ASSET PURCHASE AGREEMENT
EXHIBIT
10.1
THIS
ASSET PURCHASE AGREEMENT (this “Agreement”),
dated as of the 15th day of July, 2008 (“Effective
Date”), is by and between Green Mountain Energy Company, Inc., a Delaware
corporation with a principal address of 000 X. 0xx Xx.,
Xxxxx 000, Xxxxxx, XX (“Buyer”),
and W Power and Light, LLC, Delaware limited liability company with a principal
address of 000 Xxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (“Seller”).
RECITALS
A. Seller
is a retail electric provider (“REP”)
certified by the Public Utility Commission of Texas (“PUCT”)
engaged in the business of providing retail electric services to residential and
commercial customers in areas within the state of Texas open to retail electric
competition (the “Business”).
B. Buyer
is a REP certified by the PUCT and is engaged in the business of providing
retail electric services to residential and commercial customers in areas within
the state of Texas open to retail electric competition.
C. The
Seller desires that Seller sell to Buyer, and Buyer desires to purchase from
Seller, certain customers, customer lists, and related customer agreements, all
on the terms and subject to the conditions set forth herein.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises, the respective representations,
warranties, covenants and agreements contained in this Agreement, and other good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the Parties agree as
follows:
ARTICLE
1
PURCHASE
AND SALE OF ASSETS
1.1 Purchase
and Sale of Assets.
(a) Purchased
Assets. Buyer hereby purchases from Seller, and Seller hereby
transfers and delivers to Buyer, all right, title and interest in and to
Seller’s: (i) customer names and other customer information
(such customers, collectively, the “Customers”),
(ii) customer lists, and (iii) customer agreements (the “Customer
Contracts”) listed in Schedule
1.1(a) attached hereto and incorporated herein (all of the foregoing,
collectively, the “Purchased
Assets”).
(b) Excluded
Assets. All assets not otherwise listed or described in either
Section 1.1(a) or Schedule
1.1(a) shall be considered “Excluded
Assets”, which remain Seller’s property immediately following the
Closing.
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1.2 Assumed
Liabilities.
(a) Assumed
Liabilities. For an in consideration of Seller’s sale and
transfer of the Purchased Assets to Buyer, Buyer hereby assumes and becomes
responsible for performing the obligations of Seller under each Customer
Contract only to the extent that such obligations arise from and after the date
that Buyer becomes the REP of record for the ESI(s) (as defined below) served
under such Customer Contract (the “Transfer
Date”), as confirmed by the Electric Reliability Council of Texas (“ERCOT”) (collectively,
the “Assumed
Liabilities”). “ESI”
means an electricity delivery point identified by an electric service identifier
assigned by ERCOT.
(b) Excluded
Liabilities. The Assumed Liabilities exclude, and Buyer does
not assume or have any responsibility with respect to, all other liabilities or
obligations of Seller (collectively, the “Excluded
Liabilities”), including, but not limited to, liabilities or obligations:
(i) for taxes of any kind whatsoever; (ii) for costs and expenses incurred in
connection with negotiating the Transaction documents and performing the
transactions contemplated thereby (the “Transactions”);
(iii) under any Transaction document; (iv) under any Customer Contract that
arise or relate to any period before the applicable Transfer Date for any such
Customer Contract (including, without limitation, any obligations to apply or
refund any customer deposits held by Seller); (v) under any contract or
agreement not assumed hereunder; and (vi) any other liabilities or obligations
of Seller or related to the Business that are not expressly included in the
Assumed Liabilities.
1.3 The Closing. The
closing of the Transaction described in this Agreement shall occur upon the
execution and delivery of this Agreement by all Parties (the “Closing”).
1.4 Deliveries. On the
date of Closing (the “Closing
Date”),
(a) the
Seller has delivered or caused to be delivered to Buyer (i) an assignment and
assumption agreement duly executed by Seller; and (ii) the Xxxx-to-Market
Payment;
(b) Buyer has
delivered or caused to be delivered to Seller an assignment and assumption
agreement duly executed by Buyer; and
(c) Buyer and
Seller have cooperatively obtained and delivered any regulatory permits or
approval required for the sale of the Purchased Assets.
1.5 Transfer of
Customers. Within 5 business days after the Closing Date,
Buyer and Seller will cooperate and take such actions as may be necessary or
appropriate to transfer electric service for, and cause Buyer to become the REP
of record for, the Customers and ESIs covered by the Customer Contracts included
in the Purchased Assets from Seller to Buyer, including, without limitation, (i)
sending notice of the transfer to the Customers; (ii) initiating switch
transactions with ERCOT ( out-of-cycle unless agreed to otherwise by Seller via
email communication); and (iii) communicating and coordinating with the PUCT
and/or ERCOT. Neither party will send any customer notice regarding
the transfer of customers pursuant to this Agreement without the prior written
(which may be by email) approval of such notice, which approval shall not be
unreasonably withheld, conditioned or delayed.
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1.6 Xxxx-to-Market
Payment. Contemporaneous with the Closing, Seller will pay Buyer $190,762 (the
“Xxxx-to-Market
Payment”) to cover the expected excess Energy Related Costs (as defined
below) Buyer will incur to provide electricity service to Medium Commercial
Fixed Price Customers (as defined below) under Customer Contracts for the
remainder of the applicable contract term, where the fixed rate provided for in
the applicable Medium Commercial Fixed Price Contract is below current market
rates. “Energy Related
Costs” means all wholesale energy costs, ERCOT ancillary services costs
and fees, transmission and distribution losses, and energy management services
costs. Buyer will provide Seller with wire transfer instructions for
payment of the Xxxx-to-Market Payment. Such payment shall be in full and final
settlement of all such costs, and Seller shall have no further liability related
to such costs.
1.7 Further Obligations of
Parties.
(a) Seller
shall fully and timely perform all obligations of Seller under each Customer
Contract up through the Transfer Date for each such Customer Contract, and after
the Transfer Date will fully and timely perform any remaining obligations of
Seller under any Customer Contract that arise or relate to any period before the
applicable Transfer Date for any such Customer Contract (including, without
limitation, any obligations to apply or refund any customer deposits held by
Seller). On or before the date that is 5 days after the Closing Date,
Seller shall deliver to Buyer or provide Buyer with full access to view and copy
all of the following items (and such access shall continue for a 180-day period
following the Closing Date):
(i) all
relevant books and records, financial and credit information, payment
history (including, but not limited to, deposits, balance, prepayments, and
credits), and past and current electricity usage records, and Seller’s
obligations concerning the customers and Customer Contracts listed in Schedule
1.1(a);
(ii) any
other documentation related to the Purchased Assets requested by Buyer;
and
(iii) all
items listed in Schedule
1.1(a).
(b) For each
of Seller’s Residential Customers transferred to Buyer pursuant to this
Agreement, Buyer will make a one-time payment to Seller in an amount equal to
the product of (i) $50.00, multiplied by (ii) the number of such transferred
Residential Customers for which Buyer is still the REP of record as of December
31, 2008 and that are still receiving service from Buyer. This one-time payment
shall be paid by Buyer to Seller by January 31, 2009, and shall constitute full
and complete payment for those respective Residential Customers. On or before
January 31, 2009, Buyer shall perform in good faith a review of its records
regarding such transferred Residential Customers and shall provide a list to
Seller of such transferred Residential Customers that are still receiving
service from Buyer. For Seller’s transferred Residential Customers not receiving
electric service from Buyer as of December 31, 2008, there shall be no payment
made to Buyer, then or at any time in the future.
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1.8 Conditions Precedent to
Closing. Seller’s obligations to sell the Purchased Assets and
Buyer’s obligations to buy the Purchased Assets shall be subject to the
following conditions:
(a) all of
the representations and warranties contained in this Agreement shall be true and
complete as of the Closing Date in all material respects;
(b) all of
the deliveries listed in Section 1.4 shall have been delivered; and
(c) there
shall have been no material adverse change in the Purchased Assets.
ARTICLE
2
BUYER’S
REPRESENTATIONS AND WARRANTIES
Buyer
represents and warrants to Seller that the statements contained in this ARTICLE 2 are correct
and complete on the Closing Date.
2.1 Organization of
Buyer. Buyer is an entity duly organized, validly existing and
in good standing under the Laws of the jurisdiction of its
organization.
2.2 Authority of Buyer;
Enforceability. Buyer has the relevant entity power and
authority necessary to execute and deliver each Transaction document to which it
is a party and to perform and consummate the Transactions. Buyer has
taken all action necessary to authorize its execution and delivery of each
Transaction document to which Buyer is a party, the performance of its
obligations thereunder and its consummation of the Transactions.
2.3 No Violation. The
execution and the delivery by Buyer of this Agreement and the other Transaction
documents to which Buyer is a party, the performance by Buyer of its obligations
hereunder and thereunder, and the consummation of the Transactions by Buyer will
not constitute or create a breach or default under any of its contracts to which
Buyer is a party.
ARTICLE
3
SELLER’S
REPRESENTATIONS AND WARRANTIES CONCERNING
Seller
represents and warrants to Buyer that the statements contained in this ARTICLE 3 are correct
and complete on the Closing Date.
3.1 Entity
Status. Seller is an entity duly organized, validly existing
and in good standing under the Laws of the jurisdiction of its
organization.
3.2 Power and Authority;
Enforceability. Seller has the relevant entity power and authority
necessary to execute and deliver each Transaction document to which it is a
party and to perform and consummate the Transactions. Seller has
taken all action necessary to authorize its execution and delivery of each
Transaction document to which Seller is a party, the performance of its
obligations thereunder and its consummation of the Transactions.
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3.3 No
Violation. Except for approval required by the Public Utility
Commission of Texas, the execution and delivery by Seller of this Agreement and
the other Transaction documents to which Seller is a party, the performance by
Seller of its obligations hereunder and thereunder, the consummation of the
Transactions by Seller and Buyer’s ownership of the Purchased Assets immediately
following the Closing will not (a) with or without notice or lapse of time,
constitute or create a breach or violation of, or default under, any (i) law
(statutory, common or otherwise), constitution, ordinance, rule, regulation,
executive Order or other similar authority (“Law”)
enacted, adopted, promulgated or applied by any legislature, agency, bureau,
branch, department, division, commission, court, tribunal or other similar
recognized organization or body of any federal, state, county, municipal, local
or foreign government or other similar recognized organization or body
exercising similar powers or authority (a “Governmental
Body”), (ii) Order, ruling, decision, award, judgment, injunction or
other similar determination or finding by, before or under the supervision of
any Governmental Body or arbitrator (an “Order”),
(iii) Contract or permit to which, in the case of (i), (ii) or (iii), Seller is
a party or by which it is bound or to which any Purchased Asset is subject, or
(iv) organizational document of Seller as in effect on the Closing Date, (b)
result in the imposition of any lien, claim or encumbrance (an “Encumbrance”)
upon any Purchased Asset, (c) require any permit or consent under any Law,
Order, Contract or organizational document to which any Seller Party is a party
or by which Seller is bound or to which any Purchased Asset or the Business is
subject or (d) in any other way materially and adversely impair any Purchased
Asset.
3.4 No Undisclosed
Liabilities. There is no basis known to Seller for any present
or future action, suit, arbitration, mediation, investigation or similar
proceeding (an “Action”)
or Order against Seller or the Purchased Assets giving rise to any liability or
obligation being assumed by Buyer hereunder. Seller and each of its Affiliates
is not aware of any threatened or pending actions concerning any of the
Purchased Assets. “Affiliate”
with respect to a specified person means any other person who, directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, the specified person.
3.5 Availability, Title to and Condition
of Purchased Assets. Seller has good, marketable and
indefeasible title to all of the Purchased Assets, in each case free and clear
of any encumbrances.
3.6 Customer
Contracts. Schedule
1.1(a) lists each Customer Contract that is included in the Purchased
Assets and is assigned under this Agreement. Schedule
1.1(a) includes
three different categories of Customer Contracts, as described in Section 3.6
(a), (b) and (c) below. Schedule
1.1(a) includes, for each Customer Contract, at least the following
information:
(i)
Customer name (first and last) (for commercial, full legal name of
entity);
(ii)
Service address(es);
(iii)
Billing address and contact (if different);
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(iv) ESI
ID(s);
(v)
Contract or service beginning date;
(vi)
Contract term end dates for term customers; and
(vii)
Identification of the form of Customer Contract under which such Customer is
being served.
(a) Section A
of Schedule
1.1(a) lists all Customer Contracts with residential customers (referred
to as “Residential
Customer Contracts” and “Residential
Customers”, respectively). Each Residential Customer Contract
consists of a Terms of Service document (“TOS”),
Electricity Facts Label (“EFL”),
Your Rights as a Customer document (“YRAC”),
and enrollment form. Each Residential Customer is being served by Seller under
one of three different versions of Seller’s Residential Customer Contract,
labeled as: (i) “Version: res_ce_20070218a”, a correct and complete copy of
which is attached hereto as Exhibit
3.6(a)(i); (ii) “Version: 20080218a”, a correct and complete copy of
which is attached hereto as Exhibit
3.6(a)(ii); and (iii) “Version: 070409andrews”, a correct and complete
copy of which is attached hereto as Exhibit
3.6(a)(iii). Section A of Schedule 1.1(a) includes, for each Residential
Customer, an identifier indicating the applicable Residential Customer Contract
version such customer is on.
(b) Section B
of Schedule
1.1(a) lists all Customer Contracts with small commercial customers, as
such term is defined in the PUCT Substantive Rules §25.471(d)(10)
(i.e., a non-residential customer that has a peak demand of less than 50
kilowatts during any 12-month period, unless the customer's load is part of an
aggregation program whose peak demand is in excess of 50 kilowatts during the
same 12-month period) (referred to as “Small Commercial
Customer Contracts” and “Small Commercial
Customers”, respectively). Each Small Commercial Customer
Contract consists of a TOS, EFL, YRAC, and enrollment form. Each Small
Commercial Customer is being served by Seller under Seller’s Small Commercial
Customer Contract form labeled “Month-to-Month Commercial Plan, Version:
20060701”, a correct and complete copy of which is attached hereto as Exhibit
3.6(b).
(c) Section C
of Schedule
1.1(a) lists all Customer Contracts with non-residential customers that
are not Small Commercial Customers (referred to as “Medium Commercial
Customer Contracts” and “Medium Commercial
Customers”, respectively). Each Medium Commercial Customer is
being served by Seller under a signed written Medium Commercial Customer
Contract between Seller and such Medium Commercial Customer. All
Medium Commercial Customer Contracts are substantially consistent in all
materials respects with Seller’s standard form of Medium Commercial Contract, a
correct and complete copy of which is attached hereto as Exhibit
3.6(c). Seller has delivered to Buyer a true, correct and
complete original (or copy if an original is not available) of the actual signed
Medium Commercial Contract with each Medium Commercial
Customer. Section C of Schedule
1.1(a) includes, for each Medium Commercial Customer, an identifier
indicating whether the Medium Commercial Customer is subject to: (i) a Medium
Commercial Customer Contract with a month-to-month term and variable pricing;
or (ii) a
Medium Commercial Contract with a minimum term and a fixed price (a “Medium Commercial
Fixed Price Customer” or “Medium Commercial
Fixed Price Contract” as applicable), and, for all Medium Commercial
Fixed Price Customers, the applicable term and price. Each Medium
Commercial Fixed Price Contract covered by the Xxxx-to-Market Payment provided
for in Section 1.6 shall be separately identified in Section C of Schedule
1.1(a).
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(d) Schedule
3.6(d) shows Seller’s variable month-to-month prices for all Residential
Customers and Small Commercial Customers, and the pricing in effect for all
Medium Commercial Customers that are not subject to a Medium Commercial Contract
with a minimum term and/or fixed price, in each case, as in effect as of the
Effective Date.
(e) Seller
has delivered to Buyer a correct and complete copy of each Customer Contract (as
amended to date) listed in Schedule
1.1(a). Each such Customer Contract is enforceable and will
continue to be enforceable on identical terms following the consummation of the
Transaction. Neither Seller nor, to Seller’s knowledge, any of the
counter-parties to any such Customer Contract is or has been in (and no event
has occurred that, with or without notice or lapse of time, would create or
constitute a) breach or violation of, or default under, any of such Contract’s
provisions which would reasonably be expected to have a material adverse effect
on the Purchased Assets.. Each of the Customer Contracts is
assignable by Seller without any other party’s consent.
3.7 Litigation. To
Seller’s knowledge, none of the Purchased Assets are the subject of any Action
or Order.
3.8 Taxes. The
Purchased Assets are not subject to any liability or obligation for any federal,
state, local, or foreign income, gross receipts, license, payroll, employment,
excise, occupation, customs, ad valorem, duties, franchise, withholding, social
security, unemployment, real property, personal property, sales, use, transfer,
registration, estimated or other tax of any kind whatsoever, including any
interest, penalty or addition thereto, whether disputed or not (“Taxes”).
3.9 Accuracy of Information
Furnished. Seller and Buyer have acted in good faith and no
representation, statement or information contained in this Agreement, any of the
Transaction documents or other document made available or furnished to either
Party or its representatives by the other contains any untrue statement of a
material fact or omits any material fact necessary to make the information
contained therein not misleading.
ARTICLE
4
COVENANTS
4.1 General. If any
time after the Closing any further action is necessary or desirable to carry out
this Agreement’s purposes, each Party will take such further action (including
executing and delivering any further instruments and documents, obtaining any
permits and consents, sending any required customer notices, and providing any
reasonably requested information) as may be necessary or appropriate in order to
complete the sale and transfer of the Purchased Assets contemplated by this
Agreement or as any other Party may reasonably request.
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4.2 Confidentiality. Seller
and Buyer will, and will cause each of its respective Affiliates, directors,
officers, employees, agents, representatives and similarly situated persons to
(a) treat and hold as confidential, and not use or disclose, all of the
information concerning the Purchased Assets, the negotiation or existence and
terms of this Agreement, and the business affairs of Seller and Buyer
(“Confidential
Information”), except for (i) disclosures to the person’s professional
advisors, the actions for which the disclosing person will be responsible and
(ii) disclosures required for such person to perform obligations it may have
under this Agreement, and (b) deliver promptly to Seller or Buyer or destroy, at
Seller or Buyer’s request and option, all tangible embodiments (and all copies)
of the Confidential Information which are in such person’s
possession. If any person subject to these confidentiality provisions
is ever requested or required (by oral question or request for information or
documents in any Action) to disclose any Confidential Information, the relevant
Seller or Buyer Party will notify the other promptly of the request or
requirement so that Party may seek an appropriate protective Order or waive
compliance with this Section 4.2. Notwithstanding
any contrary provision of this Agreement, any Party (and its respective
employees, representatives or other agents) may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the
Transactions and all materials of any kind (including opinions or other tax
analyses) that are provided to such Party relating to such tax treatment and tax
structure.
ARTICLE
5
MISCELLANEOUS
5.1 Entire
Agreement. This Agreement, together with the other Transaction
documents and all schedules, exhibits, annexes or other attachments hereto or
thereto that are delivered pursuant hereto or thereto, constitutes the entire
agreement and understanding of the Parties in respect of the subject matter
hereof and supersedes all prior understandings, agreements or representations by
or among the Parties, written or oral, to the extent they relate in any way to
the subject matter hereof.
5.2 Assignment; Binding
Effect. No Party other than Buyer may assign either this
Agreement or any of its rights, interests or obligations hereunder without the
prior written approval of the other Parties, and any such assignment by a Party
without prior written approval of the other Parties will be deemed invalid and
not binding on such other Parties. All of the terms, agreements,
covenants, representations, warranties and conditions of this Agreement are
binding upon, inure to the benefit of and are enforceable by, the Parties and
their respective successors and permitted assigns.
5.3 Survival. Each
representation and warranty of the Parties contained herein and any certificate
related to such representations and warranties will survive the Closing and
continue in full force and effect for one year thereafter, except that (i) the
representations and warranties set forth in Sections 3.4,
3.5, 3.8, and 3.9, which will survive the Closing and continue in full
force and effect until the applicable statute of limitations expires (or for 15
years if there is no applicable statute of limitations) and (ii) the
representations and warranties set forth in Sections 2.1, 2.2, 3.1 and 3.2, which will
survive the Closing and will continue in full force and effect
forever. Each covenant and obligation in this Agreement and any
certificate or document delivered pursuant to this Agreement will survive the
Closing forever. Unless expressly waived pursuant to this Agreement, no
representation, warranty, covenant, right or remedy available to any person in
connection with the Transactions will be deemed waived by any action or inaction
of that person (including consummation of the Transactions, any inspection or
investigation, or the awareness of any fact or matter) at any time, whether
before, on or after the Closing.
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5.4 Notices. All
notices, requests and other communications provided for or permitted to be given
under this Agreement must be in writing and must be given by personal delivery,
by certified or registered United States mail (postage prepaid, return receipt
requested), by a nationally recognized overnight delivery service for next day
delivery. All notices, requests or other communications will be
effective and deemed given only as follows: (i) if given by personal
delivery, upon such personal delivery, (ii) if sent by certified or registered
mail, on the fifth business day after being deposited in the United States mail,
(iii) if sent for next day delivery by overnight delivery service, on the date
of delivery as confirmed by written confirmation of
delivery. Notices, requests and other communications sent in any
other manner, including by electronic mail, will not be effective.
5.5 Specific Performance;
Remedies. Each Party acknowledges and agrees that the other
Parties would be damaged irreparably if any provision of this Agreement were not
performed in accordance with its specific terms or were otherwise
breached. Accordingly, the Parties will be entitled to an injunction
or injunctions to prevent breaches of the provisions of this
Agreement.
5.6 Governing Law. This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Texas without giving effect to any choice of law provision
or rule (whether of the State of Texas or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
Texas. Any dispute arising out between the Parties shall be
exclusively filed in the state or federal courts located in Xxxxxx, Xxxxxx
County, Texas.
5.7 Amendment; Extensions;
Waivers. No amendment, modification, waiver, replacement,
termination or cancellation of any provision of this Agreement will be valid,
unless the same is in writing and signed by Buyer and Seller. Each
waiver of a right hereunder does not extend beyond the specific event or
circumstance giving rise to the right. Neither the failure nor any
delay on the part of any Party to exercise any right or remedy under this
Agreement will operate as a waiver thereof, nor does any single or partial
exercise of any right or remedy preclude any other or further exercise of the
same or of any other right or remedy.
5.8 Severability. The
provisions of this Agreement will be deemed severable and the invalidity or
unenforceability of any provision will not affect the validity or enforceability
of the other provisions hereof; provided, however, that if any
provision of this Agreement, as applied to any Party or to any circumstance, is
judicially determined not to be enforceable in accordance with its terms, the
Parties agree that the court judicially making such determination may modify the
provision in a manner consistent with its objectives such that it is
enforceable, and/or to delete specific words or phrases, and in its modified
form, such provision will then be enforceable and will be enforced.
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5.9 Expenses. Except as
otherwise expressly provided in this Agreement, each Party will bear its own
costs and expenses incurred in connection with the preparation, execution and
performance of this Agreement and the Transactions.
5.10 Counterparts;
Effectiveness. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument, and signatures to this
Agreement may be executed and delivered by facsimile or other reliable
electronic means (such as a scanned .pdf file sent by email). This
Agreement will become effective when one or more counterparts have been signed
by each Party and delivered to the other Parties.
5.11 Construction. This
Agreement has been freely and fairly negotiated between the
Parties. If an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the Parties
and no presumption or burden of proof will arise favoring or disfavoring any
Party because of the authorship of any provision of this Agreement.
IN WITNESS WHEREOF, the
Parties have caused this Agreement to be executed as of the date stated in the
introductory paragraph of this Agreement.
BUYER:
Green
Mountain Energy Company
By: _______________
Name:
Xxxx X.
Xxxxxx
Title:
President and
CEO
SELLER:
W
Power and Light, LLC
By: _______________
Name:
Xxxxx
Xxxx
Title:
President