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Exhibit 10.25
EXECUTION COPY
STOCK PURCHASE AGREEMENT
FOR
COLUMBIA ELECTRIC CORPORATION
AMONG
COLUMBIA ENERGY GROUP
AND
ORION POWER HOLDINGS, INC,
DATED AS OF
SEPTEMBER 29, 2000
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................................................ 2
Section 1.1 Definitions.................................................................................. 2
ARTICLE II SALE OF INTERESTS..................................................................................... 7
Section 2.1 Purchase and Sale of the Company Stock....................................................... 7
Section 2.2 Closing...................................................................................... 7
Section 2.3 Seller Support Obligations................................................................... 8
Section 2.4 Net Book Value Adjustment to Purchase Price.................................................. 8
Section 2.5 Adjustment to Purchase Price - Section 338(h)(10) Election................................... 10
Section 2.6 QF Assets and Liabilities and Grassy Point Project........................................... 11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER RELATING TO SELLER, THE COMPANY, THE INVESTING
COMPANIES AND PROJECT COMPANIES.............................................................. 11
Section 3.1 Organization, Standing and Power............................................................. 11
Section 3.2 Capitalization of the Company and the Investing Companies.................................... 12
Section 3.3 Investing Companies; Project Companies....................................................... 12
Section 3.4 Authority Relative to this Agreement......................................................... 13
Section 3.5 No Conflict or Violation; Consents and Approvals............................................. 13
Section 3.6 Financial Statements......................................................................... 14
Section 3.7 Absence of Certain Changes................................................................... 15
Section 3.8 Compliance with Law.......................................................................... 15
Section 3.9 Permits...................................................................................... 16
Section 3.10 Litigation................................................................................... 16
Section 3.11 Taxes........................................................................................ 16
Section 3.12 Environmental Matters........................................................................ 16
Section 3.13 Employee Benefit Plans; ERISA................................................................ 17
Section 3.14 Labor Matters................................................................................ 18
Section 3.15 Regulatory Matters........................................................................... 18
Section 3.16 Brokers and Finders.......................................................................... 18
Section 3.17 Insurance.................................................................................... 19
Section 3.18 Material Contracts........................................................................... 19
Section 3.19 Projects in Development and Construction..................................................... 19
Section 3.20 Transactions with Affiliates................................................................. 20
Section 3.21 Bank Accounts and Safe Deposit Boxes......................................................... 20
Section 3.22 Copies of Documents.......................................................................... 20
Section 3.23 Real Estate; Personalty...................................................................... 20
Section 3.24 Intellectual Property........................................................................ 21
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER........................................................... 21
Section 4.1 Organization Standing and Power.............................................................. 21
Section 4.2 Authority Relative to this Agreement......................................................... 22
Section 4.3 No Conflict or Violation; Consents and Approvals............................................. 22
Section 4.4 Legal Proceedings............................................................................ 22
Section 4.5 Investment Intent............................................................................ 22
Section 4.6 Knowledgeable Purchaser...................................................................... 23
Section 4.7 Available Funds.............................................................................. 23
Section 4.8 Investment Company Act....................................................................... 23
Section 4.9 Brokers and Finders.......................................................................... 23
ARTICLE V TAX MATTERS............................................................................................ 24
Section 5.1 Tax Matters.................................................................................. 24
Section 5.2 Additional Tax Representations and Warranties of the Seller; Tax Matters..................... 26
ARTICLE VI COVENANTS............................................................................................. 27
Section 6.1 Conduct of the Business Pending the Closing.................................................. 27
Section 6.1A Buyer's SEC Obligations...................................................................... 29
Section 6.2 Consents and Approvals....................................................................... 29
Section 6.3 Filings...................................................................................... 29
Section 6.4 Covenant to Satisfy Conditions............................................................... 30
Section 6.5 No Solicitations............................................................................. 30
Section 6.6 Further Assurances........................................................................... 30
Section 6.7 Employee Benefits............................................................................ 31
Section 6.8 Name......................................................................................... 33
Section 6.9 Business Interruption Insurance.............................................................. 33
ARTICLE VII CONDITIONS TO EACH PARTY'S OBLIGATIONS............................................................... 34
Section 7.1 Regulatory Approvals......................................................................... 34
Section 7.2 Consent...................................................................................... 34
Section 7.3 Third Party Consents......................................................................... 34
ARTICLE VIII CONDITIONS TO THE SELLER'S OBLIGATIONS.............................................................. 34
Section 8.1 Representations and Warranties of the Buyer True............................................. 34
Section 8.2 Performance.................................................................................. 34
Section 8.3 Certificates................................................................................. 34
Section 8.4 No Injunction or Proceeding.................................................................. 34
Section 8.5 HSR Act...................................................................................... 35
Section 8.6 Transition Services Agreement................................................................ 35
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ARTICLE IX CONDITIONS TO THE BUYER'S OBLIGATIONS................................................................. 35
Section 9.1 Representations and Warranties of the Seller True............................................ 35
Section 9.2 Performance by the Seller.................................................................... 35
Section 9.3 Certificates................................................................................. 35
Section 9.4 No Injunction or Proceeding.................................................................. 35
Section 9.5 HSR Act...................................................................................... 35
Section 9.6 Transition Services Agreement................................................................ 36
Section 9.7 No Material Adverse Effect................................................................... 36
Section 9.8 Opinion...................................................................................... 36
Section 9.9 Resignations of Directors and Officers....................................................... 36
Section 9.10 QF Assets and QF Liabilities and the Grassy Point Project.................................... 36
Section 9.11 Other Matters................................................................................ 36
ARTICLE X TERMINATION AND ABANDONMENT; INDEMNIFICATION........................................................... 36
Section 10.1 Termination.................................................................................. 36
Section 10.2 Procedure and Effect of Termination.......................................................... 37
Section 10.3 Survival of Representations and Warranties................................................... 37
Section 10.4 Indemnification.............................................................................. 38
ARTICLE XI MISCELLANEOUS......................................................................................... 40
Section 11.1 Waivers and Amendments....................................................................... 40
Section 11.2 Representations and Warranties; Etc. (a).................................................... 40
Section 11.3 Entire Agreement; Assignment................................................................. 41
Section 11.4 Validity..................................................................................... 41
Section 11.5 Notices...................................................................................... 41
Section 11.6 Governing Law................................................................................ 43
Section 11.7 Publicity.................................................................................... 43
Section 11.8 Jurisdiction; Forum.......................................................................... 43
Section 11.9 WAIVER OF JURY TRIAL......................................................................... 43
Section 11.10 Descriptive Headings......................................................................... 44
Section 11.11 Counterparts................................................................................. 44
Section 11.12 Expenses..................................................................................... 44
Section 11.13 Parties in Interest.......................................................................... 44
Section 11.14 Interpretation............................................................................... 44
Section 11.15 Other Acknowledgments and Disclaimers........................................................ 44
Section 11.16 Confidentiality.............................................................................. 45
Section 11.17 Interim Transaction.......................................................................... 45
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EXHIBITS
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Exhibit A Interests in Investing Companies
Exhibit A-1 Interests in QF Investing Companies and the Grassy Point Project
Exhibit B Seller Support Obligations
Exhibit B-1 QF Support Obligations
Exhibit C Form of Transition Services Agreement
Exhibit D Capital Expenditure Budgets
Exhibit E Form of Legal Opinion
SCHEDULES
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Schedule 2.4(c) Net Book Value; Reference Statement of Net Book Value
Seller's Disclosure Schedule
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Section 3.1 Jurisdictions of Organization and Qualification
Section 3.3 Investing Companies
Section 3.5 Governmental Consents and Approvals
Section 3.6 Financial Statements and Construction Budgets
Section 3.7 Certain Changes
Section 3.9 Permits
Section 3.10 Litigation
Section 3.12 Environmental Matters
Section 3.13 Employee Benefit Plans
Section 3.17 Insurance
Section 3.18 Material Contracts
Section 3.20 Transactions with Affiliates
Section 3.21 Bank Accounts, Safe Deposit Boxes, Letters of Credit, and Surety Bonds
Section 3.23 Real Property, Utilities
Section 3.24 Intellectual Property
Schedule 5.2 Certain Tax Matters
Schedule 6.7 Employees; Benefits to Retained Employees
Schedule 7.2 Consents for Indebtedness
Schedule 7.3 Other Third Party Consents
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of this
29th day of September, 2000, is made by and between COLUMBIA ENERGY GROUP, a
Delaware corporation (the "Seller"), and ORION POWER HOLDINGS, INC., a Delaware
corporation (the "Buyer").
RECITALS:
WHEREAS, the Seller owns all of the shares of capital stock of
Columbia Electric Corporation, a Delaware corporation (the "Company"); and
WHEREAS, the Company owns directly or indirectly all of the
shares of capital stock of those entities described on Exhibit A hereto as
"Investing Companies" (each, an "Investing Company"); and
WHEREAS, each Investing Company owns those interests described
on Exhibit A hereto as a general or limited partner in those partnerships or as
a member manager or member in those limited liability companies described on
Exhibit A hereto as "Project Companies" (each, a "Project Company"); and
WHEREAS, each Project Company is developing or constructing,
the electric generation facility described on Exhibit A opposite the name of
such Project Company (each, a "Project,"; and
WHEREAS, the Company also owns directly or indirectly all of
the shares of capital stock of or membership interests in those entities
described on Exhibit A-1 hereto as the QF Investing Companies (each, a "QF
Investing Company"), which owns interests in those partnerships or limited
liability companies described on Exhibit A-1 hereto as the QF Project Companies
("QF Project Companies") and the Company also owns indirectly 100% of the
membership interest in Haverstraw Bay, LLC, which owns the Grassy Point Project
as described on Exhibit A-1 hereto (the "Grassy Point Project"); and
WHEREAS, prior to the Closing hereunder, the Company will
transfer to the Seller or to an unrelated third party all shares of capital
stock of, and membership interests in, the QF Project Companies and the Grassy
Point Project and all obligations and liabilities of the Company related
thereto; and
WHEREAS, the Buyer desires to purchase from the Seller all of
the shares of capital stock of the Company, through which the Seller owns all of
its interests in the Investing Companies and the Project Companies, on the terms
and subject to the conditions herein contained, and the Seller has agreed to
sell such shares on such terms and subject to such conditions;
NOW THEREFORE, in consideration of the mutual covenants
contained herein and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The terms defined in this Article I,
whenever used herein, shall have the following meanings for all purposes of this
Agreement.
"1940 Act" shall have the meaning set forth in Section 4.8.
"Acquisition Proposal" shall have the meaning set forth in
Section 6.5(b) hereof.
"Additional Deductions" shall have the meaning set forth in
Section 10.4(f) hereof.
"Additional Taxes" shall have the meaning set forth in Section
2.5 hereof.
"Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under the Exchange Act.
"Agreement" shall mean this Stock Purchase Agreement together
with the Schedules and Exhibits hereto.
"Binghamton Liabilities" shall mean all liabilities and
obligations of the Company or Columbia Electric Binghamton General, Inc. or any
other subsidiary of the Company relating or formerly related to the Binghamton
Cogeneration Limited Partnership (collectively, "Binghamton Obligations")
including without limitation the obligations of the Company to maintain the $6
million letter of credit to Citizens Xxxxxx and under the Columbia Gas
Transmission OPT Service Agreement dated November 1, 1993.
"Buyer" shall have the meaning set forth in the preamble
hereto.
"Buyer Disclosure Schedule" shall have the meaning set forth
in Article IV hereof.
"Buyer Employee Benefit Plans" shall have the meaning set
forth in Section 6.7(a) hereof.
"Buyer Indemnified Parties" shall have the meaning set forth
in Section 10.4(a) hereof.
"Buyer Material Adverse Effect" shall have the meaning set
forth in Section 4.1 hereof.
"Buying Group" shall have the meaning set forth in Section
11.2(b).
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Closing" shall have the meaning set forth in Section 2.2(a)
hereof.
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"Closing Date" shall have the meaning set forth in Section
2.2(a) hereof.
"Closing Date Statement of Net Book Value" shall have the
meaning set forth in Section 2.4(c)
hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commitment Letter" shall have the meaning set forth in
Section 11.17 of the Seller's Disclosure Schedule.
"Company" shall have the meaning set forth in the recitals
hereto.
"Company Stock" shall have the meaning set forth in Section
3.2(a) hereof.
"Confidentiality Agreement" shall mean the Confidentiality
Agreement dated as of July 7, 2000 between the Buyer and the Seller.
"Construction Budgets" shall have the meaning set forth in
Section 3.6(d) hereof.
"Contest" shall have the meaning set forth in Section 5.1(d).
"Damages" shall mean any cash, liabilities, out-of-pocket
costs or expenses (including reasonable attorneys' fees whether or not involving
a third-party claim), judgments, fines, losses, claims, damages and amounts paid
in settlement, except to the extent caused by the negligence, willful misconduct
or fraud of an Indemnified Party.
"Deductible Amount" shall have the meaning set forth in
Section 10.4(c) hereof.
"DOJ" shall mean the Antitrust Division of the United States
Department of Justice, or any successor agency.
"Encumbrance" shall mean any lien, encumbrance, security
interest, charge, mortgage, option, pledge or restriction on transfer of any
nature whatsoever (except, in the case of the Company Stock, for restrictions
relating to applicable securities laws and except for encumbrances created
pursuant to Project financing documents and any Permits).
"Environmental Claim" shall mean any claim, action, demand,
order, or written notice by or on behalf of, any Governmental Entity or other
Person alleging a violation of, or potential liability based on, any
Environmental Law or environmental Permit.
"Environmental Laws" shall mean all federal, state, and local
laws and regulations (including common laws) relating to releases or threatened
releases of petroleum products or Hazardous Materials or otherwise relating to
the generation, the adverse effect of treatment, storage, transport or handling
of petroleum products or Hazardous Materials or pollution on human health or the
environment.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
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"ERISA Affiliate" shall have the meaning set forth in Section
3.13(c).
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exempt Wholesale Generator" shall mean any person determined
by the Federal Energy Regulatory Commission pursuant to Section 32 of PUHCA to
be engaged directly, or indirectly through one or more affiliates as defined in
Section 2(a)(11)(B) of PUHCA, and exclusively in the business of owning or
operating, or both owning and operating, all or part of one or more eligible
facilities and selling electric energy at wholesale.
"FERC" shall mean the Federal Energy Regulatory Commission, or
any successor agency.
"FTC" shall mean the Federal Trade Commission, or any
successor agency.
"Future Required Permits" shall have the meaning set forth in
Section 3.9 hereof.
"GAAP" shall mean United States generally accepted accounting
principles as in effect on the date or for the period with respect to which such
principles are applied.
"Governmental Entity" shall have the meaning set forth in
Section 3.5 hereof.
"Grassy Point Project" shall have the meaning set forth in the
recitals hereto.
"Hazardous Materials" shall mean any chemicals, materials or
substances defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "hazardous constituents," "restricted
hazardous materials," "extremely hazardous substances," "toxic substances,"
"contaminants," "pollutants," "toxic pollutants" or words of similar meaning and
regulatory effect under CERCLA or any applicable Environmental Law.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"Indemnified Party" shall have the meaning set forth in
Section 10.4(g) hereof.
"Indemnifying Party" shall have the meaning set forth in
Section 10.4(g) hereof.
"Interim Transaction" shall have the meaning set forth in
Section 11.17 of the Seller's Disclosure Schedule.
"Investing Company" shall have the meaning set forth in the
recitals hereto.
"IRS" shall mean the United States Internal Revenue Service or
any successor agency.
"Late Closing Dates" shall have the meaning set forth in
Section 2.2(a) hereof.
"Legal Exception" shall have the meaning set forth in Section
11.16.
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"Lost Operating Profits" shall have the meaning set forth in
Section 10.3(b).
"Material Adverse Effect" shall have the meaning set forth in
Section 3.1 hereof.
"Material Business" shall have the meaning set forth in
Section 6.5(b) hereof.
"Material Contract" shall have the meaning set forth in
Section 3.18 hereof.
"Multiemployer Plan" shall have the meaning set forth in
Section 3(37) of ERISA.
"Multiple Employer Plan" shall mean a plan with two or more
contributing sponsors, at least two of which are not under common control,
within the meaning of Section 4063 of ERISA.
"Net Book Value" shall have the meaning set forth in Section
2.4(b) hereof.
"Obtained Permits" shall have the meaning set forth in Section
3.9 hereof.
"Overlap Period" shall have the meaning set forth in Section
5.1(b) hereof.
"Overlap Period Taxes" shall have the meaning set forth in
Section 5.1(b) hereof.
"Permits" shall mean licenses, approvals, franchises,
authorizations, certifications, registrations and similar documents or
instruments issued by a Governmental Entity.
"Permitted Encumbrance" shall mean an Encumbrance which would
not have a Material Adverse Effect or otherwise materially impair the use or
value of the subject property for the intended use with respect to the relevant
Project Company.
"Person" shall mean any individual, partnership, joint-stock
company, joint venture, corporation, limited liability company, trust or
unincorporated organization, or a Governmental Entity or political subdivision
thereof.
"Plans" shall have the meaning set forth in Section 3.13(a)
hereof.
"Pre-Closing Taxes" shall have the meaning set forth in
Section 5.1(b) hereof.
"Project" shall have the meaning set forth in the recitals
hereto.
"Project Company" shall have the meaning set forth in the
recitals hereto.
"Purchase Price" shall have the meaning set forth in Section
2.1 hereof.
"QF Investing Company" shall have the meaning set forth in the
recitals hereto.
"QF Project Company" shall have the meaning set forth in the
recitals hereto.
"QF Assets" shall mean all shares of capital stock of the QF
Investing Companies.
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"QF Liabilities" shall mean any and all obligations, Taxes,
liabilities of and Damages incurred by the Company, directly or indirectly,
arising out of or relating to the QF Investing Companies, the QF Project
Companies, including without limitation the QF Support Obligations and the
Binghamton Liabilities, the Interim Transaction described in Section 11.17 and
the Grassy Point Project.
"QF Support Obligations" shall mean the support obligations
set forth in Exhibit B-1 hereto relating to the QF Project Companies.
"Reference Statement of Net Book Value" shall have the meaning
set forth in Section 2.4(c) hereof.
"Representative" shall mean, with respect to any Person, each
of such Person's directors, officers, employees, representatives and agents.
"Retained Employees" shall have the meaning set forth in
Section 6.7(d).
"Section 338(h)(10) Election" shall have the meaning set forth
in Section 2.5 hereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Seller" shall have the meaning set forth in the preamble
hereto.
"Seller Disclosure Schedule" shall have the meaning set forth
in Article III hereof.
"Seller Indemnified Parties" shall have the meaning set forth
in Section 10.4(b) hereof.
"Selling Group" shall have the meaning set forth in Section
11.2(b) hereof.
"Seller Support Obligations" shall have the meaning set forth
in Section 2.3 hereof.
"Single Employer Plan" shall mean a defined benefit pension
plan which is subject to Title IV of ERISA and which is not a Multiemployer
Plan.
"Tax Claims" shall mean any claims, actions, causes of action,
liabilities, losses, damages, deficiencies, judgments, settlements, costs and
expenses whatsoever (including reasonable out-of-pocket expenses and reasonable
attorneys' fees), whether or not resulting from third party claims, relating to
Taxes.
"Taxes" shall mean all income, gross receipts, profits,
franchise, single business, sales, use, transfer, occupation, property
(including in lieu-of-taxes), capital, environmental, employment, severance,
excise, workers' compensation, social security, withholding or similar taxes or
other governmental fees or charges of a similar nature, however denominated,
imposed
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by any federal, state, local or other political subdivision taxing authority,
together with any interest, additions or penalties with respect thereto.
"Tax Return" shall mean any return, report, statement,
information or other document including any amendment thereto filed or to be
filed or required to be filed or supplied to any federal, state, or local Tax
authority or any other government entity with respect to Taxes, including, where
permitted or required, combined or consolidated returns for any group of
entities.
"Transaction Regulatory Approvals" shall mean all regulatory
approvals required to consummate the transactions contemplated hereby.
"Transfer Taxes" shall have the meaning set forth in Section
5.1(a) hereof.
"Transition Services Agreement" shall mean that agreement as
executed by the Seller and the Buyer substantially in the form set forth in
Exhibit C hereto.
"WARN Act" shall have the meaning set forth in Section 6.7(d).
As used in this Agreement, references to the "knowledge" of
any Person shall mean the actual knowledge of the executive officers of such
Person and of the senior employees or managers of such Person responsible for
the area of operations of such Person to which such Person's knowledge relates.
ARTICLE II
SALE OF INTERESTS
Section 2.1 Purchase and Sale of the Company Stock. The Buyer
and the Seller hereby agree that upon the terms and subject to the satisfaction
or waiver, if permissible, of the conditions set forth herein, the Seller shall
sell, transfer and deliver to the Buyer and the Buyer shall purchase from the
Seller, free and clear of all Encumbrances, the Company Stock for a purchase
price equal to two hundred million dollars ($200,000,000) (the "Purchase Price")
in cash as adjusted pursuant to Sections 2.4 and 2.5.
Section 2.2 Closing. (a) The closing of the transactions
contemplated by this Agreement (the "Closing") shall be held at 10:00 a.m.
Eastern Standard Time on the third business day following the satisfaction of
the conditions precedent to the sale and purchase of the Company Stock to be
effective as of such day, at the offices of LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P. in New York, New York, or at such other time, date or place as the
parties may mutually agree (hereinafter referred to as the "Closing Date"),
provided that the consent of the Buyer will be required to close before December
15, 2000, and provided further that the Buyer's consent will not be required to
close after October 31, 2000 and before December 15, 2000 if (i) the Buyer is
able to obtain bridge financing on terms acceptable to it for the Purchase Price
and (ii) the Seller pays the fees applicable to such financing. The Buyer agrees
to use good faith efforts to close before December 15, 2000 if it can do so
consistent with its financing plan. If the Buyer is not able, for any reason, to
close on or before December 22, 2000 the Buyer shall pay to the Seller
$2,500,000 and an additional $2,500,000 if the Buyer is not able to close for
any
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reason, on or before December 29, 2000 (by 3:00 p.m. Eastern Standard Time)
(both December 22, 2000 and December 29, 2000, collectively, the "Late Closing
Dates"); provided in any such case that all of the conditions to the Buyer's
obligation to close set forth in Article IX and Article VII shall have been
satisfied and the Seller is ready, willing and able to close. The Closing shall
be deemed effective as of 12:01 a.m. on the Closing Date.
(b) At the Closing, the Seller shall deliver the following to
the Buyer:
(i) stock certificate(s) duly endorsed or
accompanied by stock powers duly endorsed in
blank with appropriate transfer stamps, if
any, affixed thereto, representing the
Company Stock;
(ii) the certificates contemplated by Section 9.3
hereof;
(iii) all other documents required to be delivered
by the Seller on or prior to the Closing
Date pursuant to this Agreement, and
(iv) certification that the books and records of
the Company, each Investing Company and each
Project Company are at the Buyer's disposal
and may be obtained by the Buyer at the
location specified in the certificate or
shipped to the Buyer within 10 business days
at the address indicated by the Buyer.
(c) At the Closing, the Buyer shall deliver to the Seller:
(i) the Purchase Price;
(ii) the certificates contemplated by Section 8.3
hereof; and
(iii) all other documents required to be delivered
by the Buyer on or prior to the Closing Date
pursuant to this Agreement.
(d) All payments to be made by the Buyer pursuant to this
Section 2 shall be made by wire transfer of immediately available funds to such
bank account or bank accounts which shall be designated by the Seller at least
two business days prior to the Closing Date, one business day after each of the
Late Closing Dates, or as otherwise provided in Section 2.4.
Section 2.3 Seller Support Obligations. The Buyer recognizes
that the Seller has provided financial support to the Project Companies in the
manner described on Exhibit B hereto (the "Seller Support Obligations"). At the
Closing, the Buyer shall, at the expense of the Buyer, take all necessary action
within its control, including the furnishing of credit support (but not in
excess of the amounts set forth on Exhibit B hereto) to obtain the release of
the Seller from all liability and obligation with respect to the Seller Support
Obligations at the Closing.
Section 2.4 Net Book Value Adjustment to Purchase Price. (a)
The Purchase Price shall be increased by the amount that the Net Book Value set
forth on the Closing Date Statement of Net Book Value exceeds the Net Book Value
set forth on the Reference Statement
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of Net Book Value, or decreased by the amount that the Net Book Value set forth
on the Closing Date Statement of Net Book Value is less than the Net Book Value
set forth on the Reference Statement of Net Book Value, as the case may be. It
is the intention of the parties that there shall be no increase or decrease to
the Purchase Price as a result of the transactions contemplated by Section 2.6
hereof.
(b) As used in this Agreement, "Net Book Value" means assets
less liabilities as reflected on the Reference Statement of Net Book Value. For
purposes of such calculation, assets shall be the sum of current assets
(including cash and short term investments, accounts receivable, intercompany
receivables and prepaid expenses), property, plant and equipment and other
assets as set forth in Schedule 2.4(c). Liabilities shall be the sum of current
liabilities (including accounts payable, accrued expenses, accrued income taxes
and intercompany payables) and other liabilities as set forth in Schedule
2.4(c). All of the foregoing calculations shall be made in conformity with GAAP,
except for the Seller's and the Company's capitalization of interest with
respect to the internal financing of the Ceredo Project, which shall be treated
as if it were in conformity with GAAP; provided, however, that no additional
amount representing interest with respect to such financing shall be reflected
on the Closing Date Statement of Net Book Value.
(c) For purposes of this Agreement, "Reference Statement of
Net Book Value" means the pro forma calculation of the Net Book Value of the
Company as of September 30, 2000 made in accordance with Section 2.4(b) and set
forth on Schedule 2.4(c), and "Closing Date Statement of Net Book Value" means
the calculation of the Net Book Value of the Company as of the close of business
on the day prior to the Closing Date made in accordance with Section 2.4(b) and
from which the calculation of the adjustment to the Purchase Price will be made
in accordance with Section 2.4(a) hereof.
(d) Within 45 days following the Closing Date, the Seller
shall prepare and deliver to the Buyer the Closing Date Statement of Net Book
Value prepared by the Seller in accordance with GAAP. The Closing Date Statement
of Net Book Value shall be prepared by the Seller in good faith and shall be
certified by the Seller to be, as of the date prepared, its good faith estimate
of the amounts reflected thereon. After the Seller has delivered its Closing
Date Statement of Net Book Value in accordance with this Section 2.4(d), it
shall not be entitled to raise any additional issues or changes that would
result in an increase to the Net Book Value of the Company as of the close of
business on the day prior to the Closing Date.
(e) The Seller shall provide the Buyer with a preliminary
draft of the Closing Date Statement of Net Book Value within 30 days following
the Closing Date. The Buyer shall allow the Seller and its agents access at all
reasonable times after the Closing to copies of the books, records and accounts
of the Company and make available to the Seller such information as the Seller
reasonably requests to allow the Seller to prepare the Closing Date Statement of
Net Book Value. The Buyer and the Seller will in good faith attempt to resolve
any disputes with respect to such calculation before the final Closing Date
Statement of Net Book Value is rendered.
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(f) The Buyer shall give written notice to the Seller of any
objection to the Closing Date Statement of Net Book Value within 30 days after
the Buyer's receipt of the final statement pursuant to Section 2.4(d). The
notice shall specify in reasonable detail the items in the Closing Date
Statement of Net Book Value to which the Buyer objects and shall provide a
summary of the Buyer's reasons for such objections. After the Buyer has
delivered its notice of objections in accordance with this Section 2.4(f), it
shall not be entitled to raise any additional objections which would result in
an decrease to the Net Book Value of the Company as of the close of business on
the day prior to the Closing Date.
(g) Any dispute between the Buyer and the Seller with respect
to the Closing Date Statement of Net Book Value which is not resolved within 15
days after receipt by the Seller of the written notice from the Buyer shall be
referred for decision to a nationally recognized accounting firm selected by the
Seller and reasonably acceptable to the Buyer who is not engaged in providing
services to the Seller or the Buyer or any of their Affiliates to decide the
dispute within 30 days of such referral. The decision by the accounting firm
shall be final and binding on the Seller and the Buyer. The cost of retaining
the accounting firm with respect to resolving disputes as to the Closing Date
Statement of Net Book Value shall be borne by the Seller and the Buyer equally.
(h) Following delivery of the Buyer's written notice of
objections to the Closing Date Statement of Net Book Value, any balance due to
the Seller or refund due to the Buyer pursuant to the adjustments set forth in
Section 2.4(a) that is not in dispute shall be paid within ten (10) days of such
delivery (and any payment in respect of any amount in dispute shall be paid
within 10 days of the resolution of such dispute) together with interest on each
payment amount from the Closing Date to the date of payment at 7% per annum, in
immediately available funds to an account which shall be designated by the
Seller or the Buyer, as the case may be, at least 2 days before the payment is
due.
Section 2.5 Adjustment to Purchase Price - Section 338(h)(10)
Election. If the Buyer requests the Seller to join with the Buyer in making an
election pursuant to section 338(h)(10) of the Code (the "Section 338(h)(10)
Election"), the Buyer shall pay to the Seller any Additional Taxes directly
resulting from the Section 338(h)(10) Election that are in excess of the Taxes
that would have been incurred by the Seller if the Seller instead were to have
sold all the Company Stock without effecting a Section 338(h)(10) Election, up
to an aggregate of $100,000 For purposes of this Section 2.5, "Additional Taxes"
means the net amount of any Taxes incurred by the Company, the Seller or the
Seller's Affiliates from state authorities that are in excess of the Taxes that
would have been incurred by the Company, the Seller and the Seller's Affiliates
from state authorities, if the Seller instead were to have sold all the Shares
without effecting the Section 338(h)(10) Election (including any Taxes imposed
on the increase in the Purchase Price pursuant to this Section 2.5). For
purposes of computing Additional Taxes, Taxes shall be computed at the highest
applicable corporate marginal rate, and it shall be assumed that neither the
Seller nor any of its Affiliates had any items of income, gain, loss, or
deduction or credit, including net operating losses and carryovers, other than
that resulting from the transactions contemplated by this Agreement. Not later
than 60 days after the Seller files its federal and state income Tax Returns for
the period which includes the Closing Date, the Seller shall give notice to the
Buyer of its calculation of the payment to be made by the Buyer pursuant to this
Section
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2.5, which notice shall include (i) a detailed explanation of the calculation
and all workpapers supporting such calculation and (ii) wire transfer
instructions for such payment, if any. The Seller shall promptly make available
to the Buyer such information as the Buyer reasonably requests to allow the
Buyer to examine the accuracy of such calculation. The Buyer shall pay the
amount shown on such notices by wire transfer of immediately available funds to
the Seller within 20 days of receipt by the Buyer of such notice; provided,
however, that if the Buyer disputes the calculation set forth in such notice,
the Buyer shall pay any undisputed amount and give written notice to the Seller
of any objection to such calculation within 20 days following receipt by the
Buyer of such notice, which notice shall specify in reasonable detail the items
in such calculation to which the Buyer objects and shall provide a summary of
the Buyer's reasons for such objections. Any dispute between the Buyer and the
Seller with respect to such calculation shall be resolved in accordance with the
procedures set forth in Section 2.4(g) and any payment in respect of any amount
in dispute shall be paid within 10 days of the resolution of such dispute.
Section 2.6 QF Assets and Liabilities and Grassy Point
Project. At no cost or liability to the Buyer, prior to the Closing the Seller
shall cause the QF Assets, the QF Liabilities and the Grassy Point Project (and
all assets and liabilities associated therewith) to be transferred to and
assumed by the Seller or an unrelated third party, pursuant to assignment and
assumption documentation reasonably acceptable to the Buyer, and shall take all
necessary action within its control, including the furnishing of credit support,
to obtain the release of the Company from all liability and obligation with
respect to the QF Support Obligations at or before Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER RELATING TO SELLER, THE
COMPANY, THE INVESTING COMPANIES AND PROJECT COMPANIES
The Seller shall deliver to the Buyer a Disclosure Schedule
concurrently with the execution and delivery by the Seller of this Agreement, as
attached hereto (the "Seller Disclosure Schedule"). Disclosure of any fact or
item in the Seller Disclosure Schedule referenced by a particular paragraph or
section in the Agreement shall, should the existence of the fact or item or its
contents be relevant to any other paragraph or section in the Agreement, be
deemed to be disclosed with respect to such other paragraph or section whether
or not a specific cross-reference appears; provided that the relevance of such
fact or item shall be reasonably evident from such disclosure. Except as set
forth in the Seller Disclosure Schedule, the Seller hereby represents and
warrants to the Buyer as follows:
Section 3.1 Organization, Standing and Power. As of the
Closing Date, each of the Seller, the Company, the Investing Companies and each
Project Company is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has all requisite power and
authority to conduct its business as it is now being conducted and to own, lease
and operate its property and assets, except where the failure to be so
organized, existing and in good standing or to have such power or authority will
not, in the aggregate, either (i) have a material adverse effect on the
business, results of operations, assets or financial condition of the Company,
the Investing Companies and the Project Companies, taken as a whole, or (ii)
materially impair the ability of the Seller to perform its material obligations
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under this Agreement; provided, however, that any adverse effect or impairment
attributable to or caused by conditions affecting the U.S. economy, as a whole,
or the electric wholesale generation industry, in particular, shall not be
deemed nor taken into account in determining whether there has been or will be a
Material Adverse Effect (any of such effects or impairments, a "Material Adverse
Effect"). Each of the Company, the Investing Companies and each Project Company
is qualified or licensed to do business as a foreign corporation or company and
is in good standing in each jurisdiction in which ownership of property or the
conduct of its business requires such qualification or license, except where the
failure to be so qualified or licensed will not have a Material Adverse Effect.
Section 3.1 of the Seller Disclosure Schedule sets forth the jurisdiction of
organization and states of foreign qualification for each of the Company, the
Investing Companies and the Project Companies, as well as each director, officer
and manager, as applicable, of the Company, each Investing Company and each
Project Company as of the date hereof. As of the Closing Date, other than as set
forth in Exhibit A hereto, the Company shall have no interest in any Person.
Section 3.2 Capitalization of the Company and the Investing
Companies. (a) The authorized equity capital of the Company consists of 3,000
shares of common stock, par value $25.00 per share, of which 1,835 shares have
been issued and are outstanding (the "Company Stock"), all of which Company
Stock is held beneficially and of record by the Seller. All of the shares of
Company Stock are duly authorized, validly issued, fully paid and non-assessable
and free of any preemptive rights in respect thereto.
(b) There are no outstanding (i) securities convertible into
or exchangeable for the equity capital of the Company, (ii) options, warrants or
other rights to purchase or subscribe for equity capital of the Company or (iii)
contracts, commitments, agreements, understandings or arrangements of any kind
relating to the issuance of any equity capital of the Company or any such
convertible or exchangeable securities or any such options, warrants or rights,
pursuant to which, in any of the foregoing cases, the Company is subject to or
bound.
(c) Upon delivery of the Company Stock against payment of the
Purchase Price by the Buyer in accordance with Section 2 of this Agreement,
valid and marketable title to the Company Stock, free and clear of any
Encumbrance, will pass to the Buyer.
Section 3.3 Investing Companies; Project Companies. (a) As set
forth in Section 3.3(a) of the Seller Disclosure Schedule, all issued and
outstanding shares of equity capital of each of the Investing Companies are duly
authorized, validly issued, fully paid and non-assessable, and are owned,
directly or indirectly (if indirectly, as set out in Section 3.3(a) of the
Seller Disclosure Schedule), by the Company, free and clear of all Encumbrances
and any preemptive rights in respect thereto.
(b) There are no outstanding (i) securities convertible into
or exchangeable for the equity capital of any Investing Company, (ii) options,
warrants or other rights to purchase or subscribe for equity capital of any
Investing Company or (iii) contracts, commitments, agreements, understandings or
arrangements of any kind relating to the issuance of any equity capital of any
Investing Company or any Investing Company or any such convertible or
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exchangeable securities or any such options, warrants or rights, pursuant to
which, in any of the foregoing cases, the Company or any Investing Company is
subject to or bound.
(c) The ownership interest of the Investing Companies, and
each other partner or member of a Project Company, with respect to the Projects
is disclosed in Section 3.3(c) of the Seller Disclosure Schedule. Except as
disclosed in Section 3.3(c) of the Seller Disclosure Schedule, each Investing
Company owns its ownership interest free and clear of all Encumbrances. There
are no options, rights, warrants, conversion rights or other commitments to
which any of the Project Companies, the Investing Companies or the Company is a
party providing for the issuance or transfer by such Project Companies of
interests therein. Each Investing Company is exclusively engaged in the business
of owning its interest in the related Project Companies, as disclosed in Section
3.3(c) of the Seller Disclosure Schedule. As of the Closing Date, the Company
shall not be not engaged, nor shall it own any interest in, any business other
than the Project Companies.
(d) The stock and minute books of the Company and each
Investing Company and Project Company (other than those QF Investing Companies
to be transferred pursuant to this Agreement) contain complete and accurate
records of all issuances and transfers of capital stock and other equity
interests, all meetings and other actions of their respective boards of
directors and shareholders and all material actions of the management
committees.
(e) Without limiting the foregoing, and except as set forth in
Section 3.3(e) of the Seller Disclosure Schedule, no member or partner or
Affiliate thereof of any Project Company (other than those QF Investing
Companies to be transferred pursuant to this Agreement) is entitled to any
reimbursement of any development expenses or fees which have not been paid.
Section 3.4 Authority Relative to this Agreement. The Seller
has all requisite corporate authority and power to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all required action
on the part of the Seller, including approval of the board of directors of the
Seller, and no other proceedings on the part of the Seller are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the Seller
and, assuming this Agreement has been duly authorized, executed and delivered by
the Buyer, this Agreement constitutes a valid and binding agreement of the
Seller, enforceable against the Seller in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, including the effect of statutory and other laws
regarding fraudulent conveyances and preferential transfers, and subject to the
limitations imposed by general equitable principles (regardless of whether such
enforceability is considered in a proceeding at law or in equity).
Section 3.5 No Conflict or Violation; Consents and Approvals.
Neither the execution and delivery of this Agreement by the Seller nor the
consummation of the transactions contemplated hereby by the Seller will (a)
violate any provision of the certificate of incorporation
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or by-laws of the Seller, (b) require the consent, waiver or approval of any
federal, state, local or foreign government or regulatory authority, agency or
commission, including courts of competent jurisdiction, domestic or foreign (a
"Governmental Entity"), except for (i) consents and approvals to be made and
obtained before the Closing as listed in Section 3.5 of the Seller Disclosure
Schedule hereto and (ii) such consents and approvals as, if not made or
obtained, will not in the case of this clause (b), in the aggregate, have a
Material Adverse Effect, (c) result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration or any obligation to repay)
under, or require any consent under, except as set forth in Section 7.3 of the
Seller Disclosure Schedule, any of the terms, conditions or provisions of any
indenture, mortgage, note, bond, encumbrance, license, contract, lease,
franchise, permit, agreement or other instrument or obligation to which the
Seller, the Company, any Investing Company or any Project Company is a party or
by which the Seller, the Company, any Investing Company or any Project Company
or any of their respective properties or assets may be bound, except for such
violations, breaches and defaults as, in the aggregate, will not have a Material
Adverse Effect or (d) violate any order, writ, judgment, injunction, decree,
statute, ordinance, rule or regulation of any Governmental Entity applicable to
the Seller, the Company, any Investing Company or any Project Company or by
which any of their respective properties or assets may be bound, except for such
violations as, in the aggregate, will not have a Material Adverse Effect.
Section 3.6 Financial Statements. The Seller has previously
furnished to the Buyer the financial statements of the Seller and the Project
Companies and the related financial statements of operations and cash flows of
the Seller (including any related notes) for the fiscal years ending December 31
of each of 1996, 1997, 1998 and 1999 and interim period ending July 31, 2000 and
of the Project Companies as set out in Section 3.6(a) of the Seller Disclosure
Schedule.
(a) Except as noted in the related report, if any, of
independent certified public accountants, the financial statements:
(i) have been prepared in accordance with GAAP
consistently applied, and
(ii) fairly present the financial position,
results of operations, cash flows and
stockholders' equity of the relevant
companies as of and for the period
presented.
(b) The July 31, 2000 (or June 30, 2000, in the case no July
31, 2000 balance sheet is listed on Schedule 3.6(a)) interim balance sheets,
including the notes thereto, reflect or provide for all claims against and debts
and liabilities of the Company and the Project Companies, fixed or contingent,
as of July 31, 2000 (or June 30, 2000, as applicable) which are required to be
reflected or provided for in a balance sheet and the notes thereto prepared in
accordance with GAAP consistently applied.
(c) The accounting books and records of the Company with
respect to each Investing Company and each Project Company have been maintained
by the Company in
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accordance with GAAP, and such accounting books and records accurately reflect
in all material respects all of the financial transactions that should be
reflected in its accounting books and records so maintained in accordance with
GAAP.
(d) The construction budgets ("Construction Budgets") for the
Liberty and Ceredo Projects are attached hereto as Exhibits D-1 and D-2,
respectively, and have been prepared in good faith. The transitional period
development budgets for all other Projects are attached as Exhibit D-3 and the
construction schedules for the Liberty and Ceredo Projects are attached as
Exhibits D-4 and D-5, respectively.
Section 3.7 Absence of Certain Changes. Except as set forth in
Section 3.7 of the Seller Disclosure Schedule, since July 31, 2000, neither the
Company nor any Investing Company or Project Company has (a) suffered any
change, including any casualty, to its assets, in its business, operations or
financial position, except such changes which, in the aggregate, are not
reasonably likely to have a Material Adverse Effect, (b) conducted its business
in any material respect not in the ordinary and usual course consistent with
past practice or (c) except with respect to the QF Projects, QF Assets or QF
Liabilities, and the transactions contemplated or permitted in Section 11.17 of
this Agreement, (i) incurred any indebtedness or issued any debt securities or
assumed or guaranteed the obligations of any other Person, (ii) declared, set
aside for payment or paid any dividend or other distribution (whether in cash,
stock, property or any combination thereof) in respect of the equity of the
Company or redeemed or otherwise acquired any interests of equity of the
Company, (iii) sold, transferred or otherwise disposed of any of its material
property or assets, (iv) created any Encumbrance on any of its material property
or assets other than Permitted Encumbrances, (v) increased in any manner the
rate or terms of compensation of any of its directors, officers or other
employees, (vi) paid or agreed to pay any pension, retirement allowance or other
employee benefit not required by law or any existing Plan or other agreement or
arrangement to any such director, officer or employee, whether past or present,
(vii) entered into or amended any employment, bonus, severance or retirement
contract for employees of the Company, (viii) suffered any work stoppage or
labor dispute or (ix) acquired or agreed to acquire any interest in any
corporation, partnership, limited liability company or other entity.
Section 3.8 Compliance with Law. The businesses of the
Company, the Investing Companies and the Project Companies are not being
conducted in violation of any applicable order, writ, judgment, injunction,
decree, statute, ordinance, rule or regulation of any Governmental Entity,
including any Permit, except for such violations as, in the aggregate, will not
have a Material Adverse Effect. Neither the Company nor any of the Investing
Companies or Project Companies is in default or violation (and no event has
occurred which with notice or the lapse of time or both would constitute a
default or violation) of any term, condition or provision of (a) its certificate
of incorporation or by-laws (or other comparable governing documents) or (b) any
order, writ, judgment, injunction, decree, statute, ordinance, rule or
regulation of any Governmental Entity applicable to the Company or such
Investing Company or Project Company, as the case may be, or to any of their
respective assets, except for such defaults and violations in the case of this
clause (b) as, in the aggregate, will not have a Material Adverse Effect.
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Section 3.9 Permits. Each of the Company and each Investing
Company and Project Company has all Permits necessary for the conduct of its
businesses in all material respects as presently conducted, as set forth in
Section 3.9 of the Seller Disclosure Schedule (the "Obtained Permits") and is in
compliance with the terms of the Obtained Permits, except for such Permits the
absence of which would not have a Material Adverse Effect or any non-compliance
as will not have a Material Adverse Effect. All material Permits which the
Seller reasonably believes are necessary to be obtained by or on behalf of any
Investing Company or Project Company for the construction, use or operation of
the Liberty and Ceredo Projects are listed in Section 3.9 of the Seller
Disclosure Schedule ("Future Required Permits"). The Obtained Permits are in
full force and effect, are sufficient for their intended purposes and are not,
to the Seller's knowledge, the subject of any proposed material modifications or
cancellations or protest. The Seller reasonably believes that each Future
Required Permits for the Liberty and Ceredo Projects (i) can be obtained in due
course on or prior to the date required and (ii) will not contain any conditions
or requirements the compliance with which could be reasonably expected to have a
Material Adverse Effect.
Section 3.10 Litigation. Except as set forth in Section 3.10
of the Seller Disclosure Schedule, there is no action, suit, notice of violation
or proceeding pending, or, to the knowledge of the Seller, threatened, against
the Seller, the Company, any Investing Company or any Project Company or any
properties or rights of the Seller, the Company, any Investing Company or
Project Company before any Governmental Entity, or any third party, which
involves a claim the adverse determination of which would be reasonably likely
to have a Material Adverse Effect.
Section 3.11 Taxes. (a) The Seller has, with respect to the
Company, the Investing Companies and Project Companies, within the time and
manner prescribed by law, (i) filed or caused to be filed with the appropriate
taxing authorities (or joined in the filing of) all Tax Returns required to be
filed by them in respect of any Taxes other than those Tax Returns, the failure
of which to file, would not have a Material Adverse Effect, and each such Tax
Return was complete and accurate in all material respects and (ii) paid in full
or caused to be paid in full all Taxes shown to be due and payable thereon,
except those being contested in good faith by appropriate proceedings and for
which appropriate reserves have been established in accordance with GAAP.
(b) (i) No deficiencies for any Taxes have been asserted in
writing or, to the knowledge of the Seller, verbally proposed or assessed
against the Company, the Investing Companies or any Project Company, which
remain unpaid and which in the aggregate could have a Material Adverse Effect,
or which are not being contested in good faith by appropriate proceedings and
for which appropriate reserves have been established in accordance with GAAP and
(ii) the Company and the Investing Companies have adequately reserved for all
material Taxes payable by the Company, the Investing Companies or any Project
Company for which no Tax Return has yet been filed.
Section 3.12 Environmental Matters. Except as set forth in
Section 3.12 of the Seller Disclosure Schedule, to the Seller's knowledge (a)
each Project is in compliance with all applicable Environmental Laws including
with respect to any release on site of any hazardous
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materials, except where such circumstances would not have a Material Adverse
Effect; (b) there are no Environmental Claims, pending or threatened, against
any Project Company which, if determined adversely against the Project Company,
would have a Material Adverse Effect; (c) except as would not have a Material
Adverse Effect, all information previously provided by the Seller, the Company,
the Investing Companies or the Project Companies to any Governmental Entity, in
support of, or to demonstrate compliance with, environmental and operating
Permits was accurate at the time provided in all material respects and (d)
except as would not have a Material Adverse Effect, no Project Company has any
unregistered underground storage tanks in violation of applicable Environmental
Laws. Section 3.12 of the Seller Disclosure Schedule lists all Phase I and Phase
II environmental assessments and other similar written environmental assessments
of the properties owned by any Project Company, the results of soil, surface
water and ground water testing of such sites for hazardous materials, and
correspondence with regulatory agencies relating to environmental conditions
referenced in any such environmental assessment that is currently in the
possession or control of the Seller, the Company, any Investing Company or any
Project Company.
Section 3.13 Employee Benefit Plans; ERISA. (a) Section 3.13
of the Seller Disclosure Schedule sets forth a complete and correct list of all
"employee benefit plans," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), maintained, or contributed
to, by the Company on behalf of any employee, officer or director of the Company
and all material written bonus or other incentive compensation, deferred
compensation, salary continuation, disability, stock award, stock option, stock
purchase, severance, parachute or other material employee benefit policies or
arrangements which the Company maintains or contributes to on behalf of any
employee, officer or director of the Company (collectively referred to as the
"Plans"). Complete copies of the documents comprising each of the Plans (and
where final Plan documents do not exist, the summaries which have been
provided), and complete copies of the most recent Form 5500 which have been
filed with the IRS for each Plan, have been furnished to the Buyer.
(b) None of the Plans is a Multiemployer Plan or a Multiple
Employer Plan. The Company has no liability due to a complete or partial
withdrawal from a Multiemployer Plan or Multiple Employer Plan or due to the
termination or reorganization of a Multiemployer Plan, and no events have
occurred and no circumstances exist that could reasonably be expected to result
in any such liability to the Company.
(c) The Plans that are Single Employer Plans are so noted in
Section 3.13 of the Seller Disclosure Schedule. Neither the Company nor any
ERISA Affiliate has incurred, or expects to incur, any liability, penalty or tax
to any person under Title IV of ERISA or Sections 4971, 4972, 4976, 4977 or 4979
of the Code. For purposes of this Agreement, "ERISA Affiliate" means any entity
(whether or not incorporated) which would be treated as a single employer with
the Company under Section 414(b), (c), (m) or (o) of the Code and the
regulations thereunder.
(d) Each Plan that is intended to qualify under Section 401(a)
of the Code, and the trust maintained pursuant thereto, is so qualified and
exempt from taxation under Section 501(a) of the Code, and nothing has occurred
with respect to the operation of any such Plan that could reasonably be expected
to adversely affect such qualification or tax-exempt status.
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(e) There has been no violation of ERISA or the Code with
respect to the filing of applicable reports, documents or notices regarding the
Plans with any governmental authority or the furnishing of required reports,
documents or notices to the participants or beneficiaries of the Plans, except
for such violations as would not result in a Material Adverse Effect.
(f) As required by applicable law and or the terms of any
Plan, all contributions required to have been made shall have been paid by the
Seller or the Company as applicable.
(g) The Company has not engaged in any transaction which would
result in a civil penalty pursuant to Section 502(i) of ERISA or which would
constitute a prohibited transaction under ERISA or be subject to a tax imposed
under Section 4975 of the Code with respect to the Plans, except as would not
have a Material Adverse Effect.
(h) There is no pending or, to the knowledge of the Seller,
threatened claim, legal action, proceeding or investigation against or involving
any Plan which could result in material liabilities to the Company that are not
reflected in the Company's July 31, 2000 balance sheet.
(i) As of the Closing Date, the Company will not have any
liabilities for any benefits payable under the Plans, or any other liabilities
arising out of or in connection with the operation or administration of the
Plans.
(j) No Investing Company or Project Company is a party to any
Plan or any other benefit plan, policy, program or arrangement and neither any
Investing Company nor Project Company has any employees.
Section 3.14 Labor Matters. Neither the Company nor any
Investing Company or Project Company is (i) a party to or bound by any
collective bargaining agreement with a labor union or labor organization, (ii) a
party to or bound by any contract for the employment of any employees of the
Company or (iii) the subject of any proceeding asserting that the Company or any
Investing Company or Project Company has committed an unfair labor practice or
seeking to compel it to bargain with any labor organization as to wages or
conditions of employment.
Section 3.15 Regulatory Matters. Each Project Company
described on Exhibit A as an "exempt wholesale generator" (i) has obtained all
necessary authorizations required to be an Exempt Wholesale Generator and (ii)
has conducted its business and operated in a manner consistent with the terms
and conditions of such authorizations.
Section 3.16 Brokers and Finders. No broker, finder or
investment banker, other than Xxxxxx Xxxxxxx & Co. Incorporated (all fees and
expenses of which are the Seller's obligation), is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Seller.
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Section 3.17 Insurance. Section 3.17 of the Seller Disclosure
Schedule discloses a complete and correct list of (i) all current policies of
insurance maintained by the Seller, the Company, each Investing Company and each
Project Company which provide insurance coverage to the Projects as of the date
hereof and (ii) those policies referenced in (i) above which will continue to
provide insurance coverage to the Project Companies after the Closing. Except as
set forth on Section 3.17 of the Seller Disclosure Schedule, neither the Company
nor any Investing Company nor Project Company has received any notice of
cancellation, non-renewal or amendment of any such insurance policy or bond or
is in default under any such policy or bond, no coverage thereunder is being
disputed, and, to the knowledge of the Company, all claims thereunder have been
filed in a timely fashion. No claims are currently pending.
Section 3.18 Material Contracts. (a) Each contract, agreement,
license, lease, sublease, arrangement, or understanding, or series of related
contracts (i) which involves annual expenditures of more than $250,000, (ii)
which provides for performance, regardless of amount, over a period in excess of
two years from the date of this Agreement, (iii) which involves any instrument
respecting indebtedness or guaranteeing any indebtedness, obligation or
liability of any third party involving an amount of more than $100,000, in the
aggregate for all such instruments or (iv) which involves any joint venture,
partnership or other similar arrangement, to which the Company, any Investing
Company or Project Company is bound or their properties are subject (each, a
"Material Contract") is set forth in Section 3.18 of the Seller Disclosure
Schedule, except as set forth in Exhibit B or Section 11.17.
(b) Each Material Contract is valid and binding and in full
force and effect and no default (or event which with the giving of notice or
passage of time or both would constitute a default) exists thereunder other than
those which, in the aggregate, would not create a Material Adverse Effect. The
Company has not agreed to waive any statute of limitations or other material
right or affirmative defense with respect to any of the Material Contracts.
Without limiting the foregoing, Section 3.18 of the Seller Disclosure Schedule
discloses all "change orders" and other modifications to the Liberty and Ceredo
construction contracts or to the scope of work thereunder.
Section 3.19 Projects in Development and Construction. (a) All
Project development and construction work for the Liberty and Ceredo Projects
has been performed in accordance with the applicable Construction Budgets and
Material Contracts and their respective construction Schedules relating thereto
and the Seller reasonably believes that commercial operation of all phases of
such Projects can commence on or before February 28, 2002 and May 31, 2001,
respectively; and there have been no force majeure or owner or contractor-caused
delays relating thereto. The Company did not elect to modify the scope of work
under Section 4.5 of the Ceredo construction contract.
(b) On May 15, 2000, the Company filed with the Maryland
Public Service Commission an application for a Certificate of Public
Compatibility and Need for the 1650 XX Xxxxxx Ridge Project, which filing was
accurate and complete in all material respects at the time it was made, and has
diligently prosecuted same.
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Section 3.20 Transactions with Affiliates. Except as disclosed
in Section 3.20 of the Seller Disclosure Schedule, neither the Seller nor any
Affiliate of the Seller (except for the Company, the Investing Companies or the
Project Companies):
(a) has any cause of action or other claim whatsoever
against or owes any amount to, or is owed any amount by, the Company, any
Investing Company or any Project Company, excluding intercompany receivables and
payables incurred in the ordinary course of business consistent with past
practice; or
(b) has any other contract or agreement with the Company
or any Investing Company or Project Company, excluding any intercompany service
contracts all of which will terminate on or before the Closing Date.
Section 3.21 Bank Accounts and Safe Deposit Boxes. (a) Section
3.21 of the Seller Disclosure Schedule discloses the title and number of each
bank or other deposit or financial account used by the Company, the Investing
Company or the Project Companies, the bank at which that account is maintained
and the names of the persons authorized to draw against the account or otherwise
have access to it.
(b) Section 3.21 of the Seller Disclosure Schedule also
discloses the same information as set forth in subsection (a) above for each
lock box and safe deposit box leased by the Company, the Investing Company or
the Project Companies.
(c) Section 3.21 of the Seller Disclosure Schedule also
lists all letters of credit and surety bonds posted by the Company and each
Investing Company and Project Company.
Section 3.22 Copies of Documents. The Seller has furnished or
made available to the Buyer true and complete copies of each document listed in
any of the Schedules hereto.
Section 3.23 Real Estate; Personalty.
(a) Section 3.23(a) of the Seller Disclosure Schedule
discloses the real property owned, leased or subleased by the Company, any
Investing Company or any Project Company. Each such company has good and
marketable title to all such real property free and clear of all Encumbrances
other than Permitted Encumbrances. To the Seller's knowledge, there are no
pending or threatened condemnation or eminent domain proceedings affecting any
such property.
(b) Each of the Company, each Investing Company and each
Project Company has good and marketable title to the personal property (and
replacements thereof) owned by such Company and contained in or on, or used in
connection with, the ownership, maintenance, use, occupancy or operation of its
assets or Project, free and clear of all Encumbrances, except the mortgages and
deeds of trust which are Permitted Encumbrances.
(c) There are no special assessments or charges which
have been levied against any Project in an amount greater than $100,000 in the
aggregate, nor does the Seller know of any pending or threatened special
assessments affecting a Project or any contemplated
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improvements thereto in an amount greater than $100,000 in the aggregate. Each
Project is assessed for real estate tax purposes as one or more wholly
independent tax lots, separate from any adjoining land or improvements not
constituting a part of such lot. No proceedings for the correction of the
assessed valuation of any Project have been filed on behalf of a Project Company
and are pending.
(d) Except as set forth in Section 3.23 of the Seller
Disclosure Schedule, with respect to the Liberty and Ceredo Projects, all water,
storm and sanitary sewer, gas, telephone and other utilities necessary for the
use and operation of each Project are or will be (i) supplied directly to the
Project by facilities or private utilities through lands as to which public or
private easements exist and (ii) adequate to service the development, use and
operation of each Project. Except as set forth in Section 3.23 of the Seller
Disclosure Schedule, all easements necessary for the use or operation of a
Project as an electric generating facility have been obtained and recorded and
are sufficient for their purpose.
Section 3.24 Intellectual Property. Except as would not have a
Material Adverse Effect, Section 3.24 of the Seller Disclosure Schedule
discloses all patents, trade names, trademarks, service marks and copyrights and
their registrations (or applications for registration) owned by the Company, any
Investing Company or any Project Company which are currently used in and are
material to its business. To the knowledge of the Seller, such entities have not
infringed and are not infringing, in any material manner, on any patent, trade
name, trademark, service xxxx, license, franchise or copyright belonging to any
other Person or received any notice or claim asserting any such infringement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer shall deliver to the Seller a Disclosure Schedule
concurrently with the execution and delivery by the Buyer of this Agreement (the
"Buyer Disclosure Schedule"). Disclosure of any fact or item in the Buyer
Disclosure Schedule referenced by a particular paragraph or section in the
Agreement shall, should the existence of the fact or item or its contents be
relevant to any other paragraph or section in the Agreement, be deemed to be
disclosed with respect to such other paragraph or section whether or not a
specific cross-reference appears; provided that the relevance of such fact or
item shall be reasonably evident from such disclosure. Except as set forth in
the Buyer Disclosure Schedule, the Buyer hereby represents and warrants to the
Seller as follows:
Section 4.1 Organization Standing and Power. The Buyer is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite power and authority to
conduct its business as it is now being conducted and to own, lease and operate
its property and assets except where the failure to be so organized, existing
and in good standing or to have such power or authority would not, in the
aggregate, either (i) have a material adverse effect on the business, results of
operations, assets or financial condition of the Buyer or (ii) materially impair
the ability of the Buyer to perform material obligations under this Agreement
(either of such effects, a "Buyer Material Adverse Effect").
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Section 4.2 Authority Relative to this Agreement. The Buyer
has all requisite authority and power to execute and deliver this Agreement and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby,
have been duly and validly authorized by all required action on the part of the
Buyer, including approval of the board of directors of the Buyer, and no other
proceedings on the part of the Buyer are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Buyer and, assuming this
Agreement has been duly authorized, executed and delivered by the Seller, this
Agreement constitutes a valid and binding agreement of the Buyer, enforceable
against the Buyer in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally,
including the effect of statutory and other laws regarding fraudulent
conveyances and preferential transfers, and subject to the limitations imposed
by general equitable principles (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
Section 4.3 No Conflict or Violation; Consents and Approvals.
Neither the execution and delivery of this Agreement by the Buyer nor the
consummation of the transactions contemplated hereby by the Buyer will (a)
violate any provision of the certificate of incorporation or by-laws of the
Buyer, (b) require the consent, waiver or approval of any Governmental Entity,
except for (i) the expiration of the applicable waiting period under the HSR
Act, (ii) consents and approvals to be made and obtained before the Closing and
those which have been made and obtained and (iii) such consents and approvals
as, if not made or obtained, will not, in the aggregate, have a Buyer Material
Adverse Effect, (c) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration or any obligation to repay) under, any
of the terms, conditions or provisions of any indenture, mortgage, note, bond,
encumbrance, license, contract, lease, franchise, permit, agreement or other
instrument or obligation to which the Buyer is a party or by which the Buyer or
any of its properties or assets may be bound, except for such violations,
breaches and defaults as, in the aggregate, will not have a Buyer Material
Adverse Effect or (d) violate any order, writ, judgment, injunction, decree,
statute, ordinance, rule or regulation of any Governmental Entity applicable to
the Buyer or by which any of its properties or assets may be bound, except for
such violations as, in the aggregate, will not have a Buyer Material Adverse
Effect.
Section 4.4 Legal Proceedings. There are no actions, suits or
proceedings pending or, to the knowledge of the Buyer, threatened against the
Buyer before any court, arbitrator or governmental or regulatory body or
authority which would prevent or delay the consummation of the transactions
contemplated by this Agreement.
Section 4.5 Investment Intent. The Buyer is acquiring the
Company Stock for its own account for investment and not with a view towards the
resale, transfer or distribution thereof, nor with any present intention of
distributing the Company Stock in violation of the Securities Act, other
applicable federal or state securities laws, and the rules and regulations
promulgated thereunder. The Buyer understands that the Company Stock has not
been registered under the Securities Act or other applicable federal or state
securities laws and the rules and
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regulations promulgated thereunder, by reason of the contemplated sale of the
Company Stock in a transaction exempt from the registration requirements of the
Securities Act and state securities laws, and the rules and regulations
promulgated thereunder. The Buyer represents that it is fully informed as to the
applicable limitations upon any distribution or resale of the Company Stock
under the Securities Act and other applicable federal and state securities laws,
and the rules and regulations promulgated thereunder, and the Buyer agrees that
it will refrain from transferring, distributing or otherwise disposing of the
Company Stock, or any interest therein, in such manner as to violate the
registration requirements of the Securities Act or of any applicable federal or
state securities law, and the rules and regulations promulgated thereunder, and
that the Buyer is an "accredited investor" as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act.
Section 4.6 Knowledgeable Purchaser. The Buyer (a) is
represented by competent legal, tax and financial counsel in connection with the
negotiation, execution, and delivery of this Agreement, (b) together with its
Affiliates, has sufficient knowledge and experience in owning (directly or
indirectly), managing and operating power generating facilities to enable it to
evaluate the Company, the Investing Companies, the Project Companies and the
Projects and the business of the Company and the technical, commercial,
financial, legal, regulatory and other risks associated with owning the Company
Stock and an indirect interest in the Project Companies and the Projects, (c)
acknowledges that pursuant to this Agreement it has, prior to the date hereof,
performed all due diligence that it has deemed necessary to perform in order to
close the transactions contemplated hereby, in making the decision to enter into
this Agreement and to consummate the transactions contemplated hereby, (d)
acknowledges that certain of the Projects are in the design and pre-construction
stages, (e) has relied on its own independent investigation, analysis and
evaluation of the Company, the Investing Companies, the Project Companies and
the Projects and their properties, assets, business, financial condition and
prospects and upon the express representations and warranties of the Seller in
this Agreement and in any certificate delivered at the Closing, and is not
relying on any other representations, warranties, documents or statements of or
provided by the Seller or any Affiliate thereof, whether in writing or orally
and (f) together with its Affiliates, is financially capable of purchasing and
owning the Company Stock and performing its obligations under this Agreement.
Section 4.7 Available Funds. As of the Closing Date, the Buyer
will have sufficient funds available to satisfy the obligation of the Buyer to
pay the Purchase Price and to pay all fees and expenses of the Buyer related to
the transactions contemplated by this Agreement.
Section 4.8 Investment Company Act. The Buyer is not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940 of the United States, as
amended (the "1940 Act"), or an "investment advisor" within the meaning of the
1940 Act.
Section 4.9 Brokers and Finders. No broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Buyer, other than Xxxxxxx
Sachs & Co. (the fees and expenses of which are the Buyer's obligation).
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ARTICLE V
TAX MATTERS
Section 5.1 Tax Matters. (a) Transfer Taxes. The Buyer
shall pay all sales, use, transfer, real property transfer, recording, stock
transfer and other similar taxes and fees ("Transfer Taxes"), if any, up to
$100,000, arising out of or in connection with the sale of the Company Stock
pursuant to this Agreement; and the Buyer and the Seller shall share equally any
Transfer Taxes exceeding $100,000, and shall indemnify, defend, and hold
harmless the other with respect to such Transfer Taxes. The Buyer shall file all
necessary documentation and Tax Returns with respect to such Transfer Taxes.
(b) Indemnification. The Seller shall indemnify and hold
harmless the Buyer from and against any and all Tax Claims relating to the
Company, each Investing Company or each Project Company, resulting from, arising
out of or relating to: (A) any and all Taxes imposed on or incurred by the
Company, each Investing Company, each Project Company or the Buyer relating to
any taxable period ending on or prior to the Closing Date, including any Taxes
resulting from or triggered by the transactions or actions contemplated pursuant
to this Agreement (in the aggregate, "Pre-Closing Taxes"), (B) with respect to
any taxable period ending on or after the Closing Date that includes the Closing
Date (the "Overlap Period"), any and all Taxes imposed on or incurred by the
Company, each Investing Company, each Project Company or the Buyer attributable
to the period ending on or prior to the Closing Date ("Overlap Period Taxes"),
(C) any and all Taxes of the Seller or any member of any affiliated, combined or
unitary group of which the Seller is or was a member for which any of the
Company, the Investing Companies or the Project Companies is liable either as a
transferor or on a joint and several basis under the federal consolidation
return rules or any comparable rules for state or local taxes and (D) any
liability for Taxes resulting from or attributable to a breach of the
representations and warranties contained in Section 3.11 and Section 5.2. For
purposes of the Overlap Period, Taxes shall be attributable to the period ending
on or prior to the Closing Date: (A) in the case of any real or personal
property tax imposed on or incurred by the Company, each Investing Company or
each Project Company, in an amount equal to the real or personal property tax
for the entire period multiplied by a fraction the numerator of which is the
number of days in the period for which such real or personal property tax is
paid ending on the Closing Date and the denominator of which is the number of
days in the entire period and (B) in the case of any other Taxes imposed on or
incurred by the Company, each Investing Company or each Project Company, to the
extent of any Taxes imposed on or incurred by the Company, each Investing
Company or each Project Company that would be payable if the taxable year ended
on the Closing Date.
(c) Refunds. Any refund or credit of the Company, each
Investing Company or each Project Company for Pre-Closing Taxes or Overlap
Period Taxes shall be for the benefit of the Seller and the Buyer shall pay any
such refund to the Seller within 30 days after the Company, each Investing
Company or each Project Company receives such refund or actually realize the
benefit of such refund or credit.
(d) Contests. The Seller and the Buyer agree that, in the
event the Company, each Investing Company or each Project Company receives
notice in writing of any examination, claim, settlement, proposed adjustment,
administrative or judicial proceeding, or other matter
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related to any Pre-Closing Taxes or Overlap Period Taxes (each, a "Contest"),
the Seller or the Buyer, as the case may be, shall notify the other party in
writing as soon as reasonably practical (but in no event not more than 10
business days) after receipt of such notice and the Seller shall be entitled to
control, at the Seller's own expense, all such matters; provided, the Seller
notifies the Buyer in writing within 30 business days following receipt or
issuance by the Seller of such written notice that the Seller intends to
exercise its rights pursuant to this Section 5.1(d). The Buyer shall cooperate
with the Seller by giving the Seller and its representatives, on prior
reasonable notice, access and cooperation during normal business hours to all
information, books and records pertaining to the Company's, each Investing
Company's and each Project Company's Pre-Closing Taxes and Overlap Period Taxes.
The Seller shall not settle any such Contest in a manner which would adversely
affect the Buyer, the Company, any Investing Company or any Project Company
after the Closing Date without the prior written consent of the Buyer, which
consent shall not be unreasonably withheld.
(e) Information. The Seller and the Buyer will make
available to each other, and the Buyer will cause the Company, each Investing
Company and each Project Company, respectively, to make available as reasonably
requested, and to any taxing authority, all information, records or documents
relating to the liability or potential liability for Pre-Closing Taxes, Overlap
Period Taxes and post-closing Taxes and will preserve such information, records
or documents until the expiration of any applicable statute of limitations or
extensions thereof.
(f) Code Section, 338(h)(10) Election; Purchase Price
Allocation. Upon the consummation of the purchase contemplated by this
Agreement, the Seller shall make a timely Section 338(h)(10) Election with the
Buyer, if so requested by the Buyer, with respect to the purchase of the Company
Stock and the stock of those Investing Companies selected by the Buyer and shall
make similar elections under state and local law to the fullest extent possible.
The Buyer will be responsible for preparing and filing all documents and
materials necessary in connection with making the Section 338(h)(10) Election
and any similar elections under state and local law. Not later than 120 days
after the Closing Date, the Buyer shall prepare and deliver to the Seller a
proposed allocation of the Purchase Price for purposes of the Section 338(h)(10)
Election and a Section 754 Election made by the Buyer as contemplated by section
5.1(g) below. The Buyer and the Seller shall timely complete and file Form 8023
and any similar form under applicable state law. If the Buyer and the Seller
cannot agree on such allocation, the Buyer and the Seller will select a
nationally recognized accounting firm or other recognized expert to appraise the
assets for purposes of determining such allocation. The cost of such appraisal
will be borne by the Seller. The Buyer and the Seller agree not to take any
position inconsistent with any such allocation for Tax reporting purposes.
(g) Code Section 754 Election. At the request of the
Buyer, the Seller shall cooperate with the Buyer in making a Code section 754
election to adjust the basis of each Project Company's assets under section 743
of the Code. The Buyer and the Seller shall timely complete and file the
statement required by Treasury Regulation 1.743-1 and IRS Form 8594, if
necessary, consistent with such allocation, shall provide a copy of such form to
the other party hereto and shall file a copy of such form with such party's
federal income tax return for the period that includes the Closing Date.
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(h) Proration of Partnership Income and Loss. The income
or loss of each Project Company for the Tax year ending on the Closing Date
shall be based upon a closing of the books as of such date, provided that if the
Closing Date is other than the last day of a calendar month, then the income or
loss for such month shall be prorated based upon the number of days the Seller
and the Buyer own their respective interests during such month. For this
purpose, the Seller's period of ownership shall include the Closing Date.
(i) Tax Returns. The Buyer shall be responsible for
preparing and filing, or causing to be prepared and filed, all Tax Returns of
the Company and each Investing Company relating to Tax periods ending after the
Closing Date. The Seller shall cooperate with the Buyer with respect to
preparing and filing such Tax Returns and shall promptly provide all information
reasonably requested by the Buyer necessary to prepare and file the Tax Returns.
(j) Survival of Obligations. The obligations of the
parties set forth in this Article V, and all representations and warranties
contained in Sections 3.11 and 5.2, shall be unconditional and absolute and
shall remain in effect until the expiration of the applicable statutes of
limitation.
Section 5.2 Additional Tax Representations and Warranties of
the Seller; Tax Matters. Except as disclosed in Schedule 5.2, the Seller makes
the following representations and warranties to the Buyer: (a) neither the
Company, nor any of the Investing Companies, has agreed to or will be required,
as a result of a change in method of accounting made in a Tax Return or report
filed for a taxable period ending on or prior to the Closing Date, to include
any adjustment in taxable income under Code Section 481 (or any similar rule)
for any taxable period (or portion thereof) ending after the Closing Date; (b)
no Tax Return of the Company, any of the Investing Companies or any of the
Project Companies (nor any Tax Return in which any of those companies joined in
the filing) is currently under audit by any tax authorities, and neither the
Company, any of the Investing Companies or any of the Project Companies has
received any notice that any such Tax Return is under examination; (c) no notice
of a claim has ever been made with respect to the Company, any Investing Company
or any Project Company by a taxing authority in a jurisdiction where the
respective company does not file or join in the filing of a Tax Return that it
is or may be subject to Taxes in that jurisdiction; (d) neither the Company, any
Investing Company nor any Project Company has waived any statute of limitations
in respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency; (e) there are no liens for Taxes upon any assets of
the Company, any Investing Company, or any Project Company, other than tax liens
for taxes not yet due and payable; (f) neither the Company, any of the Investing
Companies or any of the Project Companies is a party to any contract requiring
the indemnification or reimbursement of any Person with respect to the payment
of any Taxes, and no claim has been asserted, which has not been resolved or
satisfied, for any payment under any such agreement disclosed in Schedule 5.2;
(g) there has been no transfer (as defined in Code Section 708) of any interest
in the capital or profits of any Project Company within the 12 months
immediately preceding the Closing Date; (h) the Seller will not elect to
reattribute to itself any net operating loss carryovers or capital loss
carryovers of the Company or any Investing Company under Treasury Regulation
Section 1.1502-20(g); (i) each Project Company is classified as a partnership or
disregarded as an entity separate from its sole owner for tax purposes; (j) no
material issues have been raised in writing by the relevant taxing authorities
on audit that are of a recurring
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nature that would have an effect upon the Taxes of the Company, any of the
Investing Companies or any of the Project Companies and (k) all material
elections with respect to Taxes that remain in affect after the Closing
affecting the Company, any Investing Company or any Project Company set forth on
Exhibit A are disclosed in Schedule 5.2.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of the Business Pending the Closing. (a)
Except as contemplated by this Agreement or with the prior written consent
of the Buyer, during the period from the date of this Agreement to the Closing,
the Seller shall use commercially reasonable efforts to cause the Company to
conduct its businesses and operations according to its ordinary and usual course
of business consistent with past practice and shall use commercially reasonable
efforts consistent therewith to preserve intact its properties, assets and
business organizations, keep available the services of its officers and
employees (to the extent such officers and employees are willing to remain
employed) and maintain satisfactory relationships with customers, suppliers,
distributors and others having commercially beneficial business relationships
with the Company, in each case in the ordinary course of business consistent
with past practice.
(b) Unless the Buyer shall have otherwise consented,
which consent shall not be unreasonably withheld or delayed, between the date of
the execution of this Agreement and the Closing Date, the Seller shall cause the
Company, each Investing Company and each Project Company to:
(i) develop (and construct, in the case of Liberty
and Ceredo) its Project diligently in accordance with the applicable
Material Contracts and Permits for such Project and the Construction
Budget and construction schedules or Development Schedule and Budgets
thereto, as applicable, and consult with the Buyer on a regular basis
regarding same (including cooperating with reasonable requests by
Buyer); not make any changes to such schedules and budgets;
(ii) not grant or agree to grant to employees of the
Company, Investing Company or Project Company any increase in the
wages, salary, bonus or other compensation, remuneration or benefits,
or become a party to any employment agreement, employee benefit plan or
any consulting arrangement with employees of the Company employed as of
the date hereof, or (other than as required by Plans in effect as of
the date hereof) become a party to any contract or arrangement
providing for payment of bonuses, profit sharing, stock benefits,
severance payments or retirement or other employment benefits the
Seller shall not hire or make any offer to hire any officers or
employees of the Company or any Investing Company or Project Company
and (to the extent within the Seller's control) not permit NiSource
Inc. to hire or make any offer to hire any officers or employees of the
Company or any Investing Company or Project;
(iii) except as otherwise contemplated or permitted
by Section 2.6 and Section 11.17 of this Agreement, not incur any
indebtedness or declare, set aside or pay
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any dividend or make any other distribution with respect to, or
repurchase, any shares of its equity or capital stock; not prepay any
liability other than current liabilities coming due in the ordinary
course of business; provided, however, notwithstanding the limitation
set forth in Section 3.7(c)(ii) hereof, that the Company, each
Investing Company and Project Company shall declare dividends in an
amount equal to any and all cash held by each prior to the Closing,
excluding cash borrowed with respect to the funding of the Liberty
Project pursuant to the Master Agreement between Liberty Electric PA,
LLC, Liberty Electric Powers, LLC, the Lenders (as therein defined) and
The Chase Manhattan Bank;
(iv) not grant any consent or waiver under,
terminate, amend or enter into any Material Contract; or enter into
contracts or agreements which involve commitments to make expenditures
beyond those set forth in the Construction Budgets of more than $2
million in the aggregate;
(v) not make any additional capital expenditure
(including capitalized development expenditures) except for Liberty and
Ceredo as contemplated in the Construction Budgets thereto and all
other Projects as set forth in each respective capital expenditure
budget as attached hereto as Exhibit D;
(vi) promptly notify the Buyer of any material damage
to or destruction of all or any portion of any Project and any other
material development affecting any Project including any force majeure
event or other possible delay in the construction schedules for the
Liberty or Ceredo Projects;
(vii) promptly deliver to the Buyer copies of any
notices or correspondence received from or provided to any Governmental
Entity or from any Project lender or other party to any Material
Contract; and not initiate or settle any litigation or administrative
proceeding with any Governmental Entity or other Person, or make any
filing with any Governmental Entity; and
(viii) not vote or grant any material consent (or
permit its managers to do so) in its capacity as equity owner of any
Investing Company or Project Company.
(c) The Seller will, at reasonable times and upon
reasonable notice, provide the Buyer or its representatives (i) reasonable
access to management personnel and all books, records, plans, equipment, offices
and other facilities and properties of the Company and each Investing Company
and Project; (ii) such historical financial data and other information with
respect to the Company and Investing Company and each Project as the Buyer may
from time to time reasonably request; (iii) a copy of each material report,
schedule or other document filed by the Company, each Investing Company or each
Project Company with respect to the Projects with any Governmental Entity and
(iv) access to each Project for inspection by the Buyer or its representatives
and shall provide engineering, construction, operations and maintenance and
other personnel to make presentations as required, to escort the Buyer or such
representatives and to assist in all aspects of the inspection, provided that
the Buyer shall bear its own costs, if any, of such inspection.
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Section 6.1A Buyer's SEC Obligations. At the Buyer's request,
the Seller shall furnish the Buyer, within 10 business days of such request,
with the Seller's (excluding QF Assets and Liabilities and Grassy Point, and
assets and liabilities associated therewith) audited financial statements,
consisting of a balance sheets, statements of income, cash flows and
stockholder's equity for the fiscal years ended and as of December 31, 1999 and
December 31, 1998, and for the interim period ended June 30, 2000 (or such
subsequent period as may be needed), which the Buyer may be required to file
under the Securities Act of 1933 in connection with the Buyer's initial public
offering or under the Securities Exchange Act of 1934. Such financial statements
shall comply with requirements of Regulation S-X. Buyer shall pay the costs
charged by the Seller's independent auditors in preparing such financial
statements (not to exceed $250,000).
Section 6.2 Consents and Approvals. (a) Each of the
parties hereto shall use commercially reasonable efforts to (i) obtain as
promptly as practicable all consents, authorizations, approvals and waivers
required in connection with the consummation of the transactions contemplated by
this Agreement under any federal, state, local or foreign law or regulation
(including, without limitation, all of the Transaction Regulatory Approvals),
(ii) promptly cause to be lifted or rescinded any injunction or restraining
order or other order adversely affecting the ability of the parties hereto to
consummate the transactions contemplated hereby and (iii) promptly effect all
necessary registrations and filings (including, without limitation, filings
under the HSR Act and filings with Governmental Entities necessary to obtain all
of the Transaction Regulatory Approvals) and submissions of information
requested by any Governmental Entity. The parties hereto further covenant and
agree, with respect to any threatened or pending preliminary or permanent
injunction or other order, decree or ruling or statute, rule, regulation or
executive order that would adversely affect the ability of the parties hereto to
consummate the transactions contemplated hereby, to respectively use
commercially reasonable efforts to prevent the entry, enactment or promulgation
thereof, as the case may be. Prior to making any such filing each party shall
provide the other with reasonable opportunity to comment thereon.
(b) Each party hereto shall promptly inform the other of
any material communication from the FERC, the FTC, the DOJ or any other
Governmental Entity regarding any of the transactions contemplated hereby. If
any party hereto or any Affiliate thereof receives a request for additional
information or documentary material from any such Governmental Entity with
respect to the transactions contemplated hereby, then such party shall endeavor
in good faith to make, or cause to be made, as soon as reasonably practicable
and after consultation with the other party, an appropriate response in
compliance with such request. The Buyer shall advise the Seller promptly in
respect of any understandings, undertakings or agreements (oral or written) that
the Buyer proposes to make or enter into with the FERC, the FTC, the DOJ or any
other Governmental Entity in connection with the transactions contemplated
hereby.
Section 6.3 Filings. Promptly after the execution of this
Agreement, each of the parties hereto shall prepare and make or cause to be
prepared and made any required filings, submissions and notifications under the
laws of any domestic or foreign jurisdiction to the extent that such filings are
necessary to consummate the transactions contemplated hereby (including without
limitation to obtain the consents and approvals contemplated by Section 6.2
hereof) and shall
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use commercially reasonable efforts to take all other actions necessary to
consummate the transactions contemplated hereby in a manner consistent with
applicable law. Each of the parties hereto will furnish to the other party such
necessary information and reasonable assistance as such other party may
reasonably request in connection with the foregoing.
Section 6.4 Covenant to Satisfy Conditions. The Seller and the
Buyer will each respectively use commercially reasonable efforts to ensure that
the conditions set forth herein are satisfied, insofar as such matters are
within the control of such party.
Section 6.5 No Solicitations. (a) From and after the date
hereof, (i) the Seller shall not, and shall not authorize or permit any of its
Representatives to, directly or indirectly, solicit, initiate or encourage
(including by way of furnishing information) or take any other action to
knowingly facilitate any inquiries or the making of any proposal that
constitutes or may reasonably be expected to lead to an Acquisition Proposal (as
defined in Section 6.5(b) hereof) from any Person, or engage in any discussion
or negotiations relating thereto and (ii) neither the board of directors of the
Seller nor any committee thereof shall (A) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to the Buyer, the approval
or recommendation by such board of directors or such committee of this Agreement
or the transactions contemplated hereby, (B) approve or recommend, or propose
publicly to approve or recommend, any Acquisition Proposal, or (C) cause the
Seller to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement.
(b) As used herein, "Acquisition Proposal" shall mean any
inquiry, proposal or offer from any person relating to any direct or indirect
acquisition or purchase of a business (a "Material Business") that constitutes
15% or more of the net revenues, net income or the assets (including equity
securities) of the Company, and the Investing Companies, taken as a whole, or
15% or more of the voting securities of the Company or any Investing Company
owning, operating or controlling a Material Business, any tender offer or
exchange offer that if consummated would result in any Person beneficially owing
15% or more of the voting securities of the Company or any such Investing
Company, or any merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Seller or any such
Investing Company, other than the transactions contemplated by this Agreement;
provided, however, that no transaction permitted pursuant to Section 6.1 hereof
shall be deemed an Acquisition Proposal for any purpose.
(c) The Seller shall promptly advise the Buyer orally and
in writing of the receipt of any Acquisition Proposal and of the receipt of any
inquiry with respect to, or which the Seller reasonably believes could lead to,
any Acquisition Proposal. The Seller shall promptly advise the Buyer orally and
in writing of the identity of the Person making any such Acquisition Proposal or
inquiry and of the material terms of any such Acquisition Proposal and of any
material changes thereto.
Section 6.6 Further Assurances. Upon the terms and subject to
the conditions herein provided, each of the parties hereto shall use
commercially reasonable efforts to take or cause to be taken all action, to do
or cause to be done, and to assist and cooperate with the other party hereto in
doing, all things necessary, proper or advisable under applicable laws and
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regulations to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement, including, but not
limited to, (a) the satisfaction of the conditions precedent to the obligations
of any of the parties hereto, (b) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the performance of the obligations hereunder or thereunder and (c) the execution
and delivery of such instruments, and the taking of such other actions as the
other party hereto may reasonably require in order to carry out the intent of
this Agreement.
Section 6.7 Employee Benefits.
(a) Continuation of Employee Benefits and Credit for
Service. During the period commencing on the Closing Date and ending on the
second anniversary thereafter, the Buyer shall provide or cause to be provided
to the Retained Employees (as defined in Section 6.7(d) hereof), pursuant to
employee benefit and compensation plans, policies or arrangements (including but
not limited to all compensation, bonus, fringe benefits, welfare benefits,
medical, dental and other health plans, disability pay, vacation pay, severance
pay or termination pay, deferred compensation arrangements, retirement and
pension benefits) maintained or contributed to by the Company, the Buyer or
their respective Affiliates (collectively, the "Buyer Employee Benefit Plans"),
benefits and compensation not less favorable in the aggregate than those
provided by the Buyer to other similarly situated employees from time to time
during such two year period. From and after the Closing, the Buyer shall
provide, or cause to be provided, to each of the Retained Employees under Buyer
Employee Benefit Plans, credit for purposes of eligibility to participate and
commence receipt of benefits and compensation, vesting, levels of benefits, and
vacation benefit accruals for full and partial years of service with the
Company, the Seller or their respective Affiliates performed at any time prior
to the Closing, except where such crediting would result in the duplication of
benefits. Notwithstanding the foregoing, in no event shall the severance
benefits payable to any of the Retained Employees whose employment terminates
prior to the second anniversary of the Closing be less than the amount that
would have been payable to such employee under the terms of the Company's
severance benefit plans as set forth in the severance schedule in Section
3.13(a) of the Seller Disclosure Schedule; provided, however, that any election
by a Retained Employee, pursuant to such severance benefit plans, to continue
participation in benefit plans during the salary continuation period shall apply
only to the Buyer Employee Benefit Plans which are health plans, in which case
the Retained Employee can continue participation during the salary continuation
period on the same basis as is applicable to active employees (including any
employee contribution requirement). Any employee who is not a Retained Employee
provided severance benefits by the Company or the Seller shall be required to
execute a release of claims against the Buyer, the Company and the Seller, in
such form as the Buyer shall approve, as a condition for the receipt of such
benefits. The Buyer may require any employee who is a Retained Employee to
execute such a release as a condition to receiving severance benefits which the
Buyer is obligated to provide hereunder.
(b) Preexisting Conditions, Exclusions and Waiting
Periods; Deductibles. The Company, the Buyer and their respective affiliates
shall (i) waive all limitations as to preexisting conditions exclusions and
waiting periods with respect to participation and coverage requirements
applicable to Retained Employees under any of the Buyer Employee Benefit Plans
that are welfare plans, funds or programs (within the meaning of Section 3(1) of
ERISA) in
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which such Retained Employees may be eligible to participate after the Closing,
other than exclusions or waiting periods that are already in effect with respect
to such Retained Employees and that have not been satisfied as of the Closing
and (ii) provide each of the Retained Employees with credit for any co-payments
and deductibles paid by such employee prior to the Closing for purposes of
satisfying any applicable deductible or out-of-pocket requirements under any
welfare plans, funds or programs that such employee is eligible to participate
in after the Closing.
(c) COBRA. The Buyer shall be responsible and liable for
providing the appropriate COBRA notices and coverage to all Retained Employees
who experience a "qualifying event" on or after the Closing, and related COBRA
beneficiaries. The Seller shall be responsible and liable for providing the
appropriate COBRA notices and coverage, as required, to all employees of the
Company other than the Retained Employees.
(d) Employees. Following signing hereof and prior to
Closing, the Seller shall cause the Company to provide the Buyer reasonable
access to interview the Company's employees (the names, titles (including
whether an executive officer) are set forth in Schedule 6.7(d) and information
regarding such employees salaries and start dates have been made available to
the Buyer) pursuant to procedures agreed to in advance by the Buyer and the
Seller. On the Closing Date, the Company shall have as employees only those
employees (i) the Buyer has identified in a schedule to be provided to the
Seller prior to the Closing and (ii) who have accepted the Buyer's offer of
retained employment (the "Retained Employees"). The Buyer shall not be
responsible for provision of severance or any other benefits (including, without
limitation, workers' compensation and disability benefits) to employees who are
not Retained Employees and shall incur no liability under the Company's or the
Seller's severance or other benefit plans, policies or arrangements with respect
to employees of the Company. The Buyer shall indemnify and hold the Seller
harmless, subject to the procedures contained in Section 10.4(h) hereof, for any
liability incurred by the Seller to any employee as a result of (x) the Buyer's
(or, after the Closing, the Company's) violation of laws prohibiting
discrimination on the basis of race, sex, national origin, color, religion, age,
disability or other protected characteristics or (y) the Seller's (or, on or
prior to the Closing, the Company's) violation of laws prohibiting
discrimination on the basis of race, sex, national origin, color, religion, age,
disability or other protected characteristics to the extent Seller's (or, on or
prior to the Closing, the Company's) violation was caused by any action or
inaction required by the schedule of Retained Employees prepared by Buyer
pursuant to this Section 6.7(d). The Seller shall indemnify and hold the Buyer
and the Company harmless, subject to the procedures contained in Section 10.4(h)
hereof, for any liability incurred by the Buyer or the Company to any employee
of the Company as a result of actions taken on or before the Closing (excluding
liability resulting from actions with respect to which Buyer is required to
indemnify Seller pursuant to the preceding sentence), including, but not by way
of limitation, liability resulting from or under (i) claims arising under the
Civil Rights Acts of 1964, as amended; the Age Discrimination in Employment Act
of 1967, as amended, the Americans with Disabilities Act of 1990, the
Rehabilitation Act of 1973, the Equal Pay Act of 1963, and ERISA; (ii) the laws
of any applicable State concerning wages, employment and termination of
employment; (iii) any city or county employment or termination laws or any other
law, rule, regulation or ordinance pertaining to employment, terms and
conditions of employment, or termination of employment; (iv) claims arising out
of any legal restrictions of the right to
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terminate employees, such as wrongful or unlawful discharge or related causes of
action; (v) intentional infliction of emotional distress or any other tortious
conduct; (vi) violations of any contract or promise express or implied and/or
(vii) state or federal whistleblowers or similar acts. Any workforce reductions
carried out with respect to Retained Employees after the Closing by the Buyer,
the Company, or any Affiliate of either shall be done in accordance with all
laws and regulations governing the employment relationship and termination
thereof, including, but not limited to, the Worker Adjustment and Retraining
Notification Act ("WARN Act") and regulations promulgated thereunder, and any
comparable state or local law. Except as set forth on Schedule 6.7(d), the Buyer
shall be responsible for all costs associated with the severance of Retained
Employees on or after the Closing in addition to any costs or expenses incurred
under applicable law, including, but not limited to, costs associated with the
WARN Act.
(e) The Seller and Company Payments and Plans. The Seller
shall pay to all employees of the Company (including the Retained Employees) any
bonuses or change in control or like amounts payable pursuant to all bonus,
change in control or similar plans, policies or arrangements in effect on or
before the Closing Date, which payments shall be made when due. The Seller shall
take all steps, or shall cause the Company to take all steps that may be
necessary, so that, as of the Closing Date, the Company shall no longer sponsor,
maintain, contribute to or otherwise have any obligations or liabilities with
respect to any of the Plans. The Seller shall be responsible for any actions
required to be taken in connection with the Plans on or after the Closing Date,
including without limitation the filings of Forms 5500 or any other applicable
filings. The Seller shall indemnify and hold harmless, subject to the procedures
of Section 10.4(h), the Buyer, the Company, and any Affiliate of either, from
and against any cost or liability or other Damages incurred under or arising out
of or in connection with (i) any of the Plans or any other benefit plan,
program, policy or arrangement maintained or contributed to by the Company prior
to the Closing Date, and (ii) any plan, program, policy or arrangement
maintained or contributed to by any entity (whether or not incorporated) which
would be treated as a single employer with the Company under Sections 414(b),
(c), (m) or (o) of the Code and the regulations thereunder.
Section 6.8 Name. After Closing, the Buyer will not use the
name "Columbia" in conducting the business of the Company and promptly after the
Closing will change the name of the Company and the Investing Companies to
remove "Columbia" from the name of the Company and Investing Companies, subject
to the Buyer's receipt of necessary third party or Government Entity approvals,
if any.
Section 6.9 Business Interruption Insurance. The Buyer shall
maintain, for a period of one year after the Closing Date, the business
interruption insurance policy relating to the Ceredo Project in full force and
effect and in the amounts and with the type of risk coverage as maintained prior
to the Closing.
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ARTICLE VII
CONDITIONS TO EACH PARTY'S OBLIGATIONS
The obligation of each party to effect the transactions
contemplated hereby shall be subject to the fulfillment, or written waiver by
each of the parties, at or prior to the Closing of each of the following
conditions:
Section 7.1 Regulatory Approvals. All of the material
Transaction Regulatory Approvals shall have been obtained.
Section 7.2 Consent. The consents, as set forth on Schedule
7.2, required under the existing indebtedness of the Liberty Project necessary
to consummate the transactions contemplated hereby shall have been obtained at
the Seller's expense.
Section 7.3 Third Party Consents. The Seller and/or the
Company shall have obtained at the Seller's expense, all consents,
authorizations, approvals and waivers, including those set forth on Schedule
7.3, necessary pursuant to any third party agreements in connection with the
consummation of the transactions contemplated by this Agreement, except for such
consents, authorizations, approvals and waivers the failure to obtain would not
in the aggregate have a Material Adverse Effect.
ARTICLE VIII
CONDITIONS TO THE SELLER'S OBLIGATIONS
The obligations of the Seller to effect the transactions
contemplated hereby shall be subject to the fulfillment, or written waiver by
the Seller, at or prior to the Closing, of each of the following conditions:
Section 8.1 Representations and Warranties of the Buyer True.
The representations and warranties of the Buyer contained herein qualified as to
materiality shall be true and correct and those not so qualified shall be true
and correct in all material respects as of the date hereof and at and as of the
Closing Date as though such representations and warranties were made at and as
of such date unless limited by their terms to a prior date and except such
violations as will not have a Buyer Material Adverse Effect.
Section 8.2 Performance. The Buyer shall have performed and
complied in all material respects with all agreements, obligations, covenants
and conditions required by this Agreement to be performed or complied with by
the Buyer on or prior to the Closing.
Section 8.3 Certificates. The Buyer shall have furnished the
Seller with such certificates to evidence its compliance with the conditions set
forth in Sections 8.1 and 8.2 hereof as the Seller may reasonably request.
Section 8.4 No Injunction or Proceeding. No statute, rule,
regulation, executive order, decree, preliminary or permanent injunction or
restraining order shall have been enacted, entered, promulgated or enforced by
any Governmental Entity which prohibits or restricts the consummation of the
transactions contemplated hereby.
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Section 8.5 HSR Act. All required waiting periods applicable
to this Agreement and the transactions contemplated hereby under the HSR Act
shall have expired or been terminated.
Section 8.6 Transition Services Agreement. If requested by the
Buyer, the Seller and the Buyer shall have executed a Transition Services
Agreement substantially in the form set forth in Exhibit C hereto.
ARTICLE IX
CONDITIONS TO THE BUYER'S OBLIGATIONS
The obligation of the Buyer to effect the transactions
contemplated hereby shall be subject to the fulfillment, or written waiver by
the Buyer, at or prior to the Closing, of each of the following conditions:
Section 9.1 Representations and Warranties of the Seller True.
The representations and warranties of the Seller contained herein qualified as
to materiality shall be true and correct and those not so qualified shall be
true and correct in all material respects as of the date hereof and at and as of
the Closing Date as though such representations and warranties were made at and
as of such date unless limited by their terms to a prior date and except such
violations as set forth in the certificate delivered pursuant to Section 9.3 and
as such, in the aggregate, will not have a Material Adverse Effect
Section 9.2 Performance by the Seller. The Seller shall have
performed and complied in all material respects with all agreements,
obligations, covenants and conditions required by this Agreement to be performed
or complied with by the Seller on or prior to the Closing.
Section 9.3 Certificates. The Seller shall have furnished the
Buyer with such certificates to evidence its compliance with the conditions set
forth in Sections 9.1 and 9.2 hereof as the Buyer may reasonably request.
Nothing herein shall restrict the ability of the Seller to provide a certificate
pursuant to this Section 9.3 that sets forth therein exceptions to the condition
set forth in Section 9.1, and the existence of any exceptions in the certificate
shall not be deemed a failure to meet the conditions set forth in this Section
9.3; provided that the existence of the events described therein, to the extent
that such new exceptions would have a Material Adverse Effect, may result in the
failure to satisfy the condition set forth in Section 9.1 hereof.
Section 9.4 No Injunction or Proceeding. No statute, rule,
regulation, executive order, decree, preliminary or permanent injunction or
restraining order shall have been enacted, entered, promulgated or enforced by
any Governmental Entity which prohibits or restricts the consummation of the
transactions contemplated hereby.
Section 9.5 HSR Act. All required waiting periods applicable
to this Agreement and the transactions contemplated hereby under the HSR Act
shall have expired or been terminated.
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Section 9.6 Transition Services Agreement. If requested by the
Buyer, the Seller and the Buyer shall have executed a Transition Services
Agreement substantially in the form set forth in Exhibit C hereto.
Section 9.7 No Material Adverse Effect. No Material Adverse
Effect shall have occurred and be continuing.
Section 9.8 Opinion. The Buyer shall have received a favorable
legal opinion of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P. (which opinion may rely
on local counsel opinions) as to customary matters reasonably requested by it
and in form and substance reasonably satisfactory to the Buyer.
Section 9.9 Resignations of Directors and Officers. The Buyer
shall have received the resignations or terminations of all directors, officers
and management committees, members of the Company, each Investing Company and
each Project Company as it may request.
Section 9.10 QF Assets and QF Liabilities and the Grassy Point
Project. The QF Assets, the QF Liabilities and the Grassy Point Project (and
assets and liabilities associated therewith) shall have been transferred to and
assumed by the Seller or an unrelated third party, and the Company shall have
been released from all liability and obligation with respect to the QF Support
Obligations, pursuant to documentation reasonably acceptable to the Buyer, at no
cost or liability to the Buyer or the Company.
Section 9.11 Other Matters. The Buyer shall have received such
customary certificates from Governmental Entities and the Seller relating to the
transactions contemplated by this Agreement as shall be reasonably requested by
the Buyer.
ARTICLE X
TERMINATION AND ABANDONMENT; INDEMNIFICATION
Section 10.1 Termination. This Agreement may be terminated at
any time prior to the Closing:
(a) by mutual consent of the Buyer and the Seller;
(b) by the Buyer or the Seller if the Closing shall not
have occurred on or before May 1, 2001, except that the Buyer and the Seller
shall have the right, in their mutual discretion, to extend this time period in
this Section 10.1(b) an additional 15 days; provided that the right to terminate
this Agreement pursuant to this Section 10.1(b) shall not be available to a
party whose failure to perform any of its obligations under this Agreement
resulted in the failure of the Closing to be consummated by such date;
(c) by the Buyer or the Seller if any of the Transaction
Regulatory Approvals, the receipt of which are conditions precedent to
consummate the Closing, shall have been denied (and a petition for rehearing or
refiling of an application initially denied without prejudice shall also have
been denied);
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(d) by the Buyer or the Seller, if any Governmental
Entity shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting any of the transactions
contemplated hereby and such order, decree, ruling or other action shall have
become final and nonappealable; or
(e) by the Seller, if the merger of the Seller and
NiSource Inc. shall have been abandoned by either party to that merger; provided
the Seller shall have complied with Section 10.2(d).
Section 10.2 Procedure and Effect of Termination. In the event
of a termination of this Agreement pursuant to Section 10.1 hereof by one party,
written notice thereof shall forthwith be given to the other party and, except
as set forth below, this Agreement shall terminate and be void and have no
effect and the transactions contemplated hereby shall be abandoned. If this
Agreement is terminated as provided herein:
(a) the Buyer shall redeliver, and shall cause its agents
(including without limitation attorneys and accountants) to redeliver, all
documents, work papers and other material of the Seller relating to the
transactions contemplated hereby, whether obtained before or after the execution
hereof or certify the destruction thereof;
(b) all information received by the Buyer with respect to
the business, operations, assets or financial condition of the Seller, each
Project Company or each Project shall remain subject to the Confidentiality
Agreement;
(c) except as otherwise expressly set forth herein, no
party to this Agreement shall have any liability hereunder to any other party,
except (i) for any breach by such party of the terms and provisions of this
Agreement, (ii) as stated in paragraphs (a) and (b) of this Section 10.2 and
(iii) as provided in the Confidentiality Agreement; and
(d) in the case of a termination under Section 10.1(e),
the Seller shall have paid the Buyer a termination fee of $3 million inclusive
of the Buyer's out of pocket expenses incurred in connection with the
transactions contemplated herein.
Section 10.3 Survival of Representations and Warranties. (a)
(a) The representations and warranties contained in Sections 3.1 to 3.5 shall
survive the Closing and remain in full force and effect indefinitely and all
representations and warranties concerning tax or employee benefit matters shall
survive until the expiration of any relevant statute of limitations. All other
representations and warranties contained herein shall survive the Closing and
remain in full force and effect until 1 year after the Closing Date, at which
time they shall terminate.
(b) After the Closing, the sole and exclusive remedy for
any breach of any representation, warranty, covenant or agreements shall be
pursuant to Section 10.4 hereof, except in the case of fraud or unless this
Agreement expressly provides otherwise. Under no circumstances shall any party
be liable to any other party for consequential, incidental or punitive damages;
provided, however, that Lost Operating Profits (as used in this Section 10.3(a)
"Lost
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Operating Profits" shall mean foregone revenues less avoided cost of fuel and
avoided cost of variable operations and maintenance) may be taken into account
for the purpose of valuing the Damages with respect to a delay in the
anticipated Substantial Completion Dates for the Ceredo Project as set forth on
the construction schedule for the Ceredo Project in Exhibit D-5 hereto.
Section 10.4 Indemnification. (a) From and after the
Closing, the Seller shall indemnify and hold harmless, subject to the
limitations set forth in this Section 10.4, the Buyer and its Affiliates and
Representatives (collectively, the "Buyer Indemnified Parties") from and against
any Damages arising from or in connection with (i) any inaccuracy in any
representation or the breach of any warranty of the Seller under this Agreement
or in any certificate delivered pursuant hereto (without giving effect to any
exceptions set forth in such certificate); provided, however, for the purposes
of this Section 10.4(a)(i) only, in determining the inaccuracy or breach of any
representation or warranty made by the Seller in this Agreement or in any
certificate, any reference to "Material Adverse Effect" or the concept of
materiality shall be disregarded; (ii) the failure of the Seller to duly perform
or observe any term, provision, covenant or agreement to be performed or
observed by the Seller pursuant to this Agreement; (iii) the first matter set
forth under Ceredo in Schedule 3.12 (Environmental Liabilities); (iv) the
Binghamton Liabilities; (v) QF Liabilities or (vi) liabilities or obligations
relating to the Grassy Point Project including, without limitation, under the
Letter of Intent between the Town of Haverstraw and the Company dated April 26,
1999. Without limiting the foregoing, any Damages attributable to breaches or
violations which occurred on or before the Closing (including any exceptions
noted in the Seller's certificate) shall, if requested by the Buyer, be paid at
the Closing by way of offset to the Purchase Price.
(b) The Buyer shall indemnify and hold harmless, subject
to limitations set forth in Section 10.4, the Seller, its Affiliates and
Representatives (collectively, the "Seller Indemnified Parties") from and
against any Damages to the extent they are the result of (i) any inaccuracy in
any representation or the breach of any warranty of the Buyer under this
Agreement; provided, however, for the purposes of this Section 10.4(b)(i) only,
in determining the inaccuracy or breach of any representation or warranty made
by the Buyer in this Agreement, any reference to "Material Adverse Effect" or
the concept of materiality shall be disregarded or (ii) the failure of the Buyer
to duly perform or observe any term, provision, covenant or agreement to be
performed or observed by the Buyer pursuant to this Agreement, including as set
forth in Section 6.7(d).
(c) After the Closing, notwithstanding anything herein to
the contrary, no indemnification shall be available to the Buyer Indemnified
Parties under Sections 10.4(a)(i), (ii) (excluding Section 6.7) and (iii) hereof
or to the Seller Indemnified Parties under Sections 10.4(b)(i) and (ii) hereof
unless and until the aggregate amount of Damages that would otherwise be subject
to indemnification exceeds 2% of the Purchase Price (in each case, the
"Deductible Amount"), in which case the party entitled to such indemnification
shall be entitled to receive all amount of Damages. In addition, with the
exception of Section 6.7 and the QF Liabilities, in calculating the Deductible
Amount or Damages hereunder, all Damages which can reasonably be shown to relate
to the same matter which in the aggregate total less than $20,000 shall be
excluded in their entirety and the Seller and the Buyer in any event shall have
no liability
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hereunder to any Buyer Indemnified Party or any Seller Indemnified Party,
respectively, for such Damages.
(d) Notwithstanding anything herein to the contrary, and
excluding indemnification under Section 10.4(a)(v), which indemnification shall
be unlimited, the maximum aggregate liability of the Seller to the Buyer
Indemnified Parties under this Agreement shall not exceed 25% of the Purchase
Price for indemnification under Sections 10.4(a)(i) (excluding representations
and warranties in Sections 3.11 and 5.2), (ii) and (iii) or 50% of the Purchase
Price in the aggregate for indemnification under Sections
10.4(a)(i),(ii),(iii)(iv) and (vi).
(e) Any calculation of Damages for purposes of this
Section 10.4 shall be (i) net of any insurance recovery made by the Indemnified
Party (whether paid directly to such Indemnified Party or assigned by the
Indemnified Party to such Indemnified Party) and (ii) reduced to take account of
any net Tax benefit realized by the Indemnified Party arising from the
deductibility by the Indemnified Party of any such Damages (or the expenses or
losses that are attributable or relate to the creation of such Damages) or any
Tax (together, "Additional Deductions"). Any indemnification payment hereunder
shall initially be made without regard to this Section 10.4(f) and shall be
reduced to reflect any such net Tax benefit only after the Indemnified Party
actually realized such benefit. For purposes of this Agreement, an Indemnified
Party shall be deemed to have "actually realized" a net Tax benefit to the
extent that, and at such time as, the amount of Taxes payable by such
Indemnified Party (and/or any Person with which the Indemnified Party joins in
filing tax returns, or such persons collectively) is reduced below the amount of
Taxes that such Indemnified Party (and/or any Person with which the Indemnified
Party joins in filing tax returns, or such Persons collectively) would have been
required to pay but for the deductibility of any Additional Deductions. The
amount of any reduction hereunder shall be adjusted to reflect any final
determination (including the execution of Form 870-AD or successor form) with
respect to the Indemnified Party's liability for Taxes and, if necessary, the
Seller or the Buyer, as the case may be, shall make payments to the other to
reflect such adjustment. Any indemnity payment under this Agreement shall be
treated as an adjustment to the Purchase Price for Tax purposes, unless a final
determination (including the execution of Form 870-AD or successor form) with
respect to the Indemnified Party or any of its Affiliates causes any such
payment not to be treated as an adjustment to the Purchase Price for U.S.
federal income Tax purposes.
(f) No action, claim or setoff for Damages subject to
indemnification under this Section 10.4 shall be brought or made with respect to
claims for Damages resulting from a breach of any covenant or agreement
contained in this Agreement after the date on which such representation,
warranty, covenant or agreement shall terminate pursuant to Section 10.3 hereof;
provided, however, that any claim made with reasonable specificity by the party
hereto or its Affiliates or Representatives seeking indemnification (the
"Indemnified Party") to the party from which indemnification is sought (the
"Indemnifying Party") within the time periods set forth above shall survive (and
be subject to indemnification) until it is finally and fully resolved.
(g) An Indemnified Party shall give notice to an
Indemnifying Party promptly after such Indemnified Party has actual knowledge of
any claim which might give rise to a claim for Damages, and shall permit the
Indemnifying Party to assume the defense of any such claim or
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any litigation resulting therefrom; provided that the Indemnified Party may
participate in such defense at its own expense (unless the Indemnified Party
shall have reasonably concluded, based upon a written opinion of outside
counsel, that there is a reasonable likelihood of a conflict of interest between
the Indemnifying Party and the Indemnified Party in such action, in which case
the fees and expenses of one separate firm of counsel shall be at the expense of
the Indemnifying Party); and provided further that the failure of the
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder unless the Indemnifying Party is
actually and materially prejudiced thereby. An Indemnifying Party, in the
defense of any such claim or litigation, shall not, except with the consent of
the Indemnified Party (which consent shall not unreasonably be withheld),
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a full and unconditional release from all liability
in respect of such claim or litigation. An Indemnified Party shall furnish such
information regarding itself or the claim in question as such Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.
(h) Any (i) claim for Taxes shall be provided for
exclusively in Article V and (ii) breaches of the representations contained in
Section 3.11 and Section 5.2 not shall be subject to Section 10.4(c).
(i) The parties agree that it could be extremely
difficult and impracticable under the presently known and anticipated facts and
circumstances to ascertain and fix the actual damages which would ensue form the
delays discussed in Section 2.2, for which liquidated damages have been
enumerated. Accordingly, the parties agree that such liquidated damages are
intended to approximate the actual, potential damages, are not intended as a
penalty, and are Seller's sole remedy for Buyer's failure to close by the dates
set forth in Section 2.2. This provision is not intended to limit Seller's
remedies for a failure to close after December 29, 2000.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Waivers and Amendments. This Agreement may be
amended, superseded, canceled, renewed or extended, and the terms hereof may be
waived, only by a written instrument signed by each of the parties or, in the
case of a waiver, by the party or parties waiving compliance. No delay on the
part of any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party of
any right, power or privilege, nor any single or partial exercise of any such
right, power or privilege preclude any further exercise thereof or the exercise
of any other such right, power or privilege.
Section 11.2 Representations and Warranties; Etc. (a) (a) The
Buyer hereby acknowledges and agrees that the Seller is not making any
representation or warranty whatsoever, express or implied, including without
limitation in respect of the Seller, each Project Company, each Project or their
respective assets, liabilities and businesses, except for those representations
and warranties of the Seller explicitly set forth in this Agreement, together
with the Seller Disclosure Schedule or supplement thereto as shall be noted in
the Seller's certificate
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delivered pursuant to Section 9.3 or in any certificate contemplated hereby and
delivered by the Seller in connection herewith (notwithstanding the delivery or
disclosure to the Buyer or its Representatives of any other documents or
information).
(b) Other than pursuant to this Agreement, after the
Closing, neither the Buyer or any of its officers, directors, partners,
employees, Affiliates, Representatives or agents (collectively, the "Buying
Group"), nor the Seller or any of their officers, directors, partners,
employees, Affiliates, Representatives or agents (collectively, the "Selling
Group"), shall have any liability or responsibility to any Person, including
without limitation the Buyer or the Seller for (and each of them unconditionally
releases the Selling Group and the Buying Group from) any liability or
obligation of, or arising out of, or relating to, any Project Company, the Buyer
or the Seller of whatever kind or nature, whether contingent or absolute,
whether arising prior to, on or after, and whether determined or indeterminable
on, the Closing Date, and whether or not specifically referred to in this
Agreement, including without limitation liabilities and obligations (i) relating
to this Agreement and the transactions contemplated hereby, (ii) arising out of
or due to any inaccuracy of any representation or warranty or the breach of any
covenant, undertaking or other agreement of the Buyer or the Seller contained in
this Agreement, the Seller Disclosure Schedule or in any certificate
contemplated hereby and delivered by the Buyer or the Seller in connection
herewith and (iii) relating to any information (whether written or oral),
documents or materials furnished by the Seller or any of its Affiliates or any
of its respective Representatives, including the Information Memorandum dated
July 2000 prepared by Xxxxxx Xxxxxxx Xxxx Xxxxxx and any information, documents
or material made available to the Buyer in "data rooms," management
presentations or any other form in expectation of the transactions contemplated
by this Agreement.
Section 11.3 Entire Agreement; Assignment. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties or any of them with respect to the subject
matter hereof (other than the Confidentiality Agreement). This Agreement may not
be assigned by a party hereto without the consent of the other parties, provided
that the Buyer may assign its rights hereunder to one or more direct or indirect
wholly owned subsidiaries and grant a security interest in such rights to any
lender providing bridge financing. In the case of any such collateral
assignment, the Seller agrees to execute such documents as the Buyer may
reasonably request to evidence such assignment.
Section 11.4 Validity. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, each of which shall remain in full
force and effect.
Section 11.5 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given:
(a) If to the Seller, to:
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Columbia Energy Group
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000
(b) If to the Seller, to:
Columbia Electric Corporation
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000
(c) if to the Buyer, to:
Orion Power Holdings, Inc.
0 Xxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: W. Xxxxxxxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
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or such other address or facsimile number as a party may hereafter specify by
like notice to the other party. Each such notice, request or other communication
shall be effective (i) if given by facsimile, when such facsimile is transmitted
to the facsimile number specified herein and the appropriate confirmation is
provided, (ii) if given by United States mail, three days after such notice is
deposited in the mail in a postage pre-paid envelope or (iii) if given by any
other means, when delivered at the address specified herein.
Section 11.6 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of laws.
Section 11.7 Publicity. Except as otherwise may be required by
law, for so long as this Agreement is in effect, neither the Seller nor the
Buyer shall issue or cause the publication of any press release or other public
announcement with respect to the transactions contemplated by this Agreement
without the express prior written approval of the other party which shall not be
unreasonably withheld. The parties shall cooperate in preparing any such
announcements, including upon execution hereof.
Section 11.8 Jurisdiction; Forum. (a) By the execution and
delivery of this Agreement, the Buyer and the Seller submit to the personal
jurisdiction of any state or federal court in the state of New York in any suit
or proceeding arising out of or relating to this Agreement.
(b) The parties hereto agree that the appropriate and
exclusive forum for any disputes between any of the parties hereto arising out
of this Agreement or the transactions contemplated hereby shall be in any state
or federal court in the state of New York. The parties hereto further agree that
the parties will not bring suit with respect to any disputes arising out of this
Agreement or the transactions contemplated hereby in any court or jurisdiction
other than the above specified courts; provided, however, that the foregoing
shall not limit the rights of the parties to obtain execution of judgment in any
other jurisdiction. The parties hereto further agree, to the extent permitted by
law, that a final and unappealable judgment against a party in any action or
proceeding contemplated above shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States by suit on the judgment,
a certified or exemplified copy of which shall be conclusive evidence of the
fact and amount of such judgment.
Section 11.9 WAIVER OF JURY TRIAL. EACH OF THE SELLER AND THE
BUYER HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE SELLER AND THE
BUYER ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT
FOR THIS WAIVER, BE REQUIRED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
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CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
Section 11.10 Descriptive Headings. The descriptive headings
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
Section 11.11 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement.
Section 11.12 Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, and except as otherwise
expressly set forth herein, all legal and other costs and expenses incurred in
connection with the transactions contemplated by this Agreement shall be paid by
the party incurring such expenses, subject to Sections 2.2 and 10.2(d).
Section 11.13 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and their
successors and permitted assigns and, except as expressly set forth in Section
10.4 hereof, nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement. Any Person who is a
beneficiary of such Section 10.4 shall be entitled to enforce its rights
thereunder; provided, however, that, prior to the Closing, no action to enforce
such rights may be commenced by any such Person without the prior written
consent of the Seller.
Section 11.14 Interpretation. No reference in this Agreement
to "commercially reasonable efforts" shall require a Person obligated to use
such efforts to incur unreasonable out-of-pocket expenses or indebtedness or,
except as expressly provided herein, to institute litigation or to consent
generally to service of process in any jurisdiction where it is not already
subject.
Section 11.15 Other Acknowledgments and Disclaimers. Except as
set forth in Article III and Section 5.2, THE SELLER HEREBY DISCLAIMS ALL OTHER
WARRANTIES AND REPRESENTATIONS, INCLUDING WITHOUT LIMITATION ANY IMPLIED
WARRANTY OR REPRESENTATION AS TO FITNESS FOR ANY PARTICULAR PURPOSE,
MERCHANTABILITY, DESIGN, QUALITY, LAYOUT, FOOTAGE, PHYSICAL CONDITION,
OPERATION, COMPLIANCE WITH SPECIFICATION, ABSENCE OF UNKNOWN PHYSICAL DEFECTS OR
DAMAGE, OR ANY OTHER MATTER AFFECTING OR RELATED TO THE PROJECTS. WITHOUT
LIMITING THE FOREGOING, AND EXCEPT AS SET FORTH HEREIN, THE SELLER DOES NOT MAKE
AND HAS NOT MADE ANY REPRESENTATION OR WARRANTY REGARDING THE PRESENCE OR
ABSENCE OF ANY HAZARDOUS MATERIALS ON, UNDER OR ABOUT
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THE PROPERTY THAT IS RELATED TO THE PROJECTS OR THE COMPLIANCE OR NON-COMPLIANCE
OF ANY OF THE PROJECTS WITH ANY ENVIRONMENTAL LAWS. SUBJECT TO THE FOREGOING
AND, EXCEPT AS SET FORTH HEREIN, THE BUYER ACKNOWLEDGES THAT THE BUYER HAS
INSPECTED AND WILL INSPECT FURTHER, THE PROPERTY RELATED TO THE PROJECTS AND
ACCEPTS SUCH PROPERTY "AS IS", "WHERE IS" AND "WITH ALL FAULTS." EXCEPT AS SET
FORTH HEREIN, THE SELLER SHALL NOT BE LIABLE OR BOUND IN ANY MANNER BY ANY
VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO SUCH
PROPERTY FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT, AFFILIATE OR OTHER PERSON,
UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED TO HEREIN, AND THE SELLER
SHALL NOT BE LIABLE OR BOUND IN ANY MANNER BY ANY STATEMENT OR INFORMATION
CONTAINED IN ANY STUDIES OR REPORTS PROVIDED TO THE BUYER PURSUANT TO ANY
PROVISIONS OF THIS AGREEMENT OR OTHERWISE, OR ANY OMISSION WITH RESPECT TO ANY
SUCH STUDIES OR REPORTS.
Section 11.16 Confidentiality. The Seller on behalf of itself
and its Affiliates agrees to keep all confidential or proprietary information
relating to the Company, the Investing Companies and the Projects confidential,
to treat it with the same degree of care it uses in protecting its own
confidential and proprietary data, not to use it in any way detrimental to the
Company or any Investing Company or Project and not to disclose it, directly or
indirectly, in any manner whatsoever; provided, however, that (i) any disclosure
of such information may be made if the Buyer consents in writing and (ii) any
disclosure of such information may be made as otherwise required by law
(including, without limitation, pursuant to any Federal or state securities laws
or pursuant to any legal, regulatory or legislative proceeding, action, request
or filing) or as contemplated by the following sentence (the "Legal Exception").
In the event that the Seller or any of its representatives receives a request to
disclose all or any part of such information under the terms of a valid and
effective subpoena, order, civil investigative demand or similar process or
other written request issued by a court of competent jurisdiction or by a
federal, state or local, foreign or domestic, governmental or regulatory body or
agency, the Seller agrees to the extent practicable to (A) promptly notify the
Buyer of the existence, terms and circumstances surrounding such request, (B)
consult with the Buyer on the advisability of taking legally available steps to
resist or narrow such request and (C) only disclose the information requested
after complying with clauses (A) and (B), providing the Buyer with copies of any
information it intends to disclose (and, if applicable, the text of the
disclosure language itself) and exercising reasonable effort (if so requested by
the Buyer and at the Buyer's sole expense) to obtain, to the extent practicable,
an order or other reliable assurance that confidential treatment will be
accorded to such portion of any disclosed information as the Buyer may
designate. The Buyer shall be entitled to specific performance of the Seller's
obligations under this Section 11.16.
Section 11.17 Interim Transaction. Section 11.17 of the
Seller's Disclosure Schedule sets forth a description of the Interim Transaction
(as defined in Section 11.17 of the Seller's Disclosure Schedule) and the
obligations of the Seller with respect thereto.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
COLUMBIA ENERGY GROUP
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
COLUMBIA ELECTRIC CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: President & Chief
Executive Officer
ORION POWER HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: President & Chief
Executive Officer
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