EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
by and between
NGC CORPORATION
and
THE AES CORPORATION
dated as of
February 17, 1997
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of February 17, 1997, by and between NGC
Corporation, a Delaware corporation ("NGC"), and The AES Corporation, a Delaware
corporation ("Parent").
WHEREAS, simultaneously with the execution and delivery hereof, Parent, NGC
or its affiliate, Destec Energy, Inc., a Delaware corporation (the "Company"),
and The Dow Chemical Company, a Delaware corporation ("Dow"), are entering into
an agreement and plan of merger (the "Merger Agreement") pursuant to which the
Company has agreed to merge with a subsidiary of NGC (the "Merger");
WHEREAS, the Company owns and operates certain international businesses and
assets;
WHEREAS, Parent desires to cause a wholly-owned subsidiary, a Delaware
corporation ("Purchaser"), to buy and immediately following the Merger, NGC
desires to cause the Company to sell the international businesses and assets of
the Company and its subsidiaries, and Purchaser is willing to assume certain
related liabilities and obligations of the Company and its subsidiaries, all
upon the terms and conditions hereinafter set forth; and
WHEREAS, in furtherance of such acquisition, the Boards of Directors of
Parent and NGC have each approved the transactions contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
Section 1.1 Purchase and Sale of the International Assets. Subject to the
terms and conditions of this Agreement, on the Closing Date (as hereinafter
defined), and immediately following the consummation of the Merger, NGC shall
cause the Company to sell, convey, assign, transfer and deliver (or cause to be
sold, conveyed, assigned, transferred and delivered) to Purchaser, and the
Purchaser shall purchase and acquire the international assets of the Company,
including, without limitation, all of the Company's or its Subsidiaries' (as
defined in the Merger Agreement) right, title and interest in and to the
following:
(i) all of the issued and outstanding shares of capital stock (or
their equivalent under local law) (the "Purchased Shares") as set forth in Part
I of Schedule 1.1 of the disclosure schedule attached hereto (the "Disclosure
Schedule"), which when delivered to Purchaser at the Closing (as hereinafter
defined) will be free and clear of any liens, claims, security interests,
charges, leases, licenses or sublicenses created by, through or under NGC
("Liens");
(ii) all rights, options and other interests in projects or projects
in development outside of the United States, including those set forth in Part
II of Schedule 1.1 of the Disclosure Schedule;
(iii) all contracts and other agreements associated with or relating
to the projects known as Elsta, Los Mina, Indian Queens, ▇▇▇▇▇▇▇▇▇ and Kingston
Cogen (collectively, the "Projects"), including those listed on Part III of
Schedule 1.1 of the Disclosure Schedule;
(iv) all licenses, permits or franchises issued by any Governmental
Entity (as hereinafter defined) relating to the Projects; and
(v) those other assets and properties set forth in Part IV of
Schedule 1.1 of the Disclosure Schedule.
The assets being sold, conveyed, assigned, transferred and delivered to
Purchaser by the Company hereunder are hereinafter referred to as the
"International Assets" or the "International Businesses."
Section 1.2 Instruments of Conveyance and Transfer. At the Closing, NGC
shall cause the Company to (a) deliver or cause to be delivered to Purchaser
stock certificates, stock powers, assignments and other good and sufficient
instruments of transfer, conveyance and assignment as the Purchaser and its
counsel shall deem necessary or appropriate to vest in Purchaser all of the
Company's and the Subsidiaries' right, title and interest in and to the
International Assets, and (b) transfer to Purchaser all of the Company's and its
Subsidiaries' right, title and interest in and to the contracts, agreements,
commitments, books, records, files and other data relating to the International
Assets.
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Section 1.3 Assumed Liabilities. At the Closing, Purchaser shall deliver to
the Company an undertaking (the "Assumption Agreement") in the form to be agreed
upon whereby Purchaser, on and as of the Closing Date, assumes and agrees to
pay, perform and discharge when due, (i) the liabilities and obligations of the
Company and its Subsidiaries primarily attributable to the International Assets
including, without limitation, the liabilities and obligations listed on
Schedule 1.3 of the Disclosure Schedule, (ii) with respect to any corporate
liabilities of the Company unknown to NGC or Parent that are not primarily
attributable to the International Assets or to the Company's domestic assets, a
pro rata portion of such corporate liabilities calculated based on a fraction
the numerator of which is the Purchase Price and the denominator of which is the
Merger Consideration (as defined in the Merger Agreement), (iii) all liabilities
and obligations with respect to the International Employees described in Section
6.2, including, without limitation, all liabilities and obligations relating to
the International Employees under (a) the Destec Energy, Inc. 1996 Variable Pay
Plan, (b) the Destec Energy, Inc. 1995 Variable Pay Plan, (c) the Destec Special
Recognition Award (SRA) Program, (d) the Destec Energy, Inc. Amended and
Restated 1990 Award and Option Plan, (e) the Destec Foreign Service Policy, (iv)
all severance costs, obligations under employment agreements and consulting
agreements, and employee benefit liabilities arising as a result of (I) the
termination of employment of any International Employees from and after the
Closing Date or (II) the transactions consummated under this Agreement in
respect of the International Employees (the cost, obligations and liabilities
under this clause (iv) are collectively the "International Employee
Obligations"), and (v) each liability or obligation relating to any
International Employee (with respect to employee benefit plans, in excess of any
assets owned by the Company or the Subsidiaries and directly related to such
plan or held by any trust with respect thereto sponsored or maintained by the
Company or the Subsidiaries (other than the International Assets) which are
available to satisfy or otherwise offset such liability or obligation), relating
to any bonus, deferred compensation, incentive compensation, stock purchase,
stock option, restricted stock,
deferred stock, stock appreciation right, vacation policy, superannuation,
severance or termination pay, hospitalization or other medical, life or other
insurance, flexible benefit, cafeteria plan, supplemental unemployment benefits,
profit sharing, pension, or retirement plan, program, agreement or arrangement,
employment agreements, consulting agreements and each other employee benefit
plan, program, agreement or arrangement, sponsored, maintained or contributed to
by the Company or its Subsidiaries (the "International Employee Plans") and (vi)
all obligations and liabilities with respect to transfer stamp taxes or similar
taxes arising in connection with the purchase of the International Assets by
Purchaser. The liabilities and obligations assumed by Purchaser in accordance
with this Section 1.3 are hereinafter referred to as the "Assumed Liabilities."
Section 1.4 Excluded Liabilities. Any liability of the Company or any
affiliate thereof other than the Assumed Liabilities shall not be assumed by
Purchaser or its affiliates including, without limitation, all liabilities and
obligations relating to the Plans (as defined in the Merger Agreement), except
for any of the International Employee Obligations and the International Employee
Plans. The liabilities that are not to be assumed by Purchaser or its
affiliates in accordance with this Section 1.4 are hereinafter referred to as
the "Excluded Liabilities."
Section 1.5 Closing. Unless this Agreement shall have been terminated and
the transactions contemplated herein shall have been abandoned pursuant to
Section 8.1 hereof, the closing of the transactions contemplated by this
Agreement (the "Closing") will take place after all of the conditions herein or
incorporated herein are satisfied or waived immediately following the Effective
Time (as defined in the Merger Agreement), at the offices of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, unless an
earlier date or place is agreed to in writing by the parties hereto. The date
on which the Closing occurs is referred to herein as the "Closing Date."
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Section 1.6 Purchase Price and Payment. (a) In consideration for the
International Assets and subject to the terms and conditions of this Agreement,
Purchaser shall on the Closing Date assume the Assumed Liabilities as provided
in Section 1.3 hereof pursuant to the Assumption Agreement and shall transfer to
or to the order of the Company in immediately available funds in New York City
an amount equal to U.S. $407,055,000 (the "Base Purchase Price"), as adjusted as
set forth in accordance with the provisions of this Section 1.6 (the "Purchase
Price"). NGC and Purchaser agree to negotiate in good faith to adjust the Base
Purchase Price to be paid at the Closing if allocations of net cash flow to be
made pursuant to Section 1.6(c) between the date hereof and the Closing Date are
expected to be at least $10,000,000.
(b) One business day prior to the proposed Effective Time, Parent or
Purchaser shall deposit the Base Purchase Price in trust with the Paying Agent
(as defined in the Merger Agreement) in a segregated account (the "AES Fund").
NGC shall instruct the Paying Agent that the AES Fund shall not be released
without the written consent of Parent and NGC. Parent shall give its written
consent upon satisfaction of the conditions set forth in Article VII of this
Agreement. The AES Fund shall be deposited in an interest bearing account. If
the conditions set forth in Article VII of this Agreement have not been
satisfied by 12:00 noon on the second business day after the AES Fund was
initially deposited, or such later date or time as Parent in its sole discretion
may agree, NGC shall instruct the Paying Agent to return the AES Fund to Parent
or Purchaser, as the case may be, including all interest earned thereon. Upon
release of the AES Fund other than to Parent or Purchaser, NGC shall instruct
the Paying Agent to promptly pay the interest earned on the AES Fund until the
Effective Time of the Merger to Parent or Purchaser, as the case may be.
(c) The Base Purchase Price shall be adjusted as set forth in this clause (c)
to reflect the following allocation of the net cash flow of the Company and its
Subsidiaries for the period from January 1, 1997 to the
Closing Date: the net cash flow of the Company and its Subsidiaries for the
period from and including January 1, 1997 to and excluding the Closing will be
allocated in a fair and reasonable manner between the International Assets, on
the one hand, and the Company and its Subsidiaries (other than the International
Assets), on the other hand. Within three business days after such allocation
becomes final and binding upon Parent and NGC pursuant to clause (d) below, if
the net cash flow so allocated to the International Assets is greater than zero,
Parent shall cause Purchaser to pay the Company such difference, and if the net
cash flow so allocated to the International Assets is less than zero, NGC shall
cause the Company to pay Purchaser such difference. Any such adjusting payment
shall bear interest at 7.5% per annum for the period from and including the
Closing Date through and excluding the date of payment to the party to which it
is owed pursuant to this Section 1.6(c).
(d) Within 60 days after the Closing Date, NGC shall deliver to Parent a
proposed settlement statement (the "Proposed Settlement Statement") prepared in
good faith setting forth the allocation of such net cash flows between the
International Assets and the Company and its Subsidiaries (other than the
International Assets), together with supporting documentation in reasonable
detail. NGC shall provide Parent with full access to the same information
available to NGC for purposes of determining such allocation of net cash flow.
If Parent objects to the Proposed Settlement Statement, it shall so notify NGC
in writing within 30 days after receipt of the Proposed Settlement Statement,
which notice shall set forth in reasonable detail any such objections. If
Parent fails to deliver any such objection within such 30-day period, Parent
shall be deemed to have accepted the Proposed Settlement Statement (including
the calculation of the Purchase Price therein). NGC and Parent shall promptly
meet to attempt to resolve any such objections, and if they fail to resolve such
objections within 30 days after receipt by NGC of Parent's objections, such
objections shall be resolved by an independent accounting firm (the
"Accountants") selected by Deloitte & Touche and ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ & Co., with Parent and NGC to bear the fees and expenses of the
Accountants pro rata in inverse proportion to the amounts of their respective
awards with respect to the disputed items. The Purchase Price as determined by
agreement by NGC and Parent, by failure of Parent to deliver an objection as
described above or by the Accountants pursuant to this Section 1.6(d) shall be
final and binding upon the parties.
Section 1.7 Allocation of Purchase Price. The Purchase Price shall be
allocated among the International Assets in writing, by the parties hereto prior
to the Closing. The parties hereto agree that the net book value of any
International Asset may not be indicative of its fair market value.
Section 1.8 Transfer of Purchased Assets, Assignment of Contractual Rights,
Governmental Consents, Etc. (a) Anything contained in this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an agreement or an
attempted agreement to transfer, sublease or assign any contract, license,
lease, commitment, purchase order, sales order or other agreement or any claim,
right, benefit, license, permit or authorization arising thereunder or resulting
therefrom if a transfer, sublease or assignment or an attempted transfer,
sublease or assignment thereof, without the consent of any other party thereto,
would be ineffective, would constitute a breach thereof or would in any way
affect the rights of the Purchaser thereunder. Additionally, this Agreement
shall not constitute an agreement or an attempt to transfer any of the
International Assets, the transfer of which may require the prior consent of any
United States or foreign governmental authority or agency until such consent is
obtained. NGC, Parent and Purchaser shall use their reasonable best efforts to
obtain the consent of any such governmental authority and to obtain the consent
of the other party to any of the agreements referred to above, to the transfer
of the International Assets to the Purchaser in all cases in which such consent
is required for such transfer. Except as otherwise agreed between NGC and
Parent pursuant to
Section 1.8(b) hereof, if, upon the satisfaction of all conditions to the
Closing, any such consent (governmental or otherwise) is not obtained or if a
transfer, sublease, or assignment or an attempted transfer, sublease or
assignment of any of the International Assets would be ineffective, would
constitute a breach thereof or would in any way materially affect the rights
thereunder such that the Purchaser would not in fact receive all of the rights
or ownership to the International Assets as provided in this Agreement (any such
International Assets, the "Deferred Assets"), title to the Deferred Assets shall
be retained by the Company but there shall be no reduction or reimbursement of
the Purchase Price. After the Closing, NGC, the Company, Parent and Purchaser
shall continue to use their reasonable best efforts to (i) cooperate to attempt
to obtain any such consents and (ii) to transfer to Parent or Purchaser pursuant
to reasonable and lawful arrangements the benefits and liabilities with respect
to the Deferred Assets effective as of the Closing. After the Closing, such
efforts shall include, without limitation, the enforcement for the benefit of
the Purchaser (at Purchaser's cost) of any and all rights of NGC, the Company or
their subsidiaries against third parties to any contract or agreement and the
transfer or sale of such Deferred Asset to any person or entity designated by
the Purchaser (and the net proceeds from any such transfer or sale shall be for
Purchaser's account). NGC shall cooperate with Parent and the Company in all
reasonable requests Parent, Purchaser or the Company shall make in connection
with the obtaining of all such consents and approvals. Upon receipt of the
required consents or approvals with respect to any Deferred Assets, NGC shall
cause the Company to transfer such Deferred Asset (and the liabilities related
thereto) to Parent or Purchaser, without recourse except as to encumbrances in
each case created by, through or under NGC, the Company or their affiliates from
and after the Closing. Any such transfer shall to the extent possible be
effective as of the Closing, and arrangements will be made to transfer the net
cash flow between the Deferred Assets, on the one hand, and the Company and the
Subsidiaries (excluding the International Assets) on the other hand attributable
to projects so
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transferred for the period from the date of the Closing through the date of such
transfer, to the extent that they were not theretofore transferred.
(b) With respect to the project known as "▇▇▇▇▇▇▇▇▇," NGC and Parent
acknowledge that there is a question as to whether consents of the Government of
Victoria of Australia that are required pursuant to certain financing, project
and other documents relating to the ▇▇▇▇▇▇▇▇▇ project will be received at or
prior to the Closing. Therefore, NGC and Parent agree to fully cooperate to
determine whether such consents will be received prior to or at Closing by
acting together to seek such consents as expeditiously as possible. If after 15
days from the date of this Agreement it appears to either of the parties that
such consents are not reasonably likely to be received prior to or at the
Closing, NGC and the Parent agree to negotiate in good faith with respect to (i)
whether reasonable and lawful arrangements (which do not violate any law or
contractual obligations applicable to the ▇▇▇▇▇▇▇▇▇ project) can be designed to
achieve the transfer described above with respect to the ▇▇▇▇▇▇▇▇▇ project,
including to the extent feasible trust arrangements, put/call arrangements, or
obligations on the part of NGC to cause the timely sale of the ▇▇▇▇▇▇▇▇▇ project
(with proceeds thereof to be delivered to Parent or Purchaser with adjustments
to be agreed upon to reflect benefits and liabilities of the ▇▇▇▇▇▇▇▇▇ project
from the date of the Closing through the date of the sale of the ▇▇▇▇▇▇▇▇▇
project), and (ii) whether the structure of the transactions contemplated in
this Agreement and the Merger Agreement could be "flipped" so that the Parent or
its affiliate merges with the Company and immediately thereafter the Parent
causes the Company to sell its assets (other than the International Assets) to
NGC. In addition, NGC agrees that, if after such 15 days it appears that the
consents will not be received prior to or at the Closing, it shall as
expeditiously as possible seek the third party consents necessary to consummate
such a flipped transaction. Notwithstanding anything herein to the contrary,
NGC shall not be under any obligation to consummate such a flipped transaction
if a necessary third party consent is not
obtainable after a reasonable good faith effort on NGC's behalf to obtain such a
consent or NGC determines in good faith that such a transaction would be
significantly adverse to NGC.
(c) EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE III
AND EXCEPT AS OTHERWISE PROVIDED IN SECTION 1.1(i), THE INTERNATIONAL ASSETS ARE
BEING SOLD TO PURCHASER AS IS, WHERE IS, WITH ALL FAULTS, DEFECTS, LIENS AND
OTHER ENCUMBRANCES; PROVIDED THAT THE FOREGOING SHALL NOT AFFECT PARENT'S RIGHTS
UNDER SECTION 7.1.
ARTICLE II
[Intentionally Omitted]
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NGC AND THE COMPANY
NGC represents and warrants to Parent and Purchaser as follows:
Section 3.1 Organization. NGC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. NGC has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted and is or will be
qualified or licensed to do business as a foreign corporation and is in good
standing in each jurisdiction in which the nature of the business conducted by
it makes such qualification or licensing necessary, except where the failure to
be so qualified or licensed would not have a material adverse effect on the
business or financial condition of NGC and its subsidiaries, taken as a whole,
or materially impair or delay the consummation of the transactions contemplated
by this Agreement. NGC has previously delivered to the Parent and Purchaser
complete and correct copies of its certificate of incorporation and by-laws, as
currently in effect, and prior to the Closing NGC will have delivered to Parent
complete and correct copies of
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the certificate of incorporation and by-laws of the Company, as in effect at the
time of such delivery.
Section 3.2 Authorization; Validity of Agreement. NGC has the requisite
corporate power and authority to execute and deliver this Agreement. NGC has,
and as of the Closing the Company will have, the requisite corporate power and
authority to consummate the transactions contemplated hereby. The execution and
delivery by NGC of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by NGC's Board of Directors and no
other corporate proceedings on the part of NGC are necessary to authorize the
execution and delivery of this Agreement by NGC and the consummation of the
transactions contemplated hereby. The consummation of the transactions
contemplated hereby will be duly authorized by the Board of Directors of the
Company and no other corporate proceedings on the part of the Company will be
necessary to authorize the transactions contemplated hereby. This Agreement has
been duly executed and delivered by NGC and, assuming due authorization,
execution and delivery of this Agreement by Parent, is a valid and binding
obligation of NGC enforceable against it in accordance with its terms.
Section 3.3 No Violations; Consents and Approvals.
(a) Neither the execution and delivery of this Agreement by NGC nor the
consummation by NGC of the transactions contemplated hereby will (i) violate any
provision of the respective certificates of incorporation or by-laws of NGC or,
as of the Closing, the Company, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, license, lease, contract, agreement
or other instrument or obligation to which NGC or, with respect to agreements
entered into by or on behalf of NGC ("New Agreements"), the Company is a party,
or by which NGC or, pursuant to New Agreements, the Company or any of their
respective assets are bound or (iii) assuming that all consents, authorizations
and approvals contemplated by Section 3.3(b) or Section 1.8 have been obtained
and all filings contemplated thereby have been made, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to NGC, any of its
subsidiaries (excluding for purposes of this clause (iii) the Company and its
subsidiaries) or any of their properties or assets; except for such violations,
breaches, defaults, terminations, amendments, cancellations or accelerations
which would not materially impair or delay the consummation of the transactions
contemplated by this Agreement.
(b) No filing or registration with, notification to, or authorization,
consent or approval of, any Governmental Entity is required in connection with
the execution and delivery of this Agreement by NGC or the consummation by NGC
of the transactions contemplated hereby, except (i) applicable requirements
under Competition Laws (as hereinafter defined), (ii) applicable requirements
under the Securities Exchange Act of 1934, as amended and the regulations
thereunder (the "Exchange Act") and (iii) such other consents, approvals,
orders, authorizations, notifications, registrations,
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declarations and filings the failure of which to be obtained or made would not
materially impair or delay the consummation of the transactions contemplated by
this Agreement.
Section 3.4 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article III, neither NGC nor
any other Person (as defined in the Merger Agreement) makes any other express or
implied representation or warranty on behalf of NGC.
ARTICLE IV
[Intentionally Omitted]
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent represents and warrants and Purchaser as of the Closing will represent
and warrant to NGC as follows:
Section 5.1 Organization. Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
Purchaser as of the Closing will be a corporation duly organized, validly
existing and in good standing under the laws of Delaware. Parent has and as of
the Closing Purchaser will have all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as now being
or will be conducted and is or will be qualified or licensed to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so qualified or licensed would not
have a material adverse effect on the business or financial condition of Parent
and its Subsidiaries, taken as a whole, or materially impair or delay the
consummation of the transactions contemplated by this Agreement. Parent has
previously delivered to NGC complete and correct copies of its certificate of
incorporation and by-laws, as currently in effect and prior to the Closing
Parent
will have delivered to NGC complete and correct copies of the certificate of
incorporation and by-laws of Purchaser, as in effect at the time of such
delivery.
Section 5.2 Authorization; Validity of Agreement.
Parent has the requisite corporate power and authority to execute and deliver
this Agreement. Parent has, and as of the Closing Purchaser will have, the
requisite corporate power and authority to consummate the transactions
contemplated hereby. The execution and delivery by Parent of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Parent and no other corporate
proceedings on the part of Parent are necessary to authorize the execution and
delivery of this Agreement by Parent and the consummation of the transactions
contemplated hereby. The consummation of the transactions contemplated hereby
will be duly authorized by the Board of Directors of Purchaser and no other
corporate proceedings on the part of Purchaser will be necessary to authorize
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Parent and, assuming due authorization, execution and delivery of
this Agreement by NGC, is a valid and binding obligation of Parent enforceable
against Parent in accordance with its terms.
Section 5.3 No Violations; Consents and Approvals.
(a) Neither the execution and delivery of this Agreement by Parent nor the
consummation by Parent and Purchaser of the transactions contemplated hereby
will (i) violate any provision of the respective certificates of incorporation
or by-laws of Parent or Purchaser, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, license, lease, contract, agreement
or other
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instrument or obligation to which Parent or any of its Subsidiaries is a party
or by which any of them or any of their assets may be bound or (iii) assuming
that all consents, authorizations and approvals contemplated by Section 5.3(b)
have been obtained and all filings contemplated thereby have been made, violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
Parent, any of its Subsidiaries or any of their properties or assets; except for
such violations, breaches, defaults, terminations, amendments, cancellations or
accelerations which would not materially impair or delay the consummation of the
transactions contemplated by this Agreement.
(b) No filing or registration with, notification to, or authorization,
consent or approval of, any Governmental Entity is required in connection with
the execution and delivery of this Agreement by Parent or the consummation by
Parent and Purchaser of the transactions contemplated hereby, except (i)
applicable requirements under Competition Laws, (ii) applicable requirements
under the Exchange Act and (iii) such other consents, approvals, orders,
authorizations, notifications, registrations, declarations and filings the
failure of which to be obtained or made would not materially impair or delay the
consummation of the transactions contemplated by this Agreement.
Section 5.4 Financing. One business day prior to the Effective Time, Parent
and Purchaser will have sufficient funds available (through existing credit
arrangements or otherwise) to pay the Purchase Price and to perform their
obligations hereunder.
Section 5.5 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent and Purchaser.
Section 5.6 Public Utility Company; Public Utility Regulatory Policies Act.
Neither Parent nor its Subsidiaries
is subject to regulation as a "holding company" or a "subsidiary company" of a
holding company or a "public utility company" under Section 2(a) of the Public
Utility Holding Company Act of 1935.
Section 5.7 Absence of Litigation. As of the date hereof, there is no suit,
claim, action, proceeding or investigation pending against, or to the actual
knowledge of Parent, threatened against, Parent or any of its respective
properties before any Governmental Entity or arbitrator which challenges or
seeks to prevent, enjoin, alter or delay the transactions contemplated by this
Agreement. As of the date hereof, neither Parent nor any of its respective
properties is subject to any judgment, decree, order or injunction of any
Governmental Entity or arbitrator which would prevent or delay the consummation
of the transactions contemplated hereby.
Section 5.8 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article V, neither Parent,
Purchaser nor any other Person makes any other express or implied representation
or warranty on behalf of Parent or Purchaser.
ARTICLE VI
COVENANTS
Section 6.1 Further Action; Reasonable Best Efforts.
(a) Upon the terms and subject to the conditions herein provided, each of the
parties hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including using
reasonable best efforts to effect all necessary registrations and filings. Each
of the parties hereto will furnish to the other parties such necessary
information and reasonable assistance as such other
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parties may reasonably request in connection with the foregoing and will provide
the other parties with copies of all filings made by such party with any
Governmental Entity or any other information supplied by such party to a
Governmental Entity in connection with this Agreement, and the transactions
contemplated hereby. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and/or directors of the Company, including any successor, shall take or
cause to be taken all such necessary action.
(b) Parent and NGC shall use their respective reasonable best efforts to
resolve such objections, if any, as may be asserted with respect to the
transactions contemplated hereby under the laws, rules, guidelines or
regulations of any Governmental Entity. Without limiting the foregoing, Parent
and NGC shall, as soon as practicable, file Notification and Report Forms under
the HSR Act (as defined below) with the Federal Trade Commission (the "FTC") and
the Antitrust Division of the Department of Justice (the "Antitrust Division")
and shall use reasonable best efforts to respond as promptly as practicable to
all inquiries received from the FTC or the Antitrust Division for additional
information or documentation; and Parent and NGC shall use their reasonable best
efforts to take or cause to be taken all actions necessary, proper or advisable
to obtain any consent, waiver, approval or authorization relating to any
Competition Law that is required for the consummation of the transactions
contemplated by this Agreement; provided, however, that the foregoing shall not
obligate Parent or NGC to take any action which would have a material adverse
effect on the International Assets. "Competition Laws" means statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines, and other
laws that are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization, lessening of competition or
restraint of trade and includes the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended (the "HSR Act").
Section 6.2 Employee Benefits.
(a) For purposes of this Agreement, the term "International Employees" means
those employees of the Company and the Subsidiaries who devote a substantial
amount of time to the International Business and those consultants whose
services relate primarily to the International Businesses. Parent and Purchaser
hereby agree to honor without modification or contest, and to make required
payments when due under, all portions of the International Employee Plans in
existence on the date hereof (or as modified to the extent permitted by the
Merger Agreement); provided, however, that nothing in this Section 6.2 shall be
construed to limit the ability of Parent and Purchaser to amend or terminate
such Plans after the Closing to the extent permitted under the terms of the
International Employee Plans.
(b) Parent and Purchaser hereby agree that for a period of one year
immediately following the Effective Time, they shall, or shall cause the
International Entities (as hereinafter defined) to either (i) continue to
maintain the International Employee Plans on terms no less favorable in the
aggregate than those provided to the International Employees and former
international employees on the date hereof or (ii) provide that International
Employees and former international employees may participate in analogous plans
of Parent which provide benefits which in the aggregate are substantially
similar to those provided to them under the International Employee Plans on the
date hereof.
Section 6.3 Indemnification. (a) NGC shall, and NGC shall cause the Company
to, jointly and severally indemnify, defend and hold Parent, Purchaser and their
affiliates harmless against and in respect of (i) all claims asserted by third
parties with respect to Excluded Liabilities and (ii) all costs and expenses
(including expenses of investigation, settlement negotiation and attorneys'
fees) incurred by Parent or Purchaser in connection with any action, suit,
proceeding, demand, claim, investigation, assessment or
18
judgment incident to any of the matters indemnified against in this Section
6.3(a).
(b) Parent shall, and Parent shall cause the Purchaser to, jointly and
severally indemnify, defend and hold NGC, the Company and their affiliates
harmless against and in respect of (i) claims asserted by third parties with
respect to the Assumed Liabilities, (ii) all credit support obligations,
guarantees and contribution obligations relating to the International Assets,
including but not limited to those listed on Schedule 1.3 of the Disclosure
Schedule with respect to which the Company and its Subsidiaries have not been
fully released by the Closing to the reasonable satisfaction of NGC and (iii)
all costs and expenses (including expenses of investigation settlement
negotiation and attorneys' fees) incurred by the Company, NGC and their
affiliates in connection with any action, suit, proceeding, demand, claim,
investigation assessment or judgment incident to any of the matters indemnified
against in this Section 6.3(b).
(c) Promptly after receipt by an indemnified party under this Section 6.3 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6.3, notify the indemnifying party in writing of the
claim or the commencement of that action, provided that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have
to the indemnified party except to the extent that the indemnifying party is
prejudiced by such failure to notify. If any such claim shall be brought
against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein, and to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party, and to settle and compromise any such claim or action;
provided, however, such settlement or compromise shall be effected only with the
consent of the indemnified party, which consent shall not be unreasonably
withheld. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6.3 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation (including related
reasonable attorney's fees and expenses), provided, however, that the
indemnified party shall have the right to employ counsel to represent it if, in
the indemnified party's reasonable judgment, it is advisable for the indemnified
party to be represented by separate counsel), and in that event the fees and
expenses of such separate counsel shall be paid by the indemnified party unless
the named parties to any such claim or action (including any impleaded parties)
include both the indemnifying party and the indemnified party and in the opinion
of counsel to the indemnified party (which counsel is reasonably satisfactory to
the indemnifying party) representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them, in
which case the reasonable fees and expenses of separate counsel (which counsel
is reasonably satisfactory to the indemnifying party) shall be paid by the
indemnifying party. Purchaser and the Company shall each render to each other
such assistance (including by asserting reasonable counterclaims and bringing
suit against third parties) as may reasonably be requested in order to insure
the proper and adequate defense of any such claim or proceeding.
(d) The indemnities provided in this Agreement shall survive the Closing.
(e) The parties agree that the indemnification payments made pursuant to this
Agreement shall be treated for tax purposes as an adjustment to the Purchase
Price, unless otherwise required by applicable law.
Section 6.4 Publicity. None of NGC, Parent, Purchaser nor any of their
respective affiliates shall issue or cause the publication of any press release
or other
20
announcement with respect to this Agreement, or the other transactions
contemplated hereby without prior consultation with the other parties, except as
may be required by law or by any listing agreement with a national securities
exchange after prior notice has been given to, and all reasonable efforts have
been made to consult with the other parties.
Section 6.5 Corporate Names; Termination of Trademark Licensing Agreements.
(a) Each of Parent and Purchaser shall change any of the names of the
corporations or other Persons included as part of the International Assets which
contain "Destec" to corporate names not containing "Destec" within 90 days after
the transfer of such Person to Purchaser and shall use their respective
reasonable best efforts to remove all corporate names, service marks, trademarks
and trade names containing "Destec" (the "Destec Names") from any of the
International Assets within one year after the Closing Date. After the Closing
Date, neither Parent nor Purchaser shall seek to obtain any rights to or use the
Destec Names except as specifically provided in this Section 6.5.
(b) All trademark licensing agreements by and between the Company and any of
the entities included as part of the International Assets shall be terminated as
of the Closing Date subject to the provisions of this Section 6.5.
Section 6.6 No Non-Compete Obligation.
The parties hereby acknowledge that the consummation of the transactions
contemplated hereby will not create an obligation of (i) NGC or its affiliates
not to compete in any business with Parent, Purchaser or their respective
affiliates; provided that none of NGC, the Company or their affiliates shall use
any confidential information obtained from the Company in connection with NGC
entering into the Merger Agreement or this Agreement to so compete or (ii)
Parent or its affiliates not to compete in any business with NGC, the Company or
their respective affiliates; provided
that none of Parent, Purchaser or their affiliates shall use any confidential
information obtained from the Company in connection with Parent entering into
this Agreement.
Section 6.7 Obligations under Merger Agreement. If the conditions to NGC's
obligations under the Merger Agreement have been satisfied, NGC will consummate
the Merger; provided, that Parent shall be in compliance with Section 1.6(b) of
this Agreement.
Section 6.8 Transfer Taxes. Parent shall cause Purchaser to pay all transfer
taxes, stamp taxes or similar taxes arising in connection with the sale and
purchase of the International Assets hereunder.
Section 6.9 Merger Agreement Break-Up Fee. NGC shall promptly pay to Parent
its pro rata share of any proceeds received by NGC pursuant to Section 8.3 of
the Merger Agreement.
Section 6.10 Site Development Agreement. If the Company receives notice from
The Dow Chemical Company ("Dow") under Section 3.1 of the Site Development
Agreement between the Company and Dow dated February 17, 1997 with respect to
any project outside the United States of America, NGC shall cause the Company to
promptly send to Purchasers a copy of such notice.
Section 6.11 Certain Confidentiality Obligations. Parent hereby agrees to be
bound by the terms and conditions of Section 6.4 of the Merger Agreement.
Section 6.12 Tax Matters.
(a) NGC and Parent shall make a joint election for the International Entities
(as hereinafter defined) that are U.S. corporations under Section 338(h)(10) of
the Internal Revenue Code of 1986, as amended (the "Code") and under any
applicable similar provisions of state or local law
22
(collectively, the "Section 338(h)(10) Elections"). On the Closing Date, NGC and
Parent shall exchange completed and executed copies of Internal Revenue Service
Form 8023-A and any similar state or local forms (collectively, the "Forms"). If
any changes are required in the Forms as a result of information which is first
available after such Forms are prepared, the parties will promptly agree on such
changes. After all required schedules to support the Forms are completed, NGC
and Parent shall file the Forms, which filing shall be made within the time
period specified under applicable law. NGC, Parent, the International Entities
and the Company shall make all required filings relating to the Section
338(h)(10) Elections in connection with their federal and applicable state and
local income tax returns, and shall cooperate fully with each other with respect
to such filings. For purposes of this Agreement, "International Entities" means
those Persons which own, or have any rights to or interest in (direct or
indirect), the International Assets.
Within 180 days following the Closing Date, Parent shall (i) draft a schedule
(the "Allocation Schedule") allocating the Modified Adjusted Deemed Sales Price
(as defined in Section 1.338(h)(10)-1(f) of the Treasury regulations), and the
Adjusted Deemed Sales Price (as defined in Section 1.338-3(d) of the Treasury
Regulations for the International Entities for which Section 338(h)(10)
Elections or Section 338(g) elections will be among the International Assets and
(ii) deliver such Allocation Schedule to NGC. The Allocation Schedule shall be
reasonable and shall be prepared in accordance with Section 338 of the Code and
the Treasury regulations thereunder. Each of Parent, on the one hand, and NGC
(upon its consent to the Allocation Schedule, which consent shall not be
unreasonably withheld) on the other hand, shall report the transactions
contemplated hereby, and file all Tax Returns (as defined below), in each case,
for federal, state, local and foreign Tax purposes in accordance with the
Allocation Schedule.
NGC represents and warrants that it will make joint Section 338(h)(10)
Elections with Dow for the International
Entities that are U.S. corporations and will file Section 338(g) elections only
for those International Entities designated by Parent. Parent represents and
covenants that it will not file, or permit to be filed by any affiliate, Section
338(g) Elections except for those International Entities designated for such
Elections pursuant to the preceding sentence.
(b) Nothing contained herein shall be construed as altering the rights,
obligations and duties of Dow, the Company and any Subsidiaries of the Company
to each other pursuant to the Tax Sharing Agreement between Dow, the Company and
its Subsidiaries dated May 15, 1996 (the "Tax Sharing Agreement") (attached
hereto as Exhibit 6.12). The Tax Sharing Agreement shall continue to govern the
rights and obligations of Dow, the Company and any Subsidiaries of the Company
with respect to the taxable periods for which it is effective. Parent
acknowledges that the Tax Sharing Agreement shall be amended effective as of the
Closing Date in the form of the First Amendment to the Tax Sharing Agreement,
which has been previously distributed to Parent.
Parent shall pay or cause the International Entities to pay to NGC all amount
required to be paid by the International Entities to Dow under the Tax Sharing
Agreement. NGC shall pay to the International Entities all amounts Dow is
required to pay to the International Entities under the Tax Sharing Agreement.
(c) (i) NGC shall be liable for, and shall indemnify Parent and Purchaser
for and hold Parent and Purchaser harmless against (A) all income Taxes (as
defined below) imposed for any taxable year on Dow's "affiliated group" (as
defined in Section 1504(a) of the Code without regard to the limitations
contained in Section 1504(b) of the Code) or any other combined or unitary group
for state, local or foreign tax purposes that include Dow (not including the use
of any losses or other Tax attributes) (B) any incremental amount of state and
local income Taxes imposed on the International Entities (other than any amount
of state or
24
local Taxes imposed on a combined or unitary group that includes Dow) for the
taxable year that includes the Closing Date, to the extent that such amount is
incurred as a result of the Section 338(h)(10) Elections or any election under
Section 338(g) of the Code and (C) all liability for income Taxes imposed on any
International Entities pursuant to Section 1.1502-6 of the Treasury Regulations
or any comparable provision of state or local law. NGC shall be entitled to any
refund of (or credit for) Taxes allocable or attributable to Taxes for which NGC
is liable to Parent or Purchaser pursuant to this paragraph (c)(i) of this
Section 6.12.
(ii) Parent and Purchaser shall be liable for, and shall indemnify NGC
for and hold Seller harmless against all Taxes of or imposed on any of the
International Entities for any taxable period other than those Taxes referred to
in paragraph (c)(i) of this Section 6.12. Parent shall be entitled to any
refund of (or credit for) Taxes allocable or attributable to Taxes for which
Parent is liable to NGC pursuant to this paragraph (c)(ii) of Section 6.12.
(iii) Notwithstanding anything to the contrary contained
herein, Parent shall assume and pay all sales, use, privilege, transfer, stock
transfer, real property transfer, documentary, gains, stamp, duties, recording
and similar Taxes and fees and all foreign Taxes (including any penalties,
interest or additions) imposed upon any party incurred in connection with any of
the transfers contemplated by this Agreement (collectively, "Transfer Taxes")
and Parent shall, at its own expense, accurately file all necessary Tax Returns
and other documentation with respect to any Transfer Tax other than Tax Returns
which Seller is responsible for filing under applicable law. Parent and Seller
agree to timely sign and deliver such certificates or forms as may be necessary
or appropriate to establish an exemption from (or otherwise reduce), or file Tax
Returns with respect to, such Transfer Taxes.
(d) (i) Parent acknowledges that Dow shall file or cause to be filed when
due all Tax Returns Dow has elected to file pursuant to the Tax Sharing
Agreement and Dow shall remit or cause to be remitted any Taxes due in respect
of such Tax
Returns, and Parent shall file or cause to be filed when due all Tax Returns
other than those Tax Returns Dow has elected to file pursuant to the Tax Sharing
Agreement that are required to be filed by or with respect to the International
Entities and Parent shall remit or cause to be remitted any Taxes due in respect
of such Tax Returns.
(ii) None of Parent or any affiliate of Parent shall (or shall cause
or permit the Company or any of its Subsidiaries to) amend, refile or otherwise
modify any Tax Return relating in whole or in part to the Company or any of its
Subsidiaries with respect to any Company or any of its Subsidiaries with respect
to any taxable year or period ending on or before the Closing Date without the
prior written consent of NGC.
(iii) Parent shall promptly cause the International Entities
to prepare and provide to, or at the direction of, NGC, all Tax information
materials, including, without limitation, schedules and work papers which the
Company is required to provide Dow pursuant to the Tax Sharing Agreement. Each
of NGC and Parent shall (and shall cause their respective affiliates to): (A)
assist the other party and/or Dow in preparing any Tax Returns which such other
party or Dow is responsible for preparing and filing in accordance with clause
(i) of this Section 6.12, (B) cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns of the Company and
each Subsidiary of the Company, and (C) make available to the other party and to
any taxing authority as reasonably requested all information, records, and
documents relating to Taxes of the Company and each Subsidiary of the Company,
provided, NGC or Parent (or respective affiliates) has access to information,
records or personnel concerning such Tax Returns that is not available to the
other party.
(e) NGC or Parent shall pay the other party for the Taxes for which NGC or
Parent, respectively, is liable pursuant to paragraph (c) of Section 6.12 upon
the written request of the party entitled to the payment, setting forth in
detail the nature and the amount of the Taxes to which the payment relates.
26
(f) Each of NGC and Parent shall (and cause their respective affiliates to):
(A) provide timely notice to the other in writing of any notice of deficiency,
proposed adjustment, adjustment, assessment, audit, examination, suit, dispute
or other claim ("Tax Claim") delivered, sent, commenced or initiated to or
against the Company or any Subsidiary of the Company by any Taxing authority
with respect to taxable periods for which the other may have a liability under
this Section 6.12, and (B) furnish the other with copies of all correspondence
received from any taxing authority in connection with any Tax audit or
information request with respect to any such taxable period.
(g) Parent acknowledges that Dow shall have the sole right to represent the
Company's and each of its Subsidiaries' interests in any Tax Claim, Tax audit or
administrative or court proceeding ("Proceeding") relating to any Taxes (A)
imposed for any taxable year on Dow's "affiliated group" (as defined in Section
1504(a) of the Code without regard to the limitations contained in Section
1504(b) of the Code) or any other combined or unitary group of Dow, (B) imposed
on the Company or any Subsidiary of the Company as a result of the Section
338(h)(10) Elections (or similar provision under state, local or foreign law)
pursuant to paragraph (a) of Section 6.12. None of Parent, any of its
affiliates, or any International Entities may settle any Proceeding for any
taxable year which may be the subject of indemnification by NGC under paragraph
(c) of Section 6.12 without the prior written consent of NGC, which consent may
not be unreasonably withheld. Parent shall have the sole right to represent the
International Entities' interests in any Proceeding relating to any Taxes for
which Parent could be liable to NGC pursuant to Section 6.12(c) of this
Agreement. If the resolution of any Proceeding could adversely affect a party
other than the party with the sole right to represent the Company's or any
Subsidiary's interest in any Tax Claim then such other party shall have the
right to participate in such Proceeding at its own cost and expense.
(h) Any payment by Parent, Purchaser or NGC pursuant to this Section 6.12
shall be an adjustment to the Purchase Price.
(i) For purposes of this Agreement, "Taxes" shall mean any and all taxes,
charges, fees, levies or other assessments, including, without limitation, all
net income, gross income, gross receipts, excise, stamp, real or personal
property, ad valorem, withholding, estimated, social security, unemployment,
occupation, use, service, service use, license, net worth, payroll, franchise,
severance, transfer, recording or other taxes, assessments or charges imposed by
any Governmental Entity and any interest, penalties, or additions to tax
attributable thereto. For purposes of this Agreement, "Tax Return" shall mean
any return, report or similar statement required to be filed with respect to any
Tax (including any attached schedules), including, without limitation,, any
information return, claim for refund, amended return or declaration of estimated
Tax.
(j) The obligations set forth in this Section 6.12 shall be unconditional and
absolute and shall remain in effect without limitation as to time.
Section 6.13 Financing Commitment.
Parent agrees that:
(a) Within 10 days of the signing of this agreement, Parent will provide to
NGC a commitment letter substantially in the form of that original letter dated
February 17, 1997 from ▇▇▇▇▇▇ Guaranty Trust Company of New York and ▇.▇. ▇▇▇▇▇▇
Securities, Inc. (▇▇▇▇▇▇) except that (a) clauses (iii) and (iv) shall be
deleted in their entirety and (b) a termsheet evidencing the substantive terms
and conditions under which ▇▇▇▇▇▇ will finance AES's purchase of the
International Assets shall be referenced and attached.
28
(b) No later than three weeks before the special meeting of Destec's
stockholders to approve the Agreement and Plan of Merger, Parent will provide to
NGC either (a) evidence that Parent has sufficient cash on hand to fund its
obligations under this Agreement or (b) a commitment letter substantially in the
form described in (a) above except the due diligence condition in clause (i)
therein shall be deleted in its entirety, or (c) such other evidence of a firm
financing commitment as may be reasonably satisfactory to NGC and Parent.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Purchaser's Obligation to Purchase the
International Assets. The obligation of Purchaser to purchase the International
Assets hereunder shall be subject to the satisfaction or waiver by Purchaser at
or prior to the Closing of the following: (a) the representations and
warranties of NGC and the Company set forth in this Agreement shall be true and
correct (except in the case of any representation and warranty made as of a
specified date, which need only be true as of such date) as of the date of the
Closing as if such representations and warranties were made on such date except
for such representations and warranties the failure of which to be true and
correct would not have a material adverse effect on the transactions
contemplated by this Agreement; (b) no representation, warranty, condition,
covenant or other term in the Merger Agreement relating to the International
Assets shall be amended, modified or waived, which amendment, modification or
waiver could reasonably be expected to have a material adverse effect on the
International Assets taken as a whole, without the prior written consent of
Parent or Purchaser; (c) the Merger Agreement shall have been consummated,
without waiver of any of the conditions contained in the Merger Agreement, which
waiver could reasonably be expected to have a material adverse effect on the
International Assets taken as a whole, without the written consent of Parent or
Purchaser.
Section 7.2. Conditions to NGC's Obligation to Sell the International Assets.
The obligation of NGC to sell the International Assets hereunder shall be
subject to the satisfaction or waiver by NGC at or prior to the Closing of the
following: (a) the Merger shall have been consummated, (b) the representations
and warranties of the Parent and Purchaser set forth in this Agreement shall be
true and correct (except in the case of any representation and warranty made as
of a specified date, which need only be true as of such date) as of the date of
the Closing as if such representations and warranties were made on such date
except for such representations and warranties the failure of which to be true
and correct would not have a material adverse effect on the transactions
contemplated by this Agreement and (c) Purchaser shall have complied with
Section 1.6(b) hereof.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. Notwithstanding anything herein to the contrary,
this Agreement may be terminated and the transactions contemplated hereby may be
abandoned at any time prior to the Closing:
(a) By the mutual written consent of Parent and NGC; or
(b) By Parent or NGC, if: (i) the Merger Agreement is terminated; (ii) the
transactions contemplated by this Agreement have not been consummated on or
prior to December 31, 1997, or such other date, if any, as Parent and NGC shall
agree upon; provided that the right to terminate this Agreement under this
Section 8.1(b) shall not be available to a party whose failure to fulfill any
obligation under this Agreement has been the cause of or resulted in the failure
of the Closing to occur on or before such date; or (iii) any Governmental Entity
shall have issued a statute, order, decree or regulation or taken any other
action (which statute, order, decree, regulation or other action the parties
30
hereto shall use their reasonable best efforts to lift), in each case
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement or making such transactions illegal and such
statute, order, decree, regulation or other action shall have become final and
non-appealable.
Section 8.2 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 8.1, written notice thereof shall forthwith be
given to the other party or parties specifying the provision hereof pursuant to
which such termination is made, and this Agreement shall terminate, and there
shall be no liability on the part of Parent, Purchaser or NGC except as set
forth in Section 9.1 hereof; provided that the termination of this Agreement
shall not relieve any party from liability for breach of this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Fees and Expenses. Except as contemplated by this Agreement, all
costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such expenses.
Section 9.2 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
Section 9.3 Amendment; Waiver.
(a) This Agreement may be amended by the parties hereto, by action taken or
authorized by their respective Boards of Directors, at any time. This Agreement
may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
(b) At any time prior to the Closing, the parties may (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties of the
other parties contained herein or in any document, certificate or writing
delivered pursuant hereto or (iii) waive compliance with any of the agreements
or conditions of the other parties hereto contained herein. Any agreement on
the part of any party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
Section 9.4 Survival. The respective representations and warranties of
Parent, Purchaser and NGC contained herein or in any certificates or other
documents delivered prior to or as of the Closing shall not survive beyond the
Closing. The covenants and agreements of the parties hereto shall survive the
Closing without limitation (except for those which, by their terms, contemplate
a shorter survival period).
Section 9.5 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given upon (a) transmitter's confirmation of a
receipt of a facsimile transmission, (b) confirmed delivery by a standard
overnight carrier or when delivered by hand or (c) the expiration of five
business days after the day when mailed in the United States by certified or
registered mail, postage prepaid, addressed at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) if to NGC, to:
NGC Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
32
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (713)
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
2300 First City Tower
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: T. ▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
and
(b) if to Parent, to:
The AES Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Section 9.6 Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to
a Section of this Agreement unless otherwise indicated. Whenever the words
"include", "includes" or "including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation". The phrase "made
available" when used in this Agreement shall mean that the information referred
to has been made available if requested by the party to whom such information is
to be made available. The words "affiliates" and "associates" when used in this
Agreement shall have the respective meanings ascribed to them in Rule 12b-2
under the Exchange Act. The phrase "beneficial ownership" and words of similar
import when used in this Agreement shall have the meaning ascribed to it in Rule
13d-3 under the Exchange Act.
Section 9.7 Headings; Schedules. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any matter disclosed pursuant to any Schedule
to the Disclosure Schedule shall be deemed to be disclosed for all purposes
under this Agreement but such disclosure shall not be deemed to be an admission
or representation as to the materiality of the item so disclosed.
Section 9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
be considered one and the same agreement.
Section 9.9 Entire Agreement. This Agreement constitutes the entire
agreement, and supersedes all prior agreements and understandings (written and
oral) among the parties with respect to the subject matter hereof, including,
without limitation, that certain Joint Bidding Agreement, dated February 10,
1997, by and between Parent and NGC.
Section 9.10 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void, unenforceable or against its regulatory policy,
the remainder of the terms, provisions, covenants and restrictions
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of this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 9.11 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware without giving effect to
the principles of conflicts of law thereof.
Section 9.12 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by, the parties
and their respective successors and assigns. The provisions of this Agreement
are not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
Section 9.13 Consent to Jurisdiction. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to jurisdiction of the courts
of the State of Delaware and of the United States of America located in the
State of Delaware (the "Delaware Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in such Delaware Courts),
waives any objection to the laying of venue of any such litigation in the
Delaware Courts and agrees not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in an inconvenient forum.
IN WITNESS WHEREOF, Parent and NGC have caused this Agreement to be signed by
their respective officers thereunto duly authorized as of the date first written
above.
NGC CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
and General Counsel
THE AES CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
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