REDACTED] = CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND MARKED REDACTED. PURCHASE AGREEMENT by and among TRANSENERGIE HQ, INC., TRANSENERGIE U.S. LTD., UNITED CAPITAL INVESTMENTS, INC., HYDRO-QUEBEC, UNITED RESOURCES, INC.,...
EXHIBIT
2.2
EXECUTION
COPY
[REDACTED]
= CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND
MARKED
REDACTED.
by
and among
TRANSENERGIE
HQ, INC.,
TRANSENERGIE
U.S. LTD.,
UNITED
CAPITAL INVESTMENTS, INC.,
HYDRO-QUEBEC,
UNITED
RESOURCES, INC.,
XXXXXXX
& XXXXX INVESTOR SERVICES LIMITED,
XXXXXXX
& XXXXX INFRASTRUCTURE LIMITED,
CROSS-SOUND
CABLE COMPANY LLC
and
BBI
CSC LLC
TABLE
OF CONTENTS
Page
|
ARTICLE
I SALE AND PURCHASE
|
2
|
||
|
1.1
|
Sale
and Purchase
|
2
|
|
|
1.2
|
Purchase
Price
|
2
|
|
|
1.3
|
Repayment
of Loans
|
2
|
|
|
1.4
|
Closing
|
2
|
|
|
1.5
|
3
|
||
|
1.6
|
Deposit
|
3
|
|
|
4
|
|||
|
2.1
|
Organization
and Qualification; Authority; Non-Contravention; Statutory
Approvals
|
4
|
|
|
2.2
|
5
|
||
|
2.3
|
Litigation
|
5
|
|
|
ARTICLE
III REPRESENTATIONS AND WARRANTIES OF THE SELLERS RELATING
TO THE COMPANY
|
5
|
||
|
3.1
|
Organization
and Qualification; Authority; Non-Contravention; Statutory
Approvals
|
6
|
|
|
3.2
|
Subsidiaries;
Equity Interests; Capitalization
|
7
|
|
|
3.3
|
Financial
Statements
|
8
|
|
|
3.4
|
Absence
of Certain Changes or Events; Absence of Undisclosed
Liabilities
|
8
|
|
|
3.5
|
Taxes
|
9
|
|
|
3.6
|
Litigation
|
9
|
|
|
3.7
|
Compliance
With Laws
|
10
|
|
|
3.8
|
Employee
Benefits
|
10
|
|
|
3.9
|
Permits
|
10
|
|
|
3.10
|
Real
Property
|
11
|
|
|
3.11
|
Contracts
|
11
|
|
|
3.12
|
Environmental
Matters
|
12
|
|
|
3.13
|
Intellectual
Property
|
12
|
|
|
3.14
|
Affiliate
Contracts
|
13
|
|
|
3.15
|
Insurance
|
13
|
|
|
3.16
|
Title
to Assets
|
13
|
|
|
3.17
|
Books
and Records
|
13
|
|
|
3.18
|
Brokers
and Finders
|
13
|
|
|
3.19
|
No
Other Representation
|
14
|
|
|
3.20
|
Regulation
as a Utility
|
15
|
|
|
ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF PURCHASER
|
15
|
||
|
4.1
|
Organization
and Qualifications
|
15
|
|
|
4.2
|
Authority;
Non-Contravention; Statutory Approvals
|
15
|
|
|
4.3
|
Financing
|
16
|
|
-
i
-
|
4.4
|
Litigation
|
16
|
|
4.5
|
Investment
Intention; Sufficient Investment Experience; Independent
Investigation
|
17
|
|
4.6
|
Brokers
and Finders
|
17
|
|
4.7
|
Qualified
for Operation
|
17
|
|
ARTICLE
V COVENANTS
|
17
|
|
|
5.1
|
Conduct
of Business
|
17
|
|
5.2
|
Regulatory
Approvals
|
19
|
|
5.3
|
Required
Consents
|
20
|
|
5.4
|
Access
|
20
|
|
5.5
|
Publicity
|
21
|
|
5.6
|
Fees
and Expenses
|
21
|
|
5.7
|
Indemnification
of Directors and Officers
|
22
|
|
5.8
|
Survival
of Affiliate Contracts
|
23
|
|
5.9
|
Further
Assurances
|
23
|
|
5.10
|
Financing
|
23
|
|
5.11
|
Tax
Matters
|
24
|
|
5.12
|
Guaranties
Relating to the Company
|
26
|
|
5.13
|
Supplements
to Sellers Disclosure Schedule
|
26
|
|
5.14
|
Delivery
of Financial Statements
|
27
|
|
5.15
|
Exclusivity
|
27
|
|
5.16
|
O&M
Agreement
|
28
|
|
5.17
|
Company
Guaranty
|
28
|
|
5.18
|
[REDACTED]
|
28
|
|
ARTICLE
VI CONDITIONS TO CLOSING
|
28
|
|
|
6.1
|
Conditions
to the Obligations of the Parties
|
28
|
|
6.2
|
Conditions
to the Obligation of Purchaser
|
28
|
|
6.3
|
Conditions
to the Obligation of the Sellers
|
30
|
|
ARTICLE
VII TERMINATION
|
31
|
|
|
7.1
|
Termination
|
31
|
|
7.2
|
Effect
of Termination
|
32
|
|
ARTICLE
VIII INDEMNIFICATION
|
33
|
|
|
8.1
|
Indemnification
by Sellers
|
33
|
|
8.2
|
Indemnification
by Purchaser
|
33
|
|
8.3
|
Indemnification
Process
|
33
|
|
8.4
|
Limitations
on Claims
|
35
|
|
8.5
|
Characterization
of Indemnification Payments
|
36
|
|
8.6
|
Limitation
on Damages
|
36
|
|
ARTICLE
IX GUARANTEES
|
36
|
|
|
9.1
|
Trans
Guaranty
|
36
|
-
ii
-
|
9.2
|
UCI
Guaranty
|
39
|
|
9.3
|
Purchaser
Guaranty
|
41
|
|
ARTICLE
X DEFINITIONS AND INTERPRETATION
|
43
|
|
|
10.1
|
Defined
Terms
|
43
|
|
10.2
|
Definitions
|
45
|
|
10.3
|
Interpretation
|
50
|
|
ARTICLE
XI [REDACTED]
|
51
|
|
|
ARTICLE
XII GENERAL PROVISIONS
|
51
|
|
|
12.1
|
Survival
of Representations, Warranties, Covenants and Agreements
|
51
|
|
12.2
|
Notices
|
52
|
|
12.3
|
Binding
Effect
|
54
|
|
12.4
|
Assignment;
Successors; Third-Party Beneficiaries
|
54
|
|
12.5
|
Amendments;
Waivers; Etc.
|
55
|
|
12.6
|
Entire
Agreement
|
55
|
|
12.7
|
Interpretation;
Schedules
|
55
|
|
12.8
|
Severability
|
55
|
|
12.9
|
Counterparts
|
55
|
|
12.10
|
Governing
Law
|
56
|
|
12.11
|
Venue
|
56
|
|
12.12
|
Waiver
of Jury Trial; Waiver of Immunity
|
56
|
|
12.13
|
Obligations
of Sellers Several and Not Joint
|
56
|
|
12.14
|
Enforcement
|
56
|
|
12.15
|
No
Right of Set-Off
|
56
|
|
12.16
|
Currency
|
57
|
-
iii
-
SCHEDULES
Sellers
Disclosure Schedule
Purchaser
Disclosure Schedule
|
Schedule
5.1
|
Conduct
of the Company
|
|
Schedule
5.7(a)
|
List
of Persons
|
|
Schedule
5.7(b)
|
List
of Employees, Agents, Directors and Officers
|
|
Schedule
5.8
|
Survival
of Affiliate Contracts
|
|
Schedule
6.2(e)
|
Company
Resignations and Terminations
|
|
Schedule
10.2(c)
|
Company
Knowledge Group
|
|
Schedule
10.2(d)
|
Sellers
Knowledge Group
|
|
Schedule
10.2(e)
|
Purchaser
Knowledge Group
|
-
iv
-
EXHIBITS
|
Exhibit
A
|
Operating
Agreement
|
|
Exhibit
B
|
Form
of Assignment Agreement
|
|
Exhibit
C
|
O&M
Agreement
|
|
Exhibit
D
|
Company
Guaranty
|
|
Exhibit
E
|
Termination
and Release Agreement
|
|
Exhibit
F
|
Form
of LIPA Further Assurances
|
|
Exhibit
G
|
Form
of Estoppel Certificate
|
|
[REDACTED]
|
|
-
v
-
PURCHASE
AGREEMENT (this “Agreement”),
dated
as of November 8, 2005, is entered into by and among TransEnergie HQ, Inc.,
a
company incorporated under the Canada Business Corporations Act (“TEHQ”),
TransEnergie U.S. Ltd., a Delaware corporation (“TEUS”),
United Capital Investments, Inc., a Connecticut corporation (“UCI,”
and,
together with TEHQ and TEUS, the “Sellers,”
and
individually, each a "Seller"),
Cross-Sound Cable Company LLC, a Connecticut limited liability company (the
“Company”),
BBI
CSC LLC, a Delaware limited liability company (“Purchaser”),
Xxxxxxx & Xxxxx Infrastructure Limited (ACN 100 364 234), an Australian
public company, and Xxxxxxx & Xxxxx Investor Services Limited (ACN 099 717
638), acting in its capacity as trustee of Xxxxxxx & Xxxxx Infrastructure
Trust (ARSN 100 375 479) (collectively, the “Purchaser Guarantor”),
Hydro-Quebec, a body politic and corporate, duly incorporated and regulated
by
the Hydro-Quebec Act (R.S.Q., chapter H-5) (“HQ”
or
“Trans
Guarantor”)
and
United
Resources, Inc., a Connecticut corporation (“UCI
Guarantor”).
Each of
Purchaser, the Company and the Sellers are sometimes referred to individually
herein as a “Party”
and
collectively as the “Parties.”
Certain other terms are defined throughout this Agreement and in Section
10.2
hereof.
W
I T N E
S S E T H:
WHEREAS,
the Sellers collectively own all of the issued and outstanding membership
interests of the Company (the “Company
Membership Interests”),
with
TEHQ owning one Class A Membership Interest of the Company representing a one
percent (1%) ownership percentage in the Company, TEUS owning 74 Class B
Membership Interests of the Company representing a seventy-four percent (74%)
ownership percentage in the Company, and UCI owning 25 Class B Membership
Interests of the Company representing a twenty-five percent (25%) ownership
percentage in the Company; and
WHEREAS,
concurrently with the consummation of the transactions contemplated by this
Agreement, Purchaser and the Sellers shall amend and restate the Operating
Agreement of the Company in its entirety (such amended and restated agreement,
a
form of which is attached as Exhibit
A
hereto,
the “Operating
Agreement”),
to
admit Purchaser as the sole member of the Company and
to
effect the withdrawal of the Sellers as members of the Company; and
WHEREAS,
pursuant to that certain Loan Agreement, dated as of February 27, 2003, as
amended by the First Amended Loan Agreement, dated as of February 28, 2005
(the
“Loan
Agreement”),
by
and among the Company, HQ, and UIL Holdings Corporation, a Connecticut
corporation (“UIL”),
HQ
and UIL have loaned [REDACTED] to the Company, including
principal and interest through the date hereof, as evidenced by the Notes (as
defined in the Loan Agreement); and
WHEREAS,
on or prior to the Closing and in connection with this Agreement and the
transactions contemplated hereby, the Parties intend the Company to discharge
all of the
-
1
-
NOW,
THEREFORE, in consideration of the mutual promises, covenants, representations
and warranties made in this Agreement and of the mutual benefits to be derived
therefrom, the Parties agree as follows:
ARTICLE
I
SALE
AND PURCHASE
1.1 Sale
and Purchase.
Upon
the terms and subject to the conditions of this Agreement, at the Closing,
Purchaser shall purchase from each Seller, and each Seller shall sell to
Purchaser, all of the Company Membership Interests owned by such Seller, free
and clear of any and all Liens, which in the aggregate constitute all of the
Company Membership Interests issued and outstanding (the
“Transaction”).
1.2 Purchase
Price.
The
aggregate consideration to be paid by Purchaser in respect of the purchase
of
the Company Membership Interests shall be an amount in cash equal to
$213,000,000, less the amount to be transferred by Purchaser in respect of
the
Loan Agreement pursuant to Section 1.3 below (the “Purchase Price”).
1.3 Repayment
of Loans.
Upon
the terms and subject to the conditions of this Agreement, simultaneous with
the
Closing, Purchaser shall transfer to the Company funds
sufficient to enable the Company to discharge all of the Company's obligations
under Section 2.05(c)(ii) of the Loan Agreement including the principal and
interest on the Notes through the date of the Closing,
such
amounts not to exceed an aggregate of $213,000,000
(the
"Loan Repayment Amount").
Simultaneously with the Closing, the Company shall discharge all of its
obligations under Section 2.05(c)(ii) ofthe Loan Agreement by wire transfer
of
immediately available funds to the bank account or accounts designated by HQ
and
UIL prior to the Closing.
1.4 Closing.
The
closing of the Transaction (the “Closing”) shall take place at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 0000 Xxx Xxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X., 00000, at 10:00 a.m., local time, as soon as practicable,
but
in any event not later than the second (2nd)
Business Day immediately following the date on which the last of
the
-
2
-
conditions
contained in Article VI is fulfilled or waived (except for those conditions
which by their nature can only be fulfilled at the Closing, but subject to
the
fulfillment or waiver of such conditions), or at such other place, time and
date
(the “Closing Date”) as the Parties may agree;
[REDACTED]
1.5 Closing
Deliveries.
At the
Closing:
(a) Purchaser
shall pay to TEHQ an amount in cash equal to one percent (1%) of the Purchase
Price (such amount, the “TEHQ
Purchase Price”)
for
the Company Membership Interests so delivered by TEHQ, by wire transfer of
immediately available funds to the bank account or accounts designated by TEHQ
prior to the Closing.
(b) Purchaser
shall pay to TEUS an amount in cash equal to seventy-four percent (74%) of
the
Purchase Price (such amount, the “TEUS
Purchase Price”)
for
the Company Membership Interests so delivered by TEUS, by wire transfer of
immediately available funds to the bank account or accounts designated by TEUS
prior to the Closing.
(c) Purchaser
shall pay to UCI an amount in cash equal to twenty-five percent (25%) of the
Purchase Price (such amount, the “UCI
Purchase Price”)
for
the Company Membership Interests so delivered by UCI, by wire transfer of
immediately available funds to the bank account or accounts designated by UCI
prior to the Closing.
(d) Each
Seller shall deliver an Assignment Agreement to Purchaser transferring all
Company Membership Interests held by such Seller to Purchaser, in form and
substance attached hereto as Exhibit
B
(each,
an “Assignment
Agreement”),
and
duly executed by such Seller. A copy of each Assignment Agreement shall be
delivered to the Company to serve as written notice of the sale of the Company
Membership Interests. In addition, each Seller shall surrender to the Company
for registration of transfer all certificates evidencing such Seller’s Company
Membership Interests, which shall be marked “Cancelled”, and the Company shall
issue a new certificate evidencing the Company Membership Interests to
Purchaser.
(e) The
Company shall discharge all of its obligations under Section 2.05(c)(ii) of
the
Loan Agreement by wire transfer of immediately available funds to the bank
account or accounts designated by HQ and UIL prior to the Closing.
(f) Each
Party shall deliver the other documents and agreements required to be delivered
by it pursuant to Article
VI
hereof.
1.6 Deposit
Simultaneously
with the execution of this Agreement, Purchaser shall deposit into escrow with
The Bank of New York, as escrow agent (the "Escrow
Agent")
an
amount equal to $10,000,000 (such deposit, plus any interest earned thereon
from
(and including) the date hereof to (but excluding) the Closing Date or date
of
earlier termination of this Agreement being referred to as the "Deposit")
pursuant to the escrow agreement (the "Escrow
Agreement")
being
executed in connection herewith. At the Closing, the Deposit shall be
transferred by the Escrow
-
3
-
Agent
to
the Sellers, pro rata, based on their respective Percentage Shares and applied
against the Purchase Price. [REDACTED]
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE SELLERS
Except
as
disclosed on the Sellers Disclosure Schedule, each of the Sellers, severally
and
not jointly, represents and warrants, as to itself only, to Purchaser as follows
in this Article
II,
[REDACTED]:
2.1 Organization
and Qualification; Authority; Non-Contravention; Statutory
Approvals.
(a) Organization
and Qualification.
Such
Seller is duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization.
(b) Authority.
Such
Seller has full corporate power and authority to enter into this Agreement
and
the Transaction Documents to which it is or will be a party, and, subject to
receipt of the Seller Required Statutory Approvals, to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by such Seller of this Agreement and the Transaction Documents
to
which such Seller is or will be a party, the performance of its obligations
hereunder and thereunder and the consummation by such Seller of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
requisite corporate action on the part of such Seller, and no other corporate
proceedings or approvals on the part of such Seller are necessary to authorize
this Agreement or the Transaction Documents or to consummate the transactions
contemplated hereby or thereby. This Agreement and the Transaction Documents
to
which such Seller is or will be a party have been duly authorized, and this
Agreement has been, and the Transaction Documents to which such Seller is or
will be a party, have been or will be prior to the Closing, duly executed and
delivered by such Seller and, assuming the due authorization, execution and
delivery hereof by each other Party, constitutes, or will constitute at or
prior
to Closing, the legal, valid and binding obligation of such Seller, enforceable
against such Seller in accordance with their respective terms, except as limited
by Laws affecting the enforcement of creditors’ rights generally or by general
equitable principles.
(c) Non-contravention.
Such
Seller’s execution and delivery of this Agreement and the Transaction Documents
to which it is or will be a party, and the performance of its obligations
hereunder and thereunder does not, and the consummation of the transactions
contemplated hereby and thereby will not, result in any Violation of, or result
in the creation of any Lien upon any of such Seller’s Company Membership
Interests pursuant to any provision of: (i) the Organizational Documents of
such
Seller (subject to obtaining the third party Consents set forth in Section
2.1(c)
of the
Sellers Disclosure Schedule (the “Seller
Required Consents”));
(ii)
any lease, mortgage, indenture, note, bond, deed of trust, or other instrument
or agreement of any kind to which it is a party or by which it may be bound
(subject to obtaining the Seller Required Consents); or (iii) any Law, Permit
or
Governmental Order applicable to it (subject to obtaining the Seller Required
Statutory Approvals), other than, in the case of clauses (ii) and (iii)
above,
-
4
-
any
such
Violation or Lien which would not reasonably be expected to have, individually
or in the aggregate, a Seller Material Adverse Effect on such Seller or a
Company Material Adverse Effect.
(d) Statutory
Approvals.
Except
for the filings or approvals (i) set forth in Section
2.1(d)
of the
Sellers Disclosure Schedule (the “Seller
Required Statutory Approvals”)
and
(ii) as may be required due to the regulatory or corporate status of Purchaser
or Purchaser Guarantor, no Material Consent of any Governmental Entity is
required to be made or obtained by such Seller in connection with the execution
and delivery of this Agreement and the Transaction Documents or the consummation
by such Seller of the transactions contemplated hereby or thereby.
2.2 Right
and Title to Company Membership Interests.
The
Sellers are the only members of the Company, with TEHQ owning one Class A
Membership Interest of the Company representing a one percent (1%) ownership
percentage in the Company, TEUS owning 74 Class B Membership Interests of the
Company representing a seventy-four percent (74%) ownership percentage in the
Company and UCI owning 25 Class B Membership Interests of the Company
representing a twenty-five percent (25%) ownership percentage in the Company.
The Company Membership Interests have been duly authorized and validly issued
and constitute one hundred percent (100%) of the outstanding Equity Interests
of
the Company. Such Seller holds the Company Membership Interest owned by it
free
and clear of any and all Liens, other than those Liens imposed by the terms
of
the operating agreement of the Company, as currently in effect. Upon completion
of the Closing, such Seller shall have conveyed to the Purchaser the Company
Membership Interests required by this Agreement to be conveyed to the Purchaser
at the Closing, free and clear of any and all Liens.
2.3 Litigation.
There
is no action, claim, suit or proceeding at law or in equity (including, without
limitation, Governmental Entity investigations, proceedings or audits) pending
or, to the Knowledge of such Seller, threatened against such Seller that, if
adversely determined, would reasonably be expected to have, individually or
in
the aggregate, a Seller Material Adverse Effect on such Seller or a Company
Material Adverse Effect. Subject to obtaining the Seller Required Statutory
Approvals, there are no Governmental Orders of or by any Governmental Entity
applicable to such Seller except for such that would not reasonably be
expected
to have, individually or in the aggregate, a Seller Material Adverse Effect
on
such Seller or a Company Material Adverse Effect.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF
THE
SELLERS RELATING TO THE COMPANY
Except
as
disclosed on the Sellers Disclosure Schedule and except for any actions
permitted by Section
5.1
of this
Agreement, each of the Sellers, severally and not jointly, represents and
warrants to Purchaser as follows in this Article
III,
[REDACTED]:
-
5
-
3.1 Organization
and Qualification; Authority; Non-Contravention; Statutory
Approvals.
(a) Organization
and Qualification.
The
Company is duly organized, validly existing and in good standing under the
laws
of the State of Connecticut. The Company Subsidiary is duly organized, validly
existing and in good standing under the laws of the State of New York. Each
of
the Company and the Company Subsidiary has full limited liability company power
and authority to own, lease and operate its assets and properties and to conduct
its business as presently conducted. The Company and the Company Subsidiary
are
each duly qualified to do business and is in good standing as a foreign limited
liability company in all jurisdictions in which such qualification is necessary
under applicable Law as a result of the conduct of its business or the ownership
of its properties, except for those jurisdictions where failure to have such
power and authority or to be so qualified or in good standing would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(b) Authority.
The
Company has full limited liability company power and authority to enter into
this Agreement and the Transaction Documents to which it is or will be a party,
and, subject to receipt of the Company Required Statutory Approvals, to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by the Company of this Agreement and the Transaction
Documents to which it is or will be a party, the performance of its obligations
hereunder and thereunder and the consummation by the Company of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
requisite action on the part of the Company, and no other proceedings or
approvals on the part of the Company are necessary to authorize this Agreement
and the Transaction Documents or to consummate the transactions contemplated
hereby or thereby. This Agreement and the Transaction Documents to which the
Company is or will be a party have been duly authorized, and this Agreement
has
been, and the Transaction Documents to which the Company is or will be a party,
have been or will be at or prior to Closing, duly executed and delivered by
the
Company and, assuming the due authorization, execution and delivery hereof
by
each other Party, constitutes, or will constitute at or prior to Closing, the
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with their respective terms, except
as
limited by Laws affecting the enforcement of creditors’ rights generally or by
general equitable principles.
(c) Non-contravention.
The
Company’s execution and delivery of this Agreement and the Transaction Documents
to which it is or will be a party, and the performance of its obligations
hereunder and thereunder does not, and the consummation of the transactions
contemplated hereby and thereby will not, result in any Violation of, or
result
in the creation of any Lien upon any of the properties or assets of the Company
pursuant to any provision of: (i) the Organizational Documents of the Company
or
the Company Subsidiary (subject to obtaining the third-party Consents set
forth
in Section
3.1(c)
of the
Sellers Disclosure Schedule (the “Company
Required Consents”));
(ii)
any lease, mortgage, indenture, note, bond, deed of trust, or other instrument
or agreement of any kind to which the Company or the Company Subsidiary is
a
party or by which the Company or the Company Subsidiary may be bound (subject
to
obtaining the Company Required Consents and the Seller Required Consents);
or
(iii) any Law, Permit or Governmental Order applicable to the Company or
the
Company Subsidiary (subject to
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obtaining
the Seller Required Statutory Approvals and the Company Required Statutory
Approvals), other than in the case of clauses (ii) and (iii) above, any such
Violation or Lien which would not reasonably be expected to have, individually
or in the aggregate a Company Material Adverse Effect.
(d) Statutory
Approvals.
Except
for the filings or approvals (i) set forth in Section
3.1(d)
of the
Sellers Disclosure Schedule (the “Company
Required Statutory Approvals”)
and
(ii) as may be required due to the regulatory or corporate status of Purchaser
or Purchaser Guarantor, no Material Consent of any Governmental Entity is
required to be made or obtained by the Company or the Company Subsidiary in
connection with the execution and delivery of this Agreement and the Transaction
Documents or the consummation by the Company of the transactions contemplated
hereby or thereby.
3.2 Subsidiaries;
Equity Interests; Capitalization.
(a) Company
Subsidiary.
Cross-Sound Cable Company New York LLC, a New York limited liability company
(the “Company
Subsidiary”),
is
the sole Subsidiary of the Company. All of the Equity Interests of the Company
Subsidiary are wholly owned directly by the Company, and are owned free and
clear of all Liens, other than Permitted Liens. All of the issued and
outstanding Equity Interests in the Company Subsidiary have been duly authorized
and validly issued.
(b) No
Other Equity Interests.
The
Company does not own, directly or indirectly, any Equity Interests in any Person
other than the Company Subsidiary.
(c) Capitalization.
The
Sellers collectively own all of the outstanding membership interests of the
Company. Except as set forth in Section
3.2(c)
of the
Sellers Disclosure Schedule and except as provided for in the Organizational
Documents of the Company or the Company Subsidiary, there are no:
(i) subscriptions,
options, warrants, calls, conversion, exchange, purchase right or other written
contracts, rights, agreements or commitments of any kind obligating,
directly or indirectly, the Company or the Company Subsidiary to issue,
transfer, sell or otherwise dispose of, or cause to be issued, transferred,
sold
or otherwise disposed of, any Equity Interests of the Company or the Company
Subsidiary or any securities convertible into or exchangeable for any such
Equity Interests;
(ii) agreements,
limited liability company agreements, partnership agreements, voting trusts,
proxies or other agreements, instruments or understandings to which the Company
or the Company Subsidiary is a party, or by which the Company or the Company
Subsidiary is bound, relating to the voting of any shares of the Equity
Interests of the Company or the Company Subsidiary; or
(iii) dividends,
distributions or other amounts that have been declared and payable or in
arrears
and there exists no preemptive or similar right in respect of any such Equity
Interests.
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3.3 Financial
Statements.
(a) The
Company has provided to Purchaser copies of the audited consolidated balance
sheets of the Company as of December 31, 2004 and 2003 and the related
consolidated statements of operations, changes in members’ equity and cash flows
for the years then ended (the “Audited
2004 Financial Statements”).
Except as set forth on Section
3.3(a)
of the
Sellers Disclosure Schedule, the Audited 2004 Financial Statements fairly
present, in all material respects, the financial position of the Company as
of
December 31, 2004 and 2003, the results of its operations, the changes in its
members’ equity and its cash flows for the years then ended in conformity with
GAAP consistently applied.
(b) The
Company has provided to Purchaser copies of the unaudited consolidated balance
sheets of the Company as of June 30, 2005 and the related unaudited consolidated
statements of operations and cash flows for the six-month period then ended
(the
“Interim
Financial Statements”).
Except as set forth on Section
3.3(b)
of the
Sellers Disclosure Schedule, the Interim Financial Statements have been prepared
on a basis consistent with the Audited 2004 Financial Statements (subject to
the
absence of footnotes) and fairly present (subject to normal year-end audit
adjustments, which are not expected to have, individually or in the aggregate,
a
Company Material Adverse Effect) in all Material respects the financial
condition
of the Company, results of its operations and the changes in cash flows for
the
reporting period presented.
(c) Except
as
set forth on Section
3.3(c)
of the
Company Disclosure Schedule, at the Closing, neither the Company nor the Company
Subsidiary shall have any indebtedness for borrowed money.
(d) [REDACTED]
3.4 Absence
of Certain Changes or Events; Absence of Undisclosed Liabilities.
(a) Since
June 30, 2005 through the date hereof, except as set forth in Section
3.4(a)
of the
Sellers Disclosure Schedule, other than in connection with the transactions
contemplated by this Agreement, neither the Company nor the Company Subsidiary,
has taken any of the actions set forth in Sections
5.1(b)
through
5.1(n)
and
Section
5.1(p),
that,
if taken after the execution and delivery of this Agreement, would require
the
consent of Purchaser pursuant to Section
5.1.
(b) Except
as
set forth on Section
3.4(b)
of the
Sellers Disclosure Schedule, since June 30, 2005, there has not been any
change,
event, condition, circumstance, occurrence or development which has had,
or
would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(c) Since
June 30, 2005, neither the Company nor the Company Subsidiary has incurred
any
Liability that has had, or would reasonably be expected to have, individually
or
in the aggregate, a Company Material Adverse Effect.
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8
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3.5 Taxes.
Except
as set forth in Section 3.5 of the Sellers Disclosure
Schedule:
(i) each
of
the Company and the Company Subsidiary has (A) timely filed (or there has been
filed on its behalf) with the appropriate Governmental Entity all Tax Returns
required to have been filed by it, and all such Tax Returns were true, accurate
and complete in all material respects when filed and (B) duly paid in full
or
made provision in accordance with GAAP (or there has been paid or provision
has
been made on its behalf) for the payment of all Taxes shown as due or payable
on
such Tax Returns;
(ii) no
audits
or other administrative proceedings or court proceedings are, as of the date
hereof, pending with regard to any Taxes or Tax Returns of the Company or the
Company Subsidiary;
(iii) neither
the Company nor the Company Subsidiary has waived the applicable statute of
limitations for the assessment or collection of any Taxes;
(iv) there
are
no Liens for Taxes on any assets of the Company or the Company Subsidiary,
except to the extent of statutory Liens existing for any Taxes accruing but
not
yet due and payable or which are being contested in good faith by appropriate
proceedings;
(v) the
Company has qualified as, and has been treated as, a partnership for United
States federal income tax purpose at all times since the date of its formation
on September 27, 2000;
(vi) the
Company Subsidiary has qualified as, and been treated as, a disregarded entity
separate from its owner for United States federal income tax purposes at all
times since the date of its formation on September 26, 2000; and
(vii) the
unpaid Taxes of the Company and the Company Subsidiary do not exceed the
Reserve
for Tax Liability set forth on the balance sheet as of June 30, 2005 and
will
not exceed that reserve as adjusted for the passage of time through the Closing
Date in accordance with past custom and practice of the Company and the Company
Subsidiary; and
(viii) the
Company has delivered to Purchaser correct and complete copies of all Tax
Returns of the Company or the Company Subsidiary.
3.6 Litigation.
Except
as set forth in Section 3.6 of the Sellers Disclosure Schedule, there is
no action, claim, suit or other proceeding at law or in equity (including,
without limitation, Governmental Entity investigations, proceedings or audits)
pending or, to the Knowledge of the Sellers and the Company, threatened against
the Company or the Company Subsidiary or affecting the assets or properties
of
the Company or the Company Subsidiary that, if adversely determined, would
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
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3.7 Compliance
With Laws.
(a) Except
as
set forth in Section
3.7(a)
of the
Sellers Disclosure Schedule, neither the Company nor the Company Subsidiary
has
been given written notice of or been charged with any Violation of, or, to
the
Knowledge of the Sellers and the Company, is in Violation of or is under
investigation with respect to any Violation of, any Law or Governmental Order,
except in each case for Violations which would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect.
All
Material notices, consents, registrations, compliance filings and periodic
reports to be filed by the Company or the Company Subsidiary with the Federal
Energy Regulatory Commission, New York State Public Service Commission,
Connecticut Department of Public Utility Control, ISO-New England Inc., New
York
Independent System Operator, Connecticut Department of Environmental Protection,
New York State Department of Environmental Conservation, U.S. Army Corps of
Engineers, Connecticut Siting Council, City of New Haven, and New York State
Office of General Services required to be filed and necessary for the operation
of its business as currently conducted have been filed by the Company or the
Company Subsidiary, as applicable.
(b) This
Section
3.7
does not
relate to tax matters, which are instead the subject of Section
3.5,
employee benefits matters, which are instead the subject of Section
3.8,
Company
Permits, which are instead the subject of Section
3.9,
or
(except to the extent set forth in the final sentence of Section
3.7(a))
environmental matters, which are instead the subject of Section
3.12.
3.8 Employee
Benefits.
Neither
the Company nor the Company Subsidiary maintains any bonus, incentive or
deferred compensation, pension, retirement, profit-sharing, savings, employment,
consulting, compensation, stock purchase, stock option, phantom stock or other
equity-based compensation, severance pay, termination, change-in-control,
retention, salary continuation, vacation, sick leave, disability, death benefit,
group insurance, hospitalization, medical, dental, life, loan, educational
assistance or other fringe benefit plans, programs, agreements and arrangements
for the benefit of any employee or former employee of the Company
or the Company Subsidiary. Neither the Company nor the Company Subsidiary
employs any persons who would be considered employees for purposes of
ERISA.
3.9 Permits.
(a) Except
as
set forth in Section
3.9(a)
of the
Sellers Disclosure Schedule, each of the Company and the Company Subsidiary
has
all Permits that are necessary for it to own, lease and operate its assets
and
properties and conduct its operations in the manner in which they are presently
conducted, other than any such Permits the failure of which to have would
not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect (collectively, “Company
Permits”).
Except as set forth in Section
3.9(a)
of the
Sellers Disclosure Schedule, each Company Permit held by the Company and
the
Company Subsidiary is in full force and effect other than any failure to
be in
full force and effect which would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. The
Company
and the Company Subsidiary are in compliance with the terms of the Company
Permits, except failures so to comply which would not reasonably be expected
to
have, individually or in the aggregate, a Company Material Adverse Effect.
The
Company has
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10
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not
received any written notice of any modification, suspension or cancellation
of
any of the Company Permits, threatened or otherwise, except where the
modification, suspension or cancellation of any of the Company Permits,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Company Material Adverse Effect.
(b) This
Section
3.9
does not
relate to environmental matters, which are instead the subject of Section
3.12.
3.10 Real
Property
(a) Section
3.10(a)
of the
Sellers Disclosure Schedule lists
all
real property leases to which the Company or the Company Subsidiary is a party
(the “Leased
Real Property”).
Section
3.10(a)
of the
Sellers Disclosure Schedule lists all real property owned by the Company or
the
Company Subsidiary (the “Owned
Real Property”).
Section
3.10(a)
of the
Sellers Disclosure Schedule lists all easements benefiting the Company or the
Company Subsidiary (the “Easements”).
(b) Except
as
would not reasonably be expected to have, individually or in the aggregate,
a
Company Material Adverse Effect, each of the Company and the Company Subsidiary
has good and valid title to, or a valid leasehold interest in (or has analogous
property rights under applicable Law), all Owned Real Property, the Easements
and the Leased Real Property, as the case may be, used by it free and clear
of
all Liens, other than Permitted Liens.
(c) Neither
the Company nor the Company Subsidiary has received written notice of a
proceeding in eminent domain or other similar proceedings affecting any of
the
Owned Real Property, the Easements or the Leased Real Property that would
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
3.11 Contracts.
(a) Set
forth
in Section
3.11(a)
of the
Sellers Disclosure Schedule is, as of the date hereof, a list of all agreements
and contracts to which the Company or the Company Subsidiary is a party or
by
which any of their respective properties or assets are bound (the agreements
and
contracts set forth in Section
3.11(a)
of the
Sellers Disclosure Schedule are referred to herein as the “Company
Contracts”):
(b) The
Company has made available to Purchaser complete and correct copies of all
Company Contracts. Except as set forth in Section
3.11(b)(i)
of the
Sellers Disclosure Schedule, each Company Contract is the valid, binding
and enforceable obligation of the Company or the Company Subsidiary party
thereto and, to the Knowledge of the Company, of each other party thereto,
in
each case (x) except as limited by Laws affecting the enforcement of creditors'
rights generally or by general equitable principles and (y) with such exceptions
as would not reasonably be expected to have, individually or in the aggregate,
a
Company Material Adverse Effect. Each of the Company and the Company Subsidiary
has complied with its obligations under each Company Contract to which it
is a
party, except for any failures to comply which (A) have been consented to
or
waived, directly or indirectly, by the counterparty or counterparties thereto
or
(B) would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect. Except as set forth in Section
3.11(b)(ii)
of
the
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Sellers
Disclosure Schedule, neither the Company nor the Company Subsidiary is in breach
or default under any Company Contract, which breach or default has not been
waived, and, to the Knowledge of the Company, no other party to any Company
Contract is in breach or default, except in each case, for any breach or default
that would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect.
3.12 Environmental
Matters.
Except
as set forth in Section 3.12 of the Sellers Disclosure Schedule, or as
would not reasonably be expected to have, individually or in the aggregate,
a
Company Material Adverse Effect:
(a) to
the
Knowledge of the Company, the Company and the Company Subsidiary are in
compliance with all applicable Environmental Laws, including having and
complying with the terms and conditions of all Permits required pursuant to
applicable Environmental Laws;
(b) neither
the Company nor the Company Subsidiary (i) has received from any Governmental
Entity any written notice of violation of, alleged violation of, non-compliance
with, or Liability or potential Liability pursuant to, any Environmental Law,
other than notices with respect to matters that have been resolved and for
which
the Company or the Company Subsidiary has no further obligations outstanding
or
(ii) is subject to any outstanding Governmental Order, “consent order” or other
agreement with regard to any violation, noncompliance or Liability under any
Environmental Law;
(c) to
the
Knowledge of the Company, no judicial proceeding or governmental or
administrative action is pending under any applicable Environmental Law pursuant
to which the Company or the Company Subsidiary is a party; and
(d) to
the
Knowledge of the Company, no Hazardous Substances have been Released into
the
soil, surface water, sediments or ground water at, on, or under any of the
Company’s or the Company Subsidiary’s current facilities or have been abandoned
at such facilities, (i) such that the Company or the Company Subsidiary would
be
obligated to remove, remediate or otherwise respond to Releases of such
Hazardous Substances pursuant to any Environmental Law or (ii) that would
reasonably be expected to result in claims against the Company or the Company
Subsidiary by other Persons under any Environmental Law (including claims
for
damage or injury to persons, property or natural resources).
Notwithstanding
any of the representations and warranties contained elsewhere in this Agreement,
all environmental matters shall be governed exclusively by this Section
3.12.
3.13 Intellectual
Property.
(a) (i)
the
Company
and the Company Subsidiary own, or have the right to use, all patents, patent
rights (including patent applications and licenses), know-how, trade secrets,
trademarks (including trademark applications),
licenses, trademark rights, trade names, trade name rights, service marks,
service xxxx rights, copyrights and other proprietary intellectual property
rights (collectively, “Intellectual
Property”)
used
in and necessary for the conduct of the businesses of the Company and the
Company Subsidiary as currently conducted; (ii) to the Knowledge of the Company,
the use of the Intellectual Property used in the businesses
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of
the
Company and the Company Subsidiary as currently conducted does not infringe
or
otherwise violate the Intellectual Property rights of any third party; (iii)
to
the Knowledge of the Company, no third party is challenging, infringing or
otherwise violating any right of the Company or the Company Subsidiary in any
Intellectual Property necessary for the conduct of the businesses of the Company
and the Company Subsidiary as currently conducted; and (iv) neither the Company
nor the Company Subsidiary has received any written notice of any pending claim
that Intellectual Property used in and necessary for the conduct of the
businesses of the Company and the Company Subsidiary as currently conducted
infringes or otherwise violates the Intellectual Property rights of any third
party.
3.14 Affiliate
Contracts.
Section
3.14
of the
Sellers Disclosure Schedule contains a true and complete list of each written
agreement or contract as of the date hereof between (i) the Company or the
Company Subsidiary, on one hand and (ii) a Seller or any Affiliate thereof
(other than the Company and the Company Subsidiary) on the other (collectively,
the “Affiliate Contracts”).
3.15 Insurance.
All
existing insurance policies of the Company and the Company Subsidiary are in
full force and effect, all insurance premiums due thereon have been paid in
full
when due and no written notice of cancellation, non renewal or termination,
or
any written notice threatening cancellation, non renewal or termination, has
been received by the Company or the Company Subsidiary. Set forth in Section
3.15 of the Sellers Disclosure Schedule is a list of all policies of
insurance (the “Insurance Policies”) under which any of the Company’s or
the Company Subsidiary’s assets or business activities are covered, including
for each such policy the type of policy, the name of the insured, the term
of
the policy, a description of the limits of such policy, the basis of coverage
and the deductibles. The Company has made available to Purchaser copies of
the
Insurance Policies together with riders and amendments thereto or, in the case
of
such policies which have been recently renewed or are currently in the process
of being renewed, such other documentation evidencing such policies. The Company
is in compliance with the terms and conditions of the Insurance Policies, except
failures so to comply which would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect.
3.16 Title
to Assets.
Each of
the Company and the Company Subsidiary has good and valid title to all of
its
Material personal assets and Material personal properties, free and clear
of all
Liens, except for Permitted Liens. The assets, rights and properties owned
by or
leased by the Company and the Company Subsidiary constitute all of the Material
tangible and intangible property used by the Company and the Company Subsidiary
and necessary to the conduct of the Company’s and the Company Subsidiary’s
businesses and operations as it is currently being conducted.
3.17 Books
and Records.
The
books, records and accounts, including financial records, that have been
previously delivered or made available by the Sellers and the Company to
Purchaser are complete and correct copies of such books, records and accounts.
3.18 Brokers
and Finders.
None of
the Sellers, the
Company
or the Company Subsidiary has entered into any agreement or arrangement
entitling any agent, broker, investment banker, financial advisor or other
firm
or Person to any broker’s or finder’s fee or any other
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13
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commission
or similar fee payable by the Company or the Company Subsidiary in connection
with any of the transactions contemplated by this Agreement.
3.19 No
Other Representation.
EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE II AND ARTICLE
III
OR IN ANY OF THE TRANSACTION DOCUMENTS, NONE OF THE SELLERS, THE COMPANY, THE
COMPANY SUBSIDIARY OR THEIR RESPECTIVE AFFILIATES NOR ANY OF THEIR RESPECTIVE
DIRECTORS, MEMBERS OF THE MANAGEMENT COMMITTEE, OFFICERS, EMPLOYEES, CONTROLLING
PERSONS, AGENTS OR REPRESENTATIVES, MAKES OR HAS MADE, AND EACH OF THE SELLERS,
THE COMPANY, THE COMPANY SUBSIDIARY AND THEIR RESPECTIVE AFFILIATES AND ALL
OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, CONTROLLING PERSONS, AGENTS
OR
REPRESENTATIVES HEREBY NEGATE AND DISCLAIM, ANY OTHER REPRESENTATION OR
WARRANTY, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, CONCERNING THE COMPANY
MEMBERSHIP INTERESTS, THE BUSINESS, ASSETS OR LIABILITIES OF THE COMPANY OR
THE
COMPANY SUBSIDIARY, THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY OTHER MATTER.
IN CONNECTION WITH PURCHASER’S INVESTIGATION OF THE COMPANY AND THE COMPANY
SUBSIDIARY, PURCHASER HAS RECEIVED AND MAY CONTINUE TO RECEIVE FROM SELLERS,
THE
COMPANY OR THEIR RESPECTIVE REPRESENTATIVES CERTAIN ESTIMATES, PROJECTIONS
AND
OTHER FORECASTS FOR THE COMPANY AND THE COMPANY SUBSIDIARY AND CERTAIN PLAN
AND
BUDGET INFORMATION. PURCHASER ACKNOWLEDGES THAT THERE ARE UNCERTAINTIES INHERENT
IN ATTEMPTING TO MAKE SUCH PROJECTIONS, FORECASTS, PLANS AND BUDGETS, THAT
PURCHASER IS TAKING FULL RESPONSIBILITY FOR MAKING ITS OWN EVALUATION OF THE
ADEQUACY AND ACCURACY OF ALL ESTIMATES, PROJECTIONS, FORECASTS, PLANS AND
BUDGETS SO FURNISHED TO IT, AND THAT PURCHASER IS NOT RELYING ON ANY ESTIMATES,
PROJECTIONS, FORECASTS, PLANS OR BUDGETS FURNISHED BY SELLERS, THE COMPANY
OR
THEIR RESPECTIVE REPRESENTATIVES, AND PURCHASER SHALL NOT HOLD ANY SUCH PERSON
LIABLE WITH RESPECT THERETO. NEITHER SELLERS NOR THE COMPANY MAKE ANY
REPRESENTATION OR WARRANTY WITH RESPECT TO ANY ESTIMATES, PROJECTIONS,
FORECASTS, PLANS OR BUDGETS. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
PURCHASER ACKNOWLEDGES THAT NONE OF THE SELLERS, THE COMPANY, THE COMPANY
SUBSIDIARY AND THEIR RESPECTIVE AFFILIATES AND NONE OF THEIR RESPECTIVE
DIRECTORS, MEMBERS OF THE MANAGEMENT COMMITTEE, OFFICERS, EMPLOYEES, CONTROLLING
PERSONS, AGENTS OR REPRESENTATIVES HAS MADE, AND SELLERS AND THE COMPANY HEREBY
EXPRESSLY DISCLAIM AND NEGATE, AND PURCHASER HEREBY EXPRESSLY WAIVES, ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT COMMON LAW, BY STATUTE OR
OTHERWISE RELATING TO, AND PURCHASER HEREBY EXPRESSLY WAIVES AND RELINQUISHES
ANY AND ALL RIGHTS, CLAIMS AND CAUSES OF ACTION AGAINST SELLERS, THE COMPANY,
THE COMPANY SUBSIDIARY AND THEIR RESPECTIVE AFFILIATES AND ALL OF THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, SUBSIDIARIES, CONTROLLING PERSONS,
AGENTS OR REPRESENTATIVES (OTHER THAN ANY SUCH RIGHTS, CLAIMS OR CAUSES OF
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14
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ACTION
ARISING OUT OF FRAUD OR INTENTIONAL OR WILLFUL MISCONDUCT OF ANY SUCH PERSONS)
IN CONNECTION WITH, THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY
INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED TO PURCHASER
OR
ITS AFFILIATES OR REPRESENTATIVES PRIOR TO, ON OR AFTER THE DATE HEREOF BY
OR ON
BEHALF OF SELLERS, THE COMPANY AND THE COMPANY SUBSIDIARY. WITHOUT LIMITING
THE
GENERALITY OF THE FOREGOING, REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED
HEREIN MADE BY OR ON BEHALF OF A PARTY ARE MADE SOLELY AND EXCLUSIVELY BY OR
ON
BEHALF OF A PARTY AND NOT BY OR ON BEHALF OF SUCH PARTY’S REPRESENTATIVES
(INCLUDING EMPLOYEES) OR ANY OTHER PERSON.
3.20 Regulation
as a Utility.
The
Company is not regulated as an electric distribution company by the State of
Connecticut, and the Company Subsidiary is regulated as a public utility or
public service company (or similar designation) by the State of New
York.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Except
as
set forth in the Purchaser Disclosure Schedules, Purchaser represents and
warrants to each Seller as follows in this Article
IV:
4.1 Organization
and Qualification.
Purchaser is a limited liability company, duly formed, validly existing and
in
good standing under the laws of Delaware
and
has
full limited liability company power and authority to own, lease and operate
its
assets and properties and to conduct
its business as presently conducted. Purchaser is duly qualified to do business
and in good standing as a foreign limited liability company in all jurisdictions
in which such qualification is necessary under applicable Law as a result of
the
conduct of its business or the ownership of its properties, except for those
jurisdictions where failure to be so qualified or in good standing would not
reasonably be expected to have, individually or in the aggregate, a Purchaser
Material Adverse Effect.
4.2 Authority;
Non-Contravention; Statutory Approvals.
(a) Authority.
Purchaser has full limited liability company power and authority to enter
into
this Agreement and the Transaction Documents to which it is or will be a
party
and, subject to receipt of the Purchaser Required Statutory Approvals, to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by Purchaser of this Agreement and the Transaction
Documents to which it is or will be a party, the performance of its obligations
hereunder and thereunder and the consummation by Purchaser of the transactions
contemplated hereby and thereby have been duly and validly authorized by
all
requisite action on the part of Purchaser, and no other proceedings or approvals
on the part of Purchaser are necessary to authorize this Agreement and the
Transaction Documents or to consummate the transactions contemplated hereby
or
thereby. This Agreement and the Transaction Documents to which Purchaser
is or
will be a
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15
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party
have been duly authorized, and this Agreement has been, and the Transaction
Documents to which Purchaser is or will be a party, have been or will be at
or
prior to Closing, duly executed and delivered by Purchaser and, assuming the
due
authorization, execution and delivery hereof by each other Party, constitutes,
or will constitute at or prior to Closing, the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with their
respective terms, except as limited by Laws affecting the enforcement of
creditors’ rights generally or by general equitable principles.
(b) Non-contravention.
Except
as set forth in Section
4.2(b)
of the
Purchaser Disclosure Schedule, the execution and delivery of this Agreement
by
Purchaser does not, and the consummation of the transactions contemplated hereby
will not, result in any Violation, or result in the creation of any Lien upon,
any of the properties or assets of Purchaser, pursuant to any provision of
(i)
the Organizational Documents of Purchaser; (ii) any lease, mortgage, indenture,
note, bond, deed of trust, or other instrument or agreement of any kind to
which
Purchaser is a party or by which Purchaser may be bound (subject to obtaining
the third-party Consents set forth in Section
4.2(b)
of the
Purchaser Disclosure Schedule (the “Purchaser
Required Consents”));
or
(iii) any Law, Permit or Governmental Order applicable to Purchaser (subject
to
obtaining the Purchaser Required Statutory Approvals), other than in the case
of
clauses (ii) and (iii) above, for any such Violation or Lien which would not
reasonably be expected to have, individually or in the aggregate, a Purchaser
Material Adverse Effect.
(c) Statutory
Approvals.
Except
for the filings or approvals (i) set forth in Section
4.2(c)
of the
Purchaser Disclosure Schedule (the “Purchaser
Required Statutory Approvals”)
and
(ii) as may be required due to the regulatory or corporate status of the Sellers
or the Company, no Material Consent of any Governmental Entity is required
to be
made or obtained by Purchaser in connection with the execution and delivery
of
this Agreement or the consummation by Purchaser of the transactions contemplated
hereby.
4.3 Financing.
Purchaser has, and will have at the Closing available cash and credit capacity,
either in its accounts, through binding and enforceable credit arrangements
or
borrowing facilities or otherwise, sufficient to (i) pay the TEHQ Purchase
Price, the TEUS Purchase Price and the UCI Purchase Price at the Closing,
(ii)
transfer to the Company funds sufficient to enable the Company to discharge
all
of the Company’s obligations under Section 2.05(c)(ii) of the Loan Agreement
immediately prior to the Closing and (iii) perform all of its obligations
hereunder including, without limitation, its obligations under Section
5.10 (the “Financing Arrangements”), all without any distributions
from the Company in excess of the amounts transferred pursuant to clause
(ii)
above, and neither the Company nor the Company Subsidiary will be required
to
assume or become liable for such Financing Arrangements prior to the Closing.
A
description of the Financing Arrangements is set forth in Section 4.3 of
the Purchaser Disclosure Schedule. Prior to the date of this Agreement,
Purchaser has provided the Sellers with copies of all documentation relating
to
the Financing Arrangements, including any commitment letters for any of the
foregoing, which Purchaser intends to utilize to make the payments described
in
this Section 4.3.
4.4 Litigation.
Except
as set forth in Section 4.4 of the Purchaser Disclosure Schedule, there
is no action, claim, suit or proceeding at law or in equity pending or, to
the
Knowledge of Purchaser, threatened against Purchaser or any of its Subsidiaries
or affecting any of their respective assets or properties that, if adversely
determined, would reasonably be expected to have, individually or in the
aggregate, a Purchaser Material Adverse Effect. There
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are
no
Governmental Orders of or by any Governmental Entity applicable to Purchaser
or
any of its Subsidiaries except for such that would not reasonably be expected
to
have, individually or in the aggregate, a Purchaser Material Adverse
Effect.
4.5 Investment
Intention; Sufficient Investment Experience; Independent
Investigation.
Purchaser is acquiring the Company Membership Interests for its own account,
for
investment purposes only and not with a view to the distribution (as such term
is used in Section 2(a)(11) of the Securities Act of 1933, as amended (the
“Securities Act”)) thereof in a manner not permitted by the Securities
Act. Purchaser understands that the Company Membership Interests have not been
registered under the Securities Act and, if and to the extent the Securities
Act
applies, cannot be sold unless subsequently registered under the Securities
Act
or an exemption from such registration is available and pursuant to registration
or qualification (or exemption therefrom) under applicable state securities
laws. Purchaser has such knowledge and experience in financial and business
matters that it is capable of evaluating the Company and the merits and risks
of
an investment in the Company Membership Interests. Purchaser has been given
adequate opportunity to examine all documents provided by, conduct due diligence
and ask questions of, and to receive answers from, the Sellers, the Company
and
their respective representatives concerning the Company and Purchaser’s
investment in the Company Membership Interests. Purchaser acknowledges and
affirms that it has completed its own independent investigation, analysis and
evaluation of the Company and the Company Subsidiary, that it has made all
such
reviews and inspections of the business, assets, results of operations and
condition (financial or otherwise) of the Company and the Company Subsidiary
as
it has deemed necessary or appropriate, and that in making its decision to
enter
into this Agreement and to consummate the transactions contemplated hereby
it
has relied on its own independent investigation, analysis, and evaluation of
the
Sellers’ representations and warranties set forth in Article II and
Article III.
4.6 Brokers
and Finders.
Purchaser has not entered into any agreement or arrangement entitling any
agent,
broker, investment banker, financial advisor or other firm or Person to any
broker’s or finder’s fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except with
respect
to an Affiliate of Purchaser, the fees of which shall be paid entirely by
Purchaser.
4.7 Qualified
for Operation.
Purchaser is qualified to obtain any Permits necessary for the operation
by
Purchaser of the Company or the Company Subsidiary as of the Closing in the
same
manner as the Company or the Company Subsidiary are currently operated, and
employs or utilizes personnel with the technical expertise and training
necessary to operate the business of the Company and the Company Subsidiary
in
compliance with such Permits and in a safe and reliable manner.
ARTICLE V
COVENANTS
5.1 Conduct
of Business.
After
the date hereof and prior to the Closing or earlier termination of this
Agreement, except as set forth in Schedule 5.1 and except (i) as
contemplated in or permitted by this Agreement, (ii) as may be required to
comply with any Company
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Contract,
(iii) in connection with necessary or prudent repairs due to breakdown or
casualty, or other actions taken in response to a business emergency or other
unforeseen operational matters, (iv) in connection with necessary or prudent
maintenance consistent with manufacturer’s recommendations and warranties, (v)
as required by applicable Law, or (vi) to the extent Purchaser shall otherwise
consent, which decision regarding consent shall be made promptly and which
consent shall not be unreasonably withheld, conditioned or delayed, each Seller
shall exercise the voting, governance and contractual powers available to it
to
cause the Company and the Company Subsidiary to, and the Company
shall:
(a) conduct
its businesses in the ordinary and usual course in substantially the same manner
as heretofore conducted and, to the extent consistent therewith, use reasonable
best efforts to preserve its business organization intact and maintain its
existing relations and goodwill with customers, suppliers, creditors, lessors,
employees and business associates;
(b) not
(i)
amend its Organizational Documents; (ii) split, combine or reclassify its
outstanding Equity Interests; (iii) in the case of the Company only, declare,
set aside or pay any dividend payable in cash, stock or property in respect
of
any Equity Interests other than dividends paid to the Company; or (iv)
repurchase, redeem or otherwise acquire Equity Interests or any securities
convertible into or exchangeable or exercisable for any Equity
Interests;
(c) not
issue, sell, or dispose of any shares of, or securities convertible into or
exchangeable or exercisable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any of its Equity Interests;
(d) not
incur
any
indebtedness other than (i) borrowings in the ordinary course of business
or
(ii) borrowings under existing credit facilities as such facilities may be
amended or replaced, and with respect to (i) or (ii) in an aggregate amount
not
to exceed [REDACTED];
(e) not,
other than in the ordinary and usual course of business, make any commitments
for or make capital expenditures in excess of [REDACTED]
singularly
or [REDACTED] in the aggregate;
(f) not,
other than in the ordinary and usual course of business make any acquisition
of,
or investment in, assets or stock of any other Person;
(g) not,
other than in the ordinary and usual course of business, sell, lease, license,
encumber or otherwise dispose of any of its assets;
(h) not
change
any Material financial or Material Tax accounting method, policies, practices
or
election, except as required by GAAP or applicable Law;
(i) not
adopt
a plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization (other than the
Transaction);
(j) not
settle or compromise any Material litigation requiring payment of an amount
in
excess of the reserves established therefor, or waive, release or assign
any
material
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claims,
in each case other than in an amount not to exceed
[REDACTED]
singularly or [REDACTED] in
the
aggregate;
(k) not
(i)
amend or modify any Company Contract in any material respect, (ii) terminate
any
Company Contract or (iii) enter into any contract or agreement that would have
been required to be set forth in Section
3.11(a)
of the
Sellers Disclosure Schedule had it been entered into prior to the date of this
Agreement, in each case, other than in the ordinary and usual course of
business;
(l) not
establish any bonus, incentive or deferred compensation, pension, retirement,
profit-sharing, savings, employment, consulting, compensation, stock purchase,
stock option, phantom stock or other equity-based compensation, severance pay,
termination, change-in-control, retention, salary continuation, vacation, sick
leave, disability, death benefit, group insurance, hospitalization, medical,
dental, life, loan, educational assistance or other fringe benefit plans,
programs, agreements and arrangements for the benefit of any employee or former
employee of the Company or the Company Subsidiary;
(m) not
employ any persons who would be considered employees for purposes of
ERISA;
(n) not,
unless not available on commercially reasonable terms, fail to maintain
insurance with financially responsible or nationally recognized insurers in
such
amounts and against such risks and losses as are consistent with the insurance
maintained by it in the ordinary and usual course of business; provided that
the
Company shall notify Purchaser promptly of any changes to any such policy or
any
intention to make a claim thereunder;
(o) notify
Purchaser promptly of any Material damage to any of the Company’s or the Company
Subsidiary’s assets and any actions taken with respect to such damage;
and
(p) not
commit to take any of the actions set forth in subsections (b)-(n) of this
Section 5.1.
5.2 Regulatory
Approvals.
(a) Regulatory
Approvals.
Each
Party shall cooperate and use reasonable best efforts to prepare and file
as
soon as practicable all applications, notices, petitions, filings and other
documents necessary to obtain, and shall use reasonable best efforts to obtain,
the Seller Required Statutory Approvals, Company Required Statutory Approvals
and the Purchaser Required Statutory Approvals. The Parties further agree
to use
reasonable best efforts (i) to take any act, make any undertaking or
receive any clearance or approval required by any Governmental Entity or
applicable Law and (ii) to satisfy any conditions imposed by any
Governmental Entity in all Final Orders, in each case in order to consummate
the
transaction contemplated hereby as soon as reasonably possible. Each of the
Parties shall (i) respond as promptly as practicable to any inquiries or
requests received from any Governmental Entity for additional information
or
documentation and (ii) not enter into any agreement with any Governmental
Entity that would reasonably be expected to adversely affect the Parties’
ability to consummate the transactions contemplated by this Agreement, except
with the prior consent of
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the
other
Parties (which shall not be unreasonably withheld or delayed). Each of the
Parties shall use reasonable best efforts to avoid or eliminate each and every
impediment under any antitrust, competition, or trade or energy regulation
law
that may be asserted by any Governmental Entity with respect to the transactions
contemplated hereby so as to enable the Closing Date to occur as soon as
reasonably possible. The actions required by the immediately preceding sentence
shall include proposing, negotiating, committing to and effecting, by consent
decree, hold separate order or otherwise, the sale, divestiture or disposition
of such assets or businesses of Purchaser or its Affiliates (including their
respective Subsidiaries) or agreeing to such limitations on its or their conduct
or actions as may be required in order to obtain the Seller Required Statutory
Approvals, the Company Required Statutory Approvals and the Purchaser Required
Statutory Approvals as soon as reasonably possible, to avoid the entry of,
or to
effect the dissolution of, any injunction, temporary restraining order or other
order in any suit or proceeding, which would otherwise have the effect of
preventing or delaying the Closing Date, and defending through litigation on
the
merits, including appeals, any claim asserted in any court by any Person;
provided,
however,
that
the undertaking of any such action does not result in a Company Material Adverse
Effect or a Purchaser Material Adverse Effect. Each Party shall use reasonable
best efforts to prepare and make all necessary filings as expeditiously as
reasonably practicable and thereafter to make promptly any other required
submissions with respect to this Agreement and the transactions contemplated
hereby required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended (the “HSR
Act”).
Prior
to the Closing, Purchaser will: (i) determine the need for a filing under the
Connecticut Transfer Act (C.G.S. § 22a-134 et seq.) (the “CTA”)
in
connection with the transactions contemplated by this Agreement, and (ii) if
Purchaser determines that the CTA is applicable to the transaction, Purchaser
or
a “party associated with the transfer of the establishment” as defined in Conn.
Gen. Stat. 22a-134(9) will prepare and make any filings required under the
CTA,
(iii) Purchaser or a party associated with the
transfer of the establishment will execute the forms as the certifying party,
and will thereafter be solely responsible for compliance (including for any
penalties resulting from non-compliance) with the CTA; provided,
however,
that,
in the case of clauses (ii) and (iii) above, any such “party associated with the
transfer of the establishment” shall be an Affiliate of Purchaser.
(b) Communications.
The
Parties shall promptly provide the other Parties with copies of all filings
made
with, and inform one another of any communications received from, any
Governmental Entity in connection with this Agreement and the transactions
contemplated hereby, except as prohibited by applicable Law.
5.3 Required
Consents.
The
Sellers and the Company, shall use reasonable best efforts to obtain the
Company
Required Consents and the Seller Required Consents. Purchaser shall use
reasonable best efforts to obtain the Purchaser Required Consents. The Parties
shall cooperate with each other in connection with the foregoing.
5.4 Access.
After
the date hereof and prior to the Closing, the Sellers and the Company agree
that
the Company and the Company Subsidiary shall permit Purchaser and its respective
employees, counsel, accountants and other representatives to have reasonable
access, upon reasonable advance notice, during regular business hours, to
the
assets, employees (including employees of the Sellers who have responsibility
for the Company or the Company Subsidiary), accountants, properties, books
and
records, accounts, businesses and operations to the extent relating to the
Company and the Company Subsidiary as Purchaser may reasonably
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request,
provided, however, that in no event shall the Sellers, the Company
or the Company Subsidiary be obligated to provide any access or information
if
the Sellers or the Company determine, in good faith after consultation with
counsel, that providing such access or information may violate applicable Law,
cause either Seller, the Company or the Company Subsidiary to breach a
confidentiality obligation to which it is bound or jeopardize any recognized
privilege available to either Seller, the Company or the Company Subsidiary.
Purchaser agrees to indemnify and hold the Sellers, the Company and the Company
Subsidiary harmless from any and all claims and liabilities, including costs
and
expenses for loss, injury to or death of any representative of Purchaser, and
any loss, damage to or destruction of any property owned by the Sellers, the
Company or the Company Subsidiary or others (including claims or liabilities
for
loss of use of any property) resulting directly or indirectly from the action
or
inaction of any of the employees, counsel, accountants, advisors and other
representatives of Purchaser during any visit to the business or property sites
of the Company or the Company Subsidiary prior to the Closing Date, whether
pursuant to this Section 5.4 or otherwise. During any visit to the
business or property sites of the Company or the Company Subsidiary Purchaser
shall, and shall cause its employees, counsel, accountants, advisors and other
representatives accessing such properties to, comply with all applicable Laws
and all of the Company’s and the Company Subsidiary’s safety and security
procedures and conduct itself in a manner that could not be reasonably expected
to interfere with the operation, maintenance or repair of the assets of the
Company or the Company Subsidiary. Each Party shall, and shall cause its
Affiliates and representatives to, hold in strict confidence all documents
and
information concerning the other furnished to it in connection with the
transactions contemplated by this Agreement in accordance with the
Confidentiality Agreement.
5.5 Publicity.
Prior
to the Closing, none of the Sellers, the Company or Purchaser or any of their
respective Affiliates shall, without the express written approval of the
Sellers, the Company and Purchaser, make any press release or other public
announcements concerning the transactions contemplated by this Agreement,
except
as and to the extent that any such Party shall be so obligated by applicable
Law
or pursuant to any listing agreement or rules of any national securities
exchange, in which case the other Parties shall be advised and the Parties
shall
use their reasonable best efforts to cause a mutually agreeable release or
announcement to be issued.
5.6 Fees
and Expenses
(a) Purchaser
Expenses.
Subject
to Section
7.2
of this
Agreement, Purchaser shall pay all out-of pocket fees, costs and expenses,
including fees and expenses of counsel, financial advisors and accountants,
incurred by Purchaser incident to or in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, whether or not the
Closing
shall have occurred.
(b) Sellers’
Expenses.
The
Sellers shall pay, in proportion to each Seller’s Percentage Share, all
out-of-pocket fees, costs and expenses, including fees and expenses of counsel,
financial advisors and accountants, incurred by the Sellers incident to or
in
connection with the negotiation, preparation, execution, delivery and
performance of this Agreement and the
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consummation
of the transactions contemplated hereby, whether or not the Closing shall have
occurred.
(c) Other
Transaction Expenses.
Notwithstanding anything to the contrary set forth in this Agreement, (i)
Purchaser shall pay any out-of-pocket fees, costs and expenses incurred in
connection with obtaining all Purchaser Required Statutory Approvals, (ii)
the
Sellers shall pay, in proportion to each Seller’s Percentage Share, any
out-of-pocket fees, costs and expenses incurred in connection with obtaining
all
Seller Required Statutory Approvals and Company Required Statutory Approvals
(other than, in each case, the Parties’ legal fees and expenses which are the
subject of Sections
5.6(a)
and
5.6(b))
and
(iii) Purchaser shall pay any out-of-pocket fees, costs and expenses incurred
in
connection with any filings made under the HSR Act.
5.7 Indemnification
of Directors and Officers.
(a) Indemnification.
From
and after the Closing Date, Purchaser shall cause the Company, to the fullest
extent permitted under applicable Law, to indemnify and hold harmless (and
advance funds in respect of each of the foregoing) (i) each present and former
employee, agent, director, officer or member of the Management Committee of
the
Company, the Company Subsidiary and, to the extent appointed by the Company
or
the Company Subsidiary, the Persons identified on Schedule
5.7(a),
and
(ii) each present and former employee, agent, director or officer of the Sellers
identified on Schedule
5.7(b)
and, to
the extent appointed by the Company or the Company Subsidiary, the Persons
identified on Schedule
5.7(a)
(each
such person described in clauses (i) and (ii), together with such person’s
heirs, executors or administrators, an “Indemnified
Person”
and
collectively, the “Indemnified
Persons”)
against any costs
or
expenses (including advancing attorneys' fees and expenses in advance of the
final disposition of any claim, suit, proceeding or investigation to each
Indemnified Person to the fullest extent permitted by law), judgments, fines,
losses, claims, damages, liabilities and amounts paid in settlement in
connection with any actual or threatened claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative (an
“Action”),
arising out of, relating to or in connection with any action or omission by
such
Indemnified Person in his or her capacity as an employee, agent, director,
member of the Management Committee or officer of the Company, the Company
Subsidiary or any such Person identified on Schedule
5.7(a)
(or, in
the case of the individuals listed on Schedule
5.7(b),
the
Sellers) occurring or alleged to have occurred whether before or after the
Closing Date (including acts or omissions in connection with such person's
service as an officer, director or other fiduciary of any other Person if such
service was at the request or for the benefit of the Company or the Company
Subsidiary). In the event of any such Action, Purchaser shall cooperate with
the
Indemnified Person in the defense of any such Action; provided,
however,
that
Purchaser shall not be obligated to advance funds as provided in this
Section
5.7(a)
to the
extent that (i) any Indemnified Person is entitled to advancement of funds
or is
being defended pursuant to the terms of any indemnity arrangement (including
policies of insurance) provided by the Sellers or any of their respective
Affiliates, (ii) [REDACTED] or(iii)
Purchaser has assumed the defense of any such Action and is directly funding
the
payment therefor.
(b) Survival
of Indemnification.
To the
fullest extent not prohibited by Law, from and after the Closing Date, all
rights to indemnification now existing in favor of the
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Indemnified
Persons with respect to their activities as such prior to, on or after the
Closing Date, as provided in the Company’s and the Company Subsidiary’s
respective Organizational Documents or indemnification agreements in effect
on
the date of such activities or otherwise in effect on the date hereof, shall
survive the Closing and shall continue in full force and effect for a period
of
not less than six (6) years from the Closing Date, provided that,
in the
event any claim or claims are asserted or made within such survival period,
all
such rights to indemnification in respect of any claim or claims shall continue
until final disposition of such claim or claims.
(c) [REDACTED]
(d) Successors.
In the
event that, after the Closing Date, the Company or Purchaser or any of their
respective successors or assigns (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or a substantial portion
of its properties and assets to any
Person, then, and in either such case, proper provisions shall be made so that
the successors and assigns of the Company or Purchaser, as the case may be,
shall assume the obligations set forth in this Section
5.7.
(e) Benefit.
The
provisions of this Section
5.7
are
intended to be for the benefit of, and shall be enforceable by, each Indemnified
Person, his or her heirs, executors or administrators and his or her other
representatives.
5.8 Survival
of Affiliate Contracts.
Except
as set forth in Schedule 5.8 and except as agreed to in writing by the
Sellers and Purchaser, all Affiliate Contracts, including any agreements
or
understandings (written or oral) with respect thereto, shall survive the
Closing
without any further action on the part of the parties thereto or the
Parties.
5.9 Further
Assurances.
Each of
the Sellers, the Company and Purchaser agrees that, from time to time before
and
after the Closing Date, they will execute and deliver, and the Company shall
cause the Company Subsidiary to execute and deliver, or use reasonable best
efforts to cause their other respective Affiliates to execute and deliver
such
further instruments, and take, or cause their respective Affiliates to take,
such other action, as may be reasonably necessary to carry out the purposes
and
intents of this Agreement. Purchaser, the Company and each of the Sellers
agree
to use reasonable best efforts to refrain from taking any action which could
reasonably be expected to prevent or materially delay the consummation of
the
Transaction. From time to time after the Closing Date, each of the Sellers
agrees to cooperate with Purchaser upon the reasonable request of Purchaser
in
making available to Purchaser information in its possession relating to the
conduct of the business of the Company or the Company Subsidiary prior to
the
Closing; provided, however, that Sellers shall not be obligated to
make any disclosure that (i) is prohibited by applicable Law, (ii) may cause
any
of the Sellers to breach a confidentiality obligation to which it is bound
or
(iii) would reasonably be expected to result in the loss of any applicable
legal
privilege.
5.10 Financing.
Notwithstanding anything contained in this Agreement to the contrary, Purchaser
expressly acknowledges and agrees that Purchaser’s obligations hereunder are not
conditioned in any manner whatsoever upon Purchaser obtaining any financing.
Purchaser shall keep the Sellers apprised of all developments or changes
relating to the Financing Arrangements and the financing contemplated thereby.
In the event that the Financing
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Arrangements
shall cease to be in full force and effect at any time or the lenders party
thereto shall indicate any unwillingness to provide the financing contemplated
thereby, or for any reason Purchaser otherwise no longer believes in good faith
that it will be able to obtain the financing contemplated thereby, then
Purchaser shall promptly notify the Sellers and use best efforts to obtain
replacement financing arrangements or commitment letters as soon as reasonably
practicable. Purchaser shall not, or permit any of its Subsidiaries or
Affiliates to, without the prior written consent of the Sellers, take any action
or enter into any transaction, including any merger, acquisition, joint venture,
disposition, lease, contract or debt or equity financing that would reasonably
be expected to impair, delay or prevent the financing contemplated by the
Financing Arrangements.
5.11 Tax
Matters
(a) Transfer
Taxes.
Purchaser shall be responsible for the timely payment of, and shall indemnify
and hold harmless the Sellers from and against, all Transfer Taxes, if any,
arising out of or in connection with the transactions contemplated by this
Agreement. Purchaser shall prepare and file all necessary documentation and
Tax
Returns with respect to such Transfer Taxes; provided,
however,
that
the Sellers shall cooperate with Purchaser and take any action reasonably
requested by Purchaser which does not cause the Sellers to incur any
unreasonable cost or inconvenience in order to minimize such Transfer
Taxes.
(b) Tax
Returns.
Except
as otherwise provided in Section
5.11(a)
above,
(i) the
Sellers shall prepare and file or cause to be prepared and filed when due
all
Tax Returns that are required to be filed by or with respect to the Company
or
the Company Subsidiary for taxable years or periods ending on or before the
Closing Date, and the Sellers shall remit or cause to be remitted any Taxes
due
in respect of such Tax Returns. All such Tax Returns shall be prepared in
a
manner consistent with past practice.
(ii) Purchaser
shall prepare and file or cause to be prepared and filed when due all Tax
Returns that are required to be filed by or with respect to the Company or
the
Company Subsidiary for taxable years or periods ending after the Closing
Date,
and Purchaser shall remit or cause to be remitted any Taxes due in respect
of
such Tax Returns. All such Tax Returns shall be prepared in a manner consistent
with past practice. Any Tax Return required to be filed by Purchaser relating
to
any Straddle Period shall be submitted (with copies of any relevant schedules,
work papers and other documentation then available) to Sellers for Sellers’
approval not less than ten (10) days prior to the due date (including
extensions) for the filing of such Tax Return, which approval shall not be
unreasonably withheld, conditioned or delayed.
(iii) upon
the
written request of Purchaser setting forth in detail the computation of the
amount owed, the Sellers shall pay to Purchaser, no later than two (2) days
prior to the due date for the applicable Tax Return, the Taxes for which
the
Sellers are liable pursuant to this Section
5.11
but
which are payable with any Tax Return to be filed by Purchaser with respect
to
any Straddle Period. Such written request must be
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submitted
to Sellers not less than ten (10) days prior to the due date (including
extensions) for such payment.
(c) Computation
of Tax Liabilities.
To the
extent permitted or required by Law or administrative practice, the taxable
year
of the Company and the Company Subsidiary which includes the Closing Date shall
be treated as closing on (and including) the Closing Date. Where it is necessary
for purposes of this Section
5.11(c)
to
apportion between the Sellers and Purchaser the Taxes of the Company, the
Company Subsidiary or with respect to the assets of the Company or the Company
Subsidiary for a Straddle Period (which is not treated under the immediately
preceding sentence as closing on the Closing Date), such liability shall be
apportioned between the period deemed to end at the close of the Closing Date,
and the period deemed to begin at the beginning of the day following the Closing
Date on the basis of an interim
closing of the books, except that Taxes (such as real or personal property
Taxes) imposed on a periodic basis shall be allocated on a daily
basis.
(d) Assistance
and Cooperation.
After
the Closing Date, each of the Sellers and Purchaser shall (and shall cause
their
respective Affiliates to) (i) assist the other Party in preparing any Tax
Returns which such other Party is responsible for preparing and filing in
accordance with Section
5.11(b),
and
(ii) reasonably cooperate in preparing for any audits of, or disputes with,
any
Governmental Entity regarding any Tax Returns of the Company or the Company
Subsidiary.
(e) Indemnification
by the Sellers.
The
Sellers shall indemnify Purchaser from and against and in respect of any
and all
losses incurred by Purchaser, which may be imposed on, sustained, incurred,
or
suffered by or assessed against Purchaser, directly or indirectly, to the
extent
relating to or arising out of any liability for Taxes of the Company, the
Company Subsidiary or with respect to the assets of the Company or the Company
Subsidiary for any taxable year or period that ends on or before the Closing
Date and, with respect to any Straddle Period, the portion of such Straddle
Period deemed to end on and include the Closing Date.
(f) Indemnification
by Purchaser.
Purchaser shall indemnify the Sellers from and against and in respect of
(i) any
and all losses incurred by the Sellers, which may be imposed on, sustained,
incurred, or suffered by or assessed against the Sellers, directly or
indirectly, to the extent relating to or arising out of any liability for
Taxes
of the Company, the Company Subsidiary or with respect to the assets of the
Company or the Company Subsidiary for any taxable year or period that begins
after the Closing Date and, with respect to any Straddle Period, the portion
of
such Straddle Period beginning the day after the Closing Date and (ii) any
liability pursuant to Section
5.11(a)
for
Transfer Taxes arising out of or in connection with the transactions
contemplated by this Agreement.
(g) Dispute
Resolution.
In the
event that the Sellers and Purchaser disagree as to the amount or calculation
of
any payment to be made under this Agreement relating to Taxes, or the
interpretation or application of any provision under this Agreement relating
to
Taxes, the Parties shall attempt in good faith to resolve such dispute. If
such
dispute is not resolved within sixty (60) days following the receipt of written
notice by one Party from the other in respect of a dispute, the Sellers and
Purchaser shall jointly retain a nationally recognized law or
accounting
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firm,
which firm is independent of both Parties (the “Independent
Firm”),
to
resolve the dispute; provided, however, that neither Party shall be entitled
to
dispute any individual Tax item that involves an amount of less than $250,000.
If the Parties are not able to agree upon a firm to serve as the Independent
Firm within ten (10) days after the end of the aforementioned sixty (60)-day
period, then the Parties shall retain JAMS-Endispute of New York, New York
to
select such a firm. The Independent Firm shall act as an arbitrator to resolve
all points of disagreement and its decision shall be final and binding upon
all
Parties involved. Such arbitration process shall have a discovery period of
no
more than 30 days, a hearing period of no more than 7 days, and a final decision
shall be rendered no more than 30 days after the end of the hearing period.
Following the decision of the Independent Firm, the Seller and Purchaser shall
each take or cause to be taken any action necessary to implement the decision
of
the Independent Firm. The fees and
expenses relating to the Independent Firm shall be borne fifty percent (50%)
by
the Sellers, on the one hand, and fifty percent (50%) by Purchaser, on the
other
hand.
5.12 Guaranties
Relating to the Company.
Purchaser acknowledges that HQ has provided (i) that certain Guaranty Agreement,
dated as of November 28, 2000 by and between HQ and the Long Island Lighting
Company, doing business as LIPA, a New York corporation (the “LIPA
Guaranty”), and (ii) that certain Guaranty Agreement, dated as of March 16,
2001, executed by HQ in favor of Tallmadge Brothers, Inc., a Connecticut
corporation, Briarpatch Enterprises Inc, a Connecticut corporation, and Fair
Haven Clam & Lobster, LLC, a Connecticut limited liability company (the
“Shellfish Guaranty” and, together with the LIPA Guaranty, the “HQ
Guarantees”), copies of which have been provided to Purchaser.
[REDACTED]
5.13 Supplements
to Sellers Disclosure Schedule.
The
Sellers may, from time to time prior to the Closing by written notice to
Purchaser, supplement the Sellers Disclosure Schedule or add a schedule or
section to the Sellers Disclosure Schedule with a corresponding reference
to be
added in this Agreement (such added Schedule to be deemed a supplement
hereunder) to disclose any matter which, if occurring prior to the date hereof,
would have been required to be set forth or described on the Sellers Disclosure
Schedule or to correct any inaccuracy or breach in the warranties made by
the
Sellers in this Agreement. Subject to this Section 5.13, none of such
supplements to the Sellers Disclosure Schedule shall be deemed to cure the
warranties to which such matters relate with respect to satisfaction of the
conditions set forth in Section 6.2(b) hereof or otherwise affect any
other term or condition contained in this Agreement; provided,
however, that unless Purchaser shall have delivered a Breach Notice
contemplated by Section7.1(d) (to the extent Purchaser is entitled
to deliver such Breach Notice pursuant to the terms of this Agreement) within
ten (10) Business Days of the receipt by Purchaser of any supplement to the
Sellers Disclosure Schedule pursuant to this Section 5.13, then Purchaser
shall have waived any and all rights to terminate this Agreement, pursuant
to
Section7.1(d) or otherwise, arising out of or relating to the
contents of such supplement and the resulting breach or breaches of the
warranties and Purchaser shall be deemed to have accepted the contents of
such
supplement for all purposes of this Agreement; and provided,
further, that from and after the Closing, the Sellers shall have
no
liability pursuant to this Agreement or for any matters arising out of or
relating to any of the matters disclosed on the Sellers Disclosure Schedule,
as
supplemented or amended by the Sellers prior to the Closing.
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5.14 Delivery
of Financial Statements.
(a) From
the
date of this Agreement until the Closing, the Company shall deliver to
Purchaser, as soon as practicable after the end of each fiscal quarter and
in
any event within 45 days thereafter (except with respect to the fiscal quarter
most recently ending prior to the date hereof, 45 days after the date hereof),
an unaudited consolidated balance sheet as of the end
of,
and an unaudited consolidated statement of operations, changes in members’
equity and cash flows for such fiscal quarter of the Company, which shall have
been prepared in accordance with the Audited 2004 Financial Statements (except
as relates to the accounting treatment of the LIPA Contracts under EITF 01-8)
and shall fairly present in all material respects the financial position of
the
Company and the results of its operations, the changes in its members’ equity
and its cash flows for each quarter, in all cases subject to audit adjustments
normal in nature and amount and for the absence of notes.
(b) No
later
than the earlier to occur of such date that is (i) fifty-five (55) days
following the end of the current fiscal year of the Company or (ii) three
(3)
Business Days prior to the Closing Date, the Company shall deliver to Purchaser
copies of the audited consolidated balance sheet of the Company as of December
31, 2005 and the related consolidated statement of operations, changes in
members’ equity and cash flows for the year then ended, which shall have been
prepared in accordance with GAAP and shall fairly present, in all material
respects, the financial position of the Company as of December 31, 2005,
the
results of its operations, the changes in its members’ equity and its cash flows
for the year then ended in conformity with GAAP consistently applied (except
as
relates to the accounting treatment of the LIPA Contracts under EITF
01-8).
(c) [REDACTED]
5.15 Exclusivity.
From
and after the date hereof, through the earlier of the Closing Date and the
termination of this Agreement, each of the Sellers agrees (i) that it will
not,
its Subsidiaries will not, and it will not authorize or permit any of its
Subsidiaries or its Subsidiaries’ officers, directors, employees, agents and
representatives (including, without limitation, any investment banker, attorney
or accountant retained by it or any of its subsidiaries or any of the foregoing)
to, directly or indirectly, encourage, initiate or solicit (including by
way of
furnishing information) or take any other action to facilitate any inquiries
or
the making of any proposal or offer (including, without limitation, any proposal
or offer to its shareholders) which constitutes or may reasonably be expected
to
lead to an Alternative Proposal from any person or engage in any discussion
or
negotiations concerning, or provide any non-public information or data to
make
or implement an Alternative Proposal, (ii) that it will, will cause its
Subsidiaries to, immediately cease and cause to be terminated any existing
solicitation, initiation, encouragement, activity, discussions or negotiations
with any parties conducted heretofore with a view of formulating an Alternative
Proposal; and (iii) that it will notify Purchaser orally and in writing of
any
such inquiry, offer or proposals received after the date hereof (including,
without limitation, the terms and conditions of any such proposal and the
identity of the person making it), within 24 hours of the receipt thereof
and
that it shall keep Purchaser informed of the details of any such inquiry,
offer
or proposal.
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5.16 O&M
Agreement.
At the
Closing, the Company and TEUS shall enter into a short-term operation and
maintenance services agreement (the "O&M Agreement") in the form
attached hereto as Exhibit C, and TEUS or any Person to whom TEUS is
permitted to assign the O&M Agreement pursuant to the terms thereof, as the
case may be, will remain a wholly-owned subsidiary of TEHQ during the term
of
the O&M Agreement.. The Company shall cause its insurance program to be in
compliance with the provisions of Section 8.02 of the O&M Agreement
by the Closing.
5.17 Company
Guaranty.
Immediately prior to the Closing, the Company shall enter into the Company
Guaranty in form and substance attached hereto as Exhibit D (the
"Company Guaranty"), and Purchaser hereby acknowledges and agrees to such
action to be taken by the Company.
5.18 [REDACTED]
ARTICLE
VI
CONDITIONS
TO CLOSING
6.1 Conditions
to the Obligations of the Parties.
The
obligations of the Parties to effect the Closing shall be subject to the
satisfaction or waiver (to the extent permitted by Law) by Purchaser and the
Sellers, on or prior to the Closing Date, of each of the following conditions
precedent:
(a) Statutory
Approvals.
The
Seller Required Statutory Approvals, the Company Required Statutory Approvals
and the Purchaser Required Statutory Approvals set forth in Section
6.1(a)
of the
Sellers Disclosure Schedules shall have been obtained.
(b) No
Injunction.
No
statute, rule or regulation shall have been enacted or promulgated by any
Governmental Entity which prohibits the consummation of the transactions
contemplated hereby and there shall be no order or injunction of a court of
competent jurisdiction in effect precluding or prohibiting the consummation
of
the transactions contemplated
hereby; provided,
however,
that
the Parties shall use reasonable best efforts to have any such order or
injunction vacated or lifted.
6.2 Conditions
to the Obligation of Purchaser.
The
obligation of Purchaser to effect the Closing shall be subject to the
satisfaction or waiver by Purchaser on or prior to the Closing Date of each
of
the following conditions:
(a) Performance
of Obligations of the Sellers and the Company.
Each of
the Sellers and the Company shall have performed in all Material respects
its
respective agreements and covenants contained in or contemplated by this
Agreement which are required to be performed by it at or prior to the
Closing.
(b) Representations
and Warranties.
The
representations and warranties of each of the Sellers, the Trans Guarantor
and
the UCI Guarantor set forth in this Agreement shall be true and correct (i)
on
and as of the date hereof and (ii) on and as of the Closing Date with the
same
effect as though such representations and warranties had been made on and
as of
the
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Closing
Date (except for representations and warranties that expressly speak only as
of
a specific date or time which need only be true and correct as of such date
or
time), except in each of cases (i) and (ii) for such failures of representations
and warranties to be true and correct (without giving effect to any materiality
qualification or standard contained in any such representations and warranties)
which would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect or a Seller Material Adverse
Effect.
(c) Company
Required Consents.
The
Company Required Consents set forth in Section
6.2(c)
of the
Sellers Disclosure Schedule shall have been obtained.
(d) Officer’s
Certificate.
Purchaser shall have received a certificate from an authorized officer of each
of the Sellers, dated the Closing Date, to the effect that, to the best of
such
officer’s Knowledge, the conditions set forth in Sections
6.2(a)
and
6.2(b)
have
been satisfied.
(e) Resignations
of Certain Officers and Directors.
Purchaser shall have received the resignations or removals of the officers,
directors and members of the Management Committee and other persons set forth
on
Schedule
6.2(e)
from
their position as officer or director, or other management or employment
position, of the Company or the Company Subsidiary set forth opposite the name
of such officer, director or person on Schedule
6.2(e).
(f) FIRPTA.
Each
Seller, other than TEHQ, shall provide the Purchaser on the Closing Date, duly
executed and acknowledged affidavits of such Seller certifying that it is not
a
foreign person as described in Section 1.1445-2(b)(2) of the Treasury
Regulations. The Purchaser, with respect to TEHQ or any Seller that does not
provide such a certificate, shall withhold taxes as it reasonably determines
is
required under applicable Law.
(g) Operating
Agreement.
The
Company and each of the Sellers shall have executed and delivered the Operating
Agreement, in form and substance attached hereto as Exhibit
A
hereto.
(h) Note.
The
Sellers shall deliver the Note, marked “canceled”, and a Termination and Release
Agreement in the form attached hereto as Exhibit
E,
evidencing the termination of the Loan Agreement, duly executed by the Company,
HQ and UIL.
(i) Assignment
Agreements.
Each
Seller shall have delivered an Assignment Agreement transferring its Company
Membership Interest to Purchaser.
(j) O&M
Agreement.
TEUS
shall have executed and delivered the O&M Agreement, in the form of
Exhibit
C
hereto.
(k) LIPA
Further Assurances.
Purchaser shall have received further assurances from LIPA substantially
in form
and substance attached hereto as Exhibit
F.
(l) Estoppel
Certificate.
Purchaser shall have received from the lessor of each Leased Real Property
an
executed estoppel certificate in form and substance attached hereto as
Exhibit
G.
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(m) Title
Report.
Purchaser shall have received from the Company a title report from a nationally
recognized title insurance company reasonably acceptable to Purchaser setting
forth the status of title to all real property leased by the Company or the
Company Subsidiary.
6.3 Conditions
to the Obligation of the Sellers.
The
obligation of the Sellers to effect the Closing shall be subject to the
satisfaction or waiver by each of the Sellers on or prior to the Closing Date
of
each of the following conditions:
(a) Performance
of Obligations of Purchaser.
Purchaser shall have performed in all Material respects its agreements and
covenants contained in or contemplated by this Agreement which are required
to
be performed by it at or prior to the Closing.
(b) Representations
and Warranties.
The
representations and warranties of Purchaser and Purchaser Guarantor set forth
in
this Agreement shall be true and correct (i) on and as of the date hereof and
(ii) on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except for representations and warranties that expressly speak only as of
a
specific date or time which need only be true and correct as of such date or
time), except in each of cases (i) and (ii) for such failures of representations
and warranties to be true and correct (without giving effect to any materiality
qualification or standard contained in any such representations and warranties)
which would not reasonably be expected to have, individually or in the
aggregate, a Purchaser Material Adverse Effect.
(c) Purchaser
Required Consents.
The
Purchaser Required Consents set forth in Section
6.3(c)
of the
Purchaser Disclosure Schedule shall have been obtained.
(d) Officer’s
Certificate.
Each of
the Sellers shall have received a certificate from an authorized officer of
Purchaser, dated the Closing Date, to the effect that, to the best of such
officer’s Knowledge, the conditions set forth in Sections
6.3(a)
and
6.3(b)
have
been satisfied.
(e) Loan.
Purchaser shall have transferred to the Company the amount required pursuant
to
Section
1.3
of this
Agreement and the Company shall have discharged its obligations
thereunder.
(f) O&M
Agreement.
The
Company shall have executed and delivered the O&M Agreement, in form and
substance attached hereto as Exhibit
C
hereto.
(g) [REDACTED]
(h) Company
Guaranty.
The
Company shall have executed and delivered the Company Guaranty, in form and
substance attached hereto as Exhibit
D
hereto.
(i) [REDACTED]
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TERMINATION
7.1 Termination.
This
Agreement may be terminated at any time prior to the Closing Date:
(a) by
the
mutual written agreement of Purchaser, the Company and each of the
Sellers;
(b) by
Purchaser or the Sellers (acting together), if (i) a statute, rule,
regulation or executive order shall have been enacted, entered or promulgated
prohibiting the consummation of the transactions contemplated hereby or
(ii) an order, decree, ruling or injunction shall have been entered
permanently restraining, enjoining or otherwise prohibiting the consummation
of
the transactions contemplated hereby, and such order, decree, ruling or
injunction shall have become final and non-appealable and the party seeking
to
terminate this Agreement pursuant to this Section
7.1(b)(ii)
shall
have used reasonable best efforts to remove such order, decree, ruling or
injunction;
(c) by
Purchaser or the Sellers (acting together), by written notice, if the Closing
shall not have occurred on or before the date that is five business days after
the last day of the Restatement Period (the “Initial
Termination Date”);
provided,
however,
that
the right to terminate the Agreement under this Section
7.1(c)
shall
not be available to any Party whose failure to fulfill any obligation under
this
Agreement shall have caused, resulted in or contributed to the failure of the
Closing Date to occur on or before such date; and provided,
further,
that if
on the Initial Termination Date the conditions to the Closing set forth in
Section
6.1(a)
and/or
Section
6.1(b)
have not
been fulfilled but all other conditions to the Closing (other than those
conditions that, by their terms, cannot be satisfied until the Closing) have
been fulfilled (or waived) or are capable of being fulfilled by such date that
is sixty (60) days following the Initial Termination Date (the “Final
Termination Date”),
then
no Party shall have the right to terminate this Agreement pursuant to this
Section
7.1(c)
prior to
the Final Termination Date;
(d) by
Purchaser, so long as Purchaser is not then in Material breach of any of
its
representations, warranties, covenants or agreements hereunder, by written
notice to the Sellers, if there shall have been a Material breach of any
representation or warranty of the Sellers or the Company, or a Material breach
of any covenant or agreement of the Sellers hereunder, which breaches would
be
reasonably expected to have, individually or in the aggregate, a Company
Material Adverse Effect, and such breach shall not have been remedied within
thirty (30) days after receipt by the Sellers and the Company of notice in
writing from Purchaser (a “Breach
Notice”),
specifying the nature of such breach and requesting that it be remedied or
Purchaser shall not have received adequate assurance of a cure of such breach
within such thirty-day period or the Sellers shall not have made a capital
contribution to the Company in an amount equal to the expected damages from
such
breach, provided that the Sellers shall have no obligation to make any such
capital contribution pursuant to this Section
7.1(d);
(e) by
the
Sellers (acting together), so long as the Sellers or the Company are not
then in
Material breach of any of their representations, warranties, covenants or
agreements
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hereunder,
by written notice to Purchaser, if there shall have been a Material breach
of
any representation or warranty, or a Material breach of any covenant or
agreement of Purchaser hereunder, which breaches would reasonably be expected
to
have, individually or in the aggregate, a Purchaser Material Adverse Effect,
and
such breach shall not have been remedied within thirty (30) days after receipt
by Purchaser of notice in writing from the Sellers, specifying the nature of
such breach and requesting that it be remedied or the Sellers shall not have
received adequate assurance of a cure of such breach within such thirty-day
period (except in the case of any Material breach by Purchaser
of any
of its obligations under any part of Article
XI
herein,
in which case such cure period shall be three (3) business days after
Purchaser’s receipt of written notice from Sellers);
or
7.2 Effect
of Termination.
No
termination of this Agreement pursuant to Section 7.1 shall be effective
until notice thereof is given to the non-terminating Parties specifying the
provision hereof pursuant to which such termination is made. If validly
terminated pursuant to Section 7.1, this Agreement shall, subject to
Section 12.1 and except as provided in Section 1.6 or this
Section 7.2, become wholly void and of no further force
and effect
without liability to any Party or to any Affiliate, or their respective members
or shareholders, directors, members of the Management Committee, officers,
employees, agents, advisors or representatives, and following such termination
no Party shall have any liability under this Agreement or relating to the
transactions contemplated by this Agreement to any other Party;
providedthat no such termination shall (i) relieve Purchaser, any
Seller or the Company from liability for fraud or any willful or intentional
breach of any provision of this Agreement prior to such termination or (ii)
relieve Purchaser from any liability for any breach of Purchaser's
representations, warranties or covenants contained in Section 4.3 or
Section 5.10 (whether or not such breach is fraudulent, willful or
intentional). Notwithstanding the foregoing, in the event of a termination
by
Purchaser pursuant to Section 7.1(d) due to the willful or intentional
breach by the Sellers of any representation,
warranty, covenant or agreement contained herein, Sellers shall be obligated,
severally and not jointly to pay to Purchasers an amount (the "Breakup
Fee") equal to $5,000,000 to be allocated among the Sellers, pro rata, based
on their respective Percentage Shares, [REDACTED]. In the
event of the termination of this Agreement as provided in Section 7.1,
Purchaser shall redeliver to the Sellers or the Company, as the case may be,
and
will cause its agents to redeliver to the Sellers or the Company, as the case
may be, all documents, workpapers and other materials of the Sellers, the
Company and the Company Subsidiary relating to any of them and the transactions
contemplated hereby, whether obtained before or after the execution hereof
and
Purchaser shall comply with all of its obligations under the Confidentiality
Agreement.
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ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification
by Sellers.
From
and after the Closing Date and subject to the provisions of this Article
VIII and Sections 12.1 and 12.13, the Sellers agree to
indemnify, defend and hold harmless the Purchaser Indemnified Parties from
and
against any and all, subject to the limitations in Sections 8.4,
Liabilities, demands, claims, suits, actions, or causes of action, losses,
costs, expenses, damages and judgments, whether or not resulting from third
party claims, (including reasonable fees and expenses of attorneys and
accountants) (collectively, “Damages”) arising out of or relating to any
inaccuracy or breach of any representation, warranty or covenant of the Sellers
contained herein.
8.2 Indemnification
by Purchaser.
From
and after the Closing Date and subject to the provisions of this Article
VIII and Section 12.1, Purchaser agrees to indemnify, defend and hold
harmless the Seller Indemnified Parties, from and against any and all, subject
to the limitations in Section 8.4:
(a) Damages
arising out of or relating to any inaccuracy or breach of any representation,
warranty or covenant of Purchaser contained herein; and
(b) Damages
arising on or after the Closing Date in connection with or relating to the
business and operation of the Company and the Company Subsidiary, whether
arising out of or relating to conduct occurring prior to, on or after the
Closing Date, other than items for which indemnification is or would be provided
by the Sellers under this Agreement without regard to the limitations thereon
set forth in Section
8.4.
8.3 Indemnification
Process.
(a) A
party
making a claim for indemnification under this Article
VIII
shall
be, for the purposes of this Agreement, referred to as an “Indemnified
Party”
and
a
party against whom such claims are asserted under this Article
VIII
shall
be, for the purposes of this Agreement, referred to as an “Indemnifying
Party”.
All
claims by any Indemnified Party under this Article
VIII
shall be
asserted and resolved as follows:
(b) In
the
event that (i) any action, application, suit, demand, claim or legal,
administrative, arbitration or other alternative dispute resolution proceeding,
hearing or investigation (each, a “Proceeding”)
is
asserted or instituted by any Person other than the Parties or their Affiliates
which could give rise to Damages for which an Indemnifying Party could be
liable
to an Indemnified Party under this Agreement (such Proceeding, a “Third
Party Claim”)
or
(ii) any Indemnified Party under this Agreement shall have a claim to be
indemnified by any Indemnifying Party under this Agreement which does not
involve a Third Party Claim (such claim, a “Direct
Claim”
and,
together with Third Party Claims, “Claims”),
the
Indemnified Party shall, promptly after it becomes aware of a Third Party
Claim,
or facts supporting a Direct Claim, send to the Indemnifying Party a written
notice specifying the nature of such Proceeding and the amount or estimated
amount thereof (which amount or estimated amount shall not be conclusive
of the
final amount, if any, of such Proceeding) (a “Claim
Notice”),
together with
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copies
of
all notices and documents (including court papers) served on or received by
the
Indemnified Party in the case of a Third Party Claim, provided that
a delay
in notifying the Indemnifying Party shall not relieve the Indemnifying Party
of
its obligations under this Article
VIII
except
to the extent that (and only to the extent that) the Indemnifying Party shall
have been prejudiced by such failure to give such notice, in which case the
Indemnifying Party shall be relieved of its obligations under this Article
VIII
to the
extent of such prejudice.
(c) In
the
event of a Third Party Claim, the Indemnifying Party shall have the right to
defend the Indemnified Party against such Third Party Claim and be entitled
to
appoint counsel of the Indemnifying Party’s choice at the expense of the
Indemnifying Party to represent the Indemnified Party in connection with such
Proceeding (in which case the Indemnifying Party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by any
Indemnified Party or any other costs or expenses with respect to the defense
of
a Third Party Claim except as set forth below); provided that
such
counsel is reasonably acceptable to the Indemnified Party. Notwithstanding
an
Indemnifying Party’s election to defend such Third Party Claim and appoint
counsel to represent an Indemnified Party in connection with a Third Party
Claim, an Indemnified Party shall have the right to engage separate counsel,
but
the Indemnifying Party shall bear the reasonable fees, costs and expenses of
such separate counsel only
if
(i) the use of counsel selected by the Indemnifying Party to represent the
Indemnified Party would present such counsel with a conflict of interest or
(ii)
the Indemnifying Party shall not have engaged counsel to represent the
Indemnified Party within a reasonable time after notice of the institution
of
such Third Party Claim; provided that,
notwithstanding such failure to engage counsel within a reasonable time, the
Indemnifying Party shall have the right to assume the defense of such Third
Party Claim by appointment of counsel reasonably acceptable to the Indemnified
Party and shall thereafter cease to be responsible for the fees and expenses
of
separate counsel appointed by the Indemnified Party. Nothing in this
Section
8.3(c)
shall
require the Indemnifying Party to be responsible for the fees and expenses
of
more than one counsel at any time in connection with the defense against a
Third
Party Claim. If requested by the Indemnifying Party, the Indemnified Party
agrees to cooperate with the Indemnifying Party and its counsel in defending
and
contesting any Proceeding which the Indemnifying Party defends, or, if
appropriate and related to the Proceeding in question, in making any
counterclaim against the person asserting the Third Party Claim, or any
cross-complaint against any Person. No Third Party Claim may be settled or
compromised (i) by the Indemnified Party without the prior written consent
of
the Indemnifying Party (which consent shall not be unreasonably withheld or
delayed) or (ii) by the Indemnifying Party without the prior written consent
of
the Indemnified Party (which consent shall not be unreasonably withheld or
delayed), unless, in the case of this clause (ii), the sole relief provided
is
monetary damages that are paid in full by the Indemnifying Party (if such claim
by the Indemnified Party for indemnification is successful). In the event any
Indemnified Party settles or compromises or consents to the entry of any
judgment with respect to any Third Party Claim without the prior written consent
of the Indemnifying Party (except in the event the Indemnifying Party
unreasonably withheld or delayed its consent), each Indemnified Party shall
be
deemed to have waived all rights against the Indemnifying Party for
indemnification under this Article
VIII
with
respect to such Third Party Claim.
(d) In
the
event of a Direct Claim, the Indemnifying Party shall notify the Indemnified
Party within thirty (30) days of receipt of a Claim Notice whether the
Indemnifying Party disputes such Claim. From and after the delivery of a
Claim
Notice under this Agreement,
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34
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at
the
reasonable request of the Indemnifying Party, each Indemnified Party shall
grant
the Indemnifying Party and its representatives reasonable access to the books,
records, employees, representatives and properties of such Indemnified Party
to
the extent reasonably related to the matters to which the Claim Notice relates.
If the Indemnified Party is Purchaser, Purchaser shall cause the Company and
the
Company Subsidiary to grant to the Indemnifying Party the access described
in
the immediately preceding sentence. All such access shall be granted during
normal business hours and shall be granted under conditions which will not
unreasonably interfere with the business and operations of such Indemnified
Party. The Indemnifying Party will not, and shall use its reasonable best
efforts to cause its representatives not to, use (except in connection with
such
Claim Notice) or disclose to any third person other than the Indemnifying
Party’s representatives (except as may be required by applicable Law) any
information obtained pursuant to this Section
8.3(d)
which is
designated as confidential by an Indemnified Party.
8.4 Limitations
on Claims
(a) Liability
Threshold for Indemnified Parties.
Notwithstanding anything in this Article
VIII
to the
contrary, no Purchaser Indemnified Party or Seller Indemnified Party shall
be
entitled to indemnification pursuant to Sections
8.1
or
8.2,
as
applicable, unless and until the
aggregate amount of Damages incurred by such Party for which indemnification
is
available under Sections
8.1
or
8.2,
as
applicable, exceeds an amount equal to $2,500,000 (the “Liability
Threshold”),
and
then, subject to Section
8.4(b),
the
Purchaser Indemnified Parties or the Seller Indemnified Parties, as applicable,
shall be entitled to the benefit of the indemnity under Sections
8.1
or
8.2
as
applicable, only for the portion of any and all Damages that exceed the
Liability Threshold; provided,
however,
that
the provisions of this Section 8.4(a) shall not limit the obligations of the
Sellers under Section 8.1 to the extent any such obligations arise from a breach
of the representation and warranty contained in Section
3.3(d).
(b) Maximum
Liability.
Notwithstanding anything in this Agreement to the contrary, (i) the aggregate
amount of Purchaser’s liability pursuant to this Agreement and the transactions
contemplated hereby (exclusive of Purchaser's obligation to make payment
of the
aggregate consideration pursuant to Section
1.2
and
Section
1.3)
shall
not exceed $115,000,000, (ii) the aggregate amount of TEHQ’s liability
pursuant to this Agreement and the transactions contemplated hereby shall
not
exceed $1,150,000, (iii) the aggregate amount of TEUS’s liability pursuant
to this Agreement and the transactions contemplated hereby shall not exceed
$85,100,000 and (iv) the aggregate amount of UCI’s liability pursuant to this
Agreement and the transactions contemplated hereby shall not exceed
$28,750,000.
(c) Additional
Limitations.
(i) The
amount of any Damages incurred by the Indemnified Party shall be reduced
by the
net amount the Indemnified Party or any of its Affiliates recovers (after
deducting all attorneys’ fees, expenses and other costs of recovery) from any
insurer or other party liable for such Damages (other than any Seller). The
Indemnified Party shall use reasonable best efforts to effect any such
recovery.
(ii) The
amount of any Damages incurred by the Indemnified Party shall be reduced
by the
amount of any Tax benefit to the Indemnified Party arising from
-
35
-
the
recognition of
Damages (but net of any Tax Liability incurred by the Indemnified Party in
connection with the receipt of any indemnification payment
therefor).
(iii) Any
liability for indemnification under this Agreement shall be determined without
duplication of recovery by reason of the state of facts giving rise to such
liability constituting a breach of more than one representation, warranty,
covenant or agreement.
(iv) Each
Seller’s liability to Purchaser with respect to any Liabilities, obligations or
Damages owed to Purchaser hereunder by both Sellers shall be limited to such
Seller’s Percentage Share of such liability, obligation or Damage.
(d) Exclusive
Remedy.
Except
to the extent provided in Sections
5.11 or 12.14,
from
and after the Closing, the indemnities provided for in this Article
VIII
shall be
the exclusive remedies of the Parties and their respective officers, directors,
members of the Management Committee, employees, Affiliates, agents,
representatives, successors and assigns for any breach of or inaccuracy in
any
representation or warranty or breach of or noncompliance with any covenant
or
agreement contained in this Agreement and the Parties shall not be entitled
to
a
rescission of this Agreement or to any further indemnification or other rights
or claims of any nature whatsoever in respect thereof, all of which the Parties
hereto hereby waive; provided,
however,
that
the foregoing shall not limit the right of any Party to assert a claim based
on
fraud.
8.5 Characterization
of Indemnification Payments.
Purchaser and the Sellers agree to treat any indemnification payment made
under
this Agreement, to the maximum extent permitted by applicable Law, as an
adjustment to the Purchase Price.
8.6 Limitation
on Damages.
No
Party shall, under any circumstance, have any liability to any other Party
for
any special, indirect, consequential or punitive damages claimed by such
other
Party under the terms of or due to any breach or non-performance of this
Agreement, including lost profits, loss of revenue or income, cost of capital,
or loss of business reputation or opportunity, other than any such damages
claimed by the Sellers against Purchaser or Purchaser Guarantor as a result
of
Purchaser or Purchaser Guarantor’s failure to comply with its obligations
pursuant to Article XI herein.
ARTICLE IX
GUARANTEES
9.1 Trans
Guaranty
(a) Guaranty. Trans
Guarantor hereby unconditionally and irrevocably guarantees to Purchaser,
on the
terms and conditions set forth in this Section
9.1
(the
“Trans
Guaranty”),
the
prompt payment in full, when due, of TEHQ’s and TEUS’s payment obligations under
this Agreement, if any, (collectively, the “Trans
Guaranteed Obligations”);
provided
that the
total liability of Trans Guarantor hereunder shall not exceed the liability
of
TEHQ and TEUS under this Agreement and is limited in the aggregate to
$86,250,000, less any amounts paid by TEHQ and TEUS under this Agreement.
Trans
Guarantor’s obligations under the Trans Guaranty do not, and shall not be deemed
to, constitute a guaranty of any nature whatsoever of
-
36
-
any
obligation of UCI pursuant to this Agreement or otherwise. For the avoidance
of
doubt, in no event shall the guaranty in this Section
9.1
cover
any obligation or Liability of TEUS under the O&M Agreement.
(b) Demand.
If TEHQ
or TEUS shall fail to pay in full any of the Trans Guaranteed Obligations,
when
and as the same shall become due, then Purchaser shall be entitled to make
a
demand upon Trans Guarantor hereunder in writing specifying in reasonable detail
(i) the provision of this Agreement of which TEHQ or TEUS is in breach, (ii)
in
what manner and in what amount TEHQ or TEUS has failed to pay pursuant to this
Agreement, and (iii) an explanation of why such payment is due, with a specific
statement by an officer of Purchaser that Purchaser is demanding payment by
Trans Guarantor under the Trans Guaranty (hereinafter referred to as a
“Trans
Demand”).
A
single written Trans Demand shall be effective as to any specific default during
the continuance of such default, until TEHQ or TEUS or Trans Guarantor has
cured
such default, and additional written Trans Demands concerning such default
shall
not be required unless such default is cured and subsequently
recurs.
(c) Payment.
Trans
Guarantor shall, within thirty (30) Business Days following receipt of a
Trans
Demand, fully pay such Trans Guaranteed Obligations then due and owing as
set
forth in the Trans Demand to such account as Purchaser may specify in writing
to
Trans Guarantor from time to time. Any payment made by Trans Guarantor hereunder
shall, to the extent so made, discharge the obligations of Trans Guarantor
hereunder with respect to such amounts paid.
(d) Representation
and Warranties.
Trans
Guarantor represents and warrants to Purchaser as follows.
(i) Trans
Guarantor is a body
politic and corporate, duly incorporated and regulated by the Hydro-Quebec
Act
(R.S.Q., chapter H-5).
(ii) Trans
Guarantor has full corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery
and performance by Trans Guarantor of this Agreement and the consummation
by
Trans Guarantor of the transactions contemplated hereby have been duly and
validly authorized by all requisite corporate action on the part of Trans
Guarantor, and no other corporate proceedings or approvals on the part of
Trans
Guarantor are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Trans Guarantor and, assuming the due authorization, execution
and
delivery hereof by each other Party, constitutes the legal, valid and binding
obligation of Trans Guarantor, enforceable against Trans Guarantor in accordance
with its terms, except as limited by Laws affecting the enforcement of
creditors’ rights generally or by general equitable principles.
(e) Trans
Guarantor’s Obligations Unconditional.
The
obligations of Trans Guarantor hereunder shall remain in full force and effect
(subject to Section
9.1(i))
notwithstanding any act, omission, event or circumstance whatsoever, until
full,
valid and proper payment of the Trans Guaranteed Obligations.
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37
-
(f) Independent
Obligations.
The
obligations of Trans Guarantor hereunder are not in the nature of a surety
but
are in addition to, and independent of, any obligations of TEHQ or
TEUS.
(g) Waiver
of Notice.
Trans
Guarantor unconditionally waives:
(i) demands,
protests, or notices as the same pertain to TEHQ or TEUS;
(ii) any
right
to require Purchaser to proceed against TEHQ or TEUS or to exhaust any security
held by Purchaser or to pursue any other remedy; and
(iii) any
defense based upon an election of remedies by Purchaser, unless the same would
excuse performance by TEHQ or TEUS under this Agreement.
(h) Subrogation.
Trans
Guarantor agrees with respect to the Trans Guaranty that it shall have no
right
of subrogation, reimbursement, contribution or indemnity, nor any right of
recourse to security for the Trans Guaranteed Obligations until all of the
Trans
Guaranteed Obligations have been paid in full.
(i) Termination.
Subject
to Section
9.1(j) below,
the
obligations of Trans Guarantor under this Section
9.1
shall
terminate upon the earliest of (a) the termination of this Agreement prior
to
the Closing Date; provided that the obligations of Trans Guarantor hereunder
shall survive with respect to any obligation of TEHQ or TEUS arising prior
to
such termination and (b) the date on which Purchaser does not own any Company
Membership Interests.
(j) Discharge;
Reinstatement; Preference.
If at
any time any payment by or on behalf of TEHQ or TEUS in respect of the Trans
Guaranteed Obligations is rescinded or must be otherwise restored or returned
upon the insolvency, bankruptcy or reorganization of TEHQ or TEUS or otherwise,
Trans Guarantor’s obligations with respect to such payment shall be reinstated
at such time as though such payment had been due but not made at such time.
If
any payment by Trans Guarantor to Purchaser is held to constitute a preference
under any applicable bankruptcy laws, or if under applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws of general application with respect to creditors, Purchaser is required
to
refund part or all of any payment or pay the amount thereof to any other
party,
such payment to Purchaser shall not constitute a release from any liability
hereunder, and Trans Guarantor’s liability hereunder shall be reinstated to the
extent of such refund or payment to another party.
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38
-
9.2 UCI
Guaranty.
(a) Guaranty.
UCI
Guarantor hereby unconditionally and irrevocably guarantees to Purchaser, on
the
terms and conditions set forth in this Section
9.2
(the
“UCI
Guaranty”),
the
prompt payment in full, when due, of UCI’s payment obligations under this
Agreement, if any, (collectively, the “UCI
Guaranteed Obligations”);
provided
that the
total liability of UCI Guarantor hereunder shall not exceed the liability of
UCI
under this Agreement and is limited to $28,750,000, less any amounts paid by
UCI
under this Agreement. UCI Guarantor’s obligations under the UCI Guaranty do not,
and shall not be deemed to, constitute a guaranty of any nature whatsoever
of
any obligation of TEHQ or TEUS pursuant to this Agreement or
otherwise.
(b) Demand.
If UCI
shall fail to pay in full any of the UCI Guaranteed Obligations, when and as
the
same shall become due, then Purchaser shall be entitled to make a demand upon
UCI Guarantor hereunder in writing specifying in reasonable detail (i) the
provision of this Agreement of which UCI is in breach, (ii) in what manner
and
in what amount UCI has failed to pay pursuant to this Agreement, and (iii)
an
explanation of why such payment is
due,
with a specific statement by an officer of Purchaser that Purchaser is demanding
payment by UCI Guarantor under the UCI Guaranty (hereinafter referred to as
a
“UCI
Demand”).
A
single written UCI Demand shall be effective as to any specific default during
the continuance of such default, until UCI or UCI Guarantor has cured such
default, and additional written UCI Demands concerning such default shall not
be
required unless such default is cured and subsequently recurs.
(d) Representation
and Warranties.
UCI
Guarantor represents and warrants to Purchaser as follows:
(i) UCI
Guarantor is a corporation duly organized and validly existing under the
laws of
the state of Connecticut.
(ii) UCI
Guarantor has full corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery
and performance by UCI Guarantor of this Agreement and the consummation by
UCI
Guarantor of the transactions contemplated hereby have been duly and validly
authorized by all requisite corporate action on the part of UCI Guarantor,
and
no other corporate proceedings or approvals on the part of UCI Guarantor
are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered
by UCI
Guarantor and, assuming the due authorization, execution and delivery hereof
by
each other Party, constitutes the legal, valid and binding obligation of
UCI
Guarantor, enforceable against UCI Guarantor
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39
-
(e) UCI
Guarantor’s Obligations Unconditional.
The
obligations of UCI Guarantor hereunder shall remain in full force and effect
(subject to Section
9.2(i))
notwithstanding any act, omission, event or circumstance whatsoever, until
full,
valid and proper payment of the UCI Guaranteed Obligations.
(f) Independent
Obligations.
The
obligations of UCI Guarantor hereunder are not in the nature of a surety but
are
in addition to, and independent of, any obligations of UCI.
(g) Waiver
of Notice.
UCI
Guarantor unconditionally waives:
(i) demands,
protests, or notices as the same pertain to UCI;
(ii) any
right
to require Purchaser to proceed against UCI or to exhaust any security held
by
Purchaser or to pursue any other remedy; and
(i) Termination.
Subject
to Section
9.2(j) below,
the
obligations of UCI Guarantor under this Section
9.2
shall
terminate upon the earliest of (a) the termination of this Agreement prior
to
the Closing Date; provided that the obligations of UCI Guarantor hereunder
shall
survive with respect to any obligation of UCI arising prior to such termination
and (b) the date on which Purchaser does not own any Company Membership
Interests.
9.3 Purchaser
Guaranty.
(a) Guaranty.
Purchaser Guarantor hereby unconditionally and irrevocably guarantees to
Sellers, on the terms and conditions set forth in this Section
9.3
(the
“Purchaser
Guaranty”),
the
prompt payment in full, when due, of Purchaser’s payment obligations under this
Agreement, including, without limitation, payment of the Purchase Price at
the
Closing (collectively, the “Purchaser
Guaranteed Obligations”);
provided that the total liability of Purchaser Guarantor hereunder shall not
exceed the liability of Purchaser under this Agreement and is limited in the
aggregate to $115,000,000.
(b) Demand.
If
Purchaser shall fail to pay in full any of the Purchaser Guaranteed Obligations,
when and as the same shall become due, then any Seller shall be entitled to
make
a demand upon Purchaser Guarantor hereunder in writing specifying in reasonable
detail (i) the provision of this Agreement of which Purchaser is in breach,
(ii)
in what manner and in what amount Purchaser has failed to pay pursuant to this
Agreement and (iii) an explanation of why such payment is due with a specific
statement by an officer of such Seller that
such
Seller is demanding payment by Purchaser Guarantor under the Purchaser Guaranty
(hereinafter referred to as a “Purchaser
Demand”).
A
single written Purchaser Demand shall be effective as to any specific default
during the continuance of such default, until Purchaser or Purchaser Guarantor
has cured such default, and additional written Purchaser Demands concerning
such
default shall not be required unless such default is cured and subsequently
recurs.
(d) Representation
and Warranties.
Purchaser Guarantor represents and warrants to Sellers as follows:
(i) Each
of
the entities constituting the Purchaser
Guarantor has been duly organized, and is validly existing, and in good standing
under the laws of Australia.
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41
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(e) Purchaser
Guarantor’s Obligations Unconditional.
The
obligations of Purchaser Guarantor hereunder shall remain in full force and
effect (subject to Section
9.3(i))
notwithstanding any act, omission, event or circumstance whatsoever, until
full,
valid and proper payment of the Purchaser Guaranteed Obligations.
(f) Independent
Obligations.
The
obligations of Purchaser Guarantor hereunder are independent of the obligations
of Purchaser.
(g) Waiver
of Notice.
Purchaser Guarantor unconditionally waives:
(i) demands,
protests, or notices as the same pertain to Purchaser;
(ii) any
right
to require any Seller to proceed against Purchaser or to exhaust any security
held by any Seller or to pursue any other
remedy;
and
this
Agreement.
(i) Termination.
Subject
to Section
9.3(j)
below,
the obligations of Purchaser Guarantor under this Section
9.3
shall
terminate upon the earliest of (a) the termination of this Agreement prior
to
the Closing Date; provided that the obligations of Purchaser Guarantor hereunder
shall survive with respect to any obligation of Purchaser arising prior to
such
termination and (b) the Closing Date.
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42
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10.1 Defined
Terms.
The
following terms are defined in the corresponding Sections of this Agreement:
|
Defined
Term
|
Section
Reference
|
|
Action
|
|
|
Section
3.14
|
|
|
Agreement
|
Preamble
|
|
Assignment
Agreement
|
Section
1.5(d)
|
|
Audited
2004 Financial Statements
|
Section
3.3(a)
|
|
Breach
Notice
|
Section
7.1(d)
|
|
Breakup
Fee
|
Section
7.2
|
|
[REDACTED]
|
|
|
Claims
|
Section
8.3(b)
|
|
Claim
Notice
|
Section
8.3(b)
|
|
Closing
|
Section
1.4
|
|
Closing
Date
|
Section
1.4
|
|
Company
|
Preamble
|
|
Company
Guaranty
|
Section
5.17
|
|
Company
Contracts
|
Section
3.11(a)
|
|
Company
Membership Interests
|
Preamble
|
|
Company
Permits
|
Section
3.9(a)
|
|
Company
Required Consents
|
Section
3.1(c)
|
|
Company
Required Statutory Approvals
|
Section
3.1(d)
|
|
Company
Subsidiary
|
Section
3.2(a)
|
|
CTA
|
Section
5.2(a)
|
|
Damages
|
Section
8.1
|
|
Deposit
|
Section
1.6
|
|
Direct
Claim
|
Section
8.3(b)
|
|
Easements
|
Section
3.10(a)
|
|
Escrow
Agent
|
Section
1.6
|
|
Escrow
Agreement
|
Section
1.6
|
|
Final
Termination Date
|
Section
7.1(c)
|
|
Financing
Arrangements
|
Section
4.3
|
|
HQ
|
Preamble
|
|
[REDACTED]
|
|
|
[REDACTED]
|
|
|
HSR
Act
|
Section
5.2(a)
|
|
Indemnified
Party
|
Section
8.3(a)
|
|
Indemnified
Person
|
Section
5.7(a)
|
|
Indemnifying
Party
|
Section
8.3(a)
|
|
Independent
Firm
|
Section 5.11(g)
|
|
Initial
Termination Date
|
Section
7.1(c)
|
-
43
-
|
Defined
Term
|
Section
Reference
|
|
Insurance
Policies
|
Section
3.15
|
|
Intellectual
Property
|
Section
3.13
|
|
Interim
Financial Statements
|
Section
3.3(b)
|
|
Leased
Real Property
|
Section
3.10(a)
|
|
Liability
Threshold
|
Section
8.4(a)
|
|
LIPA
Guaranty
|
Section
5.12
|
|
Loan
Agreement
|
Preamble
|
|
Loan
Repayment Amount
|
Section
1.3
|
|
O&M
Agreement
|
Section
5.16
|
|
Operating
Agreement
|
Preamble
|
|
Owned
Real Property
|
Section
3.10(a)
|
|
Party
|
Preamble
|
|
Proceeding
|
Section
8.3(b)
|
|
Purchase
Price
|
Section
1.2
|
|
Purchaser
|
Preamble
|
|
Purchaser
Demand
|
Section
9.3(b)
|
|
Purchaser
Guaranteed Obligations
|
Section
9.3(a)
|
|
Purchaser
Guarantor
|
Preamble
|
|
Purchaser
Guaranty
|
Section
9.3(a)
|
|
Purchaser
Required Consents
|
Section
4.2(b)
|
|
Purchaser
Required Statutory Approvals
|
Section
4.2(c)
|
|
[REDACTED]
|
|
|
Securities
Act
|
Section
4.5
|
|
Seller
|
Preamble
|
|
Seller
Required Consents
|
Section
2.1(c)
|
|
Seller
Required Statutory Approvals
|
Section
2.1(d)
|
|
Sellers
|
Preamble
|
|
Shellfish
Guaranty
|
Section
5.12
|
|
TEHQ
|
Preamble
|
|
TEHQ
Purchase Price
|
Section
1.5(a)
|
|
TEUS
|
Preamble
|
|
TEUS
Purchase Price
|
Section
1.5(b)
|
|
Third
Party Claim
|
Section
8.3(b)
|
|
Trans
Demand
|
Section
9.1(b)
|
|
Trans
Guaranteed Obligations
|
Section
9.1(a)
|
|
Trans
Guarantor
|
Preamble
|
|
Trans
Guaranty
|
Section
9.1(a)
|
|
Transaction
|
Section
1.1
|
|
[REDACTED]
|
|
|
Services
Agreement
|
Section
5.16
|
|
UCI
|
Preamble
|
|
UCI
Demand
|
Section
9.2(b)
|
|
UCI
Guaranteed Obligations
|
Section
9.2(a)
|
|
UCI
Guarantor
|
Preamble
|
-
44
-
|
Defined
Term
|
Section
Reference
|
|
UCI
Guaranty
|
Section
9.2(a)
|
|
UIL
|
Preamble
|
10.2 Definitions.
Except
as otherwise expressly provided in this Agreement, or unless the context
otherwise requires, whenever used in this Agreement (including the Schedules),
the following terms will have the meanings indicated below:
“Affiliate”
means,
with respect to any Person or group of Persons, a Person that directly or
indirectly through one or more intermediaries, controls, is controlled by,
or is
under common control with such Person or group of Persons.
“Alternative
Proposal”
means
any merger, acquisition, consolidation, reorganization, share exchange, tender
offer, exchange offer or similar transaction, other than pursuant to this
Agreement, involving the Company or the Company Subsidiary or any proposal
or
offer to acquire in any manner, directly or indirectly, a substantial equity
interest in or a substantial portion of the assets of the Company or the
Company
Subsidiary.
“Business
Day”
means
a
day other than a Saturday, or Sunday or any other day on which banks are
not
required to be open or are authorized to close in New York, New
York.
“Company
Material Adverse Effect”
means
an event, fact, circumstance or effect that results in or causes a material
adverse change in the business, assets or financial condition of the Company
and
the Company Subsidiary, taken as a whole, except to the extent such material
adverse change results from or is caused by (i) changes in financial, securities
or currency markets, changes in prevailing interest rates or foreign exchange
rates, changes in general economic conditions, changes in electricity, gas,
coal
or other fuel supply and transportation markets, including changes to market
prices for electricity, coal, steam, natural gas or other commodities, (ii)
changes in transmission markets or effects of weather or meteorological events,
(iii) changes in law, rule or regulation of any Governmental Entity or changes
in regulatory conditions in the countries in which the Company or the Company
Subsidiary operate, (iv) events or changes that are consequences of hostility,
terrorist activity, acts of war or acts of public enemies, (v) changes in
accounting standards, principles or interpretations, (vi) the negotiation,
announcement, execution, delivery, consummation or pendency of this Agreement
or
the transactions contemplated by this Agreement or any action by any Seller
or
its Affiliates contemplated by or required by this Agreement, or (vii) actions
taken or not taken at the request of Purchaser, other than, in the case of
foregoing clauses (ii), (iii), (iv) and (v), any such changes or events that
affect the Company and the Company Subsidiary disproportionately.
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45
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“Confidentiality
Agreement”
means
the letter agreement, dated June 28, 2005, between TransEnergie inc. and Xxxxxxx
& Xxxxx XX.
“Consent”
means
any written consent, approval, authorization, order, filing, registration or
qualification of, by or with any Person.
“control”
(including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a Person, whether through the ownership
of voting securities or other Equity Interests, by contract or credit
arrangement, as trustee or executor, or otherwise.
[REDACTED]
“Current
Liabilities”
means
each and every liability of the Company or Company Subsidiary as reflected
in
the consolidated balance sheet of the Company as of Closing prepared in
accordance with GAAP except (a) the liability for the Shellfish Agreement,
(b)
the liability for asset retirement obligations established in accordance
with
GAAP and (c) the principal amount of indebtedness under the Loan Agreement
and
all accrued interest thereon. The
account references contained in this definition relate to the Audited 2004
Financial Statements and the Interim Financial Statements, in each case,
in the
form delivered to Purchaser prior to the date of this Agreement, and any
change
in the account balances arising from a change in the method of accounting
for
the LIPA Contracts resulting from EITF 01-8 shall be excluded when determining
the balance in Working Capital at Closing.
“EITF
01-8”
means
Emerging
Issues Task Force 01-8 of GAAP.
“Energy
Policy Act of 2005”
means
the Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594
(2005).
“Environmental
Law”
means
any foreign, federal, state, or local Law relating to (a) the treatment,
disposal, emission, discharge, Release or threatened Release of Hazardous
Substances or (b) the preservation and protection of the environment (including
natural resources, air and surface or subsurface land or waters).
“Equity
Interests”
means
any shares of capital stock, membership interests, partnership interests,
joint
venture interests or other equity interests, or any right to receive any
economic benefit or right similar to or derived from the foregoing.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“Final
Order”
means
an action by the relevant Governmental Entity which has not been reversed,
stayed, enjoined, set aside, annulled or suspended, with respect to which
any
waiting period prescribed by law before the transactions contemplated hereby
may
be consummated has expired (but without the requirement for expiration of
any
applicable
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46
-
rehearing
or
appeal period), and as to which all conditions to the consummation of such
transactions prescribed by law, regulation or order have been
satisfied.
“GAAP”
means
United States generally accepted accounting principles.
“Governmental
Entity”
means
any supranational, national, federal, state, municipal or local governmental
or
quasi-governmental or regulatory authority (including a national securities
exchange or other self-regulatory body), agency, governmental department, court,
commission, board, bureau or other similar entity, domestic or foreign or any
arbitrator or arbitral body.
“Governmental
Order”
means
any order, decree, ruling, injunction, judgment or similar act of or by any
Governmental Entity.
“Hazardous
Substance”
means
(a) any material, substance or waste (whether liquid, gaseous or solid) that
(i)
requires removal, remediation or reporting under any Environmental Law, or
is
listed, classified or regulated as a “hazardous
waste”
or
“hazardous
substance”
(or
other similar term) pursuant to any applicable Environmental Law or (ii) is
regulated under applicable Environmental Laws as being, toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous and (b) any petroleum product or by-product,
petroleum-derived substances wastes or breakdown products, asbestos or
polychlorinated biphenyls.
“Knowledge”
when
used with respect to the Company, means the knowledge of any fact, circumstance
or condition of those officers of the Company, the Company Subsidiary
or TEUS set forth on Schedule
10.2(c);
when
used with respect to a Seller, means the knowledge of any fact, circumstance
or
condition of those officers of such Seller or its Affiliates set forth on
Schedule
10.2(d),
and
when used with respect to Purchaser, means the knowledge of any fact,
circumstance or condition of those officers of Purchaser or its Affiliates
set
forth on Schedule
10.2(e).
“Law”
means
any law, statute, code, ordinance, regulation, rule, administrative order,
constitution, principle of common law or treaty of or by any Governmental Entity
or any arbitrator.
“Liabilities”
means
any and all known liabilities or indebtedness of any nature (whether direct
or
indirect, absolute or contingent, liquidated or unliquidated, due or to become
due, accrued or unaccrued, matured or unmatured, asserted or unasserted,
determined or determinable and whenever or however arising).
“Lien”
means
any mortgage, lien, pledge, assessment, claim, charge, security interest,
restriction on transfer, proxy or other voting agreement, or other legal or
equitable encumbrances, or any other adverse claim.
“LIPA
Contracts”
means
the Firm Transmission Capacity Purchase Agreement, entered into August 2, 2000
as Amended and Restated as of December 17, 2004, by and between the Company
and
Long Island Lighting Company d/b/a LIPA; the Bridge Period Firm Transmission
Capacity Purchase Agreement by and between the Company and Long Island Lighting
Company d/b/a LIPA, dated as of June 27, 2004; the Interim
Firm
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47
-
Transmission
Capacity Purchase Agreement between the Company and LIPA, dated March 10, 2004;
and the Settlement Agreement for compensation from LIPA to the Company for
cable
operation during emergency period, dated March 15, 2004.
“Material”
when
used with respect to the Company, means material to the Company and the Company
Subsidiary taken as a whole, and when used with respect to Purchaser, means
material to Purchaser and its Subsidiaries, taken as a whole.
“Organizational
Documents”
means
articles of incorporation, certificate of incorporation, charter, bylaws,
articles of organization, formation or association, regulations, operating
agreement, certificate of limited partnership, partnership agreement, and all
other similar documents, instruments or certificates executed, adopted, or
filed
in connection with the creation, formation, or organization of a Person,
including any amendments thereto.
“Percentage
Share”
means,
with respect to TEHQ, one percent (1%), with respect to TEUS, seventy-four
percent (74%) and with respect to UCI, twenty-five percent (25%).
“Permits”
means
all permits, licenses, franchises, registrations, exemptions, variances,
authorizations, consents, orders, certificates and approvals obtained from
or
otherwise made available by any Governmental Entity or pursuant to any
Law.
“Permitted
Liens”
means
(a) Liens for Taxes (i) not due and payable or (ii) which are being contested
in
good faith by appropriate proceeding, (b) Liens of warehousemen, mechanics
and
materialmen and other similar statutory Liens incurred in the ordinary course
of
business with respect to a liability that is not yet due or delinquent or which
is being contested in good faith and as to which adequate reserves are
maintained, (c) any Liens that do not materially detract from the value of
any
of the applicable property, rights or assets of the businesses of the Company
or
the Company Subsidiary or materially interfere with the use thereof as currently
used, (d) zoning, entitlement, conservation, restriction or other land use
or
environmental regulation by any Governmental Entity and (e) any Lien
arising under (i) the Organizational Documents of the Company and the
Company Subsidiary or (ii) any shareholders or similar agreement to which
the Company or the Company Subsidiary is a party or by which it is
bound.
“Person”
means
any natural person, firm, partnership, association, corporation, limited
liability company, joint venture, trust, business trust, unincorporated
organization, Governmental Entity or other entity.
[REDACTED]
“Purchaser
Disclosure Schedule”
means
the Schedules setting forth certain disclosures of the Purchaser, or
qualifications or exceptions to any of the Purchaser’s representations or
warranties set forth in Article
IV,
which
Schedules are delivered simultaneously with the execution and delivery of this
Agreement.
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48
-
“Purchaser
Indemnified Parties”
means
Purchaser, Purchaser’s Affiliates, and their respective directors, officers,
shareholders, members, attorneys, accountants, representatives, agents and
employees, and their respective heirs, successors and assigns.
“Purchaser
Material Adverse Effect”
means
an event, fact, circumstance or effect that (i) results in or causes a material
adverse change in the business, assets or financial condition of (a) Purchaser
and its Subsidiaries taken as a whole or (b) Purchaser Guarantor and its
Subsidiaries taken as a whole and (ii) materially and adversely affects the
ability of Purchaser or Purchaser Guarantor to consummate the transactions
contemplated by this Agreement or perform its obligations hereunder or under
the
Purchaser Guaranty, as the case may be.
“Release”
means
the release, spill, emission, leaking, pumping, pouring, emptying, escaping,
dumping, injection, deposit, disposal, discharge, dispersal, leaching or
migrating of any Hazardous Substance into the environment.
[REDACTED]
“Seller
Indemnified Parties”
means
the Sellers, the Sellers' Affiliates, and their respective directors, officers,
shareholders, members, attorneys, accountants, representatives, agents and
employees, and their respective heirs, successors and assigns.
"Seller
Material Adverse Effect"
means,
with respect to any Seller, an event, fact, circumstance
or effect that materially and adversely affects the ability of such Seller
to
consummate the transactions contemplated by this Agreement or perform its
obligations hereunder.
“Sellers
Disclosure Schedule”
means
the Schedules setting forth certain disclosures of the Sellers, or
qualifications or exceptions to any of the Sellers’ representations or
warranties set forth in Article
II
or
Article
III,
which
Schedules are delivered simultaneously with the execution and delivery of this
Agreement and may be supplemented in accordance with Section
5.13
hereof.
“Shellfish
Agreement”
means
the Settlement Agreement by and between TEUS, Tallmadge Brothers, Inc.,
Briarpatch Enterprises, Inc. and Fair Haven Clam & Lobster, LLC, dated as of
January 9, 2001, as assigned pursuant to the Assignment and Assumption Agreement
dated September 19, 2001 by and between TEUS, as assignor, and the Company,
as
assignee, as supplemented by the Supplemental Clarifying Letter Agreement
dated August 9, 2002 by and between the Company, Tallmadge Brothers, Inc.,
Briarpatch Enterprises, Inc. and Fair Haven Clam & Lobster,
LLC.
“Straddle
Period”
means
a
taxable year or period beginning on or before, and ending after, the Closing
Date.
“Subsidiary”
means,
with respect to any Person (for the purposes of this definition, the
“parent”),
any
other Person (other than a natural person), whether incorporated or
unincorporated, of which at least a majority of the securities or ownership
interests having by their terms ordinary voting power to elect a majority of
the
Board of
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49
-
Directors
or
other persons performing similar functions is directly or indirectly owned
or
controlled by the parent or by one or more of its respective Subsidiaries or
by
the
parent and
any one or more of its respective Subsidiaries.
“Tax”
or
“Taxes”
means
any tax, duty, charge, or other levy separately or jointly due or payable to,
or
levied or imposed by any Governmental Entity, including income, gross receipts,
license, wages, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duty, capital, franchise,
profits, withholding, social security, unemployment, disability, real property,
personal property, sales, use, transfer, transaction, registration, value added,
alternative/add-on minimum, estimated or other tax, duty, charge, or other
levy
of any kind whatsoever, including any interest, penalty, or addition thereto,
and any interest with respect to such addition or penalty.
“Tax
Returns”
means
all tax returns, declarations, statements, reports, schedules, forms and
information returns and any amendments to any of the foregoing relating to
Taxes.
“Transaction
Documents”
means
the Assignment Agreements, the Termination and Release Agreement,
[REDACTED].
“Transfer
Taxes”
means
any and all transfer Taxes (excluding Taxes measured in whole or in part by
net
income), including without limitation sales, use, excise, stock, stamp,
documentary, filing, recording, permit, license, authorization, controlling
interest, real estate conveyance and similar Taxes, fees, duties, levies,
customs, tariffs, imposts, assessments, obligations and charges.
“Violation”
means
any violation, breach, default, right of termination, cancellation or
acceleration of any obligation.
10.3 Interpretation.
In this
Agreement, unless otherwise specified, the following rules of interpretation
apply:
(a) references
to Sections, Schedules, Exhibits and Parties are references to sections or
sub-sections, schedules and exhibits of, and parties to, this
Agreement;
(b) the
section and other headings contained in this Agreement are for reference
purposes only and do not affect the meaning or interpretation of this
Agreement;
(c) words
importing the singular include the plural and vice versa;
(d) references
to the word “including”
do
not
imply any limitation;
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50
-
(e) the
words
“hereof”,
“herein”
and
“hereunder”
and
words of similar import, when used in this Agreement, refer to this Agreement
as
a whole and not to any particular provision of this Agreement; and
(f) references
to “$”
or
“dollars”
refer
to U.S. dollars.
ARTICLE
XII
GENERAL
PROVISIONS
12.1 Survival
of Representations, Warranties, Covenants and Agreements.
The
representations and warranties of the Parties contained herein shall survive
the
Closing Date for a period of twelve (12) months following the date thereof;
provided, however, that (i) the representations and warranties of
the Sellers contained in Sections 2.1(b) (Authority), 2.2 (Right
and Title to Company Membership Interests), 3.1(a) (Organization and
Qualification), 3.1(b) (Authority) and 3.2 (Subsidiaries; Equity
Interests; Capitalization) shall survive the Closing indefinitely, (ii) the
representations and warranties of Purchaser contained in Sections 4.2(a)
(Authority) shall survive the Closing indefinitely, (iii) the representations
and warranties of the Sellers contained in Section 3.5 (Taxes) shall
survive the Closing until thirty (30) days following the expiration of the
applicable statute of limitations (taking into account any extensions or
waivers
thereof) which for the purpose of this Agreement shall commence upon the
Closing
Date, and (iv) the representations and warranties of the Sellers contained
in
Section 3.12 (Environmental) shall survive the Closing for a period of
two (2) years following the Closing Date. All covenants and agreements contained
in this Agreement that contemplate or provide for any rights, obligations
or
actions of any Party after the Closing shall survive the Closing until they
are
fully performed or terminated in accordance with their terms. No claim or
cause
of action for indemnification under Article VIII arising out of the
inaccuracy or breach of any representation or warranty of the Sellers, the
Company or Purchaser may be made following the termination of the applicable
survival period; it being understood that in the event notice of any claim
for
indemnification under Section 8.1 or Section 8.2(a) shall have
been given within the applicable survival period, the representations and
warranties that are the subject of such indemnification claim shall survive
until such time as such claim is finally resolved. The Parties agree that,
after
the Closing Date, with respect to the Sellers, the Company and Purchaser,
any
claim or cause of action against any of the Parties, or any of their respective
directors, members of the Management Committee, officers, employees, Affiliates,
successors, permitted assigns, advisors, agents, or representatives based
upon,
directly or indirectly, any of the representations, warranties, covenants
or
agreements contained in this Agreement, or any other agreement, document
or
instrument to be executed and delivered in connection with this Agreement
may be
brought only as expressly provided in Article VIII.
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51
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12.2 Notices.
All
notices, requests, demands, waivers and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if (a) delivered personally, (b) mailed by
certified or registered mail with postage prepaid, (c) sent by next-day or
overnight mail or delivery, or (d) sent by fax or telegram, as
follows:
(a) if
to
Purchaser, Purchaser Guarantor, or Company (post-Closing),
|
BBI
CSC LLC
Xxx
Xxxxxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Fax:
000-000-0000
Telephone:
000-000-0000
Attention:
President
|
with a copy to:
|
Xxxxxxx
& Xxxxx XX
0
Xxxxx Xxxx Xxxxx
Xxxxxxxxx,
XX 00000
Tel:
000- 000-0000
Fax:
000-000-0000
Attention:
Xxxxxxx X. Xxxxxxxx
|
|
Xxxxxxx
& Xxxxx XX
0
Xxxxxxxx Xxxxxx0
Xxx
Xxxxxxxxx, XX 00000
Tel:
000-000-0000
Fax:
000-000-0000
Attention:
Xxxx Xxxxxxxxx
|
|
Xxxxxxx
& Xxxxx Infrastructure Limited
Xxxxx
00
The
Chifley Tower
0
Xxxxxxx Xxxxxx
Xxxxxx
XXX 0000
Xxxxxxxxx
Tel:
x00 0 0000 0000
Fax:
x00 0 0000 0000
Attention:
Xxxxxxx Xxxx Xxxx
|
|
Xxxxx
Xxxxxxx LLP
Omni
Plaza
00
Xxxxx Xxxxx Xxxxxx
Xxxxxx,
XX 00000
Tel:
000-000-0000
Fax:
000-000-0000
Attention:
Xxxxxxx X. Xxxxx, Esq.
|
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52
-
(b) if
to HQ,
TEHQ or TEUS,
|
TransÉnergie
H.Q. Inc
000,
xxx Xxxxx-Xxxx, xxxxxx 000
Xxxxxxxx,
Xxxxxx
X0X
0X0
Fax:
000-000-0000
Telephone:
000-000-0000
Attention:
Xxxxxx Xxxxxxx
|
with
a
copy to:
|
Hydro-Quebec
00
Xxxxxxxxxxxx
Xxxxxxxx,
Xxxxxx
X0X
0X0
Fax:
000 000-0000
Telephone:
000 000-0000
Attention: Xxxxxx
Xxxxxx
General
Counsel, Legal Affairs
|
with
a
copy to:
|
Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
0000
Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Fax:
000-000-0000
Telephone:
000-000-0000
Attention: Xxxxxxx
X. Xxxxx, Esq.
Xxxxx
X. Xxxxxx, Esq.
|
(c) if
to UCI
or UCI Guarantor,
|
United
Capital Investments, Inc.
c/o
UIL Holdings Corporation
000
Xxxxxx Xxxxxx
Xxx
Xxxxx, XX 00000
Fax:
203/000-0000
Telephone:
203/000-0000
Attention:
Chief Financial Officer
|
with
a
copy to:
|
Xxxxxx
and Xxxx, LLP
Xxx
Xxxxxxx Xxxxx
X.X.
Xxx 0000
Xxx
Xxxxx, XX 00000
Fax:
203/000-0000
Telephone: 203/000-0000
Attention: Xxxx
X. Xxxx, Esq.
|
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53
-
(d) If
to the
Company (pre-Closing),
|
TransÉnergie
H.Q. Inc
000,
xxx Xxxxx-Xxxx, xxxxxx 000
Xxxxxxxx,
Xxxxxx
X0X
0X0
Fax:
000-000-0000
Telephone: 000-000-0000
Attention:
Xxxxxx
Goyetter
|
or,
in
each case, at such other address as may be specified in writing to the other
Parties.
All
such
notices, requests, demands, waivers and other communications shall be deemed
to
have been received, if by personal delivery, certified or registered mail
or
next-day or overnight mail or delivery, on the day delivered or, if by fax
or
telegram, on the next Business Day following the day on which such fax or
telegram was sent, provided that a copy is also sent by certified or registered
mail. For the purposes of this Section
12.2,
notice
to the Company shall not constitute notice to the Sellers, and vice
versa.
12.3 Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective heirs, successors and permitted assigns.
12.4 Assignment;
Successors; Third-Party Beneficiaries.
This
Agreement is not assignable by any Party without the prior written consent
of
all of the other Parties and any attempt to assign this Agreement without
such
consent shall be void and of no effect. Notwithstanding the foregoing, without
the prior written consent of the Sellers and the Company, the Purchaser and
its
permitted assigns may at any time, in its sole discretion, assign, in whole
or
in part, (a) its rights and obligations pursuant to this Agreement and the
Transaction Documents, to one or more of its Affiliates, or (b) its rights
under
this Agreement and the Transaction Documents, in each case, for collateral
security purposes to any lender providing financing to the Purchaser or lessor
pursuant to a lease financing transaction, and any such lender or lessor
(or
collateral agent acting on its behalf) may exercise all of the rights and
remedies of the Purchaser hereunder and thereunder, and the Sellers and the
Company agree to, and shall cause its Affiliates to, execute and deliver
a
consent in favor of such lenders or lessors (or collateral agent acting on
their
behalf) with respect to the collateral assignments contemplated by this
Section 12.4 in form and substance reasonably satisfactory to the Sellers
and the Company and containing customary and reasonable provisions for similar
nonrecourse financings. Notwithstanding the foregoing, the Purchaser shall
not
be released or novated from any obligations assigned by the Purchaser pursuant
to this Section 12.4. This Agreement shall inure to the benefit of, and
be binding on and enforceable by and against, the successors and permitted
assigns of the respective Parties, whether or not so expressed. Nothing in
this
Agreement, expressed or implied, is intended or shall be construed to confer
upon any Person other than the Parties hereto and the Indemnified Persons
as set
forth in Section 5.7 any right, remedy or claim under or by reason of
this Agreement.
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54
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12.5 Amendment;
Waivers; Etc.
No
amendment, modification or discharge of this Agreement, and no waiver under
this
Agreement, shall be valid or binding unless set forth in writing and duly
executed by the Party against whom enforcement of the amendment, modification,
discharge or waiver is sought. Any reference to Sellers “acting together” shall
mean that the Sellers have unanimously agreed on any such act or omission
described. Any such waiver shall constitute a waiver only with respect to the
specific matter described in such writing and shall in no way impair the rights
of the Party granting such waiver in any other respect or at any other time.
The
waiver by any of the Parties of a breach of or a default under any of the
provisions of this Agreement, or any failure or delay to exercise any right
or
privilege under this Agreement,
shall not be construed as a waiver thereof or otherwise affect any of such
provisions, rights or privileges under this Agreement.
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55
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12.11 Venue.
Each of
the Parties (a) consents to submit itself to the exclusive jurisdiction of
the
United States District Court for the Southern District of New York or, if such
court does not have jurisdiction, the courts of the State of New York, in the
City of New York, in
12.12 Waiver
of Jury Trial; Waiver of Immunity.
(a) Each
of
the Parties irrevocably and unconditionally waives, to the fullest extent
permitted by applicable Law any right it may have to a trial by jury in respect
of any action, suit or proceeding arising out of or relating to this
Agreement.
12.13 Obligations
of Sellers Several and Not Joint.
Purchaser acknowledges and agrees that the obligations of the Sellers under
this
Agreement are several, and not joint or joint and several. Without limiting
the
generality of the foregoing, each Seller’s liability to Purchaser with respect
to any Liabilities, obligations or Damages owed to Purchaser hereunder by
both
the Sellers shall be limited to such Seller’s Percentage Share of such
liability, obligation or Damage.
12.15 No
Right of Set-Off.
Purchaser, for itself and its successors and permitted assigns, hereby
unconditionally and irrevocably waives any rights of set-off, netting,
offset,
recoupment, or similar rights that such Purchaser or any of its successors
and
permitted assigns has or may have with respect to the payment of the Purchase
Price or any other payments to be
-
56
-
-
57
-
IN
WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date
first above written.
|
TRANSENERGIE
HQ, INC.
|
|
By:
/s/
Xxxxxx Xxxxxx
|
|
Name:
Xxxxxx Xxxxxx
|
|
Title:
President
|
|
TRANSENERGIE
U.S. LTD.
|
|
By:
/s/
Xxxxxx Xxxxxxx
|
|
Name:
Xxxxxx Xxxxxxx
|
|
Title:
Chairman of the Board
|
|
UNITED
CAPITAL INVESTMENTS, INC.
|
|
By:
/s/
Xxxxx X. Xxxxxx
|
|
Name:
Xxxxx X. Xxxxxx
|
|
Title:
President
|
|
CROSS-SOUND
CABLE COMPANY LLC
|
|
By:
/s/
Xxxxxx Xxxxxxx
|
|
Name:
Xxxxxx Xxxxxxx
|
|
Title:
Chairman of the Board
|
|
UNITED
RESOURCES, INC.
|
|
By:
/s/
Xxxxx X. Xxxxxx
|
|
Name:
Xxxxx X. Xxxxxx
|
|
Title:
Chief Financial Officer
|
-
58
-
|
HYDRO-QUEBEC
|
|
By:
/s/
Xxxxxx Xxxxxx
|
|
Name:
Xxxxxx Xxxxxx
|
|
Title:
Executive Vice President Fiance
|
|
and
Chief Financial Officer
|
|
BBI
CSC LLC
|
|
By:
/s/
Xxxxxxx Xxxxxxxx
|
|
Name:
Xxxxxxx Xxxxxxxx
|
|
Title:
President
|
|
XXXXXXX
& XXXXX INFRASTRUCTURE
|
|
LIMITED
|
|
By:
/s/
Xxxxxx Xxxxxxx
|
|
Name:
Xxxxxx Xxxxxxx
|
|
Title:
Chief Executive Officer
|
|
XXXXXXX
& XXXXX INVESTOR SERVICES LIMITED
|
|
By:
/s/
Xxxxx Xxxxxxxx
|
|
Name:
Xxxxx Xxxxxxxx
|
|
Title:
Director
|
- 59
-