Exhibit B-4
INDEPENDENCE STEAM ELECTRIC
STATION UNIT NO. 2
OWNERSHIP INTEREST PURCHASE AGREEMENT
dated as of February 26, 1998
between
ENTERGY POWER, INC.
and
EAST TEXAS ELECTRIC COOPERATIVE, INC.
OWNERSHIP INTEREST PURCHASE AGREEMENT
THIS OWNERSHIP INTEREST PURCHASE AGREEMENT, dated as of
this 26th day of February, 1998, is between EAST TEXAS
ELECTRIC COOPERATIVE, Inc., an electric cooperative
organized and existing under the laws of the State of Texas
("ETEC"), and ENTERGY POWER, INC., a corporation organized
and existing under the laws of the State of Delaware
("Entergy Power").
WHEREAS, Entergy Arkansas, Inc. (formerly Arkansas
Power & Light Company), an Arkansas corporation ("Entergy
Arkansas"), has constructed and operates a coal-fired
electric generating plant near Newark, Arkansas, known as
the Independence Steam Electric Station ("Independence
SES"), in which Participants own undivided ownership
interests pursuant to the Ownership Agreement; and
WHEREAS, Entergy Power is a corporation primarily
engaged in the business of acquiring, producing and selling
electric power and energy to other parties for resale, and
ETEC is primarily engaged in the business of acquiring
electric power and energy and reselling such power to its
members in Texas; and
WHEREAS, Entergy Power owns an undivided interests in
the 842 megawatt ("MW") (nominal rating) Independence SES
Unit No. Two ("Independence Unit 2"), and in certain common
facilities and other related properties, as more
particularly described hereinafter; and
WHEREAS, Entergy Power desires to sell, and ETEC
desires to purchase, an ownership interest in Independence
Unit 2 and in such common facilities and related properties,
as more particularly described hereinafter.
NOW THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, ETEC and Entergy Power
hereby agree as follows:
I. CERTAIN DEFINED TERMS.
The following terms (whether or not underscored) when
used in this Agreement, including its preamble and recitals,
will, except when the context otherwise requires, have the
following meanings:
A. "ETEC's Ownership Share" has the meaning set forth
in Section 2.1 hereof.
A. "ETEC's Wyoming Property" has the meaning set
forth in Section 2.1 hereof
A. "Closing Date" means the date prescribed in this
Agreement on which Entergy Power transfers to ETEC ETEC's
Ownership Share and ETEC's Wyoming Property.
A. "Common Facilities" will have the meaning provided for
in Section 2. 1.
A. "Definitive Agreements" means this Agreement, together
with each other agreement or instrument executed in
connection herewith, whether or not mentioned herein.
A. "Environmental Certificate" means the Certificate of
Environmental Compatibility and Public Need for the
Independence SES.
A. "FERC" means die Federal Energy Regulatory Commission.
A. "including" means including without limiting the
generality of any description preceding such term.
A. "Operating Agreement" means the Independence Operating
Agreement, originally
dated July 31, 1979, as the same has been and may be
amended, restated, supplemented or otherwise modified from
time to time in accordance with the terms thereof.
A. "Ownership Agreement" means the Independence Ownership
Agreement, originally dated July 31, 1979, among Entergy
Arkansas, Inc. (formerly Arkansas Power & Light Company),
Entergy Mississippi, Inc. (formerly Mississippi Power &
Light Company), Arkansas Electric Cooperative Corporation
("AECC"), ETEC, the City of Conway, Arkansas ("Conway"),
City Water and Light Plant of the City of Jonesboro,
Arkansas ("Jonesboro"), the City of West Memphis, Arkansas
("West Memphis"), and the City of Osceola, Arkansas
("Osceola"), and United States Trust Company of New York, a
New York banking corporation, not in its individual capacity
but as trustee ("Owner Trustee"), as the same has been and
may be amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof
A. "Entergy Power's Ownership Share" means, collectively,
(i) the 21.5% undivided ownership interest of Entergy Power
in Independence Unit 2, (ii) the 10.75% undivided ownership
interest of Entergy Power in the Environmental Certificate,
and (iii) the 10.75% undivided ownership interest of Entergy
Power in the Common Facilities.
A. "Participant" means each of the parties to the
Ownership Agreement or the Operating Agreement, as the case
may be.
A. "Purchased Capacity" means 60 MW of electric generating
capacity from Independence Unit 2.
I. SALE AND TRANSFER OF ASSETS
A. Sale of Ownership Share and Wyoming Property. Subject
to the terms and conditions hereof, on the Closing Date
provided for in Section 2.4 hereof, Entergy Power will sell
and convey to ETEC, and ETEC will purchase from Entergy
Power, (i) a seven and thirteen one hundredths percent
(7.13%) undivided ownership interest in Independence Unit 2,
(ii) a three and fifty-six one hundredths percent (3.56%)
undivided ownership interest in the Environmental
Certificate, (iii) three and fifty-six one hundredths
percent (3.56%) undivided ownership interest in certain land
and common facilities at Independence SES (as more
particularly described in the Ownership Agreement) (the
"Common Facilities") (items (i), (ii) and (iii),
collectively, the "ETEC's Ownership Share"), and (iv) a
three and fifty-six one hundredths percent (3.56%) undivided
interest in certain mine facilities and mine equipment
located in Wyoming and a five and forty-nine one hundredths
percent (5.49%) undivided interest in other mine equipment
(as more particularly described in the Ownership Agreement
and in Exhibit "A" attached hereto and incorporated herein
by reference) ("ETEC's Wyoming Property"). ETEC's Ownership
Share will be conveyed by Special Warranty Deed and Xxxx of
Sale and by Assignment substantially in the form of Exhibits
"B" and "C", respectively, attached hereto and made a part
hereof. ETEC's Wyoming Property will be conveyed by Xxxx of
Sale substantially in the form of Exhibit "D" attached
hereto and made a part hereof.
A. Other Instruments. On the Closing Date, and from time
to time thereafter, ETEC and Entergy Power will execute such
other instruments of conveyance and transfer, and other
documents, as may be necessary or appropriate to carry out
the intent of this Agreement and to vest in ETEC all right,
title and interest in ETEC's Ownership Share and in ETEC's
Wyoming Property.
A. Closing Date. The Closing Date of the sale and
transfer of ETEC's Ownership Share and ETEC's Wyoming
Property as provided for herein will take place on June 1,
1998, or such other date mutually agreed upon by the
parties, at The Woodlands, Texas, or such other place
mutually agreed upon by the parties, provided, however, in
the event the parties have not received all necessary
governmental, regulatory or other required approvals of the
consummation of the transactions contemplated hereby by June
1, 1998, the Closing Date will be postponed from day to day
until all such approvals have been received.
A. Notice of Loss or Damage. Entergy Power hereby agrees
to provide to ETEC written notice, prior to the Closing
Date, of any loss, damage or material adverse change to
Independence SES, the Common Facilities, or the Wyoming
Property suffered between the date of this Agreement and the
Closing Date.
I. PAYMENTS BY ETEC
A. On the Closing Date. The purchase price of ETEC's
Ownership Share and ETEC's Wyoming Property will be together
THIRTY MILLION FOUR HUNDRED EIGHTY ONE THOUSAND DOLLARS
($30,481,000) (the "Purchase Price"). The Purchase Price
will be payable by ETEC to Entergy Power in cash or in
immediately available funds on the Closing Date.
3.2 Adjustments.
1. As of the date hereof, it is agreed by the
parties that the value of supplies and inventory, including
fuel, located at Independence Unit 2 and considered to be
part of ETEC's Ownership Share is $481,000. On the Closing
Date, the Purchase Price will be adjusted to reflect the
actual value of those supplies and inventory as of the
Closing Date.
1. It is recognized and agreed by the parties
that, after the Closing Date, each party will bear
responsibility for costs in proportion to its ownership
share. In the event Entergy Power may have expended, or
been billed for, sums for operating and maintenance costs,
capitalized improvements to Independence Unit 2, fuel
inventory, material and supply inventory, or other charges
for any period after the Closing Date ETEC will pay to
Entergy Power any and all such sums in proportion to ETEC's
Ownership Share within ten (10) days after Entergy Power
furnishes to ETEC a written statement reflecting said sum or
sums.
I. ASSIGNMENT TO AND ASSUMPTION BY ETEC OF
CERTAIN ENTERGY POWER RIGHTS AND OBLIGATIONS
A. Rights of ETEC Under the Ownership Agreement. As of
the Closing Date, Entergy Power hereby assigns to ETEC
certain right, dudes and obligations under the Ownership
Agreement, to the extent of ETEC's Ownership Share and
ETEC's Wyoming Property, and ETEC hereby accepts such
assignment and assumes such rights, duties and obligations.
From and after the Closing Date, ETEC will have the rights
and duties of a Participant under the Ownership Agreement to
the extent of ETEC's Ownership Share and ETEC's Wyoming
Property. All terms and conditions of the Ownership
Agreement, including the definition of terms contained
therein, are incorporated by reference herein to the extent
not in conflict herewith.
A. Rights of ETEC Under the Operating Agreement. As
of the Closing Date, Entergy Power hereby assigns to ETEC
certain rights, duties and obligations under the Operating
Agreement, to the extent of ETEC's Ownership Share and
ETEC's Wyoming Property, and ETEC hereby accepts such
assignment and assumes such rights, duties and obligations.
From and after the Closing Date, ETEC will have the rights
and duties of a Participant under the Operating Agreement to
the extent of ETECW Ownership Share and ETEC's Wyoming
Property. All terms and conditions of the Operating
Agreement, including the definition of terms contained
therein, are incorporated by reference hereby to the extent
not in conflict herewith.
A. Rights of ETEC Under Clean Air Act. As of the
Closing Date, Entergy Power hereby assigns to ETEC certain
rights, duties and obligations arising under Title IV of the
Clean Air Act Amendments of 1990 (the "Act"), to the extent
of ETEC's Ownership Share and ETEC's Wyoming Property, and
ETEC hereby accepts such assignment and assumes such rights,
duties and obligations. Such assignment of rights, duties
and obligations includes, but is not limited to, the
Environmental Protection Agency's Base Allocation of
allowances under the Act and related regulations. From and
after the Closing Date, ETEC will have the rights and duties
of a Participant under the Act to the extent of ETEC's
Ownership Share and ETEC's Wyoming Property.
I. REPRESENTATIONS AND WARRANTIES
A. Representations and Warranties by Entergy Power.
Entergy Power hereby represents and warrants as follows:
1. Entergy Power is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware and has corporate power to carry on its
business as it is now being conducted.
1. Entergy Power is the owner of, and holds
marketable title to, all real, personal and intangible
property subject to conveyance hereunder. Entergy Power has
full power to transfer said property free and clear of all
liens, encumbrances, security interests, options, claims and
restrictions, except those enumerated in Exhibit "E"
attached hereto.
1. Entergy Power has incurred no debt and is not
in default, or subject to any liabilities or obligations of
any nature whether accrued, absolute, shared, contingent or
otherwise, arising from its ownership in Independence SES,
except as enumerated in Exhibit "F" attached hereto.
1. All information provided to ETEC or its
representatives by Entergy Power or its representatives in
the course of ETEC's evaluation of the transactions
underlying the Definitive Agreements was at the time, and
continues to be as of the Closing Date, complete and
accurate to the best of Entergy Power's knowledge.
1. Entergy Power has paid all income, franchise,
corporate, and other taxes which are payable by it to all
federal, state and local taxing authorities.
1. There are no actions, suits, investigations or
proceedings pending, or to Entergy Power's knowledge
threatened, against Entergy Power arising from its ownership
in Independence SES or the Wyoming Property.
(g) The subject conveyance and assignment to ETEC is
either not subject to Article 6 of the Uniform Commercial
Code (Bulk Transfers) as adopted in Arkansas or, in the
alternative, Entergy Power has complied with the notice and
all other requirements of said Article 6.
A. Representations and Warranties by ETEC. ETEC
hereby represents and warrants as follows:
B.
1. ETEC is an electric cooperative duly organized
and validly existing in good standing under the laws of the
State of Texas and has the requisite power to carry on its
business as it is now being conducted.
I. CONDITIONS PRECEDENT
A. Conditions Precedent to Entergy Powers Obligations
Hereunder. All obligations of Entergy Power under this
Agreement are subject to the fulfillment, prior to or on the
Closing Date, of each of the following conditions (or the
waiver in writing of such conditions by Entergy Power).
1. Entergy Power shall not have discovered any
material error, misstatement or omission in the
representations and warranties made by ETEC in this
Agreement.
1. ETEC's representations and warranties contained
in this Agreement will be deemed to have been made again, at
and as of the Closing Date, and shall then be true in all
material respects; ETEC will have performed and complied
with all agreements, covenants and conditions required by
this Agreement to be performed or complied with by it prior
to or on the Closing Date; and Entergy Power will have been
furnished with a certificate, dated the Closing Date,
certifying in such detail as Entergy Power may request to
the fulfillment of the foregoing conditions.
A. Conditions Precedent to ETEC's Obligations
Hereunder. All obligations of ETEC under this Agreement are
subject to the fulfillment prior to or on the Closing Date,
of each of the following conditions (or the waiver in
writing of such conditions by ETEC).
1. ETEC shall not have received notice from
Entergy Power or otherwise become aware of the occurrence,
during the time between the date of this Agreement and the
Closing Date, of any loss, damage, or material adverse
change to Independence SES, the Common Facilities, or the
Wyoming Property.
1. ETEC shall not have discovered any material
error, misstatement or omission in the representations and
warranties made by Entergy Power in this Agreement.
1. Entergy Power's representations and warranties
contained in this Agreement will be deemed to have been made
again, at and as of the Closing Date, and will then be true
in all material respects; Entergy Power will have performed
and complied with all agreements, covenants and conditions
required by this Agreement to be performed or complied with
by it prior to or on the Closing Date; and ETEC will have
been furnished with a certificate, dated as of the Closing
Date, certifying in such detail as ETEC may request to the
fulfillment of the foregoing conditions.
A. Conditions Precedent to the Respective Obligations
of Entergy Power and ETEC. The respective obligations of
Entergy Power and ETEC hereunder are, unless waived in
writing by Entergy Power and ETEC prior to or on the Closing
Date, subject to the further conditions that:
1. ETEC shall have secured a commitment to supply
power coordination, interchange and transmission services
with respect to the delivery to ETEC of the electric energy
relating to the Purchased Capacity, on terms satisfactory to
ETEC.
1. ETEC shall have secured financing on terms and
conditions acceptable to ETEC, the proceeds of which will be
used to finance the Purchase Price.
1. Entergy Power shall have received a written
waiver from Entergy Arkansas of Entergy Arkansas's rights of
first refusal with respect to Entergy Power's sale of the
Ownership Share.
1. The boards of directors of Entergy Power and
ETEC shall each have approved the transactions contemplated
by his Agreement and each of the Definitive Agreements.
1. All necessary or appropriate consents, waivers,
approvals or other authorizations from Federal, state or
local governmental or regulatory agencies or other persons
with respect to the transactions contemplated by this
Agreement shall have been received by Entergy Power or ETEC
or both, as the case may be.
1. Entergy Power and ETEC shall have agreed to any
adjustment to the Purchase Price in accordance with Section
3.2(a) hereof.
I. MISCELLANEOUS
A. Indemnification for Obligations Arising Prior to
Closing. Entergy Power agrees to, and does hereby,
indemnify and hold ETEC harmless from and against any and
all expense, liability, claim, fine or loss whatsoever,
including, but not limited to, reasonable legal fees and
expenses (collectively referred to as "Claims") brought or
asserted by any third person, including another Participant
in any way relating to, or arising out of, the assumption by
ETEC of any obligations of Entergy Power under the
Definitive Agreements, where such Claims arose or accrued on
or prior to the Closing Date, including such Claims that are
tolled, undiscovered, or otherwise unrealized until after
the Closing Date.
A. Cross-Indemnification for Obligations Arising
After Closing. ETEC agrees to, and does hereby, indemnify
and hold Entergy Power harmless from and against any and all
Claims brought or asserted by any third person, including
another Participant, in any way arising out of the sole
negligence, gross negligence, recklessness, or willful
misconduct of ETEC occurring after the Closing Date.
Entergy Power agrees to, and does hereby, indemnify and hold
ETEC harmless from and against all Claims brought or
asserted by any third person, including another Participant,
in any way arising out of the sole negligence, gross
negligence, recklessness, or willful misconduct of Entergy
Power occurring after the Closing Date.
A. Waiver of Partition. ETEC and Entergy Power
hereby expressly waive and renounce, until Independence Unit
2 is retired from commercial service, for themselves, their
successors, transferees and assigns, all rights as tenants
in common in Independence Unit 2 to partition and
accounting.
A. No Partnership. Notwithstanding any provisions of
this Agreement, ETEC and Entergy Power do not intend to
create hereby any joint venture, partnership, association
taxable as a corporation, or other entity for the conduct of
any business for profit. ETEC and Entergy Power elect not
to be treated as a partnership for United States income tax
purposes.
A. Notice. Any notice, request, consent or other
communications permitted or required by this Agreement will
be in writing and will be deemed given when deposited in the
United States mail, first class postage paid, and if given
to ETEC, will be addressed to:
East Texas Electric Cooperative
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxx 00000
Attention: General Manager
and if given to Entergy Power, will be addressed to:
Entergy Power, Inc.
Xxxxxxxx Xxx Xxxxx 000
00000 Xxxxxx'x Xxxx Xxxx
Xxx Xxxxxxxxx, Xxxxx 00000
Attention: President
(copy) General Counsel
unless a different officer or address will have been
designated by the respective party by notice in writing.
A. Amendments. No amendment, modification,
termination or waiver of any provision of this Agreement or
any other Definitive Agreement, or consent to any departure
by either of the parties therefrom, will in any event be
effective without a written instrument duly executed by each
of the parties hereto.
A. Severability. Any provision of this Agreement or
any other Definitive Agreement which is prohibited or
unenforceable in any jurisdiction will, as to such provision
and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating or
impairing the remaining provisions of this Agreement or any
other Definitive Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
A. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference
only and will not constitute a part of this Agreement for
any other purpose or be given substantive effect.
A. Successors and Assigns. This Agreement and the
other Definitive Agreements will be binding upon the parties
hereto and their respective successors and assigns and will
inure to the benefit of the parties hereto and the
successors and assigns of each of the parties hereto.
A. Counterparts; Effectiveness. This Agreement and
any amendments, waivers, consents or supplements hereto or
in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered
will be deemed an original.
A. Entire Agreement. This Agreement, together with
the other Definitive Agreements, is intended by the parties
as a final expression of their agreement and intended to be
a complete and exclusive statement of the agreement and
understanding, written or verbal, of the parties hereto in
respect of the subject matter contained herein and
supersedes all prior agreements and understandings between
the parties with respect to such subject matter.
A. "As Is" Sale. Subject to the representations and
warranties expressly provided herein, ETEC's Ownership Share
and ETEC's Wyoming Property are being sold and conveyed by
Entergy Power to ETEC "as is" and "where is." Entergy Power
makes no representation or warranty whatsoever in this
Agreement, express, implied or statutory, including any
representation or warranty as to the value, quantity,
condition, saleability, obsolescence, merchantability,
fitness or suitability for use or working order of any part
of the Independence SES, nor does Entergy Power represent or
warrant that the use or operation of the Independence SES
will not violate patent, trademark or service xxxx rights of
any third parties. ETEC is willing to purchase ETEC's
Ownership Share and ETEC's Wyoming Property "as is" and
"where is" and in accordance with the terms and conditions
of this Agreement. Notwithstanding the foregoing, ETEC will
have the benefit, in proportion to ETEC's Ownership Share,
to all manufacturers' and vendors' warranties and all
patent, trademark, and servicemark rights running to the
Participants.
A. Governing Law. THIS AGREEMENT WILL BE GOVERNED
BY, AND WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS.
A. Representations To Survive Closing. The
representations, warranties and mutual indemnity provided by
this Agreement will survive the Closing Date.
A. Remedies. Nothing in this agreement will be
construed to abridge, limit or deprive either of the parties
hereto of any right or remedy it might otherwise have now or
hereinafter existing in law, in equity or by statute,
including the right of injunction and specific performance
for the breach of any provision of this Agreement.
IN WITNESS WHEREOF, the undersigned parties hereto have
duly executed this Agreement in the State of Texas, City of
The Woodlands, on the date first above written.
ATTEST: ENTERGY POWER, INC.
By:_______________________
Title:__________________ Title:______________________
ATTEST: EAST TEXAS ELECTRIC
COOPERATIVE, INC.
By:_______________________
Title:__________________ Title:______________________
