laws, which are exclusively addressed by SECTIONS
4.15 and 4.16.
4.8 LIABILITIES. Except as disclosed on Schedule 4.8, Seller has no
Liabilities that individually or in the aggregate exceed $100,000, excluding (i)
Liabilities under the Transferred Contracts and Excluded Contracts, (ii)
Liabilities under this Agreement, (iii) Liabilities under Seller's Permits
listed on Schedule 4.15, (iv) Liabilities under this Agreement for which Seller
is responsible, and (v) Liabilities incurred after the date hereof in accordance
with the provisions contained in ARTICLE VI.
4.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Schedule 4.9, and except as otherwise contemplated by this Agreement, between
December 31, 2003, and the Agreement Date, there has not been: (i) any Seller
Material Adverse Effect; (ii) any damage, destruction or casualty loss, whether
covered by insurance or not, which has had a Seller Material Adverse Effect; or
(iii) any entry into any agreement, commitment or transaction (including any
borrowing, capital expenditure or capital financing) by Seller or any of its
Affiliates, which is material to the Business or operations of the Purchased
Assets, except agreements, commitments or transactions in the ordinary course of
business or as contemplated herein.
4.10 TAXES. All Tax Returns that are required to be filed on or before
the Closing Date by, on behalf of or relating to Seller or its financial results
have been or will be duly and timely filed or are the subject of a timely filed
and valid extension. All Taxes that are shown to be due on such Tax Returns with
respect to the Business have been or will be timely paid in full. All Property
Taxes with respect to the Purchased Assets having a lien date in the year before
the calendar year of the Closing Date have been or will be paid in full by
Seller no later than the respective due dates for such Property Taxes. All
Property Taxes with respect to the Purchased Assets having a lien date in the
same year as the Closing Date have been or will be paid in full by Seller no
later than the respective due dates for such Property Taxes. All Property Tax
Returns with respect to the Purchased Assets have been or will be duly and
timely filed by Seller for certain time periods, as set forth in SECTION 7.1(b).
All withholding Tax requirements imposed on Seller have been satisfied in full
in all respects. Seller does not have in force any waiver of any statute of
limitations in respect of Taxes or any extension of time with respect to a Tax
assessment or deficiency. There are no pending or active audits or, to Seller's
Knowledge, threatened audits or proposed deficiencies or other claims for unpaid
Taxes of Seller.
4.11 REGULATORY STATUS.
(a) Seller is qualified as an "exempt wholesale generator" and
the Project is an "eligible facility," each within the meaning of Section 32(a)
of the Public Utility Holding Company Act of 1935. Except as set forth on
Schedule 4.11(a), Seller is not subject to regulation as a public utility or
public service company (or similar designation) by the United States, any State
of the United States, any foreign country or any municipality or any political
subdivision of the foregoing.
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(b) Seller is not an "investment company," a company
"controlled" by an "investment company" or an "investment advisor" within the
meaning of the Investment Company Act of 1940.
4.12 CONTRACTS.
(a) Schedule 4.12(a) sets forth a complete and accurate list
as of the Agreement Date of all of the following Transferred Contracts to which
Seller or an Affiliate of Seller is a party relating to the Project or the
Business or by which the Purchased Assets may be bound (collectively, "MATERIAL
CONTRACTS" and individually a "MATERIAL CONTRACT"):
(i) Contracts for the future purchase, exchange or
sale of gas;
(ii) Contracts for the future purchase, exchange or
sale of power or ancillary services;
(iii) Contracts for the future purchase, exchange, or
sale of steam;
(iv) Contracts for the future transportation or
transmission of gas or electric power;
(v) interconnection Contracts;
(vi) Contracts (A) for the sale of any Asset or (B)
that grant a right or option to purchase any Asset, other than
Contracts entered into in the ordinary course of business
relating to Assets with a value of less than $50,000
individually or $100,000 in the aggregate;
(vii) Contracts (other than Contracts identified
pursuant to SECTIONS 4.12(a)(i) THROUGH (vi)) for the future
provision of goods or services and requiring payments by
Seller in excess of $50,000 for each individual Contract;
(viii) Contracts under which Seller has created,
incurred, assumed or guaranteed any outstanding indebtedness
for borrowed money or any capitalized lease obligation, or
under which Seller has imposed a security interest on any of
its Assets, tangible or intangible, which security interest
secures outstanding indebtedness for borrowed money;
(ix) outstanding agreements of guaranty, surety or
indemnification, direct or indirect, by Seller, or by any
Affiliate of Seller for the benefit of Seller;
(x) Contracts between Seller and any Affiliate of
Seller relating to the future provision of goods or services
by Seller to such Affiliate of Seller, or by such Affiliate of
Seller to Seller;
(xi) Any contract for consulting that provides for
annual compensation by Seller in an amount in excess of
$50,000 and which is not cancelable by Seller on ninety (90)
days or less advance notice;
15
(xii) outstanding futures, swap, collar, put, call,
floor, cap, option or other Contracts that are intended to
benefit from or reduce or eliminate the risk of fluctuations
in the price of commodities, including electric power, gas or
securities;
(xiii) Contracts that purport to limit Seller's
freedom to compete in any line of business or in any
geographic area;
(xiv) partnership, joint venture or limited liability
company agreements; and
(xv) Contracts conveying, granting, leasing or
assigning to or by Seller an interest in real property.
(b) Seller has provided Purchaser with, or access to, true and
complete copies of all Material Contracts.
(c) Each of the Material Contracts is in full force and effect
in all material respects and constitutes a valid and binding obligation of
Seller (or, if applicable, an Affiliate of Seller) and, to Seller's Knowledge,
of the other parties thereto, and, except as disclosed in Schedule 4.12(c), each
Transferred Contract may be transferred to Purchaser pursuant to this Agreement
without the consent of the other parties thereto and without breaching any
material terms thereof or resulting in the forfeiture or impairment of any
rights thereunder.
(d) Except as set forth in Schedule 4.12(d), there is not
under any Material Contract any material default or event which, with notice or
lapse of time or both, (i) would constitute a material default by Seller (or by
any Affiliate of Seller which is a party thereto) or, to Seller's Knowledge, any
other party thereto, (ii) would constitute a default by Seller (or by any
Affiliate of Seller which is a party thereto) or, to Seller's Knowledge, any
other party thereto which would give rise to an automatic termination, or the
right of discretionary termination thereof, or (iii) would cause the
acceleration of any of Seller's (or any of its Affiliates') obligations
thereunder or result in the creation of any Lien (other than any Permitted Lien)
on any of the Purchased Assets. There are no claims, actions, proceedings or
investigations pending or, to Seller's Knowledge, threatened against Seller (or
by any Affiliate of Seller which is a party thereto) or, to Seller's Knowledge,
any other party to any Material Contract before any Governmental Authority
acting in an adjudicative capacity, in each case relating in any way to any
Material Contract or the subject matter thereof. Seller has no Knowledge of any
defense, offset or counterclaim arising under any Material Contract.
(e) Schedule 4.12(e) details all warranties by any vendor,
materialman, supplier, contractor or subcontractor relating to the Purchased
Assets or any component thereof and specifies the following information with
respect to each such warranty: (i) the item of equipment or other item of the
Purchased Assets to which the warranty is applicable, but only to the extent
such item has a value of $50,000 or more, (ii) the contract or agreement
pursuant to which the warranty was given or made (a true and complete copy of
each such contract or agreement has been provided to Purchaser); (iii) a
description of any warranty work done under the applicable warranty, the date
thereof and the applicable warranty period for the warranty
16
work; and (iv) whether such warranty is transferable to Purchaser. Except as
disclosed on Schedule 4.12(e), Seller has complied with all storage,
installation, operation, maintenance and other requirements with respect to each
item of equipment or other item of the Purchased Assets to which each warranty
relates and each other condition to the continued effectiveness of each such
warranty, and there are no events that have occurred or conditions applicable
that constitute or may constitute a defense to the continuing effectiveness of
each such warranty.
4.13 REAL PROPERTY.
(a) Transferred Real Property. Schedule 4.13(a) contains a
true and complete list of all Real Property of Seller that is part of the
Purchased Assets (including all rights of Seller relating to any rights of way,
encumbrances or other such rights). Based solely upon the Existing Title
Policies, Seller owns or leases (as tenant or lessee) all Real Property listed
on Schedule 4.13(a), in each case free and clear of all Liens (except for
Permitted Liens that do not affect the use or marketability of such Real
Property) created by, through or under Seller, except as otherwise noted on
Schedule 4.13(a) or as disclosed or listed in the Existing Title Policies, true
and complete copies of which title policies have been made available for due
diligence review by Purchaser.
(b) Encumbrances and Improvements. Schedule 4.13(b) includes a
description of all encumbrances, easements, licenses or rights of way of record
(or, if not of record, of which Seller has Knowledge) granted on or appurtenant
to or otherwise affecting the Real Property, and all plants, buildings,
structures or other Improvements located thereon. All Liens, easements or rights
of way that are not of public record, if any, would not reasonably be expected
to have a Seller Material Adverse Effect. There are now in full force and effect
duly issued certificates of occupancy permitting the Real Property and
Improvements located thereon to be legally used and occupied as the same are now
constituted. To Seller's Knowledge, and except for any items listed in the
Existing Title Policies or the survey prepared by Superior Surveying Services,
Inc., dated July 29, 2002 under Job #220649 (the "EXISTING SURVEY"): (i) no fact
or condition exists which would prohibit or adversely affect the ordinary rights
of access to and from the Real Property from and to the existing highways and
roads; (ii) there is no pending or threatened restriction or denial,
governmental or otherwise, upon such ingress and egress; (iii) there is not (A)
any claim of adverse possession or prescriptive rights involving any of the Real
Property, (B) any structure located on any Real Property which encroaches on or
over the boundaries of neighboring or adjacent properties or (C) any structure
of any other party which encroaches on or over the boundaries of any such Real
Property; and (iv) no public improvements have been commenced and none are
planned which in either case may result in special assessments or otherwise
would, individually or in the aggregate, reasonably be expected to have a Seller
Material Adverse Effect.
(c) Real Property Leases. Except as set forth in Schedule
4.13(c), there are no real property leases, recorded or unrecorded (the "REAL
PROPERTY LEASES"), relating to the Purchased Assets under which Seller is a
lessee, lessor or under which Seller has any interest.
(d) Approval. No state, municipal, or other governmental
approval regarding the division, platting, or mapping of real estate is required
as a prerequisite to the conveyance by
17
Seller to Purchaser (or as a prerequisite to the recording of any conveyance
document) of any Real Property pursuant to the terms hereof.
(e) Governmental Restrictions; Condemnation. Seller has not
received, and does not have Knowledge of, any notifications, restrictions, or
stipulations from the United States of America, the State of Arizona, the County
of Pinal, or any other Governmental Authority requiring any work to be done on
the Real Property or threatening the use of the Real Property. There are no
pending or, to Seller's Knowledge, threatened taking or condemnation proceedings
affecting any portion of the Real Property. Seller is not subject to, and, to
Seller's Knowledge, no basis exists for, any order, judgment, decree or
governmental restriction that would adversely affect the transactions
contemplated by this Agreement, the Real Property or the use of the Real
Property in the manner presently being used by Seller. Seller has no Knowledge
of any plan, study, litigation, action, proceeding or effort by any Governmental
Authority or private party which in any way challenges, affects or would
challenge or affect the continuation of the present use of the Real Property
specifically.
(f) Title and Access. Based solely upon the Existing Title
Policies, fee simple title to the Real Property is currently vested in Seller.
Permanent, legal access as presently existing is available to the Real Property
from a dedicated public right-of-way.
(g) Knowledge of Adverse Title Matters. Except as set forth on
Schedule 4.13(g), Seller has no Knowledge of any title defect, Lien,
encumbrance, adverse claim, or other matter relating to the title to the Real
Property or to the title insurance coverage for the Real Property which is not
shown by the public records, the Existing Title Policies or the Existing Survey.
(h) Absence of Liens. No Liens against the Real Property are
pending, or to Seller's Knowledge, are threatened or have arisen or exist under
federal or state Tax Law, any Environmental Law, or other applicable federal or
state Law, other than Permitted Liens.
(i) Utilities. All water, sewer, telephone, gas and electrical
facilities that are presently installed to the Real Property line, are, to
Seller's Knowledge, available and in good working order, and, to Seller's
Knowledge, are in compliance with all applicable Laws of all Governmental
Authorities having jurisdiction and with the rules and regulations of the
relevant public utilities.
(j) Zoning. The Real Property is zoned in part Industrial
(CI-2), subject to an Industrial Use Permit for a natural gas electrical peaking
power generation facility (including the stipulations listed in such permit),
and in part General Rural Zone (GR).
(k) Condition of Property. To Seller's Knowledge, except as
set forth on Schedule 4.13(k), all of the improvements, buildings and fixtures
on or part of the Real Property were constructed in a good and workmanlike
manner, are structurally sound, and, for purposes of their use in the Business
as currently conducted, are in good and proper working condition and repair,
normal wear and tear excepted.
(l) Insurance. Seller has not received any written (or, to
Seller's Knowledge, any oral) notice from any insurance company of any defects
or any inadequacies in the Real
18
Property or any part thereof that would adversely affect the insurability of the
Real Property. To Seller's Knowledge, the Real Property is in compliance with
the material requirements of all insurance carriers currently providing
insurance for the Real Property.
(m) Compliance. Seller has complied, in all material respects,
with all Laws, and all requirements and orders of Governmental Authorities, with
respect to the Real Property and the operations presently being conducted by
Seller upon the Real Property. Neither the Real Property, nor any improvement or
building upon the Real Property, nor the continued maintenance or use of any
portion of the Real Property for the Business, nor the current operations being
conducted by Seller on the Real Property, violates, in any material respect, any
such Laws, requirements and orders, including zoning or building Laws,
ordinances, orders or regulations. Seller has obtained all material Permits
currently required for the conduct of the current operations on the Real
Property, all such Permits are in full force and effect, and Seller is, in all
material respects, in compliance therewith. Notwithstanding any of the
foregoing, this SECTION 4.13 does not address Environmental Laws, which are
exclusively addressed by SECTIONS 4.15 and 4.16.
(n) Archeological Artifacts and Endangered Species. To
Seller's Knowledge, there are no historical or archeological materials or
artifacts of any kind or any Indian ruins of any kind located on the Real
Property. To Seller's Knowledge, no part of the Real Property is "critical
habitat" as defined in the Federal Endangered Species Act, 16 U.S.C. Sections
1531 et seq., or in regulations promulgated thereunder, nor are any "endangered
species" or "threatened species" located on the Real Property, as defined
therein.
(o) Americans with Disabilities Act. Seller has not received
any written (or to Seller's Knowledge, any oral) notice of violation of, and the
Real Property is in compliance in all material respects with, the Americans with
Disabilities Act of 1990.
(p) Special Districts. To Seller's Knowledge, except as set
forth in Schedule 4.13(p), the Real Property is not located within any water
conservation, irrigation, soil conservation, weed or insect abatement, or other
similar district, or any special improvement district. To Seller's Knowledge,
except as shown on the Survey, the Real Property is not within a flood plain,
flood way or flood control district.
(q) Taxes. To Seller's Knowledge, Seller does not have any
liability for any Taxes, or any interest or penalty in respect thereof, of any
nature that may be assessed against Purchaser or that are or may become a Lien
against the Real Property, other than the lien for current real property Taxes
not yet due and payable.
(r) Mechanics' Liens. Except as described in Schedule 4.13(r),
no work has been performed on or about the Real Property within six (6) months
prior to the Agreement Date that would legally entitle any Person to file or
record any mechanics' or materialmen's Liens.
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(s) Water Rights.
(i) Seller holds all water rights appurtenant to the
Property, including those certificated rights identified on
Schedule 4.13(s)(i) attached hereto (collectively, the "WATER
RIGHTS").
(ii) Seller owns the xxxxx ("XXXXX") and well sites
further identified on Schedule 4.13(s)(ii).
(iii) To Seller's Knowledge, the Water Rights remain
appurtenant to the Real Property, and no Water Rights have
been severed from that portion of the Real Property to which
they are appurtenant.
(iv) To Seller's Knowledge, to the extent that either
Seller or Xxxxxx X. Xxxxxx Farms, pursuant to that certain
Lease Agreement by and between Xxxxxx X. Xxxxxx d/b/a Xxxxxx
X. Xxxxxx Farms and Seller dated December 12, 2001 (the
"XXXXXX FARMS LEASE"), has used any groundwater at or for the
Real Property, all such groundwater has been pumped pursuant
to a Certificate of Grandfathered Groundwater Right (a "WATER
RIGHTS CERTIFICATE") issued by the Arizona Department of Water
Resources (the "DWR") solely for the purposes permitted by
applicable Law pursuant to such Certificate in such a manner
that the Water Rights are not subject to claims of abandonment
or forfeiture.
(v) All filings, registrations and assessments for
the Water Rights appurtenant to the Real Property have been
made and are current with all appropriate Governmental
Authorities, including the DWR. As used herein, the phrase,
"filings, registrations and assessments" includes
registrations of Xxxxx and all notifications of change of
ownership forms necessary to assign, transfer or otherwise
convey the reported ownership of the Water Rights and Xxxxx
from any previous owner to the Seller.
(vi) To Seller's Knowledge, as of the date hereof,
there are no charges, pump Taxes, groundwater withdrawal and
use fees or assessments due or owing to any state agency
including DWR for the Water Rights.
(vii) As of the date hereof, there are no enforcement
actions by DWR threatened or pending against Seller relating
to the Water Rights, and to Seller's Knowledge, Seller is in
material compliance with all water conservation rules,
regulations and requirements as set forth in the applicable
management plans for the Pinal County active management area.
(viii) Seller has caused Annual Groundwater
Withdrawal and Use Reports to be prepared and filed annually
with DWR for each Water Right, pursuant to the rules and
regulations promulgated by DWR.
4.14 PERSONAL PROPERTY. Seller has good title to (or, with respect to
those items of tangible personal property held pursuant to a lease, a good and
valid leasehold interest in) all of its tangible personal property, including
the tangible personal property listed on Schedule 4.14,
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free and clear of all Liens, except for Permitted Liens. The foregoing shall not
apply with respect to any item of Intellectual Property, which is governed
exclusively by SECTION 4.18. Seller has good title, free and clear of Liens
(other than Permitted Liens), to the spare parts in inventory listed or
disclosed on Schedule 4.14.
4.15 PERMITS.
(a) Seller has obtained all material Permits required for the
ownership and operation of the Project by Seller in the manner in which it is
currently owned and operated. All such Permits are set forth on Schedule 4.15,
are in full force and effect, and have not been amended except as set forth on
Schedule 4.15 or for extensions in the ordinary course of business.
(b) Seller is in compliance, in all material respects, with
all Permits set forth on Schedule 4.15, and, except as set forth on Schedules
4.6(b) and 4.16(b), Seller has not received any written notification from any
Governmental Authority alleging that it is in violation of any such Permits.
4.16 ENVIRONMENTAL MATTERS.
(a) Seller has made available to Purchaser, on a confidential
basis in accordance with the terms and conditions of SECTION 12.5, true and
complete copies of all environmental site assessment reports, studies and
related documents in the possession of, or available to, Seller or its
Affiliates and that relate to environmental matters in connection with the
operation of the Project or the Real Property.
(b) Except as set forth on Schedule 4.16(b):
(i) Seller has not been served with notice of any
Environmental Claims and, to Seller's Knowledge, no
Environmental Claims are threatened against Seller by any
Governmental Authority or other Person (including any private
citizen's group) under any Environmental Laws;
(ii) there has been no event or occurrence at the
Project that has caused or reasonably would be expected to
cause Seller to fail to comply with any applicable
Environmental Laws in any material respect;
(iii) there has been no Release of any Hazardous
Material at or from the Project that could reasonably be
expected to result in an Environmental Claim;
(iv) there are not outstanding, nor have there been
issued, any judgments, decrees or judicial orders relating to
the Purchased Assets regarding (A) compliance with any
Environmental Law or (B) the investigation or cleanup of
Hazardous Materials under any Environmental Law;
(v) Seller is, and at all times has been, in
compliance with, in all material respects, and has not been
and is not in violation of or liable in any
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material respect under, any Environmental Law in connection
with the Business or the Purchased Assets;
(vi) to Seller's Knowledge, there are no
Environmental Liabilities associated with the Purchased Assets
that would, individually or in the aggregate, reasonably be
expected to have a Seller Material Adverse Effect; and
(vii) Seller is and at all times has been in full
compliance with all terms and conditions of the Certificate of
Environmental Compatibility.
(c) Seller makes no representation or warranty regarding any
environmental matters except as expressly set forth in SECTIONS 4.15 and 4.16.
4.17 INSURANCE. The Project and its tangible Assets are covered by
insurance policies in such amounts and against such risks and losses as are
consistent with Seller's historical practices. To Seller's Knowledge, except as
set forth in Schedule 4.17, all such policies purchased or held by and insuring
the Business or the Purchased Assets are in full force and effect, and all
premiums with respect thereto covering all periods up to and including the date
as of which this representation is being made have been paid. Seller has not
received any written (or to Seller's Knowledge, any oral) notice of cancellation
or termination with respect to any such policy which was not replaced on
substantially similar terms prior to the date of such cancellation. Seller has
provided to Purchaser a summary of the loss experience under each insurance
policy insuring the Business or the Purchased Assets. Except as described in
Schedule 4.17, Seller has not been refused any insurance with respect to the
Business or the Purchased Assets nor, to Seller's Knowledge, has Seller's
coverage been limited by any insurance carrier to which it has applied for any
such insurance or with which it has carried insurance during the twelve (12)
month period immediately preceding the Agreement Date.
4.18 INTELLECTUAL PROPERTY. Except for the Excluded Items:
(a) Schedule 4.18 lists all issued patents and registered
trademarks owned by Seller and currently used in the United States in the
Business as currently conducted. As described on Schedule 4.18, Seller owns, or
has the license or right to use for the Business, all material Intellectual
Property currently used in the Business. The Parties acknowledge and agree that
Purchaser shall not acquire in or in connection with the transactions
contemplated by this Agreement or any of the Ancillary Agreements any trademarks
or trade names using "PPL."
(b) Seller has not received from any third party a claim in
writing that Seller is infringing the Intellectual Property of such third party.
To Seller's Knowledge, no third party is infringing any Intellectual Property
owned or exclusively licensed by Seller.
4.19 RELATED PERSONS. Except as set forth on Schedule 4.19, no
Affiliate of Seller has any interest in any of the Purchased Assets, and no
Affiliate of Seller is a party to any Contract with Seller with respect to the
Purchased Assets.
4.20 BROKERS. Seller does not have any liability or obligation to pay
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which Purchaser could become
liable or obligated.
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4.21 EMPLOYEES.
(a) Each of the employees at the Project (each, a "PROJECT
EMPLOYEE") is employed by PPL Montana. Schedule 4.21(a) sets forth, with respect
to each Project Employee (including any Project Employee who is on a leave of
absence or on layoff status): (i) the name and title of such Project Employee;
(ii) the aggregate dollar amounts of the compensation (including wages, salary,
commissions, fringe benefits, bonuses, profit-sharing payments and other
payments or benefits of any type) received by such Project Employee from PPL
Montana; (iii) such Project Employee's annualized compensation as of the
Agreement Date; (iv) the number of hours of sick-time which such Project
Employee has accrued as of the date hereof and the aggregate dollar amount
thereof; and (v) the number of hours of vacation time which such Project
Employee has accrued as of the date hereof and the aggregate dollar amount
thereof.
(b) Except as set forth on Schedule 4.21(b), neither PPL
Montana nor Seller is a party to or bound by, or has ever been a party to or
bound by, any employment contract or any union contract, collective bargaining
agreement or similar contract with respect to the Project. The employment of the
Project Employees is terminable by Seller at will and no employee is entitled to
severance pay or other benefits following termination or resignation, except as
otherwise provided by Law.
(c) Seller has delivered to Purchaser accurate and complete
copies of all employee manuals and handbooks, policy statements and other
documents in Seller's possession relating to the terms and conditions of
employment of the current Project Employees.
(d) Schedule 4.21(d) sets forth the name of, and a general
description of the services performed by, each independent contractor to whom
Seller has made any payment in excess of $50,000 in the aggregate since January
1, 2003 for services rendered in respect of the Project.
4.22 EMPLOYEE BENEFITS. Set forth on Schedule 4.22 is a complete and
correct list of all Benefit Plans currently in effect with respect to the
Project Employees. With respect to any "employee benefit plan," within the
meaning of Section 3(3) of ERISA, that is sponsored, maintained or contributed
to, or has been sponsored, maintained or contributed to within six (6) years
prior to the Agreement Date, by any ERISA Affiliate, (a) no withdrawal
liability, within the meaning of Section 4201 of ERISA, has been incurred, which
withdrawal liability has not been satisfied, (b) no liability to the Pension
Benefit Guaranty Corporation has been incurred by any such entity, which
liability has not been satisfied, (c) no accumulated funding deficiency, whether
or not waived, within the meaning of Section 302 of ERISA or Section 412 of the
Code has been incurred, and (d) all contributions (including installments) to
such plan required by Section 302 of ERISA and Section 412 of the Code have been
timely made.
4.23 IMPROVEMENTS. Except as set forth in Schedule 4.23, Seller has not
received any written notices from any Governmental Authority stating or alleging
that any Improvements with respect to the Purchased Assets have not been
constructed in compliance with applicable Law. Except as set forth in Schedule
4.23, no written notice has been received by Seller from any Governmental
Authority requiring or advising as to the need for any repair, alteration,
restoration or improvement of the Purchased Assets.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Effective as of the Agreement Date and the Closing Date, Purchaser
hereby represents and warrants to Seller that:
5.1 CORPORATE EXISTENCE. Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Arizona and
has all requisite corporate power and authority to enter into this Agreement and
each of the Ancillary Agreements to which it is a party, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. Purchaser is duly qualified or licensed to do
business in each other jurisdiction where the nature of its business or the
actions required to be performed by it hereunder makes such qualification or
licensing necessary, except in those jurisdictions where the failure to be so
qualified or licensed would not reasonably be expected to result in a material
adverse effect on Purchaser's ability to perform its obligations hereunder.
Purchaser has made available to Seller true, correct and complete copies of
Purchaser's Charter Documents.
5.2 AUTHORITY. Purchaser has all requisite corporate power and
authority to execute and deliver this Agreement and each of the Ancillary
Agreements to which it is a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by Purchaser of this Agreement and each of the
Ancillary Agreements to which Purchaser is a party and the performance by
Purchaser of its obligations hereunder and thereunder have been duly and validly
authorized by all corporate action on behalf of Purchaser. This Agreement and
each of the Ancillary Agreements to which Purchaser is a party have been duly
and validly executed and delivered by Purchaser and constitute the legal, valid
and binding obligation of Purchaser enforceable against Purchaser in accordance
with their respective terms except that the enforcement hereof and thereof may
be limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar Laws relating to or affecting the rights of creditors generally,
or by general equitable principles.
5.3 NO CONFLICTS. The execution, delivery, and performance by Purchaser
of this Agreement and each of the Ancillary Agreements to which Purchaser is a
party and the completion of the transactions contemplated hereby and thereby do
not and will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of Purchaser's Charter Documents;
(b) violate, result in a breach of, constitute (with due
notice or lapse of time or both) a default or cause any obligation, penalty,
premium or right of termination, cancellation or acceleration to arise or accrue
under, any Contract to which Purchaser is a party or by which it or any of its
Assets may be bound, except for any such defaults or consents (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained or which would not, individually or in the
aggregate, reasonably be expected to have a Purchaser Material Adverse Effect;
or
24
(c) assuming all required filings, approvals, consents,
authorizations and notices set forth in Schedule 5.3(c) (collectively, the
"PURCHASER APPROVALS") have been made, obtained or given, (i) conflict with or
result in a material violation or breach of any term or provision of any Law or
writ, judgment, order or decree applicable to Purchaser or its Assets, or (ii)
require the consent, approval, or notification of, or registration or filing
with, any Governmental Authority under any applicable Law, except for any such
consents, approvals, notifications, registrations or filings which would not,
individually or in the aggregate, reasonably be expected to have a Purchaser
Material Adverse Effect.
5.4 LEGAL PROCEEDINGS. Neither Purchaser nor any of its Affiliates has
been served with notice of any Claim, and, to Purchaser's Knowledge, none has
been threatened against any such Person, that (a) affects Purchaser or its
Assets and would, individually or in the aggregate, if pursued or resulting in a
judgment against Purchaser, reasonably be expected to have a Purchaser Material
Adverse Effect or (b) seeks a writ, judgment, order or decree restraining,
enjoining or otherwise prohibiting or making illegal any of the transactions
contemplated by this Agreement. Purchaser does not have any Knowledge of any
facts that would reasonably be expected to form the basis for any such Claim,
writ, judgment, order or decree. For purposes of this Agreement, "PURCHASER'S
KNOWLEDGE" means the actual knowledge of the individuals named on Schedule 5.4,
who Purchaser represents to be the persons generally responsible for the subject
matters to which such knowledge is pertinent.
5.5 COMPLIANCE WITH LAWS AND ORDERS. Purchaser is in compliance with
all Laws and orders applicable to Purchaser or its Assets, except where any
non-compliance would not, in the aggregate, reasonably be expected to have a
Purchaser Material Adverse Effect.
5.6 BROKERS. Purchaser does not have any liability or obligation to pay
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which Seller could become liable
or obligated.
5.7 FINANCIAL RESOURCES. Subject to Purchaser's receipt of the ACC
Order, Purchaser has cash or credit available, and will have cash available at
the Closing, to enable it to purchase the Purchased Assets on the terms hereof.
ARTICLE VI
COVENANTS
6.1 REGULATORY AND OTHER APPROVALS.
(a) Seller covenants that, from the date hereof until the
earlier of the Closing or termination of this Agreement in accordance with its
terms (the "INTERIM PERIOD"), Seller will, in order to consummate the
transactions contemplated hereby (including the transfer of the Transferred
Permits to Purchaser), take such reasonable steps as are necessary or desirable,
and proceed diligently and in good faith and use all reasonable efforts to
expedite and obtain the Seller Approvals and Seller Consents, and to make all
filings with, and to give all notices to, Governmental Authorities, and provide
such other information and communications to such Governmental Authorities or
other Persons, as such Governmental Authorities or other Persons
25
may reasonably request in connection therewith. Purchaser covenants that, during
the Interim Period, Purchaser will, in order to consummate the transactions
contemplated hereby (including the transfer of the Transferred Permits to
Purchaser), take such reasonable steps as are necessary or desirable, and
proceed diligently and in good faith and use all reasonable efforts to expedite
and obtain the Purchaser Approvals, and to make all filings with, and to give
all notices to, Governmental Authorities, and provide such other information and
communications to such Governmental Authorities or other Persons, as such
Governmental Authorities or other Persons may reasonably request in connection
therewith. Without limiting the generality of the foregoing, each Party shall
provide, and cause its respective Affiliates to provide, true and accurate
information in a timely manner with respect to all filings with and notices to
Governmental Authorities. Nothing in this SECTION 6.1(a) shall be construed to
require (i) Purchaser to take any action with respect to filings with or notices
to Governmental Authorities that in Purchaser's discretion could materially
adversely affect any other proceeding with such Governmental Authorities or (ii)
Seller to take any action that would result in the transfer of a Permit to
Purchaser prior to Closing. Each Party will cooperate fully in good faith with
the other Party with respect to all filings that are required by Law or that
such other Party elects to make in connection with the transactions contemplated
under this Agreement. Each Party will also cooperate fully in good faith with
the other in obtaining all material consents and approvals required under this
Agreement.
(b) Each Party will provide the other Party with a reasonable
opportunity to review and provide prior comment upon any notices, filings or
other submissions that the Party plans to deliver or submit to any Governmental
Authority, and will promptly provide to such other Party a copy of any such
notices or filings. Notwithstanding the foregoing, the Parties recognize that as
a result of the short time frames available for the preparation and filing of
many documents required to be filed in the proceedings seeking the ACC Order,
each Party may be able to afford the other Party only a very brief opportunity
for prior review of or comment on filings in such proceedings. Each Party will
provide prompt notification to the other Party when any approval referred to in
SECTION 6.1(a) is obtained, taken, made or given, as applicable, and will advise
the other Party of any material communications with any Governmental Authority
from which such approval is required regarding any pending application or
request for approval by such Governmental Authority of any of the transactions
contemplated by this Agreement.
(c) Each Party shall prepare, as soon as is reasonably
practicable following the execution of this Agreement, all necessary filings in
connection with the transactions contemplated by this Agreement that may be
required to be made by such Party at FERC or under the HSR Act. Each Party shall
submit such filings as soon as practicable, but, in the case of filings under
the HSR Act, in no event later than thirty (30) days after the date that the
Parties file their application with FERC, under Section 203 of the Federal Power
Act of 1935, and Part 33 of the FERC Regulations (18 CFR Part 33), for the
approval of the transactions contemplated by this Agreement. Unless the Parties
agree otherwise at the time of filing, the Parties shall request expedited
treatment of filings at FERC and early termination of the waiting period under
the HSR Act. The Parties shall promptly make any appropriate or necessary
subsequent or supplemental filings and shall cooperate in the preparation of
such filings as is reasonably necessary and appropriate.
26
(d) To the extent that any Transferred Contract or Transferred
Permit is not assignable without the consent of another party, then this
Agreement shall not constitute an assignment or attempted assignment thereof if
such assignment or attempted transfer thereof would constitute a breach thereof
or a default thereunder. Without limiting the provisions of SECTION 6.1(a), if
any such consent shall not be obtained, or if any attempted assignment of a
Transferred Contract or Transferred Permit would be ineffective or would impair
Purchaser's rights and obligations such that Purchaser would not in effect
acquire the benefit of substantially all of such rights and obligations, Seller
shall cooperate with Purchaser in any reasonable arrangement, to the extent
legally permissible, designed to provide for Purchaser the benefits intended to
be assigned to Purchaser under the Transferred Contract or Transferred Permit,
including enforcement at the cost and for the account of Purchaser of any and
all rights of Seller against the other party thereto arising out of the breach
or cancellation thereof by such party or otherwise. If and to the extent that
such arrangement is not made in a manner reasonably satisfactory to Purchaser,
Purchaser shall have no obligation pursuant to SECTION 2.3 or otherwise with
respect to such Transferred Contract or Transferred Permit. The provisions of
this SECTION 6.1(d) shall not affect the right of Purchaser not to consummate
the transactions contemplated by this Agreement if the conditions to Purchaser's
obligations set forth in SECTION 8.5 have not been fulfilled.
6.2 ACCESS OF PURCHASER. Seller covenants that, during the Interim
Period, Seller will provide Purchaser and its Representatives with reasonable
access, upon reasonable prior notice and during normal business hours, to the
Project, all Contracts to which Seller is a party related to the Project or the
Business or by which the Purchased Assets are bound, all Books and Records,
including all environmental records, permits, and compliance audits relating to
the Business or the Project, and the officers and employees of Seller or its
Affiliates who have significant responsibility for Seller, but only to the
extent that such access does not unreasonably interfere with the Business of
Seller and that such access is reasonably related to the Purchaser's obligations
and rights hereunder; provided that Seller shall have the right to (i) have a
Representative of Seller present for any communication with employees or
officers of Seller or its Affiliates and (ii) impose reasonable restrictions and
requirements upon Purchaser and its Representatives for safety purposes.
Purchaser shall be entitled, at its sole cost and expense, to have the Real
Property surveyed and to conduct physical inspections (including invasive
testing procedures) of the Real Property. Purchaser shall provide Seller with
not less than five (5) Business Days prior written notice of the date and time
on which any such entry upon the Real Property is proposed to occur. Promptly
upon completion of any such entry, Purchaser shall, at its sole cost and
expense, repair any and all damage caused by such entry and restore any affected
Real Property and any other affected property to its original condition.
Purchaser hereby agrees to indemnify, defend and hold harmless Seller and its
Representatives and Affiliates from and against any and all Losses, whether or
not involving a third-party Claim, resulting from or arising out of or in
connection with any entry upon the Real Property by Purchaser or any of its
Affiliates or any of its or their respective Representatives, agents,
contractors or subcontractors pursuant to this SECTION 6.2. The provisions of
this SECTION 6.2 shall apply to the access and inspection by Purchaser of any
and all portions of the Real Property leased by Seller to Xxxxxx X. Xxxxxx d/b/a
Xxxxxx X. Xxxxxx Farms under the Xxxxxx Farms Lease. In addition to complying
with the notice, repair and other provisions of this Section, Purchaser shall
comply with any and all additional requirements set forth in the Xxxxxx Farms
Lease, and any access and inspection by Purchaser to the portions of the Real
Property leased
27
under the Xxxxxx Farms Lease shall be subject to the rights of the tenant under
such lease. Without limiting the foregoing, Seller shall take all actions that
are reasonably necessary and appropriate to assist Purchaser in gaining access
to and inspecting such portions of the Real Property in accordance with the
terms and conditions of this Section.
6.3 CERTAIN RESTRICTIONS. Seller covenants that, except as set forth in
Schedule 6.3, during the Interim Period, Seller will operate and maintain the
Business and the Purchased Assets in the usual and ordinary course consistent
with Good Operating Practices. Without limiting the foregoing, during the
Interim Period, Seller will not, without the prior consent of Purchaser, which
consent shall not be unreasonably withheld or delayed:
(a) permit, allow, or suffer to exist any Lien (other than a
Permitted Lien) against any of the Purchased Assets;
(b) grant any waiver of any material term under, or give any
material consent with respect to, any Material Contract;
(c) sell, lease (as lessor), transfer, convey or otherwise
dispose of any Purchased Assets (including by way of merger, liquidation or
dissolution) having an aggregate value in excess of $50,000, other than
Purchased Assets used, consumed or replaced in the ordinary course of business
consistent with Good Operating Practices or Purchased Assets which are replaced
prior to the Closing;
(d) other than trade payables incurred in the ordinary course
of business or accounts payable pursuant to any Contract, incur, create, assume
or otherwise become liable for indebtedness or issue any debt securities or
assume or guarantee the obligations of any other Person;
(e) change any accounting method or practice in a manner that
is inconsistent with past practice except as may be required to meet the
requirements of applicable Law or GAAP, in a way that would adversely affect the
Business or Seller;
(f) fail to maintain its limited liability company existence
or consolidate with any other Person or acquire all or substantially all of the
Assets of any other Person;
(g) issue or sell any limited liability company membership
interests;
(h) liquidate, dissolve, recapitalize, reorganize, or
otherwise wind up its business or operations;
(i) purchase any securities of any Person, except for
short-term investments made in the ordinary course of business;
(j) enter into, terminate, extend or amend any Contract
involving total consideration throughout its term in excess of $100,000 (other
than Contracts entered into in the ordinary course which will be fully performed
prior to Closing);
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(k) cancel any debts or waive any claims or rights with
respect to the Purchased Assets having a value, individually or in the
aggregate, in excess of $100,000;
(l) enter into any collective bargaining or labor agreement;
(m) make any material election with respect to Taxes;
(n) amend or modify its Charter Documents;
(o) make any material change in the operations of the
Purchased Assets including the levels of inventory and materials and supplies
customarily maintained by Seller;
(p) enter into, terminate, extend or amend any real or
personal property Tax agreement, treaty or settlement, except as required by
applicable Law;
(q) execute, enter into, terminate, extend or amend any
agreement, order, decree or judgment relating to any material Permit, except as
required by applicable Law or (in any case other than termination) except in the
ordinary course of business consistent with past practices;
(r) prohibit payment of or delay payment of or prohibit or
delay discharge of any Liability that will be an Assumed Liability; or
(s) agree or commit to do any of the foregoing.
Notwithstanding the foregoing, Seller may take commercially reasonable actions
with respect to emergency situations so long as Seller shall, upon receipt of
notice of any such actions, promptly inform Purchaser of any such emergency
actions taken outside the ordinary course of business.
6.4 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each Party shall, upon request by the other Party at any time, or
from time to time, after the Closing, and without further consideration, execute
and deliver to such other Party such other instruments of sale, transfer,
conveyance, assignment and confirmation, provide such materials and information
and take such other actions as such other Party may reasonably request in order
to consummate the transactions contemplated by this Agreement.
6.5 EMPLOYEE AND EMPLOYEE BENEFIT MATTERS.
(a) Schedule 6.5(a) sets forth a list of Project Employees
that Seller and such Affiliates will make available to Purchaser at least thirty
(30) Business Days before the Closing Date (the "AVAILABLE EMPLOYEES") for the
purpose of discussing potential employment with Purchaser (which discussions the
Parties agree shall not violate SECTION 12.5), together with each such Available
Employee's name, current annual base compensation, job title, work location,
hire date, vacation balance and sick leave balance, as of the date hereof. Prior
to the Closing Date, Purchaser may make an offer of employment to any Available
Employee, and each such offer shall include terms and provisions determined by
Purchaser that are consistent with the provisions of this SECTION 6.5; provided,
that subject to the following provisions of this SECTION 6.5, the foregoing
shall not be construed to prevent Purchaser from changing the terms
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and conditions of employment of any Continued Employee (as hereinafter defined)
following the Closing Date. Seller shall be responsible for, and shall indemnify
and hold Purchaser harmless from and against, (i) all severance benefits payable
under Seller's applicable severance policies to any Available Employees (or any
other employee of Seller or its Affiliates) who do not accept or are not
provided with an offer of employment with Purchaser or its Affiliates prior to
or at Closing, and (ii) any accrued salary or incentive compensation or
outstanding vacation or sick pay balance as of the Closing owing to any employee
of Seller or its Affiliates, whether or not any such employee is provided with
or accepts an offer of employment with Purchaser or its Affiliates. Purchaser
shall be responsible for, and shall indemnify and hold Seller harmless from and
against, any Losses caused by or resulting from any failure by Purchaser to
offer employment to any Available Employee on any basis prohibited by applicable
Law.
(b) On or before five (5) Business Days prior to the Closing
Date, Purchaser shall deliver to Seller a Schedule 6.5(b) that sets forth the
names of the Available Employees who have agreed to accept employment with
Purchaser effective as of the Closing Date (each, a "CONTINUED EMPLOYEE");
provided, that to be a Continued Employee, such employee must (i) accept
Purchaser's offer to transfer employment to Purchaser under the terms provided
in Purchaser's offer, and (ii) on the Closing Date, be actively at work, on
wellness or sickness leave, short-term disability or an approved leave of
absence.
(c) Effective as of the Closing Date, the Continued Employees
shall cease to participate in all "employee benefit plans" (within the meaning
of Section 3(3) of ERISA) of Seller or its Affiliates (the "SELLER PLANS").
Purchaser shall not assume any of the Seller Plans.
(d) From and after the Closing Date, Purchaser shall cause
each Continued Employee to be provided with compensation and benefits on a basis
substantially similar to those provided to similarly situated employees of
Purchaser and its Affiliates. Purchaser shall cause each Continued Employee and
his or her "eligible dependents" (as defined by the applicable group health plan
of Purchaser or its Affiliates) to be covered under a group health plan
maintained by Purchaser or an Affiliate of Purchaser that (i) provides medical
benefits to the Continued Employee and such eligible dependents effective
immediately upon the Closing Date and (ii) credits such Continued Employee and
such eligible dependents, for the year during which such coverage under such
group health plan begins, with any deductibles and co-payments already incurred
during such year under a group health plan maintained by Seller or an Affiliate
of Seller (provided, that for purposes of applying this clause (ii) with respect
to any Continued Employee or eligible dependent, the Continued Employee or
eligible dependent, as applicable, shall be responsible for providing the
necessary information to Purchaser based on explanation of benefit forms
received by the Continued Employee or the eligible dependent from the group
health plan maintained by Seller or an Affiliate of Seller). Purchaser shall
cause the employee benefit plans and programs maintained after the Closing by
Purchaser and the Affiliates of Purchaser to recognize each Continued Employee's
years of service and level of seniority prior to the Closing Date with Seller
and the Affiliates of Seller for purposes of terms of employment and eligibility
and vesting under such plans and programs (other than benefit accruals under any
defined benefit pension plan). Purchaser shall cause each employee welfare
benefit plan or program sponsored by Purchaser or an Affiliate of Purchaser in
which the Continued Employees may be eligible to participate on or after the
Closing Date to waive any preexisting condition
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exclusion with respect to participation and coverage requirements applicable to
Continued Employees and their eligible dependents.
(e) Claims of Continued Employees and their eligible
beneficiaries and dependents for medical, dental, prescription drug, life
insurance, or other welfare benefits ("WELFARE BENEFITS") (other than disability
benefits) that are incurred before the Closing Date shall be the responsibility
solely of Seller and the Seller Plans. Claims of Continued Employees and their
eligible beneficiaries and dependents for Welfare Benefits (other than
disability benefits) that are incurred from and after the Closing Date shall be
the responsibility solely of Purchaser and its Affiliates. For purposes of this
paragraph, a medical/dental claim shall be considered incurred on the date when
the medical/dental services are rendered or medical/dental supplies are
provided, and not when the condition arose or when the course of treatment
began. Claims of individuals receiving long-term disability benefits under a
Seller Plan as of the Closing Date shall be the responsibility solely of Seller
and the Seller Plans. Except as provided in the preceding sentence, claims of
Continued Employees and their eligible beneficiaries and dependents for
short-term or long-term disability benefits from and after the Closing Date
shall be the responsibility solely of Purchaser and its Affiliates (without
regard to whether the circumstances giving rise to such claim occurred before,
on or after the Closing Date).
(f) All claims for health care and dependent care flexible
spending account benefits submitted on or after the Closing Date for expenses
incurred prior to the Closing Date by Continued Employees shall be paid by
Seller's or its Affiliates' health care and dependent care flexible spending
account plan to the extent permitted in accordance with the terms of such plan.
(g) Claims for workers' compensation benefits arising out of
occurrences prior to the Closing Date shall be the responsibility of Seller.
Claims for workers' compensation benefits for Continued Employees arising out of
occurrences on or after the Closing Date shall be the responsibility of
Purchaser.
6.6 INSURANCE. Seller shall maintain or cause to be maintained the
insurance policies (or reasonably equivalent renewals or replacements thereof)
covering the Project until the Closing. Neither Seller nor any of its Affiliates
shall have any liability for any claims made or reported under such insurance
policies after the Closing.
6.7 SELLER'S COVENANTS AND CLOSING CONDITIONS. Except as contemplated
by this Agreement or with the prior written consent of Purchaser, during the
Interim Period Seller shall use commercially reasonable efforts to:
(a) take all actions that are reasonably necessary or
appropriate to ensure that the representations and warranties in ARTICLE IV
hereof remain true and correct in all respects at the Closing;
(b) promptly advise Purchaser of any facts of which Seller has
Knowledge that would cause any of Seller's representations and warranties to be
untrue or would make the satisfaction of the conditions in ARTICLE VIII
impossible or unlikely; and
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(c) bring about, as soon as practical after the date hereof,
the satisfaction of all the conditions set forth in ARTICLE VIII.
6.8 PURCHASER'S COVENANTS AND CLOSING CONDITIONS. Except as
contemplated by this Agreement or with the prior written consent of Seller,
during the Interim Period Purchaser shall use commercially reasonable efforts
to:
(a) take all actions that are reasonably necessary or
appropriate to ensure that the representations and warranties in ARTICLE V
remain true and correct in all material respects at the Closing;
(b) promptly advise Seller of any facts of which Purchaser has
Knowledge that would cause any of Purchaser's representations and warranties to
be untrue or would make the satisfaction of the conditions in ARTICLE IX
impossible or unlikely; and
(c) bring about, as soon as practical after the date hereof,
the satisfaction of all the conditions set forth in ARTICLE IX.
6.9 EXCLUSIVITY. Seller covenants that it will not, and will not cause
or permit its Affiliates or any of their respective Representatives to, directly
or indirectly, (a) discuss, negotiate, undertake, authorize, recommend, propose
or enter into, either as the proposed surviving, merged, acquiring or acquired
entity, any transaction involving a merger, consolidation, business combination,
purchase or disposition of any of the Purchased Assets or any equity interest in
Seller other than the transactions contemplated by this Agreement and the
Ancillary Agreements (an "ACQUISITION TRANSACTION"), (b) facilitate, encourage,
solicit or initiate discussions, negotiations or submissions of proposals or
offers in respect of an Acquisition Transaction, (c) furnish or cause to be
furnished, to any Person, any information concerning the business, operations,
properties or Assets of Seller in connection with an Acquisition Transaction, or
(d) otherwise cooperate in any way with, or assist or participate in, facilitate
or encourage, any effort or attempt by any other Person to do or seek any of the
foregoing; provided, however, that Affiliates of the Seller may engage in
discussions or negotiations with, or furnish information concerning the Seller
and its properties, assets and business to, any person which makes, or indicates
in writing an intention to make, a proposal for an Acquisition Transaction if
the Board of Directors of such Affiliate shall conclude in good faith on the
basis of the advice of its outside counsel that the failure to take such action
would violate the fiduciary obligations of such Board of Directors under
applicable Law. Seller will inform Purchaser in writing immediately following
the receipt by Seller, its Affiliates or any Representative of any substantial
written proposal in respect of any Acquisition Transaction. Notwithstanding the
foregoing, and without limiting the provisions of SECTION 6.3, Seller shall be
entitled from time to time and at any time prior to the Closing, without
obligation of or liability to Purchaser, to market, sell and deliver capacity
and energy products and services from the Project and any portion thereof for a
term or terms ending not later than the Closing.
6.10 RISK OF LOSS.
(a) From the date hereof until the Closing, all risk of loss
or damage to the property included in the Purchased Assets shall be borne by
Seller.
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(b) If, before the Closing any or all of the Purchased Assets
are taken by eminent domain, or are the subject of a pending or, to Seller's
Knowledge, contemplated taking or condemnation which has not been consummated,
Seller shall notify Purchaser promptly in writing of such fact.
(i) If such taking would reasonably be expected to
have a Seller Material Adverse Effect, Purchaser and Seller
shall negotiate in good faith to settle the loss resulting
from such taking or condemnation (including by making a fair
and equitable adjustment to the Purchase Price) and, upon such
settlement, consummate the transactions contemplated by this
Agreement pursuant to the terms of this Agreement. If no such
settlement is reached within sixty (60) days after Seller has
notified Purchaser of such taking or condemnation, then
Purchaser or Seller may, if such taking relates to the
Purchased Assets, terminate this Agreement pursuant to SECTION
10.1(h) hereof.
(ii) If such taking or condemnation would not
reasonably be expected to have a Seller Material Adverse
Effect, Purchaser and Seller shall negotiate in good faith to
settle the loss resulting from such taking or condemnation
(including by making a fair and equitable adjustment to the
Purchase Price or by transferring certain rights to the
condemnation award, if any, to Purchaser) and, upon such
settlement, consummate the transactions contemplated by this
Agreement pursuant to the terms of this Agreement.
(c) If, before the Closing, all or any material portion of the
Purchased Assets are damaged or destroyed by fire or other casualty, Seller
shall notify Purchaser promptly in writing of such fact.
(i) If such damage or destruction would reasonably be
expected to have a Seller Material Adverse Effect and Seller
has not notified Purchaser of its intention to cure such
damage or destruction within thirty (30) days after the
occurrence of such damage or destruction, Purchaser and Seller
shall negotiate in good faith to settle the loss resulting
from such casualty (including by making a fair and equitable
adjustment to the Purchase Price) and, upon such settlement,
consummate the transactions contemplated by this Agreement
pursuant to the terms of this Agreement. If no such settlement
is reached within sixty (60) days after Seller has notified
Purchaser of such casualty, then Purchaser or Seller may
terminate this Agreement pursuant to SECTION 10.1(h) hereof.
(ii) If such damage or destruction would not
reasonably be expected to have a Seller Material Adverse
Effect and Seller has not notified Purchaser of its intention
to cure such damage or destruction within thirty (30) days
after the occurrence of such damage or destruction, Purchaser
and Seller shall negotiate in good faith to settle the loss
resulting from such casualty (including by making a fair and
equitable adjustment to the Purchase Price or by transferring
certain rights to insurance proceeds, if any, to Purchaser)
and, upon such settlement, consummate the transactions
contemplated by this Agreement pursuant to the terms of this
Agreement.
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(d) If the Parties fail to reach a settlement contemplated by
SECTION 6.10(b)(ii) or SECTION 6.10(c)(ii) hereof, as applicable, within thirty
(30) days after Seller has notified Purchaser of such taking or casualty, as the
case may be, then the Purchase Price shall be adjusted downward by the amount of
the fair market value of the portion of the Purchased Assets subject to the
taking, condemnation or casualty loss, as determined by Independent Accountants
for review and final determination of such fair market value. The Independent
Accountants may request of Seller or Purchaser such documents and information as
may be necessary or appropriate for proper determination of any such matter, and
such Parties will cooperate to promptly satisfy any such request. The
Independent Accountants shall be instructed to deliver to Purchaser and Seller a
written determination of the fair market value within thirty (30) days from the
date of referral thereof to the Independent Accountants. Except in the case of
fraud or manifest error, the determination by the Independent Accountants of
such fair market value will be final and binding on the Parties. Seller and
Purchaser will equally share the fees and disbursements of the Independent
Accountants in undertaking such review and determination.
6.11 CURRENT EVIDENCE OF TITLE.
(a) As soon as is reasonably possible after the Agreement
Date, and in no event later than thirty (30) Business Days after the Agreement
Date, Seller shall furnish to Purchaser, for each parcel, tract or subdivided
land lot of Real Property set forth on Schedule 4.13(a):
(i) from Xxxxxxx Title Guaranty Company (the "TITLE
INSURER"):
(A) title commitments issued by the Title Insurer to
insure title to all Real Property and Improvements in
the amount of that portion of the Purchase Price
allocated to the Real Property, covering such Real
Property, naming Purchaser as the proposed insured
and having an effective date after the Agreement
Date, wherein the Title Insurer shall agree to issue,
an ALTA 1992 form owner's extended coverage policy of
title insurance (each a "TITLE COMMITMENT"); and
(B) complete and legible copies of all documents
listed or disclosed in Schedule B to the Title
Commitment (the "TITLE EXCEPTION DOCUMENTS"); and
(ii) at Purchaser's cost and expense, a survey of the
Real Property made after the Agreement Date by a land surveyor
licensed by the State of Arizona and bearing a certificate,
signed and sealed by the surveyor, certifying to Seller,
Purchaser and the Title Insurer that:
(A) such survey was made (1) in accordance with
"MINIMUM STANDARD DETAIL REQUIREMENTS FOR ALTA/ACSM
LAND TITLE SURVEYS," jointly established and adopted
by ALTA and ACSM in 1992, and includes Items 1-4, 6,
7(a), 7(b)(1), 7(c), 8-11 and 13 of Table A thereof,
and (2) pursuant to the Accuracy Standards (as
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adopted by ALTA and ACSM and in effect on the date of
said certificate) of an "Urban" survey; and
(B) such survey reflects the locations of all
building lines, easements and areas affected by any
Title Exception Documents affecting such Real
Property as disclosed in the Title Commitment
(identified by issuer, commitment number, and an
effective date after the date hereof) as well as any
encroachments onto the Real Property or by the
Improvements onto any easement area or adjoining
property (each a "SURVEY"); and
(iii) The Title Commitment shall include the Title
Insurer's standard requirements for issuing its title policy,
which requirements, to the extent applicable to Seller, shall
be met by Seller on or before the Closing Date (including
those requirements that must be met by releasing or satisfying
monetary Liens, but excluding requirements that are to be met
solely by Purchaser).
(iv) Seller shall pay the premium for a standard form
owner's policy. Purchaser shall be responsible for the
difference in premium between standard and extended coverage
and for other endorsements and any other costs and expenses of
such policy of title insurance.
(b) If any of the following shall occur:
(i) any Title Commitment or other evidence of title or
search of the appropriate real estate records discloses that
any party other than Seller has title to the insured estate
covered by the Title Commitment;
(ii) any title exception is disclosed in Schedule B to
the Title Commitment that (A) is not one of the Permitted
Liens and (B) Purchaser reasonably believes could have a
material adverse effect on Purchaser's use and enjoyment of
the Real Property described therein; or
(iii) any Survey discloses any matter that Purchaser
reasonably believes could have a material adverse effect on
Purchaser's use and enjoyment of the Real Property described
therein;
then Purchaser shall notify Seller in writing ("PURCHASER'S NOTICE") of
such matters (any such matter of which Purchaser so provides
Purchaser's Notice to Seller, a "TITLE OBJECTION") within thirty (30)
Business Days after receiving all of the Title Commitment, Survey and
copies of Title Exception Documents for the Real Property covered
thereby. Any such matter of which Purchaser fails to provide
Purchaser's Notice to Seller within such period shall not constitute a
Title Objection and shall be deemed to be acceptable to Purchaser and
constitute a Permitted Lien for purposes of this Agreement.
(c) Seller shall have ten (10) Business Days after receipt of
Purchaser's Notice to notify Purchaser that either (i) Seller has elected to
remove any Title Objection(s) from
35
the title and provide Purchaser with evidence reasonably satisfactory to
Purchaser of such removal, or provide Purchaser with evidence reasonably
satisfactory to Purchaser that said exceptions will be removed on or before the
Closing, or (ii) Seller has elected not to remove such Title Objections.
Notwithstanding the provisions to the contrary contained in this SECTION
6.11(c), Seller shall remove all liens, mortgages, deeds of trust or other
monetary liens and encumbrances (other than non-delinquent real estate taxes for
the current year or special assessments or local improvement district
assessments payable in installments which shall be paid or prorated to the
Closing Date as provided in SECTION 3.2) prior to or upon Closing. If Seller
gives Purchaser notice under the foregoing clause (ii), Purchaser shall have ten
(10) Business Days to elect to proceed with the purchase and take the Real
Property subject to such Title Objections (which exceptions shall then
constitute Permitted Liens), or to terminate this Agreement. If Purchaser shall
fail to give Seller written notice of such election within said ten (10)
Business Days, Purchaser shall be deemed to have waived any and all such Title
Objections. If Seller shall give notice pursuant to the foregoing clause (i),
Seller shall use commercially reasonable efforts to cure each Title Objection
which is the subject of such notice prior to the Closing and take all steps
required by the Title Insurer to eliminate each Title Objection as an exception
to the Title Commitment. In the event that Seller shall thereafter fail to
remove any such Title Objections from title prior to the Closing Date, and
Purchaser is unwilling to take title subject thereto, Purchaser may elect to
terminate this Agreement, and in the event of any such termination, Seller shall
be liable for payment of all title cancellation charges. Any Title Objection
that the Title Company is willing to insure over on terms acceptable to Seller
and Purchaser is herein referred to as an "INSURED EXCEPTION." The Insured
Exceptions, together with any title exception or matters disclosed by the Survey
not objected to by Purchaser in the manner aforesaid, shall be deemed to be
acceptable to Purchaser and shall constitute a Permitted Lien for purposes of
this Agreement.
(d) Nothing herein waives Purchaser's right to claim a breach
of SECTION 4.13 or to claim a right to indemnification as provided in ARTICLE XI
if Purchaser suffers Losses as a result of a misrepresentation with respect to
the condition of title to the Real Property.
6.12 TRANSITION PLAN. Within ten (10) Business Days after the Agreement
Date, Purchaser shall deliver to Seller a list of its proposed representatives
to a joint transition team. Seller will add its representatives to such team
within five (5) Business Days after receipt of Purchaser's list. Such team will
be responsible for preparing as soon as reasonably practicable after the
Agreement Date, and timely implementing, a transition plan which will identify
and describe substantially all of the various transition activities that the
Parties will cause to occur before and after the Closing and any other transfer
of control matters that any Party reasonably believes should be addressed in
such transition plan. If requested by either Party, the terms and conditions
governing such transition activities will be more fully set forth in a
transition agreement reasonably satisfactory to the Parties. Purchaser and
Seller shall use commercially reasonable efforts to cause their representatives
on such transition team to cooperate in good faith and take all reasonable steps
necessary to develop a mutually acceptable transition plan by no later than
sixty (60) days after the Agreement Date.
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6.13 UPDATING.
(a) Each Party shall, from time to time prior to the Closing
by written notice to the other Party, supplement or amend the Schedules to this
Agreement to correct any matter that constitutes a breach of any representation
or warranty made by such Party in ARTICLE IV or ARTICLE V, as the case may be,
as of the Agreement Date. In the event that at any time either Party supplements
or amends any Schedule pursuant to this SECTION 6.13(a), such Party shall: (i)
concurrently with a notice provided to the other Party containing such
supplement or amendment, specifically identify and provide a detailed
description (including any supporting information, materials and data) of the
breach such supplement or amendment is proposed to cure reasonably sufficient to
enable the other Party to make an informed decision with respect to the
consequences of such breach and (ii) promptly, and in any event within two (2)
Business Days of the request of the other Party, provide the other Party with
any additional information, materials and data relating to such breach as may be
reasonably requested by the other Party. Provided that the foregoing shall have
been complied with, any such supplement or amendment shall, unless the other
Party objects thereto in writing within a period of fifteen (15) Business Days
after notice of such supplement or amendment, be deemed to cure, effective as of
the Agreement Date, any applicable inaccuracy in such representation or warranty
to the extent (and only to the extent) such inaccuracy has been specifically
detailed as provided above, and to constitute a waiver by such other Party of
any applicable breach of or default under this Agreement. Notwithstanding the
foregoing, any such waiver shall not apply to the conditions set forth in
SECTION 8.6 or SECTION 9.6 and no retroactive effect shall be given to any such
supplement or amendment for purposes of any determination as to the magnitude
of, as the case may be, (1) any change in the Purchased Assets after the
Agreement Date that, individually or in the aggregate with other such changes,
has, or could reasonably be expected to have, a Seller Material Adverse Effect,
or (2) any change in the business, assets, operations, property, performance or
condition (financial or otherwise) of Purchaser after the Agreement Date which,
individually or in the aggregate with other such changes, has, or could
reasonably be expected to have, a Purchaser Material Adverse Effect. In the
event that the other Party does so object in writing, the applicable Schedule
supplement or amendment made pursuant to this SECTION 6.13(a) shall not be
deemed to cure any inaccuracy of any representation or warranty made in this
Agreement by the Party supplementing or amending such Schedule, and shall not be
considered to constitute or give rise to a waiver by the other Party of any
condition or obligation set forth in this Agreement.
(b) Each Party shall, from time to time prior to the Closing
by written notice to the other Party, supplement or amend the Schedules to this
Agreement with respect to any matter arising after the Agreement Date that, if
existing at, or occurring on, the Agreement Date, would have been required to be
set forth or described on any such Schedule. In the event that at any time
either Party supplements or amends any Schedule pursuant to this SECTION
6.13(b), such Party shall: (i) concurrently with a notice provided to the other
Party containing such supplement or amendment, specifically identify and provide
a detailed description (including any supporting information, materials and
data) of the breach such supplement or amendment is proposed to cure reasonably
sufficient to enable the other Party to make an informed decision with respect
to the consequences of such breach and (ii) promptly, and in any event within
two (2) Business Days of the request of the other Party, provide the other Party
with any additional information, materials and data relating to such breach as
may be reasonably requested by the
37
other Party. Any such supplement or amendment shall, effective immediately upon
notice thereof to the other Party, be deemed to cure any applicable inaccuracy
in such representation or warranty to the extent (and only to the extent) such
inaccuracy has been specifically detailed as provided above, and any applicable
breach of or default under this Agreement shall be deemed waived; provided that
notwithstanding the foregoing, the foregoing waiver shall not apply to the
conditions set forth in SECTION 8.6 or SECTION 9.6 and no retroactive effect
shall be given to any such supplement or amendment for purposes of any
determination as to the magnitude of, as the case may be, (1) any change in the
Purchased Assets after the Agreement Date that, individually or in the aggregate
with other such changes, has, or could reasonably be expected to have, a Seller
Material Adverse Effect, or (2) any change in the business, assets, operations,
property, performance or condition (financial or otherwise) of Purchaser after
the Agreement Date which, individually or in the aggregate with other such
changes, has, or could reasonably be expected to have, a Purchaser Material
Adverse Effect. In the event that any Schedule to this Agreement is supplemented
or amended pursuant to this SECTION 6.13(b), and the matter with respect to
which such Schedule is supplemented or amended causes or results in an expense,
fee or other type of cost to either Party, the Parties shall negotiate in good
faith to determine how such expense, fee or other costs should fairly and
reasonably be apportioned between the Parties. If the Parties are unable
reasonably promptly to agree upon such apportionment of such expense, fee or
other costs, the Parties' dispute with respect to such apportionment shall be
resolved in accordance with the arbitration provisions of SECTION 11.6;
provided, however, that if the Parties are unable reasonably promptly to agree
upon such apportionment of such expense, fee or other costs, and such expense,
fee or other costs must be paid prior to the Closing, the Parties shall, pending
the Closing, share such expense, fee or other costs equally so as not to delay
or prevent the Closing, subject to reimbursement of any overpayment following
resolution of the Parties dispute in accordance with the arbitration provisions
of SECTION 11.6.
(c) Each Party shall notify the other Party promptly after
becoming aware of any inaccuracy in or breach of any representation or warranty
of such other Party under this Agreement.
(d) Without limiting the generality of the foregoing, (i)
Seller shall notify Purchaser promptly of the occurrence of any event which, to
Seller's Knowledge, could reasonably be expected to result in a Seller Material
Adverse Effect, and (ii) Purchaser shall notify Seller promptly of the
occurrence of any event which, to Purchaser's Knowledge, could reasonably be
expected to result in a Purchaser Material Adverse Effect.
6.14 RECORDS.
(a) On the Closing Date or as soon as practicable thereafter,
Seller shall deliver or cause to be delivered to Purchaser all original
agreements, documents, Books and Records and files, including records and files
stored in electronic form (collectively, "RECORDS"), if any, in the possession
of Seller relating to the Business to the extent not then in the possession of
Purchaser, provided that (i) Purchaser recognizes that certain Records may
contain incidental information relating to Affiliates of Seller, and that Seller
may retain such Records and shall provide copies of the relevant portions
thereof to Purchaser and (ii) Records shall not include (A) documents or files
relating to employees who are not Continued Employees or (B) employee
38
documents or files afforded confidential treatment under any applicable Laws,
except to the extent the affected employee consents in writing to the disclosure
of the same to Purchaser.
(b) Following the Closing, Purchaser shall permit Seller and
its Representatives, during normal business hours and upon reasonable notice, to
have reasonable access to personnel of Purchaser, and to examine and make copies
of, all Records, in each case relating to transactions or events occurring prior
to the Closing ("PRE-CLOSING TRANSACTIONS") or transactions or events occurring
subsequent to the Closing that are related to or arising out of Pre-Closing
Transactions, to the extent such Pre-Closing Transactions relate to Excluded
Liabilities or Excluded Assets or to the extent necessary to comply with
applicable financial reporting obligations. Purchaser agrees that it shall
retain all such Records for a period of seven (7) years following the Closing,
or for such longer period following the Closing as may be required by applicable
Law.
6.15 SYNTHETIC LEASE TRANSACTION. Seller represents and warrants that,
pursuant to the terms of an Amended and Restated Participation Agreement dated
as of July 17, 2001 by and among PPL Large Scale Distributed Generation II, LLC,
as Lessee and Supervisory Agent, Large Scale Distributed Generation II Statutory
Trust, a Connecticut statutory trust, as Lessor, State Street Bank and Trust
Company of Connecticut, National Association, as Trustee, First Union National
Bank, as Administrative Agent, certain financial institutions, as Certificate
Holders, and certain financial institutions, as Lenders, and various other
related agreements, Seller and certain of its Affiliates entered into a
synthetic lease arrangement (the "SYNTHETIC LEASE TRANSACTION") for purposes of
financing the acquisition and construction of the Project. The Synthetic Lease
Transaction subjects the Purchased Assets to various Liens and leases. Seller
covenants and agrees that: (a) prior to the Closing, all right, title and
interest in, to and under the Purchased Assets that are the subject of the
Synthetic Lease Transaction shall be transferred to Seller; and (b) promptly
following such transfer, Seller shall (i) provide notice thereof to Purchaser
and (ii) update the Schedules as necessary and appropriate to reflect such
transfer. Without limiting the provisions of SECTION 2.1, Seller covenants and
agrees that, on the terms and subject to the conditions set forth in this
Agreement, Seller shall, at the Closing, sell, assign, convey, transfer and
deliver to Purchaser all of Seller's right, title and interest in the Purchased
Assets free and clear of any and all Liens and leases (other than Permitted
Liens) resulting from or arising out of or in connection with the Synthetic
Lease Transaction. The Parties acknowledge and agree that Seller's
representations and warranties in this Agreement with respect to the Purchased
Assets that are the subject of the Synthetic Lease Transaction contemplate, and
are cast as of the time period commencing immediately following, the transfer to
Seller of all right, title and interest in, to and under the Purchased Assets
that are the subject of the Synthetic Lease Transaction, which transfer shall in
any event be effective no later than the Closing.
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ARTICLE VII
TAX MATTERS
7.1 PRORATION.
(a) With respect to Taxes to be prorated in accordance with
SECTION 3.2(a) hereof only, Purchaser shall prepare and timely file all Tax
Returns, if any, required to be filed with respect to the Purchased Assets, and
shall duly and timely pay all such Taxes shown to be due on such Tax Returns;
provided, however, that Seller shall file all of its federal and state income
tax returns (including those reporting prorated income) and shall not be
required to permit Purchaser to review or comment on any such income tax
returns; provided, further, that any income Tax Returns that report Seller's
income shall be prepared in accordance with SECTION 3.6 hereof. Purchaser shall
make such Tax Returns that it prepares under this SECTION 7.1 available for
Seller's review and comment no later than sixty (60) days prior to the due date
for filing each such Tax Return, and shall not unreasonably refuse to accept any
such comments or proposed changes. Within ten (10) days after receipt of such
Tax Return, Seller shall pay to Purchaser Seller's proportionate share of the
amount shown as due on such Tax Return as determined in accordance with SECTION
3.2 hereof.
(b) With respect to Property Taxes to be prorated in
accordance with SECTION 3.2(b) hereof only, (i) for all such Property Taxes
having a lien date in the year before the calendar year of the Closing Date,
Seller shall prepare and timely file all related Property Tax Returns required
to be filed with respect to the Purchased Assets and Seller shall duly and
timely pay all such Property Taxes; (ii) for all such Property Taxes having a
lien date in the same calendar year of the Closing Date, Seller shall prepare
and timely file all related Property Tax Returns required to be filed with
respect to the Purchased Assets and Seller shall duly and timely pay all such
Property Taxes; and (iii) for all such Property Taxes having a lien date in the
year after the calendar year of the Closing Date, Seller shall prepare and file
when due all related Property Tax Returns required to be filed with respect to
the Purchased Assets, except that, if such Property Tax Returns are not due
before the Closing Date, Seller shall prepare and file such Property Tax Returns
on or before the Closing Date, and in either case Purchaser shall duly and
timely pay all such Property Taxes, and shall be reimbursed for a portion
thereof in accordance with SECTION 3.2(b)(iii). Seller shall, in good faith,
prepare and timely file any such Property Tax Returns, including any affirmative
claims for adjustments, reasonably and in good faith defend the values and
adjustments filed, and preserve any and all appeal rights related to such
returns. The Parties hereby acknowledge that, without regard to any other
provision of this Agreement, all Property Tax Returns, documentation and
supporting workpapers relating to any Property Taxes of Seller shall be
proprietary to Seller and have not and will not be disclosed to Purchaser;
provided, however, that (i) Seller shall, upon request of Purchaser, provide an
estimate of Property Taxes to be paid, and (ii) the Party receiving the actual
Property Tax bills or statements from the Taxing Authorities shall, upon request
from the other Party, provide copies of such Property Tax bills or statements to
the requesting Party.
7.2 COOPERATION. Except as limited by SECTION 7.1(b), Seller and
Purchaser shall provide each other with such assistance as may reasonably be
requested by the other Party in connection with the preparation of any Tax
Return, any audit or other examination by any
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Taxing Authority, or any judicial or administrative proceedings relating to
liability for Taxes, and upon any such request the requested Party shall retain
and provide the requesting Party with any records or information which may be
relevant to such return, audit or examination, proceedings or determination.
Except as required by applicable Law, any information obtained pursuant to this
SECTION 7.2 or pursuant to any other Section hereof providing for the sharing of
information or review of any Tax Return or other schedule relating to Taxes
shall be kept confidential by the Parties in accordance with SECTION 12.5.
7.3 TRANSFER TAXES. Notwithstanding any other provision of this
Agreement, responsibility for payment of any and all Transfer Taxes incurred in
connection with this Agreement and the transactions contemplated hereby shall be
borne by Seller. Seller shall, at its own expense, file, to the extent required
by Law, all necessary Tax Returns and other documentation with respect to all
such Transfer Taxes, and Purchaser will be entitled to review such return in
advance and, if required by applicable Law, Purchaser shall join in the
execution of any such Tax Returns or other required documentation.
ARTICLE VIII
PURCHASER'S CONDITIONS TO CLOSING
The obligation of Purchaser to purchase the Purchased Assets under this
Agreement is subject to the fulfillment, at or before the Closing, of each of
the following conditions (except to the extent waived in writing by Purchaser in
its sole discretion):
8.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Seller in ARTICLE IV of this Agreement shall be true and correct in all
material respects (except for representations and warranties that contain a
qualification as to materiality, which shall have been true and correct in all
respects) as of the Agreement Date and shall be true and correct in all material
respects (except for representations and warranties that contain a qualification
as to materiality, which shall have been true and correct in all respects) as of
the Closing Date as if made on the Closing Date or, in the case of
representations and warranties made as of a specified date earlier than the
Closing Date, on and as of such earlier date (after giving effect to any
Schedule supplements or amendments delivered by Seller pursuant to SECTION 6.13
to the extent (and only to the extent) such Schedule supplements or amendments
are expressly permitted to be taken into account in determining the accuracy of
Seller's representations and warranties following compliance by the Parties with
the terms and conditions set forth in SECTION 6.13).
8.2 PERFORMANCE. Seller shall have performed and complied, in all
material respects, with the agreements, covenants and obligations required by
this Agreement to be so performed or complied with by Seller at or before the
Closing.
8.3 DELIVERIES. Seller shall have made all deliveries required of it
under SECTION 3.4 hereof.
8.4 ORDERS AND LAWS. There shall not be any litigation or proceedings
(filed by a Person other than Purchaser or its Affiliates) or Law or order
restraining, enjoining or otherwise prohibiting or making illegal or threatening
to restrain, enjoin or otherwise prohibit or make
41
illegal the consummation of any of the transactions contemplated by this
Agreement or the Ancillary Agreements; provided, however, that this SECTION 8.4
is not intended to expand the scope of the conditions described in SECTION
8.7(b).
8.5 CONSENTS AND APPROVALS. The consents and approvals listed on
Schedule 8.5 shall have been duly obtained, made or given and shall be in full
force and effect.
8.6 SELLER MATERIAL ADVERSE EFFECT. There shall not have occurred and
be continuing any change in the business, Assets, operations, property,
performance or condition (financial or otherwise) of Seller after the Agreement
Date which, individually or in the aggregate with other such changes, has, or
could reasonably be expected to have, a Seller Material Adverse Effect.
8.7 APPROVALS OF GOVERNMENTAL AUTHORITIES.
(a) All consents and approvals of Governmental Authorities
required for the consummation of the transactions contemplated hereby or by the
Ancillary Agreements, including the Seller Approvals and the Purchaser
Approvals, shall have become Final Orders (other than the ACC Order, which must
meet the conditions of SECTION 8.7(b) rather than becoming a Final Order, and
approval under the HSR Act, which may be obtained by the expiration or early
termination of the initial waiting period and shall not be required to be or
become a Final Order) with such terms and conditions as shall have been imposed
by the Governmental Authority issuing such Final Order, and such terms or
conditions in the aggregate, could not reasonably be expected to have a material
adverse effect on the Business, the Purchased Assets, or the business, assets,
operations or condition (financial or otherwise) of Purchaser; provided,
however, that this SECTION 8.7(a) is not intended to expand the scope of the
conditions described in SECTION 8.7(b).
(b) Without limiting the provisions of SECTION 8.7(a), the ACC
shall have issued one or more orders (collectively, the "ACC ORDER"), each of
which orders shall (as determined by Purchaser in the reasonable exercise of its
discretion) be substantially the same in form and substance as the orders
requested by Purchaser in its applicable filings with the ACC, (i) approving the
transactions contemplated hereby and by the Ancillary Documents and the
regulatory treatment of the Purchased Assets, including, (A) to the extent
Purchaser, in its sole discretion, determines such approval is necessary,
Purchaser's financing of all or a portion of the Purchase Price, (B)
authorization for the inclusion in Purchaser's rate base of the Purchased Assets
at the Purchase Price plus the deferred costs described in clause (D) of this
SECTION 8.7(b) without any direct or indirect disallowance, with such inclusion
to be effective in Purchaser's next rate case, (C) authorization for the timely
recovery in Purchaser's retail rates of all reasonable costs of owning and
operating the Purchased Assets, including the deferred costs described in clause
(D) of this SECTION 8.7(b), with such recovery to be effective no later than
Purchaser's next rate case, (D) an order authorizing deferral for future
recovery in the Purchaser's next general rate proceeding of all capital and
operating costs associated with the Purchased Assets, net of any savings
produced by the Purchased Assets, and (E) a declaration that the Certificate of
Environmental Compatibility is in full force and effect and a modification to
Condition 16 of the Certificate of Environmental Compatibility to eliminate the
self-executing nature of such Condition; and (ii) the ACC shall not have
rescinded, altered or amended the ACC Order nor shall the ACC have taken or be
in the process of taking any action that could result in
42
the rescission, alteration or amendment of such ACC Order. The ACC Order shall
not be required to be or become a Final Order.
8.8 TRANSFERRED PERMITS. Purchaser shall be satisfied that all
Transferred Permits will be transferred to Purchaser or obtained by Purchaser
effective as of or promptly after the Closing.
8.9 TITLE INSURANCE. Purchaser shall have received an unconditional and
binding commitment to issue the policy of title insurance consistent with
SECTION 6.11, dated the Closing Date, in an aggregate amount equal to the amount
of the Purchase Price allocated to the Real Property, acknowledging the
satisfaction of all requirements listed in ALTA Schedule B-1, amending the
effective date to the date and time of recordation of the Deed conveying title
to the Real Property to Purchaser with no exception for the gap between Closing
and recordation, deleting or insuring over Title Objections as required pursuant
to SECTION 6.11, attaching all reasonable endorsements available from the title
company required by Purchaser in order to ensure provision of all coverage
required pursuant to SECTION 6.11 and otherwise in form satisfactory to
Purchaser insuring Purchaser's interest in each parcel of Real Property or
interest therein to the extent required by SECTION 6.11.
8.10 ENVIRONMENTAL DILIGENCE. Purchaser shall, within ninety (90) days
following the Agreement Date, have completed, at its sole cost and expense, an
environmental investigation of the Real Property (which may, in Purchaser's
discretion, include environmental audits or any other similar invasive or
non-invasive procedures, subject to SECTION 6.2), and shall have determined, in
its sole discretion, that the results of such investigation are satisfactory to
Purchaser. Purchaser shall provide written notice to Seller, not later than
fifteen (15) days following the completion of such investigation but in any
event not less than thirty (30) days prior to Closing, whether Purchaser has
determined that it is satisfied with respect to the results of such
investigation. No such investigation or assessment shall in any manner be deemed
to relieve Seller of any obligations with respect to any warranties,
representations, covenants or other undertakings made hereunder or to qualify
any such warranties, representations or covenants, except to the extent that
Purchaser has failed to comply with its obligations under SECTION 6.13(c) or
6.13(d). Purchaser shall have the right to extend the ninety (90)-day deadline
set forth above upon a showing of good cause and with the consent of Seller
(which consent shall not be unreasonably withheld).
8.11 LEGAL OPINION. Purchaser shall have received opinions from Xxxxxxx
Xxxxx & Xxxxx LLP and Moyes Storey, dated the Closing Date and satisfactory in
form and substance to Purchaser and its counsel, substantially to the effect
that, when taken together:
(a) Seller is a limited liability company duly formed,
existing and in good standing under the Laws of the State of Delaware and has
the requisite power and authority to execute and deliver this Agreement and the
Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby; and the execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by requisite action taken on the part of
Seller;
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(b) This Agreement and the Ancillary Agreements have been
executed and delivered by Seller and (assuming that the required approvals of
Governmental Authorities are obtained) are valid and binding obligations of
Seller, enforceable against it in accordance with their respective terms, except
that such enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting creditors' rights
generally, and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and except to
the extent that the right to indemnification and contribution contained therein
may be limited by state or federal securities Laws or the public policy
underlying such Laws;
(c) The execution, delivery and performance of this Agreement
and the Ancillary Agreements by Seller do not (i) constitute a violation of the
Charter Documents of Seller or, (ii) to such counsel's knowledge, constitute a
violation of or default under the Material Contracts; and
(d) No declaration, filing or registration with, or notice to,
or authorization, consent or approval of any Governmental Authority is necessary
for the consummation by Seller of the transactions contemplated by this
Agreement and the Ancillary Agreements to which it is a party other than (i)
those that have been obtained and are in full force and effect with such terms
and conditions as shall have been imposed by any applicable Governmental
Authority, (ii) such declarations, filings or registrations, or notices, or
authorizations, consents or approvals relating to Permits and (iii) such
declarations, filings or registrations, or notices, or authorizations, consents
or approvals which, if not obtained or made, would not, in the aggregate,
reasonably be expected to have a Seller Material Adverse Effect. Any opinions
relied upon by such counsel shall be delivered together with the opinion of such
counsel. Such opinion may expressly rely as to matters of fact upon certificates
furnished by Seller and by public officials.
ARTICLE IX
SELLER'S CONDITIONS TO CLOSING
The obligation of Seller to sell the Purchased Assets under this
Agreement is subject to the fulfillment, at or before the Closing, of each of
the following conditions (except to the extent waived in writing by Seller in
its sole discretion):
9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Purchaser in ARTICLE V of this Agreement shall be true and correct in
all material respects (except for representations and warranties that contain a
qualification as to materiality, which shall have been true and correct in all
respects) as of the Agreement Date and shall be true and correct in all material
respects (except for representations and warranties that contain a qualification
as to materiality, which shall have been true and correct in all respects) as of
the Closing Date as if made on the Closing Date or, in the case of
representations and warranties made as of a specified date earlier than the
Closing Date, on and as of such earlier date (after giving effect to any
Schedule supplements or amendments delivered by Purchaser pursuant to SECTION
6.13 to the extent (and only to the extent) such Schedule supplements or
amendments are expressly permitted to be taken into account in determining the
accuracy of Purchaser's representations
44
and warranties following compliance by the Parties with the terms and conditions
set forth in SECTION 6.13).
9.2 PERFORMANCE. Purchaser shall have performed and complied, in all
material respects, with the agreements, covenants and obligations required by
this Agreement so to be performed or complied with by Purchaser at or before the
Closing.
9.3 DELIVERIES. Purchaser shall have taken all actions and made all
deliveries required of it under SECTIONS 3.5.
9.4 ORDERS AND LAWS. There shall not be any litigation or proceedings
(filed by a Person other than Seller or its Affiliates) or Law or order
restraining, enjoining or otherwise prohibiting or making illegal or threatening
to restrain, enjoin or otherwise prohibit or make illegal the consummation of
any of the transactions contemplated by this Agreement or the Ancillary
Agreements.
9.5 CONSENTS AND APPROVALS. The consents and approvals listed on
Schedule 9.5 shall have been duly obtained, made or given and shall be in full
force and effect.
9.6 PURCHASER MATERIAL ADVERSE EFFECT. There shall not have occurred
and be continuing any change in the business, Assets, operations, property,
performance or condition (financial or otherwise) of Purchaser after the
Agreement Date which, individually or in the aggregate with other such changes,
has, or could reasonably be expected to have, a Purchaser Material Adverse
Effect.
9.7 APPROVALS OF GOVERNMENTAL AUTHORITIES. All consents and approvals
of Governmental Authorities required for the consummation of the transactions
contemplated hereby or by the Ancillary Agreements, including the Seller
Approvals and the Purchaser Approvals, shall have become Final Orders (other
than the ACC Order, which must meet the conditions of SECTION 8.7(b) rather than
becoming a Final Order, and approval under the HSR Act, which may be obtained by
the expiration or early termination of the initial waiting period and shall not
be required to be or become a Final Order) with such terms and conditions as
shall have been imposed by the Governmental Authority issuing such order, and
such terms or conditions, in the aggregate, could not reasonably be expected to
have a material adverse effect on the Business, the Purchased Assets, or the
business, assets, operations or condition (financial or otherwise) of Seller.
9.8 LEGAL OPINION. Seller shall have received an opinion from Xxxxx &
Xxxxxx L.L.P., dated the Closing Date and satisfactory in form and substance to
Seller and its counsel, substantially to the effect that:
(a) Purchaser is a corporation duly formed, existing and in
good standing under the Laws of the State of Arizona and has the requisite power
and authority to execute and deliver this Agreement and the Ancillary Agreements
and to consummate the transactions contemplated hereby and thereby; and the
execution and delivery of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by requisite action taken on the part of Purchaser;
45
(b) This Agreement and the Ancillary Agreements have been
executed and delivered by Purchaser and (assuming that the required approvals of
Governmental Authorities are obtained) are valid and binding obligations of
Purchaser, enforceable against it in accordance with their respective terms,
except that such enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting
creditors' rights generally, and (ii) general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in equity) and
except to the extent that the right to indemnification and contribution
contained therein may be limited by state or federal securities Laws or the
public policy underlying such Laws;
(c) The execution, delivery and performance of this Agreement
and the Ancillary Agreements by Purchaser do not (i) constitute a violation of
the Charter Documents of Purchaser or, (ii) to such counsel's knowledge,
constitute a violation of or default under Purchaser's Applicable Contracts.
"PURCHASER'S APPLICABLE CONTRACTS" means those agreements or instruments set
forth on a schedule attached to such counsel's opinion and which have been
identified by Purchaser to such counsel as all of the agreements and instruments
which are material to the business or financial condition of Purchaser; and
(d) No declaration, filing or registration with, or notice to,
or authorization, consent or approval of any Governmental Authority is necessary
for the consummation by Purchaser of the transactions contemplated by this
Agreement and the Ancillary Agreements to which it is party other than (i) those
that have been obtained and are in full force and effect with such terms and
conditions as shall have been imposed by any applicable Governmental Authority,
(ii) such declarations, filings or registrations, or notices, or authorizations,
consents or approvals relating to Permits and (iii) such declarations, filings
or registrations, or notices, or authorizations, consents or approvals which, if
not obtained or made, would not, in the aggregate, reasonably be expected to
have a Purchaser Material Adverse Effect. Any opinions relied upon by such
counsel shall be delivered together with the opinion of such counsel. Such
opinion may expressly rely as to matters of fact upon certificates furnished by
Purchaser and by public officials.
ARTICLE X
TERMINATION
10.1 TERMINATION. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, as follows:
(a) at any time before the Closing, by mutual consent of
Seller and Purchaser;
(b) at any time before the Closing, by either Party effective
upon notice to the other Party, in the event that any Law or order of any
Governmental Authority becomes effective and continues in effect for sixty (60)
days restraining, enjoining or otherwise prohibiting or making illegal the
consummation of the transactions contemplated by this Agreement or the Ancillary
Agreements;
46
(c) by Purchaser, effective upon notice to Seller, if there
has been a material violation or breach by Seller of any covenant,
representation, or warranty contained in this Agreement which has rendered the
satisfaction of any condition to the obligations of Purchaser to effect the
Closing impossible and such violation or breach is not cured by the date which
is thirty (30) days after receipt by Seller of notice specifying particularly
such violation or breach, and such violation or breach has not been waived by
Purchaser, provided that Purchaser may not terminate this Agreement if Purchaser
is also at the time in such material violation or breach of any covenant,
representation or warranty contained in this Agreement;
(d) by Seller, effective upon notice to Purchaser, if there
has been a material violation or breach by Purchaser of any covenant,
representation, or warranty contained in this Agreement which has rendered the
satisfaction of any condition to the obligations of Seller to effect the Closing
impossible and such violation or breach (other than a breach by Purchaser of its
obligation to pay the Purchase Price in accordance with the terms of ARTICLE
III) is not cured by the date thirty (30) days after receipt by Purchaser of
notice specifying particularly such violation or breach and such violation or
breach has not been waived by Seller, provided that Seller may not terminate
this Agreement if Seller is also at the time in such material violation or
breach of any covenant, representation or warranty contained in this Agreement;
(e) by Purchaser, effective upon notice to Seller, if any of
the Purchaser Approvals shall have been denied (and a petition for rehearing or
refiling of any application initially denied without prejudice shall also have
been denied) and such denial was not caused by a breach of this Agreement by
Purchaser;
(f) by Seller, effective upon notice to Purchaser, if any of
the Seller Approvals shall have been denied or refused (and a petition for
rehearing or refiling of any application initially denied without prejudice
shall also have been denied) and such denial or refusal was not caused by a
breach of this Agreement by Seller;
(g) (i) by either Party that is not in breach of this
Agreement, by notice to the other Party on or before the close of business on
January 10, 2005, if the conditions described in SECTION 8.7(b) have not been
satisfied on or prior to the close of business on December 31, 2004, or (ii)
automatically and without action by either Party, at the close of business on
March 31, 2005 (the "TERMINATION DATE"), if the Closing shall not have occurred
on or prior thereto, unless Seller, in its sole and absolute discretion,
notifies Purchaser prior thereto that Seller has elected to extend the
Termination Date for a period of 60 days; provided, however, that in the event
of any such extension by Seller, the Purchase Price shall increase by the amount
of Fifty Thousand and No/100 Dollars ($50,000.00) per day for each day from
March 31, 2005 up to and including the Closing Date; provided, further, that,
notwithstanding the foregoing, the right to terminate this Agreement under this
SECTION 10.1(g) shall not be available to any Party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing Date to occur on or before such date; or
(h) by either Party pursuant to SECTION 6.10, effective upon
notice to the other Party.
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10.2 EFFECT OF TERMINATION.
(a) If this Agreement is validly terminated pursuant to
SECTION 10.1, then:
(i) the obligations of the Parties to consummate the
transactions contemplated by this Agreement and the Ancillary
Agreements shall terminate;
(ii) all filings, applications and other submissions
made to any Governmental Authority shall, to the extent
reasonably practicable, be withdrawn from the Governmental
Authority to which they were made by the Party making them;
and
(iii) Purchaser shall return all documents, work
papers and other materials (and all copies thereof) obtained
from Seller relating to the transactions contemplated by this
Agreement and the Ancillary Agreements, whether so obtained
before or after execution of this Agreement, and Purchaser
shall ensure that all Seller Information received by Purchaser
shall be treated in accordance with the requirements of
SECTION 12.5.
(b) If this Agreement is validly terminated pursuant to
SECTION 10.1, then except as set forth in SECTION 10.2(c), there will be no
liability or obligation on the part of Seller or Purchaser (or any of their
respective Representatives or Affiliates). Without limiting the foregoing,
SECTION 1.2 (Construction), SECTIONS 4.20 and 5.6 (Brokers), SECTION 6.2 (Access
of Purchaser), SECTION 11.2(b) (Non-reimbursable Damages), SECTION 11.2(c) (No
Personal Liability), SECTION 11.6 (Arbitration), SECTION 12.3 (Expenses),
SECTION 12.4 (Public Announcements), SECTION 12.5 (Confidential Information),
SECTION 12.14 (Governing Law; Venue; and Jurisdiction) and SECTION 12.15
(Attorneys' Fees) will survive any such termination.
(c) Notwithstanding any other provision of this Agreement to
the contrary, if this Agreement is validly terminated by Purchaser pursuant to
SECTION 10.1(c) or by Seller pursuant to SECTION 10.1(d), the terminating Party
shall be entitled to all rights and remedies available to it, except that no
Party shall have any liability for a breach of a representation or warranty if
such Party used commercially reasonable efforts to cure such breach prior to the
date of termination.
ARTICLE XI
INDEMNIFICATION, LIMITATIONS OF LIABILITY, WAIVERS AND ARBITRATION
11.1 INDEMNIFICATION.
(a) Subject to the limitations set forth in SECTION 11.1(c)
and elsewhere in this ARTICLE XI, from and after the Closing, Seller hereby
agrees to indemnify, defend and hold harmless Purchaser and its Representatives
and Affiliates (collectively, the "PURCHASER INDEMNIFIED PARTIES") from and
against any and all Losses, whether or not involving a third-party Claim,
resulting from or arising out of or in connection with:
48
(i) any breach of a representation or warranty made
by Seller in this Agreement;
(ii) the breach by Seller of, or default in the
performance by Seller of, any covenant, agreement or
obligation to be performed by Seller pursuant to this
Agreement or in any other certificate, document, writing or
instrument delivered by Seller pursuant to this Agreement;
(iii) any Benefit Plan established or maintained by
Seller; and
(iv) any Excluded Liability.
(b) Subject to the limitations set forth in SECTION 11.1(c)
and elsewhere in this ARTICLE XI, from and after the Closing Purchaser hereby
agrees to indemnify, defend and hold harmless Seller and its Representatives and
Affiliates (collectively, the "SELLER INDEMNIFIED PARTIES") from and against any
and all Losses, whether or not involving a third-party Claim, resulting from or
arising out of or in connection with:
(i) any breach of a representation or warranty made
by Purchaser in this Agreement;
(ii) the breach by Purchaser of, or default in the
performance by Purchaser of, any covenant, agreement or
obligation to be performed by Purchaser pursuant to this
Agreement or in any other certificate, document, writing or
instrument delivered by Purchaser pursuant to this Agreement;
(iii) any Assumed Liability; and
(iv) any entry upon the Real Property by Purchaser or
any of its Affiliates or any of its or their respective
Representatives, agents, contractors or subcontractors
pursuant to SECTION 6.2.
(c) Notwithstanding anything to the contrary contained in this
Agreement, any and all Environmental Liabilities and Tort Liabilities (other
than the Excluded Environmental Liabilities and the Excluded Tort Liabilities)
shall be deemed to constitute Assumed Liabilities for all purposes of this
Agreement (including for purposes of SECTIONS 11.1(b)(iii), 11.4(b) and
11.4(C)); provided, however, that Seller agrees to indemnify, defend and hold
harmless the Purchaser Indemnified Parties from and against any and all Losses,
whether or not involving a third-party Claim, resulting from or arising out of
or in connection with any such Environmental Liabilities or Tort Liabilities
that accrue, arise or occur prior to the Closing ("PRE-CLOSING ENVIRONMENTAL
LIABILITIES/TORT LIABILITIES"); provided, further, that in no event shall
Seller's aggregate liability arising out of its indemnification obligations for
or with respect to any such Pre-Closing Environmental Liabilities/Tort
Liabilities exceed the amount of $3,500,000 in the aggregate; and provided,
further, that Seller's indemnification obligations shall extend only to such
Pre-Closing Environmental Liabilities/Tort Liabilities as are attributable to
conditions existing at or prior to Closing, and Seller shall not be required to
indemnify Purchaser for Losses to the extent attributable to acts or omissions
of Purchaser resulting in any increase or aggravation of such Environmental
Liabilities or Tort Liabilities, whether arising from a change
49
in use of the Purchased Assets or otherwise. Notwithstanding anything to the
contrary contained in SECTION 11.3 or any other provision of this Agreement,
after the Closing, any assertion by Purchaser or any Purchaser Indemnified Party
that Seller is liable to Purchaser or any Purchaser Indemnified Party for
indemnification with respect to Losses for or with respect to any Pre-Closing
Environmental Liabilities/Tort Liabilities must be made in writing and must be
given to Seller (or not at all) on or prior to the earlier of the fifth
anniversary of the Closing Date or the date on which the applicable statute of
limitations expires with respect to the matters covered thereby.
(d) The Parties acknowledge that Section 5 of the Xxxxxx Farms
Lease provides as follows (with all capitalized terms used in the following
paragraph having the meaning assigned thereto in the Xxxxxx Farms Lease):
Lessee, as a material part of the consideration for this
Lease, hereby agrees to indemnify and hold Lessor entirely free and
harmless from all liability, responsibility and obligations for any
crop loss or damage or other loss, damage or injury to any person or
property (whether arising during or after the lease term) that may
arise from (a) Lessee's use of the Premises or from the acts or
omissions of Lessee or its agents, employees, invitees or contractors,
or from (b) Lessor's delivery to the Premises and Lessee's use of reuse
water from the Power Plant or, as to claims brought by, through or on
behalf of Lessee or persons or entities financing Lessee, any other act
or omission of Lessor or Lessor's affiliated entities or persons
arising from or related to the operation of the Power Plant and/or its
water supply, treatment, storage, disposal and/or reuse systems and
operations. The forgoing indemnity shall also apply to any and all
damages, claims, losses, costs and expenses arising from or related to
the acts or omissions set forth in this paragraph, including without
limitation any attorneys' fees incurred by Lessor in defending against
any such liability.
The Parties further acknowledge that Section 8.3 of the Xxxxxx Farms Lease
provides as follows (with all capitalized terms used in the following paragraph
having the meaning assigned thereto in the Xxxxxx Farms Lease):
Lessee agrees to indemnify and hold Lessor harmless from any
and all claims, damages, fines, judgments, penalties, costs,
liabilities or losses (including, without limitation, any and all sums
paid for settlement of claims, attorneys' fees, consultant and expert
fees) arising during or after the term of this Lease from or in
connection with the presence of hazardous substances and/or
contaminants in or on the Premises as the result of Lessee's actions or
inactions, or those of its agents, invitees, employees or assigns,
unless the hazardous substances are present solely as a result of the
negligence, willful misconduct or other wrongful acts of the Lessor's
agents, employees, contractors or invitees. This indemnification shall
specifically include any and all costs due to hazardous substances that
flow, diffuse, migrate or percolate into, onto or under the Premises
after the Lease terminates. As used herein, "hazardous substance" means
any substance that is toxic, ignitable, reactive or corrosive, or is
defined and/or
50
regulated as "hazardous waste," "extremely hazardous waste," or
"hazardous substance" pursuant to state, federal or local governmental
law.
(The indemnity obligations set forth above in this SECTION 11.1(d) are
hereinafter referred to collectively as the "XXXXXX FARMS INDEMNITY
OBLIGATIONS"). Without limiting any other provision of this ARTICLE XI,
Purchaser agrees that, in the event that (i) the Xxxxxx Farms Lease is, in
accordance with the intent of the Parties, included among the Transferred
Contracts sold, assigned, conveyed, transferred and delivered by Seller to
Purchaser pursuant to SECTION 2.1 of this Agreement, and (ii) at any time from
and after the Closing Seller incurs any Claim by or Loss to Purchaser under
ARTICLE XI of this Agreement for or in respect of any Losses that, in Seller's
reasonable determination, fall within the scope of the Xxxxxx Farms Indemnity
Obligations, Purchaser shall, promptly upon any request by Seller, assign,
transfer and convey to Seller all right, title and interest of Purchaser for and
with respect to any rights, claims and causes of action available under the
Xxxxxx Farms Indemnity Obligations. In the event that Purchaser is not
reasonably capable of effecting any such assignment, transfer and conveyance, or
in the event that any such assignment, transfer or conveyance does not, in
Seller's reasonable determination, provide Seller with a complete and effective
remedy and right of action against the lessee under the Xxxxxx Farms Lease for
or in respect of the Xxxxxx Farms Indemnity Obligations, Purchaser shall, upon
any request by Seller and at Seller's sole cost and expense, actively and
diligently pursue against the lessee under the Xxxxxx Farms Lease, for and on
behalf of Seller, any and all Claims that are reasonably available to Purchaser
under the Xxxxxx Farms Indemnity Obligations for or in respect of any such
Losses. The legal counsel employed in any such action shall be selected by
Seller in its sole discretion, and the fees and expenses of such counsel shall
be paid exclusively by Seller. Purchaser shall cooperate fully with Seller and
such counsel in the defense or compromise of such Claim, and in such event that
Purchaser provides such cooperation no compromise or settlement of such Claims
may be effected by Seller without Purchaser's consent unless there is not in
connection therewith any finding or admission of any violation of Law or any
violation of the rights of any Person by Purchaser. Purchaser covenants and
agrees that it will not, without the prior consent of Seller, permit or agree to
any amendment of the Xxxxxx Farms Lease that eliminates or in any way reduces
the benefits and protections afforded by the Xxxxxx Farms Indemnity Obligations
to the lessor under the Xxxxxx Farms Lease.
11.2 WAIVER OF REMEDIES.
(a) The Parties hereby agree to limit their recourse for all
matters, and not make any Claim for any Loss or other matter, under, relating to
or arising out of this Agreement or any other document, agreement, certificate
or other matter delivered pursuant hereto, whether based on contract, tort,
strict liability, other Laws or otherwise, except (i) for Claims for
indemnification pursuant to this ARTICLE XI , (ii) as permitted in ARTICLE X, or
(iii) as permitted under SECTION 12.15 (Attorneys' Fees). From and after the
Closing, the indemnification provisions of this ARTICLE XI shall be the sole and
exclusive remedy of each Party (including the Seller Indemnified Parties and
Purchaser Indemnified Parties) (i) for any breach of the other Party's
representations, warranties or covenants contained in this Agreement or (ii)
otherwise with respect to this Agreement or the transactions contemplated
hereby.
(b) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, UNDER NO CIRCUMSTANCES SHALL ANY
51
PARTY BE LIABLE UNDER OR IN CONNECTION WITH THIS AGREEMENT FOR SPECIAL,
PUNITIVE, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES, OR LOST
PROFITS, WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY, OTHER LAW OR
OTHERWISE AND WHETHER OR NOT ARISING FROM SUCH PARTY'S SOLE, JOINT OR CONCURRENT
NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT ("NON-REIMBURSABLE DAMAGES").
(c) Notwithstanding anything to the contrary contained in this
Agreement, no Representative of Seller, Affiliate of Seller or Representative of
any such Affiliate shall, except as provided in the Guaranty Agreement, have any
personal liability to Purchaser or any other Person as a result of the breach of
any representation, warranty, covenant or agreement of Seller contained herein
and no Representative of Purchaser, Affiliate of Purchaser or Representative of
any such Affiliate shall have any personal liability to Seller or any other
Person as a result of the breach of any representation, warranty, covenant or
agreement of Purchaser contained herein.
11.3 SURVIVAL AND TIME LIMITATION. The terms and provisions of this
Agreement shall survive the Closing. Notwithstanding the foregoing, after the
Closing, any assertion by Purchaser or any Purchaser Indemnified Party that
Seller is liable to Purchaser or any Purchaser Indemnified Party for
indemnification under the terms of this Agreement or otherwise in connection
with the transactions contemplated in this Agreement must be made in writing and
must be given to Seller (or not at all) on or prior to the date that is
twenty-four (24) months after the Closing Date, except for (i) indemnification
for breach of Seller's representations and covenants in SECTIONS 4.10, 4.13(a),
4.14, 4.21, 6.5, 6.15 and 7.1, which shall survive for the limitations period
provided under applicable Law, and (ii) indemnification for matters addressed in
SECTION 11.1(a)(iii) or (iv), which must be made in writing and must be given to
Seller (or not at all) on or prior to the date that is ninety (90) days after
the date on which the applicable statute of limitations expires with respect to
the matters covered thereby.
11.4 WAIVER OF OTHER REPRESENTATIONS; LIMITATIONS OF LIABILITY.
(a) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, IT IS THE EXPRESS INTENT OF EACH PARTY HERETO THAT NEITHER PARTY IS
MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, EXCEPT FOR
THOSE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE IV AND ARTICLE V,
RESPECTIVELY, AND THAT, EXCEPT FOR SUCH EXPRESS REPRESENTATIONS AND WARRANTIES,
PURCHASER IS ACQUIRING THE PURCHASED ASSETS "AS IS" AND "WHERE IS." WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, SELLER HEREBY EXPRESSLY DISCLAIMS ANY
OTHER REPRESENTATION OR WARRANTY OF ANY KIND, INCLUDING ANY IMPLIED
REPRESENTATION OR WARRANTY AS TO CONDITION, MERCHANTABILITY OR SUITABILITY FOR
ANY PARTICULAR PURPOSE AS TO ANY OF THE PURCHASED ASSETS AND SELLER MAKES NO
REPRESENTATION OR WARRANTY TO PURCHASER WITH RESPECT TO ANY FINANCIAL PROJECTION
OR FORECAST RELATING TO THE PURCHASED ASSETS. WITH RESPECT TO ANY SUCH
PROJECTION OR FORECAST DELIVERED BY OR ON BEHALF OF SELLER TO PURCHASER,
PURCHASER ACKNOWLEDGES THAT (I) THERE ARE UNCERTAINTIES INHERENT IN ATTEMPTING
TO MAKE SUCH
52
PROJECTIONS AND FORECASTS, (II) IT IS FAMILIAR WITH SUCH UNCERTAINTIES, AND
(III) IT HAS MADE ITS OWN EVALUATION OF THE ADEQUACY AND ACCURACY OF ALL SUCH
PROJECTIONS AND FORECASTS FURNISHED TO IT.
(b) Notwithstanding anything to the contrary contained in this
Agreement, (i) Seller shall have no liability for its indemnification
obligations under SECTION 11.1(a)(i) or SECTION 11.1(a)(ii) until the aggregate
amount of all Losses incurred by the Purchaser Indemnified Parties equals or
exceeds $1,000,000 (the "THRESHOLD AMOUNT"), in which event Seller shall be
liable for all such Losses from dollar one; it being understood and agreed that
the foregoing Threshold Amount shall not apply to (A) claims for indemnification
relating to Excluded Liabilities, and (B) claims for indemnifications relating
to SECTIONS 3.2, 4.10, 4.13(a), 4.14, 4.21, 6.5, 6.15 and 7.1, in each case for
which Seller shall be responsible from dollar one, whether or not the Threshold
Amount has been reached and (ii) Purchaser shall have no liability for its
indemnification obligations under SECTION 11.1(b)(i) or SECTION 11.1(b)(ii)
until the aggregate amount of all Losses incurred by the Seller Indemnified
Parties equals or exceeds the Threshold Amount, in which event Purchaser shall
be liable for all such Losses from dollar one; it being understood and agreed
that the foregoing Threshold Amount shall not apply to (A) claims for
indemnification relating to Assumed Liabilities, and (B) claims for
indemnification relating to SECTIONS 3.2, 6.5 and 7.1, in each case for which
Purchaser shall be responsible from dollar one, whether or not the Threshold
Amount has been reached; and
(c) In no event shall (i) Seller's aggregate liability arising
out of its indemnification obligations under SECTION 11.1(a)(i) and SECTION
11.1(a)(ii) exceed 50% of the Purchase Price; it being understood and agreed
that the foregoing limitation shall not apply to claims for indemnification
relating to Excluded Liabilities and any indemnifiable Losses related to such
Excluded Liabilities shall not be deemed to count against or otherwise reduce
such limitation on Seller's aggregate liability and (ii) Purchaser's aggregate
liability arising out of its indemnification obligations under SECTION
11.1(b)(i) and SECTION 11.1(b)(ii) exceed 50% of the Purchase Price; it being
understood and agreed that the foregoing limitation shall not apply to claims
for indemnification relating to Assumed Liabilities and any indemnifiable Losses
related to such Assumed Liabilities shall not be deemed to count against or
otherwise reduce such limitation on Purchaser's aggregate liability.
11.5 PROCEDURE FOR INDEMNIFICATION - THIRD-PARTY CLAIMS.
(a) If any Party shall claim indemnification hereunder arising
from any Claim of a third party, the Party seeking indemnification (the
"INDEMNIFIED PARTY") shall notify in writing the Party from which
indemnification is sought (the "INDEMNIFYING PARTY") of the basis for such
Claim, setting forth the nature of the Claim in reasonable detail. The failure
of the Indemnified Party to so notify the Indemnifying Party shall not relieve
the Indemnifying Party of any indemnification obligation hereunder except to the
extent that the defense of such Claim is materially prejudiced by the failure to
give such notice.
(b) If any proceeding is brought by a third party against an
Indemnified Party and the Indemnified Party gives notice to the Indemnifying
Party pursuant to SECTION 11.5(a), the Indemnifying Party shall be entitled to
participate in such proceeding and, to the extent that it wishes, to assume the
defense of such proceeding, if (i) the Indemnifying Party provides written
53
notice to the Indemnified Party that the Indemnifying Party intends to undertake
such defense, (ii) the Indemnifying Party conducts the defense of the
third-party Claim actively and diligently with counsel reasonably satisfactory
to the Indemnified Party and (iii) if the Indemnifying Party is a party to the
proceeding, the Indemnifying Party has not determined in good faith that joint
representation would be inappropriate because of a conflict in interest. The
Indemnified Party shall, in its sole discretion, have the right to employ
separate counsel (who may be selected by the Indemnified Party in its sole
discretion) in any such action and to participate in the defense thereof, and
the fees and expenses of such counsel shall be paid by such Indemnified Party.
The Indemnified Party shall fully cooperate with the Indemnifying Party and its
counsel in the defense or compromise of such Claim. If the Indemnifying Party
assumes the defense of a proceeding, no compromise or settlement of such Claims
may be effected by the Indemnifying Party without the Indemnified Party's
consent unless (A) there is no finding or admission of any violation of Law or
any violation of the rights of any Person and no effect on any other Claims that
may be made against the Indemnified Party and (B) the sole relief provided is
monetary damages that are paid in full by the Indemnifying Party.
(c) If (i) the Indemnified Party gives notice to the
Indemnifying Party of the commencement of any third-party legal proceeding and
the Indemnifying Party does not, within ten (10) days after the Indemnified
Party's notice is given, give notice to the Indemnified Party of the
Indemnifying Party's election to assume the defense of such legal proceeding,
(ii) any of the conditions set forth in clauses (i) through (iii) of SECTION
11.5(b) above become unsatisfied or (iii) an Indemnified Party determines in
good faith that there is a reasonable probability that a legal proceeding may
adversely affect it other than as a result of monetary damages for which it
would be entitled to indemnification from the Indemnifying Party under this
Agreement, the Indemnified Party shall (upon notice to the Indemnifying Party)
have the right to undertake the defense, compromise or settlement of such claim;
provided that the Indemnifying Party shall reimburse the Indemnified Party for
the Indemnified Party's costs of defending against the third-party claim
(including reasonable attorneys' fees and expenses) and the Indemnifying Party
shall remain responsible for any indemnifiable amounts arising from or related
to such third-party claim to the fullest extent provided in this ARTICLE XI. The
Indemnifying Party may elect to participate in such legal proceedings,
negotiations or defense at any time at its own expense.
11.6 ARBITRATION.
(a) Any and all disputes between the Parties arising out of or
relating to this Agreement (a "DISPUTE") must be resolved through the use of
binding arbitration using three (3) arbitrators, selected in accordance with the
Commercial Arbitration Rules of the American Arbitration Association ("AAA") as
then in effect, as supplemented to the extent necessary to determine any
procedural appeal questions by the Federal Arbitration Act (Title 9 of the
United States Code), and shall be administered by AAA. If there is any
inconsistency between this SECTION 11.6 and the Commercial Arbitration Rules or
the Federal Arbitration Act, the terms of this SECTION 11.6 will control the
rights and obligations of the Parties. If there is more than one (1) Arbitrable
Dispute that involves the same facts and parties as the facts and parties with
respect to which an arbitration has been initiated pursuant to this Agreement,
such disputes shall be consolidated into the first arbitration initiated
pursuant to this Agreement. No other arbitration shall be consolidated with any
arbitration initiated pursuant to this Agreement without
54
the agreement of the Parties or parties thereto. The Party initiating any
Dispute must promptly notify AAA in writing of any such action.
(b) Arbitration must be initiated within the applicable time
limits set forth in this Agreement and not thereafter or if no time limit is
given, within the time period allowed by the applicable statute of limitations.
Arbitration may be initiated by either Seller or Purchaser ("CLAIMANT") serving
written notice on Purchaser or Seller, respectively ("RESPONDENT") that Claimant
elects to refer the Dispute to binding arbitration (the "ARBITRABLE DISPUTE").
(c) Claimant's notice initiating binding arbitration must
describe in reasonable detail the nature of the Arbitrable Dispute and the facts
and circumstances relating thereto and identify the arbitrator Claimant has
appointed. Respondent shall respond to Claimant within sixty (60) days after
receipt of Claimant's notice, identifying the arbitrator Respondent has
appointed. If Respondent fails for any reason to name an arbitrator within such
sixty (60) day period, Claimant may upon notice to the AAA and the Respondent,
request that the AAA office in Phoenix, Arizona select the Respondent's
arbitrator, with the AAA giving due regard to the selection criteria set forth
below and input from the Respondent in making such selection. The two (2)
arbitrators so chosen shall select a third arbitrator within thirty (30) days
after the second arbitrator has been appointed. If the two (2) arbitrators are
unable to agree on a third arbitrator within such thirty (30) day selection
period, then either Party may, upon notice to the AAA and the other Party,
request that the AAA office in Phoenix, Arizona select the third arbitrator,
with the AAA giving due regard to the selection criteria set forth below and
input from the Parties and other arbitrators in making such selection.
(d) The AAA shall select the third arbitrator not later than
thirty (30) days from the notice of request sent to the AAA in accordance with
SECTION 11.6(c) above. In the event the AAA should fail to select the third
arbitrator within such thirty (30) day period, then either Party may petition
the Chief United States District Judge for the State of Arizona to select the
third arbitrator. The Party making such petition shall provide a copy thereof to
the other Party. The Chief Judge shall give due regard to the selection criteria
set forth below and input from the Parties and other arbitrators in making such
selection.
(e) Subject to the arbitrators' award of costs to the
prevailing party, Claimant shall pay the compensation and expenses of the
arbitrator named by or for it, Respondent shall pay the compensation and
expenses of the arbitrator named by or for it, and Claimant and Respondent shall
each pay one-half (-1/2) of the compensation and expenses of the third
arbitrator. All arbitrators must be neutral parties who have never been
officers, directors or employees of the Parties or any of their Affiliates. Each
of the three (3) arbitrators must have not less than seven (7) years experience
as an attorney or accountant handling complex business transactions and have
formal training in dispute resolution.
(f) The hearing will be conducted in Phoenix, Arizona, and
commence within sixty (60) days after the selection of the third arbitrator. The
Parties and the arbitrators should proceed diligently and in good faith in order
that the award may be made as promptly as possible. The arbitrators shall
determine the Arbitrable Disputes of the Parties and render a final award in
accordance with the choice of Law set forth in this Agreement. The arbitrators
shall render their decision within sixty (60) days following completion of the
hearing. The arbitrators'
55
decision shall be in writing and set forth the reasons for the
award and shall include an award of costs to the prevailing Party (or an
allocation of such costs between the Parties based upon the extent to which each
prevails), including reasonable attorneys' fees and disbursements and the fees
and expenses of the arbitrators. All statutes of limitations and defenses based
upon passage of time applicable to any Arbitrable Dispute (including any
counterclaim or setoff) shall be interrupted by the filing of the arbitration
and suspended while the arbitration is pending. The terms of this SECTION 11.6
shall not create nor limit any obligations of a Party hereunder to defend,
indemnify or hold harmless the other Party against Claims or Losses. In order to
prevent irreparable harm, the arbitrators shall have the power to grant
temporary or permanent injunctive or other equitable relief. A Party may,
notwithstanding any other provision of this Agreement, seek temporary injunctive
relief or other interim, provisional or interlocutory relief or any order in aid
of arbitration from any court of competent jurisdiction; provided, that the
Party seeking such relief shall (if arbitration has not already been commenced)
simultaneously commence arbitration. Such court-ordered relief shall not
continue more than ten (10) days after the appointment of the third arbitrator
and in no event for longer than sixty (60) days. Except as provided in the
Federal Arbitration Act, the decision of the arbitrators will be binding on and
non-appealable by the Parties. Each Party agrees that any arbitration award
against it may be enforced in any court of competent jurisdiction and that any
Party may authorize any such court to enter judgment on the arbitrators'
decisions. The arbitrators may not grant or award Non-reimbursable Damages.
ARTICLE XII
MISCELLANEOUS
12.1 NOTICES.
(a) Unless this Agreement specifically requires otherwise, any
notice, demand or request provided for in this Agreement, or served, given or
made in connection with it, shall be in writing and shall be deemed properly
served, given or made if delivered in person or sent by facsimile equipment
providing confirmation of successful transmission or sent by registered or
certified mail, postage prepaid, or by a nationally recognized overnight courier
service that provides a receipt of delivery, in each case, to the applicable
Party at the applicable address or number specified below:
If to Purchaser, to:
Arizona Public Service Company
X.X. Xxx 00000
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Corporate Secretary
56
With a copy to:
Xxxxx & Xxxxxx L.L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
If to Seller to:
PPL Sundance Energy, LLC
000 Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx
With a copy to:
PPL Services Corporation
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. Xxxxxxxxx
(b) Notice given by personal delivery, mail or overnight courier
pursuant to this SECTION 12.1 shall be effective upon physical receipt. Notice
given by facsimile pursuant to this SECTION 12.1 shall be effective as of the
date of confirmed delivery if delivered before 5:00 p.m. Phoenix time on any
Business Day or on the next succeeding Business Day if confirmed delivery is
after 5:00 p.m. Phoenix time on any Business Day or during any non-Business Day.
12.2 ENTIRE AGREEMENT. This Agreement and the Ancillary Agreements
supersede all prior discussions, agreements and understandings between the
Parties with respect to the subject matter hereof and thereof and contain the
sole and entire agreement between the Parties with respect to the subject matter
hereof and thereof. As of the execution of this Agreement by the Parties, the
Confidentiality Agreement between Purchaser and PPL EnergyPlus dated as of
February 10, 2004 shall be deemed fully replaced, merged in and superseded by
this Agreement and the Ancillary Agreements as of the Agreement Date for all
periods after the Agreement Date; provided, however, such Confidentiality
Agreement shall remain in full force and effect with respect to any event or
circumstance that is within the subject matter of such agreement and that
occurred prior to the Agreement Date.
12.3 EXPENSES. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, each Party
will be responsible for, and will pay, its own costs and expenses incurred in
anticipation of, relating to and in connection with the negotiation and
execution of this Agreement and the transactions contemplated hereby.
12.4 PUBLIC ANNOUNCEMENTS. Except as may be required by Law or any
applicable stock exchange rules, neither Party will issue or make any press
releases or other public
57
disclosures concerning this Agreement or the transactions contemplated hereby
without first obtaining consent from the other Party, which consent shall not be
unreasonably withheld, conditioned or delayed.
12.5 CONFIDENTIAL INFORMATION.
(a) For a period of two (2) years from and after the Closing, Seller
shall cause any data or information received at any time by Seller or its
Affiliates or its or their Representatives from Purchaser, any data or
information regarding Purchaser or its businesses, operations, financial
conditions or prospects, and any data or information regarding the Purchase
Price and other key financial terms of the transactions contemplated hereby and
the discussions among the Parties relating thereto (any of the foregoing,
"PURCHASER INFORMATION"), to be maintained by Seller, its Affiliates and their
respective Representatives in confidence, not to be utilized for any purpose
(except, pending Closing, to prepare therefor) and not to be disclosed for any
purpose. Without limiting the generality of the foregoing, Seller and Purchaser
acknowledge that, during the Interim Period, Purchaser may conduct one or more
solicitations or requests for proposals from third parties and that the
foregoing restrictions concerning the Purchase Price and other financial terms
are necessary in order to protect Purchaser's interest in the integrity of its
acquisition activities.
(b) From the Agreement Date until the Closing (or, if this Agreement
is earlier terminated, then until two (2) years after the date of such
termination, and in any event, in the case of any Seller Information not
contained in the Purchased Assets, from the Agreement Date until a period two
(2) years from and after the Closing), Purchaser shall cause any such data or
information received at any time by Purchaser, its Affiliates or their
respective Representatives from Seller, its Affiliates or their respective
Representatives and any such data or information regarding Seller or its
businesses, operations, financial conditions or prospects, and any data or
information regarding the Purchase Price and other key financial terms of the
transactions contemplated hereby and the discussions among the Parties relating
thereto (any of the foregoing, "SELLER INFORMATION"), to be maintained by
Purchaser, its Affiliates and their respective Representatives in confidence,
not to be utilized for any purposes (except pending Closing, to prepare
therefor) and not to be disclosed for any purpose.
(c) Purchaser and Seller acknowledge that the approvals of the
Governmental Authorities that are required by this Agreement will likely
necessitate the provision of Confidential Information to third parties in
proceedings to obtain such approvals. Where a filing is made with any
Governmental Authority for approval of this Agreement, the Party responsible for
the filing shall request that the Governmental Authority approve a reasonable
confidentiality agreement or protective order that will provide appropriate
protections for any Confidential Information of the other Party.
(d) Other than as provided in SECTION 12.5(c) and with respect to
the obligations under SECTIONS 12.5(a) and 12.5(b), in the event that the Party
receiving Confidential Information (the "RECEIVING PARTY") is requested by any
Governmental Authority to disclose any Confidential Information of the other
Party (the "DISCLOSING PARTY"), the Receiving Party shall give the Disclosing
Party prompt written notice of such requirement and shall not disclose any such
Confidential Information without reasonable assurances from such Governmental
Authority
58
that such Confidential Information will be afforded reasonable confidentiality
protections by such Governmental Authority. In the event that the Receiving
Party becomes legally compelled (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand or similar process) to disclose
any Confidential Information (or, in the case of any such disclosure to the ACC,
the Receiving Party is required or requested to make such disclosure as a
condition to the approval by the ACC contemplated by SECTION 8.7(b)), the
Receiving Party shall give the Disclosing Party prompt written notice of such
requirement so that the Disclosing Party may attempt to seek a protective order
or other assurance that confidential treatment will be accorded to any such
portion of such Confidential Information as may be required to be disclosed (and
the Receiving Party shall cooperate reasonably with any such efforts by the
Disclosing Party) or waive compliance with the terms of this SECTION 12.5. In
the event that such protective order or other remedy is not timely obtained, the
Receiving Party agrees to give the Disclosing Party written notice of the
Confidential Information to be disclosed as far in advance of such disclosure as
is reasonably practicable, and shall furnish only that portion of the
Confidential Information for which the Disclosing Party has waived compliance
with the relevant provisions of this SECTION 12.5, or which is in the opinion of
the Receiving Party's legal counsel required to be disclosed in order to avoid a
contempt order or other civil or criminal sanction or penalty.
(e) Notwithstanding the foregoing, the confidentiality obligations
set forth in this SECTION 12.5 shall not apply to any disclosure of information:
(i) which at the time of disclosure is already in the public
domain through no fault of the applicable Parties, their Affiliates
or their respective Representatives;
(ii) which after disclosure becomes part of the public domain
through no act or fault of the applicable Parties or their
Affiliates or their respective Representatives;
(iii) if such information subsequently becomes known to the
applicable Parties or their Affiliates through no breach of their
obligations hereunder;
(iv) which is independently developed by the applicable
Parties or their Affiliates through no breach of their obligations
hereunder; or
(v) required by Law or stock exchange rules; provided that the
applicable Parties shall use, and shall cause their applicable
Affiliates, if any, to use, commercially reasonable efforts to give
the other Parties prior notice of such disclosure in sufficient time
to enable such other Parties to protect any such information.
12.6 DISCLOSURE. Seller may, at its option, include in the Schedules items
that are not material in order to avoid any misunderstanding, and any such
inclusion, or any references to dollar amounts, shall not be deemed to be an
acknowledgment or representation that such items are material, to establish any
standard of materiality or to define further the meaning of such terms for
purposes of this Agreement.
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12.7 WAIVER; REMEDIES CUMULATIVE. Any term or condition of this Agreement
may be waived at any time by the Party that is entitled to the benefit thereof,
but no such waiver shall be effective unless set forth in a written instrument
duly executed by or on behalf of the Party waiving such term or condition. No
waiver by any Party of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Agreement on any future occasion. The
failure of any Party to assert any of its rights under this Agreement shall not
constitute a waiver of such rights. All remedies, either under this Agreement or
by Law or otherwise afforded, will be cumulative and not alternative.
12.8 AMENDMENT. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each Party, which
written instrument indicates that such writing is intended to amend the terms of
this Agreement.
12.9 NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of the Parties and their
respective successors or permitted assigns, and it is not the intention of the
Parties to confer third-party beneficiary or similar rights upon any other
Person.
12.10 ASSIGNMENT; BINDING EFFECT. Purchaser may assign its rights and
obligations hereunder to an Affiliate; provided, however, that no such
assignment shall release Purchaser from its obligations hereunder. Except as
provided in the preceding sentence, neither this Agreement nor any right,
interest or obligation hereunder may be assigned by either Party without the
prior written consent of the other Party, and any attempt to do so will be null
and void. Subject to this SECTION 12.10, this Agreement is binding upon, inures
to the benefit of and is enforceable by the Parties and their respective
successors and permitted assigns.
12.11 HEADINGS. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
12.12 INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law, and if the
rights or obligations of any Party under this Agreement will not be materially
and adversely affected thereby, such provision will be fully severable, this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
12.13 COUNTERPARTS; FACSIMILE. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together shall constitute one and the same instrument. Any facsimile
copies hereof or signature hereon shall, for all purposes, be deemed originals.
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12.14 GOVERNING LAW; VENUE; AND JURISDICTION.
(a) This Agreement shall be governed by and construed in accordance
with the Laws of the State of Arizona, without giving effect to any conflict or
choice of law provision that would result in the imposition of another state's
Law.
(b) WITH RESPECT TO THE ENFORCEMENT OF ANY ARBITRATION AWARD
PURSUANT TO SECTION 11.6, THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN PHOENIX, ARIZONA.
(c) WITH RESPECT TO THE ENFORCEMENT OF ANY ARBITRATION AWARD
PURSUANT TO SECTION 11.6, EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY.
12.15 ATTORNEYS' FEES. If either of the Parties shall bring an action to
enforce the provisions of this Agreement, the prevailing Party shall be entitled
to recover its reasonable attorneys' fees and expenses incurred in such action
from the non-prevailing Party.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officer of each Party as of the date first above written.
SELLER:
PPL SUNDANCE ENERGY, LLC
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------------------
Title: President
----------------------------------------
PURCHASER:
ARIZONA PUBLIC SERVICE COMPANY
By: /s/ Xxxx X. Xxxxx
----------------------------------------
Name: Xxxx X. Xxxxx
----------------------------------------
Title: CEO and President
----------------------------------------
SIGNATURE PAGE
PURCHASE AGREEMENT
APPENDIX I
DEFINITIONS
"AAA" has the meaning given to it in SECTION 11.6(a).
"ACC" means the Arizona Corporation Commission or any successor agency
with jurisdiction over the rates and charges of Purchaser.
"ACC ORDER" has the meaning given to it in SECTION 8.7(b).
"ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION" means the net
accumulated credit balance arising from provisions for depreciation or
amortization of assets. The net balance reflects current and prior credits less
charges.
"ACQUISITION TRANSACTION" has the meaning given to it in SECTION 6.9.
"ACSM" means the American Congress on Surveying and Mapping, or its
successor.
"ACTUAL PRORATED AMOUNTS" has the meaning given to it in SECTION
3.2(c)(ii).
"AFFIDAVIT OF PROPERTY VALUE" means the form of Affidavit of Property
Value attached hereto as Exhibit B.
"AFFILIATE" means any Person that directly, or indirectly through one or
more intermediaries, controls, is controlled by or is under common control with
the Person specified. For purposes of this definition, control of a Person means
the power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through ownership of voting
securities or ownership interests, by contract or otherwise, and specifically
with respect to a corporation, partnership or limited liability company, means
direct or indirect ownership of more than 50% of the voting securities in such
corporation or of the voting interests in a partnership or limited liability
company.
"AGREEMENT" has the meaning given to it in the recitals.
"AGREEMENT DATE" has the meaning given to it in the introduction to this
Agreement.
"ALTA" means the American Land Title Association, or its successor.
"ANCILLARY AGREEMENTS" means the Assumption Agreement, the Affidavit of
Property Value, the Deed, the Xxxx of Sale and Assignment of Rights, the Form of
Certification of Non-Foreign Status, the Guaranty Agreement and such other
documents, instruments, certificates or agreements as may be executed and
delivered in connection with this Agreement or the foregoing.
"ARBITRABLE DISPUTE" has the meaning given to it in SECTION 11.6(b).
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"ASSETS" of any Person means all assets and properties of every kind,
nature, character and description (whether real, personal or mixed, whether
tangible or intangible and wherever situated), including the goodwill related
thereto, operated, owned or leased by such Person.
"ASSUMED LIABILITIES" has the meaning given to it in SECTION 2.3.
"ASSUMPTION AGREEMENT" has the meaning given to it in SECTION 3.5(c).
"AVAILABLE EMPLOYEES" has the meaning given to it in SECTION 6.5(a).
"BENEFIT PLANS" means (a) each "employee benefit plan," as such term is
defined in Section 3(3) of ERISA, (b) each plan that would be an "employee
benefit plan", as such term is defined in Section 3(3) of ERISA, if it was
subject to ERISA, such as foreign plans and plans for directors, (c) each stock
bonus, stock ownership, stock option, stock purchase stock appreciation rights,
phantom stock, or other stock plan (whether qualified or nonqualified), and (d)
each bonus or incentive compensation plan.
"XXXX OF SALE AND ASSIGNMENT OF RIGHTS" means the form of Xxxx of Sale and
Assignment of Rights from Seller to Purchaser attached hereto as Exhibit D.
"BOOKS AND RECORDS" means all books, operating records, operating, safety
and maintenance manuals, engineering design plans, blueprints and as-built
plans, specifications, procedures and similar items relating specifically to the
Purchased Assets.
"BUSINESS" means the ownership and operation of the Project, including the
generation and sale of electricity and capacity at or from the Project and the
conduct of other activities related or incidental to the foregoing.
"BUSINESS DAY" means a day other than Saturday, Sunday or any day on which
banks located in the State of Arizona are authorized or obligated to close.
"CERTIFICATE OF ENVIRONMENTAL COMPATIBILITY" means the Decision of the
Arizona Power Plant and Transmission Line Siting Committee and Certificate of
Environmental Compatibility issued on April 11, 2001, and revised nunc pro tunc
on June 25, 2001, by the Arizona Power Plant and Transmission Line Siting
Committee in Xxxx Xx. 000, Xxxxxx Xx. X-00000X-00-0000 (Xxxxxxxx No. 63863), as
affirmed and approved on July 9, 2001 by the Arizona Corporation Commission,
with respect to the Project.
"CHARTER DOCUMENTS" means with respect to any Person, the articles of
incorporation or organization and by-laws, the limited partnership agreement,
the partnership agreement or the limited liability company agreement, or such
other organizational documents of such Person, including those that are required
to be registered or kept in the place of incorporation, organization or
formation of such Person and which establish the existence of such Person as a
legal entity.
"CLAIM" means any demand, claim, action, investigation, legal proceeding
(whether at law or in equity) or arbitration.
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"CLAIMANT" has the meaning set forth in SECTION 11.6(b).
"CLOSING" means the closing of the transactions contemplated by this
Agreement, as provided for in SECTION 3.3.
"CLOSING DATE" means the date on which Closing occurs.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" means Seller Information or Purchaser
Information, individually or collectively as the context may require.
"CONTINUED EMPLOYEE" has the meaning set forth in SECTION 6.5(b).
"CONTRACT" means any written contract, lease, license, evidence of
indebtedness, mortgage, indenture, purchase order, binding bid, letter of
credit, security agreement or other legally binding arrangement.
"CREDIT RATING" means (i) with respect to any entity other than a
financial institution, the current (A) rating issued or maintained by S&P or
Xxxxx'x with respect to such entity's senior, unsecured debt securities or (B)
corporate credit rating or long-term issuer rating issued or maintained with
respect to such entity by S&P or Xxxxx'x, or (ii) if such entity is a financial
institution, the ratings issued or maintained by S&P or Xxxxx'x with respect to
such entity's long-term, unsecured, unsubordinated deposits.
"DEED" means the form of Special Warranty Deed from Seller to Purchaser
attached hereto as Exhibit C.
"DISCLOSING PARTY" has the meaning given to it in SECTION 12.5(d).
"DISPUTE" has the meaning given to it in SECTION 11.6(a).
"DWR" has the meaning given to it in SECTION 4.13(s)(iv).
"ENVIRONMENTAL CLAIM" means any Claim arising out of or related to any
violation of Environmental Law, or in respect of any Environmental Conditions or
Hazardous Materials.
"ENVIRONMENTAL CONDITION" means the presence or Release to the
environment, whether at the Real Property or otherwise, of Hazardous Materials,
including any migration of Hazardous Materials through air, soil or groundwater
at, to or from the Real Property or at, to or from any Off-Site Location,
regardless of when such presence or Release occurred or is discovered.
"ENVIRONMENTAL LAW" means any Law relating to (i) facility siting, land
use and environmental matters, (ii) the control of any pollutant, or protection
of the air, water, or land, (iii) solid, gaseous or liquid waste generation,
handling, treatment, storage, disposal or transportation, (iv) exposure to
hazardous, toxic or other harmful substances, and (v) the protection and
enhancement of the environment. Environmental Laws shall include the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et
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seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq.; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.;
the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1471 et seq.; the Toxic Substances
Control Act, 15 U.S.C. Sections 2601 through 2629; the Oil Pollution Act, 33
U.S.C. Section 2701 et seq.; the Emergency Planning and Community Right-to-Know
Act, 42 U.S.C. Section 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Sections 300f through 300j; Endangered Species Act, 16 U.S.C. Sections 1531 et
seq.; Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections 136
et seq.; Occupational Safety and Health Act; National Environmental Policy Act;
Comprehensive Air Quality Act, A.R.S. Sections 49-401 et seq.; Arizona
Emergency Planning and Community Right-to-Know Act, A.R.S. Sections 26-341 et
seq.; Water Quality Control, A.R.S. Sections 49-201 to 391; Solid Waste
Management, A.R.S. Sections 49-701 to 881; Hazardous Waste Disposal, A.R.S.
Sections 49-901 to 971; Underground Storage Tank Act, A.R.S. Sections 49-1001
to 1073; Groundwater Management Act, A.R.S. Sections 45-401 to 704 and all
similar Laws of any Governmental Authority having jurisdiction over the assets
in question addressing pollution or protection of the environment and all
amendments to such Laws and all regulations implementing any of the foregoing.
"ENVIRONMENTAL LIABILITIES" means all Liabilities with respect to the
Purchased Assets or the Business arising under or relating to Environmental Laws
or relating to any Environmental Claim, including settlements, judgments, costs
and expenses, including reasonable attorneys fees, whether based on common law
or Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any entity, trade or business that is a member of
a group described in Section 414(b), (c), (m) or (o) of the Code or Section
4001(b)(1) of ERISA that includes Seller, or that is a member of the same
"controlled group" as Seller pursuant to Section 4001(a)(14) of ERISA; provided,
that Seller shall not be considered to be an ERISA Affiliate from and after the
Closing Date.
"ESTIMATED PRORATED AMOUNTS" has the meaning given to it in SECTION
3.2(c)(ii).
"EXCLUDED ASSETS" has the meaning given to it in SECTION 2.2.
"EXCLUDED CONTRACTS" has the meaning given to it in SECTION 2.2(f).
"EXCLUDED ENVIRONMENTAL LIABILITIES" has the meaning given to it in
SECTION 2.4(i).
"EXCLUDED ITEMS" has the meaning given to it in SECTION 2.2(h).
"EXCLUDED LIABILITIES" has the meaning given to it in SECTION 2.4.
"EXCLUDED TORT LIABILITIES" has the meaning given to it in SECTION 2.4(j).
"EXISTING SURVEY" has the meaning given to it in SECTION 4.13(b).
"EXISTING TITLE POLICIES" means (a) Title Insurance Policy No.
O-993-2374088, dated September 21, 2001, by Xxxxxxx Title and Trust of Phoenix,
Inc. insuring PPL Sundance Energy,
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LLC, and (b) Title Insurance Policy No. 0-0000-0000000, dated November 19, 2001,
by Xxxxxxx Title and Trust of Phoenix, Inc. insuring PPL Sundance Energy, LLC.
"FERC" means the Federal Energy Regulatory Commission, or its successor.
"FINAL ORDER" means an action by a Governmental Authority as to which: (a)
no request for stay of the action is pending, no such stay is in effect and if
any time period is permitted by applicable Law for filing any request for such
stay, such time period has expired; (b) no petition for rehearing,
reconsideration or application for review of the action is pending and the time
for filing any such petition or application has expired; (c) such Governmental
Authority does not have the action under reconsideration or subject to rehearing
on its own motion or otherwise and the time in which such reconsideration or
rehearing is permitted has expired; and (d) no appeal to a court, or a request
for stay by a court of the Governmental Authority's action is pending or in
effect and the deadline for filing any such appeal or request has expired. For
purposes of determining the consent and approval of Governmental Authorities
under the HSR Act, a "Final Order" shall include the signing of any stipulation
between the Governmental Authority and the Parties allowing consummation of the
transactions contemplated hereby and by the Ancillary Documents.
"FIRPTA AFFIDAVIT" means an affidavit, signed by and acknowledged on
behalf of Seller under penalties of perjury, certifying that Seller is not a
nonresident alien, foreign corporation, foreign partnership, foreign trust,
foreign estate, or other foreign person within the meaning of Section 1445 and
7701 of the Internal Revenue Code of 1986, as amended, and the associated
Treasury Regulations.
"GAAP" means generally accepted accounting principles in the United States
of America applied on a consistent basis.
"GOOD OPERATING PRACTICES" means, with respect to the Project or the
Purchased Assets, the practices, methods and acts generally engaged in or
approved by a significant portion of the independent electric power industry in
the WECC for similarly situated facilities in the WECC during a particular time
period, or any of such practices, methods, and acts, which, in the exercise of
reasonable judgment in light of the facts known or that reasonably should be
known at the time a decision is made, would be expected to accomplish the
desired result in a manner consistent with applicable Law, reliability, safety,
environmental protection, economy and expedition, and taking into consideration
the requirements of this Agreement, the Material Contracts and the other
Contracts affecting the operation of the Project. Good Operating Practices are
not intended to be limited to the optimum practices, methods or acts, to the
exclusion of all others, but rather to include a spectrum of possible practices,
methods or acts generally acceptable in the region during the relevant period in
light of the circumstances.
"GOVERNMENTAL AUTHORITY" means any court, tribunal, authority, agency,
commission, official or other instrumentality of the United States, or any
domestic state, province, county, city or other political subdivision or similar
governing entity, and including any governmental, quasi-governmental or
non-governmental body administering, regulating or having general oversight over
gas, electricity, power or other markets.
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"GUARANTY AGREEMENT" has the meaning given to it in SECTION 3.4(j).
"HAZARDOUS MATERIAL" means any chemicals, materials, substances, or items
in any form, whether solid, liquid, gaseous, semisolid, or any combination
thereof, whether waste materials, raw materials, chemicals, finished products,
by-products, or any other materials or articles, which are listed or regulated
as hazardous, toxic or dangerous or as waste or a contaminant, or are otherwise
listed or regulated, or for which liability or standards of care are imposed,
under any Environmental Law, including petroleum products, asbestos, PCBs, coal
combustion by-products, urea formaldehyde foam insulation, lead-containing
paints or coatings, and any substances included in the definition of "hazardous
debris," "hazardous substances," "hazardous materials," "hazardous wastes,"
"toxic substances," "pollutants," "contaminants" or words of similar import,
under any Environmental Law.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976
and the rules and regulations thereunder.
"IMPROVEMENTS" means all buildings, structures, fixtures and improvements
located on the Real Property or included in the Purchased Assets, including
those under construction as of the Closing Date.
"INDEMNIFIED PARTY" has the meaning given to it in SECTION 11.5(a).
"INDEMNIFYING PARTY" has the meaning given to it in SECTION 11.5(a).
"INDEPENDENT ACCOUNTANTS" means a nationally recognized firm of
independent certified public accountants that is mutually acceptable to Seller
and Purchaser.
"INSURED EXCEPTION" has the meaning given to it in SECTION 6.11(c).
"INTELLECTUAL PROPERTY" means the following intellectual property rights,
both statutory and common law rights, if applicable: (a) copyrights, and
registrations and applications for registration thereof, (b) trademarks,
trademark rights, service marks, service xxxx rights, trade names, trade name
rights, slogans, domain names, logos and trade dress, and registrations and
applications for registrations thereof, (c) patents, as well as any reissued and
reexamined patents and extensions corresponding to the patents, and any patent
rights and patent applications, as well as any related continuation,
continuation in part and divisional applications and patents issuing therefrom
and (d) trade secrets and confidential information, including ideas, designs,
concepts, inventions, compilations of information, methods, techniques,
procedures, processes and other know-how, whether or not patentable.
"INTERIM PERIOD" has the meaning given to it in SECTION 6.1.
"INVENTORY ADJUSTMENT NOTICE" has the meaning given to it in SECTION
3.7(c).
"INVESTMENT GRADE ENTITY" means an entity having a Credit Rating of BBB-
or above from S&P and Baa3 or above from Xxxxx'x.
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"KNOWLEDGE" when used in a particular representation or otherwise herein
(a) with respect to Seller, means Seller's Knowledge, and (b) with respect to
Purchaser, means Purchaser's Knowledge.
"LAWS" means all laws, statutes, rules, regulations, ordinances,
judgments, orders, decrees and other pronouncements having the effect of law of
any Governmental Authority.
"LIABILITY" with respect to any Person, any liability, indebtedness or
obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, disputed or
undisputed, liquidated or unliquidated, secured or unsecured, joint or several,
due or to become due, vested or unvested, executory, determined, determinable or
otherwise, and whether or not the same is required to be accrued on the
financial statements of such Person.
"LIEN" means any mortgage; deed of trust; pledge; security interest;
adverse possessory right; mechanic's, materialmen's or other lien; covenant,
condition or restriction; charge or assessment; lease; easement; license;
purchase option; right of first refusal; or any other matter affecting title of
any nature whatsoever.
"LOSS" means any and all judgments, losses, Liabilities, amounts paid in
settlement, damages, fines, penalties, deficiencies, losses and expenses
(including interest, court costs, reasonable fees and expenses of attorneys,
accountants and other experts or other reasonable expenses of litigation or
other proceedings or of any claim, default or assessment). For all purposes in
this Agreement the term "LOSSES" does not include any Non-reimbursable Damages.
"XXXXXX FARMS INDEMNITY OBLIGATIONS" has the meaning given to it in
SECTION 11.1(d).
"XXXXXX FARMS LEASE" has the meaning given to it in SECTION 4.13(s)(iv).
"MATERIAL CONTRACT" or "MATERIAL CONTRACTS" has the meaning given to it in
SECTION 4.12(a).
"MINIMUM INVENTORY AMOUNT" means one million fifty thousand dollars
($1,050,000).
"XXXXX'X" means Xxxxx'x Investor Services, Inc., or any successor thereto.
"NON-REIMBURSABLE DAMAGES" has the meaning given to it in SECTION 11.2(b).
"OFF-SITE LOCATION" means any real property other than the Real Property.
"ORIGINAL COST" means the cost of utility property at the time such
property was brought into service.
"PARTICIPATION AGREEMENT" has the meaning given to it in SECTION 6.15.
"PARTY" means each of Purchaser and Seller, individually; and "PARTIES"
means Purchaser and Seller, collectively.
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"PERMITS" means all licenses, permits, certificates of authority,
authorizations, approvals, franchises, exemptions, variances, consents, orders,
judgments or decrees granted by, or any notices to, declarations of, or filings
or registrations with, any Governmental Authority under any provision of any
applicable Laws.
"PERMITTED LIEN" means (a) any Lien for Taxes not yet due or delinquent;
(b) imperfections or irregularities of title and other Liens that would not,
individually or in the aggregate, reasonably be expected to have a Seller
Material Adverse Effect; (c) zoning, planning, entitlement, conservation
restriction and other similar governmental limitations and restrictions; (d) any
Lien to be released on or prior to Closing; (e) any statutory Lien (other than
mechanics' or materialmen's Liens) arising in the ordinary course of business by
operation of Law with respect to a Liability that is not yet due or delinquent;
and (f) each item set forth on Schedule 2.1; provided, however, that Permitted
Liens shall include (i) any Lien for Taxes and (ii) any statutory Lien, to the
extent not otherwise included in clauses (a) and (e) above, but only if such are
being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP.
"PERSON" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, other business
organization, trust, union, joint venture, association, whether or not a legal
entity, and any Governmental Authority.
"PLANT ACQUISITION ADJUSTMENT" means the difference between the cost to
the utility of plant acquired as an operating unit or system by purchase,
merger, consolidation, liquidation or otherwise, and the Original Cost of such
plant less the amount(s) credited at the time of acquisition to Accumulated
Provision for Depreciation and Amortization.
"POST-CLOSING INVENTORY AMOUNT DETERMINATION" has the meaning given to it
in SECTION 3.7(c).
"PPL ENERGY SUPPLY" means PPL Energy Supply, LLC, a Delaware limited
liability company and Affiliate of Seller.
"PPL ENERGYPLUS" means PPL EnergyPlus, LLC, a Pennsylvania limited
liability company and Affiliate of Seller.
"PPL MONTANA" means PPL Montana, LLC, a Delaware limited liability company
and Affiliate of Seller.
"PRE-CLOSING ENVIRONMENTAL LIABILITIES/TORT LIABILITIES" has the meaning
given to it in SECTION 11.1(c).
"PRE-CLOSING TRANSACTIONS" has the meaning given to it in SECTION 6.14(b).
"PREPAYMENTS" means all advance payments, including but not limited to any
advance payments made in connection with the Master Power Purchase and Sale
Agreement Confirmation Letter, for a term beginning June 1, 2003, by and between
Tucson Electric Power and PPL EnergyPlus, LLC, as amended by Amendment dated May
6, 2003, prepaid expenses, progress payments and deposits of Seller, rights to
receive prepaid expenses, deposits or progress
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payments relating to the ownership, operation and maintenance of the Purchased
Assets, but not including any prepaid expenses or deposits attributable to
Excluded Assets.
"PROJECT" means the 450 MW generating plant located on a site owned by
Seller in Pinal County, Arizona, together with all auxiliary equipment,
ancillary and associated facilities and equipment, electrical transformers,
pipeline and electrical interconnection and metering facilities (whether owned
or leased) that are located at such site, together with all other improvements
that are located at such site.
"PROJECT EMPLOYEE" has the meaning given to it in SECTION 4.21(a).
"PROPERTY TAX RETURN" means any returns, declarations, reports, bills,
claims for refund, information returns or other documents (including any related
or supporting schedules, statements or information) filed or required to be
filed in connection with the determination, assessment or collection of any
Property Taxes or in connection with the administration of any statutes, laws,
rules, regulations, orders or awards of any Governmental Authorities relating to
any Property Taxes.
"PROPERTY TAXES" means any tax, imposition or assessment resulting from
and relating to the assessment of real or personal property by any Governmental
Authority.
"PRORATED DIFFERENCE" has the meaning given to it in SECTION 3.2(c)(ii).
"PURCHASE PRICE" has the meaning given to it in SECTION 3.1.
"PURCHASE PRICE ALLOCATION SCHEDULE" has the meaning given to it in
SECTION 3.6.
"PURCHASED ASSETS" means, subject to the Permitted Liens, all of the
right, title and interest in, to and under the real and personal property,
tangible or intangible, constituting the Project or used principally for
generation purposes in connection with the Project including the following
assets owned by Seller: (i) the Real Property described on Schedule 4.13(a) as
associated with the Project, together with all easements, rights of way and
privileges (including water rights) relating to the Project; (ii) all
inventories of fuels, supplies, materials and spares located on or in transit to
the Real Property on the Closing Date or otherwise held for use principally in
connection with the Project on the Closing Date; (iii) the machinery, equipment,
vehicles, furniture and other personal property located on the Real Property or
held for use principally in connection with the Project on the Closing Date,
including the items of personal property included in Schedule 4.14 as being
associated with the Project, and all Warranty Rights; (iv) the Transferred
Contracts; (v) the Transferred Permits; (vi) the Transferred Intellectual
Property; (vii) all Books and Records; (viii) all financial records relating
primarily to the Purchased Assets, and plant in service, construction work in
process, fuel inventory, spares and materials and supplies in inventory records;
(ix) any emission reduction credits paid for or obtained for the Purchased
Assets; (x) Prepayments; and (xi) all rights, privileges, claims, causes of
action and options against any third parties (including indemnification,
contribution and insurance claims) relating to any Purchased Assets or Assumed
Liabilities.
"PURCHASER" has the meaning given to it in the introduction to this
Agreement.
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"PURCHASER APPROVALS" has the meaning given to it in SECTION 5.3(c).
"PURCHASER INDEMNIFIED PARTIES" has the meaning given to it in SECTION
11.1(a).
"PURCHASER INFORMATION" has the meaning given to it in SECTION 12.5(a).
"PURCHASER MATERIAL ADVERSE EFFECT" means a material adverse effect on (i)
the ability of Purchaser to perform its obligations under this Agreement, (ii)
the validity or enforceability of this Agreement or any of the Ancillary
Agreements, or (iii) the rights or remedies of Seller hereunder or thereunder.
"PURCHASER'S APPLICABLE CONTRACTS" has the meaning given to it in SECTION
9.8(c).
"PURCHASER'S KNOWLEDGE" has the meaning given to it in SECTION 5.4.
"PURCHASER'S NOTICE" has the meaning given to it in SECTION 6.11(b).
"REAL PROPERTY" means the real property of which any of the Project is a
part or on which the Project is located, together with all rights, privileges,
easements and rights-of-way appurtenant thereto and Improvements thereon, as
described in Schedule 4.13(a).
"REAL PROPERTY LEASES" has the meaning given to it in SECTION 4.13(c).
"RECEIVING PARTY" has the meaning given to it in SECTION 12.5(d).
"RECORDS" has the meaning given to it in SECTION 6.14(a).
"RELEASE" means any actual or threatened release, spill, emission,
migration, leaking, pumping, injection, deposit, disposal or discharge of any
Hazardous Materials into the environment, to the extent prohibited under
applicable Environmental Laws.
"REPRESENTATIVES" means, with respect to any Person, such Person's
officers, directors, employees, counsel, accountants, financial advisers,
consultants and other advisers.
"REQUEST DATE" has the meaning given to it in SECTION 3.2(c)(ii).
"RESPONDENT" has the meaning given to it in SECTION 11.6(b).
"S&P" means the Standard & Poor's Rating Group, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor thereto.
"SCHEDULES" means the disclosure schedules prepared by Seller and attached
to this Agreement.
"SELLER" has the meaning given to it in the introduction to this
Agreement.
"SELLER APPROVALS" has the meaning given to it in SECTION 4.3(c).
"SELLER CONSENTS" has the meaning given to it in SECTION 4.3(b).
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"SELLER INDEMNIFIED PARTIES" has the meaning given to it in SECTION
11.1(b).
"SELLER INFORMATION" has the meaning given to it in SECTION 12.5(b).
"SELLER MATERIAL ADVERSE EFFECT" means an effect caused by any event,
circumstance, condition, development, or occurrence, individually or in the
aggregate, that is or is reasonably likely to be materially adverse to the
Business, Purchased Assets or operations, performance or condition (financial or
otherwise) of Seller or the Project, taken as a whole; provided that the
following shall not be considered when determining whether a Seller Material
Adverse Effect has occurred: any effect resulting from (i) any change resulting
from changes in the international, national, regional or local wholesale or
retail markets for electricity; (ii) any change resulting from changes in the
international, national, regional or local markets for any fuel used at the
Project; (iii) any change resulting from changes in the North American,
national, regional or local electricity or gas transmission systems; (iv) any
change in the financial condition or results of operations of Seller caused by
the pending sale of the Purchased Assets to Purchaser; or (v) any actions to be
taken pursuant to or in accordance with this Agreement, excluding any actions
taken by Seller pursuant to the "emergency situations" provision in the last
paragraph of SECTION 6.3.
"SELLER PLANS" has the meaning given to it in SECTION 6.5(c).
"SELLER'S KNOWLEDGE" has the meaning given to it in SECTION 4.4.
"SURVEY" has the meaning given to it in SECTION 6.11(a)(ii)(b).
"SYNTHETIC LEASE TRANSACTION" has the meaning given to it in SECTION 6.15.
"TAX" or "TAXES" means any federal, state, local or foreign income, gross
receipts, ad valorem, sales, transaction privilege or use, employment, social
security, disability, occupation, rent, property, severance, value added,
transfer, capital stock, excise or other taxes, charges, fees, levies or other
assessments imposed by or on behalf of any Taxing Authority, including any
interest or penalty thereon, or any addition thereto.
"TAX RETURN" means any returns, declarations, reports, bills, claims for
refund, information returns (including where permitted or required, any
consolidated, combined or unitary returns) or other documents (including any
related or supporting schedules, statements or information) filed or required to
be filed in connection with the determination, assessment or collection of any
Taxes or in connection with the administration of any statutes, laws, rules,
regulations, orders or awards of any Governmental Authorities relating to any
Taxes.
"TAXING AUTHORITY" means, with respect to any Tax, the Governmental
Authority that imposes such Tax, and the Governmental Authority (if any) charged
with the collection of such Tax for the Governmental Authority that imposes such
Tax.
"TERMINATION DATE" has the meaning given to it in SECTION 10.1(g).
"THRESHOLD AMOUNT" has the meaning given to it in SECTION 11.4(b).
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"TITLE COMMITMENT" has the meaning given to it in SECTION 6.11(a)(i)(A).
"TITLE EXCEPTION DOCUMENTS" has the meaning given to it in SECTION
6.11(a)(i)(B).
"TITLE INSURER" has the meaning given to it in SECTION 6.11(a)(i).
"TITLE OBJECTION" has the meaning given to it in SECTION 6.11(b).
"TORT LIABILITIES" means all Liabilities (other than Environmental
Liabilities) to third parties for personal injury or tort, or similar causes of
action arising out of the Business or the ownership, lease, maintenance or
operation of the Purchased Assets.
"TRANSFER TAXES" means all transfer, sales, transaction privilege, use,
goods and services, value added, documentary, stamp duty, gross receipts,
excise, transfer and conveyance Taxes and other similar Taxes, duties, fees or
charges.
"TRANSFERRED CONTRACTS" means all Contracts to which Seller (or any
Affiliate of Seller) is a party and relating to the Business or by which the
Purchased Assets may be bound (including the Material Contracts but excluding
the Excluded Contracts), subject to receipt of necessary consents and approvals.
"TRANSFERRED INTELLECTUAL PROPERTY" means the Intellectual Property
identified on Schedule 4.18 as "Transferred Intellectual Property," subject to
receipt of necessary consents and approvals, and any plant drawings, equipment
performance data, design criteria or maintenance records collected by the
Seller's data collection or other information technology systems or software and
relating to the Project, whether or not identified on Schedule 4.18 as
"Transferred Intellectual Property."
"TRANSFERRED PERMITS" means the Permits identified on Schedule 4.15 as
"Transferred Permits," subject to receipt of necessary consents and approvals.
"WARRANTY RIGHTS" means warranties against manufacturers or vendors
relating to the Purchased Assets, to the extent that such warranties relate
specifically to the Project, are unexpired as of the Closing and are
transferable, including those warranties set forth on Schedule 4.12(e).
"WATER RIGHTS" has the meaning given to it in SECTION 4.13(s)(i).
"WATER RIGHTS CERTIFICATE" has the meaning given to it in SECTION
4.13(s)(iv).
"WECC" means the Western Electricity Coordinating Council, or its
successor.
"WELFARE BENEFITS" has the meaning given to it in SECTION 6.5(e).
"XXXXX" has the meaning given to it in SECTION 4.13(s)(ii).
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