Exhibit B
Draft 9/30/04
(East Bend Generating Station)
ASSET TRANSFER AGREEMENT
BY AND BETWEEN
THE CINCINNATI GAS & ELECTRIC COMPANY
AND
THE UNION LIGHT, HEAT AND POWER COMPANY
Dated as of _______________
ARTICLE I.................................................................2
DEFINITIONS...............................................................2
SECTION 1.01. Definitions..........................................2
ARTICLE II................................................................9
TRANSFER OF ASSETS........................................................9
Section 2.01. Transfer of Assets...................................9
Section 2.02. Excluded Assets......................................10
Section 2.03. Assumed Liabilities..................................12
Section 2.04. Excluded Liabilities.................................13
ARTICLE III...............................................................14
ASSET TRANSFER; CLOSING...................................................14
Section 3.01. Asset Transfer.......................................14
Section 3.02. Inventory; Transaction Costs.........................15
Section 3.03. Proration........... ................................15
Section 3.04. Closing..............................................15
Section 3.05. Closing Deliveries...................................16
ARTICLE IV................................................................17
REPRESENTATIONS AND WARRANTIES............................................17
Section 4.01. Representations and Warranties of Transferor.........17
Section 4.02. Representations and Warranties of Transferee.........22
ARTICLE V.................................................................23
COVENANTS.................................................................23
Section 5.01. Books and Records....................................23
Section 5.02. Finder's Fees........................................24
Section 5.03. Tax Matters..........................................24
Section 5.04. Further Assurances......... .........................24
Section 5.05. Site Access..........................................25
ARTICLE VI................................................................26
INDEMNIFICATION...........................................................26
Section 6.01. Survival............................................26
Section 6.02. Indemnification.....................................26
Section 6.03. Procedure for Indemnification........................28
ARTICLE VII...............................................................30
MISCELLANEOUS PROVISIONS..................................................30
Section 7.01 Notices..............................................30
Section 7.02. Waiver...............................................30
Section 7.03. Entire Agreement; Amendment etc......................31
Section 7.04. Assignment...........................................31
Section 7.05. Severability.........................................31
Section 7.06. Bulk Sales Laws......................................32
Section 7.07. Governing Law........................................32
Section 7.08. Counterparts; Facsimile Execution....................32
Section 7.09. Schedules............................................32
Section 7.10 U.S. Dollars.........................................32
Section 7.11. Dispute Resolution...................................32
EXHIBITS
Exhibit A Form of Deed
Exhibit B Form of Xxxx of Sale
Exhibit C Form of Assignment and Assumption Agreement
Exhibit D Form of Facilities Operation Agreement
Exhibit E Form of PSOA
SCHEDULES
Schedule 2.01(a) Improvements
Schedule 2.01(b) Tangible Personal Property
Schedule 2.01(d) Transferred Contracts
Schedule 2.01(e) Transferred Permits
Schedule 2.02(a) Transmission Assets
Schedule 4.01(c)(ii) Transferor's Required Governmental and Third Party
Consents
Schedule 4.01(e)(i) Real Property
Schedule 4.01(m) Environmental Permits (see Section I of Schedule
4.01(m))
Schedule 4.01(k) Transferor Contracts
Schedule 4.01(m) Permits (see Section II of Schedule 4.01(m))
Schedule 4.02(c)(ii) Transferee's Required Governmental and Third Party
Consents
ASSET TRANSFER AGREEMENT
ASSET TRANSFER AGREEMENT (this "Agreement"), dated as of ___________,
by and between The Cincinnati Gas & Electric Company, an Ohio corporation
("Transferor"), and The Union Light, Heat and Power Company, a Kentucky
corporation ("Transferee" and, together with Transferor, the "Parties" and,
individually, a "Party").
W I T N E S S E T H
WHEREAS, Transferor owns an undivided 69% interest, as tenant in common
with the Dayton Power & Light Company, in Unit 2 of the East Bend Generating
Station ("East Bend Station"), a coal-fired electric generating station with a
nameplate rating of 648 megawatts located in Xxxxx Count, Kentucky near the
Village of Rabbit Hash, such generating station being comprised of a boiler and
steam turbine generator, together with certain other improvements, equipment,
assets, properties (both tangible, including real property, and intangible),
facilities and rights associated therewith or ancillary thereto;
WHEREAS, Transferor desires to transfer and assign to Transferee, and
Transferee desires to acquire and assume from Transferor, the Transferred Assets
(as hereinafter defined) and certain associated liabilities, upon the terms and
conditions hereinafter set forth;
WHEREAS, concurrently with, and as a condition to, the execution and
delivery of this Agreement, Transferor and Transferee are executing and
delivering two additional asset transfer agreements (the "Related Asset Transfer
Agreements"), pursuant to which, and subject to the terms and conditions
thereof, Transferor has agreed to transfer and Transferee to acquire,
concurrently with the closing of the transactions contemplated herein, the
Woodsdale Generating Station, located in Trenton, Ohio, and Xxxx 0 of the Miami
Fort Generating Station, located near North Bend, Ohio, together in each case
with certain other assets, properties, facilities and rights associated
therewith or ancillary thereto (collectively, together with East Bend Station,
the "Plants");
WHEREAS, Transferor and Transferee intend that the transfer of the
Transferred Assets contemplated herein qualify under Section 351 of the Internal
Revenue Code of 1986, as amended; and
WHEREAS, Cinergy Corp., a Delaware corporation, owns directly or
indirectly all of the outstanding common stock of Transferor and Transferee.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, agreements, representations and warranties hereinafter set forth, the
Parties, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. (a) As used in this Agreement, the
following terms have the following meanings:
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified. The term "control" (including the terms
"controlling," "controlled by" and "under common control with") means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Ancillary Agreements" means the Assignment and Assumption Agreement,
the Xxxx of Sale, the Deed, the Facilities Operation Agreement, the PSOA and any
other agreements or instruments entered into between the Parties with respect to
the transactions contemplated by this Agreement.
"Assignment and Assumption Agreement" means that certain Assignment and
Assumption Agreement to be entered into by and between Transferor and Transferee
at Closing, in substantially the form attached hereto as Exhibit C.
"Assumed Liabilities" has the meaning set forth in Section 2.03.
"Xxxx of Sale" means that certain Xxxx of Sale to be executed and
delivered at Closing by Transferor to Transferee, in substantially the form
attached hereto as Exhibit B.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended from time to time.
"Closing" has the meaning set forth in Section 3.04.
"Closing Date" has the meaning set forth in Section 3.04.
"Closing Inventory" means an amount in dollars equal to Transferor's
ownership interest in all Inventories on the Closing Date.
"Deed" means that certain [Warranty Deed and Assignment of Adjoining
Easement and License Interests] to be executed and delivered at Closing by
Transferor to Transferee, in substantially the form attached hereto as Exhibit
A.
"Direct Claim" has the meaning set forth in Section 6.03(c).
"East Bend Station" has the meaning set forth in the recitals to this
Agreement.
"Encumbrance" means any security interest, pledge, mortgage, lien,
charge, option to purchase, lease, claim, restriction, covenant, title defect,
hypothecation, assignment, deposit arrangement or other encumbrance of any kind
or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
title retention agreement).
"Environmental Condition" means the presence or Release to the
environment, whether at the Real Property or otherwise, of Hazardous Substances,
including any migration of Hazardous Substances through air, soil or groundwater
at, to or from the Real Property or at, to or from any Off-Site Location,
regardless of when such presence or Release occurred or is discovered.
"Environmental Laws" means all (a) Laws relating to pollution or
protection of the environment, natural resources or human health and safety,
including Laws relating to Releases or threatened Releases of Hazardous
Substances or otherwise relating to the manufacture, formulation, generation,
processing, distribution, use, treatment, storage, Release, transport,
Remediation, abatement, cleanup or handling of Hazardous Substances, (b) Laws
with regard to recordkeeping, notification, disclosure and reporting
requirements respecting Hazardous Substances and (c) Laws relating to the
management or use of natural resources.
"Environmental Liabilities" has the meaning set forth in Section
2.03(b).
"Environmental Permit" has the meaning set forth in Section 4.01(i).
"Excluded Assets" has the meaning set forth in Section 2.02.
"Excluded Liabilities" has the meaning set forth in Section 2.04.
"Facilities Operation Agreement" means that certain Facilities
Operation Agreement to be effective at Closing by and between Transferor and
Transferee, in substantially the form attached as Exhibit D.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time, applied on a consistent basis.
"Good Utility Practice" means any of the practices, methods and acts
engaged in or approved by a significant portion of the electric utility industry
during the relevant time period, or any of the practices, methods or acts which,
in the exercise of reasonable judgment in light of the facts known at the time
the decision was made, could have been expected to accomplish the desired result
at a reasonable cost consistent with good business practices, reliability,
safety and expedition.
"Governmental Authority" means any: (a) nation, state, county, city,
town, village, district, or other jurisdiction of any nature; (b) federal,
state, local, municipal, foreign, or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal); (d)
multi-national organization or body; or (e) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature.
"Hazardous Substances" means (a) any petrochemical or petroleum
products, oil or coal ash, radioactive materials, radon gas, asbestos in any
form that is or could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contain dielectric fluid which may contain
levels of polychlorinated biphenyls; (b) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "hazardous constituents," "restricted hazardous
materials," "extremely hazardous substances," "toxic substances,"
"contaminants," "pollutants," "toxic pollutants," or words of similar meaning
and regulatory effect under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any applicable Environmental Law.
"Improvements" means all buildings, structures, machinery and equipment
(including all fuel handling and storage facilities), fixtures, construction in
progress, and other improvements, including all piping, cables and similar
equipment forming part of the mechanical, electrical, plumbing or HVAC
infrastructure of any building, structure or equipment, located on and affixed
to the Real Property.
"Indemnifiable Loss" has the meaning set forth in Section 6.02(a).
"Indemnifying Party" has the meaning set forth in Section 6.02(d).
"Indemnitee" has the meaning set forth in Section 6.02(c).
"Inventories" means all inventories of fuels, supplies, materials and
spare parts of Transferor located on or in transit to the Real Property.
"Knowledge" means the actual knowledge of the corporate officer or
officers of the specified Person charged with responsibility for the particular
function as of the date of this Agreement, or, with respect to any certificate
delivered pursuant to this Agreement, the date of delivery of the certificate,
after reasonable inquiry by each such officer of selected employees of the
specified Person whom such officer believes, in good faith, to be the persons
generally responsible for the subject matters to which the knowledge is
pertinent.
"Laws" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of the United States, any foreign
country and any domestic or foreign state, county, city or other political
subdivision or of any Governmental Authority.
"Liability" means any liability or obligation, whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, whether incurred or
consequential, and whether due or to become due.
"Material Adverse Effect" means (i) any event, circumstance or
condition materially impairing the ability of Transferor to perform its
obligations under this Agreement or any Ancillary Agreement, or (ii) any change
in or effect on Transferor or the Transferred Assets that is materially adverse
to the Transferred Assets, other than (a) any change resulting from changes in
the international, national, regional or local wholesale or retail markets for
electricity, (b) any change resulting from changes in the international,
national, regional or local markets for fuel used at East Bend Station, (c) any
change resulting from changes in the North American, national, regional or local
electric transmission system, and (d) any change in Law generally applicable to
similarly situated Persons.
"Net Book Value" means an amount in dollars, as reflected in the
corresponding line item or items of the balance sheet of Transferor as of the
applicable date, equal to (i) total fixed assets net of accumulated depreciation
in respect of Transferor's ownership interest in East Bend Station plus (ii)
construction work in progress.
"Off-Site Location" means any real property other than the Real
Property.
"Organizational Documents" means (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the limited liability company
or operating agreement and certificate of formation of a limited liability
company; (c) the partnership agreement and any statement of partnership of a
general partnership; (d) the limited partnership agreement and the certificate
of limited partnership of a limited partnership; (e) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person; and (f) any amendment to any of the foregoing.
"PSOA" means that certain Purchase, Sales and Operation Agreement to be
effective at Closing by and between Transferor and Transferee, in substantially
the form attached hereto as Exhibit E.
"Parent" has the meaning set forth in the first paragraph of this
Agreement.
"Party" has the meaning set forth in the first paragraph of this
Agreement.
"Permits" has the meaning set forth in Section 4.01(m).
"Permitted Encumbrances" means (i) the respective rights and
obligations of the Parties under this Agreement and the Ancillary Agreements;
(ii) all matters that would be disclosed in a current title commitment or title
policy or survey for the Real Property; (iii) Encumbrances for Taxes not yet due
or which are being contested in good faith by appropriate proceedings and that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; (iv) carriers', warehousemen's, materialmen's,
mechanics', repairman's or other like Encumbrances arising in the ordinary
course of business that would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect; (v) zoning, planning,
conservation restriction and other land use and environmental regulations by
Governmental Authorities; (vi) Encumbrances resulting from legal proceedings
being contested in good faith by appropriate proceedings that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and (vii) other Encumbrances that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Authority.
"Prime Rate" means as of any date, the prime rate as published in The
Wall Street Journal on such date or, if not published on such date, on the most
recent date of publication.
"Real Property" has the meaning set forth in Section 4.01(e)(i).
"Real Property Lease" has the meaning set forth in Section 4.01(e)(ii).
"Release" means any release, spill, leak, discharge, disposal of,
pumping, pouring, emitting, emptying, injecting, leaching, dumping or allowing
to escape into or through the environment.
"Remediation" means an action of any kind to address an Environmental
Condition or a Release of Hazardous Substances or the presence of Hazardous
Substances at the Real Property or an Off-Site Location, including the following
activities to the extent they relate to, result from or arise out of the
presence of a Hazardous Substance at the Real Property or an Off-Site Location:
(a) monitoring, investigation, assessment, treatment, cleanup, containment,
removal, mitigation, response or restoration work; (b) obtaining any permits,
consents, approvals or authorizations of any Governmental Authority necessary to
conduct any such activity; (c) preparing and implementing any plans or studies
for any such activity; (d) obtaining a written notice from a Governmental
Authority with jurisdiction over the Real Property or an Off-Site Location under
Environmental Laws that no material additional work is required by such
Governmental Authority; (e) the use, implementation, application, installation,
operation or maintenance of removal actions on the Real Property or an Off-Site
Location, remedial technologies applied to the surface or subsurface soils,
excavation and treatment or disposal of soils at an Off-Site Location, systems
for long-term treatment of surface water or groundwater, engineering controls or
institutional controls; and (f) any other activities reasonably determined by a
Party to be necessary or appropriate or required under Environmental Laws to
address an Environmental Condition or a Release of Hazardous Substances or the
presence of Hazardous Substances at the Real Property or an Off-Site Location.
"Representatives" means, with respect to a Party, such respective
directors (or parties performing similar functions), officers, employees,
representatives, agents and advisors (including accountants, legal counsel,
environmental consultants and financial advisors).
"Tax" means any tax, charge, fee, levy, penalty or other assessment
imposed by any federal, state, local or foreign taxing authority, including, but
not limited to, any income, gross receipts, excise, property, sales, transfer,
use, franchise, payroll, withholding, social security or other tax, including
any interest, penalty or addition attributable thereto.
"Third Party Claim" has the meaning set forth in Section 6.03(a).
"Transfer Consideration" has the meaning set forth in Section 3.01.
"Transferee" has the meaning set in the first paragraph of this
Agreement.
"Transferee Indemnitee" has the meaning set forth in Section 6.02(b).
"Transferee's Required Consents" means Transferee's Required
Governmental Consents and Transferee's Required Third-Party Consents.
"Transferee's Required Governmental Consents" means the consents,
approvals, filings and/or notices of, with, from or to Governmental Authorities
listed in Section I of Schedule 4.02(c)(ii).
"Transferee's Required Third-Party Consents" means the consents,
approvals, filings and/or notices of, with, from or to Third Parties (other than
Governmental Authorities) listed in Section II of Schedule 4.02(c)(ii).
"Transferred Assets" has the meaning set forth in Section 2.01.
"Transferor" has the meaning set forth in the first paragraph of this
Agreement.
"Transferor Indemnitee" has the meaning set forth in Section 6.02(a).
"Transferor's Required Consents" means Transferor's Required
Governmental Consents and Transferor's Required Third-Party Consents.
"Transferor's Required Governmental Consents" means the consents,
approvals, filings and/or notices of, with, from or to Governmental Authorities
listed in Section I of Schedule 4.01(c)(ii).
"Transferor's Required Third-Party Consents" means the consents,
approvals, filings and/or notices of, with, from or to Third Parties (other than
Governmental Authorities) listed in Section II of Schedule 4.01(c)(ii).
"Transferred Contracts" has the meaning set forth in Section 2.01(d).
"Transferred Intellectual Property" has the meaning set forth in
Section 2.01(h).
"Transferred Permits" has the meaning set forth in Section 2.01(e).
"Transmission Assets" has the meaning set forth in Section 2.02(a).
(b) Interpretation. In this Agreement, unless otherwise specified or
where the context otherwise requires:
(i) a reference, without more, to a recital is to the relevant
recital to this Agreement, to an Article or Section is to the relevant Article
or Section of this Agreement, and to a Schedule or Exhibit is to the relevant
Schedule or Exhibit to this Agreement;
(ii) words importing any gender shall include other genders;
(iii) words importing the singular only shall include the
plural and vice versa;
(iv) the words "include," "includes" or "including" shall be
deemed to be followed by the words "without limitation;"
(v) reference to any agreement, document or instrument means
such agreement, document or instrument as amended or modified and in effect from
time to time in accordance with the terms thereof;
(vi) reference to any applicable Law means, if applicable,
such Law as amended, modified, codified, replaced or reenacted, in whole or in
part, and in effect from time to time, including rules and regulations
promulgated thereunder,
(vii) "or" is used in the inclusive sense of "and/or";
(viii) references to documents, instruments or agreements
shall be deemed to refer as well to all addenda, exhibits, schedules or
amendments thereto;
(ix) the words "hereof," "herein" and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
(x) references to any party hereto or any other agreement or
document shall include such party's successors and permitted assigns, but, if
applicable, only if such successors and assigns are not prohibited by this
Agreement.
ARTICLE II
TRANSFER OF ASSETS
Section 2.01. Transfer of Assets. Upon the terms and conditions set
forth in this Agreement, at the Closing, Transferor shall transfer, convey,
assign and deliver to Transferee, and Transferee shall acquire and assume from
Transferor, free and clear of all Encumbrances, other than Permitted
Encumbrances, all of Transferor's right, title and interest in, to and under the
real and personal property, tangible and intangible, constituting, or used in
connection with or ancillary to the ownership or operation of, the East Bend
Station, except as otherwise provided in Section 2.02, each as of the Closing
Date, including all of Transferor's right, title and interest in, to and under
the following assets (collectively, the "Transferred Assets"):
(a) the portion of the Real Property that on the date hereof
is or has been included in Transferor's rate base (including all buildings and
other structures and Improvements located thereon and all appurtenances thereto,
including without limitation those certain reserve auxiliary transformers and
Improvements identified on Schedule 2.01(a)), which Real Property is more
specifically described in Part II of Schedule 4.01(e)(i);
(b) the machinery, equipment (including communications
equipment), vehicles, furniture and other personal property located on the Real
Property, including the items of tangible personal property listed on Schedule
2.01(b), but excluding property used or primarily usable as part of the
Transmission Assets or otherwise constituting part of the Excluded Assets;
(c) all Inventories;
(d) subject to the receipt of any necessary consents and
approvals, the contracts or agreements (including any licenses or real or
personal property leases, other than any thereof constituting Transferred
Permits or Transferred Intellectual Property) listed on Schedule 2.01(d) (the
"Transferred Contracts");
(e) subject to the receipt of any necessary consents and
approvals, the permits, licenses, certificates, certifications, orders and other
governmental authorizations listed on Schedule 2.01(e) (the "Transferred
Permits");
(f) all unexpired, transferable warranties and guarantees from
manufacturers, vendors and other third parties with respect to any Improvement
or item of real or tangible personal property constituting part of the
Transferred Assets;
(g) all books, expired purchase orders, operating records,
operating, safety and maintenance manuals, engineering design plans, blueprints
and as-built plans, specifications, procedures, studies, reports, equipment
repair, safety, maintenance or service records, and similar items (subject to
the right of Transferor to retain copies of same for its use), other than such
items that are proprietary to third parties and accounting records (to the
extent that any of the foregoing is contained in an electronic format,
Transferor shall cooperate with Transferee to transfer such items to Transferee
in a format that is reasonably acceptable to Transferee); and
(h) subject to the receipt of any necessary consents and
approvals, any Intellectual Property (the "Transferred Intellectual Property").
Notwithstanding the foregoing, the transfer of the Transferred Assets
pursuant to this Agreement shall not include the assumption of any Liability
related to the Transferred Assets unless Transferee expressly assumes that
Liability pursuant to Section 2.03.
Section 2.02. Excluded Assets. Notwithstanding anything to the contrary
contained in Section 2.01 or elsewhere in this Agreement, nothing in this
Agreement shall constitute or be construed as conferring on Transferee, and
Transferee is not acquiring, any right, title or interest in and to (x) any
properties, assets, business, operation, or division of Transferor or any of its
Affiliates (other than Transferee) not expressly set forth in Section 2.01, or
(y) the following specific assets of Transferor (or as to which Transferor has
an undivided ownership interest therein, as tenant in common) that are
associated with the Transferred Assets, but which are specifically excluded from
the tranfer contemplated hereunder, are excluded from the Transferred Assets and
shall remain the property of Transferor after the Closing (collectively, the
"Excluded Assets"):
(a) the electrical transmission or distribution facilities (as
distinguished from generation facilities) located at or forming part of East
Bend Station (whether or not regarded as a "transmission" or "generation" asset
for regulatory or accounting purposes), including all switchyard facilities,
substation facilities and support equipment, as well as all permits, contracts
and warranties related thereto (other than any distribution assets expressly
identified on Schedule 2.01(a) or (b)), including those certain assets
facilities and agreements specifically identified on Schedule 2.02(a) (the
"Transmission Assets"); provided, further, that without limitation of the
foregoing, Transferor is not transferring to Transferee any of Transferor's
right, title and interest in and to any generation step-up transformers or any
other equipment or facilities connected or appurtenant to East Bend Station
classified as "Station Equipment" under Account No. 353 of the Federal Energy
Regulatory Commission's Uniform System of Accounts Prescribed for Public
Utilities and Licensees Subject to Provisions of the Federal Power Act, 18
C.F.R. ss. 101;
(b) all real property associated with East Bend Station, other
than the interests therein to be conveyed by the Deed;
(c) all cash, cash equivalents, bank deposits, accounts and
notes receivables (trade or otherwise), prepaid expenses relating to the
Transferred Assets and any income, sales, payroll or other Tax receivables;
(d) all minute books, stock transfer books, corporate seals
and other corporate records;
(e) any refund, credit, penalty, payment, adjustment or
reconciliation (i) related to Taxes paid prior to the Closing Date in respect of
the Transferred Assets, whether such refund, credit, penalty, payment,
adjustment or reconciliation is received as a payment or, subject to Section
3.03, as a credit against future Taxes payable, or (ii) arising under any
Transferred Contract and relating to a period before the Closing Date (including
any payment received after the Closing Date for electricity sold and delivered
from East Bend Station prior to the Closing Date);
(f) the rights of Transferor in, to and under all contracts,
agreements, arrangements, permits or licenses of any nature, of which the
obligations of Transferor thereunder are not expressly assumed by Transferee
pursuant to Section 2.03;
(g) any insurance policies;
(h) certificates of deposit, shares of stock, securities,
bonds, debentures, evidences of indebtedness, and interests in joint ventures,
partnerships, limited liability companies and other entities;
(i) all tariffs, agreements and arrangements to which
Transferor is a party for the purchase or sale of electric capacity and/or
energy or for the purchase or sale of transmission or ancillary services
involving the Transferred Assets or otherwise;
(j) all personnel records together with all deferred
compensation, profit-sharing, retirement and pension plans and all bonus, fringe
benefit and other employee benefit plans maintained or with respect to which
contributions are made by Transferor or any of its Affiliates (other than
Transferee) in respect of the current employees of Transferor or any of its
Affiliates (other than Transferee) providing services for or otherwise
associated with the Transferred Assets;
(k) except in respect of Assumed Liabilities, the rights of
Transferor in and to any causes of action against third parties relating to the
Transferred Assets or any part thereof, including any claim for refunds (other
than those Tax refunds that are covered by Section 2.02(d) above), prepayments,
offsets, recoupment, insurance proceeds, condemnation awards, judgments and the
like, whether received as a payment or credit against future liabilities,
relating specifically to East Bend Station and relating to any period ending on
or prior to the Closing Date;
(l) all other assets and properties owned by Transferor or any
of its Affiliates (other than Transferee) that are not used in the operation of
East Bend Station; and
(m) the rights of Transferor under this Agreement and the
Ancillary Agreements.
Section 2.03. Assumed Liabilities. On the Closing Date, Transferor and
Transferee shall execute and deliver the Assignment and Assumption Agreement,
pursuant to which, among other things, Transferee shall assume and agree to
perform and discharge, without recourse to Transferor, the following Liabilities
of Transferor, solely to the extent such Liabilities accrue or arise from and
after the Closing and would otherwise constitute Liabilities (in whole or in
part) of Transferor (as opposed to any other joint owner of East Bend Station),
other than Excluded Liabilities (as defined below), in accordance with the
respective terms and subject to the respective conditions thereof (collectively,
the "Assumed Liabilities"):
(a) All Liabilities of Transferor under the Transferred
Contracts, Transferred Permits and Transferred Intellectual Property, in each
case in accordance with the terms thereof, except to the extent that such
Liabilities, but for a breach or default by Transferor, would have been paid,
performed or otherwise discharged on or prior to the Closing Date or to the
extent the same arise out of any such breach or default or out of any event
which after the giving of notice would constitute a default by Transferor;
(b) all Liabilities with respect to East Bend Station arising
under or relating to Environmental Laws or relating to any claim in respect of
Environmental Conditions or Hazardous Substances, including settlements,
judgments, costs and expenses, including reasonable attorneys fees, whether
based on common law or Environmental Laws (collectively, "Environmental
Liabilities"), but in each case solely to the extent accruing or arising from
and after the Closing Date, with respect to (i) any violation or alleged
violation of Environmental Laws with respect to the ownership, lease,
maintenance or operation of any of the Transferred Assets, including any fines
or penalties that arise in connection with the ownership, lease, maintenance or
operation of the Transferred Assets, and the costs associated with correcting
any such violations; (ii) loss of life, injury to persons or property or damage
to natural resources caused (or allegedly caused) by any Environmental Condition
or the presence or Release of Hazardous Substances at, on, in, under, adjacent
to or migrating from the Transferred Assets, including any Environmental
Condition or Hazardous Substances contained in building materials at or adjacent
to the Transferred Assets or in the soil, surface water, sediments, groundwater,
landfill cells, or in other environmental media at or near the Transferred
Assets; (iii) any Remediation of any Environmental Condition or Hazardous
Substances that are present or have been Released at, on, in, under, adjacent to
or migrating from, the Transferred Assets or in the soil, surface water,
sediments, groundwater, landfill cells or in other environmental media at or
adjacent to the Transferred Assets; (iv) any bodily injury, loss of life,
property damage, or natural resource damage arising from the storage,
transportation, treatment, disposal, discharge, recycling or Release, at any
Off-Site Location, or arising from the arrangement for such activities, of
Hazardous Substances generated in connection with the ownership, lease,
maintenance or operation of the Transferred Assets; (v) any Remediation of any
Environmental Condition or Release of Hazardous Substances arising from the
storage, transportation, treatment, disposal, discharge, recycling or Release,
at any Off-Site Location, or arising from the arrangement for such activities,
of Hazardous Substances generated in connection with the ownership, lease,
maintenance or operation of the Transferred Assets; and (vi) any obligation to
repower, replace, decommission, deactivate, dismantle, demolish or close the
Transferred Assets or any portion thereof, or any surface impoundments or other
waste or effluent handling or storage units on owned or leased adjacent
properties used in connection with the operation of the Transferred Assets;
(c) all liabilities or obligations to third parties for
personal injury or tort, or similar causes of action arising solely out of the
ownership, lease, maintenance or operation of the Transferred Assets
(collectively, "Tort Liabilities"), but in each case solely to the extent
accruing or arising from and after the Closing Date; and
(d) any Tax that may be imposed by any federal, state or local
government on the ownership, sale, operation or use of the Transferred Assets on
or after the Closing Date, except for any income Taxes attributable to income
received by Transferor.
Section 2.04. Excluded Liabilities. Except for the Assumed Liabilities,
Transferee shall not assume by virtue of this Agreement, the Assignment and
Assumption Agreement or any other Ancillary Agreement, or the transactions
contemplated hereby or thereby, or otherwise, and shall have no liability for,
any Liabilities of Transferor (the "Excluded Liabilities"), including any of the
following Liabilities:
(a) any Liabilities of Transferor in respect of any Excluded
Assets or other assets of Transferor that are not Transferred Assets, except to
the extent caused by the acts or omissions of Transferee or Transferee's
ownership, lease, maintenance or operation of the Transferred Assets;
(b) any Liabilities in respect of Taxes attributable to the
Transferred Assets for taxable periods ending before the Closing Date;
(c) any Liabilities of Transferor (i) arising from the breach
or default by Transferor, prior to the Closing Date, of any Transferred
Contract, Transferred Permit or Transferred Intellectual Property or (ii) in
respect of any other contract, agreement, personal property lease, permit,
license or other arrangement or instrument entered into by Transferor;
(d) subject to Section 3.03, any payment obligations of
Transferor or its Affiliates (other than Transferee) for goods delivered or
services rendered prior to the Closing Date;
(e) any fines and penalties imposed by any Governmental
Authority resulting from any act or omission by Transferor that occurred prior
to the Closing Date;
(f) any income Taxes attributable to income received by
Transferor;
(g) any Liability of Transferor arising as a result of its
execution and delivery of this Agreement or any Ancillary Agreement, the
performance of its obligations hereunder or thereunder, or the consummation by
Transferor of the transactions contemplated hereby or thereby;
(h) any Liability of Transferor based on Transferor's acts or omissions after
the Closing; and
(i) any and all Environmental Liabilities and Tort Liabilities
accruing, arising, existing or occurring prior to the Closing Date.
ARTICLE III
ASSET TRANSFER; CLOSING
Section 3.01. Asset Transfer. Transferor shall transfer the Transferred
Assets to Transferee at Net Book Value on the Closing Date ("Transfer
Consideration"). The Parties agree and acknowledge that in consideration
therefor Transferee will issue a combination of debt and equity of Transferee to
Transferor, in such relative proportions as Transferor and Transferee shall
mutually agree.
Section 3.02. Inventory; Transaction Costs. At Closing, Transferee
shall also compensate Transferor for the Closing Inventory, at cost. Further,
Transferee shall reimburse Transferor for all transaction costs incurred by
Transferor or any of its affiliates in connection with the transactions
contemplated by this Agreement.
Section 3.03. Proration. (a) Transferee and Transferor agree that all
of the items normally prorated, including those listed below, relating to the
business and operation of the Transferred Assets shall be prorated as of the
Closing Date, with Transferor liable to the extent such items relate to any time
period through the Closing Date, and Transferee liable to the extent such items
relate to periods subsequent to the Closing Date:
(i) personal property, real estate, occupancy and any other
Taxes, assessments and other charges, if any, on or with respect to the business
and operation of the Transferred Assets;
(ii) rent, Taxes and other items payable by or to Transferor
under any of the Transferor Agreements to be assigned to and assumed by the
Transferee hereunder;
(iii) any permit, license or registration fees with respect to
any Environmental Permit or other Permit; and
(iv) sewer rents and charges for water, telephone, electricity
and other utilities.
(b) In connection with such proration, in the event that actual figures
are not available at the Closing Date, the proration shall be based upon the
actual amount of such Taxes or fees for the preceding year (or appropriate
period) for which actual Taxes or fees are available and such Taxes or fees
shall be reprorated upon request of either the Transferor or the Transferee made
within 60 days of the date that the actual amounts become available. Transferor
and Transferee agree to furnish each other with such documents and other records
as may be reasonably requested in order to confirm all adjustment and proration
calculations made pursuant to this Section 3.03.
Section 3.04. Closing. The transfer, assignment, conveyance and
delivery of the Transferred Assets, and the consummation of the other
transactions contemplated by this Agreement shall take place at a closing (the
"Closing"), to be held at the offices of Cinergy Corp., 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx Xxxx 00000 at 10:00 a.m. eastern standard time (or another mutually
acceptable time and location), on the date of execution and delivery of this
Agreement by each of the Parties (or on such other date as may be mutually
agreed upon by the Parties) (the "Closing Date"). The Closing shall be effective
for all purposes as of the close of business on the Closing Date.
Section 3.05. Closing Deliveries. (a) At the Closing, Transferor
will deliver, or cause to be delivered, to Transferee:
(i) the Deed, duly executed and acknowledged by Transferor and
in recordable form;
(ii) the Xxxx of Sale, duly executed by Transferor;
(iii) the Assignment and Assumption Agreement, duly executed
by Transferor;
(iv) the Facilities Operation Agreement, duly executed by
Transferor;
(v) the PSOA, duly executed by Transferor;
(vi) copies of all Transferor's Required Consents obtained by
Transferor; and
(vii) such other documents as are contemplated by this
Agreement or as the Transferee may reasonably request to carry out the purposes
of this Agreement.
(b) At the Closing, Transferee will provide the Transfer Consideration
as well as reimbursement or compensation for the Closing Inventory and
transaction costs. In addition, Transferee will deliver, or cause to be
delivered, to Transferor:
(i) the Assignment and Assumption Agreement, duly executed by
Transferee;
(ii) the Facilities Operation Agreement, duly executed by
Transferee;
(iii) the PSOA, duly executed by Transferee;
(iv) copies of all Transferee's Required Consents obtained by
Transferee; and
(v) such other documents as are contemplated by this Agreement
or as the Transferor may reasonably request to carry out the purposes of this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of Transferor.
Transferor represents and warrants to Transferee as follows:
(a) Organization and Good Standing; Qualification. Transferor is a
corporation duly formed, validly existing and in good standing under the laws of
the State of Ohio. Transferor has all requisite power and authority to own,
lease or operate the Transferred Assets and to carry on its business as it is
now being conducted. Transferor is duly qualified or licensed to do business as
a foreign corporation and is in good standing as a foreign corporation in each
jurisdiction in which the character or location of the properties owned or used
by it or the nature of the business conducted by it makes such qualification or
license necessary, except for jurisdictions in which the failure to be so
qualified, licensed or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Authority and Enforceability. Transferor has full corporate power
and authority to execute and deliver, and carry out its obligations under, this
Agreement and each Ancillary Agreement to which it is a party and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance by Transferor of this Agreement and each Ancillary Agreement to
which it is a party, and the consummation of the transactions contemplated
hereby and thereby, have been duly and validly authorized by all necessary
corporate action on the part of Transferor. Assuming the due authorization,
execution and delivery of this Agreement and each Ancillary Agreement to which
it is a party by Transferee, and subject to the receipt of Transferor's Required
Consents, each of this Agreement and each such Ancillary Agreement constitutes a
legal, valid and binding obligation of Transferor, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency and other similar laws affecting the rights
and remedies of creditors generally and by general principles of equity.
(c) No Violation; Consents and Approvals. (i) Subject to obtaining
Transferor's Required Consents, neither the execution, delivery and performance
by Transferor of this Agreement and each Ancillary Agreement to which it is a
party, nor the consummation by Transferor of the transactions contemplated
hereby and thereby, will (A) conflict with or result in any breach of any
provision of the Organizational Documents of Transferor; (B) result in a default
(or give rise to any right of termination, cancellation or acceleration), or
require a consent, under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, material agreement or other instrument or obligation
to which Transferor is a party or by which it or any of the Transferred Assets
may be bound, except for any such defaults or consents (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained or which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; or (C)
constitute a violation of any law, regulation, order, judgment or decree
applicable to Transferor, except for any such violations as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(ii) Except as set forth in Section I of Schedule 4.01(c)(ii) (listing
each of Transferor's Required Governmental Consents) or Section II thereof
(listing each of Transferor's Required Third-Party Consents), no consent or
approval of, filing with, or notice to, any Governmental Authority or other
Person is necessary for the execution, delivery and performance of this
Agreement by Transferor or of any Ancillary Agreement to which Transferor is a
party, or the consummation by Transferor of the transactions contemplated hereby
and thereby, other than such consents, approvals, filings or notices which, if
not obtained or made, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(d) Insurance. All material policies of fire, liability, workers'
compensation and other forms of insurance owned or held by, or on behalf of,
Transferor and insuring the Transferred Assets are in full force and effect, all
premiums with respect thereto covering all periods up to and including the date
hereof have been paid (other than retroactive premiums which may be payable with
respect to comprehensive general liability and workers' compensation insurance
policies), and no notice of cancellation or termination has been received with
respect to any such policy which was not replaced on substantially similar terms
prior to the date of such cancellation.
(e) Real Property. (i) Schedule 4.01(e)(i) sets forth in Part I thereof
all real property owned (whether on a tenancy in common basis or otherwise),
used or occupied by Transferor and constituting part of or otherwise associated
with East Bend Station (the "Real Property"), including a description of all
land, and all encumbrances, easements or rights of way of record (or, if not of
record, of which Transferor has Knowledge) granted on or appurtenant to or
otherwise affecting such Real Property.
(ii) There are [no material Real Property leases (the "Real Property
Leases")] relating to the Transferred Assets under which the Transferor is a
lessee, lessor or under which Transferor has any interest.
(f) Conveyance of Real Property. No state, municipal, or other
governmental approval regarding the division, platting, or mapping of real
estate is required as a prerequisite to the conveyance by Transferor to
Transferee (or as a prerequisite to the recording of any conveyance document) of
any Real Property pursuant to the terms hereof.
(g) Improvements. Neither Transferor nor any Affiliate thereof has
received any written notices from any Governmental Authority stating or alleging
that any Improvements constituting part of the Transferred Assets have not been
constructed in compliance with applicable Laws.
(h) Title; Condition of Assets. (i) Subject to Permitted Encumbrances,
Transferor is the holder of record title to the Real Property and has good and
valid title to the other Transferred Assets that it purports to own, free and
clear of all Encumbrances.
(ii) The tangible assets (real and personal) at, related to, or used in
connection with East Bend Station, taken as a whole, (A) are in good operating
and usable condition and repair, free from any defects (except for ordinary wear
and tear, in light of their respective ages and historical usages, and except
for such defects as do not materially interfere with the use thereof in the
conduct of the normal operation and maintenance of the Transferred Assets taken
as a whole) and (B) have been maintained consistent with Good Utility Practice.
(i) Environmental Matters. (i) Transferor or its Affiliate, Cinergy
Power Generation Services, LLC, a Delaware limited liability company ("GGPS"),
holds, and is in compliance with, all permits, certificates, certifications,
licenses and other authorizations issued by Governmental Authorities under
Environmental Laws (collectively, "Environmental Permits") that are required for
Transferor to conduct the business and operations of the Transferred Assets, and
Transferor is otherwise in compliance with all applicable Environmental Laws
with respect to the business and operations of the Transferred Assets, except
for any such failures to hold or comply with required Environmental Permits, or
such failures to be in compliance with applicable Environmental Laws, as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect;
(ii) Transferor has not received any written request for information,
or been notified of any violation, or that it is a potentially responsible
party, under CERCLA or any other Environmental Law for contamination or air
emissions at East Bend Station or the Real Property, except for any such
requests or notices that would result in liabilities under such laws as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and there are no claims, actions, proceedings or investigations
pending or, to the Knowledge of Transferor, threatened against Transferor before
any Governmental Authority or body acting in an adjudicative capacity relating
in any way to any Environmental Laws or against Transferor or Parent concerning
contamination or air emissions at East Bend Station or the Real Property; and
(iii) there are no outstanding judgments, decrees or judicial orders
relating to the Transferred Assets regarding compliance with any Environmental
Law or to the investigation or cleanup of Hazardous Substances under any
Environmental Law relating to the Purchase Assets, except for such outstanding
judgments, decrees or judicial orders as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(iv) Section I of Schedule 4.01(m) lists all Environmental Permits.
The representations and warranties made in this Section 4.01(i) are the
exclusive representations and warranties of Transferor relating to environmental
matters.
(j) Condemnation. There are no pending or, to the Knowledge of
Transferor, threatened proceedings or governmental actions to condemn or take by
power of eminent domain all or any part of the Transferred Assets.
(k) Contracts and Leases. (i) Schedule 4.01(k) lists all written
contracts, agreements, licenses (other than Environmental Permits, Permits or
Intellectual Property) or personal property leases of Transferor that are
material to the business or operations of the Transferred Assets, other than any
such agreements, licenses, or personal property leases that are expected to
expire or terminate on or prior to the Closing Date.
(ii) Except as disclosed in Schedule 4.01(k), each Transferred Contract
(A) constitutes a legal, valid and binding obligation of Transferor and, to
Transferor's Knowledge, constitutes a valid and binding obligation of the other
parties thereto, (B) is in full force and effect and Transferor has not
delivered or received any written notice of termination thereunder, and (C) may
be transferred to Transferee pursuant to this Agreement without the consent of
the other parties thereto and will continue in full force and effect thereafter,
in each case without breaching the terms thereof or resulting in the forfeiture
or impairment of any rights thereunder.
(iii) Except as set forth in Schedule 4.01(k), there is not under any
Transferred Contract any default or event which, with notice or lapse of time or
both, (A) would constitute a default by Transferor or, to Transferor's
Knowledge, any other party thereto, (B) would constitute a default by Transferor
or, to Transferor's Knowledge, any other party thereto which would give rise to
an automatic termination, or the right of discretionary termination, thereof, or
(C) would cause the acceleration of any of Transferor's obligations thereunder
or result in the creation of any Encumbrance (other than any Permitted
Encumbrance) on any of the Transferred Assets. There are no claims, actions,
proceedings or investigations pending or, to the Knowledge of Transferor,
threatened against Transferor or any other party to any Transferred Contract
before any Governmental Authority or body acting in an adjudicative capacity
relating in any way to any Transferred Contract or the subject matter thereof.
Transferor has no Knowledge of any defense, offset or counterclaim arising under
any Transferred Contract.
(l) Legal Proceedings. There are no actions or proceedings pending or,
to the Knowledge of Transferor, threatened against Transferor before any court,
arbitrator or Governmental Authority, which, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect. Transferor is
not subject to any outstanding judgments, rules, orders, writs, injunctions or
decrees of any court, arbitrator or Governmental Authority that, individually or
in the aggregate, would reasonably be expected to have a Material Adverse
Effect.
(m) Permits. (i) Transferor has all permits, licenses, franchises and
other governmental authorizations, consents and approvals (other than
Environmental Permits, which are addressed in Section 4.01(i)) (collectively,
"Permits") necessary to own and operate the Transferred Assets, except where any
failures to have such Permits would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Transferor has not
received any written notification that Transferor is in violation, nor does
Transferor have Knowledge of any violations, of any such Permits, or any Law or
judgment of any Government Authority applicable to Transferor with respect to
the Transferred Assets, except for violations that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(ii) Section II of Schedule 4.01(m) lists all material Permits (other
than Environmental Permits).
(n) Taxes. Transferor has filed all Tax Returns that are required to be
filed by it with respect to any Tax relating to the Transferred Assets, and
Transferor has paid all Taxes that have become due as indicated thereon, except
where such Tax is being contested in good faith by appropriate proceedings, or
where any failures to so file or pay would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. There are
no Encumbrances for Taxes on the Transferred Assets that are not Permitted
Encumbrances.
(o) Intellectual Property. Transferor has such ownership of or such
rights by license or other agreement to use all Intellectual Property necessary
to permit Transferor to conduct its business with respect to the Transferred
Assets as currently conducted, except where any failures to have such ownership,
license or right to use would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. Transferor is not, nor has
Transferor received any notice that Transferor is, in default (or with the
giving of notice or lapse of time or both, would be in default) under any
contract to use such Intellectual Property, and there are no material
restrictions on the transfer of any material contract, or any interest therein,
held by Transferor in respect of such Intellectual Property. Transferor has not
received notice that it is infringing any Intellectual Property of any other
Person in connection with the operation or business of the Transferred Assets.
(p) Compliance with Laws. Transferor is in compliance with all
applicable Laws with respect to the ownership or operation of the Transferred
Assets, except where any such failures to be in compliance would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(q) Limitation of Representations and Warranties. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT AND IN ANY ANCILLARY
AGREEMENT, TRANSFEROR IS NOT MAKING, AND HEREBY DISCLAIMS, ANY OTHER
REPRESENTATIONS AND WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED,
CONCERNING TRANSFEROR, EAST BEND STATION OR THE TRANSFERRED ASSETS OR ANY PART
THEREOF.
Section 4.02. Representations and Warranties of Transferee. Transferee
represents and warrants to Transferor as follows:
(a) Organization and Good Standing. Transferee is a corporation duly
formed, validly existing and in good standing under the laws of the State of
Kentucky and has all requisite power and authority to own, lease or operate its
properties and to carry on its business as it is now being conducted.
(b) Authority and Enforceability. Transferee has full corporate power
and authority to execute and deliver and carry out its obligations under this
Agreement and each Ancillary Agreement to which it is a party, and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance by Transferee of this Agreement and each such Ancillary Agreement,
and the consummation of the transactions contemplated hereby and thereby, have
been duly and validly authorized by all necessary corporate action by
Transferee. Assuming the due authorization, execution and delivery of this
Agreement and each such Ancillary Agreement by the other party or parties
thereto, and subject to the receipt of Transferee's Required Consents, each of
this Agreement and each such Ancillary Agreement constitutes a legal, valid and
binding obligation of Transferee, enforceable against Transferee in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency and other similar laws affecting the rights and remedies
of creditors generally and by general principles of equity.
(c) No Violation; Consents and Approvals. (i) Subject to obtaining
Transferee's Required Consents, neither the execution, delivery and performance
by Transferee of this Agreement and each Ancillary Agreement to which Transferee
is a party, nor the consummation by Transferee of the transactions contemplated
hereby and thereby, will (A) conflict with or result in any breach of any
provision of the Organizational Documents of Transferee; (B) result in a default
(or give rise to any right of termination, cancellation or acceleration), or
require a consent, under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, material agreement or other instrument or obligation
to which Transferee is a party or by which any of their respective material
properties or assets may be bound, except for any such defaults or consents (or
rights of termination, cancellation or acceleration) as to which requisite
waivers or consents have been obtained or which would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of Transferee to perform its obligations under this Agreement and the
Ancillary Agreements; or (C) constitute a violation of any law, regulation,
order, judgment or decree applicable to Transferee, except for any such
violations as would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of Transferee to
perform its obligations under this Agreement and the Ancillary Agreements.
(ii) Except as set forth in Section I of Schedule 4.02(c)(ii) (listing
each of Transferee's Required Governmental Consents) or Section II thereof
(listing each of Transferee's Required Third-Party Consents), no consent or
approval of, filing with, or notice to, any Governmental Authority or other
Person is necessary for the execution and delivery of this Agreement or any
Ancillary Agreement by Transferee, or the consummation by Transferee or Company
of the transactions contemplated hereby and thereby, except for any such
consents, approvals, filings or notices which, if not obtained or made, would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of Transferee to perform its obligations under
this Agreement and the Ancillary Agreements.
(d) Legal Proceedings. There are no actions or proceedings pending or,
to the Knowledge of Transferee, threatened against Transferee before any court,
arbitrator or Governmental Authority, which, individually or in the aggregate,
would reasonably be expected to have a material adverse effect on the ability of
Transferee to perform its obligations under this Agreement and the Ancillary
Agreements. Transferee is not subject to any outstanding judgments, rules,
orders, writs, injunctions or decrees of any court, arbitrator or Governmental
Authority which, individually or in the aggregate, would reasonably be expected
to have a material adverse effect on the ability of Transferee to perform its
obligations under this Agreement and the Ancillary Agreements.
ARTICLE V
COVENANTS
Section 5.01. Books and Records. For a period of 7 years after the
Closing Date (or such other date as the Parties may mutually determine), each
Party and its Representatives shall have reasonable access to all books and
records of the Transferred Assets, to the extent that such access may reasonably
be required by such Party in connection with the Assumed Liabilities or the
Excluded Liabilities, or other matters affected by the operation of the
Transferred Assets. Such access shall be afforded by the Party in possession of
any such books and records upon receipt of reasonable advance notice and during
normal business hours. The Party exercising this right of access shall be solely
responsible for any costs or expenses incurred by it or the other Party with
respect to such access pursuant to this Section 5.01. If the Party in possession
of such books and records desires to dispose of any such books and records upon
or prior to the expiration of such seven-year period, such Party shall, prior to
such disposition, give the other Party a reasonable opportunity, at such other
Party's expense, to segregate and remove such books and records as such other
Party may select.
Section 5.02. Finder's Fees. Transferor, on the one hand, and
Transferee, on the other hand, represent and warrant to the other that no
broker, finder or other Person is entitled to any brokerage fees, commissions or
finder's fees in connection with the transactions contemplated hereby by reason
of any action taken by the Party making such representation. Transferor, on the
one hand, and Transferee, on the other hand, will pay to the other or otherwise
discharge, and will indemnify and hold the other harmless from and against, any
and all claims or liabilities for all brokerage fees, commissions and finder's
fees incurred by reason of any action taken by the indemnifying party.
Section 5.03. Tax Matters. All transfer, use, stamp, sales and similar
Taxes incurred in connection with this Agreement and the transactions
contemplated hereby shall be the sole responsibility of Transferor and, to the
extent paid by Transferee, Transferor shall promptly reimburse Transferee upon
request.
Section 5.04. Further Assurances. (a) Subject to the terms and
conditions of this Agreement, each of Transferor, on the one hand, and
Transferee, on the other hand, shall use 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 under applicable Laws to consummate and
make effective the transfer of the Transferred Assets pursuant to this Agreement
and the assumption of the Assumed Liabilities, including using commercially
reasonable efforts with a view to obtaining all necessary consents, approvals
and authorizations of, and making all required notices or filings with, third
parties required to be obtained or made in order to consummate the transactions
hereunder, including the transfer of the Transferred Permits to Transferee.
Neither Transferor, on the one hand, nor Transferee, on the other hand, shall,
without prior written consent of the other, take or fail to take any action
which might reasonably be expected to prevent or materially impede, interfere
with or delay the transactions contemplated by this Agreement.
(b) In the event that any portion of the Transferred Assets shall not
have been conveyed to Transferee at the Closing, Transferor shall, subject to
paragraphs (c) and (d) immediately below, convey such asset to Transferee as
promptly as practicable after the Closing.
(c) To the extent, if any, that Transferor's rights under any
Transferred Contract may not be assigned without the consent of any other party
thereto, which consent has not been obtained by the Closing Date, this Agreement
shall not constitute an agreement to assign the same if an attempted assignment
would constitute a breach thereof or be unlawful. Transferor and Transferee
agree that if any consent to an assignment of any Transferred Contract has not
been obtained at the Closing Date, or if any attempted assignment would be
ineffective or would impair Transferee's rights and obligations under the
Transferred Contract in question, so that Transferee would not in effect acquire
the benefit of all such rights and obligations, Transferor, at its option and to
the maximum extent permitted by law and such Transferred Contract, shall, after
the Closing Date, (i) appoint Transferee to be Transferor's agent with respect
to such Transferred Contract or (ii) to the maximum extent permitted by law and
such Transferred Contract, enter into such reasonable arrangements with
Transferee or take such other commercially reasonable actions to provide
Transferee with the same or substantially similar rights and obligations of such
Transferred Contract. From and after the Closing Date, Transferor and Transferee
shall cooperate and use commercially reasonable efforts to obtain an assignment
to Transferee of any such Transferred Contract.
(d) To the extent that Transferor's rights under any warranty or
guaranty described in Section 2.01(f) may not be assigned without the consent of
another Person, which consent has not been obtained by the Closing Date, this
Agreement shall not constitute an agreement to assign the same, if an attempted
assignment would constitute a breach thereof or be unlawful. The Parties agree
that if any consent to an assignment of any such warranty or guaranty has not
been obtained or if any attempted assignment would be ineffective or would
impair Transferee's rights and obligations under the warranty or guaranty in
question, so that Transferee would not in effect acquire the benefit of all such
rights and obligations, Transferor shall use commercially reasonable efforts to
the extent permitted by law and such warranty or guaranty, to enforce such
warranty or guaranty for the benefit of Transferee to the maximum extent
possible so as to provide Transferee with the benefits and obligations of such
warranty or guaranty. Notwithstanding the foregoing, Transferor shall not be
obligated to bring or file suit against any third party, provided that if
Transferor determines not to bring or file suit after being requested by
Transferee to do so, Transferor shall assign, to the extent permitted by law or
any applicable agreement, its rights in respect of the claims so that Transferee
may bring or file such suit.
Section 5.05. Site Access. The Parties acknowledge and agree that
pursuant to the transactions contemplated hereby, and in light of the ongoing
business operations and imperatives of Transferor, Transferor is not conveying
to Transferee all of Transferor's ownership interest in the Real Property (and
further that such portion of the Real Property being conveyed by Transferor
pursuant to the Deed is subject to the terms and conditions set forth therein,
including any reservations or restrictions in favor of Transferor), but rather
solely that portion of the Real Property anticipated to be necessary or
appropriate for Transferee's full enjoyment of its ownership interest in East
Bend Station as presently configured for the expected useful life thereof. The
foregoing notwithstanding, and in addition to the rights granted with respect
thereto under the Deed, the Parties confirm that each may have legitimate needs
for rights of access and use, from time to time after the Closing, on reasonable
terms and conditions, with respect to real estate owned by the other
constituting part of or otherwise associated with East Bend Station, and the
Parties agree to cooperate with each other in good faith to accommodate such
legitimate needs (taking into account rights of any other owners of East Bend
Station), including, without limitation, developing written protocols and if
necessary or appropriate legal instruments embodying the terms and conditions of
such mutual accommodation in respect of access and use.
ARTICLE VI
INDEMNIFICATION
Section 6.01. Survival. (a) The representations and warranties of the
Parties contained herein shall survive the Closing for a period of one year and
thereafter shall be of no further force and effect, except that (i) the
representations and warranties set forth in Section 4.01(i) shall survive the
Closing for a period of three years, (ii) the representations and warranties set
forth in Section 4.01(n) shall survive the Closing for the period of the
applicable statute of limitations, (iii) the representations and warranties set
forth in Section 4.01(a), (b) and (c) and Section 4.02(a), (b) and (c) shall
survive indefinitely, and (iv) any representation or warranty as to which a
claim has been asserted during the survival period shall continue in effect with
respect to such claim until such claim has been finally resolved or settled.
(b) The covenants and agreements of the Parties contained in this
Agreement shall survive the Closing in accordance with their respective terms.
Section 6.02. Indemnification. (a) From and after the Closing,
Transferee shall indemnify, defend and hold harmless Transferor and its
Representatives (each, a "Transferor Indemnitee") from and against any and all
claims, demands, suits, losses, liabilities, penalties, damages, obligations,
payments, costs and expenses (including, without limitation, the costs and
expenses of any and all actions, suits, proceedings, assessments, judgments,
settlements and compromises relating thereto and reasonable attorneys' fees and
reasonable disbursements in connection therewith) (each, an "Indemnifiable
Loss") asserted against or suffered by any Transferor Indemnitee relating to,
resulting from or arising out of (i) any breach by Transferee of any
representation, warranty, covenant or agreement of Transferee contained in this
Agreement or the Ancillary Agreements, or (ii) the Assumed Liabilities.
(b) From and after the Closing, Transferor shall indemnify, defend and
hold harmless Transferee and its Representatives (each, a "Transferee
Indemnitee") from and against any and all Indemnifiable Losses asserted against
or suffered by any Transferee Indemnitee relating to, resulting from or arising
out of (i) any breach by Parent or Transferor of any of their representations,
warranties, covenants or agreements contained in this Agreement or the Ancillary
Agreements, (ii) the Excluded Liabilities, or (iii) noncompliance with any bulk
sales or transfer laws as provided in Section 7.06.
(c) The amount of any Indemnifiable Loss shall be reduced (i) to the
extent that any Person entitled to receive indemnification under this Agreement
(an "Idemnitee") receives any insurance proceeds with respect to such
Indemnifiable Loss, and (ii) to take into account any net Tax benefit realized
by the Indemnitee arising from the recognition of such Indemnifiable Loss (but
only to the extent that the Parties, following good faith negotiations for a
period of 30 days, jointly agree that such Tax benefit would be realized by the
Indemnitee).
(d) The expiration or termination of any covenant, agreement,
representation or warranty shall not affect the Parties' obligations under this
Section 6.02 if the Indemnitee provided the Person required to provide
indemnification under this Agreement (the "Indemnifying Party") with proper
notice of the claim or event for which indemnification is sought prior to such
expiration, termination or extinguishment.
(e) Subject to Section 7.10 and subparagraph (f) immediately below, the
rights and remedies of the Parties under this Article VI are exclusive and in
lieu of any and all other rights and remedies which the Parties may have under
this Agreement or otherwise in respect of any breach of or failure to perform
any representation, warranty, covenant or agreement set forth in this Agreement,
after the occurrence of the Closing.
(f) Each Party waives any provision of law to the extent that it would
limit or restrict the agreements contained in this Section 6.02. Notwithstanding
any provisions in this Agreement to the contrary, each Party retains its
remedies at law or in equity with respect to willful, knowing or intentional
misrepresentations or breaches of this Agreement.
(g) Notwithstanding anything to the contrary herein, no Party
(including an Indemnitee) shall be entitled to recover from any other Party
(including an Indemnifying Party) for any liabilities, damages, obligations,
payments, losses, costs, or expenses under this Agreement or any amount in
excess of the actual compensatory damages, court costs and reasonable attorney's
fees suffered by such party. The Parties waive any right to recover punitive,
special, exemplary and consequential damages arising in connection with or with
respect to this Agreement. The provisions of this Section 6.02(g) shall not
apply to indemnification for a Third Party Claim.
(h) An Indemnitee shall use commercially reasonable efforts to mitigate
all Indemnifiable Losses, including availing itself of any defenses,
limitations, rights of contribution, claims against third parties and other
rights at law or equity. Commercially reasonable efforts shall include the
reasonable expenditure of money to mitigate or otherwise reduce or eliminate any
losses or expenses for which indemnification would otherwise be due hereunder,
and, in addition to its other obligations hereunder, the Indemnifying Party
shall reimburse the Indemnitee for the Indemnitee's reasonable expenditures in
undertaking such mitigation.
(i) The rights and obligations of indemnification under this Section
6.02 shall not be limited or subject to set-off based on any violation or
alleged violation of any obligation under this Agreement or otherwise, including
but not limited to breach or alleged breach by the Indemnitee of any
representation, warranty, covenant or agreement contained in this Agreement.
Section 6.03. Procedure for Indemnification. (a) If any Indemnitee
receives notice of the assertion of any claim or of the commencement of any
claim, action, or proceeding made or brought by any Person who is not a party to
this Agreement or any Affiliate of a Party to this Agreement (a "Third Party
Claim") with respect to which indemnification is to be sought from an
Indemnifying Party, the Indemnitee shall give such Indemnifying Party reasonably
prompt written notice thereof, but in any event such notice shall not be given
later than 20 days after the Indemnitee's receipt of notice of such Third Party
Claim. Such notice shall describe the nature of the Third Party Claim in
reasonable detail and shall indicate the estimated amount, if practicable, of
the Indemnifiable Loss that has been or may be sustained by the Indemnitee. The
Indemnifying Party will have the right to participate in or, by giving written
notice to the Indemnitee, to elect to assume the defense of any Third Party
Claim at such Indemnifying Party's expense and by such Indemnifying Party's own
counsel, provided that the counsel for the Indemnifying Party who shall conduct
the defense of such Third Party Claim shall be reasonably satisfactory to the
Indemnitee. The Indemnitee shall cooperate in good faith in such defense at such
Indemnitee's own expense. If an Indemnifying Party elects not to assume the
defense of any Third Party Claim, the Indemnitee may compromise or settle such
Third Party Claim over the objection of the Indemnifying Party, which settlement
or compromise shall conclusively establish the Indemnifying Party's liability
pursuant to this Agreement.
(b) If, within 20 days after an Indemnitee provides written notice to
the Indemnifying Party of any Third Party Claims, the Indemnitee receives
written notice from the Indemnifying Party that such Indemnifying Party has
elected to assume the defense of such Third Party Claim as provided in Section
6.03(a), the Indemnifying Party will not be liable for any legal expenses
subsequently incurred by the Indemnitee in connection with the defense thereof;
provided, however, that if the Indemnifying Party shall fail to take reasonable
steps necessary to defend diligently such Third Party Claim within 20 days after
receiving notice from the Indemnitee that the Indemnitee believes the
Indemnifying Party has failed to take such steps, the Indemnitee may assume its
own defense and the Indemnifying Party shall be liable for all reasonable
expenses thereof. Without the prior written consent of the Indemnitee, the
Indemnifying Party shall not enter into any settlement of any Third Party Claim
which would lead to liability or create any financial or other obligation on the
part of the Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder. If a firm offer is made to settle a Third Party Claim
without leading to liability or the creation of a financial or other obligation
on the part of the Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder and the Indemnifying Party desires to accept and agree
to such offer, the Indemnifying Party shall give written notice to the
Indemnitee to that effect. If the Indemnitee fails to consent to such firm offer
within 10 days after its receipt of such notice, the Indemnifying Party shall be
relieved of its obligations to defend such Third Party Claim and the Indemnitee
may contest or defend such Third Party Claim. In such event, the maximum
liability of the Indemnifying Party as to such Third Party Claim will be the
amount of such settlement offer plus reasonable costs or expenses paid or
incurred by Indemnitee up to the date of said notice.
(c) Any claim by an Indemnitee on account of an Indemnifiable Loss
which does not result from a Third Party Claim (a "Direct Claim") shall be
asserted by giving the Indemnifying Party reasonably prompt written notice
thereof, stating the nature of such claim in reasonable detail and indicating
the estimated amount, if practicable, but in any event such notice shall not be
given later than 30 days after the Indemnitee becomes aware of such Direct
Claim, and the Indemnifying Party shall have a period of 30 days within which to
respond to such Direct Claim. If the Indemnifying Party does not respond within
such thirty 30 day period, the Indemnifying Party shall be deemed to have
accepted such claim. If the Indemnifying Party rejects such claim, the
Indemnitee will be free to seek enforcement of its right to indemnification
under this Agreement.
(d) If the amount of any Indemnifiable Loss, at any time subsequent to
the making of an indemnity payment in respect thereof, is reduced by recovery,
settlement or otherwise under or pursuant to any insurance coverage, or pursuant
to any claim, recovery, settlement or payment by, from or against any other
entity, the amount of such reduction, less any costs, expenses or premiums
incurred in connection therewith (together with interest thereon from the date
of payment thereof at the Prime Rate) shall promptly be repaid by the Indemnitee
to the Indemnifying Party. Upon making any indemnity payment, the Indemnifying
Party, to the extent of such indemnity payment, shall be subrogated to all
rights of the Indemnitee against any third party in respect of the Indemnifiable
Loss to which the indemnity payment relates; provided, however, that (i) the
Indemnifying Party shall then be in compliance with its obligations under this
Agreement in respect of such Indemnifiable Loss and (ii) until the Indemnitee
recovers full payment of its Indemnifiable Loss, any and all claims of the
Indemnifying Party against such third party on account of said indemnity payment
are hereby made subordinate in right of payment to the Indemnitee's rights
against such third party. Without limiting the generality or effect of any other
provision hereof, each such Indemnitee and Indemnifying Party shall duly execute
upon request all instruments reasonably necessary to evidence and perfect the
above-described subrogation and subordination rights, and otherwise cooperate in
the prosecution of such claims at the direction of the Indemnifying Party.
Nothing in this Section 6.03(d) shall require any Party hereto to obtain or
maintain any insurance coverage.
(e) A failure to give timely notice as provided in this Section 6.03
shall not affect the rights or obligations of any Party hereunder except if, and
only to the extent that, as a result of such failure, the Party which was
entitled to receive such notice was actually and materially prejudiced as a
result of such failure.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given (i) on the day when delivered
personally or by e-mail (with confirmation) or facsimile transmission (with
confirmation), (ii) on the next business day when delivered to a nationally
recognized overnight delivery service, or (iii) 5 business days after deposited
as registered or certified mail (return receipt requested), in each case,
postage prepaid, addressed to the recipient Party at its address set forth below
(or to such other addresses and e-mail and facsimile numbers for a Party as
shall be specified by like notice; provided, however, that any notice of a
change of address or e-mail or facsimile number shall be effective only upon
receipt thereof):
If to Transferor, to:
The Cincinnati Gas & Electric Company
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: President
Facsimile No.: 000-000-0000
If to Transferee, to:
The Union Light, Heat and Power Company
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: President
Facsimile No: 000-000-0000
Section 7.02. Waiver. The rights and remedies of the Parties are
cumulative and not alternative. Neither the failure nor any delay by any Party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable Law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one Party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by each other Party; (b) no waiver that may be
given by a Party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of such Party or of the right of the Party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
Section 7.03. Entire Agreement; Amendment etc.
(a) This Agreement and the Ancillary Agreements, including the
Schedules, Exhibits, documents, certificates and instruments referred to herein
or therein, embody the entire agreement and understanding of the Parties hereto
in respect of the transactions contemplated by this Agreement. There are no
restrictions, promises, representations, warranties, covenants or undertakings,
other than those expressly set forth or referred to herein or therein. This
Agreement supersedes all prior agreements and understandings between the
Parties, whether written or oral, with respect to the transactions contemplated
hereby.
(b) This Agreement may not be amended, supplemented, terminated or
otherwise modified except by a written agreement executed by Transferor, Parent
and Transferee.
(c) This Agreement shall be binding upon and inure solely to the
benefit of each Party hereto and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
Section 7.04. Assignment. This Agreement and all the of the provisions
hereof shall be binding upon and inure to the benefit of the Parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned by, on
the one hand, Transferor, and on the other hand, Transferee, in whole or in part
(whether by operation of law or otherwise), without the prior written consent of
the other Party, and any attempt to make any such assignment without such
consent will be null and void. Notwithstanding the foregoing, Transferor or
Transferee may assign or otherwise transfer its rights hereunder and under any
Ancillary Agreement to any bank, financial institution or other lender providing
financing to Transferor or Transferee, as applicable, as collateral security for
such financing; provided, however, that no such assignment shall (x) impair or
materially delay the consummation of the transactions contemplated hereby or (y)
relieve or discharge Transferor or Transferee, as the case may be, from any of
its obligations hereunder and thereunder.
Section 7.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party hereto. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the Parties
will negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
Section 7.06. Bulk Sales Laws. Transferee hereby acknowledges that,
notwithstanding anything in this Agreement to the contrary, Transferor will not
comply with the provisions of the bulk sales laws of any jurisdiction in
connection with the transactions contemplated by this Agreement; and Transferee
hereby irrevocably waives compliance by Transferor with the provisions of the
bulk sales laws of all applicable jurisdictions.
Section 7.07. Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of Ohio, without giving
effect to choice of law principles thereof.
Section 7.08. Counterparts; Facsimile Execution. This Agreement may be
executed in one or more counterparts, all of which will be considered one and
the same agreement and will become effective when one or more counterparts have
been signed by each of the Parties and delivered to each other Party, it being
understood that the Parties need not sign the same counterpart. This Agreement
may be executed by facsimile signature(s).
Section 7.09. Schedules. The Schedules to this Agreement are intended
to be and hereby are specifically made a part of this Agreement.
Section 7.10 Specific Performance. The Parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not to be performed in accordance with the terms hereof and that
the Parties will be entitled to specific performance of the terms hereof in
addition to any other remedies at law or in equity.
Section 7.11. Dispute Resolution. (a) If a dispute arises between the
Parties relating to this Agreement, the Parties agree to use the following
alternative dispute resolution ("ADR") procedures prior to any Party pursuing
other available remedies:
(i) A meeting shall be held promptly between the Parties,
attended by individuals with decision-making authority regarding the dispute, to
attempt in good faith to negotiate a resolution of the dispute.
(ii) If, within 30 days after such meeting, the Parties have
not succeeded in negotiating a resolution of the dispute, they will jointly
appoint a mutually acceptable neutral person not affiliated with either Party
(the "Neutral") to act as a mediator. If the Parties are unable to agree on the
Neutral within 20 days, they shall seek assistance in such regard from the CPR
Institute for Dispute Resolution, Inc. ("CPR"). The Parties shall share the fees
of the Neutral and all other common fees and expenses equally.
(iii) The mediation may proceed in accordance with CPR's Model
Procedure for Mediation of Business Disputes, or the Parties may establish their
own procedure.
(iv) The Parties shall pursue mediation in good faith and in a
timely manner. In the event the mediation does not result in resolution of the
dispute within 60 days, then, upon 7 days" written notice to the other Party,
either Party may propose another form of ADR (e.g., arbitration, a mini-trial,
or a summary jury trial) or may pursue other available remedies.
(b) All ADR proceedings shall be strictly confidential and used solely
for the purposes of settlement. Any materials prepared by one Party for the ADR
proceedings shall not be used as evidence by the other Party in any subsequent
litigation; provided, however, that the underlying facts supporting such
materials may be subject to discovery.
(c) Each Party fully understands its specific obligations under the ADR
provisions of this Agreement. Neither Party considers such obligations to be
vague or in any way unenforceable, and neither Party will contend to the
contrary at any future time or in any future proceeding.
IN WITNESS WHEREOF, each of the Parties has caused this Asset Tranfer
Agreement to be executed on its behalf by its respective officer thereunto duly
authorized, all as of the day and year first above written.
THE CINCINNATI GAS & ELECTRIC COMPANY
By: ________________________________________
THE UNION LIGHT HEAT AND POWER COMPANY
By: __________________________________________
