Exhibit B.1
6-7-01 Execution Copy
Execution Copy
SETTLEMENT AGREEMENT
AMONG
CITY OF HOLYOKE GAS & ELECTRIC DEPARTMENT
AND
HOLYOKE WATER POWER COMPANY
AND
HOLYOKE POWER AND ELECTRIC COMPANY
June 7, 2001
Table of Contents
1. Definitions; Interpretation.
2. Acquisition of Assets by Buyer
2.1. Transfer of Assets
2.2. Excluded Assets
2.3. Assumption of Liabilities
2.4. Excluded Liabilities.
2.5. Purchase Price
2.6. Adjustments to Initial Purchase Price
2.7. Allocation of Purchase Price
2.8. Proration
2.9. The Closing
2.10.Deliveries by the Seller at the Closing
2.11.Deliveries by the Buyer at the Closing
3. Representations, Warranties and Disclaimers of the Seller
3.1. Organization of the Seller
3.2. Authorization of Transaction
3.3. Noncontravention
3.4. Brokers' Fees
3.5. Title to Acquired Assets
3.6. Legal and Other Compliance; Permits
3.7. Taxes
3.8. Contracts and Leases
3.9. Insurance
3.10. Litigation
3.11. [Reserved]
3.12. Environmental Matters
3.13. Condemnation
3.14. Regulation as a Utility
3.15. [Reserved]
3.16. Assets Used in Operation of the Facilities
3.18. Disclaimers Regarding Acquired Assets
3A. Representations, Warranties and Disclaimers of the HP&E
3.1.A. Organization of the HP&E
3.2.A. Authorization of Transaction
3.3.A. Noncontravention
3.4.A. Disclaimer
4. Representations and Warranties of the Buyer
4.1. Organization of the Buyer
4.2. Authorization of Transaction
4.3. Noncontravention
4.4. Brokers' Fees
4.5. Litigation
4.6. No Knowledge of the Seller's Breach
4.7. Availability of Funds
4.8. "As Is" Sale
4.9. Environmental Reports
4.10.Qualified Buyer
5. Covenants
5.1. General
5.2. Notices, Consents and Approvals
5.3. Operation of Business
5.4. Full Access
5.5. Interim Period Notice
5.6. Further Assurances
5.7. Employee Matters
5.8. Title Commitment and Surveys
5.9. Access after Closing
5.10. NEPOOL
5.11. Risk of Loss
5.12. [Reserved]
5.13. Waiver of Distribution Franchise Rights
5.14. Discharge of Environmental Liabilities
5.15. Settlement; Mutual Release
5.16. Collection of Accounts Receivable
6. Conditions to Obligation to Close
6.1. Conditions to Obligation of the Buyer to Close
6.2. Conditions to Obligation of the Seller and HP&E to Close
7. Confidentiality
8. Taxes
9. Survival of Representations and Warranties; Effect of
Closing and Indemnification
9.1. Survival of Representations and Warranties; Survival of
Covenants and Agreements
9.2. Effect of Closing
9.3. Indemnity by the Seller
9.4. Indemnity by Buyer
9.5. Exclusive Remedy
9.6. Matters Involving Third Parties
9.7. Net of Taxes and Insurance
9.8. No Recourse
10. Termination
10.1.Termination of Agreement
10.2.Effect of Termination
10.3.Termination for Adverse Labor Determination
10.4.Termination by Buyer
10.5.Termination by Seller
10.6.Termination Fee
11. Miscellaneous
11.1. Press Releases and Public Announcements
11.2. No Third Party Beneficiaries
11.3. No Joint Venture
11.4. Entire Agreement
11.5. Succession and Assignment
11.6. Counterparts
11.7. Headings
11.8. Notices
11.9. Governing Law
11.10. Change in Law
11.11. Consent to Jurisdiction
11.12. Amendments and Waivers
11.13. Severability
11.14. Expenses
11.15. Construction
11.16. Incorporation of Exhibits and Schedules
11.17. Specific Performance
11.18. Dispute Resolution
11.19. No Recording
EXHIBITS
Exhibit A-1 - Form of Deed
Exhibit A-2 - Form of Conservation Restriction
Exhibit A-3 - Form of Trustee Deed
Exhibit B - Form of Xxxx of Sale
Exhibit C - Form of Assignment and Assumption Agreement
Exhibit D - Form of Property Tax Agreement
Exhibit E - Form of First Amendment to the Transmission Service Agreement
Exhibit F - Form of Assignment and Assumption (Headwater Benefits)
Exhibit G - Form of Coordination Agreement
Exhibit H - Form of Environmental Consultant Reliance Letter
Exhibit I - Capital Expenditure Protocol
Exhibit J - Form of Charter Amendments
Schedules
Schedule 2.1(a)(i) - Real Property
Schedule 2.1(a)(ii) - Additional Real Property Matters
Schedule 2.1(b) - Personal Property
Schedule 2.1(c) - Leases
Schedule 2.1(d) - Billing Software
Schedule 2.1(f) - Contracts
Schedule 2.1(h) - Names of Facilities
Schedule 2.1(k) - Prospect Substation
Schedule 2.1.2 - Real Property Subject to Conservation Restrictions
Schedule 2.2.(a) - Transmission and Associated Telecommunication Assets
Schedule 2.2.(b) - Excluded Real Property
Schedule 2.2(d) - Mt. Xxx Property and Assets
Schedule 2.7 - Allocation Schedule Form 8594
Schedule 2.10(r) - Matters for Opinion from Counsel to the Seller
Schedule 2.11(i) - Matters for Opinion from Counsel to the Buyer
Schedule 3.1 - Seller's Charter and By-laws
Schedule 3.3 - Matters of Contravention
Schedule 3.5 - Title Commitment
Schedule 3.6(b) - Permits
Schedule 3.8(b) - Exceptions to Contract Obligations
Schedule 3.8(c) - Assumed Contracts
Schedule 3.9 - Insurance
Schedule 3.1 - Litigation
Schedule 3.1 - Environmental
Schedule 3.1 - Condemnation
Schedule 3.1 - Exceptions to Assets used in
Operation of the Facilities
Schedule 3.1.A - HP&E's Charter and By-laws
Schedule 5.2(e) - FERC License; Water Quality Certification
Schedule 5.3.1(e) - Fuel Commitments
Schedule 5.3.2 - Pre-Approved Capital Expenditures
Schedule 5.3.3 - Riverside Plan
Schedule 5.3.4 - Interim Environmental Actions
Schedule 5.3.6 - Open Purchase Orders
Schedule 5.3.10 - WMECO Matters
Schedule 5.6(e) - Leased Vehicles and Equipment
Schedule 5.6(f) - Spare Transformer
Schedule 5.13(c) - Seller's Post-Closing Activities
Schedule 6.1(c) - Buyer's Regulatory Approvals
Schedule 6.1(f) - Tax Exempt Financing
Schedule 6.2(c) - Seller's Regulatory Approvals
Schedule 11.5 - Assignable Real Property
Settlement Agreement
This Settlement Agreement (the "Agreement") is entered into
as of June 7, 2001, by and between CITY OF HOLYOKE GAS & ELECTRIC
DEPARTMENT, a Massachusetts municipal light plant, acting by and
through its commission (the "Buyer"), and HOLYOKE WATER POWER
COMPANY, a Massachusetts business corporation (the "Seller"), and
HOLYOKE POWER AND ELECTRIC COMPANY, a Massachusetts business
corporation ("HP&E"). The Buyer, HP&E and the Seller are each
referred to herein as a "Party" or, collectively as the
"Parties."
This Agreement contemplates a settlement of existing
litigation through a transaction in which the Buyer will purchase
certain assets of the Seller (as set forth in Section 2.1 below)
and certain obligations from the Seller and/or HP&E in
consideration of the Purchase Price (as defined in Section 2.5
below).
Now, therefore, in consideration of the premises and the
mutual promises herein made, and in consideration of the
representations, warranties, and covenants herein contained, the
Parties agree as follows:
1. Definitions; Interpretation.
1.1 Definitions.
"Acquired Assets" has the meaning set forth in Section 2.1.
"Act" means "An Act Concerning Electric Restructuring,"
Chapter 164 of the Massachusetts Acts of 1997.
"Affiliate" means, when used with reference to a specified
Person, any Person that directly or indirectly controls or is
controlled by or is under common control or ownership with the
specified Person. For purposes of this definition, "control"
means the power to direct the management and policies of the
specified Person. A Person shall be deemed to be in control of
another Person if such Person (i) directly or indirectly holds
outstanding shares or other evidence of ownership having voting
power to elect a majority of the board of directors, management
committee or its equivalent of such other Person, and/or (ii) has
the right to appoint a majority of the governing body of such
other Person. Unless otherwise expressly indicated herein, the
City and any of its political subdivisions, departments, agencies
and other instrumentalities shall be deemed to be an Affiliate of
the Buyer.
"Affiliated Transferor" has the meaning set forth in Section
2.1.1.
"Agreement" has the meaning set forth in the preamble above.
"Approval Date" means the date on which FERC issues an order
approving the transfer of the FERC License to the Buyer, without
regard to any appeal period(s) applicable to such order.
"Assignment and Assumption Agreement" means the agreement
between the Parties by which the Seller shall assign certain
rights, liabilities and obligations and the Buyer shall assume
the Assumed Liabilities, in substantially the form attached
hereto as Exhibit C.
"Assumed Liabilities" has the meaning set forth in Section
2.3.
"Xxxx of Sale" means the form of xxxx of sale by which the
title to personal property shall be conveyed to the Buyer,
substantially in the form attached hereto as Exhibit B.
"Business Day" means any day other than a Saturday, Sunday
or day on which banks are legally closed for business in Boston,
Massachusetts.
"Buyer" has the meaning set forth in the preamble above.
"Buyer Material Adverse Effect" means any material adverse
change in, or effect on, the business, financial condition,
operations, results of operations or future prospects of the
Buyer, including any change or effect that is materially adverse
to the Buyer's ability to own, operate or use the Acquired Assets
as so owned, operated and used by the Seller prior to the
Effective Date, taken as a whole; provided that any change or
effect that is cured prior to Closing shall not be considered a
Buyer Material Adverse Effect; and provided, further, that any
change or effect having an individual value of One Hundred
Thousand Dollars ($100,000.00) or less and/or an aggregate value
of Five Hundred Thousand Dollars ($500,000.00) or less, in each
case determined on a cumulative present value using the Prime
Rate, shall not be deemed to be a Buyer Material Adverse Effect.
"Buyer's Observers" has the meaning set forth in Section
5.4(b).
"Buyer's Regulatory Approvals" means those approvals
identified on Schedule 6.1(c) attached hereto to be obtained by
the Buyer.
"Capital Commitments" means all binding contractual
commitments to make capital expenditures relating to the Acquired
Assets, Facilities or Sites incurred by the Seller during the
Interim Period that extend beyond the Closing Date, whether or
not relating to the Pre-Approved Capital Expenditures.
"Capital Expenditure Protocol" means the protocol
established between the Parties with respect to capital
expenditures expected to occur during the Interim Period
(including, without limitation, Capital Commitments), other than
Pre-Approved Capital Expenditures, a copy of which is attached
hereto as Exhibit I.
"Cash" means cash and cash equivalents (including marketable
securities and short term investments) calculated in accordance
with GAAP.
"Charter Amendments" means the amendments to the corporate
charters of the Seller and HP&E, respectively, in the form
attached hereto as Exhibit J.
"City" means the City of Holyoke, Massachusetts.
"Closing" has the meaning set forth in Section 2.9.
"Closing Adjustment" has the meaning set forth in Section
2.6(c).
"Closing Date" has the meaning set forth in Section 2.9.
"Closing Purchase Price" has the meaning set forth in
Section 2.5.
"Closing Statement" has the meaning set forth in Section
2.6(d).
"C.M.R." means Code of Massachusetts Regulations.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collective Bargaining Agreement" means the current
collective bargaining agreement with the Union, with respect to
employees assigned to the Acquired Assets.
"Commercially Reasonable Efforts" means efforts which are
reasonably within the contemplation of the Parties at the
Effective Date and which do not require the performing Party to
expend any funds other than expenditures which are customary and
reasonable in transactions of the kind and nature contemplated by
this Agreement in order for the performing Party to satisfy its
obligations hereunder.
"Confidentiality Agreement" means the confidentiality
agreement dated August 1, 2000, among the Seller, the Buyer and
HP&E.
"Conservation Restriction" means the form of conservation
restriction relating to the Facilities, substantially in the form
attached hereto as Exhibit A-2.
"Contracts" has the meaning set forth in Section 2.1.1(f).
"Customers" means collectively the end-use customers
purchasing electricity at retail and water under agreements
(millpowers, licenses or otherwise) as of the Closing Date from
the Seller.
"Deed" means the form of deed by which the Real Property
shall be conveyed to the Buyer, substantially in the form
attached hereto as Exhibit A-1.
"Distribution" has the meaning ascribed thereto in 1 of the
Act (other than the reference to the jurisdiction of the DTE), as
clarified by subsequent orders by the DTE (including, without
limitation, orders issued in Docket 97-46); expressly excluding,
however, to the extent otherwise within such definition any
transmission assets or transmission activities subject to the
jurisdiction of FERC.
"Distribution Operations" means the process of conducting
and supporting Distribution at retail.
"Distribution System" means the distribution, communication,
substation and other assets necessary for the current
Distribution Operations of the Seller as identified on Schedules
2.1(a)(i) or 2.1(b). This includes poles, manholes, wires,
transformers, cutouts/disconnects and other protective equipment,
capacitors, and other related equipment relating to Distribution
Operations. For purposes of the foregoing, a substation shall be
part of the Distribution System if its source is distribution
level voltage (as provided in the definition of "distribution in
1 of the Act, as clarified by subsequent orders by the DTE
(including, without limitation, orders issued in Docket 97-46)).
"DTE" means the Massachusetts Department of
Telecommunications and Energy or any successor agency.
"Effective Date" means the date on which this Agreement has
been duly executed and validly delivered by the Parties.
"Environment" means soil, land surface or subsurface strata,
real property, surface waters, groundwater, wetlands, sediments,
drinking water supply, ambient air (including indoor air) and any
other environmental medium or natural resource.
"Environmental Claim" means a claim by any Person based upon
a breach of Environmental Laws or an Environmental Liability
alleging loss of life, injury to persons, property or business,
damage to natural resources or trespass to property, whether or
not such loss, injury, damage or trespass arose or was made
manifest before the Closing Date or arises or becomes manifest
after the Closing Date.
"Environmental Laws" means all applicable Laws and any
binding administrative or judicial interpretations thereof
relating to: (a) the regulation, protection and use of the
Environment; (b) the conservation, management, development,
control and/or use of land, natural resources and wildlife; (c)
the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal,
release, threatened release, abatement, removal, remediation, or
handling of, or exposure to, any Hazardous Substances; or (d)
noise; and includes without limitation, the following federal
statutes (and their implementing regulations): the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended; the Solid Waste Disposal Act, as amended, 42 U.S.C.
56901 et seq.; the Federal Water Pollution Control Act of 1972,
as amended, 33 U.S.C. 1251 et seq.; the Toxic Substances Control
Act of 1976, as amended, 15 U.S.C. 2601 et. seq.; the Clean Air
Act of 1966, as amended, 42 U.S.C. 7401 et seq.; the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended, 7 U.S.C.
136 et seq.; the Coastal Zone Management Act of 1972, as
amended, 16 U.S.C. 1451 et seq.; the Oil Pollution Act of 1990,
as amended, 33 U.S.C. 2701 et. seq.; the Rivers and Harbors Act
of 1899, as amended, 33 U.S.C. 401 et seq.; the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. 1801 et
seq.; the Endangered Species Act of 1973, as amended, 16 U.S.C.
1531 et. seq.; the Occupational Safety and Health Act of 1970,
as amended, 29 U.S.C. 651 et seq.; and the Safe Drinking Water
Act of 1974, as amended, 42 U.S.C. 300(f) et seq.; and all
analogous or comparable state statutes and regulations,
including, without limitation, the Massachusetts Contingency Plan
(310 C.M.R. 40.000); the Massachusetts Hazardous Waste Management
Act (M.G.L. 21C); and the Massachusetts Oil and Hazardous
Material Release Prevention Act (M.G.L. 21E); and Title V
relating to septic systems.
"Environmental Liabilities" means any Liability under or
related to Environmental Laws arising as a result of or in
connection with (i) any violation or alleged violation of
Environmental Law, prior to, on or after the Closing Date, with
respect to the ownership, operation or use of the Acquired
Assets; (ii) any Environmental Claims caused (or allegedly
caused) by the presence or Release of Hazardous Substances at,
on, in, under, adjacent to or migrating from the Acquired Assets
prior to, on or after the Closing Date; (iii) the investigation
and/or Remediation (whether or not such investigation or
Remediation commenced before the Closing Date or commences after
the Closing Date) of Hazardous Substances that are present or
have been Released prior to, on or after the Closing Date at, on,
in, under, adjacent to or migrating from the Acquired Assets;
(iv) compliance with Environmental Laws on or after the Closing
Date with respect to the ownership or operation or use of the
Acquired Assets; (v) any Environmental Claim arising from or
relating to the off-site disposal, treatment, storage,
transportation, discharge, Release or recycling, or the
arrangement for such activities, of Hazardous Substances, on or
after the Closing Date, in connection with the ownership or
operation of the Acquired Assets; and (vi) the investigation
and/or remediation of Hazardous Substances that are generated,
disposed, treated, stored, transported, discharged, Released,
recycled, or the arrangement of such activities, on or after the
Closing Date, in connection with the ownership or operation of
the Acquired Assets, at any Offsite Disposal Facility.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Estimated Adjustment" has the meaning set forth in Section
2.6(c).
"Estimated Closing Statement" has the meaning set forth in
Section 2.6(c).
"Event of Loss" has the meaning set forth in Section 5.11.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Environmental Liability" means any Liability under
or related to Environmental Laws arising as a result of, or in
connection with, those sites known as the Holyoke Gas Tar
Deposits, identified as MADEP Site # 1-1055, and the Former
Holyoke Gas Works, identified as MADEP Site # 1-0816.
"Excluded Liabilities" has the meaning set forth in Section
2.4.
"Excluded Records" has the meaning set forth in Section
2.1.1(g).
"Exhibits" means the exhibits to this Agreement.
"Facilities" means the hydro-electric generating facilities
identified by name on Schedule 2.1(h) attached hereto.
"FERC" means the Federal Energy Regulatory Commission, or
its regulatory successor, as applicable.
"FERC Applications" has the meaning set forth in Section
5.2(a).
"FERC License" means license issued to Seller (Project #2004-
073) by FERC with respect to the Facilities.
"Financing" means the financing to be obtained by the Buyer
to fund the transactions contemplated hereunder, as referenced in
Section 6.1(f).
"FIRPTA Affidavit" means the affidavit to be delivered by
the Parties at Closing pursuant to Section 1445(b)(2) of the
Code, to establish that each Party is not a "foreign person"
within the meaning of that Section.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"Generation Support Services Agreement" means an agreement
between the Buyer and Northeast Generation Services Company under
which the Buyer can contract, at the Buyer's option, for the
provision of certain services to the Buyer after the Closing.
"Good Industry Practices" means any of the practices,
methods and acts engaged in or approved by a significant portion
of the electric utility industry during the relevant time period,
or any of the practices, methods or acts which, in the exercise
of reasonable judgment in light of the facts known at the time
the decision was made, could have been expected to accomplish the
desired result at a reasonable cost consistent with good business
practices, reliability, safety and expedition. Good Industry
Practices are not intended to be limited to the optimum practice,
method or act to the exclusion of all others, but rather to be
acceptable practices, methods or acts generally accepted in the
region.
"Governmental Authority" means any federal, state, local or
other governmental, regulatory or administrative agency,
commission, department, board, or other governmental subdivision,
court, tribunal, arbitral body or other governmental authority,
but excluding the Buyer and any subsequent owner of the Sites (if
otherwise a Governmental Authority under this definition).
"Granted Easements" has the meaning set forth in the Deed.
"Hazardous Substance" means (a) any petrochemical or
petroleum products, oil, waste oil, asbestos in any form that is
or could become friable, urea formaldehyde foam insulations, lead-
based paint and polychlorinated biphenyls; (b) any products,
mixtures, compounds, materials or wastes, air emissions, toxic
substances, wastewater discharges and any chemical, material or
substance that may give rise to liability pursuant to, or is
listed or regulated under, or the human exposure to which or the
Release of which is controlled or limited by applicable
Environmental Laws; and (c) any materials or substances defined
in Environmental Laws as "hazardous", "toxic", "pollutant", or
"contaminant", or words of similar meaning or regulatory effect.
"HP&E" has the meaning set forth in the preamble above.
"Improvements" means all buildings, structures (including
all fuel handling and storage facilities), machinery and
equipment, fixtures, construction in progress, including all
piping, cables and similar equipment forming part of the
mechanical, electrical, plumbing or HVAC infrastructure of any
building, structure or equipment, and including all generating
units, located on and affixed to the underlying real property.
"Indemnified Party" has the meaning set forth in Section
9.6(a).
"Indemnifying Party" has the meaning set forth in Section
9.6(a).
"Initial Purchase Price" has the meaning set forth in
Section 2.5.
"Inspections" means all tests, reviews, examinations,
inspections, investigations, verifications, samplings and similar
activities conducted by any Party or such Party's agents or
representatives with respect to the Acquired Assets prior to the
Closing.
"Interim Period" means that period of time commencing on the
Effective Date and ending on the Closing Date.
"Inventory" or "Inventories" means fuel inventories,
materials, spare parts, consumable supplies and chemical and gas
inventories located at the Facilities, in transit to such Sites
or identified in any Schedule.
"ISO New England" means ISO New England Inc., the
independent system operator as established or designated by
NEPOOL.
"Knowledge" means the actual, current knowledge, after due
inquiry, of the corporate officers charged with responsibility
for the particular function at the date of this Agreement, or,
with respect to any certificate delivered pursuant to this
Agreement, the date of delivery of the certificate.
"Laws" means all laws, rules, regulations, codes,
injunctions, judgments, orders, decrees, rulings,
interpretations, constitution, ordinance, common law, or treaty,
of any federal, state, local municipal and foreign,
international, or multinational government or administration and
related agencies.
"Leases" has the meaning set forth in Section 2.1.1(c).
"Liability" or "Liabilities" means any liability or
obligation (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, whether incurred
or consequential and whether due or to become due), including any
liability for Taxes.
"Licensed Site Professional" has the meaning set forth in
M.G.L. c.21A, 19.
"Lien" means any mortgage, pledge, lien, security interest,
charge, claim, equitable interest, encumbrance, restriction on
transfer, conditional sale or other title retention device or
arrangement (including, without limitation, a capital lease),
transfer for security for the payment of any indebtedness, or
restriction on the creation of any of the foregoing, whether
relating to any property or right or the income or profits
therefrom; provided, however, that the term "Lien" shall not
include any of the following "Permitted Encumbrances": (i) Liens
for Taxes or other charges or assessments by any Governmental
Authority to the extent that the payment thereof is not in
arrears or otherwise due or is being contested in good faith;
(ii) encumbrances in the nature of zoning restrictions, building
and land use laws, ordinances, orders, decrees, restrictions or
any other conditions imposed by any Governmental Authority; (iii)
easements (including, without limitation, the Reserved Easements
and any other easement or like right granted by an instrument
executed in connection with this Agreement or the Related
Agreements or the transactions contemplated hereby or thereby,
but excluding such encumbrances that secure indebtedness),
rights, restrictions, title imperfections and similar matters
including such matters as are set forth in any applicable FERC
license or exemption on the uses of property if the same do not
materially detract from the operation or use of such property in
the business of the Seller as conducted on the Effective Date;
(iv) deposits or pledges made in connection with, or to secure
payment of, worker's compensation, unemployment insurance, old
age pension programs mandated under applicable laws or other
social security regulations; (v) statutory or common law liens in
favor of carriers, warehousemen, mechanics and materialmen,
statutory or common law liens to secure claims for labor,
materials or supplies to the Acquired Assets and other like
liens, which, in the case of clauses (i) through (v), inclusive,
secure obligations to the extent that payment thereof is not in
arrears or otherwise due and which have been incurred under Good
Industry Practices; (vi) any Lien with respect to the Acquired
Assets that arises under Good Industry Practices and is not
material to the operation or use of the Acquired Assets in the
business of the Seller as conducted on the Effective Date;
(vii) any Lien or title imperfection with respect to the Acquired
Assets created by or resulting from any act or omission of the
Buyer; (viii) all exceptions set forth in the "Title Commitments"
or discoverable based on a review of an accurate survey of the
Sites or the land records of the respective towns in which the
Sites are located; and (ix) matters set forth on Schedule
2.1(a)(ii) and Conservation Restrictions contemplated in Section
2.1.2.
"Losses" has the meaning set forth in Section 9.3.
"MADEP" means the Massachusetts Department of Environmental
Protection or its successors.
"Major Loss" has the meaning set forth in Section 5.11(b).
"Material Adverse Effect" means any change in, or effect on,
the Acquired Assets that is materially adverse to the operations
or condition of the Acquired Assets as operated by the Seller on
the Effective Date, taken as a whole, other than any such change
or effect resulting from (a) changes in the international,
national, regional or local wholesale or retail markets for
electric power or fuel used in connection with the Acquired
Assets; (b) changes in the North American, national, regional or
local electric transmission systems or the operation thereof or
the costs imposed on generators of electricity in connection with
the use of such electric transmission systems; or (c) any order
of any Governmental Authority (other than an Affiliate of the
Buyer) or legislation, in each case applicable to providers of
generation, transmission or distribution of electricity generally
that imposes restrictions, regulations or other requirements on
such providers; provided that any change or effect that is cured
prior to Closing shall not be considered a Material Adverse
Effect; and provided, further, that any change or effect having
an individual value of Five Hundred Thousand Dollars
($500,000.00) or less and/or an aggregate value of Two Million
Dollars ($2,000,000.00) or less, in each case determined on a
cumulative present value using the Prime Rate, shall not be
deemed to be a Material Adverse Effect.
"M.G.L." means Massachusetts General Laws.
"MOU" means the Memorandum of Understanding dated October
27, 2000, between the Seller and Buyer.
"Mt. Xxx" means the Mt. Xxx Station owned by Seller, as more
particularly described on Schedule 2.2(d).
"NEPOOL" means the New England Power Pool, established by
the NEPOOL Agreement, or its successor.
"NEPOOL Agreement" means the New England Power Pool
Agreement, dated September 1, 1971, as amended by the Restated
New England Power Pool Agreement filed with FERC on July 22,
1998, as finally approved by FERC and as further amended from
time to time.
"Offsite Disposal Facility" means a location, other than a
Facility or a Site, which receives or received Hazardous
Substances for disposal by the Seller prior to the Closing Date
or by the Buyer on or after the Closing Date.
"Party" and "Parties" have the meanings set forth in the
preamble above.
"Pending Litigation" means the cases pending in Dockets 95-
224 and 99-241 before Hampden County, Massachusetts Superior
Court and Docket 99-P-953 before Massachusetts Appeals Court.
"Permits" means all certificates, licenses, permits,
approvals, consents, orders, decisions and other actions of a
Governmental Authority pertaining to a particular Acquired Asset,
or the ownership, operation or use thereof, including the FERC
License.
"Permitted Encumbrances" has the meaning set forth in the
definition of Lien.
"Person" means an individual, a partnership, a corporation,
an association, a joint stock company, a trust, a joint venture,
a limited liability company, an unincorporated organization, or a
governmental entity (or any department, agency, or political
subdivision thereof).
"Pre-Approved Capital Expenditures" means those capital
expenditures set forth on Schedule 5.3.2.
"Prime Rate" means the prime commercial lending rate
announced from time to time for commercial loans by Fleet
National Bank, N.A., or its successors.
"Prospect Substation" has the meaning set forth in Section
2.1.1(k).
"Purchase Price" has the meaning set forth in Section 2.5.
"Purchase Price Adjustment" has the meaning set forth in
Section 2.6.
"Real Property" has the meaning set forth in Section
2.1.1(a).
"Related Agreements" means the Assignment and Assumption
Agreement, the Xxxx of Sale, the Deed, and the Property Tax
Agreement.
"Release" means any actual or threatened spilling, leaking,
pumping, pouring, emitting, dispersing, emptying, discharging,
injecting, escaping, leaching, dumping, or disposing of any
Hazardous Substance into the Environment that may cause an
Environmental Liability (including the disposal or abandonment of
barrels, containers, tanks or other receptacles containing or
previously containing any Hazardous Substance).
"Releasee" has the meaning set forth in Section 5.15(a).
"Releasor" has the meaning set forth in Section 5.15(a).
"Relicensing Proceeding" means the proceeding currently
pending before FERC relating to the FERC License.
"Remediation" means any or all of the following activities
to the extent required to address the presence or Release of
Hazardous Substances: (a) monitoring, investigation, assessment,
treatment, cleanup containment, removal, mitigation, response or
restoration work as well as obtaining any permits, consents,
approvals or authorizations of any Governmental Authority
necessary to conduct any such activity; (b) preparing and
implementing any plans or studies for any such activity; (c)
obtaining a written notice from a Governmental Authority with
competent jurisdiction under Environmental Laws or a written
opinion of a Licensed Site Professional as contemplated by the
relevant Environmental Laws and in lieu of a written notice from
a Governmental Authority, that no material additional work is
required; and (d) any other activities reasonably determined by a
Party to be necessary or appropriate or required under
Environmental Laws.
"Representative" means, as to any Person, such Person's
Affiliates and its and their directors, officers, employees,
agents, advisors (including, without limitation, financial
advisors, counsel and accountants).
"Reserved Easements" has the meaning set forth in the Deed.
"Reserved Litigation" means collectively (a) any and all
cases of Seller pending before the Commonwealth of Massachusetts
Appellate Tax Board (including, without limitation, cases in
Dockets F-254355 (real property - fiscal year 1999), F-254354
(personal property - fiscal year 1999), F-258521 (real property -
fiscal year 2000), and F-258520 (personal property - fiscal year
2000); (b) any and all cases, petitions or similar requests for
relief of Seller currently subject to an abatement proceeding;
(c) all of the rights of Seller with respect to its ability to
contest, challenge, appeal or otherwise dispute Taxes applicable
to Mt. Xxx or any of the other Excluded Assets; and (d) all of
the rights of Seller with respect to its ability to
contest, challenge, appeal or otherwise dispute Taxes
applicable to all or any portion of the Acquired Assets.
"Retail Electricity Sales" means the supply of electricity
and associated products and services to end-use consumers
thereof; expressly excluding, however, Distribution Operations
and Transmission Operations.
"Riverside Plan" has the meaning set forth in Section 5.3.3.
"Schedule" means a schedule to this Agreement.
"SEC" means the Securities and Exchange Commission.
"Seller" has the meaning set forth in the preamble.
"Seller's Regulatory Approvals" means those approvals
identified on Schedule 6.2.(c) hereto to be obtained by the
Seller.
"Settlement Deadline" means the ninetieth (90th) day after
the Approval Date.
"Site" means the Real Property and Improvements forming a
part of, or used or usable in connection with, a Facility, the
Prospect Substation and/or the Distribution System. Any
reference to a Site shall include, by definition, the surface and
subsurface elements, including the soils and groundwater present
at such Site, and any reference to items "at the Site" shall
include all items "at, on, in, upon, over, across, under and
within" the Site.
"Spare Transformer" has the meaning set forth in Section
5.6(f).
"Survey" means any and all surveys of the Real Properties
containing Improvements that the Buyer conducts, at its sole cost
and expense, pursuant to Section 5.8(b).
"Taking" has the meaning set forth in Section 5.11.
"Tax" or "Taxes" means any federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code 59A), customs duties,
capital stock, franchise, profits, withholding, social security
(or similar, including FICA), unemployment, disability, real
property, personal property, sales, use, transfer, registration,
value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim
for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any
amendment thereof.
"Third Party" means a Person who is not a Party, an
Affiliate of a Party, a Representative of a Party, a
Representative of an Affiliate of a Party or a shareholder of any
of a Party, a Party's Affiliate or a Party's Representative;
provided that for purposes of the Reserved Litigation only, the
City shall not be considered an Affiliate of Buyer.
"Third Party Claim" has the meaning set forth in Section
9.6(a).
"Title Commitments" has the meaning set forth in Section
5.8(a).
"Title V" means Title 5 of the Massachusetts Environmental
Code (310 C.M.R. 15.000 et seq.) and related regulations.
"Trademarks" means any trademarks, service marks, trade
dress, and logos, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill
associated therewith.
"Transferable Permits" has the meaning set forth in Section
3.6(b).
"Transmission" has the meaning ascribed thereto in 1 of the
Act, as clarified by subsequent orders by the DTE (including,
without limitation, orders issued in Docket 97-46).
"Transmission Assets" means the transmission, communication,
substation and other assets necessary to current or future
Transmission Operations of the Seller.
"Transmission Operations" means the process of conducting
and supporting Transmission, subject to the jurisdiction of FERC.
"Trustee Deed" means the form of deed attached hereto as
Exhibit A-3.
"Union" means the International Brotherhood of Electrical
Workers, Local 455.
"WARN Act" means the Federal Worker Adjustment Retraining
and Notification Act of 1988, as amended.
"Water Quality Certification" means the 401 Water Quality
Certification dated February 14, 2001, relating to the
Facilities.
"WMECO" means Western Massachusetts Electric Company, a
Massachusetts corporation, and its successors.
2. Acquisition of Assets by Buyer.
2.1. Transfer of Assets.
2.1.1. Purchase and Sale. The Seller agrees to sell and
transfer, directly or indirectly through any of its Affiliates
that acquires any of the Acquired Assets after the Effective Date
(an "Affiliated Transferor"), to the Buyer, and the Buyer agrees
to purchase from the Seller at the Closing, subject to and upon
the terms and conditions contained herein, free and clear of any
Lien, all of the right, title and interest of the Seller (or such
Affiliated Transferor) in and to the following properties and
assets owned by the Seller (or such Affiliated Transferor)
constituting, or used in and necessary for the operation of, the
Facilities and the Distribution System (collectively, the
"Acquired Assets"):
(a) the real property, Improvements thereon,
Granted Easements and other rights in real property (if any)
described in Schedule 2.1(a)(i), but subject to the
exceptions and encumbrances set forth in the Title
Commitments and subject to the Permitted Encumbrances,
including the matters set forth in Schedule 2.1(a)(ii)
(collectively, the "Real Property");
(b) the machinery, equipment, furniture, boats,
vehicles, intellectual property, Inventories and other
personal property owned by the Seller (or transferred by
Seller to such Affiliated Transferor) and located at the
Facilities (including, without limitation the items of
personal property described on Schedule 2.1(b), all
applicable warranties against manufacturers or vendors, to
the extent that such warranties are transferable without
further action by the Seller, and all items of personal
property due under applicable warranties), in each case as
in existence on the Effective Date, but excluding such items
disposed of by the Seller in the ordinary course of business
during the Interim Period, and including such additional
items as may be acquired by the Seller for use in connection
with the Acquired Assets in the ordinary course of business
during the Interim Period;
(c) all rights with respect to leasehold interests and
subleases and rights thereunder relating to real property
set forth on Schedule 2.1(c) (the "Leases");
(d) copies of all Customer files, lists of Customers,
collection and credit records, billing system hardware and
software listed on Schedule 2.1(d) to the extent owned and
transferable by the Seller (and expressly excluding any such
software and/or hardware under license), and all other
documentation relating to the Customers;
(e) all Permits relating to ownership or operation of
the Facilities and the Distribution System (to the extent
transferable by the Seller or its Affiliates);
(f) (i) all millpowers (other than those millpowers
described in the Trustee Deed), licenses, and water use
arrangements relating to the Facilities and/or the
Distribution System; (ii) all electric use, generation
and/or customer contracts and agreements relating to the
Facilities and/or the Distribution System; (iii) personal
property leases which are material to the operation of the
Facilities and/or the Distribution System; (iv) all use,
maintenance and/or license arrangements and agreements
relating to the Facilities, including, without limitation,
the Seller's canal system being transferred hereunder; (v)
the beneficial interest of the Seller in the millpowers
described in the Trustee Deed; and (vi) all other contracts
which relate to the operation of the Facilities and the
Distribution System and which are set forth in Schedule
2.1(f) (the contracts and agreements set forth in the
foregoing clauses (i) through (v) collectively being called
the "Contracts"); provided that the Seller shall retain the
rights and interests under any Contract to the extent such
rights and interests provide for indemnity and exculpation
rights for occurrences for which the Seller remains liable
under this Agreement;
(g) all (i) books, operating records, real estate
records, engineering designs, blueprints, as-built plans,
specifications, procedures, studies, reports and equipment
repair, safety, maintenance or service records in the
possession, custody or control of the Seller (or such
Affiliated Transferor) relating specifically to the
operation of the Facilities and the Distribution System, and
(ii) all non-financial historical records that relate to the
Facilities and the Distribution System and relate to the
history of Holyoke, Massachusetts and are no longer required
for the continued operation of the Seller's (or such
Affiliated Transferor's) business after the Closing Date;
but expressly excluding from the foregoing records relating
to the Seller's corporate proceedings and/or existence
(including, without limitation, minutes of meetings of
shareholders and /or directors of the Seller and all
corporate records maintained by the Clerk or Assistant Clerk
of the Seller in the ordinary course of the performance of
the duties of such officers), and all of the following
records (collectively, the "Excluded Records"): financial
records (including, without limitation, Tax returns and
records, forward electricity price curves and financial
projections and estimates), employee records, books of
account, records relating to the Excluded Assets (including,
without limitation, Mt. Xxx) and/or the Excluded Liabilities
(including, without limitation, the Excluded Environmental
Liability and the Reserved Litigation), and other records or
information that (A) the Seller or the Seller's counsel
believes constitutes or could be deemed to constitute a
waiver of the attorney-client privilege, or (B) the Seller
is under a legal obligation not to supply;
(h) the rights of the Seller (or such Affiliated
Transferor) to the use of the names of the Facilities set
forth in Schedule 2.1(h);
(i) all rights of the Seller in and to any causes of
action against a Third Party relating to any Assumed
Liability, whether received as a payment or credit against
future liabilities, including, without limitation, insurance
proceeds, condemnation awards and cash payments under
warranties covering the Acquired Assets to the extent such
payments relate to Assumed Liabilities;
(j) [reserved]; and
(k) the Seller's substation known as "Prospect
Substation" located in Chicopee, Massachusetts, as more
particularly described on Schedule 2.1(k) ("Prospect
Substation"), together with all Permits relating to
ownership or operation thereof (to the extent transferable
by the Seller or its Affiliates) and all engineering
designs, blueprints, as-built plans, specifications,
procedures, studies, reports and equipment repair, safety,
maintenance or service records of the Seller relating
specifically to the operation of the Prospect Substation.
The Parties acknowledge that the Seller intends to convey the
Facilities and the entire Distribution System of the Seller to
the Buyer. To the extent that it is determined within five (5)
years after the Closing Date that the Deeds delivered at the
Closing include property rights that neither Party intends to be
conveyed as part of the Facilities or the Distribution System
and/or omits real estate interests which should have been
conveyed as part of the Facilities or the Distribution System,
then the Seller, any Affiliated Transferor, or the Buyer, as the
case may be, shall take all reasonable actions as may be
necessary or appropriate to accomplish the conveyance of the
appropriate property to the appropriate Party, free and clear of
any Liens for borrowed money, in order to accomplish the mutual
intent of the Parties as aforesaid.
2.1.2. Conservation Restrictions. Prior to, or
simultaneously with, the Closing, the Seller and HP&E shall grant
a Conservation Restriction with respect to the real properties
identified on Schedule 2.1.2. If, at any time during the Interim
Period, FERC requires Conservation Restrictions relating to the
Facilities to affect additional properties of the Seller or HP&E
(as compared to the Conservation Restrictions identified on
Schedule 2.1.2), other than Mt. Xxx and adjacent properties, then
the Seller, any Affiliated Transferor, or HP&E, as the case may
be, will transfer such required Conservation Restrictions, at no
additional cost (other than conveyance and other transfer taxes),
to the Buyer. The Parties also shall cooperate at FERC with
respect to the designation of additional beneficiaries of the
Conservation Restrictions to be granted during the Interim
Period. The Buyer shall not offer, initiate, solicit or
otherwise encourage any such requests for Conservation
Restrictions, without the prior written authorization of the
Seller, and shall promptly notify the Seller of any inquiry,
request or other indication of the same. The Seller and HP&E
shall have the right to intervene or otherwise participate in
proceedings with respect to such additional Conservation
Restrictions, and the Buyer shall consent to and otherwise
support such participation and shall cooperate with the Seller
and HP&E in any attempt that the Seller and/or HP&E may make to
resist or restrict such actions by FERC, provided that prior to
lending such support, Buyer may request reasonable assurances
from Seller that Seller shall reimburse Buyer for any Third Party
costs identified by Buyer that Buyer would not have otherwise
incurred but for such support and cooperation.
2.2. Excluded Assets. Notwithstanding anything to the
contrary in this Agreement, there shall be excluded from the
Acquired Assets to be sold, assigned, transferred, conveyed or
delivered to the Buyer hereunder, and to the extent in existence
on the Effective Date or on the Closing Date, there shall be
retained by the Seller or HP&E, as the case may be, any and all
right, title or interest to the following assets, properties and
rights (collectively, the "Excluded Assets"):
(a) the property comprising or constituting any or all
of the Transmission Assets, including, without limitation,
all Permits and contracts, to the extent they relate to the
Transmission Assets, and those certain assets and facilities
identified for use or used by the Seller, HP&E or others
pursuant to easements or agreements from or with the Seller
or HP&E for telecommunications purposes, including, without
limitation, as identified on Schedule 2.2(a), or any
document or exhibit referred to or incorporated in
Schedule 2.2(a); provided that the foregoing shall not
affect the transfer of the Prospect Substation and the
Distribution System contemplated hereunder.
(b) the interests in the real property, Improvements
thereon, easements and other rights in real property
described in Schedule 2.2(b);
(c) all Cash, accounts and notes receivable,
checkbooks and canceled checks, bank deposits and property
or income tax receivables or any other Tax refunds to the
extent allocable to a period ending on or before the Closing
Date;
(d) all of the Seller's right, title and interest in
and to the Mount Xxx electric generating facility,
substation and generator leads, including all real and
personal property (including, without limitation, air
allowances and air emission credits) constituting, or used
in and necessary for the operation of, such facility, and
all books, operating records, engineering designs,
blueprints, as-built plans, specifications, procedures,
studies, reports and equipment repair, safety, maintenance
or service records of the Seller relating to the operation
of such facility, and those properties and assets described
in Schedule 2.2(d);
(e) all of the Seller's right, title and interest in
and to HP&E;
(f) all contracts, instruments or other agreements
relating to the sale by the Seller or HP&E of electric
capacity or energy under wholesale rates, or otherwise
subject to regulation by the FERC;
(g) all rights of the Seller or HP&E in and to any
causes of action against a Third Party relating to any
period through the Closing Date, whether received as a
payment or credit against future liabilities, including,
without limitation, any rights or interests in respect of
any refunds relating to property Taxes paid by the Seller or
HP&E for any period prior to the Closing Date, insurance
proceeds (including, without limitation, all insurance
claims, rights and proceeds relating to the pending repairs
of the South Xxxxxx station), condemnation awards, and cash
payments under warranties covering the Acquired Assets (to
the extent such payments relate to warranty claims made by
the Seller or HP&E prior to the Closing Date), but excluding
any such rights of the Seller or HP&E to the extent the
associated Third Party claims relate to an Assumed
Liability;
(h) financial records, employee records, books of
account, and copies of other records and information that
the Seller is entitled to retain in accordance with and, in
each case excluded from transfer under, Section 2.1.1(g);
and
(i) subject to Section 5.13, the rights of the Seller
to the use of the name "Holyoke Water Power Company" and all
rights of the Seller to the marks and words "HWP" and
"Holyoke Water Power Company" and any Trademark which is
composed of or comprises any derivative thereof.
2.3. Assumption of Liabilities. On the terms and subject to
the conditions set forth herein, from and after the Closing, the
Buyer will assume and satisfy or perform all of the Liabilities
of the Seller or any Affiliated Transferor in respect of, or
otherwise arising from the operation or use of the Acquired
Assets, other than the Excluded Liabilities (as set forth in
Section 2.4 below), including the following Liabilities (the
"Assumed Liabilities"):
(a) all Environmental Liabilities (including, without
limitation, the Environmental Liabilities relating to the
properties referenced in Sections 5.3.3 and 5.3.4, other
than the limited obligations with respect thereto retained
by Seller pursuant to such Sections (which retained
obligations shall fully and finally terminate upon Seller's
satisfaction thereof in accordance with the requirements of
such Sections)), other than the Excluded Liabilities (as set
forth in Section 2.4 below);
(b) all Liabilities under (i) the Contracts, Leases,
and the Transferable Permits in accordance with the terms
thereof, (ii) the contracts, leases and other agreements
entered into by the Seller with respect to the Acquired
Assets which would be required to be disclosed on
Schedule 2.1(c) or 2.1(f) but for the exception provided in
clause (iii) of Section 3.8(a), in accordance with the terms
thereof, and (iii) the contracts, leases, commitments and
other agreements entered into by the Seller with respect to
the Acquired Assets during the Interim Period consistent
with the terms of this Agreement (including, without
limitation, Capital Commitments);
(c) all Liabilities under the Permitted Encumbrances
other than under or with respect to the exercise of the
Reserved Easements;
(d) all Liabilities to Customers under the Contracts
to which such Customers are a party and/or in connection
with the use, operation and/or ownership of the Distribution
System and/or the Facilities, including, without limitation,
the obligation to provide electrical and related services to
the Customers; provided that Seller shall retain any
undisclosed Liability arising out of any failure by Seller
to deliver electrical, water or related services to such
Customers as required by such Contract(s) during the forty-
five (45) days before the Closing Date;
(e) all Liabilities relating to the Acquired Assets,
including any FERC fees or headwater benefits assessments
assessed on the Facilities and all Liabilities associated
with the structural integrity of buildings adjacent to the
Acquired Assets; and
(f) all other Liabilities expressly allocated to the
Buyer in this Agreement or in any of the Related Agreements.
2.4. Excluded Liabilities. The Buyer shall not assume or be
responsible hereunder for the performance of any of the following
Liabilities (collectively, the "Excluded Liabilities"):
(a) any Liability of the Seller in respect of or
otherwise arising from the operation or use of the Excluded
Assets or any other assets of the Seller that are not
Acquired Assets;
(b) any Liability of the Seller including, without
limitation, any Environmental Liability, in respect of or
otherwise arising from the exercise of the Reserved
Easements by Seller or its Affiliates after the Closing
Date, including Hazardous Substances disposed of or Released
by Seller after the Closing Date at, on or under the
Reserved Easements;
(c) any Liability relating to the treatment, disposal,
storage, discharge, Release, recycling or the arrangement
for such activities at, or the transportation to, any
Offsite Disposal Facility, by the Seller, prior to the
Closing Date, of Hazardous Substances that were generated at
the Sites, provided that for purposes of this Section,
"Offsite Disposal Facility" does not include any location to
which Hazardous Substances disposed of or Released at the
Acquired Assets have migrated;
(d) any Liability of the Seller relating to the
Excluded Environmental Liability;
(e) any Liability of the Seller arising from the
making or performance of this Agreement or a Related
Agreement or the transactions contemplated hereby or
thereby;
(f) any Liability of the Seller in respect of payment
obligations for goods delivered or services rendered prior
to the Closing Date or other Liabilities under contracts or
leases which the Buyer has not assumed pursuant to Section
2.3(b);
(g) any Liability which is or would be required to be
accrued by the Seller on a balance sheet of the Seller as of
the Closing Date prepared in accordance with GAAP, other
than those Liabilities which are expressly set forth as
Assumed Liabilities in Sections 2.3(a), (b) and (c) hereof;
(h) any Liability of the Seller arising out of any
employee benefit plan established or maintained by the
Seller or to which the Seller contributes or any Liability
for the termination of any such employee benefit plan;
(i) any Liability of the Seller for any compensation
or any benefits, including, without limitation, vacation
pay, severance pay, post-retirement benefits and COBRA
coverage, accruing on or prior to the Closing Date under the
terms or provisions of any Seller's employee benefit plan,
the Collective Bargaining Agreement or any other agreement,
plan, practice, policy, instrument or document relating to
any of the Seller's employees;
(j) any Liability of the Seller relating to any cause
of action against the Seller filed with or pending before
any court or administrative agency on the Closing Date;
provided that the Pending Litigation shall be settled in
accordance with Section 5.15;
(k) any Liability of the Seller for any fines or
penalties imposed by a Governmental Authority resulting from
(x) any investigation or proceeding pending on or prior to
the Closing Date or (y) illegal acts or willful misconduct
of the Seller on or prior to the Closing Date; excluding,
however, the following Assumed Liabilities: (i) any fines or
penalties imposed as a result of, or relating to any
Environmental Liability (other than those fines or penalties
that may arise in connection with the Seller's fulfillment
after the Effective Date of its obligations under Sections
5.3.3 and 5.3.4); and (ii) any fines or penalties imposed by
an Affiliate of the Buyer after the Closing Date;
(l) [reserved];
(m) [reserved]; and
(n) any Liability in respect of Taxes attributable to
the Acquired Assets for periods prior to and including the
Closing Date (including, without limitation, any Liability
resulting from the Reserved Litigation), except those Taxes
for which the Buyer is liable pursuant to Sections 2.8 and
8.
2.5. Purchase Price.
(a) The Buyer agrees to assume the Assumed Liabilities and
pay to the Seller, any Affiliated Transferor and HP&E at the
Closing an aggregate amount equal to Seventeen Million Five
Hundred Fifty Thousand Dollars ($17,550,000.00) (the "Initial
Purchase Price") plus or minus amounts to account for (i) the
Estimated Adjustment to the Initial Purchase Price to be made as
of the Closing under Section 2.6(c), (ii) the pro rations to be
made as of the Closing under Section 2.8(a), and (iii) the price
adjustment contemplated in Section 2.5(b) (the Initial Purchase
Price, as so adjusted, shall be referred to herein as the
"Closing Purchase Price"). The Closing Purchase Price shall be
payable in cash by wire transfer to the Seller in accordance with
written instructions of the Seller given to the Buyer at least
three (3) Business Days prior to the Closing. Following the
Closing, the Closing Purchase Price shall be subject to
adjustment pursuant to Sections 2.6(d) and 2.8(b), and the
Closing Purchase Price, as so adjusted pursuant to such Sections,
shall be herein referred to as the "Purchase Price."
(b) If the Closing Date has not occurred on or before
October 31, 2001, then the Initial Purchase Price shall be
increased by an amount equal to Six Thousand Seven Hundred
Dollars ($6,700.00), times the number of calendar days from and
including November 1, 2001 to and including the Closing Date;
provided that if Buyer has timely supplied its portion of the
FERC Applications in accordance with Section 5.2(a), but the
Approval Date does not occur on or before August 1, 2001, then
the foregoing per diem increase shall not be assessed for the
number of calendar days included in the period commencing on
August 2, 2001 and ending on the day on which the Approval Date
occurs.
2.6. Adjustments to Initial Purchase Price. The Initial
Purchase Price shall be increased or reduced as set forth in
Sections 2.6(a), (b) and (c), and the Closing Purchase Price
shall be subject to adjustment as set forth in Section 2.6(d).
Such increases or reductions, as the case may be, shall be
referred to herein as the "Purchase Price Adjustment" and shall
be determined and paid as set forth below:
(a) the Initial Purchase Price shall be increased to
account for the following items: (i) any Pre-Approved
Capital Expenditures incurred by the Seller during the
Interim Period; (ii) any other capital expenditures incurred
by the Seller during the Interim Period to which the Buyer
shall have consented pursuant to Section 5.3.2 or as
otherwise set forth in the Capital Expenditure Protocol;
(iii) the cost of any personal property subject to leases
which have been terminated before the Closing at the Buyer's
request in accordance with Section 5.6(e) for conveyance to
the Buyer at the Closing; and (iv) any operations and
maintenance expenses paid for by the Seller during the
Interim Period that the Seller would not have actually paid
but for the Buyer's advance written request;
(b) the Initial Purchase Price shall be reduced to
account for (i) any Capital Commitments assumed by the Buyer
that were not (1) Pre-Approved Capital Expenditures, or (2)
capital expenditures necessitated by Good Industry Practice
to which Buyer consented pursuant to Section 5.3.2; and (ii)
any sale of Real Property prior to the Closing pursuant to
Section 5.3.9.
(c) at least twenty (20) Business Days prior to the
anticipated Closing Date, the Seller shall prepare and
deliver to the Buyer an Estimated Closing Statement (the
"Estimated Closing Statement") that shall set forth the
Seller's best estimate of all adjustments to the Initial
Purchase Price required by Sections 2.6(a) and 2.6(b) (the
"Estimated Adjustment"). Within ten (10) Business Days
following the delivery of the Estimated Closing Statement by
the Seller to the Buyer, the Buyer may object in good faith
to the Estimated Adjustment in writing. If the Buyer
objects to the Estimated Adjustment, the Parties shall
attempt to resolve such dispute by negotiation. If the
Parties are unable to resolve such dispute before five (5)
Business Days prior to the Closing Date (or if the Buyer
fails to object to the Estimated Adjustment), the Initial
Purchase Price shall be adjusted (the "Closing Adjustment")
for the Closing by the amount of the Estimated Adjustment
not in dispute; and
(d) within thirty (30) days following the Closing
Date, the Seller shall prepare and deliver to the Buyer a
closing statement that shall set forth the Seller's
computation of the final Purchase Price Adjustment based on
Sections 2.6(a) and (b) and the components thereof taking
into account actual data (the "Closing Statement"). Within
twenty (20) days following the delivery of the Closing
Statement by the Seller to the Buyer, the Buyer may object
to the Closing Statement in writing. The Seller agrees to
cooperate with the Buyer to provide to the Buyer or the
Buyer's Representatives information used to prepare the
Closing Statement and information relating thereto. If the
Buyer objects to the Closing Statement, the Parties shall
attempt to resolve such dispute by negotiation. If the
Parties are unable to resolve such dispute within twenty
(20) days of any objection by the Buyer, the Parties shall
appoint Xxxxxx Xxxxxxxx LLP who shall, at the Seller's and
the Buyer's joint expense, review the Closing Statement and
determine the appropriate Purchase Price Adjustment under
this Section 2.6. The agreed upon Closing Statement or the
finding of such accounting firm, as the case may be, shall
be the Purchase Price Adjustment and shall be binding on the
Parties. Upon the determination of the Purchase Price
Adjustment, the Party owing a balance on account of the
Purchase Price Adjustment shall deliver the balance due to
the other Party no later than two (2) Business Days after
such determination in immediately available funds or in any
other manner as reasonably requested by the payee. The
balance due shall be determined by offsetting against each
Party's credits and debits arising from the Purchase Price
Adjustment the credits and debits accorded to each Party in
the Closing Statement on account of the Estimated
Adjustment. The acceptance by the Buyer and the Seller of
the Purchase Price Adjustment shall not constitute or be
deemed to constitute a waiver of the rights of such Party in
respect of any other provision of this Agreement.
2.7. Allocation of Purchase Price. The Purchase Price shall
be allocated among the Acquired Assets for all purposes
(including, without limitation, financial accounting and tax
purposes) in accordance with the allocation schedule (Form 8594)
attached hereto as Schedule 2.7; provided that such allocation
shall be adjusted, if necessary, to comply with Section 1060 of
the Code and the Treasury Regulations thereunder and applicable
FERC regulations. Within one hundred and twenty (120) days after
the Effective Date (or such later date as the Parties may
mutually agree) but in no event fewer than thirty (30) days prior
to the Closing, the Parties shall use their good faith best
efforts to agree upon an allocation of the fair value of the Real
Property, consistent with Schedule 2.7, on a county basis to be
used for the computation of transfer taxes under Section 8(a) and
the determination of the amount of title insurance under Section
6.1(i). The Buyer and the Seller may jointly agree to obtain the
services of an independent appraiser to determine such fair
value, the cost of which shall be borne equally by the Buyer and
the Seller. Each Party shall report the transactions
contemplated by this Agreement and the Related Agreements for
federal income Tax and all other Tax purposes in a manner
consistent with the allocation determined pursuant to this
Section 2.7. Each Party agrees to provide the other promptly
with any other information required to complete Form 8594. Each
Party shall notify and provide the other with reasonable
assistance in the event of an examination, audit or other
proceeding regarding the agreed upon allocation of the Purchase
Price.
2.8. Proration.
(a) The Parties agree that all of the items normally
prorated in a sale of assets of the type contemplated by
this Agreement, including those listed below, relating to
the business and operations of the Acquired Assets, will be
prorated as of the Closing Date, with the Seller or HP&E, as
the case may be, liable to the extent such items relate to
any period through the Closing Date, and the Buyer liable to
the extent such items relate to periods after the Closing
Date: (i) personal property, Real Property, occupancy and
water Taxes, assessments and other charges, if any, on or
associated with the Acquired Assets; (ii) rent, Taxes and
other items payable by or to the Seller under any of the
Contracts or Leases assigned to and assumed by the Buyer
hereunder; (iii) any Permit, license, registration or fees
with respect to any Transferable Permit associated with the
Acquired Assets, including, without limitation, fees
assessed by FERC and headwater benefit assessments; and (iv)
sewer rents and charges for water, telephone, electricity
and other utilities. Subject to Section 2.8(b), below, not
less than five (5) Business Days prior to the Closing Date,
the Parties shall agree upon the sum of the net amount of
the prorated amounts to which either the Seller or the Buyer
shall be entitled pursuant to this Section 2.8(a) and the
Initial Purchase Price shall be adjusted to reflect such net
amount.
(b) If the amount of one or more Taxes, fees or other
liabilities to be prorated in accordance with Section 2.8(a)
is not known or determinable on or prior to the Closing
Date, the amounts to be prorated upon the Closing in
accordance with Section 2.8(a) shall be based upon the
actual Taxes, fees or other liabilities for the preceding
year (or appropriate period) for which such actual Taxes,
fees or liabilities are available. The amount of Taxes,
fees or other liabilities prorated upon the Closing
pursuant to Section 2.8(a) shall be adjusted upon the
request of either the Seller, on the one hand, or the Buyer,
on the other hand, made within sixty (60) days of the date
the actual amounts become available. The Seller and the
Buyer agree to furnish each other with such documents and
other records that may be reasonably requested in order to
confirm all adjustment and proration calculations made
pursuant to this Section 2.8.
(c) If the Closing Date is not a meter reading date
under any Contract with a Customer for the sale of water
and/or electrical energy, then the Buyer and the Seller
shall estimate Customer usage based on historical average
for the same period in prior years, taking into account
weather conditions and other then current factors that
affect consumption. To the extent possible, the Parties
shall attempt to arrange for an interim meter reading on or
near the Closing Date. If, despite Commercially Reasonable
Efforts, the Parties are not able to obtain information that
reasonably evidences the consumption of any Customer through
the Closing Date, then the consumption of such Customer
during the subject period shall be allocated to the Seller
based on the number of days in such period, compared to the
number of days therein through the Closing Date, with the
balance being allocated to the Buyer. The absence of a
definite allocation shall not affect the collection of
accounts receivable after the Closing in accordance with
Section 5.16, and the Seller and the Buyer agree to furnish
each other with such access, documents and other records
that may be reasonably requested in order to confirm
Customer consumption.
(d) The electrical energy produced from the Facilities
and the ancillary services, rated capability and other
products and services (e.g., green power credits) associated
therewith shall be allocated to the Seller through the
Closing Date based on the rules and regulations of ISO New
England. To the fullest extent practical, the Buyer and the
Seller shall estimate such capacity and associated energy
based on records available as of the Closing Date from ISO
New England, and the Closing Statement shall reflect any
adjustments to such estimates. If, despite Commercially
Reasonable Efforts or due to the rules and regulations of
ISO New England, the Parties are not able to obtain
information that reasonably evidences production and
associated capacity through the Closing Date, or such
products are sold on terms other than a daily basis, then
the affected production and associated capacity during the
subject period shall be allocated to the Seller based on the
number of days in such period, compared to the number of
days therein through the Closing Date, with the balance
being allocated to the Buyer. Without limiting the
foregoing, the Seller shall retain all rights with respect
to installed capacity for the Facilities during the month in
which the Closing Date occurs, but the Buyer shall be
entitled to a credit adjustment in the Closing Statement
equal to the value received by the Seller for such installed
capacity for that portion of such month after the Closing
Date. The Seller shall retain the right to any products
recognized, price or other economic adjustments made, or
other actions taken by ISO New England or any Governmental
Authority to the extent related to any period before the
Closing Date.
2.9. The Closing. Unless otherwise agreed to by the
Parties, the closing of the transactions contemplated by this
Agreement (the "Closing") shall take place in Boston,
Massachusetts at the same offices as the closing of the Financing
(or such other location as the Parties may mutually agree),
commencing at 9:00 a.m. eastern time on the date that is five (5)
days (or, if the fifth day is not a Business Day, then the next
Business Day following such fifth day) following the date on
which all of the conditions set forth in Sections 6.1 and 6.2
have either been satisfied or waived by the Party for whose
benefit such condition exists, such satisfaction or waiver to
conform to Section 11.12. The date of Closing is hereinafter
called the "Closing Date" and shall be effective for all purposes
herein as of 11:59 p.m. Eastern clock time on the Closing Date.
2.10. Deliveries by the Seller at the Closing. At the
Closing, the Seller shall deliver, or cause the delivery of, the
following to the Buyer, duly executed and properly acknowledged,
if appropriate:
(a) the deed for the Real Property and Improvements,
substantially in the form attached hereto as Exhibit A-1,
executed in four counterparts, and otherwise in a form
suitable for recording;
(b) the Trustee Deed in the form attached hereto as
Exhibit A-3 and otherwise in form suitable for recording;
(c) a Xxxx of Sale, substantially in the form attached
hereto as Exhibit B, for the tangible personal property
included in the Acquired Assets;
(d) the Assignment and Assumption Agreement, in the
form attached hereto as Exhibit C, in recordable form if
necessary;
(e) a Property Tax Agreement, substantially in the
form attached hereto as Exhibit D;
(f) the First Amendment to the Transmission Service
Agreement, in the form attached hereto as Exhibit E;
(g) the Assignment and Assumption (Headwater
Benefits), in the form attached hereto as Exhibit F;
(h) the Coordination Agreement, in the form attached
hereto as Exhibit G;
(i) Environmental Consultant Reliance Letters in the
form of Exhibit H hereto, duly executed and addressed to the
Buyer with respect to the pending Remediation at Xxxxxx
Falls Station and Riverside Station; provided that Seller
shall not be required to use more than Commercially
Reasonable Efforts to obtain such letters and/or shall have
no obligation to offer or pay any consideration in order to
obtain any of such letters;
(j) a FIRPTA Affidavit executed by the Seller;
(k) subject to Section 5.6(e), certificates of title
for the vehicles which are part of the Acquired Assets;
(l) all attornment agreements, notices and other
documents and instruments required for the assignment or
other transfer of the Leases from the Seller to the Buyer,
which agreements, notices, documents and instruments shall,
upon the reasonable request of the Buyer, be in recordable
form;
(m) copies of all consents, waivers or approvals
obtained by the Seller with respect to the Acquired Assets,
the transfer of the Transferable Permits (including, without
limitation, the FERC License) or the consummation of the
transactions contemplated by this Agreement and the Related
Agreements, to the extent specifically required under this
Agreement or the Related Agreements;
(n) the Stipulations of Dismissal contemplated in
Section 5.15(a);
(o) a certificate from an authorized officer of the
Seller, dated the Closing Date, to the effect that, to such
officer's Knowledge, the conditions set forth in Sections
6.1(a), (b), (e) and (g) and Sections 6.2(c), (d) and (f)
have been satisfied;
(p) a copy, certified by the Clerk or an Assistant
Clerk of the Seller, of corporate resolutions authorizing
the execution and delivery of this Agreement and the Related
Agreements and instruments attached as exhibits hereto and
thereto, and the consummation of the transactions
contemplated hereby and thereby;
(q) certificates of the Clerk or an Assistant Clerk of
the Seller, any Affiliated Transferor and HP&E,
respectively, which shall identify by name and title and
bear the signature of the officers of the Seller and HP&E
authorized to execute and deliver this Agreement and the
Related Agreements and instruments attached as exhibits
hereto and thereto;
(r) an opinion or opinions from one or more counsel to
the Seller (any of whom may be an employee of the Seller or
its Affiliates), dated the Closing Date and reasonably
satisfactory in form to the Buyer and its counsel, covering
substantially the matters set forth in Schedule 2.10(r); and
(s) all such other instruments of sale, transfer,
conveyance, assignment or assumption as the Buyer and its
counsel may reasonably request in connection with the sale
of the Acquired Assets, provided however, that this Section
2.10(s) shall not require the Seller to prepare or obtain
any surveys relating to the Real Property other than those
previously provided to the Buyer.
2.11. Deliveries by the Buyer at the Closing. At the
Closing, the Buyer shall deliver to the Seller, properly executed
and acknowledged, if appropriate:
(a) the Closing Purchase Price;
(b) the Assignment and Assumption Agreement, in the
form attached hereto as Exhibit C to this Agreement, duly
executed by the Buyer, and if necessary or desirable to the
Seller, in recordable form;
(c) the Property Tax Agreement, substantially in the
form attached hereto as Exhibit D;
(d) the First Amendment to the Transmission Service
Agreement, in the form attached hereto as Exhibit E;
(e) the Assignment and Assumption (Headwater
Benefits), in the form attached hereto as Exhibit F;
(f) a certificate from an authorized officer of the
Buyer, dated the Closing Date, to the effect that, to such
officer's Knowledge, the conditions set forth in
Sections 6.1(c), (d), (f) and (i) and Sections 6.2(a), (b),
(e) and (h) have been satisfied;
(g) a copy, certified by the Secretary or Assistant
Secretary of the Buyer, of resolutions authorizing the
execution and delivery of this Agreement and the Related
Agreements and instruments attached as exhibits hereto and
thereto, and the consummation of the transactions
contemplated hereby and thereby;
(h) a certificate of the Secretary or Assistant
Secretary of the Buyer which shall identify by name and
title and bear the signature of the officers of the Buyer
authorized to execute and deliver this Agreement and the
Related Agreements and instruments attached as exhibits
hereto and thereto;
(i) an opinion or opinions from one or more counsel to
the Buyer (any of whom may be an employee of the Buyer or
its Affiliates), dated the Closing Date and reasonably
satisfactory in form to the Seller and its counsel, covering
substantially the matters set forth in Schedule 2.11(i);
(j) the Environmental Consultant Reliance Letter in
the form of Exhibit H hereto, duly executed and addressed to
the Seller, with respect to the reports prepared for Buyer
as indicated on Schedule 3.12; provided that Buyer shall not
be required to use more than Commercially Reasonable Efforts
to obtain such letters and/or shall have no obligation to
offer or pay any consideration in order to obtain any of
such letters;
(k) the Stipulations of Dismissal contemplated in
Section 5.15(a);
(l) evidence of the Buyer's membership in NEPOOL;
(m) the Coordination Agreement, in the form attached
hereto as Exhibit G;
(n) [reserved]; and
(o) all such other instruments of purchase, sale,
transfer, conveyance, delivery, receipt, assignment or
assumption as the Seller and its counsel may reasonably
request in connection with the sale or purchase of the
Acquired Assets or assumption of the Assumed Liabilities.
3. Representations, Warranties and Disclaimers of the Seller.
The Seller represents and warrants to the Buyer that the
statements contained in this Section 3 are correct and complete
as of the Effective Date.
3.1. Organization of the Seller. The Seller is duly
organized, validly existing and has filed the necessary documents
to be (and on or before the Closing Date will be) in good
standing under the laws of the Commonwealth of Massachusetts.
Complete and accurate copies of the charter and by-laws of the
Seller, each as amended to date, are attached hereto as Schedule
3.1.
3.2. Authorization of Transaction. The Seller has the power
and authority (including corporate power and authority) to
execute and deliver this Agreement and the Related Agreements
and, subject to receipt of all the Seller's Regulatory Approvals,
to perform its obligations hereunder and thereunder. All
corporate actions or proceedings to be taken by or on the part of
the Seller to authorize and permit the due execution and valid
delivery by the Seller of this Agreement and the Related
Agreements and the instruments required to be duly executed and
validly delivered by the Seller pursuant hereto and thereto, the
performance by the Seller of its obligations hereunder and
thereunder, and the consummation by the Seller of the
transactions contemplated herein and therein, have been duly and
properly taken. This Agreement and the Related Agreements have
been duly executed and validly delivered by the Seller and
constitute the legal, valid and binding obligation of Seller,
enforceable in accordance with their terms and conditions.
3.3. Noncontravention. Subject to the Seller obtaining the
Seller's Regulatory Approvals, neither the execution and the
delivery of this Agreement or any of the Related Agreements, nor
the consummation of the transactions contemplated hereby and
thereby, will (a) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge,
license or other restriction of any Governmental Authority (other
than Buyer or any of Buyer's Affiliates) to which the Seller or
any of its property is subject or any provision of the charter or
by-laws of the Seller, or (b) conflict with, result in a breach
of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which the
Seller is bound or to which any of the Acquired Assets is subject
(or result in the imposition of any Lien upon any of such
Acquired Assets), except for matters that will not have a
Material Adverse Effect or as disclosed in Schedule 3.3 or any
other Schedule.
3.4. Brokers' Fees. Neither the Seller nor HP&E has any
Liability or obligation to pay any fees or commissions to any
broker, finder or agent with respect to the transactions
contemplated by this Agreement for which the Buyer could become
liable or obligated.
3.5. Title to Acquired Assets. Except for Permitted
Encumbrances, the Seller has (and any Affiliated Transferor will
have) title to the Real Property to the extent, and only to the
extent, specified in the Title Commitments. Except as set forth
in Schedule 3.5 and except for Permitted Encumbrances, the Seller
has (and any Affiliated Transferor will have) good and valid
title to the other Acquired Assets.
3.6. Legal and Other Compliance; Permits.
(a) The Seller is in substantial compliance with all
current Laws applicable to the Acquired Assets or the
Seller's operation of the Acquired Assets the violation of
which could have a Material Adverse Effect, other than with
respect to matters covered by Section 3.12 below.
(b) Schedule 3.6(b) sets forth all Permits which are
material to the ownership or operation of the Facilities and
the Distribution System, and also identifies those material
Permits which are transferable or assignable by the Seller
to the Buyer or which will pass to the Buyer as successor in
title to the Facilities or the Distribution System by
operation of applicable Laws (the "Transferable Permits").
3.7. Taxes. The Seller has filed all Tax Returns that it
was required to file, and has paid all Taxes that have become due
as indicated thereon, where the failure so to file or pay could
have a Material Adverse Effect, except where the Seller is
contesting the same in good faith by appropriate proceedings.
There is no unpaid Tax due and payable that could have a Material
Adverse Effect on the Buyer's ownership, operation or use of the
Acquired Assets for which the Buyer could become liable.
3.8. Contracts and Leases.
(a) Except (i) as listed in Schedules 2.1(a)(ii),
2.1(f) or 2.1(c) or any other Schedule, (ii) for contracts,
agreements, personal property leases, commitments,
understandings or instruments which will terminate or expire
prior to the Closing Date (including, without limitation,
those between the Seller and any of its Affiliates), and
(iii) for agreements with suppliers entered into in the
ordinary course of business for amounts not in excess of
$25,000 individually or $50,000 in the aggregate and which
have a term ending on or prior to December 31, 2001, the
Seller is not a party to any written contract, agreement,
personal property lease, commitment, understanding or
instrument which (x) is material to the business or
operations of the Acquired Assets or (y) which provides for
the sale of any amount of capacity or energy from any of the
Acquired Assets (whether or not entered into in the ordinary
course of business).
(b) Except as disclosed in Schedule 3.8(b) (i) each of
the Contracts constitutes a valid and binding obligation of
the Seller, (ii) the Seller is not in default in any
material respect under any of the Contracts and, to the
Seller's Knowledge, the other parties to the Contracts are
not in default in any material respect under any thereof,
and (iii) the Contracts may be transferred to the Buyer
pursuant to this Agreement and will continue in full force
and effect thereafter, in each case without breaching the
terms thereof or resulting in the forfeiture or impairment
of any material rights thereunder.
(c) Notwithstanding the above, to the Seller's
Knowledge, all material operating contracts in effect on the
Effective Date and to be assumed by Buyer are listed on
Schedule 3.8(c).
3.9. Insurance. Except as set forth in Schedule 3.9, all
material policies of fire, liability, worker's compensation and
other forms of insurance owned or held by the Seller insuring the
Acquired Assets are in full force and effect, all premiums with
respect thereto covering all periods up to and including the date
as of which this representation is being made have been paid
(other than retroactive premiums which may be payable with
respect to comprehensive general liability and worker's
compensation insurance policies), and no written notice of
cancellation or termination has been received with respect to any
such policy which was not replaced on substantially similar terms
prior to the date of such cancellation. Except as described in
Schedule 3.9, as of the date of this Agreement, the Seller has
not been refused any insurance with respect to the Acquired
Assets nor has its coverage been limited by any insurance carrier
to which it has applied for any such insurance or with which it
has carried insurance during the last five years.
3.10. Litigation. Except as disclosed in Schedule 3.10,
no action, suit, claim, demand or other proceeding is pending or,
to Seller's Knowledge, threatened that would be reasonably likely
to result in a Material Adverse Effect or that questions the
validity of this Agreement or the Related Agreements or of any
action taken or to be taken pursuant to or in connection with the
provisions of this Agreement or the Related Agreements.
3.11. [Reserved].
3.12. Environmental Matters. During the two-year
period preceding the Effective Date, except for Excluded
Liabilities, except as disclosed in Schedule 3.12, and except
where such matters, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect, (i) the
Seller did not receive any written notice from any Governmental
Authority that it is not in compliance with Environmental Laws or
failed to obtain material Permits required for the ownership or
operation of any Acquired Asset under Environmental Laws; (ii)
the Seller did not receive any written notice from any
Governmental Authority that any Acquired Asset is listed under
the Comprehensive Environmental Response, Compensation Liability
Information Systems or any similar state list; (iii) the Seller
did not receive any written notice from any Person alleging
Liability for any Environmental Claims; and (iv) the Seller was
not required by any applicable Environmental Laws to place any
use or activities restrictions or any institutional controls on
any Acquired Assets. The Seller is not aware of any matters
which could give rise to Environmental Liabilities which would
reasonably be expected to have a Material Adverse Effect which
are not disclosed or identified in the reports, documents and/or
matters referred to in Schedule 3.12.
3.13. Condemnation. Except as set forth in
Schedule 3.13, the Seller has received no written notice from any
Governmental Authority of any pending or threatened proceeding to
condemn or take by power of eminent domain or otherwise, by any
Governmental Authority, all or any part of the Acquired Assets,
which would constitute a Major Loss.
3.14. Regulation as a Utility. The Seller is a
"subsidiary company" of a "holding company" which is registered
under (and as those terms are defined in) the Public Utility
Holding Company Act of 1935, as amended.
3.15. [Reserved]
3.16. Assets Used in Operation of the Facilities.
Except for the Excluded Assets and except as set forth on
Schedule 3.16, the Acquired Assets constitute all material assets
and properties that are used by the Seller in the operation of
the Facilities and the Distribution System on the Effective Date.
3.18. Disclaimers Regarding Acquired Assets. EXCEPT FOR
ANY REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 3,
THE ACQUIRED ASSETS ARE SOLD "AS IS, WHERE IS," AND THE SELLER
AND ANY AFFILIATED TRANSFEROR EXPRESSLY DISCLAIM ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, AS TO LIABILITIES, OPERATIONS OF THE FACILITIES AND/OR
THE DISTRIBUTION SYSTEM, TITLE, CONDITION, VALUE OR QUALITY OF
THE ACQUIRED ASSETS OR THE PROSPECTS (FINANCIAL AND OTHERWISE),
RISKS AND OTHER INCIDENTS OF THE ACQUIRED ASSETS INCLUDING,
WITHOUT LIMITATION, WITH RESPECT TO THE ACTUAL OR RATED
GENERATING CAPABILITY OF ANY OF THE FACILITIES OR THE ABILITY OF
THE BUYER TO SELL FROM ANY OF THE FACILITIES ELECTRIC ENERGY,
CAPACITY OR OTHER PRODUCTS RECOGNIZED BY ISO NEW ENGLAND FROM
TIME TO TIME, AND THE SELLER AND ANY AFFILIATED TRANSFEROR
SPECIFICALLY DISCLAIM ANY REPRESENTATION OR WARRANTY OF
MERCHANTABILITY, USAGE, OR SUITABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE WITH RESPECT TO THE ACQUIRED ASSETS, OR ANY
PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF
ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, OR COMPLIANCE WITH
ENVIRONMENTAL REQUIREMENTS, OR AS TO THE CONDITION OF THE
ACQUIRED ASSETS, OR ANY PART THEREOF, OR WHETHER THE SELLER OR
ANY AFFILIATED TRANSFEROR POSSESSES SUFFICIENT REAL PROPERTY OR
PERSONAL PROPERTY TO OPERATE THE ACQUIRED ASSETS. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN, THE SELLER AND ANY
AFFILIATED TRANSFEROR FURTHER SPECIFICALLY DISCLAIM ANY
REPRESENTATION OR WARRANTY REGARDING THE ABSENCE OF HAZARDOUS
SUBSTANCES OR LIABILITY OR POTENTIAL LIABILITY ARISING UNDER
ENVIRONMENTAL LAWS. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE SELLER AND
ANY AFFILIATED TRANSFEROR EXPRESSLY DISCLAIM ANY REPRESENTATION
OR WARRANTY OF ANY KIND REGARDING THE CONDITION OF THE ACQUIRED
ASSETS OR THE SUITABILITY THEREOF AS SITES FOR THE DEVELOPMENT OF
ADDITIONAL OR REPLACEMENT DISTRIBUTION OR GENERATION CAPACITY,
AND NO MATERIAL OR INFORMATION PROVIDED BY OR COMMUNICATIONS MADE
BY THE SELLER OR AND ANY AFFILIATED TRANSFEROR, OR BY ANY BROKER
OR INVESTMENT BANKER, INCLUDING ANY ORAL, WRITTEN OR ELECTRONIC
RESPONSE TO ANY INFORMATION REQUEST PROVIDED TO THE BUYER, WILL
CAUSE OR CREATE ANY WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, CONDITION, VALUE OR QUALITY OF THE ACQUIRED ASSETS. IN
ADDITION, THE SELLER AND ANY AFFILIATED TRANSFEROR MAKE NO
REPRESENTATION OR WARRANTY WHATSOEVER WITH RESPECT TO THE
SUITABILITY, ACCURACY, USEFULNESS OR INTEGRITY OF ANY PLANS,
MODELS, RECORDS, DESIGNS, PROCEDURES, MANUALS AND/OR DOCUMENTS
PROVIDED, DELIVERED OR TRANSFERRED PURSUANT HERETO OR IN
CONNECTION HEREWITH, AND ANY USE THEREOF OR RELIANCE THEREON BY
THE BUYER SHALL BE DONE OR UNDERTAKEN AT ITS SOLE RISK; PROVIDED
THAT EFFECTIVE ON THE CLOSING DATE, ALL REPRESENTATIONS AND
WARRANTIES OF SELLER'S CONSULTANTS (OTHER THAN CONSULTANTS THAT
ARE AFFILIATES OF SELLER) RELATING THERETO ARE HEREBY ASSIGNED,
WITHOUT RECOURSE, TO BUYER.
3A. Representations, Warranties and Disclaimers of the HP&E.
HP&E represents and warrants to the Buyer that the statements
contained in this Section 3A are correct and complete as of the
Effective Date.
3.1.A. Organization of HP&E . HP&E is duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. Complete and accurate copies of
the charter and by-laws of HP&E, each as amended to date, are
attached hereto as Schedule 3.1.A.
3.2.A. Authorization of Transaction. HP&E has the power
and authority (including corporate power and authority) to
execute and deliver this Agreement and the Related Agreements
and, subject to receipt of all the Seller's Regulatory Approvals,
to perform its obligations hereunder and thereunder. All
corporate actions or proceedings to be taken by or on the part of
HP&E to authorize and permit the due execution and valid delivery
by HP&E of this Agreement and the Related Agreements and the
instruments required to be duly executed and validly delivered by
HP&E pursuant hereto and thereto, the performance by HP&E of its
obligations hereunder and thereunder, and the consummation by
HP&E of the transactions contemplated herein and therein, have
been duly and properly taken. This Agreement and the Related
Agreements have been duly executed and validly delivered by HP&E
and constitute the legal, valid and binding obligation of HP&E,
enforceable in accordance with their terms and conditions.
3.3.A. Noncontravention. Subject to HP&E obtaining
Seller's Regulatory Approvals, neither the execution and the
delivery of this Agreement or any of the Related Agreements, nor
the consummation of the transactions contemplated hereby and
thereby, will (a) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge,
license or other restriction of any Governmental Authority (other
than Buyer or any of Buyer's Affiliates) to which HP&E or any of
its property is subject or any provision of the charter or by-
laws of HP&E, or (b) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which HP&E is
bound, except for matters that will not have a Material Adverse
Effect.
3.4.A. Disclaimers Regarding Acquired Assets. HP&E
EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND
OR NATURE, EXPRESS OR IMPLIED, AS TO TITLE, CONDITION, VALUE OR
QUALITY OF THE ACQUIRED ASSETS OR THE PROSPECTS (FINANCIAL AND
OTHERWISE), RISKS AND OTHER INCIDENTS OF THE ACQUIRED ASSETS.
HP&E SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF
MERCHANTABILITY, USAGE, OR SUITABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE WITH RESPECT TO THE ACQUIRED ASSETS, OR ANY
PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF
ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, OR COMPLIANCE WITH
ENVIRONMENTAL REQUIREMENTS, OR AS TO THE CONDITION OF THE
ACQUIRED ASSETS, OR ANY PART THEREOF. HP&E FURTHER SPECIFICALLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING THE ABSENCE OF
HAZARDOUS SUBSTANCES OR LIABILITY OR POTENTIAL LIABILITY ARISING
UNDER ENVIRONMENTAL LAWS. NO MATERIAL OR INFORMATION PROVIDED BY
OR COMMUNICATIONS MADE BY HP&E, OR BY ANY BROKER OR INVESTMENT
BANKER, INCLUDING ANY ORAL, WRITTEN OR ELECTRONIC RESPONSE TO ANY
INFORMATION REQUEST PROVIDED TO THE BUYER, WILL CAUSE OR CREATE
ANY WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, CONDITION,
VALUE OR QUALITY OF THE ACQUIRED ASSETS. IN ADDITION, HP&E MAKES
NO REPRESENTATION OR WARRANTY WHATSOEVER WITH RESPECT TO THE
SUITABILITY, ACCURACY, USEFULNESS OR INTEGRITY OF ANY PLANS,
MODELS, RECORDS, DESIGNS, PROCEDURES, MANUALS AND/OR DOCUMENTS
PROVIDED, DELIVERED OR TRANSFERRED PURSUANT HERETO OR IN
CONNECTION HEREWITH, AND ANY USE THEREOF OR RELIANCE THEREON BY
THE BUYER SHALL BE DONE OR UNDERTAKEN AT ITS SOLE RISK.
4. Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Seller and HP&E that the
statements contained in this Section 4 are correct and complete
as of the Effective Date.
4.1. Organization of the Buyer. The Buyer is a municipal
light plant duly organized, validly existing and in good standing
under the laws of Massachusetts. Copies of the organizational
documents of the Buyer, each as amended to date, have been
heretofore delivered to the Seller and are accurate and complete.
4.2. Authorization of Transaction. The Buyer has the power
and authority (including municipal light plant power and
authority) to execute and deliver this Agreement and the Related
Agreements and, subject to receipt of all Buyer's Regulatory
Approvals, to perform its obligations hereunder and thereunder.
All actions or proceedings to be taken by or on the part of the
Buyer to authorize and permit the due execution and valid
delivery by the Buyer of this Agreement, the Related Agreements
and the instruments required to be duly executed and validly
delivered by the Buyer pursuant hereto and thereto, the
performance by the Buyer of its obligations hereunder and
thereunder, and the consummation by the Buyer of the transactions
contemplated herein and therein, have been duly and properly
taken. This Agreement and the Related Agreements have been duly
executed and validly delivered by the Buyer and constitute the
valid and legally binding obligations of the Buyer, enforceable
in accordance with their terms and conditions.
4.3. Noncontravention. Subject to the Buyer obtaining the
Buyer's Regulatory Approvals, neither the execution and the
delivery of this Agreement or any of the Related Agreements, nor
the consummation of the transactions contemplated hereby and
thereby, will (i) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any Governmental Authority to which the
Buyer is subject or any provision of the organizational documents
of the Buyer or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which the
Buyer is a party or by which it is bound or to which any of its
assets is subject, except for matters that will not have a Buyer
Material Adverse Effect.
4.4. Brokers' Fees. The Buyer has no Liability or
obligation to pay any fees or commissions to any broker, finder
or agent with respect to the transactions contemplated by this
Agreement for which the Seller could become liable or obligated.
4.5. Litigation. No action, suit, claim, demand or other
proceeding is pending or, to the Buyer's Knowledge, threatened
that would be reasonably likely to result in a Buyer Material
Adverse Effect or that questions the validity of this Agreement
or the Related Agreements or of any action taken or to be taken
pursuant to or in connection with the provisions of this
Agreement or the Related Agreements. There are no judgments,
orders, decrees, citations, fines or penalties heretofore
assessed against the Buyer that have a Buyer Material Adverse
Effect or impair, estop, impede, restrain, ban or otherwise
adversely affect the Buyer's ability to satisfy or perform any of
the Assumed Liabilities under any federal, state or local Law.
4.6. No Knowledge of the Seller's Breach. The Buyer has no
Knowledge of any breach by the Seller of any representation or
warranty contained in Section 3 hereof, or of any condition or
circumstance that would excuse the Buyer from performance of its
obligations under this Agreement or the Related Agreements.
4.7. Availability of Funds. The Buyer has no reason to
believe it will not have sufficient funds available to it to pay
the Closing Purchase Price on the Closing Date.
4.8. "As Is" Sale. The representations and warranties set
forth in Section 3 and 3A hereof constitute the sole and
exclusive representations and warranties of the Seller and HP&E
in connection with the transactions contemplated hereby. There
are no representations, warranties, covenants, understandings or
agreements among the Parties regarding the Acquired Assets or
their transfer other than those incorporated in this Agreement.
Except for the representations and warranties expressly set forth
in Section 3, the Buyer disclaims reliance on any
representations, warranties or guarantees, either express or
implied, by the Seller including any oral, written or electronic
response to any information request provided to the Buyer.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE BUYER
ACKNOWLEDGES AND AGREES THAT THE ACQUIRED ASSETS ARE BEING
ACQUIRED "AS IS, WHERE IS" ON THE CLOSING DATE, AND IN THEIR
CONDITION ON THE CLOSING DATE, AND THAT PRIOR TO THE EXECUTION OF
THIS AGREEMENT, THE BUYER HAS CONDUCTED TO ITS SATISFACTION ALL
NECESSARY AND SUFFICIENT EXAMINATION OF THE ACQUIRED ASSETS, AND
THAT THE BUYER IS RELYING ON ITS OWN EXAMINATION OF THE ACQUIRED
ASSETS, AND IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY MADE
BY THE SELLER, ANY AFFILIATED TRANSFEROR OR HP&E, OR ANY BROKER
OR INVESTMENT BANKER. THE BUYER FURTHER ACKNOWLEDGES AND AGREES
THAT, EXCEPT AS SET FORTH IN SECTION 9.1, THE REPRESENTATIONS AND
WARRANTIES OF THE SELLER AND HP&E SET FORTH IN THIS AGREEMENT
TERMINATE AS OF THE CLOSING DATE OR TERMINATION OF THIS AGREEMENT
PURSUANT TO SECTION 10, AND THAT FOLLOWING THE CLOSING DATE OR
SUCH TERMINATION, AS THE CASE MAY BE, THE BUYER SHALL HAVE NO
RECOURSE AGAINST THE SELLER, ANY AFFILIATED TRANSFEROR OR HP&E
WITH RESPECT TO ANY BREACH OF SUCH REPRESENTATIONS AND
WARRANTIES.
4.9. Environmental Reports. No reports, studies or other
investigations or analyses relating to potential Environmental
Liabilities with respect to any of the Acquired Assets have been
prepared by, or at the request of, the Buyer, other than as set
forth in subsection (a) of Schedule 3.12.
4.10. Qualified Buyer. To the Knowledge of the Buyer,
the Buyer is qualified to obtain any Permits necessary for the
Buyer to own and operate the Acquired Assets as of the Closing,
to the extent such operation is either required by any Related
Agreement or this Agreement, or is contemplated by the Buyer.
5. Covenants. The Parties agree as follows:
5.1. General. Prior to the Closing, each of the Parties
will use its best efforts to take all actions and to do all
things necessary, proper or advisable in order to consummate and
make effective the transactions contemplated by this Agreement
and the Related Agreements prior to September 15, 2001 including
satisfaction, but not waiver, of the closing conditions set forth
in Section 6 below.
5.2. Notices, Consents and Approvals.
(a) The Parties acknowledge and agree that it is
important that the Closing occur as soon as possible in
order to achieve the date set forth in Section 5.1.
Accordingly, the Buyer hereby covenants that it shall (x)
submit its portion of the draft applications, including all
required exhibits and attachments, under Sections 203 and
205 of the Federal Power Act substantially in a form ready
for filing with the FERC (the "FERC Applications") to the
Seller within fifteen (15) days after the Effective Date for
the Seller's review, and (y) cooperate with the Seller with
a view to filing the FERC Applications with the FERC in
accordance with the rules and regulations of the FERC on or
before thirty (30) days after the Effective Date and shall
thereafter not seek to amend or withdraw such FERC
Applications.
(b) Without limitation of Section 5.2(a), prior to the
Closing, the Seller and the Buyer shall cooperate with each
other and use all Commercially Reasonable Efforts to (i)
promptly prepare and file all necessary documentation, (ii)
effect all necessary applications, notices, petitions and
filings and execute all agreements and documents, (iii)
obtain the transfer or reissuance to the Buyer of all
necessary Permits and (iv) obtain all necessary consents,
approvals and authorizations of all other parties necessary
or advisable to consummate the transactions contemplated by
this Agreement or in any of the Related Agreements
(including, without limitation, the Seller's Regulatory
Approvals and the Buyer's Regulatory Approvals) or required
by the terms of any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, concession, contract,
lease or other instrument to which the Seller or the Buyer
is a party or by which any of them is bound. The Seller and
the Buyer shall have the right to review in advance all
characterizations of the information relating to the
transactions contemplated by this Agreement or in any of the
Related Agreements which appear in any filing made in
connection with the transactions contemplated hereby or
thereby. Notwithstanding the foregoing, the Seller is not
obligated to assign or transfer any interest in any
Transferable Permits, including, without limitation, those
obtained pursuant to the applicable requirements of
Environmental Laws, if the consent or approval of the third
Person for such assignment or transfer cannot be obtained.
(c) Except as set forth in Section 5.2(d), the Parties
shall share responsibility for securing the transfer or
reissuance of the Permits (including the Transferable
Permits) effective as of the Closing Date, and each Party
shall bear all of the costs and expenses incurred by such
Party in connection therewith (provided that the Buyer shall
solely bear any reissuance, transfer or similar fees). The
Parties shall cooperate with the efforts in this regard. If
Parties are unable to secure the transfer or reissuance of
one or more Permits effective on the Closing Date, then the
Closing shall be postponed until such permits are
transferred or reissued, or canceled; provided that if such
postponement exceeds thirty (30) days, the Buyer and the
Seller shall use Commercially Reasonable Efforts to arrange
for the operation of the Facilities under the existing
Permits (with appropriate indemnities in favor of the Seller
and its Affiliates) pursuant to the Generation Support
Services Agreement or other mutually agreed arrangement that
allows the Closing to occur notwithstanding the failure to
transfer or reissue certain Permits; provided, however, that
the Closing shall not occur unless FERC has authorized the
transfer of the FERC License.
(d) Within thirty (30) days after the Effective Date,
the Buyer shall provide Seller with copies, in form ready to
be filed with FERC, of duly executed contingent withdrawals
or similar pleadings from the Buyer, the City, Massachusetts
Municipal Wholesale Electric Company, and the City of
Ashburnham, withdrawing, terminating or otherwise removing
any and all competing applications, motions to intervene,
motions for rehearing, appeals and/or any other actions
affecting the FERC License, as the case may be, by any of
such Persons in the Relicensing Proceeding. Such
withdrawals shall be contingent and without prejudice if
either this Agreement terminates without the consummation of
the transactions contemplated hereunder, or FERC denies the
request for authorization to transfer the FERC License to
the Buyer. Simultaneously with the filing of the FERC
Applications, Buyer shall file, or cause each of such other
Persons to file, such withdrawals with FERC. Buyer shall
use its best efforts to obtain any additional documents or
other assurances required by FERC in connection with such
withdrawals.
(e) Notwithstanding anything in this Section 5.2 or
elsewhere in this Agreement to the contrary, Seller shall
retain full authority and discretion with regard to the
conduct of, and negotiations, agreement and other
commitments related to and/or arising from the Relicensing
Proceeding. Seller shall provide Buyer with advance notice
of any significant developments in the Relicensing
Proceedings and shall reasonably consider Buyer's position
in that regard. Notwithstanding the rights reserved by
Seller with respect to the Relicensing Proceeding, (i) the
Seller shall not modify the FERC License and/or the Water
Quality Certification, copies of which are attached hereto
as Schedule 5.2(e), in a manner that would have a Material
Adverse Effect, unless the Buyer has consented to such
modification, which consent shall not be unreasonably
withheld or delayed; and (ii) all capital expenditures made
or undertaken by the Seller during the Interim Period with
respect to the FERC License and/or the Water Quality
Certification shall be subject to the terms of Section
5.3.2.
5.3. Operation of Business.
5.3.1. Interim Operation. During the Interim Period, the
Seller will operate and maintain the Acquired Assets in the
ordinary course consistent with Good Industry Practices, unless
otherwise contemplated by this Agreement or with the prior
written consent of the Buyer. Without limiting the generality of
the foregoing, the Seller shall not, without the prior written
consent of the Buyer, which Buyer shall not unreasonably withhold
or delay, during the Interim Period, with respect to the Acquired
Assets:
(a) sell, lease (as lessor), transfer or otherwise
dispose of, any of the Acquired Assets, other than as used,
consumed or replaced in the ordinary course of business
consistent with Good Industry Practices, or encumber,
pledge, mortgage or suffer to be imposed on any of the
Acquired Assets any Lien other than (1) Conservation
Restrictions and other Permitted Encumbrances of the type
described in clauses (i) through (vi) of the definition
thereof, (2) to any Affiliated Transferor, and (3) as
permitted in Section 5.3.5;
(b) make any material change in the levels of
Inventories customarily maintained by the Seller with
respect to the Acquired Assets, except for such changes that
are consistent with Good Industry Practices;
(c) amend, terminate or otherwise modify any Contract,
Lease or Permit other than in the ordinary course of
business, or as may be required in connection with
transferring the Seller's rights or obligations thereunder
to the Buyer pursuant to this Agreement;
(d) enter into, amend, or otherwise modify any real or
personal property Tax agreement, treaty or settlement; or
(e) except as set forth in Schedule 5.3.1(e), enter
into any commitment for the purchase or sale of fuel
(whether commodity or transportation) having a term greater
than three (3) months and not terminable either
(i) automatically on the Closing Date; or (ii) by option of
the Buyer in its sole discretion at any time after the
Closing Date without penalty.
On the Closing Date, Seller shall arrange, at Seller's cost, for
the final removal and proper disposal, in accordance with
applicable Law, of any Hazardous Substances generated in the
ordinary course of business in operating and maintaining the
Acquired Assets that have been stored at the Facilities pending
such removal.
5.3.2. Capital Expenditures. During the Interim Period,
subject to the terms of this Section 5.3.2, the Seller shall not
be entitled to reimbursement for any capital expenditures with
respect to the Acquired Assets that are not Pre-Approved Capital
Expenditures or a Capital Commitment relating thereto, except
for:
(a) those capital expenditures or Capital Commitments which
have been approved or deemed to have been approved by the
Buyer in accordance with the Capital Expenditure Protocol
(in which event such capital expenditures or Capital
Commitments shall be deemed to be Pre-Approved Capital
Expenditures); and
(b) those capital expenditures or Capital Commitments
necessitated by Good Industry Practice or in compliance with
applicable Law (including, without limitation, the FERC
License and/or the Water Quality Certification), and
undertaken in an emergency situation or despite the Buyer's
objections thereto, each as contemplated in the Capital
Expenditure Protocol, in which case the Buyer and the Seller
shall endeavor to address responsibility for the cost of
such capital expenditures or Capital Commitments in good
faith.
Notwithstanding anything in Section 5.3.2 to the contrary, the
Seller may, in its sole discretion, (i) make Pre-Approved Capital
Expenditures or incur a Capital Commitment with respect thereto,
and (ii) make Capital Commitments for which an adjustment to the
Initial Purchase Price will be made pursuant to Section 2.6(b).
To the extent that a capital expenditure or Capital Commitment
exceeds the amount of any Pre-Approved Capital Expenditure, the
Seller may incur and/or commit the entire amount, but such excess
amount only shall be subject to the Capital Approval Protocol
and/or the provisions of Section 2.6(b).
5.3.3. Riverside Restoration. Seller shall complete the
demolition, Remediation and restoration of the former Riverside
Generating Station located at Water Street, Holyoke,
Massachusetts, in accordance with the plan attached hereto as
Schedule 5.3.3 (the "Riverside Plan"). In connection therewith,
the Seller shall bear all costs of (a) completion of the
Riverside Plan, and (b) reconnection of all eight distribution
lines used in the Distribution System and currently emanating
therefrom, including, without limitation, the distribution line
crossing the Connecticut River. Notwithstanding the foregoing,
if the work contemplated in the Riverside Plan has not been
completed before the Closing Date, the Closing shall nonetheless
occur, and the Seller shall retain the responsibility to complete
such work, at Seller's sole cost and expense, in accordance with
the Riverside Plan after the Closing. In such event, the Buyer
shall provide such access and other rights as the Seller may
reasonably require to complete such work. The Seller's
obligations under this Section 5.3.3 or otherwise under this
Agreement shall expire and otherwise terminate, without any
further Liability whatsoever, and Buyer shall assume full
Liability for the Riverside Generating Station, simultaneously
with the earlier to occur of (i) the expiration of the sixtieth
(60th) day after submission to the MADEP of the Seller's filing
of a Class A-3 Response Action Outcome for such work, without
objection from the MADEP during such 60 day period (or if the
MADEP so objects, the date on which Seller satisfies such
objections to the satisfaction of the MADEP); or (ii) the date on
which the MADEP approves or otherwise accepts (in whatever form)
the Class A-3 Response Action Outcome for such work.
5.3.4. Interim Environmental Actions. Subject to the terms
and conditions of this Section 5.3.4, Seller shall complete the
additional testing and/or Remediation described on Schedule
5.3.4. Seller shall retain full authority and discretion with
regard to filings, negotiations, agreement and other commitments
related to and/or arising from the performance of the work
described on Schedule 5.3.4. If any of such work has not been
completed before the Closing Date, the Closing shall nonetheless
occur, and Seller shall retain the responsibility to complete
such work in accordance with the requirements of Schedule 5.3.4.
In such event, the Buyer shall provide such access and other
rights as the Seller may reasonably require to complete such
work. Seller shall solely bear all third party costs and
expenses resulting from the work contemplated under this Section
5.3.4. Each Party shall bear its own internal costs with respect
to the work contemplated under this Section 5.3.4. As to each
item described in Schedule 5.3.4, Seller's obligations under this
Section 5.3.4 or otherwise under this Agreement shall expire and
otherwise terminate, without any further Liability whatsoever,
and Buyer shall assume full Liability for the Acquired Asset
affected by such item, simultaneously with the fulfillment of the
acceptance criteria applicable to such item on Schedule 5.3.4.
Nothing set forth herein shall prejudice or otherwise impair any
claim or other right that Seller or any of its Affiliates may
have against any other Person with respect to the Remediation
contemplated under this Section 5.3.4.
5.3.5. Reserved Easements. In lieu of reserving all or any
portion of the Reserved Easements referenced in the Deed (and
affecting the areas set forth in Exhibit D to the Deed) at the
Closing, the Seller and HP&E shall have the right to grant such
Reserved Easements, in whole or in part, to the Seller's
Affiliates or any other Person during the Interim Period. The
Seller and/or HP&E shall provide to the Buyer copies of all such
instruments of conveyance executed and delivered during the
Interim Period.
5.3.6. Purchase Order Transition. The Buyer acknowledges
that in connection with the Closing, the Seller and its
Affiliates intends to terminate, cancel or otherwise modify all
or a portion of the outstanding purchase orders relating to the
operation of the Acquired Assets such that the vendors will not
supply materials or services thereunder for the Acquired Assets
after the Closing Date. Such purchase orders include those
listed on Schedule 5.3.6; provided that Seller may modify and/or
continue all or some of such purchase orders in connection with
the operation of Mt. Xxx. The Seller shall reasonably cooperate
with the Buyer's efforts to enter into new purchase orders or
contracts with any of the vendors identified on Schedule 5.3.6;
provided that the Closing shall not be affected by the status of
Buyer's effort in that regard.
5.3.7 Cove Island. During the Interim Period, Seller shall
not provide any assurances to any of the licensees under the
campsite licenses affecting Cove Island, South Xxxxxx,
Massachusetts (as set forth in Schedule 2.1(f)) about the future
disposition of such licenses, including, without limitation, the
possible extension of such licenses for a longer term, without
the prior written authorization of Buyer. Buyer and Seller shall
reasonably coordinate to act in a manner consistent with Buyer's
plans for Cove Island after the Closing. Nothing in this Section
5.3.7 shall impose any obligations or other Liabilities on Seller
with respect to the condition of Cove Island, or affect Buyer's
assumption of all Liabilities relating to Cove Island and/or
arising (under applicable Law or otherwise) out of the transfer
of Cove Island pursuant hereto, including, without limitation,
all obligations to comply with Title V and all Environmental
Liabilities associated with Cove Island, it being understood that
the Assumed Liabilities include any and all Liabilities of Seller
under Title V and, in accordance with Section 9.4, Buyer shall
indemnify Seller against any actions taken by, and/or omission
of, Seller, any of such licensees, or any other Person with
respect to Cove Island.
5.3.8 Inventory. To the extent that the Seller maintains
any inventory of major equipment and/or spare parts solely
allocated to (as opposed to shared with) the Facilities and/or
the Distribution System at any location other than a Site, the
Seller shall cause such Inventory to be delivered to a Facility
before the Closing, or make suitable arrangements to grant access
to such Inventory for removal by the Buyer after the Closing.
5.3.9 Real Property Sale. Seller reserves the right to
sell Parcel 82-109 in Holyoke, Massachusetts (as more
particularly described in Schedule 2.1(a)), pursuant to a
Purchase and Sale Agreement between the Seller and Xxxxx Xxxx, in
which case the Initial Purchase Price shall be reduced by the
full amount of the cash proceeds received by the Seller from
Xxxxx Xxxx in such sale, if consummated before the Closing.
Alternatively, the Seller may convey such real property subject
to such Purchase and Sale Agreement, or cancel such Purchase and
Sale Agreement, in each case without resulting in any reduction
or other adjustment to the Purchase Price.
5.3.10 WMECO. During the Interim Period, Buyer shall
negotiate in good faith an agreement with WMECO, effective on the
Closing Date, to address the matters set forth on Schedule
5.3.10.
5.4. Full Access.
(a) During the Interim Period, the Seller will permit the
Buyer and Representatives of the Buyer during normal business
hours (i) to have reasonable access upon reasonable notice, in a
manner so as not to either interfere with the normal business
operations of the Seller and/or increase the operating costs of
the Seller, to all premises, properties, management, personnel,
books, records (including Tax records, but excluding all other
Excluded Records) and documents associated with the Acquired
Assets; (ii) permit the Buyer to make such reasonable inspections
thereof as the Buyer may reasonably request; and (iii) furnish
the Buyer with a copy of each material report, schedule or other
document filed or received by it with respect to the Acquired
Assets with a Governmental Authority. The Seller also shall
afford the Buyer a reasonable opportunity for the Buyer to copy,
at Buyer's sole expense, any records (excluding, however, any of
the Excluded Records) being removed from Xxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxxxx for retention by Seller after the Closing
in accordance with Section 2.2(h).
(b) During the Interim Period, at the sole cost and expense
of the Buyer, the Seller will permit designated employees or
Representatives of the Buyer (the "Buyer's Observers") to observe
all operations of the Seller related to the Acquired Assets and
to ask questions and receive appropriate responses with respect
to such operations. Such observation and inquiry shall be
permitted on a cooperative basis in the presence of personnel of
the Seller during normal business hours of the Seller; provided,
however, that the Buyer's Observers shall not unreasonably
interfere (in terms of frequency, scope or otherwise) with the
operation of the Acquired Assets by the Seller.
(c) The Buyer acknowledges that the access and observation
rights set forth in this Section 5.4 shall not be construed as
any obligation by the Seller or any of its Affiliates to train,
educate or otherwise convey any experience or expertise to the
Buyer or any of Buyer's Representatives or Buyer's Observers with
regard to the Seller's business, including, without limitation,
the operation of any of the Acquired Assets.
5.5. Interim Period Notice.
(a) The Buyer shall notify the Seller promptly if any
information comes to its attention prior to the Closing that is
likely to (i) excuse the Buyer from the performance of its
obligations under this Agreement or the Related Agreements, (ii)
cause any condition to close set forth in Sections 6.1 or 6.2 not
to be satisfied, or (iii) cause a Material Adverse Effect.
(b) The Seller shall notify the Buyer of the existence of
any matter which would cause any of the representations or
warranties in Section 3 and/or 3A above to be untrue or
incorrect. Unless the Buyer has the right to terminate this
Agreement pursuant to Section 10.1(b)(vi) below by reason of such
notice and exercises that right within the period of 15 days
referred to in Section 10.1(b)(vi) below, the written notice
pursuant to this Section 5.5(b) shall be deemed to have amended
the appropriate Schedule or Schedules as of the Effective Date,
to have qualified the representations and warranties contained in
Section 3 and/or 3A above as of the Effective Date, and to have
cured any misrepresentation or breach of warranty that otherwise
might have existed hereunder by reason of the existence of such
matter.
(c) The Buyer may elect at any time to notify the Seller of
the existence of any matter, which if in existence on the
Effective Date or the Closing Date would or might cause any of
the representations or warranties in Section 4 above to be untrue
or incorrect. Unless the Seller has the right to terminate this
Agreement pursuant to Section 10.1(c)(vi) below by reason of such
notice and exercises that right within the period of 15 days
referred to in Section 10.1(c)(vi) below, the written notice
pursuant to this Section 5.5(b) shall be deemed to have amended
the appropriate Schedule or Schedules as of the Effective Date,
to have qualified the representations and warranties contained in
Section 4 above as of the Effective Date, and to have cured any
misrepresentation or breach of warranty that otherwise might have
existed hereunder by reason of the existence of such matter.
5.6. Further Assurances.
(a) At any time and from time to time after the Closing, at
the request of a Party, the other Party will execute and deliver
such instruments of sale, transfer, conveyance, assignment and
confirmation and take such action as the Seller and the Buyer may
both reasonably agree is necessary to transfer, convey and assign
to the Buyer, and to confirm the Buyer's title to or interest in
the Acquired Assets and Assumed Liabilities or to put the Buyer
in actual possession and operating control of the Acquired
Assets.
(b) In the event that any asset that is an Acquired Asset
shall not have been conveyed to the Buyer at the Closing, the
Seller shall, subject to Sections 5.6(c), (d) and (e), use its
best efforts to convey such asset to the Buyer as promptly as is
practicable after the Closing.
(c) To the extent that the Seller's rights under any
Contract or Lease may not be assigned without the consent of
another Person which consent has not been obtained by the Closing
Date, this Agreement shall not constitute an agreement to assign
the same if an attempted assignment would constitute a breach
thereof or be unlawful, and the Seller, at its expense, shall use
its Commercially Reasonable Efforts to obtain any such required
consent(s) as promptly as possible. The Seller and the Buyer
agree that if any consent to an assignment shall not be obtained,
or if any attempted assignment would be ineffective or would
impair the Buyer's rights and obligations under the Contract or
Lease in question, so that the Buyer would not in effect acquire
the benefit of all such rights and obligations, the Seller, to
the maximum extent permitted by law and such Contract or Lease,
shall, after the Closing, appoint the Buyer to be the Seller's
agent with respect to such Contract or Lease, and the Seller
shall, to the maximum extent permitted by law and such Contract
or Lease, enter into such reasonable arrangements with the Buyer
as are necessary to provide the Buyer with the benefits and
obligations of such Contract or Lease. The Seller and the Buyer
shall cooperate and shall each use their Commercially Reasonable
Efforts after the Closing to obtain an assignment of such
Contract or Lease to the Buyer; provided that neither the Seller
nor the Buyer shall have any obligation to offer or pay any
consideration in order to obtain any such consents.
(d) To the extent that the Seller's rights under any
warranty or guaranty described in Section 2.1.1(b) may not be
assigned without the consent of another Person, which consent has
not been obtained by the Closing Date, this Agreement shall not
constitute an agreement to assign the same, if an attempted
assignment would constitute a breach thereof, or be unlawful. The
Seller and the Buyer agree that if any consent to an assignment
of any such warranty or guaranty would be ineffective or would
impair the Buyer's rights and obligations under the warranty or
guaranty in question, so that the Buyer would not in effect
acquire the benefit of all such rights and obligations, the
Seller shall use Commercially Reasonable Efforts, at the Buyer's
sole cost and expense (provided that the Seller shall not be
reimbursed for any internal costs associated with such effort),
to the extent permitted by law and such warranty or guaranty, to
enforce such warranty or guaranty for the benefit of the Buyer so
as to the maximum extent possible to provide the Buyer with the
benefits and obligations of such warranty or guaranty.
Notwithstanding the foregoing, the Seller shall not be obligated
to bring or file suit against any Third Party, provided that if
the Seller shall determine not to bring or file suit after being
requested by the Buyer to do so, the Seller shall assign, to the
extent permitted by law or any applicable agreement or contract,
its rights in respect of the claims so that the Buyer may bring
or file such suit.
(e) To the extent that any personal property lease cannot
be assigned to the Buyer, including, without limitation, the
leases listed on Schedule 5.6(e), or is not subject to
arrangements described in Section 5.6(c), upon the Buyer's
request and at the Buyer's sole expense, the Seller will use
Commercially Reasonable Efforts to acquire the assets relating to
such lease and to include them in the Acquired Assets before the
Closing Date.
(f) The Seller and its Affiliates shall have the right, for
a period of twelve (12) months after the Closing Date, to use,
without charge from Buyer, the transformer described on Schedule
5.6(f) (the "Spare Transformer"), at Seller's sole handling
expense; provided that such right shall terminate upon the
earlier to occur of the delivery of a new replacement transformer
(capable of performing the functions of the Spare Transformer) to
the warehouse of Seller or its Affiliate, or the first
anniversary of the Closing Date. If the Seller or any such
Affiliates requires the use of the Spare Transformer during such
period, the Seller shall notify the Buyer thereof, and the
affected parties shall coordinate immediate usage. In all such
circumstances, the Person exercising the right to use the Spare
Transformer in accordance with this Section 5.6(f) shall (i)
return the Spare Transformer in a maintained condition at no cost
to the Buyer within in thirty (30) days after the right to use
the Spare Transformer terminates as previously provided in this
Section 5.6(f), (ii) provide evidence of the inclusion of the
Spare Transformer in the then existing insurance coverage of such
Person, with insurers authorized to do business in the
Commonwealth of Massachusetts, and (iii) be responsible for any
loss or casualty affecting the Spare Transformer during the
period that such Person possesses or controls such equipment.
The Buyer shall promptly advise the Seller if it intends to
install the Spare Transformer in its system during such 12 month
period, which notice shall include an estimated duration of its
use, and the Buyer shall keep the Seller reasonably apprised of
Buyer's repair and/or replacement efforts and the anticipated
availability of the Spare Transformer. The Spare Transformer
shall not be used during such 12 month period by any Person
(including, without limitation, Buyer or Seller), except for
emergency purposes and then only for the duration of such
emergency.
5.7. Employee Matters.
(a) The Seller and the Buyer shall reasonably coordinate
the acquisition process to minimize any impact on the Seller's
employees. The Buyer intends to post positions for eleven (11)
experienced hydro-electric facility operations and maintenance
personnel. Personnel on the payroll at the Facilities on the
Effective Date will be offered the opportunity to apply for all
of such posted positions at comparable wages.
(b) The Seller shall comply with any and all continuation
of coverage under the Seller's employee benefit plans as required
under 601 through 608 of ERISA and 4980B of the Code with
respect to any person as to whom a "qualifying event" as defined
in 4980 of the Code occurred on or prior to the Closing Date, at
no cost to Buyer.
(c) Subject to Section 10.3, on or before the Closing Date,
the Seller shall be solely responsible for the payment of all
wages and compensation legally owing to or with respect to any of
the Seller's employees that arise in connection with the Buyer's
purchase of the Acquired Assets, including, without limitation,
accrued and payable vacation pay, bonuses, severance pay,
overtime, and all benefits under any employee benefit plan that
became payable on account of termination of employment or any
other amounts to which such employees may be entitled for
services rendered prior to their termination or by virtue of
their termination. The Buyer shall not have any liability under
the Seller's employee benefit plans for retirees of the Seller as
of the Closing Date.
(d) Subject to Section 10.3, Seller agrees to timely
perform and discharge all requirements under the WARN Act and
under applicable state and local Laws for the notification of its
employees arising from the sale of the Acquired Assets to the
Buyer up to and including the Closing Date. After the Closing
Date, the Buyer shall be responsible for performing and
discharging all requirements under the WARN Act and under
applicable state and local laws and regulations for the
notification of its employees. All severance and other costs
associated with workforce restructuring activities associated
with the Acquired Assets and/or the Buyer's employees subsequent
to the Closing Date shall be borne solely by the Buyer.
5.8. Title Commitment and Surveys.
(a) On or prior to the Effective Date, Buyer shall obtain,
at its sole cost and expense, a title insurance commitment
("Title Commitment") for the Real Property, which may contain the
standard exception for such matters that would be disclosed by an
accurate survey of the Real Property. The Title Commitment, a
copy of which is attached hereto as Schedule 3.5, is hereby
incorporated into this Agreement by this reference. The Title
Commitment shall be issued by a title insurance company or
companies reasonably satisfactory to Buyer, agreeing to issue to
Buyer standard form owner's policies of title insurance with
respect to all Real Property. Such policy shall be standard ALTA
owner's policy in the full amount of the fair value of the Real
Property as determined in accordance with Section 2.7. All
policies shall insure title in full accordance with the terms and
conditions hereof.
(b) Within ninety (90) days after the Effective Date,
Buyer, at its sole cost and expense, may obtain and deliver to
Seller any and all Surveys that Buyer deems necessary with
respect to any portion of the Real Property containing
Improvements. Such Survey(s) will comply with the requirements
of the issuer of the Title Commitment as a condition to the
removal as to the surveyed areas of the survey exception from the
standard printed exceptions in Schedule B of the Title
Commitment; provided that such removal shall not be required
unless Buyer has procured the necessary surveys as contemplated
in this Section 5.8(b).
(c) Seller shall prepare legal descriptions for the Real
Properties located in Chicopee and South Xxxxxx, Massachusetts to
be transferred to the Buyer as a portion of the Acquired Assets,
and the interests in the real property, Improvements thereon,
easements and other rights in real property described in Schedule
2.2(b) located in Holyoke, Massachusetts and to be retained by
the Seller as a portion of the Excluded Assets. Buyer shall
prepare legal descriptions for the Real Properties and easements
located in Holyoke, Massachusetts to be transferred to the Buyer
as a portion of the Acquired Assets. All of such legal
descriptions shall be in a form suitable for acceptance for
recording by the applicable Registry of Deeds, and Buyer and
Seller shall use Commercially Reasonable Efforts to complete such
descriptions within ninety (90) days after the Effective Date.
(d) Seller shall use Commercially Reasonable Efforts to
obtain from rights from Mastex Industries, Inc. to maintain the
control room at the Xxxxxxx Station Facility in its current
configuration or to otherwise address the possible minor
encroachment of a portion of such control room on property owned
by Mastex Industries, Inc., as more particularly described in a
plan dated May 2001, prepared by Xxxxx Associates Surveys, Inc.
for the Buyer.
(e) If reasonably requested by the issuer of the Title
Commitment, Buyer may direct Seller to (i) request a common
fence/wall agreement or similar arrangement with Ludlow Corp.
with respect to the storage and parking facility shared by Seller
and Ludlow Corp. located at Water Street, Holyoke, Massachusetts;
and (ii) notify any Person that has encroached on any of the Real
Properties in Chicopee to the extent shown on a plan dated May
2001, prepared by X. X. Xxxx, Inc., for the Buyer and, in
connection therewith, either propose a license arrangement (which
shall be effective on the Closing Date), or record an appropriate
notice with the Registry of Deeds evidencing the Seller's
objection to such encroachment. Any notices, documents,
instruments or agreements relating to actions requested by Buyer
pursuant to this Section 5.8(e) shall be prepared by Buyer, at
Buyer's expense, and shall be subject to Seller's reasonable
consent and approval. After complying with Buyer's request in
connection with the foregoing, Buyer and Seller shall reasonably
coordinate to act in a manner consistent with the requirements of
such issuer of the Title Commitment, but Seller shall have no
obligation to take any action with respect to such request,
notice or otherwise, including, without limitation, the
commencement of eviction proceedings or the negotiation of any
documents, instruments or agreements. Nothing in this Section
5.8(e) shall impose any obligations or other Liabilities on
Seller with respect to the condition of the Real Properties, or
affect the Assumed Liabilities relating thereto, and Buyer shall
not rely on the matters subject to this Section 5.8(e) as a basis
for the failure to satisfy the condition precedent set forth in
Section 6.1(i). In accordance with Section 9.4, Buyer shall
indemnify Seller against any Losses arising from, or relating to,
any action taken by Seller at the direction of Buyer pursuant to
this Section 5.8(e). This Section 5.8(e) shall not impair,
hinder or otherwise preclude Seller's right to take action during
the Interim Period to protect its interests with regard to the
Real Properties, including, without limitation, actions under
applicable Law to remove or otherwise object to encroachments;
provided that, to the extent practical under the circumstances
(taking into account the need for Seller to act within a period
under applicable Law), Seller shall coordinate any of such
actions with Buyer and the issuer of the Title Commitment.
(f) The Seller shall remove all consensual Liens that
require a payment of dollars, if any, including any mortgages, at
or prior to the Closing Date.
5.9. Access after Closing.
(a) For a period of five (5) years after the Closing Date,
or as a permanent public record as provided in Section 5.9(b),
the Seller and its Affiliates shall have reasonable access to all
of the records, books and documents related to the Acquired
Assets to the extent that such access may reasonably be required
by the Seller in connection with matters relating to or affected
by the operations of the Seller prior to the Closing Date. Such
access shall be afforded by the Buyer upon receipt of reasonable
advance notice and during normal business hours. The Seller (or
such Affiliate(s)) shall be solely responsible for any costs or
expenses incurred by it pursuant to this Section 5.9(a). If the
Buyer shall desire to dispose of any records, books or documents
that may relate to operation of the Acquired Assets before the
Closing prior to the expiration of such five-year period, the
Buyer shall, prior to such disposition, give to the Seller a
reasonable opportunity, at the Seller's expense, to segregate and
remove such records, books or documents as the Seller may select.
Notwithstanding anything to the contrary in this Agreement, the
Seller and HP&E shall be entitled to retain copies of all
records, books and documents transferred to the Buyer pursuant to
the terms hereof; provided that the Seller and HP&E shall not use
such copies relating to the Facilities for purposes of gaining a
competitive advantage over the Buyer.
(b) All historical records of the Seller acquired by the
Buyer pursuant to Section 2.1.1(g) shall be adequately protected
from fire or other casualty and shall be made available to public
and the Seller for inspection and copying (at the cost of the
requesting Person) in Holyoke, Massachusetts during normal
business hours. Buyer shall have the right to fulfill the
foregoing obligation by donating all or a portion of such
historical records to the local historical society or library,
provided that such Person has the ability to manage such records
and access. The Parties recognize that some of the historical
records may have little value, in which case, prior to disposing
of any such record, the Buyer and the Seller shall comply with
the provisions of Section 5.9(a).
(c) After the Closing, the Seller shall have reasonable
access to the Acquired Assets and other properties of the Buyer
to the extent that such access may reasonably be required by the
Seller in connection with matters relating to or affected by the
Excluded Liabilities and as contemplated in Sections 5.3.3 and
5.3.4. Such access shall be afforded by the Buyer upon receipt
of reasonable advance notice and during normal business hours.
The Seller shall be solely responsible for any costs or expenses
incurred by it pursuant to this Section 5.9(c) and shall maintain
adequate insurance coverage for its activities during such
access.
5.10. NEPOOL. At the Closing, the Buyer shall be a member
in good standing in NEPOOL. Except as required to preserve
system reliability and in compliance with the requirements of the
ISO New England or NEPOOL, and as may be otherwise provided in
any Related Agreement, the Seller shall not interfere with the
Buyer's efforts to expand or modify generation capacity at any of
the Sites.
5.11. Risk of Loss. Except as otherwise provided in this
Section 5.11, during the Interim Period all risk of loss or
damage to the Acquired Assets shall be borne by the Seller. If
during the Interim Period the Acquired Assets are damaged by fire
or other casualty (each such event, an "Event of Loss"), or are
taken by a Governmental Authority by exercise of the power of
eminent domain (each, a "Taking"), then the following provisions
shall apply:
(a) the occurrence of (i) any one or more Events of
Loss, as a result of which the aggregate costs to restore,
repair or replace, less any insurance proceeds received or
payable to the Seller in connection with such Event or
Events of Loss (provided that any insurance proceeds
received or payable in connection with an Event or Events of
Loss are either used to restore, repair or replace such
Event or Events of Loss or made available to the Buyer), are
reasonably estimated to be an amount less than or equal to
$500,000, and/or (ii) any one or more Takings, as a result
of which the aggregate condemnation proceeds equal an amount
less than or equal to $500,000, shall have no effect on the
transactions contemplated hereby;
(b) upon the occurrence of (i) any one or more Events
of Loss, as a result of which the aggregate costs to
restore, repair or replace, less any insurance proceeds
received or payable to the Seller in connection with such
Event or Events of Loss (provided that any insurance
proceeds received or payable in connection with an Event or
Events of Loss are either used to restore, repair or replace
such Event or Events of Loss or made available to the
Buyer), are reasonably estimated to be an amount in excess
of $500,000, or (ii) any one or more Takings, as a result of
which the aggregate condemnation proceeds equal an amount in
excess of $500,000 (a "Major Loss"), the Seller shall have,
in the case of a Major Loss relating to one or more Events
of Loss, the option, exercised by notice to the Buyer, to
restore, repair or replace the damaged Acquired Assets prior
to Closing. If the Seller elects to restore, repair or
replace the Acquired Assets relating to a Major Loss, which
election shall be made by notice to the Buyer within fifteen
(15) days following the occurrence of the Major Loss, the
completion of the repair, replacement or restoration will be
a condition to the Closing and the Closing Date shall be
postponed at the election of the Seller for the amount of
time reasonably necessary to complete the restoration,
repair or replacement, not to exceed one hundred and eighty
(180) days without the Buyer's consent. If the Seller
elects not to restore, repair or replace the Acquired Assets
affected by a Major Loss, or such Major Loss is the result
of one or more Takings, the provisions of Section 5.11.(c)
will apply;
(c) in the event that the Seller elects not to
restore, repair or replace a Major Loss, or in the event
that the Seller, having elected to repair, replace or
restore the Major Loss, fails to complete the repair,
replacement or restoration within the one hundred eighty
(180) days (or such longer period as the Buyer shall have
consented to), or in the event that a Major Loss is the
result of one or more Takings, then the Parties shall,
within thirty (30) days following the Seller's election,
failure to complete, or the occurrence of such Takings, as
the case may be, negotiate in good faith an equitable
adjustment in the Purchase Price to reflect the impact of
the Major Loss, as mitigated by any repair, replacement or
restoration work actually completed by the Seller, on the
Acquired Assets being sold to the Buyer, and proceed to
Closing. To assist the Buyer in its evaluation of any and
all Events of Loss, the Seller shall provide the Buyer such
access to the Acquired Assets and such information as the
Buyer may reasonably request in connection therewith; and
(d) in the event that the Parties fail to reach
agreement on an equitable adjustment of the Purchase Price
within the thirty (30) days provided in Section 5.11(c),
then the Buyer shall have the election, exercisable by
notice to the Seller within fifteen (15) days immediately
following the expiration of the thirty (30) day period, to
either (i) proceed with the consummation of the transaction
at Closing, with a reduction in the Purchase Price
consistent with the Seller's last offer communicated to the
Buyer, in which event the Seller shall assign over or
deliver to the Buyer at Closing all condemnation proceeds or
insurance proceeds which the Seller receives, or to which
the Seller becomes entitled by virtue of the Events of Loss,
less any costs and expenses reasonably incurred by the
Seller in obtaining such condemnation proceeds or insurance
proceeds, or (ii) terminate this Agreement, in which event
this Agreement shall terminate and neither Party shall
thereafter have any obligation or liability to the other by
reason of this Agreement. If the Buyer fails to make the
election within the fifteen (15) day period, the Buyer will
be deemed to have made the election to proceed with the
Closing.
5.12. [Reserved]
5.13. Waiver of Distribution Franchise Rights.
(a) It is the intent of the Parties that from and after the
Closing, as to the Parties, (i) the Buyer shall have an exclusive
franchise for the distribution of electricity in Holyoke,
Massachusetts; (ii) the Seller and HP&E shall not engage in
Distribution Operations in Holyoke, South Xxxxxx, Chicopee,
Northampton, Easthampton, Southampton, Westfield and West
Springfield, Massachusetts; and (iii) the Seller and HP&E shall
not compete with Retail Electricity Sales of the Buyer in
Holyoke, South Xxxxxx, Chicopee, and Westfield, unless, for each
such municipality, applicable Law generally allows Persons to
compete with the Buyer for such Retail Electricity Sales. In
furtherance of the foregoing, effective simultaneously with the
Closing, subject to, and in accordance with this Section 5.13:
(1) each of the Seller and HP&E hereby irrevocably waives
and relinquishes their franchises or similar rights that
entitle the Seller and HP&E to own, operate, conduct or
otherwise directly or indirectly engage in Distribution
Operations in Holyoke, South Xxxxxx, Chicopee, Northampton,
Easthampton, Southampton, Westfield and West Springfield,
Massachusetts (or any portion thereof);
(2) the Seller and HP&E shall not directly or indirectly
engage in Distribution Operations in Holyoke, South Xxxxxx,
Chicopee, Northampton, Easthampton, Southampton, Westfield
and West Springfield, Massachusetts (or any portion
thereof);
(3) the Seller shall not directly or indirectly engage in
Retail Electricity Sales; and
(4) HP&E shall not directly or indirectly engage in Retail
Electricity Sales in Holyoke, South Xxxxxx, Chicopee, and/or
Westfield (or any portion thereof) unless and until, as to
each such municipality, any Person, other than the municipal
lighting plant (as referenced in Section 47A of the Act)
serving such municipality, has the right to engage in Retail
Electricity Sales in such municipality; provided that the
foregoing shall not affect the right of HP&E to engage in
wholesale sales of electricity.
(b) Prior to the Closing, the Parties shall not take any
action to effect the Charter Amendments, including, without
limitation, the introduction of any legislation to committee or
other initiation of the legislative process. After the Closing,
the Parties shall cooperate with (and each shall cause their
Affiliates not to take any actions or advocate any positions
inconsistent with) the Buyer's efforts to obtain legislation in
the Commonwealth of Massachusetts to effect the Charter
Amendments. In furtherance of the foregoing, at any time within
the six (6) year period after the Closing Date, until the
effective date of the legislation contemplated in this Section
5.13(b), at the request of the Buyer, the Seller and HP&E will
execute and deliver such applications, consents and other
documents and take such action as the Buyer may reasonably
request at a reasonable cost in connection with the Buyer's
efforts to secure such legislation. To the extent that the
Seller remains liable under any Contracts, pursuant to Section
5.6(c) or otherwise, the Buyer and the Seller will agree to defer
the effective date of the Charter Amendment of the Seller, if
appropriate, until the earlier of the Seller's release from such
liability, or the expiration of all of such Contracts without
liability to, or claims against, the Seller. Subject to the
foregoing, the Buyer shall diligently proceed to effect such
Charter Amendments. After the effective date of its Charter
Amendment, the Seller and HP&E reserve the right to file a
certificate of incorporation or similar document (including,
without limitation, an amendment and/or restatement of the
articles of incorporation of such Party) or take other actions
under applicable Law to avail each of the power and privileges of
a company formed under M.G.L. Chapter 156B. The presence or
absence of the Charter Amendments shall not affect the
obligations of the Seller and HP&E under this Section 5.13.
(c) From and after the Closing Date, the Seller shall not
engage in any new business enterprises, but shall limit its
business activities to all things necessary or convenient to
carry out its business and affairs as in existence on the Closing
Date, including, without limitation, any activities arising out,
or relating to the exploitation, development or other realization
relating to the Excluded Assets, subject to the restrictions set
forth in this Section 5.13. The foregoing shall not limit in any
manner whatsoever the Seller's conduct of its business set forth
on Schedule 5.13(c) and the fulfillment of its obligations under
this Agreement, whether to the Buyer or retained by the Seller
(including, without limitation, matters relating to and/or
arising out of the Excluded Liabilities). In furtherance of the
foregoing, the Seller shall cease to conduct such business and
affairs and shall thereafter diligently proceed to liquidate and
dissolve pursuant to applicable Law upon the earlier to occur of
(i) the complete wind-down and disposition of the Seller's
business and affairs as in existence on the Closing Date,
including, without limitation, the satisfaction of all
Liabilities (including, without limitation, the outstanding
pollution control bonds and the Excluded Liabilities) and the
sale or other transfer of all assets (including, without
limitation, Mt. Xxx and all other Excluded Assets), or (ii) the
twenty-fifth (25th) anniversary of the Closing Date, provided
that if, at the time of such 25th anniversary, the Seller only
engages in the business of ownership, operation, use and
disposition of Mt. Xxx and its related assets, the Seller may
defer such cessation and liquidation until Mt. Xxx (including,
without limitation, any repowering or reconfiguration thereof)
permanently ceases operations. The foregoing shall be construed
as a commitment to terminate the corporate existence of the
Seller commencing on the above-referenced date and shall not be
construed as a covenant binding any Person (including, without
limitation, any Affiliate of the Seller) (1) acquiring any of the
assets of the Seller (including, without limitation, Mt. Xxx and
related assets), and/or (2) other than Seller that continues in
existence after a merger or other corporate reorganization.
(d) Nothing in this Section 5.13 or elsewhere in this
Agreement shall be construed to limit, restrict, or otherwise
affect in any manner whatsoever, (i) the Seller's and/or HP&E's
rights with respect to (A) Transmission Operations (except to the
extent that the sale and purchase of the Acquired Assets may
affect such operations); and (B) the participation in wholesale
sales of electricity supply; (ii) the affairs, operations and
business, including, without limitation, franchise and other
rights, past, present or future, of any of the Affiliates of the
Seller or HP&E, including, without limitation, WMECO and any
Affiliated Transferor; (iii) the Seller's right to generate
electricity, including, without limitation, all activities and
enterprises incidental or related thereto; (iv) the Seller's
right to preserve and maintain tax exempt financing, including
without limitation, the outstanding pollution control bonds and
any replacement, refunding or other refinancing thereof; and (v)
the rights (including, without limitation, franchise rights other
than those, if any, that may have been obtained from the Seller
or HP&E) and operations of any Person that acquires (through
purchase or other transfer) all or any portion of the assets of
Seller and/or HP&E, or that merges with Seller or HP&E. To the
extent that any provision hereof or any Charter Amendment
adversely affects or otherwise constrains any of such reserved
rights, the Seller and/or HP&E shall have the right to remove or
otherwise remedy such constraint by such means as Seller and/or
HP&E deem reasonably necessary, and the Buyer shall execute and
deliver such documents and take such actions as the Seller and/or
HP&E may request in connection therewith. Notwithstanding any
other provisions of this Section 5.13, Seller and HP&E shall not
transfer any franchise or similar rights waived and relinquished
by such Parties pursuant to Section 5.13(a)(1).
(e) Each Party acknowledges and agrees that the other
Parties would be damaged irreparably in the event any of the
provisions of this Section 5.13 are not performed in accordance
with their specific terms or otherwise are breached.
Accordingly, each Party agrees that:
(i) the other Parties shall be entitled to an
injunction or injunctions to prevent breaches of the
provisions of this Section 5.13 and to enforce specifically
this Section 5.13 in addition to any other remedy to which
it may be entitled hereunder, at law or in equity; and
(ii) any Party that breaches this Section 5.13 shall be
liable to the Party that obtains a final judgment ordering
relief with respect to such breach for court costs and
reasonable attorneys' fees suffered or incurred by such
prevailing Party in connection with the underlying
proceeding.
(f) Notwithstanding anything to the contrary in the
foregoing, this Section 5.13 shall be null and void and have no
effect whatsoever if the Closing does not occur and/or if all or
any portion of the transactions contemplated hereby are
rescinded, and the Buyer shall execute and deliver such documents
and take such actions as the Seller and/or HP&E may request in
connection therewith.
(g) Nothing in this Section 5.13 shall affect or impair the
ability of the Seller and/or HP&E at any time to (i) liquidate,
dissolve or otherwise terminate their respective existence,
and/or (ii) sell, transfer or otherwise dispose of all or any
portion of their respective assets or any interest therein, and
Buyer shall not oppose or otherwise hinder (and shall cause its
Affiliates not to take any actions or advocate any positions
inconsistent with) any of such actions. The Seller and/or HP&E
at any time also may amend or otherwise change their respective
charters consistent with the terms hereof after the Closing
(including, without limitation, in connection with any merger or
other corporate reorganization), and the Buyer shall have the
right to oppose any such action that is inconsistent with the
obligations of the Seller and/or HP&E under this Section 5.13.
(h) No Party shall take any actions, including, without
limitation, proposing any statutory changes to the Legislature,
legislative committee or other legislative entity, to effect
legislation that grants any rights to, or restricts any rights
of, the Seller and/or HP&E in a manner that is inconsistent with
this Section 5.13, and in furtherance thereof, the Seller or
HP&E, as the case may be, shall include a covenant, enforceable
by the Buyer as a third party beneficiary, in the document or
instrument pursuant to which any Person acquires any rights
and/or property (other than documents effecting a transfer of any
real estate interest) from such Party to the effect that such
Person shall not take such legislative action to so grant any
rights to, or restrict any rights of, such transferring Party in
a manner that is inconsistent with this Section 5.13. Each Party
shall use its best efforts to cause its Affiliates to refrain
from taking any such action, and if any Affiliate nonetheless
takes such action, each Party shall take such action and execute
such documents (including, without limitation, statements of
opposition for submission to the legislature) as any other Party
may reasonably request in its efforts to oppose such action by
such Affiliate.
5.14. Discharge of Environmental Liabilities. In
discharging its Environmental Liabilities, if any, on or after
the Closing Date, pursuant to Section 2.3(a) hereof, the Buyer
agrees and covenants that the Buyer will not prejudice or impair
the Seller's rights under the Environmental Laws or interfere
with the Seller's ability to contest in appropriate
administrative, judicial or other proceedings its liability, if
any, for Environmental Claims or Remediation. The Buyer further
agrees to provide to the Seller draft copies of all plans and
studies prepared in connection with any Site investigation or
Remediation prior to their submission to the Governmental
Authority with jurisdiction under Environmental Laws. The Seller
shall have the right, without the obligation, to attend all
meetings between the Buyer, its agents or representatives, and
such Governmental Authorities. The Buyer shall promptly provide
to the Seller copies of all written information, plans, documents
and material correspondence submitted to or received from such
Governmental Authorities relating to the Buyer's discharge of any
Environmental Liabilities assumed pursuant to this Agreement.
5.15. Settlement; Mutual Release.
(a) The Seller and the Buyer hereby settle, effective on
the Closing Date, all pending litigation between them including,
without limitation, the Pending Litigation and any claims by the
Buyer in, or rights of the Buyer arising as a result of the
Relicensing Proceeding, excluding, however, the Reserved
Litigation, and, to the extent deemed to constitute litigation,
the Excluded Environmental Liability. At the Closing, the Seller
and the Buyer shall execute, deliver and forthwith file
Stipulations of Dismissal with prejudice and without costs in all
such settled cases. Pending the Closing, the Seller and the
Buyer shall request that the court in all such pending litigation
stay the same, without prejudice to any party to the proceedings,
and each of the Seller and the Buyer shall take such action and
execute and deliver such documents as may be reasonably necessary
to obtain such stay on such terms.
(b) Effective on the Closing Date, each Party does hereby,
on behalf of itself, its successors and assigns, and the
representatives, agents, directors, officers, employees, and
servants of each such Party (and the respective heirs, successors
and assigns of such Persons) (collectively, "Releasors"),
irrevocably and fully release and forever discharge each other
Party, its successors and assigns and the representatives,
agents, directors, officers, employees, and servants of such
Party, and the respective successors, assigns, heirs, executors
and administrators of such Persons (collectively, "Releasees"),
of and from all manner of action and actions, cause and causes of
action, loss, cost, expense, suits, debts, dues, sums of money,
accounts, reckoning, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances,
trespasses, liabilities, obligations, damages, judgments,
extents, executions, rights to an accounting, claims whatsoever
in law or in equity, and whether under domestic or foreign law or
proceeding, which any of the Releasors ever had, now have or
hereafter can, shall or may have against any of the Releasees
for, upon, or by reasons of, any matter, cause or thing
whatsoever, direct or indirect, absolute or contingent, arising
from, or relating to, any act, obligation (contractual or
otherwise), or omission of any of the Releasees occurring on or
before the Closing Date; provided that the foregoing release
shall not affect in any manner whatsoever, the rights, interests,
obligations, liabilities and/or other responsibilities of any
Party with respect to (i) the Reserved Litigation; (ii) the
Excluded Environmental Liability; (iii) the respective rights and
obligations of the Parties under this Agreement and the Related
Agreements; and (iv) any agreements, obligations, understandings
or other arrangement between such Party and any Affiliate of
another Party, including, without limitation, the obligations of
the Buyer under the System Power Sales Agreement dated June 10,
1994, between the Buyer and Northeast Utilities Service Company,
and the various interconnection agreements between the Buyer and
certain of the Seller's Affiliates.
(c) Each Party, on behalf of itself and its successors and
assigns, hereby waives any and all rights and benefits that each
now has, or in the future may have conferred upon it by virtue of
any statute or common law principle which provides that a general
release does not extend to claims or other obligations which an
entity does not know or suspect to exist in its favor at the time
of such release, which if known, would have materially affected
such person's settlement with the other entity. In furtherance
of the foregoing, each Party hereby expressly acknowledges that
(i) factual matters now unknown to it or its Affiliates may have
given or may hereafter give rise to claims or other obligations
that are presently unknown, unanticipated and unsuspected with
respect to the matters released under Section 5.15(b); (ii)
Section 5.15(b) and the other terms and conditions hereof have
been negotiated and agreed upon in light of that awareness; and
(iii) in addition to the Purchase Price and covenants and terms
of this Agreement, the Parties have provided such general release
and continuing waiver of future claims in reliance on, and in
consideration of, the mutual undertakings by the other Parties
with respect to such release, waiver and covenant not to xxx set
forth in this Section 5.15. Nothing contained herein shall be
construed to release any claims which may arise from the breach
of this Agreement; provided that the existence and/or prosecution
of, or any Liability resulting from, any such claims shall not
invalidate or otherwise affect the settlement, release and other
terms and conditions of this Section 5.15.
(d) No Party shall bring any action or proceeding
attempting to enforce any of the claims hereby released,
including, without limitation, the Pending Litigation, and that
in the event that one of them should do so, such Party shall be
liable to the other Parties for any loss, costs, damages, and/or
expenses (including, without limitation, reasonable attorneys'
fees) suffered or incurred in the defense of such a proceeding or
in the enforcement or attempted enforcement of this covenant.
The terms and provisions of this Section 5.15 shall survive the
Closing.
(e) Each Party acknowledges: (i) that the settlement
contemplated in this Section 5.15 does not constitute an
admission that any of the claims against any Party had any merit
whatsoever, and (ii) that the Parties are entering into such
settlement and release solely on the basis of pragmatic
considerations, to save the expense and risk of further lengthy
and costly litigation.
(f) Upon request of any other Party, each Party will
execute, deliver and/or file such further pleadings and other
documents, and take such actions as may reasonably be required to
effectuate any of the terms contained in this Section 5.15.
(g) Each Party acknowledges and agrees that the other
Parties would be damaged irreparably in the event any of the
provisions of this Section 5.15 are not performed in accordance
with their specific terms or otherwise are breached.
Accordingly, each Party agrees that the other Parties shall be
entitled to an injunction or injunctions to prevent breaches of
the provisions of this Section 5.15 and to enforce specifically
this Section 5.15 in addition to any other remedy to which it may
be entitled, at law or in equity.
(h) The terms, conditions and transactions contemplated
under this Agreement, and the discussions related hereto,
constitute settlement discussions. If this Agreement has been
terminated before the Closing, this Agreement (including, without
limitation, the settlement and release contemplated in this
Section 5.15) shall not be used for any purpose whatsoever in
litigation or similar proceedings, including, without limitation,
any regulatory proceedings.
5.16 Collection of Accounts Receivable. In connection with
the Closing, the Seller shall deliver or caused to be delivered
to the Buyer a list of then outstanding accounts receivable due
from Customers as well as any other payments or credits due to
Seller that may be paid or made available to Buyer (e.g., through
ISO New England). Following the Closing, the Buyer shall use
Commercially Reasonable Efforts (which do not require Buyer to
commence legal proceedings) to collect all accounts receivable
due under the Contracts with Customers and on account of such
other payments or credits (including, without limitation, amounts
allocated to the Seller in accordance with Section 2.8); provided
that (a) if the Seller receives any payments on account of
amounts retained by or otherwise due to the Seller, the Seller
may retain such payments and advise the Buyer thereof; and (b) if
the Seller receives any payments that Buyer is entitled to retain
under this Section 5.16, the Seller shall promptly forward such
payments (or the part thereof relating to the period after the
Closing) to the Buyer in the form received (or as otherwise
mutually agreed by the Seller and the Buyer). For each payment
or credit received by Buyer from the obligor, the Buyer shall pay
to, or as directed by, the Seller, on a first priority basis,
within fifteen (15) days after receipt, all amounts so received
by the Buyer, until the Seller has received an aggregate amount
equal to the outstanding balance due from such obligor (as shown
on the list furnished by the Seller in accordance with this
Section 5.16), plus all amounts allocated to the Seller under
Section 2.8(c) for periods through the Closing but which are not
billed until after the Closing; provided that if a dispute arises
with respect to any invoice related to pre-Closing period, the
Buyer shall not be required to make any payment on account of
such disputed invoice, and the Seller shall be entitled to assume
the collection of such invoice or to otherwise resolve such
dispute. Payments under this Section 5.16 shall be made in cash
by wire transfer in a manner consistent with the wire transfer
instructions for the payment of the Closing Purchase Price.
6. Conditions to Obligation to Close.
6.1. Conditions to Obligation of the Buyer to Close. The
obligation of the Buyer to consummate the transactions to be
performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(a) Representations and Warranties. The
representations and warranties set forth in Section 3 above
shall be true and correct in all material respects at and as
of the Closing Date;
(b) Performance by the Seller. The Seller shall have
performed and complied in all material respects with all of
its covenants, agreements and obligations hereunder through
the Closing;
(c) Buyer's Regulatory Approvals. The Buyer shall
have received the Buyer's Regulatory Approvals specified in
Schedule 6.1(c), with such terms and conditions as may be
included therein except for such terms and conditions that,
either singly or in the aggregate, are reasonably likely to
have a Material Adverse Effect;
(d) Seller's Regulatory Approvals. The Seller shall
have received the Seller's Regulatory Approvals specified in
Schedule 6.2(c), with such terms and conditions as may be
included therein except for such terms and conditions that,
either singly or in the aggregate, are reasonably likely to
have a Material Adverse Effect;
(e) Absence of Litigation. There shall not be any
injunction, judgment, order, decree or ruling in effect or
pending which would prevent or inhibit consummation of the
transactions contemplated by this Agreement or the Related
Agreements;
(f) Financing . Buyer shall have obtained tax exempt
municipal bond financing (or alternate Financing reasonably
acceptable to the Buyer) to pay the Closing Purchase Price
on commercially reasonable terms, as more particularly
described on Schedule 6.1(f);
(g) No Material Adverse Effect. There shall not be
any Material Adverse Effect; and
(h) Deliveries. The Seller shall have complied in all
material respects with the delivery requirements of Section
2.10.
(i) Title Insurance. The issuer of the Title
Commitment shall have made available to Buyer title
insurance policies in an amount equal to the fair market
value of the Real Property as determined under Section 2.7
insuring title to the Real Property as of the Closing Date
substantially in the form of the Title Commitments, but (i)
subject to any survey exception; (ii) with such changes
therefrom as shall not in the aggregate have a Material
Adverse Effect; and (iii) with the removal of the exceptions
for parties in possession (other than those disclosed in
Schedule 2.1(a)(ii), if any) and unfiled mechanics' and
materialmen's liens (other than those that result from
capital expenditures undertaken in accordance with Section
5.3.2, arise from any act of Buyer, or arise under Good
Industry Practice and are not material to the operation or
use of the Acquired Assets in the business of Seller as
conducted on the Effective Date); provided, that Buyer shall
be under no obligation to pay any amounts to the issuer of
such title insurance policies in order to cause an exception
not contained in the Title Commitments to be removed from
such title insurance policies if the amount of such payment
would constitute a Material Adverse Effect.
The Buyer may waive any condition specified in this Section 6.1
if it executes a writing so stating at or prior to the Closing
and such waiver shall not be considered a waiver of any other
provision in this Agreement unless the writing specifically so
states.
6.2. Conditions to Obligation of the Seller and HP&E to
Close. The obligation of the Seller and HP&E to consummate the
transactions to be performed by each in connection with the
Closing is subject to satisfaction of the following conditions:
(a) Representations and Warranties. The
representations and warranties set forth in Section 4 above
shall be true and correct in all material respects at and as
of the Closing Date;
(b) Performance by Buyer. The Buyer shall have
performed and complied in all material respects with all of
its covenants, agreements and obligations hereunder through
the Closing;
(c) Seller's Regulatory Approvals. The Seller shall
have received the Seller's Regulatory Approvals specified in
Schedule 6.2.(c), in each case without terms and conditions
that are reasonably likely to have a material adverse effect
on the Seller and in the case of the approvals to be
obtained from FERC or MADEP, with such terms and conditions
as are acceptable to the Seller in its sole and absolute
discretion;
(d) Buyer's Regulatory Approvals. The Buyer shall
have received the Buyer's Regulatory Approvals specified in
Schedule 6.1(c), in each case without terms and conditions
that are reasonably likely to have a material adverse effect
on the Seller;
(e) Absence of Litigation. There shall not be any
injunction, judgment, order, decree or ruling in effect or
pending which would prevent or inhibit consummation of the
transactions contemplated by this Agreement or the Related
Agreements. Without limitation of the foregoing, the
Closing shall not occur until an award has been issued and
implemented in the arbitration proceeding referenced in
Section 10.3 (or the parties thereto have otherwise resolved
such dispute);
(f) Bond Consents. The Seller shall have received all
necessary consents and/or authorizations (including, without
limitation, any appropriate amendments to the underlying
financing documents) from the lenders, the trustee, the
letter of credit issuers and the bondholders with respect to
the Seller's outstanding pollution control bonds, in each
case without (i) loss of or other impairment of the tax
exempt status of such debt, (ii) requiring the prepayment or
other modification of the amortization schedule for such
debt, and (iii) any other terms and conditions that are
reasonably likely to have a material adverse effect on the
Seller ;
(g) Deliveries. The Buyer shall have complied in all
material respects with the delivery requirements of Section
2.11; and
(h) NEPOOL. The Buyer shall be a member in good
standing of NEPOOL.
The Seller may waive any condition specified in this Section 6.2
if it executes a writing so stating at or prior to the Closing
and such waiver shall not be considered a waiver of any other
provision in this Agreement unless the writing specifically so
states.
7. Confidentiality. Any Confidential Information (as defined
in the Confidentiality Agreement), including, without limitation,
trade secrets, technical information and operational data,
furnished to a Party in furtherance of, or in connection with,
this Agreement shall be subject to the terms and provisions of
the Confidentiality Agreement, which shall survive unchanged and
in full force and effect notwithstanding the execution and
delivery of this Agreement; provided, however, that any Party may
release a copy of this Agreement to any Person upon written
notice to the other Parties given a reasonable period (of not
less than three (3) Business Days) to the other Parties, in which
case the Parties shall reasonably coordinate such release to
ensure that all Parties simultaneously release copies of this
Agreement to appropriate Persons.
8. Taxes.
(a) All transfer and sales Taxes incurred in
connection with this Agreement and the transactions
contemplated hereby shall be borne by the Seller, including,
Massachusetts state sales tax, and the Seller, at its own
expense, will file, to the extent required by applicable
Laws, all necessary Tax Returns and other documentation with
respect to all such transfer or sales Taxes, and, if
required by applicable Laws, the Buyer will join in the
execution of any such Tax Returns or other documentation.
(b) With respect to Taxes to be prorated in accordance
with Section 2.8 of this Agreement only, the Buyer shall
prepare and timely file all Tax Returns required to be filed
after the Closing with respect to the Acquired Assets, if
any, and shall duly and timely pay all such Taxes shown to
be due on such Tax Returns. The Buyer's preparation of any
such Tax Returns shall be subject to the Seller's approval,
which approval shall not be unreasonably withheld. No later
than twenty-five (25) Business Days prior to the due date of
any such Tax Return, the Buyer shall make such Tax Return
available for the Seller's review and approval. The Seller
shall respond no later than ten (10) Business Days prior to
the due date for filing such Tax Return. With respect to
such Tax Return, the Seller shall pay to the Buyer its
appropriate share of the amount shown as due on the Tax
Returns determined in accordance with Section 2.8 of this
Agreement.
(c) Each of the Buyer and the Seller shall provide the
other with such assistance as may reasonably be requested by
the other Party in connection with the preparation of any
Tax Return, any audit or other examination by any taxing
authority, or any judicial or administrative proceedings
relating to liability for Taxes, and each will retain and
provide the requesting Party with any records or information
which may be relevant to such Tax Return, audit or
examination, proceedings or determination. Any information
obtained pursuant to this Section 8 or pursuant to any other
Section hereof providing for the sharing of information or
review of any Tax Return or other schedule relating to Taxes
shall be deemed to be and shall be subject to the
Confidentiality Agreement.
9. Survival of Representations and Warranties; Effect of
Closing and Indemnification.
9.1. Survival of Representations and Warranties; Survival of
Covenants and Agreements. The representations and warranties of
the Seller set forth in Sections 3.1, 3.2, 3.3, 3.4 and 3.16, and
the representations and warranties of the Buyer set forth in
Sections 4.1, 4.2, 4.3 and 4.4, shall survive the Closing for a
period of twelve months; all other representations and warranties
of the Parties contained in this Agreement shall terminate at the
Closing and all representations and warranties of the Parties
contained in this Agreement shall terminate upon a termination of
this Agreement pursuant to Section 10.1. The covenants of the
Parties contained in this Agreement, other than those which by
their terms survive the Closing and/or termination of this
Agreement, shall terminate at the Closing or the termination of
this Agreement pursuant to Section 10.1.
9.2. Effect of Closing. Upon the Closing, any condition to
the obligations of either Party hereunder that has not been
satisfied, or any representation, warranty or covenant that has
been breached or left unsatisfied by either Party will be deemed
waived by the Parties, and each Party will be deemed to fully
release and forever discharge the other Party on account of any
and all claims, demands or charges, known or unknown, with
respect to the same. Nothing in this Section 9.2 shall be deemed
to affect any provision herein which expressly survives the
Closing or pertains to matters which will occur after the
Closing.
9.3. Indemnity by the Seller. The Seller and HP&E, as the
case may be based on the Party responsible for the underlying
Liability, shall indemnify, defend and hold harmless the Buyer
against and in respect of all Liabilities, obligations,
judgments, Liens, injunctions, charges, orders, decrees, rulings,
damages, assessments, Taxes, losses, fines, penalties, damages,
expenses, fees, costs, and amounts paid in settlement (including
reasonable consultants', attorneys' and expert witness fees and
disbursements in connection with investigating, defending or
settling any action or threatened action), arising out of any
claim, complaint, demand, cause of action, audit, investigation,
hearing, action, suit or other proceeding asserted or initiated
or otherwise existing in respect of any matter (collectively, the
"Losses"), that results from:
(a) any Liability of the Seller or HP&E that becomes a
Liability of the Buyer under any bulk transfer law of any
jurisdiction;
(b) any Excluded Liability; provided that the
foregoing indemnification shall not extend to, or otherwise
impose any Liability on the Seller and/or HP&E regarding,
the Excluded Environmental Liability, the Reserved
Litigation and/or any other matters expressly excluded from
the scope of the settlement and release set forth in Section
5.15 hereof, it being understood that the Parties have
reserved their respective rights with respect to such
Liabilities, all of which shall not be affected hereby nor
subject to any claim or right of indemnification hereunder;
(c) any breach by the Seller or HP&E of any
representation or warranty which by its terms survives the
Closing or the termination of this Agreement under Section
10.1 hereof, provided that the Losses associated therewith
have a Buyer Material Adverse Effect; and
(d) any breach by the Seller or HP&E of any of its
covenants contained in Section 5 hereof.
9.4. Indemnity by Buyer. The Buyer hereby agrees to
indemnify, defend and hold harmless the Seller, HP&E and their
respective Affiliates against and in respect of all Losses that
result from:
(a) any Third Party Claim against the Seller, HP&E or
any such Affiliate based on or relating to the Buyer's
ownership, operation or use of the Acquired Assets on or
after the Closing Date;
(b) the Assumed Liabilities;
(c) the Financing procured by the Buyer to acquire all
or any portion of the Acquired Assets;
(d) any breach by the Buyer of any of its covenants
contained in Section 5 hereof; or
(e) the failure of the Buyer to close the transactions
contemplated hereby within the time provided in Section 2.9
hereof, other than because of a failure of the Seller to
perform its obligations under this Agreement.
9.5. Exclusive Remedy. From and after the Closing, the
remedies set forth in this Section 9 shall constitute the sole
and exclusive remedies for any and all claims, damages,
complaints, demands, causes of action, investigations, hearings,
actions, suits or other proceedings relating to this Agreement
and are in lieu of any and all other rights and remedies which
the Seller or the Buyer may have under this Agreement or
otherwise for monetary relief with respect to any breach or
failure to perform or with respect to the Assumed or Excluded
Liabilities. Each Party waives any provision of law to the
extent that it would limit or restrict the agreements contained
in this Section 9. Nothing herein shall prevent either Party
from terminating this Agreement in accordance with Section 10.
9.6. Matters Involving Third Parties.
(a) If any Third Party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third
Party Claim") which may give rise to a claim for
indemnification against any other Party (the "Indemnifying
Party") under this Section 9, then the Indemnified Party
shall promptly notify the Indemnifying Party thereof in
writing; provided, however, that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder
unless (and then solely to the extent) the Indemnifying
Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim
with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as (i) the Indemnifying Party
notifies the Indemnified Party in writing within fifteen
days after the Indemnified Party has given notice of the
Third Party Claim that the Indemnifying Party will indemnify
the Indemnified Party from and against the entirety of any
Losses the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by
the Third Party Claim, (ii) the Indemnifying Party provides
the Indemnified Party with evidence acceptable to the
Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder, (iii)
the Third Party Claim involves only money damages and does
not seek an injunction or other equitable relief, settlement
of, or an adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified
Party, likely to establish a precedential custom or practice
adverse to the continuing business interests of the
Indemnified Party, and (iv) the Indemnifying Party conducts
the defense of the Third Party Claim actively and
diligently.
(c) So long as the Indemnifying Party is conducting
the defense of the Third Party Claim in accordance with
Section 9.5(b) above, (i) the Indemnified Party may retain
separate co-counsel at its sole cost and expense and
participate in the defense of the Third Party Claim, (ii)
the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the
Indemnifying Party (which consent shall not unreasonably be
withheld), and (iii) the Indemnifying Party will not consent
to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim unless written
agreement is obtained releasing the Indemnified Party from
all liability thereunder.
(d) In the event any of the conditions in Section
9.5(b) above is or becomes unsatisfied, however, (i) the
Indemnified Party may defend against, and consent to the
entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner it may deem
appropriate (and the Indemnified Party need not consult
with, or obtain any consent from, any Indemnifying Party in
connection therewith), (ii) the Indemnifying Party will
reimburse the Indemnified Party promptly and periodically
for the costs of defending against the Third Party Claim
(including attorneys' fees and expenses, notwithstanding
Section 9.3), and (iii) the Indemnifying Party will remain
responsible for any Losses the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature
of, or caused by the Third Party Claim to the fullest extent
provided in this Section 9.
9.7. Net of Taxes and Insurance. Any calculation of a Loss
under this Section 9 shall, in each case, give full effect to (i)
any and all income Tax benefits to the Indemnified Party in
respect of the Loss, and (ii) any and all insurance proceeds
received or payable to the Indemnified Party in respect of the
Loss.
9.8. No Recourse. To the extent the transfer, conveyance,
assignment and delivery of the Acquired Assets to the Buyer as
provided in this Agreement is accomplished by deeds, assignments,
easements, leases, licenses, bills of sale, or other instruments
of transfer and conveyance, whether executed at the Closing or
thereafter, these instruments are made without representation or
warranty by, or recourse against, the Seller or HP&E, except as
expressly provided in this Agreement or in any such instrument.
10. Termination.
10.1. Termination of Agreement. The Parties may terminate
this Agreement as provided below:
(a) the Parties may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(b) the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the
Closing if any of the following has occurred: (i) the
Seller has breached any representation, warranty or covenant
contained in this Agreement in any material respect, the
Buyer has notified the Seller of the breach, and the breach
has continued without cure for a period of sixty (60) days
after the notice of breach; (ii) the Closing shall not have
occurred on or before the Settlement Deadline by reason of
the failure of any condition precedent under Section 6
hereof (unless the failure results primarily from the Buyer
itself breaching any representation, warranty, or covenant
contained in this Agreement); (iii) one or more courts of
competent jurisdiction shall have issued an order, judgment
or decree permanently restraining, enjoining or otherwise
prohibiting the Closing, which order, judgment or decree
shall not have been terminated, lifted, vacated or otherwise
rendered irrelevant within ninety (90) days of the issuance
thereof; (iv) any statute, rule or regulation shall have
been enacted by any Governmental Authority (other than an
Affiliate of the Buyer) which, directly or indirectly,
prohibits the consummation of the transactions contemplated
hereby; (v) in accordance with Section 5.11 hereof; (vi)
[reserved]; (vii) (W) the Seller has within the then
previous fifteen (15) days given the Buyer any notice
pursuant to Section 5.5(a) above and the matter that is the
subject of such notice, if in existence on the Effective
Date or the Closing Date, would cause the representations
and warranties of the Seller or HP&E set forth in Section 3
or 3A hereof not to be true and correct, (X) such matter
would have a Material Adverse Effect, (Y) the Buyer has
notified the Seller of its intent to terminate pursuant to
this Section 10.1(b)(vi), and (Z) the matter that is the
subject of such notice continues to exist for a period of
sixty (60) consecutive days after such notice by the Buyer;
or (viii) in accordance with Section 11.19 hereof;
(c) the Seller or HP&E may terminate this Agreement by
giving written notice to the Buyer at any time prior to the
Closing if any of the following has occurred: (i) the Buyer
has breached any representation, warranty, or covenant
contained in this Agreement in any material respect, the
Seller or HP&E has notified the Buyer of the breach, and the
breach has continued without cure for a period of sixty (60)
days after the notice of breach; (ii) the Closing shall not
have occurred on or before the Settlement Deadline by
reason of the failure of any condition precedent under
Section 6 hereof (unless the failure results primarily from
the Seller or HP&E breaching any representation, warranty,
or covenant contained in this Agreement), provided that if,
during the ten (10) days before the Settlement Deadline, the
Buyer has provided the Seller with reasonably acceptable
assurances from the Buyer's financial adviser or the
underwriter that the Financing is expected to close within
thirty (30) days after the expiration of the Settlement
Deadline, and the Buyer waives its termination right under
Section 10.1(b)(ii) during such extended period, then the
Seller shall not exercise its right to terminate under this
Section 10.1(c)(ii) until after the expiration of such
thirty day period; (iii) one or more courts of competent
jurisdiction shall have issued an order, judgment or decree
permanently restraining, enjoining or otherwise prohibiting
the Closing, which order, judgment or decree shall not have
been terminated, lifted, vacated or otherwise rendered
irrelevant within ninety (90) days of the issuance thereof;
(iv) any statute, rule or regulation shall have been enacted
by any Governmental Authority which, directly or indirectly,
prohibits the consummation of the transactions contemplated
hereby; (v) in accordance with Section 5.11 hereof; (vi)
[reserved]; (vii) (W) the Buyer has within the then previous
fifteen (15) days given the Seller any notice pursuant to
Section 5.5(a) above and the matter that is the subject of
such notice, if in existence on the Effective Date or the
Closing Date, would cause the representations and warranties
of the Buyer set forth in Section 4 hereof not to be true
and correct, (X) such matter would have a Material Adverse
Effect, (Y) the Seller has notified the Buyer of its intent
to terminate pursuant to this Section 10.1(c)(vi), and (Z)
the matter that is the subject of such notice continues to
exist for a period of sixty (60) consecutive days after such
notice by the Seller; or (viii) in accordance with Section
11.19 hereof;
(d) The Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the
Closing if any of the following has occurred:
(i) legislation shall be enacted by The
Commonwealth of Massachusetts or the United States or a
decision by a court of the United States or the United
States Tax Court shall be rendered, or a ruling or
regulation (final, temporary or proposed) shall be made
by or on behalf of the Treasury Department of the
United States or the Internal Revenue Service, or a
release or official statement shall be issued by the
President, the Treasury Department or the Internal
Revenue Service of the United States, which makes the
revenues or other income of the general character
expected to be derived by the Buyer from the Acquired
Assets, or the interest received on bonds of the
general character of the Financing, subject to federal
income or Massachusetts personal income taxation or
which would have the effect of changing directly or
indirectly the federal income or Massachusetts personal
income tax consequences of interest on bonds of the
general character of the Financing in the hands of the
owners thereof, which in the opinion of the Buyer's
financial adviser materially affects the market price
of the Buyer's bonds adversely; or
(ii) (1) the United States shall have become
engaged in hostilities which have resulted in a
declaration of war or a national emergency, or (2) in
the reasonable opinion of the Buyer's financial adviser
there shall have occurred any other outbreak of
hostilities, local, national or international, or an
escalation thereof, the effect of which on the
financial markets of the United States is such as would
affect materially and adversely the ability of the
Buyer to market its bonds in the Financing; or
(iii) there shall have occurred a general
suspension of trading on the New York Stock Exchange or
a general banking moratorium shall have been declared
by the United States, New York State or Massachusetts
authorities; or
(iv) any action by the Securities and Exchange
Commission or a court which would require registration
of the Buyer's bonds issued in the Financing under the
Securities Act of 1933, as amended, in connection with
the public offering thereof, or qualification of the
documents for the Financing under the Trust Indenture
Act of 1939, as amended; and
(e) the appropriate Party may terminate this Agreement
in accordance with the terms and conditions of Sections 10.3
through 10.5.
10.2. Effect of Termination. Subject to the termination
fee due under Section 10.6, if either Party terminates this
Agreement pursuant to Section 10.1 above, all rights and
obligations of the Parties hereunder shall terminate without any
Liability of either Party to the other Party (except for any
Liability of any Party then in breach and except as otherwise
expressly provided herein).
10.3. Termination for Adverse Labor Determination.
(a) The Parties acknowledge that the Union has filed a
lawsuit in the United States District Court and a grievance
against Seller with respect to the transaction contemplated
hereunder, and as a result of actions taken by the Union, Seller
and the Union have agreed to conduct an arbitration proceeding to
determine the validity of the Union's claims. Seller shall keep
Buyer reasonably apprised of the conduct of such proceedings, and
Seller shall furnish a copy of any draft or final arbitration
award or court order to Buyer promptly after Seller's receipt
thereof. In the event that an award in such arbitration
proceeding or order of the court requires the Seller to obligate
the Buyer to hire employees of the Seller as part of the sale of
the Acquired Assets, then Buyer may terminate this Agreement
without any Liability of either Party to the other Party (except
for any Liability of any Party then in breach and except as
otherwise expressly provided herein) by written notice given
within twenty (20) days after Buyer's receipt of such arbitration
award or court order.
(b) If the arbitration award or court order referenced in
Section 10.3(a) imposes any conditions on the transactions
contemplated hereunder (except for the requirement to hire
employees as contemplated pursuant to Section 10.3(a)), and the
adverse financial consequences of such conditions, in the
aggregate, as to any Party exceed $500,000.00, then the Party
suffering such adverse consequences may terminate this Agreement
without any Liability of either Party to the other Party (except
for any Liability of any Party then in breach and except as
otherwise expressly provided herein) by written notice given
within twenty (20) days after such Party's receipt of such award.
10.4. Termination by Buyer. The Buyer may terminate this
Agreement, in its discretion, but subject to the termination fee
due from the Buyer as a result hereof under Section 10.6, at any
time on or before the applicable date set forth below relating to
a condition, due to the failure to satisfy any the following
conditions on or before such date:
(a) the receipt of a favorable vote of the Holyoke Gas &
Electric Commission with respect to this Agreement on or before
June 15, 2001; or
(b) the receipt of a favorable vote from the Holyoke City
Council with respect to the Financing on or before September 1,
2001.
The Buyer shall (i) keep the Seller reasonably apprised of
the status of its efforts to satisfy the foregoing conditions;
and (ii) promptly notify the Seller of the satisfaction of each
of such conditions. If the Buyer does not terminate this
Agreement in accordance with this Section 10.4 due to the failure
to satisfy any of the foregoing conditions, then this Section
10.4 shall be automatically of no further force and effect, in
which case the Buyer shall have no right to terminate this
Agreement due to any of such conditions.
10.5. Termination by Seller. The Seller may terminate this
Agreement, in its discretion, but subject to the termination fee
due from the Seller as a result hereof under Section 10.6, at any
time on or before the applicable date set forth below relating to
a condition, due to the failure to satisfy any the following
conditions on or before such date:
(a) the receipt of approval of this Agreement and the
transactions contemplated hereunder by the respective
Board of Directors of Seller and HP&E on or before June
15, 2001; or
(b) the receipt of approval of this Agreement and the
transactions contemplated hereunder by the sole
shareholder of the Seller on or before August 15, 2001.
The Seller shall (i) keep the Buyer reasonably apprised of
the status of its efforts to satisfy the condition set forth in
Section 10.5(a); and (ii) promptly notify the Buyer of the
satisfaction of such condition. If the Seller does not terminate
this Agreement in accordance with this Section 10.5 due to the
failure to satisfy any on the foregoing conditions, then this
Section 10.5 shall be automatically of no further force and
effect, in which case the Seller shall have no right to terminate
this Agreement due to any of such conditions.
10.6 Termination Fee.
(a) A termination fee determined in accordance with Section
10.6(b) shall be paid, as liquidated damages, by the following
Party under the following circumstances:
(i) by the Seller, if the Buyer terminates this Agreement
pursuant to Section 10.1(b)(i) (as a result of a
uncured breach by Seller), Section 10.1(b)(vii)
(regarding representations and warranties), or Section
10.1(b)(viii)(regarding prohibited recordation);
(ii) by the Buyer, if the Buyer terminates this Agreement
pursuant to Section 10.1(b)(ii) (relating to the
Settlement Deadline);
(iii) by the Buyer, if the Seller terminates this Agreement
pursuant to Section 10.1(c)(i) (as a result of a
uncured breach by Buyer),Section 10.1(c)(vii)
(regarding representations and warranties), or Section
10.1(c)(viii) (regarding prohibited recordation);
(iv) by the Buyer, if the Seller terminates this Agreement
pursuant Section 10.1(c)(ii) (relating to the
Settlement Deadline); provided that Buyer shall not pay
a termination fee if Seller has exercised such
termination right due to the failure to satisfy the
conditions set forth in Section 6.2(c) (regarding
Seller's Regulatory Approvals), or Section 6.2(f)
(regarding bond consents);
(v) by the Buyer, if the Buyer terminates this Agreement
pursuant to Section 10.1(d) (relating to the
Financing); provided that if the Buyer exercises its
termination right pursuant to Section 10.1(d), and as
of the date of such termination notice, the Prime Rate
then in effect exceeds the Prime Rate in effect on the
Effective Date by more than two hundred and twenty-five
(225) basis points, then the Buyer shall not have any
obligation to pay a termination fee under this Section
10.6 as a result of the exercise of such termination
right;
(vi) by the Seller, if the Seller terminates this Agreement
pursuant to Section 10.5 (relating to corporate
approvals); or
(vii) by the Buyer, if the Buyer terminates this Agreement
pursuant to Section 10.4 (relating to necessary
governing body authorizations).
(b) The termination fee shall be equal to the following
amounts, in each case as determined by the effective date of
termination:
(i) if termination is effective at any time within and
including sixty (60) days after the Effective Date, the
termination fee shall be equal to Two Hundred Fifty
Thousand Dollars ($250,000.00);
(ii) if termination is effective at any time after sixty
(60) days after the Effective Date, but within and
including ninety (90) days after the Effective Date,
the termination fee shall be equal to Five Hundred
Thousand Dollars ($500,000.00);
(iii) if termination is effective at any time after ninety
(90) days after the Effective Date, but within and
including one hundred twenty (120) days after the
Effective Date, the termination fee shall be equal to
Seven Hundred Fifty Thousand Dollars ($750,000.00); or
(iv) if termination is effective at any time after one
hundred twenty (120) days after the Effective Date, the
termination fee shall be equal to One Million Dollars
($1,000,000.00).
(c) Notwithstanding anything to the contrary in this
Section 10.6, there shall not be any termination fee due from or
to any Party as result of the termination of this Agreement under
the following circumstances:
(i) pursuant to Section 10.1 due to the occurrence of a
casualty, irrespective of whether the Buyer (Section
10.1(b)(v)) or the Seller (Section 10.1(c)(v))
exercises the right of termination;
(ii) pursuant to Section 10.1 due to action of a
Governmental Authority, irrespective of whether the
Buyer (Section 10.1(b) (iv)) or the Seller (Section
10.1(c)(iv)) exercises the right of termination;
(iii) pursuant to Section 10.1 due to an order judgment or
decree permanently restraining, enjoining or otherwise
prohibiting the Closing, irrespective of whether the
Buyer (Section 10.1(b)(iii)) or the Seller (Section
10.1(c)(iii)) exercises the right of termination; or
(iv) the failure of FERC to issue an order approving the
transfer of the FERC License to the Buyer, as
contemplated hereunder.
(d) Each Party acknowledges that the actual losses of the
other Parties would be difficult to determine with specificity
and the payment set forth in Section 10.6(b) is a fair and
reasonable estimation of such losses. Each Party hereby waives
any right it may otherwise have to dispute the fairness or
accuracy of the termination fee set forth in this Section 10.6.
(e) The termination fee due under this Section 10.6 shall
be paid by wire transfer within two (2) days after the effective
date of such termination. If Party required to make such payment
fails to timely make such payment, such defaulting Party shall
pay all costs and expenses (including, without limitation,
reasonable attorneys fees) incurred by the other Party in the
enforcement or attempted enforcement of such obligation, together
with interest on such fee at a fixed rate equal to the Prime Rate
in effect on the date that such fee was required to be paid, plus
three percent (3%), through the date of receipt of payment in
full.
11. Miscellaneous.
11.1. Press Releases and Public Announcements. No Party
shall issue any press release or make any public announcement
relating to the subject matter of this Agreement prior to the
Closing without the prior approval of the other Party; provided,
however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded
securities (in which case the disclosing Party will provide the
other Party with the opportunity to review in advance the
disclosure).
11.2. No Third Party Beneficiaries. This Agreement
shall not confer any rights or remedies upon any Third Party,
except for those expressly conferred herein to Affiliates.
11.3. No Joint Venture. Nothing in this Agreement
creates or is intended to create an association, trust,
partnership, joint venture or other entity or similar legal
relationship between the Parties, or impose a trust, partnership
or fiduciary duty, obligation, or liability on or with respect to
either Party. Except as provided in Section 5.6 hereof, neither
Party is or shall act as or be the agent or representative of the
other Party.
11.4. Entire Agreement. This Agreement (including the
Exhibits and Schedules hereto), together with the Related
Agreements and any other documents referred to herein, constitute
the entire agreement between the Parties and supersede any prior
understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they relate in any way to
the subject matter hereof (including, without limitation, the
MOU), provided, however, that the Confidentiality Agreement shall
remain in full force and effect without regard to any provision
of this Agreement. All conflicts or inconsistencies between the
terms hereof and the terms of any of the Related Agreements, if
any, shall be resolved in favor of this Agreement.
11.5. Succession and Assignment.
(a) This Agreement shall be binding upon and inure to the
benefit of the Parties named herein and their respective
successors and permitted assigns.
(b) No Party may assign either this Agreement or the
Related Agreements or any of its rights, interests, or
obligations hereunder or thereunder without the prior written
approval of the other Party; provided, however, that prior to the
Closing, the Buyer may assign its right to purchase, individually
or in the aggregate, any of the Real Property described on
Schedule 11.5 to the City, any Affiliate of the City, or the
Commonwealth of Massachusetts or any of its subdivisions or
agencies, provided that the Buyer shall deliver to the Seller the
following documents before such assignment: (i) a written notice
of such assignment(s) at least fifteen (15) Business Days prior
to the then anticipated Closing Date; (ii) an assumption by the
assignee in form reasonably satisfactory to the Seller of all
obligations of the Buyer under this Agreement, all Related
Agreements and all other agreements and commitments contemplated
hereby or thereby or in connection with the Closing entered into
for the benefit of the Seller relating to such real property
(including, without limitation, all Environmental Liabilities);
(ii) a copy, certified by the appropriate official, of
resolutions authorizing such assumption and the acquisition of
such real property by the assignee; (iii) a certificate of the
appropriate official identifying by name and title and bearing
the signatures of the officials of the assignee authorized to
execute and deliver such assumption; and (iv) an opinion from
reputable counsel to the assignee, dated as of the date of such
assignment (and, if different, updated as of the Closing Date)
and reasonably satisfactory to the Seller and its counsel,
substantially to the effect that the assumption has been duly
authorized, is a valid and binding obligation of the assignee,
and will not affect any of the Buyer's Regulatory Approvals, the
Seller's Regulatory Approval and/or any of the Permits. That
portion of the Initial Purchase Price allocable to any such
assigned property shall be determined in accordance with Schedule
11.5 (and shall be subject to the adjustments contemplated
herein), and the satisfaction of all conditions precedent to the
Buyer' obligations to the Closing shall be deemed to satisfy any
and all obligations of the assignee to the acquisition of such
property. Buyer shall be responsible for all reasonable expenses
incurred by Seller in connection with any such assignment.
(c) Seller shall keep Buyer reasonably apprised of any
intent to transfer all or any portion of the Acquired Assets to
any Affiliated Transferor(s), including the proposed structure
thereof. Buyer shall promptly notify Seller of any concerns
regarding such transaction, including, without limitation, any
aspects of the proposed transaction that would cause any
condition to close set forth in Section 6 not to be satisfied, or
that would, in Buyer's reasonable opinion, materially and
adversely affect the terms and conditions under which Buyer would
have acquired such Acquired Assets from Seller in accordance with
this Agreement. The Parties shall reasonably coordinate and
cooperate in good faith to address any such concerns raised by
Buyer. In any event, Seller shall provide Buyer with written
notice of any proposed transfer of all or any portion of the
Acquired Assets to an Affiliated Transferor(s) at least ten (10)
Business Days prior to the then anticipated Closing Date. Buyer
shall notify Seller within five (5) Business Days after receipt
of such notice whether Buyer objects to such transfer, and any
objection shall be reasonable and based on unresolved concerns
previously expressed by Buyer. If Buyer so objects, the Parties
shall negotiate in good faith to extend the Closing Date pending
the satisfaction of such objection.
(d) Any assignment in violation of this Section 11.5 shall
be null and void.
11.6. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original but all of which together will constitute one and the
same instrument.
11.7. Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect
in any way the meaning or interpretation of this Agreement.
11.8. Notices. All notices, requests, demands, claims
and other communications hereunder will be in writing. Any
notice, request, demand, claim or other communication hereunder
shall be deemed duly given (i) upon confirmation of facsimile,
(ii) one Business Day following the date sent when sent by
overnight delivery and (iii) five Business Days following the
date mailed when mailed by registered or certified mail return
receipt requested and postage prepaid at the following address:
If to the Seller:
Holyoke Water Power Company
c/o Select Energy, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: 000.000.0000
Attn: President
Copy to:
Vice President, Secretary and General Counsel
Northeast Utilities
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: 000.000.0000
If to the Buyer:
City of Holyoke Gas & Electric Department
00 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000- 0000
Fax: 000.000.0000
Attn: Manager
Copy to:
Xxxx X. Xxxxxxxx, Esq.
Lyon, Xxxxxxxx & Xxxxxxxxxxx, LLP
00 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Fax: 000.000.0000
Either Party may send any notice, request, demand, claim, or
other communication hereunder to the intended recipient at the
address set forth above using any other means (including personal
delivery, expedited courier, messenger service, telecopy, telex,
ordinary mail, or electronic mail), but no such notice, request,
demand, claim or other communication shall be deemed to have been
duly given unless and until it actually is received by the
intended recipient. Either Party may change the address to which
notices, requests, demands, claims and other communications
hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.
11.9. Governing Law. This Agreement shall be governed
by and construed in accordance with the domestic laws of the
Commonwealth of Massachusetts without giving effect to any choice
or conflict of law provision or rule (whether of the Commonwealth
of Massachusetts or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the
Commonwealth of Massachusetts.
11.10. Change in Law. If and to the extent that, during
the Interim Period, any laws or regulations that govern any
aspect of this Agreement shall change, so as to make any aspect
of this transaction unlawful, then the Parties agree to make such
modifications to this Agreement as may be reasonably necessary
for this Agreement to accommodate any such legal or regulatory
changes.
11.11. Consent to Jurisdiction. Each of the Seller and
the Buyer consents to the nonexclusive jurisdiction of any local,
state or federal court located within the City of Springfield,
Massachusetts, for adjudication of any suit, claim, action or
other proceeding at law or in equity relating to this Agreement,
or to any transaction contemplated hereby. The Seller and the
Buyer each accept, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waive any
objection as to venue, and any defense of forum non conveniens.
11.12. Amendments and Waivers. No amendment of any
provision of this Agreement shall be valid unless the same shall
be in writing and signed by the Buyer and the Seller. No waiver
by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
11.13. Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
11.14. Expenses. Except as provided in Section 10.6,
each Party will bear its own costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby (including legal and accounting fees and expenses, except
as otherwise provided in Section 9 above), except that the Buyer
shall bear the entire cost of the Joint Application for
authorization pursuant to Sections 203 and 205 of the Federal
Power Act.
11.15. Construction. Ambiguities or uncertainties in the
wording of this Agreement will not be construed for or against
any Party, but will be construed in the manner that most
accurately reflects the Parties' intent as of the Effective Date.
The Parties acknowledge that they have been represented by
counsel in connection with the review and execution of this
Agreement, and, accordingly, there shall be no presumption that
this Agreement or any provision hereof be construed against the
Party that drafted this Agreement.
11.16. Incorporation of Exhibits and Schedules. The
Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
11.17. Specific Performance. Each of the Parties
acknowledges and agrees that the other Party would be damaged
irreparably in the event any of the provisions of this Agreement
are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the Parties agrees
that the other Party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court
of the United States or any state thereof having jurisdiction
over the Parties and the matter in addition to any other remedy
to which it may be entitled, at law or in equity.
11.18. Dispute Resolution. Prior to instituting any
litigation or dispute resolution mechanism, the Parties will
attempt in good faith to resolve any dispute or claim promptly by
referring any such matter to their respective chief executive
officers for resolution. Either Party may give the other Party
written notice of any dispute or claim. Within ten (10) days
after delivery of said notice, the executives will meet at a
mutually acceptable time and place, and thereafter as often as
they reasonably deem necessary to exchange information and to
attempt to resolve the dispute or claim within thirty (30) days.
11.19 No Recording. No Party shall record this
Agreement in any public record whatsoever, including, without
limitation, in the land records of any municipality (including,
without limitation, Holyoke, Chicopee and/or South Xxxxxx), with
the registry or other records of any county (including, without
limitation, any registry of Hampden County), or with any
Governmental Authority (other than filings required under
applicable Law). The action of such recording shall be deemed a
default hereunder and shall render this Agreement null and void
at the option of any of the other Parties. Each such other Party
may exercise said option by executing and recording a Notice of
Termination of this Agreement, signed by such exercising Party
alone, and this Agreement will thereupon be terminated in all
respects (except for obligations that specifically survive
termination, including, without limitation, Section 10.6), and it
is hereby agreed that it will thereupon not constitute an
encumbrance or cloud on the title to the Real Property in any
respect whatsoever.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement on the date first above written.
Signed, sealed and delivered
in the presence of:
CITY OF HOLYOKE GAS
& ELECTRIC DEPARTMENT
By: /S/ XXXX X. XXXXXXXX XX.
Title: Commissioner
By: /S/ XXXXXXX X. XXXXX
Title: Commissioner
By: /S/XXXXXXX X. XXXX III.
Title: Commissioner
HOLYOKE WATER POWER COMPANY
By: /S/ Xxxxx X. XxXxxx
Title: Vice President and Treasurer
HOLYOKE POWER AND ELECTRIC COMPANY
/S/ By: Xxxxx X. XxXxxx
Title: Vice President and Treasurer
STATE OF CONNECTICUT )
) ss. Berlin
COUNTY OF HARTFORD )
This instrument was acknowledged before me on the ___ day of
June, 2001, by Xxxxx X. XxXxxx, Vice President and Treasurer of
Holyoke Water Power Company, a Massachusetts corporation, on
behalf of said corporation.
My Commission Expires:
Notary Public
________________________________
Notary's Printed/Typed Name
STATE OF CONNECTICUT )
) ss. Berlin
COUNTY OF HARTFORD )
This instrument was acknowledged before me on the ___ day of
June, 2001, by Xxxxx X. XxXxxx, Vice President and Treasurer of
Holyoke Power and Electric Company, a Massachusetts corporation,
on behalf of said corporation.
My Commission Expires:
Notary Public
________________________________
Notary's Printed/Typed Name
COMMONWEALTH OF MASSACHUSETTS )
) ss. ___________
COUNTY OF _________ )
This instrument was acknowledged before me on the ___ day of
June, 2001, by __________, ________________, and _____________,
the Commissioners of City of Holyoke Gas & Electric Department, a
Massachusetts municipal light plant, on behalf of said entity.
My Commission Expires: ________________________________
Notary Public
_______________
________________________________
Notary's Printed/Typed Name
