EXHIBIT B-3
AMENDMENT TO PURCHASE AGREEMENT
BY AND AMONG ATLANTIC CITY ELECTRIC COMPANY,
PECO ENERGY COMPANY, PSEG POWER LLC AND PSEG NUCLEAR LLC
This AMENDMENT dated as of October 3, 2000 (this "Amendment"), by and
among Atlantic City Electric Company, a New Jersey corporation ("ACE" or
"Seller"), PECO Energy Company, a Pennsylvania corporation ("PECO"), PSEG Power
LLC, a Delaware limited liability company ("PSEG Power"), and PSEG Nuclear LLC,
a Delaware limited liability company ("PSEG Nuclear" and, together with PSEG
Power and PECO, "Buyers"), amends in certain aspects the Purchase Agreement
dated as of September 27, 1999 (the "Purchase Agreement") by and among PECO,
PSEG Power and Seller, which was assigned by PSEG Power to its wholly-owned
subsidiary, PSEG Nuclear LLC on May 12, 2000, with respect to the sale and
purchase of certain undivided tenant in common interests in the Peach Bottom
Atomic Power Station. ACE, PECO, PSEG Power and PSEG Nuclear are referred to
individually as a "Party" and collectively as the "Parties." Capitalized terms
used herein but not defined shall have the meanings given to such terms in the
Purchase Agreement.
WHEREAS, ACE, PECO and PSEG Power have entered into the Purchase
Agreement pursuant to which ACE agreed to sell to each of PECO and PSEG Power
one-half of ACE's interest in the Peach Bottom Atomic Power Station Station; and
WHEREAS, the parties to the Purchase Agreement have experienced
unanticipated delays in the Closing of the transactions contemplated by such
Purchase Agreement; and
WHEREAS, the Purchase Agreement may be terminated by either Buyers or
Seller at any time prior to the Closing and after the first anniversary of the
Purchase Agreement (the "Termination Date"); and
WHEREAS, pursuant to the Purchase Agreements, PSEG Power assigned its
rights, duties and interest thereunder to PSEG Nuclear; and
WHEREAS, the Parties desire to amend the Purchase Agreement, among
other reasons, to extend the Termination Date.
NOW, THEREFORE, in consideration of the foregoing and of the covenants
and agreements set forth herein, and in consideration of the agreement of the
Parties, including certain Affiliates of PSEG Power, to enter into the Wholesale
Transaction Confirmation, dated the date hereof, for a term commencing October
7, 2000, and intending to be legally bound hereby, the Parties hereby agree to
amend the Purchase Agreement as follows:
1. Section 3.11 of the Purchase Agreement is hereby amended by deleting
such Section in its entirety.
2. Section 7.7 of the Purchase Agreement is hereby amended to read in its
entirety:
"Risk of Loss.
--------------
(a) From September 27, 1999 through (but not including) October 7,
2000, all risk of loss or damage to the assets or properties included in
the Purchased Assets (other than the Decommissioning Funds) shall be borne
by Seller. Notwithstanding any provision hereof to the contrary, if, prior
to October 7, 2000, all or any portion of the Purchased Assets is (i)
condemned or taken by eminent domain or is the subject of a pending or
threatened condemnation or taking which has not been consummated or (ii)
damaged or destroyed by fire or other casualty, Seller shall notify Buyers
promptly in writing of such fact, and (x) in the case of a condemnation or
taking, Seller shall assign or pay, as the case may be, any proceeds
thereof to PECO, to the extent of the PECO Interest, and to PSEG, to the
extent of the PSEG Interest, at the Closing and (y) in the case of a fire
or other casualty, Seller shall either restore such damage or assign the
insurance proceeds therefor (and pay the amount of any deductible and/or
self-insured amount in respect of such casualty) to PECO, to the extent of
the PECO Interest, and to PSEG, to the extent of the PSEG Interest, at the
Closing. Notwithstanding the foregoing, if such condemnation, taking,
damage, destruction or other casualty results in a Material Adverse Effect,
Buyers and Seller shall negotiate to settle the loss resulting from such
condemnation, taking, damage, destruction or other casualty (and such
negotiation shall include the negotiation of a fair and equitable reduction
of the Purchase Price). If no such settlement can be agreed upon within
sixty (60) days after Seller has notified Buyers of such casualty or loss,
then PECO and PSEG, on the one hand, or Seller on the other hand, may
terminate this Agreement pursuant to Section 10.1(h).
(b) From and after October 7, 2000 through (but not including) the
Closing Date, all risk of loss or damage to the assets or properties
included in the Purchased Assets (other than (i) any condemnation or taking
by eminent domain, of the Purchased Assets or (ii) an event or occurrence
which arises out of or relates to the Assumed Decommissioning Liabilities)
shall be borne by PECO, to the extent of the PECO Interest and PSEG, to the
extent of the PSEG Interest. From and after October 7, 2000 through (but
not including) the Closing Date, all risk of loss or damage to the assets
or properties included in the Purchased Assets which arises out of or
relates to (i) any condemnation or taking by eminent domain of the
Purchased Assets or (ii) the Assumed Decommissioning Liabilities shall be
borne by Seller.
If, on or after October 7, 2000 and before the Closing Date, all or
any portion of the Purchased Assets is (i) condemned or taken by eminent
domain or is the subject of a pending or threatened condemnation or taking
which has not been consummated or (ii) damaged or destroyed by fire or
other casualty, Seller shall notify Buyers promptly in writing of such
fact. In the case of a fire or other casualty, Seller shall assign the
insurance proceeds therefor to PECO, to the extent of the PECO Interest,
and to PSEG, to the extent of the PSEG Interest, at the earlier of the
Closing or the receipt of such proceeds.
Buyers shall not have the right to terminate this Agreement pursuant
to Section 10.1(h) in the event such damage, destruction or other casualty
(other than (i) any condemnation or taking by eminent domain, of the
Purchased Assets or (ii) an event or occurrence which arises out of or
relates to the Assumed Decommissioning Liabilities) results in a Material
Adverse Effect. In the event of (i) any condemnation or taking by eminent
domain of the Purchased Assets or (ii) an event or occurrence which arises
out of or relates to the Assumed Decommissioning Liabilities, in each case,
which results in a Material Adverse Effect, Buyers and Seller shall
negotiate to settle the loss resulting from such event (and such
negotiation shall include the negotiation of a fair and equitable reduction
of the Purchase Price). If no such settlement can be agreed upon within
sixty (60) days after Seller has notified Buyers of such event, then PECO
and PSEG, on the one hand, or Seller on the other hand, may terminate this
Agreement pursuant to Section 10.1(h).
(c) Notwithstanding anything in this Section 7.7 to the contrary, if the
Purchase Agreement terminates prior to the Closing, the risk of loss shall
be borne by Seller as provided for in Section 10.2, and, pursuant to the
Transaction Confirmation "Price" Sections (2) and (3), Seller shall
reimburse Buyers for any capital expenditures paid by Buyers for Seller's
respective share of Peach Bottom."
3. Section 8.2(g) of the Purchase Agreement is hereby amended by deleting
such Section in its entirety.
4. Section 8.2(h) of the Purchase Agreement is hereby amended to read in
its entirety:
"There shall not have occurred and be continuing a Material Adverse
Effect, provided that Buyers shall be obligated to consummate the
transactions contemplated hereby if such Material Adverse Effect arises out
of or relates to any of the Assumed Liabilities and arises out of or
relates to events or occurrences on or after October 7, 2000."
5. Section 8.3(g) of the Purchase Agreement is hereby amended by deleting
such Section in its entirety.
6. Section 8.3(h) of the Purchase Agreement is hereby amended to read in
its entirety:
"There shall not have occurred and be continuing a Material Adverse Effect,
provided that Buyers shall be obligated to consummate the transactions
contemplated hereby if such Material Adverse Effect arises out of or relates to
any of the Assumed Liabilities and arises out of or relates to events or
occurrences on or after October 7, 2000."
7. Section 8.4(j) of the Purchase Agreement is hereby amended by deleting
such Section in its entirety.
8. Section 8.4(k) of the Purchase Agreement is hereby amended to read in
its entirety:
"Seller shall have received a private letter ruling issued by the Internal
Revenue Service to the effect that Seller will be allowed current ordinary
deductions for federal income tax purposes for any amounts treated as
realized by Seller, or otherwise recognized as income to Seller, as a
result of Buyers' assumption of the Assumed Decommissioning Liabilities,
provided, however that if the PECO Restructuring shall have occurred prior
to the Closing, the condition set forth in this Section 8.4(k) shall be
satisfied only if such private letter ruling contemplates and, accurately
sets forth as factual matters in a manner reasonably satisfactory to Seller
(i) that the Closing and the closing of the Collateral Agreement will occur
at different times and are independent of each other and (ii) that the PECO
Restructuring has occurred."
9. Section 10.1(b)(iii) of the Purchase Agreement is hereby amended to
read in its entirety:
"(iii) at any time after September 26, 2001, at 11:59 p.m., New York
City time, if the Closing shall not have occurred on or before such date
(the "Termination Date")."
10. Section 10.1(h) of the Purchase Agreement is hereby amended to read in
its entirety:
"This Agreement may be terminated by Seller, on the one hand (subject
to Seller's obligation to comply with Section 7.7(c) after such termination), or
PECO and PSEG acting together, on the other hand, upon written notice to the
other Party, in accordance with the provisions of Section 7.7(a) or 7.7(b), as
the case may be, provided that the Party seeking to so terminate shall have
complied in all material respects with its obligations under Section 7.7(a) or
7.7(b)."
11. Section 10.2 of the Purchase Agreement is hereby amended to read in
its entirety:
"Effect of Termination.
----------------------
(a) Upon termination of this Agreement prior to the Closing pursuant to
Section 10.1, this Agreement shall be null and void and of no further force or
effect (except that the provisions set forth in this Section 10.2 and Article
XI, and the Confidentiality Agreements, shall remain in full force and effect in
accordance with their respective terms); and no Party shall have any further
liability or obligation under this Agreement (other than (i) the obligations of
such Party under such provisions hereof as remain in full force and effect after
such termination and (ii) for any willful breach of its obligations hereunder).
If this Agreement is terminated as provided herein, all filings, applications
and other submissions made pursuant to this Agreement, to the extent
practicable, shall be withdrawn from the agency or other Person to which they
were made.
(b) In the event that this Agreement is terminated in accordance with its
terms prior to the Closing hereunder and after the Closing (as defined in the
Collateral Agreement), then within thirty (30) days thereafter, ACE shall pay to
each of PECO and PSEG Power an amount equal to one-fourth of the amount by
which, as of the close of business on the date immediately preceding the Closing
Date under the Collateral Agreement, the Decommissioning Funds exceeds the DP&L
Decommissioning Funds. As used herein, "DP&L Decommissioning Funds" means the
amount of Decommissioning Funds as defined in the Collateral Agreement.
12. Section 11.9(b)(A) of the Purchase Agreement is hereby amended to read
in its entirety:
"impair or materially delay the consummation of the transactions
contemplated hereby, it being acknowledged and agreed to by the Seller and
Buyers that the assignment, transfer, pledge, conveyance or disposition
pursuant to Section 11.9(b) by PECO to an affiliate of PECO ("GENCO"), (the
"PECO Restructuring") shall not be deemed to impair or materially delay the
consummation of the transactions contemplated hereby, or"
13. Section 11.2 of the Purchase Agreement is hereby amended to read in
its entirety:
"Except to the extent provided herein, whether or not the transactions
contemplated hereby are consummated, all costs, fees and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by the Party incurring such costs,
fees and expenses, including the fees and commissions referred to in
Section 11.3. During the first year after the date of this Agreement,
in no event shall Seller bear or be liable for the payment of any
costs, fees or expenses (other than attorneys' fees and expenses and
the fees and commissions referred to in Section 11.3) incurred by
Seller to obtain any approval of FERC or the NRC Approvals included
among the PECO Required Regulatory Approvals, PSEG Required Regulatory
Approvals, or Seller's Required Regulatory Approvals, or to transfer
the Decommissioning Funds to Buyer at the Closing, to the extent that
the aggregate amount of such costs, fees and expenses exceeds,
together with all such costs, fees and expenses which Seller bears or
is liable for under the Collateral Agreement, $200,000; and Buyers
shall equally bear and be liable to the extent of such excess. After
September 27, 2000, subject to Sections 7.9(a) and (b), all costs,
fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by the Party incurring
such costs, fees and expenses."
14. The Parties agree that Exhibit A to the Purchase Agreement (Amendment
to Owners Agreement) shall be amended at the Closing, in form and substance
mutually satisfactory to the Parties, to give effect to the transactions
contemplated by the Transaction Confirmation (as defined below) and this
Amendment.
15. Subject to the terms and conditions of this Amendment, each Party
shall use its Commercially Reasonable Efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable under Law to effect the separate Closing of the Purchase Agreement and
the Collateral Agreement as soon as practicable. Such actions shall include,
without limitation, each Party using its Commercially Reasonable Efforts to
ensure the separate satisfaction of the conditions precedent to its obligations
under the Purchase Agreement and the Collateral Agreement, including obtaining
all necessary consents, approvals, and authorizations of third parties and
Governmental Authorities required to be obtained in order separately to
consummate the transactions contemplated by the Purchase Agreement and the
Collateral Agreement. Except as permitted by Section 11.9, no Party shall,
without the prior written consent of the other Parties, take or fail to take any
other action, which would reasonably be expected to prevent or materially
impede, interfere with or delay the separate Closing of the Purchase Agreement
or the Collateral Agreement; provided that the good faith exercise of any
approval rights or discretion provided for in the Purchase Agreement and the
Collateral Agreement shall not be deemed in violation of the requirements of
this Section 15.
16. Reference is made to that certain Wholesale Transaction Confirmation
of even date herewith, a copy of which is attached as Annex I hereto (the
"Transaction Confirmation"). The responsibility for the payment, performance and
discharge of all liabilities and obligations in respect of nuclear fuel
supplies, operation and maintenance costs and capital expenditures, and
allocation of responsibility for other liabilities and obligations, set forth in
the Transaction Confirmation shall be governed by the Transaction Confirmation,
notwithstanding any provision of the Purchase Agreement (including, without
limitation, Sections 3.7 and 7.1 of the Purchase Agreement), as amended hereby,
or the Owners Agreement to the contrary.
17. Except as herein modified or as modified by the Transaction
Confirmation, the terms and conditions of the Purchase Agreement shall remain
unmodified and shall remain in full force and effect and are hereby ratified and
confirmed. This Amendment shall be construed as one with the Purchase Agreement,
and the Purchase Agreement shall, where the context requires, be read and
construed throughout so as to incorporate this Amendment.
18. This Amendment shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania (without giving effect to conflicts
of law principles) as to all matters, including validity, construction, effect,
performance and remedies.
19. This Amendment may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered by their duly authorized officers as of the date first
written above.
ATLANTIC CITY ELECTRIC COMPANY
By: _____________________________
Name: _____________________________
Title: _____________________________
PECO ENERGY COMPANY
By: _____________________________
Name: _____________________________
Title: _____________________________
PSEG POWER LLC
By: _____________________________
Name: _____________________________
Title: _____________________________
PSEG NUCLEAR LLC
By: _____________________________
Name: _____________________________
Title: _____________________________
