Stock Purchase Agreement
by and among
Enron Asset Holdings, LLC,
Mirant EcoElectrica Investments I, Ltd.
Mirant EcoElectrica Finance, Ltd.
and
Mirant Corporation
Dated as of July 25, 2001
----- DENOTES CONFIDENTIAL INFORMATION THAT HAS BEEN OMITTED FROM THIS EXHIBIT
AND FILED SEPARATELY, ACCOMPANIED BY A CONFIDENTIAL TREATMENT REQUEST, WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934.
Schedules
Schedule 1 The Facility
Schedule 2 Disclosure Schedules
Schedule 2.2 The Holding Subsidiaries
Schedule 2.3 Pledge of Partnership Interests
Schedule 2.5 Miscellaneous Contracts
Schedule 2.6 Financial Statements
Schedule 2.7 No Conflict or Violation
Schedule 2.8 Governmental and Third Party Consents
Schedule 2.9 Litigation
Schedule 2.10 Material Contracts
Schedule 2.13 Environmental Matters
Schedule 2.16 Distributions
Schedule 3.4 Governmental Consents
Schedule 4.2 Restructuring Activities
Schedule 4.3 Guaranteed Indebtedness
Schedule 4.4 Insurance Obligations
Schedule 5.7 Partnership Effect Determination
Schedule 8.1 Other Assets
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of July 25,
2001 by and among Enron Asset Holdings, LLC, a Delaware limited liability
company (the "Stockholder"); Mirant Corporation, a Delaware corporation
("Mirant"); Mirant EcoElectrica Investments I, Ltd., a British Virgin Islands
limited liability company ("Buyer") and wholly-owned indirect subsidiary of
Mirant; and Mirant EcoElectrica Finance, Ltd., a British Virgin Islands limited
liability company ("Note Buyer") and wholly-owned indirect subsidiary of Mirant.
Capitalized terms used in this Agreement not otherwise defined have the meanings
ascribed to them in Section 8.1 hereof.
A. Enron LNG Power (Atlantic) Ltd., a Cayman Islands limited liability
company (the "Company"), owns an indirect equity interest in EcoElectrica, LP, a
Bermuda limited partnership (the "Partnership"), and the Partnership owns a
power plant located in Puerto Rico, as set forth on Schedule 1 hereto (the
"Facility").
B. The Stockholder directly owns all of the issued and outstanding
shares of Capital Stock of the Company, as described in Section 2.3 hereof (the
"Company Shares").
C. The Stockholder desires to sell to Buyer and Note Buyer, and Buyer
and Note Buyer desire to purchase from the Stockholder, all of the Company
Shares and certain other assets, respectively, on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
SALE AND PURCHASE
1.1 Agreement to Sell and Purchase. On and subject to the terms of this
Agreement, at the closing of the transactions contemplated by this Agreement
(the "Closing"), (A) the Stockholder shall (i) sell the Company Shares and cause
its Affiliates to sell the Other Assets to Buyer, (ii) cause its Affiliate to
assign the OMFM Agreement to Buyer, and (iii) cause its Affiliate to assign the
Subordinated Note to Note Buyer; (B) Buyer shall, and Mirant shall cause Buyer
to, (i) purchase from the Stockholder, the Company Shares, (ii) purchase from
the Stockholder's Affiliates the Other Assets, and (iii) assume from the
Stockholder's Affiliate, the OMFM Agreement; and (C) Note Buyer shall, and
Mirant shall cause Note Buyer to, purchase from the Stockholder's Affiliate the
Subordinated Note.
1.2 Purchase Price. The purchase price for the Company Shares, the
Subordinated Note, the Other Assets and the OMFM Agreement shall be an aggregate
of (i) two hundred and sixty six million U.S. dollars ($266,000,000), less the
aggregate amount of the Distributions, plus (ii) 50% of the amount of interest
that accrues on the Subordinated Note after May 31, 2001 through the Closing
Date (provided that such 50% of such interest accrual shall not exceed $90,000
per month), plus (iii) ---------- (the "Purchase Price"), in immediately
available funds.
1.3 Closing. Subject to Section 1.4 hereof, the Closing will take place
at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, XX on
such date that is three (3) business days after the conditions set forth in
Sections 6.1, 6.2(a) and 6.3(a) have either been satisfied or, in the case of
conditions not satisfied, waived in writing by the party entitled to the benefit
of such conditions (the "Closing Date").
1.4 Payment and Delivery. At the Closing, provided that all of the
conditions set forth in Article 6 hereof have either been satisfied or, in the
case of conditions not satisfied, waived in writing by the party entitled to the
benefit of such conditions:
(a) the Stockholder shall (i) deliver to Buyer or its
designees stock certificates, duly endorsed in blank (or accompanied by duly
executed stock powers), representing the Company Shares, (ii) deliver to Buyer
or its designees an executed Assignment and Assumption Agreement pursuant to
Section 4.5 hereof, and (iii) deliver to Note Buyer the Subordinated Note.
(b) Buyer and Note Buyer shall, and Mirant shall cause Buyer
and Note Buyer to, in accordance with the Stockholder's duly authorized wire
transfer or other payment instructions, (i) pay to the Stockholder the Purchase
Price, and (ii) deliver to the Stockholder an executed Assignment and Assumption
Agreement pursuant to Section 4.5 hereof. The Purchase Price shall be allocated
among the Company Shares, the OMFM Agreement, the Subordinated Note and the
Other Assets in accordance with Section 4.9 hereof.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
Each representation and warranty contained in this Article 2 is
qualified by the disclosures made in the Disclosure Schedules attached hereto as
part of Schedule 2. This Article 2 and the Disclosure Schedules shall be read
together as an integrated provision. Except as set forth on the Disclosure
Schedules, the Stockholder hereby makes the representations and warranties to
Buyer as set forth below.
2.1 Organization and Good Standing. The Stockholder is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware. The Company is an entity duly organized,
validly existing and in good standing under the laws of the Cayman Islands, with
full corporate power and authority to carry on its business as such business is
now conducted, and to own, lease or operate its assets and properties. To the
knowledge of the Stockholder, the Partnership is duly formed, validly existing
and is in good standing under the laws of the jurisdiction of Bermuda. The
Company and, to the knowledge of the Stockholder, the Partnership are duly
qualified to do business and in good standing in every jurisdiction in which the
character of the properties owned or leased by them or the nature of the
businesses conducted by them makes such qualification necessary, except where
failure to be so qualified would not have a Material Adverse Effect. Complete
and accurate copies of the charter documents and bylaws of the Company and the
organizational or partnership documents of the Partnership, with all amendments
thereto to the date hereof, have been furnished to Buyer or its representatives.
2.2 Identification of the Holding Subsidiaries.
The Holding Subsidiaries are identified and defined on Schedule 2.2 attached
hereto. The Company directly or indirectly owns those outstanding shares of
Capital Stock of the Holding Subsidiaries, Eco Holdings and Eco Ltd. as
described in Section 2.3 below. Eco Holdings and Eco Ltd. directly own the
Partnership Interests in the Partnership as described in Section 2.3 below.
2.3 Capitalization of, and Ownership in, the Company, the Holding
Subsidiaries, Eco Holdings, Eco Limited and the Partnership.
(a) The Company. The authorized capital stock of the Company
consists of 50,000 Ordinary shares, par value $1.00 per share, 10,900 of which
are issued and outstanding (the "Company Shares"). The Stockholder has good and
valid title to, and sole record and beneficial ownership of, the Company Shares.
(b) The Holding Subsidiaries. (i) The authorized capital stock
of LNGP VI consists of 2,000 shares Class A1 (Voting) Ordinary shares, par value
$1.00 per share, all of which are issued and outstanding. The shares of LNGP VI
referenced above are collectively referred to herein as the "LNGP VI Shares".
The Company has good and valid title to, and sole record and beneficial
ownership of, the LNGP VI Shares.
The authorized capital stock of LNGP VI also consists of (X) 1,500 shares of
Class B2 (Non-Voting) Ordinary shares, par value $1.00 per share, all of which
are issued and outstanding, (Y) 35,000 shares of Preference shares, par vale
$1.00 per share, all of which are issued and outstanding, and (Z) 500 shares of
Class A2 (Voting) Ordinary shares, par value $1.00 per share, all of which are
issued and outstanding.
(ii) The authorized capital stock of LNGP IV consists of (A)
4,400,000 Ordinary shares, par value $.01 per share, of which one share is
issued and outstanding, and (B) 2,200,000 shares of Preference shares, par value
$.01 per share, of which zero shares are issued and outstanding. The shares
referenced in clause (A) above are collectively referred to herein as the "LNGP
IV Shares"). The Company has good and valid title to, and sole record and
beneficial ownership of, the LNGP IV Shares.
(iii) The authorized capital stock of LNGP I consists of Class
A membership interests and Class B membership interests, all of which are issued
and outstanding. The Company has good and valid title to, and sole record and
beneficial ownership of, the Class A membership interests (the "LNGP I Shares"),
representing .01% of the total issued and outstanding membership interests of
LNGP I. LNGP II has good and valid title to, and sole record and beneficial
ownership of, the Class B membership interests, representing 99.9% of the total
issued and outstanding membership interests of LNGP I. LNGP II is also the
managing member of LNGP I.
(iv) The authorized capital stock of LNGP III consists of
Class A membership interests and Class B membership interests, all of which are
issued and outstanding (collectively, the "LNGP III Shares"). LNGP VI has good
and valid title to, and sole record and beneficial ownership of, the Class A
membership interests, representing 25% of the total issued and outstanding
membership interests of LNGP III. LNGP VI is also the managing member of LNGP
III. LNGP I has good and valid title to, and sole record and beneficial
ownership of, the Class B membership interests, representing 75% of the total
issued and outstanding membership interests of LNGP III.
(v) The authorized capital stock of LNGP II consists of 30,000
Ordinary units and 105,000 Preference units, all of which are issued and
outstanding. LNGP IV has good and valid title to, and sole record and beneficial
ownership of, the 30,000 outstanding Ordinary units (the "LNGP II Shares").
(vi) The authorized capital stock of BGPL consists of
1,000,000 Ordinary shares, par value $1.00 per share, 100,100 of which are
issued and outstanding (the "BGPL Shares"). LNGP III has good and valid title
to, and sole record and beneficial ownership of, the BGPL Shares.
Collectively, the LNGP VI Shares, the LNGP IV Shares, the LNGP I Shares, the
LNGP III Shares, the LNGP II Shares, and the BGPL Shares are hereinafter
referred to as the "Holding Subsidiary Shares".
(c) Eco Holdings and Eco Ltd.. (i) The authorized capital
stock of Eco Holdings consists of (A) 500,000,000 shares of Class A Ordinary
shares, par value $.01 per share, 100 of which are issued and outstanding, and
(B) 500,000,000 shares of Class B Ordinary shares, par value $.01 per share, 100
of which are issued and outstanding. The shares referenced in clause (A) above
are collectively referred to herein as the "Eco Holdings Shares". BGPL has good
and valid title to, and sole record and beneficial ownership of, the Eco
Holdings Shares.
(ii) The authorized capital stock of Eco Ltd. consists of
500,000,000 Ordinary shares, par value $.01 per share, one share of which is
issued and outstanding (the "Eco Ltd. Shares"). To the knowledge of the
Stockholder, Eco Holdings has good and valid title to, and sole record and
beneficial ownership of, the Eco Ltd. Shares.
(d) The Partnership. The authorized capital stock of the
Partnership consists of limited partnership interests and general partnership
interests, all of which are issued and outstanding (collectively, the
"Partnership Interests"). Eco Holdings has good and valid title to, and sole
record and beneficial ownership of, the limited partnership interests,
representing 99% of the total issued and outstanding Partnership Interests of
the Partnership. Eco Ltd. has good and valid title to, and sole record and
beneficial ownership of, the general partnership interest, representing 1% of
the total issued and outstanding Partnership Interests of the Partnership.
(e) Except as set forth on Schedule 2.3 attached hereto, all
of the Company Shares the Holding Subsidiary Shares, the Eco Holdings Shares,
and, to the knowledge of the Stockholders, the Eco Ltd. Shares and the
Partnership Interests (i) are held free and clear of any claims, liens, pledges,
options, security interests, trusts, encumbrances of any person or entity, and
(ii) are validly issued, fully paid and nonassessable. Except as set forth on
Schedule 2.7 attached hereto, neither the Stockholder, the Company, nor the
Holding Subsidiaries have granted, issued, or agreed to grant or issue any other
equity interests in the Company, the Holding Subsidiaries or the Partnership
other than those referenced above, and there are no outstanding options,
warrants, subscription rights, securities that are convertible into or
exchangeable for any equity interests of the Company, the Holding Subsidiaries,
or to the knowledge the Stockholder, the Partnership. Except for the Holding
Subsidiary Shares, the Eco Holdings Shares, the Eco Ltd. Shares and the
Partnership Interests, the Company, does not directly or indirectly own, either
of record or beneficially, any equity interest in any other entity.
2.4 Authorization of Agreement. The Stockholder has all requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder. This Agreement and the other Transaction Documents have
(except for Transaction Documents to be executed and delivered solely by Mirant
and Buyer) been duly and validly approved by the board of directors of the
Stockholder and no other proceedings on the part of the Stockholder are
necessary to approve this Agreement and to authorize the performance by the
Stockholder of its obligations hereunder and thereunder. This Agreement and the
other Transaction Documents to be delivered by the Stockholder: (a) have been
(or upon execution will have been) duly executed and delivered by the
Stockholder, and (b) constitute (or upon execution will constitute) legal, valid
and binding obligations of the Stockholder, enforceable against the Stockholder
in accordance with their respective terms, except as such enforceability may be
limited by the Bankruptcy Exception.
2.5 Assets and Permits. Other than the contracts set forth on Schedule
2.5, the Company and the Holding Subsidiaries are holding companies that conduct
no material business except for the ownership of various interests described in
Section 2.3 hereof. On the Closing Date, other than the contracts set forth on
Schedule 2.5, (a) the Company and the Holding Subsidiaries will not be a party
to, or have any material obligations under, any material contract; (b) the
property of the Company and the Holding Subsidiaries will not be subject to, or
be bound by, any material contract, other than this Agreement; and (c) the
Company and the Holding Subsidiaries will not have any material liabilities or
obligations (whether accrued, absolute, contingent or otherwise) or any material
assets other than its respective Capital Stock interests referenced in this
Agreement. There are no outstanding agreements, options or commitments of any
nature obligating the Company or the Stockholder to transfer any of the assets
of the Company or rights or interests therein to any party. The Company and the
Partnership currently own, lease or otherwise have the right to use all of the
property necessary for the conduct of their respective businesses as currently
conducted, except where the absence of such right would not have a Material
Adverse Effect. Except as set forth on Schedule 2.13, the Company and the
Partnership have all Licenses necessary for the conduct of their respective
businesses as currently conducted, except where the failure to obtain the same
would not have a Material Adverse Effect.
2.6 Financial Statements.
(a) Attached as Schedule 2.6 hereto are (i) an unaudited
balance sheet of the Company and an audited balance sheet of the Partnership at
December 31, 1999 and 2000, and related unaudited consolidated statements of
income and cash flows of the Company and audited consolidated statements of
income and cash flows of the Partnership for the years then ended; and (ii) an
unaudited balance sheet of the Company and the Partnership at May 31, 2001 and
related consolidated statements of income and cash flows of the Company and the
Partnership for the five-month period then ended (such statements specified in
clauses (i) and (ii), together with the related notes thereto, collectively, the
"Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied,
and fairly present in all material respects the financial condition of the
Company and the Partnership, respectively, as of the dates thereof and the
results of their operations for the periods covered thereby except, in the case
of Financial Statements of the Company and the Partnership at and for the five
months ended May 31, 2001, for the absence of notes and as otherwise noted
therein and subject to normal recurring year-end adjustments. Neither the
Company nor the Partnership has any liability or obligation (whether accrued,
absolute, contingent or otherwise) which, individually or in the aggregate,
would have a Material Adverse Effect, other than (w) liabilities reflected (but
only to the extent so reflected) or reserved against in the Financial
Statements, (x) liabilities or obligations that have arisen since May 31, 2001
in the ordinary course of business, none of which, individually or in the
aggregate, would have a Material Adverse Effect, (y) liabilities or obligations
disclosed herein or in any schedule hereto, or (z) liabilities or obligations
incurred in accordance with the terms of this Agreement or any Contract.
(b) Since May 31, 2001, there has not been any event,
circumstance, condition, development or occurrence causing, resulting in or
having a Material Adverse Effect.
2.7 No Conflict or Violation. Except as set forth on Schedule 2.5 and
Schedule 2.7 attached hereto, the execution, delivery and performance by the
Stockholder of this Agreement and the other Transaction Documents to be
delivered by the Stockholder and the performance by the Stockholder of its
obligations hereunder and thereunder do not and will not: (a) violate or
conflict with any provision of the operating agreement of the Stockholder, the
charter documents or bylaws of the Company, or the partnership agreement of the
Partnership; (b) violate any provision or requirement of any federal, state or
local law, statute, judgment, order, writ, injunction, decree, award, rule, or
regulation of any Governmental Entity applicable to the Stockholder, the Company
or, to the knowledge of the Stockholder, the Partnership, except for violations
that would not have a Material Adverse Effect; (c) violate in any material
respect, result in a material breach of, constitute (with due notice or lapse of
time or both) a material default or cause any material obligation, penalty,
premium or right of termination to arise or accrue under, any Contract; (d)
result in the creation or imposition of any material lien, charge or encumbrance
of any kind whatsoever upon any of the properties or assets of the Stockholder,
the Company or, to the knowledge of the Stockholder, the Partnership, except
where the creation of any such liens would not have a Material Adverse Effect;
or (e) result in the cancellation, modification, revocation or suspension of any
License, except where the loss of such Licenses would not have a Material
Adverse Effect.
2.8 Governmental and Third-Party Consents. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the HSR Act, no filing with or notice to, and no
permit, authorization, consent or approval of, any Governmental Entity or third
party is necessary for the execution and delivery by the Stockholder of this
Agreement and the other Transaction Documents required to be delivered by the
Stockholder or the consummation of the transactions contemplated hereby or
thereby, except to the extent specified on Schedule 2.8 or where the failure to
obtain such permits, authorizations, consents or approvals or to make such
filings or give such notices would not, individually or in the aggregate, have a
Material Adverse Effect.
2.9 Litigation. Except with respect to Tax matters (which are addressed
in Section 2.12), Schedule 2.9 of the Disclosure Schedule lists (a) each action,
suit, claim or proceeding (including, but not limited to, any arbitration
proceeding) pending or, to the knowledge of the Stockholder, threatened, and (b)
each investigation which, to the knowledge of the Stockholder, is pending or
threatened, against the Company or the Partnership, at law or in equity, or
before or by any Governmental Entity which, if determined adversely to the
Company or the Partnership, would have a Material Adverse Effect. For purposes
of the preceding sentence, no representation is made with respect to (i) any
proceeding before any Governmental Entity initiated by the Company or the
Partnership in which the Company or the Partnership is an applicant for any
License, to the extent the matters considered in such proceeding are limited to
the approval or authority requested in such application, or (ii) proceedings
initiated by a third party in which the Company or the Partnership is an
intervener, and the subject matter of such intervention is of general
applicability to similarly-situated parties. Neither the Company nor the
Partnership is in default with respect to any order, writ, injunction or decree
known to or served upon such entity of any Governmental Entity, except for
defaults which would not have a Material Adverse Effect.
2.10 Contracts. Schedule 2.10 of the Disclosure Schedule lists all of
the material contracts and agreements to which the Partnership is a party
relating to or affecting the operation of the Facility and which require an
annual payment in excess of One Million Dollars ($1,000,000) (the "Contracts").
To the knowledge of the Stockholder: (a) each Contract is valid, binding and in
full force and effect, and is enforceable by the Partnership in accordance with
its terms, except as enforceability may be limited by the Bankruptcy Exception
and except as would not have a Material Adverse Effect, (b) the Partnership has
performed in all material respects the obligations required to be performed by
it to date under each Contract, except for such failure or failures to perform
which would not have a Material Adverse Effect, and (c) the Partnership has not
received any notice of default under any Contract to which it is a party, except
as would not have a Material Adverse Effect.
2.11 Compliance with Applicable Law. Except with respect to Tax matters
(which are addressed in Section 2.12) and Environmental Laws (which are
addressed in Section 2.13), the operations of the Company, and to the knowledge
of the Stockholder, the Partnership are, and have been, conducted in all
material respects in accordance with all applicable laws, regulations, orders
and other requirements of all Governmental Entities having jurisdiction over the
Company and the Partnership or their respective assets, properties or
operations, except in any case where the failure to so conduct their operations
would not have a Material Adverse Effect. Except with respect to Tax matters
(which are addressed in Section 2.12) and environmental matters (which are
addressed in Section 2.13), the Company and, to the knowledge of the
Stockholder, the Partnership have not received any notice of any material
violation of any such law, regulation, order or other legal requirement, and are
not in material default with respect to any order, writ, judgment, award,
injunction or decree of any Governmental Entity, applicable to the Company or
the Partnership or any of their respective assets, properties or operations.
2.12 Tax Matters.
(a) The Company, the Holding Subsidiaries, Eco Holdings, Eco
Ltd. and the Partnership (each, a "Taxpayer") has filed on a timely basis all
Tax returns required to be filed by a Taxpayer on or prior to the date hereof,
except where such instance of non-compliance would not have a Material Adverse
Effect. As of the time of filing, the foregoing Tax returns of the Company, and
the Partnership were true and complete in all material respects.
(b) With respect to all Taxes imposed on each Taxpayer in any
taxable period or portion of a period ending on or before the Closing Date
(other than Taxes with respect to activities, events and elections of the Buyer,
the Holding Subsidiaries, Eco Holdings, Eco Ltd., the Partnership and their
Affiliates on or after the Closing), all such Taxes required to be paid to
taxing authorities reflected on such returns on or before the date hereof have
been paid, except such Taxes, if any, as are being contested in good faith,
Taxes which are not yet due and payable or are assumed by Buyer under this
Agreement. The Taxpayers have complied with all Tax laws in all material
respects.
(c) No adjustments to the Tax liability of any Taxpayer have
been proposed in writing (and are currently pending) by any taxing authority in
connection with any tax return of any Taxpayer, except for adjustments that
would not have a Material Adverse Effect. All deficiencies asserted or
assessments made as a result of any examinations of any Taxpayer have been fully
paid, are fully reflected as a liability in the financial statements of the
applicable Taxpayer, or are being contested in good faith.
(d) There are no liens for Taxes (other than for Taxes not yet
due and payable) on any of the assets of any Taxpayer.
2.13 Environmental Matters. Subject to the matters set forth on
Schedule 2.13 attached hereto:
(a) The Company and, to the knowledge of the Stockholder, the
Partnership comply in all material respects with all Environmental Laws and have
obtained and maintained in effect all Environmental Permits and are in material
compliance with all such Environmental Permits.
(b) Neither the Company nor, to the knowledge of the
Stockholder, the Partnership has performed, failed to perform or suffered any
act which will give rise to, or has otherwise incurred, material liability to
any person (governmental or not) under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq., or any other
Environmental Laws, nor has it received notice of any such liability or any
claim therefor.
(c) There are no pending or, to the knowledge of the
Stockholder, threatened administrative, judicial or regulatory proceedings, or,
to the knowledge of the Stockholder, any threatened actions or claims, or any
consent decrees or other agreements in effect that relate to environmental
conditions in, on, under, about or related to the Company, the Partnership or
their respective operations or the real properties leased or owned by them.
2.14 Insurance. Each of the Company and, to the knowledge of the
Stockholder, the Partnership holds (either directly or indirectly through
affiliated entities) valid policies of insurance of such types and in such
amounts as is customary for companies similarly situated.
2.15 Brokers. Except for Credit Suisse First Boston Corporation, no
broker, finder, investment banker, or other person is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement, based on contractual arrangements made by or on
behalf of the Stockholder.
2.16 Distributions. Neither the Stockholder, the Companies nor the
Holding Subsidiaries has received a cash distribution from the Partnership
pursuant to the Partnership Agreement after January 1, 2001 other than the
distributions, if any, listed on Schedule 2.16 (the "Distributions"). The term
"Distributions" does not include, among other matters, payments or obligations
arising independently under any other contract or agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF MIRANT, BUYER AND NOTE BUYER
Mirant, Buyer and Note Buyer represent and warrant to the Stockholder
that:
3.1 Organization and Corporate Authority. Mirant is a corporation, and
Buyer and Note Buyer are limited liability companies, in each case duly
organized, validly existing and in good standing under the laws of their
respective jurisdictions or organization and have all requisite corporate power
and authority to enter into this Agreement and the other Transaction Documents
and to perform their respective obligations hereunder and thereunder. This
Agreement and the other Transaction Documents to be executed and delivered by
Mirant, Buyer and Note Buyer: (a) have been (or upon execution will have been)
duly executed and delivered by Mirant, Buyer and Note Buyer; (b) have been
effectively authorized by all necessary action, corporate or otherwise, and no
other proceedings on the part of Mirant, Buyer or Note Buyer are necessary to
authorize the performance of their respective obligations hereunder and
thereunder; and (c) constitute (or upon execution will constitute) legal, valid
and binding obligations of Mirant, Buyer and Note Buyer enforceable against
Mirant, Buyer and Note Buyer in accordance with their respective terms, except
as such enforceability may be limited by the Bankruptcy Exception.
3.2 No Conflict or Violation. The execution, delivery and performance
by Mirant, Buyer and Note Buyer of this Agreement and the other Transaction
Documents to be executed and delivered by Mirant, Buyer and Note Buyer and the
performance by Mirant, Buyer and Note Buyer of their respective obligations
hereunder and thereunder, do not and will not: (a) violate or conflict with any
provision of the charter documents or bylaws of Mirant, Buyer or Note Buyer; or
(b) violate any provision or requirement of any federal, state or local law,
statute, judgment, order, writ, injunction, decree, award, rule, or regulation
of any Governmental Entity applicable to Mirant, Buyer or Note Buyer.
3.3 Litigation. There are no material claims, actions, suits, or
proceedings (including, but not limited to, any arbitration proceeding) of any
nature, at law or in equity, pending or, to the knowledge of Mirant, Buyer or
Note Buyer, threatened by or against Mirant, Buyer, Note Buyer, the directors,
officers, employees, agents of Mirant, Buyer or Note Buyer, or any of their
respective Affiliates involving, affecting or relating to the transactions
contemplated by this Agreement or the performance of the respective obligations
of Mirant, Buyer and Note Buyer hereunder. Neither Mirant, Buyer nor Note Buyer
is subject to any order, writ, judgment, award, injunction or decree of any
Governmental Entity involving, affecting or relating to the transactions
contemplated by this Agreement or the performance of the respective obligations
of Mirant, Buyer and Note Buyer hereunder.
3.4 Governmental Consents. Except for filings, permits, authorizations,
consents and approvals as may be required under, and other applicable
requirements of, the HSR Act, no filing with or notice to, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary for
the execution and delivery by Mirant, Buyer or Note Buyer of this Agreement and
the other Transaction Documents required to be delivered by Mirant, Buyer or
Note Buyer or the performance of the respective obligations of Mirant, Buyer and
Note Buyer hereunder and thereunder.
3.5 Availability of Funds. On the Closing Date, Mirant, Buyer and Note
Buyer will have, sufficient funds available to enable Mirant, Buyer and Note
Buyer to consummate the transactions contemplated hereby and to permit Mirant,
Buyer and Note Buyer to timely perform all of their respective obligations under
this Agreement.
3.6 Qualified Buyer. Mirant, Buyer and Note Buyer are qualified to
obtain any permits, licenses or authorizations necessary for Buyer to own the
Company and the Partnership and to operate the Facility as contemplated by this
Agreement, the OMFM Agreement that is being assigned to, and assumed by, Buyer
in accordance with Section 4.5, and the LNG Tolling Agreement.
3.7 Securities Matters.
(a) The Company Shares to be received by Buyer will be
acquired for investment for Buyer's own account, not with a view to the
distribution of any part thereof, and Buyer has no present intention of selling,
granting any participation in, or otherwise distributing the same. Neither
Mirant, Buyer nor Note Buyer has any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Company Shares.
(b) Mirant, Buyer and Note Buyer understand that the Company
Shares are characterized as "restricted securities" under the U.S. federal
securities laws inasmuch as such securities are being acquired in a transaction
not involving a public offering and that under such laws and applicable
regulations such securities may not be resold in the absence of an effective
registration statement covering the Company Shares or an exemption from
registration under the Securities Act.
3.8 Brokers. No broker, finder, investment banker, or other person is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement, based upon arrangements
made by or on behalf of Mirant, Buyer or Note Buyer.
3.9 Status Under PURPA. Neither Mirant, Buyer nor Note Buyer is
"primarily engaged in the generation or sale of electric power" under Section
201 of the Public Utility Regulatory Policies Act of 1978 (as incorporated in
Section 3(17) and 3(18) of the Federal Power Act), FERC's implementing
regulations, and FERC's precedent thereunder.
ARTICLE 4
CERTAIN AGREEMENTS
4.1 Access and Confidentiality.
(a) Upon the reasonable request of Buyer, the Stockholder
shall use commercially reasonable efforts to afford to Buyer and Buyer's
accountants, counsel and representatives full access, during normal business
hours throughout the period prior to the Closing (or the earlier termination of
this Agreement), to all of the properties, books, records and contracts of the
Company and the Partnership (including, without limitation, the Partnership's
accounting records, the work papers of the Partnership's independent
accountants, and all environmental studies, reports and other environmental
records of the Partnership), to the extent such disclosure does not conflict
with any confidentiality obligations of the Stockholder, the Company, any
Holding Subsidiary or the Partnership.
(b) Neither Mirant, Buyer, Note Buyer nor any of their
respective directors, officers, employees, agents or representatives may,
directly or indirectly, disclose to any person or entity or use any Confidential
Information for any purpose other than to evaluate and consummate the
transactions contemplated by this Agreement and the other Transaction Documents.
If Mirant, Buyer or Note Buyer is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative, demand, or similar process) to disclose any
Confidential Information, Mirant, Buyer and Note Buyer shall promptly notify the
Stockholder so that the Stockholder may seek an appropriate protective order or
waive compliance with the provisions of this Section 4.1(b). If, in the absence
of a protective order or the receipt of a waiver hereunder, Mirant, Buyer or
Note Buyer is, on the advice of counsel, compelled to disclose any Confidential
Information to any tribunal, Mirant, Buyer or Note Buyer, as applicable, may
disclose the Confidential Information to the tribunal; provided, however, that
Mirant, Buyer and Note Buyer shall use all commercially reasonable efforts to
obtain an order or other assurance that confidential treatment will be accorded
to such portion of the Confidential Information required to be disclosed.
4.2 Certain Changes and Conduct of Business. From and after the date of
this Agreement and until the Closing (or the earlier termination of this
Agreement), the Stockholder shall cause the Company to conduct the Company's
business solely in the ordinary course consistent with past practices. Without
limiting the generality of the preceding sentence, except as required or
permitted pursuant to the terms hereof, the Stockholder shall not permit the
Company to do any of the following without obtaining the consent of the Buyer,
which consent shall not be unreasonably withheld:
(a) make any change in the charter documents or bylaws of the
Company;
(b) issue any additional shares of capital stock or equity
securities or grant any option, warrant or right to acquire any capital stock or
equity securities or issue any security convertible into or exchangeable for the
capital stock of the Company, alter any term of any of the outstanding
securities of the Company, or make any change in the outstanding shares of
capital stock or other ownership interests or in the capitalization, whether by
reason of a reclassification, recapitalization, stock split or combination,
exchange or readjustment of shares, stock dividend or otherwise;
(c) (i) issue any notes, bonds, debentures or other corporate
securities or grant any option, warrant or right to purchase any of the
foregoing, (ii) issue any securities convertible or exchangeable for debt
securities of the Company, or (iii) issue any options or other rights to acquire
directly or indirectly any debt securities of the Company or any security
convertible into or exchangeable for such debt securities; or
(d) commit itself to do any of the foregoing.
Notwithstanding the foregoing, the Stockholder, the Company, the Holding
Subsidiaries, their respective Affiliates, and the Partnership shall be
permitted to undertake such actions as are necessary or appropriate in their
discretion to carry out the restructuring activities set forth on Schedule 4.2.
4.3 Stockholder Guarantees. The Stockholder and/or its Affiliates are
guarantors with respect to certain indebtedness or otherwise provide certain
forms of credit support, in each case as listed on Schedule 4.3-A (the
"Guaranteed Indebtedness"). Prior to the Closing, Mirant, Buyer and Note Buyer
shall cause the Stockholder and its Affiliates to be replaced by an Affiliate of
Mirant as guarantor or other applicable status with respect to all of the
Guaranteed Indebtedness as listed on Schedule 4.3-B.
4.4 Insurance Matters. The Stockholder and/or its Affilates maintain
insurance for the Company, the Holding Subsidiaries and the Partnership as
listed on Schedule 4.4 (the "Insurance Obligations"). Prior to the Closing,
Mirant, Buyer and Note Buyer shall replace all of the Insurance Obligations with
insurance that conforms with the requirements (i) established by each of the
Company, the Holding Subsidiaries, and the Partnership and (ii) if applicable,
is acceptable to each of the lenders for such entities. Such insurance shall be
placed with financially secured insurers and be of such types and in such
amounts as is customary in the case of similar business but no less than
required by the applicable entity.
4.5 Assignment of Assumption of OMFM Agreement. At the Closing, the
Stockholder shall cause its Affiliate to assign to Buyer or an Affiliate of
Buyer, and Mirant or Buyer shall, or shall cause an Affiliate of Buyer to,
assume from the Affiliate of the Stockholder the OMFM Agreement. Such assignment
and assumption shall include a novation by the Partnership releasing the
assignor and be pursuant to the terms of a mutually acceptable executed
Assignment and Assumption Agreement.
4.6 Regulatory Approvals.
(a) Antitrust Notification. Mirant, Buyer, Note Buyer and the
Stockholder shall, as promptly as practicable but in no event later than twenty
(20) days following the execution and delivery of this Agreement, each file with
the FTC and the DOJ the Notification and Report Form under the HSR Act, if any,
required in connection with the transactions contemplated hereby and as promptly
as practicable supply any additional information, if any, requested in
connection herewith pursuant to the HSR Act. Any such Notification and Report
Form and additional information, if any, submitted to the FTC or the DOJ shall
be in substantial compliance with the requirements of the HSR Act. Each of
Mirant, Buyer, Note Buyer and the Stockholder shall furnish to the others such
information and assistance as the others may reasonably request in connection
with their preparation of any filing or submission, which is necessary under the
HSR Act. Each of Mirant, Buyer, Note Buyer and the Stockholder shall keep the
others apprised in a prompt manner of the status and substance of any
communications with, and inquiries or requests for additional information from,
the FTC and the DOJ and shall comply promptly with any such inquiry or request.
Each of Mirant, Buyer, Note Buyer and the Stockholder shall use commercially
reasonable efforts to obtain the termination or expiration of any applicable
waiting period required under the HSR Act for the consummation of the
transactions contemplated hereby. Mirant, Buyer and Note Buyer shall pay all
filing fees payable under the HSR Act in connection with the transactions
contemplated hereby, and each of Mirant, Buyer, Note Buyer and the Stockholder
shall pay its own respective costs incurred in preparation of all reports and
notifications required under the HSR Act.
(b) Regulatory Approval Process. Mirant, Buyer, Note Buyer and
the Stockholder shall, as promptly as practicable but in no event later than
thirty days following the execution and delivery of this Agreement, submit to
the appropriate agencies or third parties all consent requests, declarations,
filings and registrations listed on Schedules 2.7, 2.8 and 3.4. With respect to
any filings that may be required to be submitted to FERC, Mirant, Buyer, Note
Buyer and the Stockholder shall cooperate to share and develop information
necessary for such filings and drafts of such filings within fifteen days
following execution and delivery of this Agreement, and shall give each other
reasonable opportunity to comment on such draft filings before such filings are
submitted to FERC.
4.7 Efforts. Upon the terms and subject to the conditions of this
Agreement, each of the parties hereto shall use all its commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable consistent with applicable law
to cause the fulfillment of the conditions to Closing set forth herein and to
consummate and make effective in the most expeditious manner practicable the
transactions contemplated hereby.
4.8 Notice of Changes. Prior to the Closing, each party shall promptly
advise the other in writing with respect to any matter arising after execution
of this Agreement of which that party obtains knowledge and which, if existing
or occurring at the date of this Agreement, would have been required to be set
forth in this Agreement, including any of the schedules hereto. If, as a result
of such development, Buyer has the right to terminate this Agreement pursuant to
Section 7.1 and Buyer fails to exercise that right within the period of ten (10)
days after such right accrues, then the written notice delivered to Mirant,
Buyer or Note Buyer pursuant to this Section 4.8 will be deemed to have amended
this Agreement, including any appropriate schedule hereto, to have qualified the
representations and warranties contained in Article 2 above, and to have cured
any misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the development.
4.9 Certain Tax Matters.
(a) Tax Returns. After the Closing, Mirant, Buyer and Note
Buyer shall cause the Company, the Holding Subsidiaries, Eco Holdings, Eco Ltd.
and the Partnership to furnish tax information to the Stockholder for inclusion
in the Stockholder's or its Affiliates' Tax returns and reports, including Form
5471 and supporting schedules for taxable years or periods ending on or before
or including the Closing Date, prepared in accordance with the Company's, the
Holding Subsidiaries', Eco Holdings', Eco Ltd.'s and the Partnership's past
practices. Such information shall be furnished to the Stockholder within 90 days
after the close of the calendar year of the sale of the Company Shares
hereunder.
(b) Authority. After the Closing, Mirant, Buyer and Note Buyer
shall, and shall cause the Company, the Holding Subsidiaries, Eco Holdings, Eco
Ltd., the Partnership and their Affiliates to provide the Stockholder and its
Affiliates with such powers of attorney or other authorizations as are
reasonably necessary to empower them to execute and file Tax returns for which
they are responsible, file refund and similar claims for Taxes for which they
are responsible or entitled, and contest, settle and resolve any audits and
disputes over which they have control under this Agreement (including any refund
claims which evolve into audits or disputes).
(c) Cooperation. After the Closing, Mirant, Buyer and Note
Buyer, on the one hand, and the Stockholder, on the other hand, shall provide
prompt written notice to the other of any pending or threatened tax audit,
assessment or proceeding of which it becomes aware related to the Company, the
Holding Subsidiaries, Eco Holdings, Eco Ltd. or the Partnership for whole or
partial periods for which the other is responsible hereunder. Such notice shall
contain known factual information describing any potential liability in
reasonable detail and be accompanied by copies of any notice or other document
received from or sent to any tax authority in respect of such matters. After the
Closing, Mirant, Buyer and Note Buyer, on the one hand, and the Stockholder, on
the other hand, shall cooperate fully, and to the extent reasonably requested by
the other party, in connection with the filing of all tax returns pursuant to
this Agreement and any audit, litigation, or other proceeding related to such
tax returns. Such cooperation shall include the retention and provision of
records and information relevant to any such tax filing, audit, litigation or
other matter and making employees available on a reasonable basis.
(d) Audits. The Stockholder shall control all audits and
contests relating to any Taxes for the Company, the Holding Subsidiaries, Eco
Holdings, Eco Ltd. and the Partnership for all tax periods ending on or prior to
the Closing Date. Buyer shall control all audits and contests relating to Taxes
of the Company, the Holding Subsidiaries, Eco Holdings, Eco Ltd. and the
Partnership for all tax periods beginning after the Closing Date.
(e) Tax Sharing Agreements. Any tax sharing agreement between
the Stockholder and the Company, the Holding Subsidiaries, Eco Holdings or Eco
Ltd. shall terminate as of the Closing Date, immediately prior to the Closing,
and will have no further effect for any taxable year (whether the current year,
a future year, or a past year).
(f) Transfer Taxes. All stamp, documentary, recording,
transfer, sales and use and similar Taxes incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by Mirant,
Buyer and Note Buyer. Mirant, Buyer and Note Buyer at their own expense shall
file, to the extent required by applicable law, all necessary Tax returns and
other documentation with respect to all such stamp, documentary, recording,
transfer, sales and use and similar Taxes.
(g) Section 338(g) Election. After the Closing, Mirant, Buyer
and Note Buyer shall cause a timely and effective election under Section 338(g)
of the Code to be made with respect to the purchase of the Company (the "Section
338 Election"). Buyer shall, and Mirant shall cause Buyer to, execute such
election, timely and properly file the same, and upon so doing provide written
assurance to the Stockholder it has done so (including providing the Stockholder
with IRS date stamped copies of such election). Mirant, Buyer and Note Buyer
shall not, and Mirant, Buyer and Note Buyer shall cause their Affiliates to not,
take any action to modify or change the Section 338 Election.
(h) Indemnification. Mirant, Buyer and Note Buyer shall, and
shall cause their Affiliates to, indemnify and hold the Stockholder and its
Affiliates harmless from and against any Taxes arising from operations,
activities, elections (other than the Section 338 Election and the Section 754
election made by Buyer with respect to its purchase from the Stockholder of the
Company, the Holding Subsidiaries, Eco Holdings, Eco Ltd. and the Partnership)
and transactions occurring on or after the Closing with respect to the Company,
the Holding Subsidiaries, Eco Holdings, Eco Ltd. and the Partnership. The
indemnification obligations under Section 4.9 hereof shall continue until such
time as the applicable statute of limitations has expired on the right of the
applicable Governmental Authority to legally impose the Tax liability upon which
the Stockholder Indemnitee's Loss is based.
(i) FIRPTA Certificate. On the Closing Date, the Stockholder
shall provide Buyer with a certificate certifying that the Stockholder is not a
"foreign person" within the meaning of Treasury Regulation 1.1445-2(b).
(j) Treatment of Payments. All indemnification payments made
under this Agreement shall be treated as Purchase Price adjustments for tax
purposes.
(k) Allocation. The Stockholder, Buyer and Note Buyer agree to
endeavor to allocate the Purchase Price among the Company Shares and the other
assets to be acquired by the Buyer (or its Affiliates) hereunder not later than
five days before the Closing Date. The agreed allocation shall be made by side
letter agreement and shall be used to file all returns and reports with respect
to Taxes. If Buyer, Note Buyer and Stockholder are unable to agree on an
allocation within 150 days after the Closing Date, Buyer, Note Buyer and
Stockholder shall each be free to make any allocation they desire. If Buyer,
Note Buyer and Stockholder fail to agree on such allocation, Mirant, Buyer and
Note Buyer shall allow Stockholder and its authorized agents and representatives
access to the Company, the Holding Subsidiaries, Eco Holdings, Eco Ltd. and the
Partnership and such other assets, rights, books and records related thereto
and/or purchased hereunder to allow Stockholder to make an appraisal of such
entities and assets and an allocation. Should Buyer or its Affiliates, on the
one hand, or Stockholder or its Affiliates, on the other hand, hire an
independent accounting or appraisal firm to appraise the value of the Company
Shares, the Company, the Holding Subsidiaries, Eco Holdings, Eco Ltd. and/or the
Partnership or any of the other assets acquired pursuant to this Agreement, the
other shall be provided with a true copy of the written appraisal report made by
such firm.
(l) Coordination. Mirant, Buyer and Note Buyer shall not take,
and shall cause their respective Affiliates, and after the Closing, the Company,
any Holding Subsidiary, Eco Holdings, Eco Ltd. and the Partnership not to take,
any action inconsistent with, contest any position with respect to, attempt to
recharacterize and/or voluntarily make any disclosure of any kind to any third
party, including any Governmental Entity, with respect to any action, election,
position, transaction, and/or characterization made or taken by the Stockholder,
the Company, any Holding Subsidiary, Eco Holdings, Eco Ltd. or the Partnership,
in respect of (i) any restructuring activity required, permitted or associated
with the completion of the transactions contemplated by this Agreement (whether
or not set forth on Schedule 4.2 hereto), or (ii) in respect of any Taxes or Tax
matter related to whole or partial taxable periods or activities on or before
the Closing. The provisions of this Section 4.9(l) shall not prohibit any
disclosure required by law, provided that no such disclosure shall be made
without first promptly notifying Stockholder and authorizing the Stockholder to
review and challenge the same.
ARTICLE 5
INDEMNIFICATION
5.1 Indemnification by Stockholder. For a period of one (1) year
following the Closing Date and subject to the limits set forth in this Article
5, the Stockholder and its successors and assigns shall indemnify, defend,
reimburse and hold harmless the Buyer Indemnitees, from and against any and all
claims, losses, damages, liabilities, obligations, assessments, penalties and
interest, demands, actions and expenses (including, without limitation,
settlement costs and any legal, accounting and other expenses for investigating
or defending any actions) ("Losses") reasonably incurred by any Buyer
Indemnitee, arising out of (i) the breach of any representation or warranty made
by the Stockholder in Article 2 of this Agreement; or (ii) the breach of any
covenant, agreement or obligation of the Stockholder contained in this Agreement
or any other Transaction Document. Notwithstanding the one-year time limitation
set forth above, the Stockholder's indemnification obligations under this
Section 5.1 arising from the breach of any representation or warranty made by
the Stockholder (x) in Section 2.12 of this Agreement shall continue until such
time as the applicable statute of limitations has expired on the right of the
applicable Governmental Authority to legally impose the Tax liability upon which
the Buyer Indemnitee's claimed Loss is based; and (y) in Section 2.13 of this
Agreement shall continue for a period of two years following the Closing Date.
Furthermore, notwithstanding the foregoing or anything else in this Agreement to
the contrary, in the event that any Buyer Indemnitee reasonably incurs Losses in
connection with the breach of any representation or warranty of the Stockholder
regarding Eco Holdings, Eco Ltd. and the Partnership made by the Stockholder in
Article 2 of this Agreement, the Stockholder's obligations under this Section
5.1 shall apply to only fifty percent (50%) of such Losses.
5.2 Indemnification by Mirant, Buyer and Note Buyer. For a period of
one (1) year following the Closing Date and subject to the limits set forth in
this Article 5, Mirant, Buyer, Note Buyer and their respective successors and
assigns shall indemnify, defend, reimburse and hold harmless the Stockholder
Indemnitees from and against any and all Losses reasonably incurred by any
Stockholder Indemnitee arising out of (i) the breach of any representation or
warranty made by Mirant, Buyer and Note Buyer in Article 3 of this Agreement;
(ii) the breach of any covenant, agreement or obligation of Mirant, Buyer or
Note Buyer contained in this Agreement or any other Transaction Document; or
(iii) the ownership or operation of the Company, the Holding Subsidiaries, Eco
Holding, Eco Ltd., and the Partnership after the Closing.
5.3 Indemnification Procedure.
(a) Whenever any claim (a "Claim") shall arise for
indemnification under this Article 5, the Indemnitee shall promptly (but in any
event within ten (10) days of Indemnitee becoming aware of the Claim) give
written notice to the Indemnitor with respect to the Claim, which notice shall
include reliable information of the facts constituting the basis for the Claim.
Notwithstanding the foregoing, the failure to timely give such notice shall not
relieve the Indemnitor from any obligation under this Agreement, except to the
extent, if any, that the Indemnitor is materially prejudiced thereby. In the
event of any Claim resulting from or in connection with any claim or legal
proceedings by a third party (a "Third Party Claim"), the notice to the
Indemnitor shall specify, if known, the amount or an estimate of the amount of
liability arising therefrom. The Indemnitee shall not settle or compromise any
claim by any third party for which it is entitled to indemnification hereunder,
without the prior written consent of the Indemnitor unless suit shall have been
instituted against it and the Indemnitor shall not have taken control of such
suit after notification thereof as provided in Section 5.3(c) hereof.
(b) Upon receipt of written notice from the Indemnitee of a
Third Party Claim, the Indemnitor shall provide counsel (such counsel subject to
the reasonable approval of the Indemnitee) to defend the Indemnitee against the
matter from which the Third Party Claim arose, at the Indemnitor's sole cost,
risk and expense. The Indemnitee shall cooperate in all reasonable respects, at
the Indemnitor's sole cost, risk and expense, with the Indemnitor in the
investigation, trial, defense and any appeal arising from the matter from which
the Third Party Claim arose. The Indemnitee shall be entitled to participate in
(but not control) the defense of any such action, with counsel at its own
expense. The Indemnitor shall have the right to elect to settle any claim for
monetary damages without the Indemnitee's consent only if the settlement
includes a complete release of the Indemnitee. If the settlement does not
include such a release, it will be subject to the consent of the Indemnitee,
which will not be unreasonably withheld; provided, however, if the Indemnitee
fails to give such consent within twenty (20) days of being requested to do so,
the Indemnitee shall, at its expense, assume the defense of such Third Party
Claim and regardless of the outcome of such matter, the Indemnitor's liability
hereunder shall be limited to the amount of the proposed settlement. The
Indemnitor may not admit any liability of the Indemnitee or waive any of the
Indemnitee's rights without the Indemnitee's prior written consent, which will
not be unreasonably withheld. If the subject of any Third Party Claim results in
a judgment or settlement, the Indemnitor shall promptly pay such judgment or
settlement.
(c) If the Indemnitor (i) fails to assume the defense of the
subject of any Third Party Claim in accordance with the terms of Section 5.3(b),
(ii) fails diligently to prosecute such defense, or (iii) has, in the
Indemnitee's reasonable good faith judgment, a conflict of interest, the
Indemnitee may defend against the subject of the Claim, at the Indemnitor's sole
cost, risk and expense, in such manner and on such terms as the Indemnitee deems
appropriate, including, without limitation, settling the subject of the Claim;
provided, however, that any compromise or settlement shall be subject to the
Indemnitor's consent, which consent will not be unreasonably withheld. If the
Indemnitee defends the subject of a Claim in accordance with this Section
5.3(c), the Indemnitor shall cooperate with the Indemnitee and its counsel, at
the Indemnitor's sole cost, risk and expense, in all reasonable respects, and
shall deliver to the Indemnitee or its counsel copies of all pleadings and other
information within the Indemnitor's knowledge or possession reasonably requested
by the Indemnitee or its counsel that are relevant to the defense of the subject
of any such Claim and that will not prejudice the Indemnitor's position, claims
or defenses. The Indemnitee shall maintain confidentiality with respect to all
such information consistent with the conduct of a defense hereunder.
5.4 Payment. All payments owing under this Article 5 will be made
promptly as indemnifiable Losses are incurred. If the Indemnitee defends the
subject matter of any Claim in accordance with Section 5.3(c), the expenses
(including reasonable attorneys' fees and costs) incurred by the Indemnitee
shall be paid by the Indemnitor in advance of the final disposition of such
matter as incurred by the Indemnitee; provided that the Indemnitee undertakes in
writing to repay any such advances in the event that it is ultimately determined
that the Indemnitee is not entitled to indemnification under the terms of this
Agreement or applicable law.
5.5 Limitations.
(a) Notwithstanding any provision of this Agreement to the
contrary, the Stockholder shall have no obligation to indemnify any Buyer
Indemnitee under this Article 5 or to pay damages in respect of contract or
other claims arising under this Agreement or any other Transaction Document
unless the Buyer Indemnitees have suffered indemnifiable Losses hereunder in an
aggregate amount attributable to all Claims in excess of One Million Five
Hundred Thousand Dollars ($1,500,000) (the "Threshold"). Once the aggregate
amount of indemnifiable Losses hereunder exceeds the Threshold, the Buyer
Indemnitees shall be entitled to recover the full amount of all such Losses in
excess of the Threshold.
(b) Notwithstanding any provision of this Agreement to the
contrary, the maximum aggregate liability of the Stockholder to the Buyer
Indemnitees for all claims arising under this Agreement and the other
Transaction Documents equals ten percent (10%) of the Purchase Price.
(c) Notwithstanding any provision of this Agreement to the
contrary, neither Mirant, Buyer nor Note Buyer shall have any obligation to
indemnify any Stockholder Indemnitee under this Article 5 or to pay damages in
respect of contract or other claims arising under this Agreement or any other
Transaction Document unless the Stockholder Indemnitees have suffered
indemnifiable Losses hereunder in the aggregate amount attributable to all
Claims in excess of the Threshold; provided, however, that Mirant's, Buyer's and
Note Buyer's obligations to indemnify any Stockholder Indemnitee for any Losses
arising from for any breach of this Agreement by Mirant, Buyer or Note Buyer of
their obligation to pay, or directly or indirectly resulting in the failure of
Mirant, Buyer and Note Buyer to pay, the Purchase Price under this Agreement,
shall not be subject to the Threshold. Subject to the foregoing proviso, once
the aggregate amount of Losses exceeds the Threshold, the Stockholder
Indemnitees shall be entitled to recover the full amount of Losses in excess of
the Threshold.
(d) Notwithstanding any provision of this Agreement to the
contrary, the maximum aggregate liability of Mirant, Buyer and Note Buyer to the
Stockholder Indemnitees for all claims arising under this Agreement and the
other Transaction Documents equals ten percent (10%) of the Purchase Price;
provided, however, that Mirant's, Buyer's and Note Buyer's liability for any
breach of this Agreement by Mirant, Buyer or Note Buyer of their obligation to
pay, or directly or indirectly resulting in the failure of both Mirant, Buyer
and Note Buyer to pay, the Purchase Price shall not be subject to such
limitation.
(e) No Indemnitee shall be entitled to indemnification under
this Article 5 for Losses (i) directly or indirectly caused by a willful or
negligent act of such Indemnitee or a breach by such Indemnitee of any
representation, warranty, covenant or other agreement set forth in this
Agreement or any duty to the potential Indemnitor or (ii) covered by insurance
proceeds from insurance owned and paid for by the Stockholder, the Companies,
the Holding Subsidiaries, the Partnership or any of their respective Affiliates
prior to the Closing, to the extent that the Buyer Indemnitees actually receive
such insurance proceeds to cover such Losses.
5.6 Survival. The representations and warranties made in this Agreement
or in any exhibit, schedule, or any other Transaction Document or certificate
shall survive any investigation made by any party hereto and the Closing of the
transactions contemplated hereby until the first anniversary of the Closing
Date; provided, however, that the representations and warranties made by the
Stockholder (x) in Section 2.12 of this Agreement shall survive until such time
as the applicable statute of limitations has expired on the right of the
applicable Governmental Authority to legally impose the Tax liability upon which
the Buyer Indemnitee's claimed Loss is based; and (y) in Section 2.13 of this
Agreement shall survive for a period of two years following the Closing Date. No
party will be liable to another under any warranty or representation after the
applicable expiration of such warranty or representation; provided, however,
that if a claim or notice is given under this Article 5 with respect to any
representation or warranty prior to the applicable expiration date, such claim
may be pursued to resolution notwithstanding expiration of the representation or
warranty under which the claim was brought.
5.7 ----------
(a) Definitions. This Section 5.7 shall apply to any PREPA Resolution
---------- For purposes of this Section 5.7, a "PREPA Resolution" shall mean
----------. For purposes of this Section 5.7, the "PREPA Resolution Amount"
shall equal either (i) ----------; (ii) the ---------- of the Partnership Effect
---------- (the "Partnership Effect"); or (iii) ----------.
(b) PREPA Resolution ----------. (i) ----------. In the event of a
pre-Closing PREPA Resolution, ----------, the Stockholder shall, in accordance
with the ---------- of the PREPA Resolution, ----------. Also in the event of a
pre-Closing PREPA Resolution, at the Closing, ---------- equal to the lesser of
(A) ---------- of the Partnership Effect, if any, and (B) ---------- of the
Partnership Effect, if any, such that when added to ----------, the total amount
---------- under the PREPA Resolution ----------.
(ii) In the event of a pre-Closing PREPA Resolution that requires
---------- or of any PREPA Resolution that occurs ----------, the Stockholder
shall, (A) ---------- of (1) ---------- and (2) ----------, and (B) -----------
of (1) ----- of the Partnership Effect, if any, and (2) that portion of the
Partnership Effect, if any, ---------- under the PREPA Resolution equals
----------.
(iii) In the event that no PREPA Resolution ----------. In the event
that no PREPA Resolution ----------.
(c) PREPA Resolution ----------. In the event of a pre-Closing PREPA
Resolution ----------.
(d) Limitations. ----------
(e) Required Approvals. Without the prior written consent of the Buyer,
----------- PREPA Resolution pursuant to which (i) the PREPA Resolution Amount
----------, or (ii) the PREPA Resolution is -----------. Without the prior
written consent of the Stockholder, ---------- PREPA Resolution pursuant to
which (i) the PREPA Resolution Amount ----------, or (ii) the PREPA Resolution
is ----------. Notwithstanding the foregoing sentence, Buyer shall not be
required ---------- for a PREPA Resolution ---------- provided that Buyer
---------- relating to such PREPA Resolution ----------.
(f) ----------. In the event that at any time ---------- In the event
that ---------- results in a PREPA Resolution, ----------. For purposes of this
Section 5.7(f), ----------- shall mean (i) ----------- the PREPA Resolution
Amount, or (ii) ---------- in the event such PREPA Resolution Amount ----------.
(g) PREPA Resolution ----------. During such time as ---------- in any
PREPA Resolution pursuant to this Section 5.7, (i) --------- to achieve a PREPA
Resolution; and (ii) ----------. ----------
5.8 Exclusivity of Indemnification. The indemnification provisions of
this Article 5 are intended to provide the exclusive remedy as to all Losses
that any party hereunder may incur arising from or relating to the transactions
contemplated by this Agreement. Each party hereby waives, to the extent that it
may do so, any other rights or remedies that may arise under any applicable
statute, rule or regulation; provided, however, that the foregoing shall not be
interpreted to limit the types of remedies, including specific performance or
other equitable remedies, which may be sought by an Indemnitee in connection
with a breach of any covenant or agreement contained herein and shall not limit
any available remedy for a willful misrepresentation or breach by another party.
5.9 Consequential Damages and Remedies. No party will be liable to any
other party in connection with this Agreement, or any of the transactions
contemplated hereby, for any consequential, punitive, special or indirect
damages. Each party hereby expressly releases the other parties, their
respective Affiliates, directors, officers, employees, agents and
representatives from any such liability.
ARTICLE 6
CONDITIONS TO CLOSING
6.1 Conditions to Obligations of Each Party. The obligations of the
Stockholder, on the one hand, and Mirant, Buyer and Note Buyer, on the other
hand, to consummate the transactions contemplated hereby are subject to the
fulfillment to the reasonable satisfaction of the party entitled to the benefit
of the conditions in this Section 6.1, on or before the Closing Date, any one or
more of which may be jointly waived in writing by the Stockholder and Buyer
acting together.
(a) No Action or Proceeding. No preliminary or permanent
injunction or other order issued by any Governmental Entity that declares this
Agreement invalid in any material respect or prevents or would be violated by
the consummation of the transactions contemplated hereby, or which would have a
Material Adverse Effect, is in effect. No action or proceeding has been
instituted or threatened by any Governmental Entity, other person, or entity
which seeks to prevent or delay the consummation of the transactions
contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement, the result of which could constitute a
Material Adverse Effect.
(b) Consents, Approvals and Filings. All consents,
authorizations and approvals from, and all declarations, filings and
registrations with, governmental agencies or third parties that are listed on
Schedules 2.7, 2.8 and 3.4 shall have been obtained or made, as appropriate. All
waiting periods under the HSR Act shall have expired or been properly
terminated.
6.2 Conditions to Obligations of Buyer. The obligations of Mirant,
Buyer and Note Buyer to consummate the transactions contemplated hereby are
subject to the fulfillment, on or before the Closing Date, of the conditions set
forth in this Section 6.2, any one or more of which may be waived by Mirant or
Buyer in writing in its discretion.
(a) Representations and Warranties; Covenants. The
representations and warranties of the Stockholder contained in this Agreement
(as revised, modified or updated pursuant to Section 4.10 hereof) shall be true
and correct in all material respects on the Closing Date; provided, however,
that if any portion of any such representation or warranty is already qualified
by materiality, for purposes of determining whether this condition has been
satisfied with respect to such portion of such representation or warranty, such
portion of such representation or warranty as so qualified must be true and
correct in all respects The Stockholder shall have performed in all material
respects all obligations required to be performed by it under this Agreement on
or before the Closing Date. At the Closing, the Stockholder shall have delivered
to Buyer a certificate dated as of the Closing Date to such effect signed by an
authorized representative of the Stockholder.
(b) LNG Term Out under Credit Agreement. The Term-Out of all
Construction Loans into Term Loans shall have been completed pursuant to Section
2.01(b) of the Credit Agreement referenced on Schedule 2.10.
(c) Restructuring Activities. The restructuring activities set
forth on Schedule 4.2 shall have been completed.
(d) Stock Books. The Stockholder shall have delivered any
stock books, stock ledgers, minute books and any corporate seals of the Company
and the Holding Subsidiaries.
(e) Resignation of Directors. Buyer shall have received
written resignations of the directors of the Company and the Holding
Subsidiaries.
(f) Satisfaction of Other Closing Conditions. All conditions
to the obligations of Mirant, Buyer and Note Buyer to close the transaction
contemplated under that certain Stock Purchase Agreement by and among Edison
Mission Energy, EME del Caribe, Mirant, Buyer and Note Buyer, dated as of the
date hereof, shall have been satisfied or waived.
6.3 Conditions to Obligations of the Stockholder. The obligations of
the Stockholder to consummate the transactions contemplated hereby are subject
to the fulfillment, on or before the Closing Date, of the conditions set forth
in this Section 6.3, any one or more of which may be waived by the Stockholder
in writing in its discretion.
(a) Representations and Warranties; Covenants. The
representations and warranties of Mirant and Buyer contained in this Agreement
shall be true and correct in all material respects as of the date hereof and on
the Closing Date; provided, however, that if any portion of any such
representation or warranty is already qualified by materiality, for purposes of
determining whether this condition has been satisfied with respect to such
portion of such representation or warranty, such portion of such representation
or warranty as so qualified must be true and correct in all respects. Mirant and
Buyer shall have performed in all material respects all obligations required to
be performed by them under this Agreement on or before the Closing Date. At the
Closing, both Mirant and Buyer shall have delivered to the Stockholder a
certificate dated as of the Closing Date to such effect signed by the Secretary
of Buyer.
(b) Removal as Guarantor. Buyer shall have caused the
Stockholder and its Affiliates to be removed as a guarantor of the Guaranteed
Indebtedness in accordance with Section 4.3.
(c) Replacement of Insurance Obligations. Buyer shall have
replaced the Stockholder's or its Affiliates' Insurance Obligations in
accordance with Section 4.4.
(d) Assignment and Assumption Agreement. Buyer or its
Affiliate shall have assumed, pursuant to the Assignment and Assumption
Agreement referenced in Section 4.5 hereof, all of the rights and obligations
under the OMFM Agreement.
ARTICLE 7
TERMINATION AND ABANDONMENT
7.1 Termination. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to the Closing:
(a) by Mirant or Buyer, if (i) the Stockholder fails to comply
in any material respect with any of its covenants or agreements contained
herein, or (ii) any of the representations and warranties of the Stockholder set
forth in Article 2 hereof (as revised, modified or updated pursuant to Section
4.8 hereof) is breached or is inaccurate in any material respect, or (iii) any
event has occurred or circumstances exist which have a Material Adverse Effect;
provided, however, that neither Mirant nor Buyer may terminate this Agreement
pursuant to this Section 7.1(a) if (x) the Stockholder has cured such material
noncompliance, breach, inaccuracy or Material Adverse Effect within fifteen (15)
business days after the receipt of written notice thereof by Mirant or Buyer or
(y) Mirant or Buyer has breached in any material respect any of its
representations, warranties or obligations under this Agreement;
(b) by the Stockholder, if (i) Mirant, Buyer or Note Buyer
fails to comply in any material respect with any of its covenants or agreements
contained herein, or (ii) any of the representations and warranties of Mirant,
Buyer or Note Buyer set forth in Section 3 hereof is breached or is inaccurate
in any material respect; provided, however, that the Stockholder may not
terminate this Agreement pursuant to this Section 7.1(b) if (x) Mirant, Buyer
and Note Buyer has cured such noncompliance, breach or inaccuracy within fifteen
(15) business days after the receipt of written notice thereof by the
Stockholder or (y) the Stockholder has breached in any material respect any of
its representations, warranties or obligations under this Agreement; or
(c) by the Stockholder, on the one hand, or Mirant, Buyer or
Note Buyer, on the other hand, if (i) a Governmental Entity has issued a
non-appealable order, decree or ruling or taken any other action (which order,
decree or ruling the parties hereto have used all their commercially reasonable
efforts to lift), which permanently restrains, enjoins or otherwise prohibits
the transactions contemplated by this Agreement; or (ii) a condition to the
terminating party's performance hereunder has not been satisfied or waived prior
to December 31, 2001; provided, however, that a party may not terminate this
Agreement pursuant to this Section 7.1(c) if such party's failure to fulfill any
of its obligations under this Agreement is the reason for the occurrence of
either of the foregoing clauses (i) or (ii) hereof.
7.2 Notice of Termination. In the event of termination of this
Agreement pursuant to Section 7.1 hereof, written notice shall be given
forthwith by the terminating party to the other parties and this Agreement will
terminate and the transactions contemplated hereby will be abandoned in
accordance with the terms of this Article 7, without further action by any
party.
7.3 Effect of Termination. If this Agreement is terminated as provided
in this Article 7, no party to this Agreement will have any liability or further
obligation to any other party to this Agreement, except as provided in Sections
4.1(b), 8.10, 8.11, 8.13, and 8.14 and except that termination of this Agreement
will not affect any liability of any party for any breach of this Agreement
prior to termination, or any breach at any time of the provisions hereof
surviving termination.
ARTICLE 8
MISCELLANEOUS
8.1 Definitions.
(a) "Action" means any action, suit, counterclaim,
cross-claim, appeal, arbitration or mediation for any relief against a party
hereunder or any of its Affiliates, successors or assigns, declaratory or
otherwise, to enforce the terms of this Agreement or to declare rights under
this Agreement.
(b) "Affiliate" has the meaning ascribed to it in Rule 405
under the Securities Act.
(c) "Bankruptcy Exception" means the limitations on
enforceability imposed by general principles of equity and bankruptcy,
insolvency, reorganization and moratorium and other similar laws relating to
creditors' rights.
(d) "Buyer" has the meaning ascribed to it in the preamble to
this Agreement.
(e) "Buyer Indemnitees" means Buyer and its directors,
officers and employees.
(f) "Capital Stock" means common stock, preferred stock,
partnership interests, limited liability company interests or other ownership
interests of the issuer thereof.
(g) "Claim" has the meaning ascribed to it in Section 5.3(a)
hereof.
(h) "Closing" has the meaning ascribed to it in Section 1.1
hereof.
(i) "Closing Date" has the meaning ascribed to it in Section
1.2 hereof.
(j) "Company" has the meaning ascribed to it in Recital A
hereof.
(k) "Company Shares" has the meaning ascribed to it in Section
2.3 hereof.
(l) "Confidential Information" means any information not in
the public domain, in any form, whether acquired prior to or after the Closing
Date, received from the Stockholder, the Company or any of their advisors
relating to the business and operations of the Stockholder, the Company, the
Holding Subsidiaries, the Partnership and their respective Affiliates,
including, without limitation, information regarding vendors, suppliers, trade
secrets, training programs, technical information, contracts, systems,
procedures, know-how, trade names, improvements, price lists, financial or other
data, business plans, computer programs, software systems, internal reports,
personnel files or any other compilation of information, written or unwritten,
which is or was used in the business of the Stockholder, the Company, the
Holding Subsidiaries, the Partnership or their respective Affiliates, except for
information (i) that was or becomes generally available to the public, other
than as a result of disclosure by Mirant or Buyer; or (ii) that is received by
Mirant or Buyer or any of their Affiliates on a non-confidential basis from a
third party that is not prohibited from disclosing such information by
obligation to the Stockholder, the Company, the Holding Subsidiaries or the
Partnership.
(m) "Contracts" has the meaning ascribed to it in Section 2.10
hereof.
(n) "Decision" means any judgment, order, ruling, or award
granted with respect to an Action.
(o) "Disclosure Schedule" means the disclosure schedule of the
Stockholder attached hereto as Schedule 2 and the Schedules included therein.
(p) "Distributions" has the meaning ascribed to it in Section
2.16 hereof.
(q) "DOJ" means the United States Department of Justice.
(r) "Eco Holdings" means EcoElectrica Holdings, Ltd., an
entity organized under the laws of the Cayman Islands.
(s) "Eco Ltd." means EcoElectrica Ltd., an entity organized
under the laws of the Cayman Islands.
(t) "Environmental Laws" means all applicable laws,
regulations and other requirements of Governmental Entities or duties under
common law (other than the same relating to Taxes) relating to toxic or
hazardous substances, wastes, pollution or to the protection of health, safety
or the environment.
(u) "Environmental Permits" means all licenses, permits and
other authorizations or registrations required under all Environmental Laws.
(v) "Facility" has the meaning ascribed to it in Recital A
hereof.
(w) "FERC" means the Federal Energy Regulatory Commission.
(x) "Financial Statements" has the meaning ascribed to it in
Section 2.6(a).
(y) "FTC" means the United States Federal Trade Commission.
(z) "Governmental Entity" means any court, arbitrator,
federal, state or local government agency, regulatory body, or other
governmental authority.
(aa) "Guaranteed Indebtedness" has the meaning ascribed to it
in Section 4.3. hereof.
(bb) "Holding Subsidiaries" means all of the entities
identified as Holding Subsidiaries on Schedule 2.2 to the Agreement.
(cc) "Holding Subsidiary Shares" has the meaning ascribed to
it in Section 2.3 hereof.
(dd) "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
(ee) "Indemnitee" means the party entitled to indemnification
under Article 5 hereof.
(ff) "Indemnitor" means the party obligated to provide
indemnity under Article 5 hereof.
(gg) "Insurance Obligations" has the meaning ascribed to it
in Section 4.4 hereof.
(hh) "knowledge" or "known" means, with respect to any
individual, the actual knowledge of such individual or, in the case of the
Stockholder, the actual knowledge, without independent investigation, of Xxxx
Xxxxxx and Xxxx Xxxxxx.
(ii) "License" means any permit, license or other governmental
authorization.
(jj) "LNG Tolling Agreement" means the LNG Tolling Services
Agreement between the Partnership and the Stockholder dated October 31, 1997.
(kk) "Losses" has the meaning ascribed to it in Section 5.1
hereof.
(ll) "Material Adverse Effect" means an effect or series of
effects that, either individually or in the aggregate, is materially adverse to
the business, assets, financial condition or results of operations of the
Partnership, taken as a whole; provided, however, that any such effect or
effects arising from any circumstances not disclosed in this Agreement or the
schedules hereto that result, or are reasonably likely to result, in an
uninsured loss to the Partnership in excess of $30,000,000 shall be conclusively
presumed to constitute a Material Adverse Effect; and provided further that,
notwithstanding the foregoing, none of the following will be deemed,
individually or together, to constitute a "Material Adverse Effect:" (x) any
changes, circumstances or effects resulting from or relating to changes or
developments in the economy, financial markets, commodity markets, laws,
regulations or rules in the applicable electric power markets (including,
without limitation, changes in laws or regulations affecting owners or providers
of electric generation, transmission or distribution as a group and not the
Partnership exclusively) or in the political climate generally or in any
specific region; (y) any changes in conditions or developments generally
applicable to the industries in which the Partnership is involved; and (z) any
changes, circumstances or effects attributable to the announcement or pendency
of the transactions contemplated by this Agreement (including any cancellations
of or delays in customer agreements, any reductions in sales, any disruption in
supplier, distributor, partner or similar relationships or any loss of
employees), or resulting from or relating to compliance with the terms of, or
the taking of any action required by, this Agreement.
(mm) "OMFM Agreement" means the Operations, Maintenance and
Fuels Management Agreement between the Partnership and EI Puerto Rico
Operations, Inc. dated October 31, 1997.
(nn) "Other Assets" means those items set forth on Schedule
8.1.
(oo) "Partnership Interests" means the interests in the
Partnership, as described in Section 2.3 hereof.
(pp) "Partnership" means EcoElectrica, LP, a Bermuda limited
partnership.
(qq) "Partnership Agreement" means the Partnership Agreement
dated December 10, 1997 between EcoElectrica Holdings, Ltd. and EcoElectrica
Ltd relating to the Partnership.
(rr) "PREPA" means the Puerto Rico Electric Power Authority.
(ss) "PPOA" means the Power Purchase and Operating Agreement
dated March 10, 1995, as amended, between PREPA and the Partnership.
(tt) "Prevailing Party" has the meaning ascribed to it in
Section 8.14.
(uu) "Purchase Price" has the meaning ascribed to it in
Section 1.3 hereof.
(vv) "Securities Act" means the Securities Act of 1933, as
amended.
(ww) Stockholder" means Enron Asset Holdings, LLC, a Delaware
limited liability company.
(xx) "Stockholder Indemnitees" means the Stockholder and its
Affiliates, and the directors, officers and employees of any of them.
(yy) "Subordinated Note" means the EDC Subordinated Promissory
Note representing a loan from Enron Development Corp. to the
Partnership in the principal amount of $12,064,185 (plus accrued
interest through 5/31/01 of $6,100,329 and interest accruing after
5/31/01 in accordance with the terms of the Note).
(zz) "Tax or Taxes" means all taxes, imposts, duties or
assessments of any kind or nature whatsoever, and howsoever described
or denominated, including income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental, property, ad valorem, customs duties, capital,
wealth, capital stock, franchise, profits, withholding, social security
(or similar), sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax or charge of any
kind whatsoever, including any interest, penalty, or addition thereto,
whether disputed or not, imposed by any governmental or taxing
authority.
(aaa) "Taxpayer" has the meaning ascribed to it in Section
2.12(a) hereof.
(bbb) "Threshold" has the meaning ascribed to it in Section
5.5(a) hereof.
(ccc) "Transaction Documents" means this Agreement, the
Assignment and Assumption Agreement referenced in Section 4.5 hereof, and all
necessary stock powers required to be delivered in connection with the
consummation of the transaction contemplated by this Agreement.
8.2 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed given upon personal delivery
or three (3) days after being mailed by certified or registered mail, postage
prepaid, return receipt requested, or one (1) business day after being sent via
a nationally recognized overnight courier service if overnight courier service
is requested from such service or upon receipt of electronic or other
confirmation of transmission if sent via facsimile, to the parties, their
successors in interest or their assignees at the following addresses and
telephone numbers, or at such other addresses or telephone numbers as the
parties may designate by written notice in accordance with this Section 8.2:
If to Mirant, Buyer or Note Buyer:
Mirant EcoElectrica Investments I, Ltd.
0000 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: J.R. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Xxxxxxxx Xxxxxxx LLP
000 0xx Xxxxxx, XX, Xxxxx 0000
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Stockholder: Enron Global Assets & Services
000 Xxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: General Counsel
Facsimile No.: (000) 000-0000
With a copy to: Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
Attn: Xxxx Xxxx
Facsimile No.: (000) 000-0000
8.3 Assignability and Parties in Interest. This Agreement and the
rights, interests or obligations hereunder may not be assigned by any of the
parties hereto without the prior written consent of the other parties hereto;
provided, however, that this Agreement may be assigned to an Affiliate, but that
no such assignment shall relieve Mirant, Buyer or Note Buyer of their respective
obligations hereunder. This Agreement shall inure to the benefit of and be
binding upon Mirant, Buyer, Note Buyer, the Stockholder, and their respective
permitted successors and assigns. Nothing in this Agreement will confer upon any
person or entity not a party to this Agreement, or the legal representatives of
such person or entity, any rights or remedies of any nature or kind whatsoever
under or by reason of this Agreement.
8.4 Publicity. No press release or other public announcement or
disclosure related to this Agreement or the transactions contemplated herein
(including but not limited to the terms and conditions of this Agreement) shall
be issued or made without the prior approval of Buyer, on the one hand, and the
Stockholder, on the other hand. The foregoing shall not prohibit any disclosure
required by law; provided that such disclosure is made pursuant to Section
4.1(b) hereof and that the disclosing party consults with the other parties at
least one (1) business day in advance of such disclosure. To the extent a
disclosure is required by law, the disclosing party shall cooperate with the
other parties hereto to prepare an appropriate confidential treatment request
with the applicable Governmental Entity in order to prevent disclosure of any
sensitive matters as to which the disclosing party believes there exists a good
faith argument for confidential treatment.
8.5 Complete Agreement. This Agreement, the exhibits and schedules
hereto and the other Transaction Documents contain or will contain the entire
agreement between the parties hereto with respect to the transactions
contemplated herein and therein and shall supersede all previous oral and
written and all contemporaneous oral negotiations, commitments, and
understandings including, without limitation, all letters, memoranda or other
documents or communications, whether oral, written or electronic, submitted or
made by (a) Mirant, Buyer Note Buyer or their respective agents or
representatives to the Stockholder, Credit Suisse First Boston Corporation or
any of their respective agents or representatives, or (b) the Stockholder,
Credit Suisse First Boston Corporation or their respective agents or
representatives to Mirant, Buyer, Note Buyer or any of their respective agents
or representatives, in connection with the bidding process which occurred prior
to the execution of this Agreement or otherwise in connection with the
negotiation and execution of this Agreement. No communications by or on behalf
of the Stockholder, including responses to any questions or inquiries, whether
orally, in writing or electronically, and no information provided in any data
room or any copies of any information from any data room provided to Mirant,
Buyer or Note Buyer or any other information shall be deemed to (x) constitute a
representation, warranty or an agreement of the Stockholder, or (y) be part of
this Agreement.
8.6 Acknowledgment; Independent Due Diligence. Mirant, Buyer and Note
Buyer acknowledge that the Stockholder has not made any representation or
warranty, expressed or implied, as to the accuracy or completeness of any
information regarding the Stockholder, the Company or any of the Holding
Subsidiaries, Eco Holdings, Eco Ltd., the Partnership or the Facility not
included in this Agreement and the schedules hereto. Without limiting the
generality of the foregoing, no representation or warranty is made with respect
to any information in the Confidential Information Memorandum, dated April 2001,
or any supplement or amendment thereto provided in connection with the
solicitation of proposals to enter into the transactions contemplated by this
Agreement, such information having been provided for the convenience of Mirant,
Buyer and Note Buyer in order to assist Mirant, Buyer and Note Buyer in framing
its due diligence efforts. Mirant, Buyer and Note Buyer further acknowledge
that: (a) Mirant, Buyer and Note Buyer, either alone or together with any
individuals or entities Mirant, Buyer or Note Buyer has retained to advise it
with respect to the transactions contemplated hereby, have knowledge and
experience in transactions of this type and in the business of the Stockholder,
the Company, the Holding Subsidiaries, Eco Holdings, Eco Ltd. and the
Partnership and is therefore capable of evaluating the risks and merits of
acquiring the Company Shares; (b) it has relied on its own independent
investigation, and has not relied on any information or representations
furnished by the Stockholder or any representative or agent thereof (except as
specifically set forth herein), in determining to enter into this Agreement; (c)
neither the Stockholder nor any representative or agent thereof has given any
investment, legal or other advice or rendered any opinion as to whether the
purchase of the Company Shares is prudent, and Mirant, Buyer and Note Buyer are
not relying on any representation or warranty by the Stockholder or any
representative or agent thereof except as set forth in this Agreement; (d)
Mirant, Buyer and Note Buyer have conducted extensive due diligence, including a
review of the documents contained in a data room prepared by or on behalf of the
Stockholder ; and (e) the Stockholder has made available to Mirant, Buyer and
Note Buyer all documents, records and books pertaining to the Company, the
Holding Subsidiaries, the Partnership and the Facility that Mirant, Buyer, Note
Buyer and their attorneys, accountants, advisors have requested, and Mirant,
Buyer, Note Buyer and their attorneys, accountants and advisors have had the
opportunity to visit the Facility, and ask questions and receive answers
concerning the Company, the Holding Subsidiaries, the Partnership, and the
Facility and the terms and conditions of this Agreement. All such questions have
been answered to Mirant's, Buyer's and Note Buyer's full and complete
satisfaction.
8.7 Disclaimer Regarding Assets. Except as otherwise expressly provided
herein, the Stockholder expressly disclaims any representations or warranties of
any kind or nature, express or implied, as to the condition, value or quality of
the assets or operations of the Company, the Holding Subsidiaries, Eco Holdings,
Eco Ltd., the Partnership, the Facility or the prospects (financial and
otherwise), risks and other incidents of the Company, the Holding Subsidiaries,
Eco Holdings, Eco Ltd., the Partnership or the Facility, and the Stockholder
specifically disclaims any representation or warranty of merchantability, usage,
suitability or fitness for any particular purpose with respect to such 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, or the rights of the Company, the
Holding Subsidiaries, Eco Holdings, Eco Ltd., the Partnership or the Facility
in, or their title to, any of their assets, or any part thereof, or whether the
Company, the Holding Subsidiaries, Eco Holdings, Eco Ltd., the Partnership or
the Facility possess sufficient real property or personal property interests to
own or operate such assets. Except as expressly provided herein, no schedule or
exhibit to this Agreement, nor any other material or information provided by or
communications made by the Stockholder or any of their respective
representatives will cause or create any warranty, express or implied, as to the
condition, value or quality of such assets. Without limiting the generality of
the foregoing, no representation or warranty is made with respect to the
accuracy of any information provided in any site tours or on any web site, or in
any meetings with management or other personnel of the Company, the Holding
Subsidiaries, Eco Holdings, Eco Ltd., the Partnership, the Facility or their
respective representatives, except as expressly set forth herein.
8.8 Modifications, Amendments and Waivers. At any time prior to the
Closing Date or termination of this Agreement, the Stockholder, on the one hand,
and Mirant, Buyer and Note Buyer, on the other hand, may (a) waive any
inaccuracies in the representations and warranties of the other contained in
this Agreement or in any other Transaction Document; and (b) waive compliance by
the other party with any of the covenants or agreements contained in this
Agreement. No waiver of any of the provisions of this Agreement will be
considered, or will constitute, a waiver of any of the rights or remedies, at
law or equity, of the party entitled to the benefit of such provisions unless
made in writing and executed by the party entitled to the benefit of such
provision.
8.9 Headings; References. The headings contained in this Agreement and
the other Transaction Documents are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. References
herein to articles, sections, schedules and exhibits refer to the referenced
articles, sections, schedules or exhibits hereof unless otherwise specified.
8.10 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of Texas.
8.11 Submission to Jurisdiction. All actions or proceedings arising in
connection with this Agreement shall be tried and litigated exclusively in the
state or federal courts located in the County of Xxxxxx, State of Texas. The
aforementioned choice of venue is intended by the parties to be mandatory and
not permissive in nature, thereby precluding the possibility of litigation
between the parties with respect to or arising out of this Agreement in any
jurisdiction other than that specified in this paragraph. Each party hereby
waives any right it may have to assert the doctrine of forum non conveniens or
similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this paragraph, and stipulates that the state and federal courts
located in the County of Xxxxxx, State of Texas shall have in personam
jurisdiction over each of them for the purpose of litigating any such dispute,
controversy, or proceeding. Each party hereby authorizes and accepts service of
process sufficient for personal jurisdiction in any action against it as
contemplated by this Section 8.11 by registered or certified mail, return
receipt requested, postage prepaid, to its address for the giving of notices as
set forth in Section 8.2. Nothing herein shall affect the right of any party to
serve process in any other manner permitted by law.
8.12 Severability. Any provision of this Agreement which is invalid,
illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality, or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal, or unenforceable in any other jurisdiction.
8.13 Expenses of Transactions. All fees, costs and expenses incurred by
Mirant, Buyer and Note Buyer in connection with the transactions contemplated by
this Agreement shall be borne by Mirant, Buyer and Note Buyer, and all fees,
costs and expenses incurred by Stockholder in connection with the transactions
contemplated by this Agreement shall be borne by the Stockholder. The
Stockholder shall be liable for any fees or commissions payable to Credit Suisse
First Boston Corporation in connection with the transactions contemplated by
this Agreement to the extent they become due pursuant to contractual
arrangements made by or on behalf of the Stockholder.
8.14 Attorneys' Fees. If Mirant, Buyer, Note Buyer or any of their
Affiliates, successors or assigns brings any Action against the Stockholder or
any of its Affiliates, successors or assigns, or if the Stockholder or any of
its Affiliates, successors or assigns brings any Action against Mirant, Buyer,
Note Buyer or any of their Affiliates, successors or assigns, in each case in
connection with this Agreement, in addition to any damages and costs which the
prevailing party otherwise would be entitled, the non-prevailing party shall pay
to the prevailing party its actual attorneys' fees and costs incurred in
bringing and prosecuting such Action and/or enforcing any Decision granted
therein, all of which shall be deemed to have accrued on the commencement of
such Action and shall be paid whether or not such action is prosecuted to a
Decision. Any Decision entered in such Action shall contain a specific provision
providing for the recovery of attorneys' fees and costs incurred in enforcing
such Decision. For the purposes of this Section 8.14, attorneys' fees shall
include, without limitation, fees incurred in the following: (a) postjudgment
motions and collection actions; (b) contempt proceedings; (c) garnishment, levy
and debtor and third party examinations; (d) discovery; and (e) bankruptcy
litigation. For purposes of this Section 8.14, the "prevailing party" means the
party who agrees to dismiss an action on the other party's payment of the sum
allegedly due or performance of the covenants allegedly breached, or who obtains
substantially the relief sought by it. If there are multiple claims, the
prevailing party shall be determined with respect to each claim separately. The
prevailing party shall be the party who has obtained the greater relief in
connection with any particular claim, although, with respect to any claim, it
may be determined that there is no prevailing party.
8.15 Joint and Several Liability; Waiver. (a) Whether or not expressly
stated in this Agreement, all of Buyer's and Note Buyer's payment obligations
under this Agreement are the joint and several obligations of Buyer, Note Buyer
and Mirant.
(b) Without in any manner limiting the obligations of either
Mirant, Buyer or Note Buyer hereunder, the Stockholder may, subject to the terms
and conditions hereof, (i) accept partial payments from either Mirant, Buyer or
Note Buyer on account of the obligations; (ii) create new indebtedness or renew,
compromise, extend, increase, accelerate and otherwise change the time for
payment of, or otherwise change the terms of, any of the Transaction Documents,
or any part thereof; (iii) release or substitute either Mirant, Buyer or Note
Buyer, and otherwise deal with either Mirant, Buyer or Note Buyer as the
Stockholder may determine in accordance with the terms hereof and applicable
law; (iv) settle or release, either by agreement or by operation of law, either
Mirant,Buyer or Note Buyer; and (v) proceed directly against the property of
either Mirant, Buyer or Note Buyer without proceeding against the other to
collect and recover the full amount of the obligations or any portion thereof,
and each of Mirant, Buyer and Note Buyer waives any right to require the
Stockholder to proceed against the other, or pursue any other remedy in the
Stockholder's power whatsoever.
(c) Each of Mirant, Buyer and Note Buyer hereby waives any
defense arising by reason of any disability or other defense of the other or by
reason of the cessation from any action of any kind against the other. The
Stockholder may, at its election, exercise any right or remedy it may have
against either Mirant, Buyer or Note Buyer without affecting or impairing in any
way the liability of the other hereunder. The Stockholder's rights under this
Agreement and the other Transaction Documents will be enforceable without regard
to the validity, regularity or enforceability of the obligations of either
Mirant, Buyer or Note Buyer or any document evidencing the same.
(d) Until all of the obligations under this Agreement and the
other Transaction Documents have been fully and finally satisfied, neither
Mirant, Buyer nor Note Buyer shall have any right of subrogation to any of the
rights of the Stockholder against Mirant, Buyer or Note Buyer and each of
Mirant, Buyer and Note Buyer waives any right to enforce any remedy which the
Stockholder now has or may hereafter have against Mirant, Buyer or Note Buyer.
(e) Each of Mirant, Buyer and Note Buyer waives all rights and
defenses arising out of an election of remedies by the Stockholder even though
that election of remedies has destroyed Mirant's, Buyer's or Note Buyer's rights
of subrogation, reimbursement and/or contribution against the other.
8.16 Further Assurances. Upon the reasonable request of a party or
parties hereto at any time after the Closing Date, the other party or parties
shall forthwith execute and deliver such further instruments of assignment,
transfer, conveyance, endorsement, direction or authorization and other
documents as the requesting party or parties or its or their counsel may
reasonably request in order to effectuate the purposes of this Agreement.
8.17 Counterparts. Facsimile transmission of any signed original
document and/or retransmission of any signed facsimile transmission will be
deemed the same as delivery of an original. At the request of any party, the
parties will confirm facsimile transmission by signing a duplicate original
document. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which shall constitute but one and the same
instrument.
[The remainder of this page has been intentionally left
blank; signature page follows.]
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first written above.
BUYER:
MIRANT ECOELECTRICA INVESTMENTS I, LTD.
By:
--------------------------------------------------
Name:
--------------------------------------------------
Title:
--------------------------------------------------
NOTE BUYER
MIRANT ECOELECTRICA FINANCE, LTD.
By:
--------------------------------------------------
Name:
--------------------------------------------------
Title:
--------------------------------------------------
MIRANT:
MIRANT CORPORATION
By:
-------------------------------------------------------
Name:
-----------------------------------------------------
Title:
----------------------------------------------------
THE STOCKHOLDER:
ENRON ASSET HOLDINGS, LLC
By: Enron Finance Management, LLC
Its Class A and Managing Member
By: Enron Corp.
Its Sole Member
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
SCHEDULE 1
The Facility
EcoElectrica L.P.'s 507 MW power plant and LNG Receiving Terminal
located in Penuelas, Puerto Rico
SCHEDULE 2
DISCLOSURE SCHEDULE
The following are exceptions to the representations and warranties of
Enron Asset Holdings, LLC, a Delaware LLC (the "Stockholder") contained in that
certain Stock Purchase Agreement by and among the Stockholder; Mirant
Corporation, a Delaware corporation ("Mirant"); and Mirant Eco Electrica
Investements I, Ltd., a British Virgin Islands international business company
("Buyer") and Mirant Eco Electrica Finance Ltd., a British Virgin Islands
international business company (the "Note Buyer"), both wholly-owned
subsidiaries of Mirant (the "Agreement"). All capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in the Agreement.
The numbered schedules contained in this disclosure schedule correspond to the
section numbers in the Agreement; provided, however, that any item disclosed in
any particular schedule contained in this disclosure schedule shall constitute
an exception to all other representations or warranties made in the Agreement to
which such item applies.
SCHEDULE 2.2
The Holding Subsidiaries
(i) LNG Power VI Limited, a Cayman Islands limited liability company ("LNGP
VI"); (ii) LNG Power IV Limited, a Cayman Islands limited liability company
("LNGP IV"); (iii) LNG Power I LLC, a Delaware limited liability company ("LNGP
I"); (iv) LNG Power III LLC, a Delaware limited liability company ("LNGP III");
(v) LNG Power II LLC, a Delaware limited liability company ("LNGP II"); and (vi)
Buenergia Gas & Power Ltd., a Cayman Islands limited liability company ("BGPL").
Schedule 2.3
Pledge of Partnership Interests
Pledge of the Partnership Interests to the lenders under the Credit Agreement,
dated October 31, 1997, with ABN AMRO Bank N.V. as the administrative agent, as
amended, pursuant to (a) the Assignment and Security Agreement between
EcoElectrica Holdings Ltd. and Chase Manhattan Bank dated October 31, 1997, and
(b) the Assignment and Security Agreement between EcoElectrica, Ltd. and Chase
Manhattan Bank dated October 31, 1997, and related agreements.
SCHEDULE 2.5
Miscellaneous Contracts
1. Members Agreement among the Company, Project Finance XI, Ltd. (also
sometimes referred to herein as "GE"), and LNG Power VI, Ltd. dated March
23, 2000.
2. Shareholders Agreement among the Company, Project Finance XI, Ltd., and LNG
Power VI, Ltd. dated March 23, 2000.
3. Purchase Agreement among the Company, Project Finance XI, Ltd., and LNG
Power VI, Ltd. dated March 23, 2000.
4. Master Subscription Agreement among the Company, Project Finance XI, Ltd.,
and LNG Power VI, Ltd. dated March 23, 2000.
5. U.S. Tax Agreement among the Company, Project Finance XI, Ltd., and LNG
Power VI, Ltd. dated March 23, 2000.
6. Purchase Agreement among the Company, Project Finance XI, Ltd., and LNG
Power II, Ltd. dated March 23, 2000.
7. Master Amendment Agreement among the Company, Project Finance XI, Ltd., and
LNG Power II, Ltd. dated March 31, 2000.
8. Subscription Agreement among the Company, Project Finance XI, Ltd., and LNG
Power II, Ltd. dated March 31, 2000.
9. Shareholder's Agreement by and among EME del Caribe, BGPL, and Eco
Electrica Holdings, Ltd., as amended.
10. Articles of Association of LNG VI.
11. Third Amended Third Amended and Restated Limited Liability Company
Agreement of LNG Power II LLC.
12. Second Amended and Restated Limited Liability Company Agreement of LNG I,
LLC.
13. Second Amended and Restated Limited Liability Company Agreement of LNG II,
LLC.
14. First Amended and Restated Limited Liability Company Agreement of LNG III,
LLC.
15. LNG Tolling Services Agreement between EcoElectrica, L.P. and Enron LNG
Power (Atlantic) Ltd. dated as of October 31, 1997.
16. First Amended and Restated Limited Partnership Agreement of Eco Electrica
Ltd. and Eco Electrica Holdings Ltd.dated Decemeber 10, 1997.
SCHEDULE 2.6
Financial Statements
1. Unaudited balance sheets of the Company as of December 31, 1999 and 2000,
and related unaudited statements of income for the years then ended.
2. An audited balance sheet of the Partnership as of December 31, 1999 and
2000, and related audited statements of income and cash flows for the years
then ended.
3. An unaudited balance sheet of the Company as of May 31, 2001, and related
unaudited statements of income for the five-month period then ended.
4. An unaudited balance sheet of the Partnership as of May 31, 2001, and
related unaudited statements of income and cash flows for the five-month
period then ended.
-----Forty-three pages of financial statements omitted pursuant to the request
for confidential treatment submitted to the Securities and Exchange
Commission-----
SCHEDULE 2.7
No Conflict or Violation
1. If Buyer is a utility or a utility affiliate under the PURPA, Puerto Rico
Electric Power Authority waiver of requirement under the Power Purchase
Agreement dated March 10, 1995, with Puerto Rico Electric Power Authority,
as amended, that the EcoElectrica Project maintain Qualifying Facility
status with respect to utility ownership level.
2. Credit Agreement, dated October 31, 1997, with ABN AMRO Bank N.V. as the
administrative agent, as amended.
3. Master Guarantee and Support Instrument, dated October 31, 1997, with ABN
AMRO Bank N.V. and the Chase Manhattan Bank.
4. Equity Support Guarantee, dated October 31, 1997, with ABN AMRO Bank N.V.
and the Chase Manhattan Bank.
5. Tolling Counterparty Payment Guarantee among EcoElectrica, L.P., Enron
Corp. and the Collateral Agent dated as of October 31, 1997.
6. Operation Maintenance and Fuels Management Agreement between EcoElectrica,
L.P. and EI Puerto Rico Operations Inc. dated as of October 31, 1997.
SCHEDULE 2.8
Governmental and Third Party Consents
1. Filing with Office of Industrial Tax Exemption of Puerto Rico, request for
approval of transfer of Partnership Tax Exemption.
2. If Buyer is a utility or a utility affiliate under the PURPA, Puerto Rico
Electric Power Authority waiver of requirement under the Power Purchase
Agreement that the EcoElectrica Project maintain Qualifying Facility status
with respect to utility ownership level.
3. Consent of GE pursuant to the Consent of GE pursuant to the Members
Agreement among the Stockholder, Project Finance XI, Ltd., and LNG Power
VI, Ltd. Dated March 23, 2000, which shall include GE's consent to Buyer's
election under Section 754 of the U. S. Internal Revenue Code, as amended.
4. Consent of GE pursuant to the Shareholders Agreement among the Stockholder,
Project Finance XI, Ltd., and LNG Power VI, Ltd. Dated March 23, 2000,
which shall include GE's consent to Buyer's election under Section 754 of
the U.S. Internal Revenue Code, as amended.
5. Consent of GE pursuant to the Third Amended Third Amended and Restated
Limited Liability Company Agreement of LNG Power II LLC, which shall
include GE's consent to Buyer's election under Section 754 of the U.S.
Internal Revenue Code, as amended.
6. See Schedule 2.7.
SCHEDULE 2.9
Litigation
----------
1. ----------
2. ----------
3. ----------
4. ----------
5. ----------
6. ----------
7. ----------
SCHEDULE 2.10
Contracts
1. Power Purchase and Operating Agreement, dated March 10, 1995, with The
Puerto Rico Electric Power Authority, as amended.
2. LNG Sales Agreement, dated July 31, 1997, with Cabot LNG Corporation, as
amended.
3. LNG Tolling Services Agreement, dated October 31, 1997, with Enron LNG
Power (Atlantic) Ltd., as amended.
4. LPG Storage and Services Agreement, dated October 21, 1997, with Pro
Caribe, as amended.
5. Operations, Maintenance and Fuel Management Agreement, dated October 31,
1997, with EI Puerto Rico Operations, Inc., as amended.
6. Credit Agreement, dated October 31, 1997, with ABN AMRO Bank N.V. as the
administrative agent, as amended.
7. Amended and Restated Onshore Construction Contract with the Partnership and
EI Power I (Puerto Rico), Inc. dated October 31, 1997, as amended.
8. Amended and Restated Offshore Supply Agreement with the Partnership and
Enron Equipment Procurement Company dated October 31, 1997.
9. Administrative Services Agreement, dated October 31, 1997 with EME Del
Caribe (as successor in interest to KES Bermuda Inc., effective as of
December 23, 1998) and the Partnership.
10. KESI Subordinated Promissory Note dated December 15, 1997 with Kenetech
assigned to EME del Caribe pursuant to an Assignment and Assumption
Agreement dated December 23, 1998 with KESI.
11. EDC Subordinated Promissory Note dated December 15, 1997 with Enron
Development Corp.
12. Collective Bargaining Agreement negotiated with the United Steelworkers and
the Partnership.
13. See Schedule 2.9 ----------.
14. Subordinated Reimbursement Agreement dated as of October 31, 1997 with the
Chase Manhattan Bank, as Collateral Agent, and the Chase Manhattan Bank, as
Depositary Agent and certain Subordinated Parties set forth therein.
15. Water Supply Agreement with the Puerto Rico Aqueduct and Sewer Authority
and Puerto Rico Electric Power Authority dated as of May 6, 1997.
16. Marine Facilities Agreement with the Puerto Rico Ports Authority, dated as
of April 1, 1996.
17. See Schedule 4.3.
SCHEDULE 2.13
Environmental Matters
1. Notice of Violation: On April 5, 2000, the Partnership received a Notice of
Violation (the "NOV") from the United States Environmental Protection
Agency Region II (the "EPA"). The NOV alleges various violations of the PSD
permit issued to the Partnership on October 1, 1996, authorizing the
construction and operation of the project, including (i) failure to install
a SCR system prior to February 13, 2000; (ii) failure to conduct
performance testing of each of the two combustion gas turbines; (iii)
causing excess emissions of NOX; (iv) failure to operate a CEMS to measure
and record NOX concentrations prior to November 12, 1999; and (v) failure
to submit a written excess emissions report to the EPA within 30 days of
the end of the calendar quarter.
----------
2. Compliance Order: On April 10, 2000, the Partnership received a Compliance
Order from the EPA, ordering that the Partnership (i) within 10 days of the
date of receipt, submit to EPA all initial notifications for the gas
turbine and duct burners required pursuant to ss.60.7 of the General
Provisions of the NSPS; (ii) within 10 days of receipt submit to EPA a
schedule of when the initial performance tests will be conducted; (iii)
provide EPA at least 30 days prior notice of any performance tests that are
scheduled; (iv) provide a written report of the results of the performance
test to the EPA within 15 days after completion of such test and (v) comply
at all times with the requirements of 40 C.F.R. Part 60, Subparts Db and
Subpart GG. The Partnership is working with the EPA regarding the testing
and is complying with the Compliance Order.
3. Compliance Order: On May 15, 2000, the Partnership received an
Administrative Compliance Order ("ACO") from the Region 2 Offices of the
USEPA located in New York. The order was based on the NPDES permit issued
to the Partnership on January 16, 1997, becoming effective on June 1, 1997
and expiring on May 31, 2002. There are four permitted outfalls. The ACO
alleged permit violations ordering the Partnership to comply with the
monitoring and reporting requirements of the permit for Free Available
Chlorine. In addition, the ACO required that an Action Plan be submitted
and instituted that would address effluent limitations re: Dissolved
Oxygen, pH and Total Suspended Solids as well as the sampling and reporting
provisions of the permit. On February 21, 2001, the Partnership received a
letter from the Region 2 Office of the USEPA informing the Partnership that
the ACO had been "closed-out."
4. ----------
SCHEDULE 2.16
Distributions Made to Stockholder
No distributions in 2001.
Schedule 3.4
Governmental Consents
FUCO filing with the Securities and Exchange Commission.
Schedule 4.2
Restructuring Activities
1. ----------
2. A U.S. "check the box" election or liquidation of LNG Power IV, dissolution
of LNG Power IV or merger of LNG Power IV with the Company.
3. A distribution by Company to Stockholder in the amount of $-----.
SCHEDULE 4.3
Stockholder Guarantees
(a) All Guarantees.
1. EcoElectrica, L.P., entered into an Option to Purchase Agreement with Union
Carbide Caribe Inc. ("XXXX") under which EcoElectrica, L.P. agreed to
indemnify XXXX with respect to certain post-closing activities (property
damage or personal injury) and environmental contamination on the plant
site. This indemnity obligation was guaranteed by Enron Power Corp. and
Kenetech Energy Systems Inc., ("KES") pursuant to a Guaranty dated November
25, 1997 (the "XXXX Guaranty").
2. Master Guarantee and Support Instrument, dated October 31, 1997, with ABN
AMRO Bank N.V. and the Chase Manhattan Bank.
3. Enron Corp. guaranty issued to Project Finance XI Ltd. (GE) dated March 23,
2000, providing a guaranty of certain performance obligations of the
Stockholder under (i) the Third Amended and Restated Limited Liability
Company Agreement of LNG Power II LLC dated September 11, 2000, (ii) the
Members Agreement among the Stockholder, Project Finance XI, Ltd., and LNG
Power VI, Ltd. Dated March 23, 2000, and (iii) the Shareholders Agreement
among the Stockholder, Project Finance XI, Ltd., and LNG Power VI, Ltd.
Dated March 23, 2000.
4. Enron Corp. guaranty issued to Project Finance XI Ltd. (GE) dated March 31,
2000, providing a guaranty of certain performance obligations of the
Stockholder under (i) the Third Amended and Restated Limited Liability
Company Agreement of LNG Power II LLC dated September 11, 2000, (ii) the
Members Agreement among the Stockholder, Project Finance XI, Ltd., and LNG
Power VI, Ltd. Dated March 23, 2000, and (iii) the Shareholders Agreement
among the Stockholder, Project Finance XI, Ltd., and LNG Power VI, Ltd.
Dated March 23, 2000.
5. Tolling Counterparty Payment Guarantee among EcoElectrica, L.P., Enron
Corp. and the Collateral Agent dated as of October 31, 1997.
6. EPC Onshore Construction Contract Guarantee among Enron Power Corp.,
EcoElectrica, L.P., the Collateral Agent and the Administrative Agent dated
as of October 31, 1997.
7. Onshore Construction Contract Payment Guarantee among Enron Corp., the
Administrative Agent, the Collateral Agent and the Depositary Agent dated
as of October 31, 1997.
8. Offshore Supply Contract Payment Guarantee among Enron Corp, the Collateral
Agent and the Depositary Agent dated as of October 31, 1997.
9. EPC Offshore Supply Contract Guarantee among Enron Power Corp.,
EcoElectrica, L.P., the Collateral agent and the Administrative Agent dated
as of October 31, 1997.
10. LPG Servicer Payment Guarantee among EcoElectrica, L.P., Enron Corp. and
the Collateral Agent dated as of October 31, 1997
11. EPC LPG Servicer Guarantee among EcoElectrica, L.P., the Collateral Agent
and the Depositary Agent dated as of October 31, 1997.
12. Equity Support Guarantee, dated October 31, 1997, with ABN AMRO Bank N.V.
and the Chase Manhattan Bank.
(b) Guarantees to be assumed by Mirant or Buyer.
The guarantees listed in 1-5 above.
SCHEDULE 4.4
Partnership Insurance Provided by Stockholder
----------
SCHEDULE 5.7 Partnership Effect
--------------------------------------------------------------------------------
---------- Corresponding
---------- Partnership Effect
--------------------------------------------------------------------------------
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Schedule 8.1
Other Assets
1. ----------.
2. ----------.
3. Tax identification maps for all the landowners throughout the southern
route.
4. Preliminary Environmental Impact Statement document ("EIS") for the
Southern Route (Environmental literature study for all the environmental
concerns).
5. Environmental maps for the southern route indicating areas of concern for
the EIS preparation.
6. Phase 1A Archeological Study for entire route.
7. Permit table list.
8. Binders for permit preparation per agency and permit.
9. Natural gas market study for southern area of Puerto Rico.
10. Natural gas market questionnaire.
11. List of all the PREPA plants per turbine capacity, heat rate and load
factor.
12. Offshore pipeline impact study and alternative map routes (5 alternative
routes).
13. Detailed Map route for pipeline crossing southern section of the island to
reach the Xxxxxxx power plant.
14. Helicopter video of the southern and northern routes.
15. Detailed map route for pipeline crossing from north to south to reach the
northern power plants.
16. Photographic layout of the southern pipeline route as per agency most
recent photos.
17. Preliminary alternative study required as part of the EIS process.
18. Project presentations to the Corps of Engineers, Puerto Rico Electric Power
Authority and several other agencies.
19. Socio-Economic study of the five Municipalities crossing the southern
route.
20. PREPA South Coast Plant Mapand air emissions analysis for the plant
conversion.
21. LNG Trucking to Metro Area: Permit table with binders (agency and
requirements). Environmental Assessment for EcoElectrica truck loading
facility presented by the sponsoring agency, PRIDCO, to the Puerto Rico
Environmental Quality Board. Design basis for truck loading facility,
Piping andInstrumentation Diagrams, Plot Plans, equipment data sheets and
vendor quotes (expired).
