Exhibit 10.3(a)
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AGREEMENT AND PLAN OF MERGER
among
PAMC MANAGEMENT CORPORATION,
▇▇▇▇ ▇▇▇▇ ENERGY, LLC,
MESA WIND DEVELOPERS,
ZOND-PANAERO WINDSYSTEM PARTNERS I,
A CALIFORNIA LIMITED PARTNERSHIP,
ZOND-PANAERO WINDSYSTEM PARTNERS II,
A CALIFORNIA LIMITED PARTNERSHIP,
WESTERN WIND ENERGY CORP.,
and
MESA WIND POWER CORPORATION
July 3, 2006
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TABLE OF CONTENTS
Page
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ARTICLE I DISTRIBUTIONS; MESA, ZP-I, AND ZP-II ASSETS; SUBSIDIARIES; MERGER....2
1.1 DISTRIBUTIONS ...................................................2
1.2 MESA, ZP-I, AND ZP-II ASSETS......................................2
1.3 PAMC SUBSIDIARIES; OTHER TRANSACTIONS.............................3
1.4 MERGER............................................................3
ARTICLE II MESA WIND CONSIDERATION; MERGER CONSIDERATION; ZP-I AND ZP-II
CONSIDERATION..................................................................5
2.1 MERGER CONSIDERATION..............................................5
2.2 DEPOSIT; ESTIMATED WORKING CAPITAL; DELIVERY AND PAYMENT OF
MERGER CONSIDERATION; POST-CLOSING ADJUSTMENT..................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PAMC.............................8
3.1 ORGANIZATION; AUTHORITY AND POWER OF PAMC.........................8
3.2 NON-CONTRAVENTION; CONSENTS.......................................9
3.3 FINANCIAL STATEMENTS..............................................9
3.4 ABSENCE OF CERTAIN CHANGES........................................9
3.5 ABSENCE OF LIABILITIES...........................................10
3.6 TAX MATTERS......................................................10
3.7 PAMC TITLE AND ENCUMBRANCES......................................11
3.8 LITIGATION.......................................................11
3.9 GOVERNMENTAL AUTHORIZATION.......................................11
3.10 CAPITALIZATION; SUBSIDIARIES.....................................12
3.11 PAMC CONTRACTS...................................................13
3.12 INTELLECTUAL PROPERTY............................................13
3.13 EMPLOYEE MATTERS.................................................13
3.14 INSURANCE........................................................13
3.15 COMPLIANCE WITH LAWS.............................................13
3.16 CORPORATE APPROVALS..............................................14
3.17 NO BROKERS OR FINDERS............................................14
3.18 SOLE BUSINESS....................................................14
3.19 DISCLOSURE.......................................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇ ▇▇▇▇........................14
4.1 ORGANIZATION; AUTHORITY AND POWER OF ▇▇▇▇ ▇▇▇▇...................14
4.2 NON-CONTRAVENTION; CONSENTS......................................15
4.3 LITIGATION.......................................................15
4.4 FINANCIAL STATEMENTS.............................................15
4.5 SUBSIDIARIES.....................................................15
4.6 COMPLIANCE WITH LAWS.............................................16
4.7 SOLE BUSINESS....................................................16
4.8 NO BROKERS OR FINDERS............................................16
4.9 DISCLOSURE.......................................................16
ARTICLE V REPRESENTATIONS AND WARRANTIES OF MESA WIND.........................16
5.1 ORGANIZATION OF MESA WIND........................................16
5.2 NON-CONTRAVENTION; CONSENTS......................................17
5.3 MESA WIND TITLE AND ENCUMBRANCES.................................17
5.4 LITIGATION.......................................................17
5.5 MESA CONTRACTS...................................................18
5.6 CAPITALIZATION...................................................18
5.7 COMPLIANCE WITH LAWS.............................................18
5.8 SOLE BUSINESS....................................................18
5.9 NO BROKERS OR FINDERS............................................18
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF ZP-I.............................18
6.1 ORGANIZATION; AUTHORITY AND POWER................................19
6.2 NON-CONTRAVENTION; CONSENTS......................................19
6.3 TITLE AND ENCUMBRANCES...........................................19
6.4 LITIGATION.......................................................19
6.5 PARTNERS.........................................................20
6.6. COMPLIANCE WITH LAWS.............................................20
6.7 SOLE BUSINESS....................................................20
6.8 NO BROKERS OR FINDERS............................................20
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF ZP-II...........................20
7.1 ORGANIZATION; POWER AND AUTHORITY................................20
7.2 NON-CONTRAVENTION; CONSENTS......................................21
7.3 TITLE AND ENCUMBRANCES...........................................21
7.4 LITIGATION.......................................................21
7.5 PARTNERS.........................................................21
7.6 COMPLIANCE WITH LAWS.............................................21
7.7 SOLE BUSINESS....................................................22
7.8 NO BROKERS OR FINDERS............................................22
ARTICLE VII-A DISCLAIMER OF REPRESENTATIONS OR WARRANTIES.....................22
ARTICLE VIII REPRESENTATIONS AND WARRANTIES OF THE BUYER AND MERGER SUB.......22
8.1 ORGANIZATION.....................................................22
8.2 NON-CONTRAVENTION; CONSENTS......................................23
8.3 NO BROKERS OR FINDERS............................................23
ARTICLE IX CLOSING; CLOSING CONDITIONS; CLOSING DELIVERIES....................23
9.1 CLOSING..........................................................23
9.2 CONDITIONS TO THE OBLIGATIONS OF THE BUYER AND MERGER SUB........23
9.3 CONDITIONS TO THE OBLIGATIONS OF THE SELLERS.....................24
9.4 CONDITIONS TO THE OBLIGATIONS OF THE PARTIES.....................24
9.5 CLOSING DELIVERIES...............................................26
ARTICLE X COVENANTS...........................................................30
10.1. PRE-CLOSING COVENANTS.............................................30
10.2 TAX MATTERS.......................................................31
10.3 FURTHER ASSURANCES................................................32
10.4 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS...........................32
10.5 BOOKS AND RECORDS.................................................32
ARTICLE XI INDEMNIFICATION....................................................33
11.1 INDEMNIFICATION OBLIGATIONS OF THE SELLERS........................33
11.2 INDEMNIFICATION OBLIGATIONS OF THE BUYER..........................33
11.3 LIMITATIONS.......................................................33
11.4 ESCROW............................................................35
11.5 INDEMNIFICATION PROCEDURE.........................................35
ARTICLE XII ARBITRATION.......................................................37
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12.1 ARBITRATORS.......................................................37
12.2 PROCEDURES........................................................37
12.3 DECISION..........................................................37
12.4 COSTS.............................................................37
12.5 BINDING AWARD.....................................................38
12.6 INJUNCTIVE RELIEF.................................................38
ARTICLE XIII TERMINATION......................................................38
13.1 TERMINATION.......................................................38
13.2 EFFECT OF TERMINATION.............................................39
13.3 DEPOSIT...........................................................39
ARTICLE XIV RELEASE...........................................................40
ARTICLE XV PAMC REPRESENTATIVE................................................40
15.1 APPOINTMENT.......................................................40
15.2 ENTITLEMENTS......................................................40
15.3 LIMITATIONS ON LIABILITY..........................................41
ARTICLE XVI MISCELLANEOUS PROVISIONS..........................................41
16.1 EXPENSES..........................................................41
16.2 ENTIRETY OF AGREEMENT.............................................41
16.3 NOTICES...........................................................42
16.4 AMENDMENT.........................................................43
16.5 NO WAIVER.........................................................43
16.6 COUNTERPARTS......................................................43
16.7 ASSIGNMENT........................................................44
16.8 HEADINGS..........................................................44
16.9 GOVERNING LAW.....................................................44
16.10 SEVERABILITY......................................................44
16.11 CONSTRUCTION......................................................44
16.12 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS..44
16.13 NO CONSEQUENTIAL OR PUNITIVE DAMAGES..............................45
EXHIBITS
EXHIBIT A - DEFINITIONS
EXHIBIT B - FORMS OF MERGER FILINGS
EXHIBIT C - FORM OF ESCROW AGREEMENT
EXHIBIT D - FORM OF MESA WIND ▇▇▇▇ OF SALE
EXHIBIT E - FORM OF ZP-I ▇▇▇▇ OF SALE
EXHIBIT F - FORM OF ZP-II ▇▇▇▇ OF SALE
EXHIBIT G - PAMC ASSETS
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 3,
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2006, is made by and among PAMC MANAGEMENT CORPORATION, a Colorado corporation
("PAMC"), ▇▇▇▇ ▇▇▇▇ ENERGY, LLC, a Colorado limited liability company ("Alta
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Mesa"), MESA WIND DEVELOPERS, a California joint venture and general partnership
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("Mesa Wind"), ZOND-PANAERO WINDSYSTEM PARTNERS I, A CALIFORNIA LIMITED
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PARTNERSHIP ("ZP-I"), ZOND-PANAERO WINDSYSTEM PARTNERS II, A CALIFORNIA LIMITED
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PARTNERSHIP ("ZP-II"), WESTERN WIND ENERGY CORP., a British Columbia, Canada
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corporation (the "Buyer"), and MESA WIND POWER CORPORATION, a Delaware
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corporation and wholly-owned subsidiary of the Buyer ("Merger Sub").
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Each of PAMC, ▇▇▇▇ ▇▇▇▇, Mesa Wind, ZP-I, ZP-II, the Buyer and Merger Sub
is sometimes referred to herein as a "Party" and collectively they are sometimes
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referred to herein as the "Parties."
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Capitalized terms used herein and not otherwise defined have the meanings
ascribed to such terms in Exhibit A hereto.
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RECITALS
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WHEREAS, as of the date hereof, each of PAMC, Mesa Wind, ZP-I, and ZP-II
owns or has the right to use certain of the assets related to the operation of
two wind farms located in Riverside County, California as follows: approximately
19.5MW of capacity (approximately 300 Vestas V-15 turbines, rated at 65KW each)
operated by ZP-I (the "ZP-I Project") and approximately 10.4MW of capacity
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(approximately 160 Vestas V-15 turbines) operated by ZP-II (the "ZP-II Project,"
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together with the ZP-I Project, the "Projects"); and collectively, as of the
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date hereof, PAMC, Mesa Wind, ZP-I, and ZP-II own or have the right to use all
of the assets related to the operation of the Projects;
WHEREAS, PAMC and ▇▇▇▇ ▇▇▇▇ own all of the partnership interests of PanAero
California, Ltd., a California limited partnership ("PACL"), which, in turn,
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owns a 50% joint venture and partnership interest of Mesa Wind;
WHEREAS, Enron Wind Systems, LLC, a California limited liability company
("Enron"), is the sole member of each of the general partners of ZP-I and ZP-II
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and owns a 50% joint venture and partnership interest of Mesa Wind; and
WHEREAS, PAMC, ▇▇▇▇ ▇▇▇▇, Mesa Wind, ZP-I, and ZP-II (each, a "Seller" and
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collectively, the "Sellers") desire to sell, and the Buyer desires to purchase,
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the Projects by conveying all assets of Mesa Wind, ZP-I, and ZP-II related to
the Projects to PAMC and merging Merger Sub with and into PAMC, with PAMC as the
surviving corporation (the "Surviving Corporation"), on the terms and subject to
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the conditions set forth herein.
AGREEMENT
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NOW, THEREFORE, for good and valid consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DISTRIBUTIONS; MESA, ZP-I, AND ZP-II ASSETS; SUBSIDIARIES; MERGER
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1.1 Distributions. At or prior to Closing, PAMC, Mesa Wind, PACL, and any
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other subsidiaries of PAMC and ▇▇▇▇ ▇▇▇▇ shall be permitted to distribute any
and all cash and cash equivalents to their respective equity holders.
1.2 Mesa, ZP-I, and ZP-II Assets.
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(a) Mesa Assets. On and subject to the terms and conditions of this
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Agreement, at or prior to Closing and prior to consummation of the Merger, Mesa
Wind shall execute and deliver to PAMC a ▇▇▇▇ of sale, in the form attached
hereto as Exhibit D (the "Mesa Wind ▇▇▇▇ of Sale"), pursuant to which Mesa Wind
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shall distribute, sell, transfer, convey, and deliver to PAMC, and PAMC shall
accept, all of the right, title, and interest that Mesa Wind possesses and has
the right to transfer in and to the following (the "Mesa Assets"): (i) all
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tangible personal property (such as machinery, equipment, supplies, parts,
furniture, and tools) used in connection with the Projects and located at the
Project site; (ii) all agreements, contracts, instruments, other similar
arrangements, and rights thereunder related to the Projects to which Mesa Wind
is a party, other than agreements to which only Mesa Wind, PAMC, ZP-I or ZP-II
are parties, which shall be terminated; (iii) to the extent assignable, all
franchises, approvals, permits, licenses, orders, registrations, certificates,
variances, and similar rights obtained from governments and governmental
agencies related to the Projects; (iv) all production reports and records,
operation and maintenance reports, environmental reports and records and other
written information related to the Projects that were previously made available
to the Buyer; and (v) the BLM Right of Way. The material equipment included in
the Mesa Assets is listed in an attachment to the Mesa Wind ▇▇▇▇ of Sale.
(b) ZP-I Assets. On and subject to the terms and conditions of this
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Agreement, at or prior to Closing and prior to consummation of the Merger, ZP-I
shall execute and deliver to PAMC a ▇▇▇▇ of sale, in the form attached hereto as
Exhibit E (the "ZP-I ▇▇▇▇ of Sale"), pursuant to which ZP-I shall sell,
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transfer, convey, and deliver to PAMC, and PAMC shall accept, all of the right,
title, and interest that ZP-I possesses and has the right to transfer in and to
the following (the "ZP-I Assets"): (i) all wind turbines owned by ZP-I relating
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to the Projects; (ii) all other tangible personal property (such as equipment,
supplies, parts, furniture, and tools) used in connection with the Projects and
located at the Project site; (iii) to the extent assignable, all franchises,
approvals, permits, licenses, orders, registrations, certificates, variances,
and similar rights obtained from governments and governmental agencies related
to the portion of the Projects operated by ZP-I; and (iv) all production reports
and records, operation and maintenance reports, and other written information
related to the Projects that were previously made available to the Buyer. The
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wind turbines included in the ZP-I Assets are listed in an attachment to the
ZP-I ▇▇▇▇ of Sale.
(c) ZP-II Assets. On and subject to the terms and conditions of this
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Agreement, at or prior to Closing and prior to consummation of the Merger, ZP-II
shall execute and deliver to PAMC a ▇▇▇▇ of sale, in the form attached hereto as
Exhibit F (the "ZP-II ▇▇▇▇ of Sale"), pursuant to which ZP-II shall sell,
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transfer, convey, and deliver to PAMC, and PAMC shall accept, all of the right,
title, and interest that ZP-II possesses and has the right to transfer in and to
the following (the "ZP-II Assets"): (i) all wind turbines owned by ZP-II
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relating to the Projects; (ii) all other tangible personal property (such as
equipment, supplies, parts, furniture, and tools) used in connection with the
Projects and located at the Project site; (iii) to the extent assignable, all
franchises, approvals, permits, licenses, orders, registrations, certificates,
variances, and similar rights obtained from governments and governmental
agencies related to the portion of the Projects operated by ZP-II; and (iv) all
production reports and records, operation and maintenance reports, and other
written information related to the Projects that were previously made available
to the Buyer. The wind turbines included in the ZP-I Assets are listed in an
attachment to the ZP-II ▇▇▇▇ of Sale.
1.3 PAMC Subsidiaries; Other Transactions. At or prior to Closing and
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after the distributions and conveyances described in Sections 1.1 and 1.2
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hereof, but prior to consummation of the Merger, (i) PAMC shall sell, transfer,
convey, and deliver to ▇▇▇▇ ▇▇▇▇, and ▇▇▇▇ ▇▇▇▇ shall accept, all of the right,
title, and interest that PAMC possesses and has the right to transfer in and to
its partnership interests of PACL and its capital stock of PanAero Alpha Corp.
and PanAero Omega Corp., both Colorado corporations, so that, as of the
consummation of the Merger, PAMC does not directly or indirectly own any capital
stock or ownership interests of any other Person; (ii) all liabilities of PAMC
with respect to PACL, PanAero Alpha Corp. and PanAero Omega Corp. shall be
assumed by ▇▇▇▇ ▇▇▇▇; and (iii) any and all intercompany debt and other
liabilities of PAMC with respect to its Affiliates shall be cancelled.
1.4 Merger. In accordance with the terms and provisions of this
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Agreement, the Colorado Business Corporation Act, as amended (the "CBCA"), and
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the Delaware General Corporation Law, as amended (the "DGCL"), as of the
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Effective Time, Merger Sub shall be merged with and into PAMC, with PAMC as the
Surviving Corporation (the "Merger").
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(a) Directors and Officers; Articles of Incorporation and Bylaws. From
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and after the Effective Time, (i) the directors and officers of Merger Sub, as
in effect immediately prior to the Effective Time, shall be the directors and
officers of the Surviving Corporation; and (ii) the articles of incorporation
and bylaws of PAMC, as in effect immediately prior to the Effective Time, shall
be the articles of incorporation and bylaws of the Surviving Corporation.
(b) Effect of Merger. Except as hereinafter specifically set forth,
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the identity, existence, corporate organization, purposes, powers, objects,
franchises, privileges, rights, and immunities of Merger Sub shall be merged
with and into PAMC, and PAMC shall, as the Surviving Corporation, be fully
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vested therewith. The separate existence and the corporate organization of
Merger Sub, except insofar as they may continue by statute, shall cease as of
the Effective Time.
(c) Effective Time of Merger. The Merger shall not become effective
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until, and shall become effective at, the point in time at which a Statement of
Merger and a Certificate of Merger in the forms attached hereto as Exhibit B
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(the "Merger Filings") shall have been executed and filed with the Secretary of
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State of Colorado in accordance with Article 111 of the CBCA and Section 252 of
the DGCL, as applicable. The time when the Merger shall become effective as
aforesaid is herein called the "Effective Time." PAMC, the Buyer, and Merger Sub
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shall cause such documentation to be executed and filed as aforesaid on the
Closing Date upon the satisfaction of the conditions contained in Article IX
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hereof.
(d) Conversion of Capital Stock. As of the Effective Time, subject to
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Sections 1.4(e) and (f) hereof, all of the issued and outstanding shares of
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capital stock of PAMC (the "PAMC Shares") shall be automatically converted into
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the right to receive the consideration for the Merger in accordance with Article
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II hereof; and all capital stock of PAMC shall be thereupon canceled and shall
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be without further rights or obligations, except that each holder of the PAMC
Shares immediately before the Effective Time (each, a "PAMC Shareholder" and
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collectively, the "PAMC Shareholders") shall be entitled to surrender its PAMC
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Shares in exchange for the such consideration, and each share of capital stock
of Merger Sub shall be automatically converted into an equal number of shares of
common stock of PAMC.
(e) Treasury Stock. All shares of capital stock of PAMC that,
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immediately prior to the Effective Time, are held by PAMC as treasury stock, if
any, shall be canceled without consideration therefor.
(f) Warrants, Options, Etc. Each warrant, option, or other right to
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acquire any capital stock of PAMC as of the Effective Time, if any, shall be
canceled without consideration therefor.
(g) Stock Transfer Books. The stock transfer books of PAMC shall be
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closed as of the Effective Time and no transfer of capital stock of PAMC shall
be made or consummated thereafter except by the Surviving Corporation.
(h) Dividends and Distributions. Subsequent to the Effective Time, the
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PAMC Shareholders shall have no right to receive any dividends or other
distributions in respect of the capital stock of PAMC, whether or not such
dividends or distributions have been declared.
(i) Dissenting Shares. Notwithstanding anything to the contrary
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contained in this Agreement, the PAMC Shares of any PAMC Shareholder that
provides notice of its intention to exercise dissenters' rights shall not be
converted into or represent the right to receive the Merger Consideration in
accordance with Article II hereof, and each such dissenting shareholder shall be
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entitled only to such rights as may be granted pursuant to the CBCA and the
DGCL.
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ARTICLE II
MESA WIND CONSIDERATION; MERGER CONSIDERATION;
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ZP-I AND ZP-II CONSIDERATION
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2.1 Merger Consideration. The consideration for the Merger (the "Merger
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Consideration") shall be $13,400,000, as adjusted pursuant to Sections 2.2(b)
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and (d) hereof.
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2.2 Deposit; Estimated Working Capital; Delivery and Payment of Merger
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Consideration; Post-Closing Adjustment.
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(a) Deposits. PAMC acknowledges receipt of a $100,000 nonrefundable
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▇▇▇▇▇▇▇ money deposit from the Buyer pursuant to that certain letter agreement,
dated June 2, 2006, among the Parties (the "Non-Refundable Deposit"). In
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addition, the Buyer has deposited $1,351,000 (the "Break-Up Escrow Amount") with
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▇▇▇▇▇ Fargo Bank, N.A., as escrow agent pursuant to that certain escrow
agreement, dated as of June 2, 2006, as amended, among the Buyer, PAMC, and such
escrow agent. Promptly after execution and delivery of this Agreement and the
Buyer's receipt of a written certificate from an authorized officer of PAMC
certifying that the PAMC Shareholders have approved the Merger, the Buyer and
PAMC (on behalf of the Sellers) shall instruct ▇▇▇▇▇ Fargo Bank, N.A. in writing
to deliver the Break-Up Escrow Amount to PAMC. From and after receipt of the
Break-Up Escrow Amount, PAMC shall hold such amounts pending the application of
the Break-Up Escrow Amount in accordance with this Section 2.2 or Section 13.3
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hereof. The Non-Refundable Deposit and the Break-Up Escrow Amount will be
applied against the Merger Consideration at Closing.
(b) Estimated Working Capital; Estimated Taxes. Prior to the date
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hereof, PAMC has provided a pro forma, good faith estimate of the Working
Capital (including a reasonably detailed itemization of the components of such
Working Capital) and the accrued but unpaid federal, state and local income
taxes of PAMC and its subsidiaries (to the extent reported and paid on a
consolidated basis) as of the Closing Date. At least three (3) Business Days
prior to the Closing, PAMC shall deliver to the Buyer an updated good faith
estimate of (i) the Working Capital of PAMC as of the Closing Date (including a
reasonably detailed itemization of the components of such Working
Capital)("Estimated Working Capital"), determined in accordance with generally
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accepted accounting principles of the United States, consistently applied in
accordance with past practices ("GAAP"), and (ii) the accrued but unpaid
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federal, state and local income taxes of PAMC and its subsidiaries (to the
extent reported and paid on a consolidated basis) as of the Closing Date
("Estimated Taxes"), and PAMC and the Buyer shall agree on such good faith
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estimates at least one (1) Business Day prior to Closing. If PAMC and the Buyer
do not agree on such estimates at least one (1) Business Day prior to Closing,
but all other conditions to Closing have been satisfied or waived, then the
Parties shall consummate the Transactions based on the Estimated Working Capital
and Estimated Taxes determined by PAMC, so long as the Estimated Working Capital
is no greater than $200,000 and the Estimated Taxes are no less than $425,776.
Upon the final, pre-Closing determination of Estimated Working Capital and
Estimated Taxes pursuant to this Section, PAMC shall prepare and deliver to the
Parties a funds flow memorandum (the "Flow of Funds Memo") setting forth the
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mechanics of the payment of the Merger Consideration.
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(c) Payment of Merger Consideration.
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(i) At least one (1) Business Day prior to Closing, (A) PAMC
shall deliver to a closing agent acceptable to the Parties (the
"Closing Agent") cash in an amount equal to the Non-Refundable Deposit
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and the Break-Up Amount and (B) the Buyer shall deliver or cause to be
delivered to the Closing Agent cash in an amount equal to the Merger
Consideration plus, to the extent Estimated Working Capital exceeds
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zero, the amount by which Estimated Working Capital exceeds zero on a
dollar-for-dollar basis, or minus, to the extent Estimated Working
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Capital is less than zero, the amount by which Estimated Working
Capital is less than zero on a dollar-for-dollar basis, minus the
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amount of the Non-Refundable Deposit and the Break-Up Escrow Amount.
The Closing Agent shall hold such funds in escrow pending receipt of
written instructions from the Parties directing the release of such
funds in accordance with the terms of this Agreement.
(ii) At Closing, the Parties shall instruct the Closing Agent, in
writing, to pay the funds held by the Closing Agent in accordance with
the following and the Flow of Funds Memo:
(A) deposit $774,500 (the "Merger Escrow") in a segregated
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escrow account with ▇▇▇▇▇ Fargo Bank, N.A. (the "Escrow Agent")
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pursuant to an escrow agreement substantially in the form of Exhibit C
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hereto, with such changes as may be reasonably required by the Escrow
Agent (the "Escrow Agreement");
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(B) deposit the Estimated Taxes, plus $100,000 (the "Tax
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Escrow" and, together with the Merger Escrow, the "Escrow") in the
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foregoing escrow account with the Escrow Agent pursuant to the Escrow
Agreement;
(C) pay to ▇▇▇▇ ▇▇▇▇ $187,500 by wire transfer of
immediately available funds to an account designated in writing by
▇▇▇▇ ▇▇▇▇ in consideration of its interest in the Mesa Assets;
(D) pay to Enron $375,000 by wire transfer of immediately
available funds to an account designated in writing by Enron in
consideration of its interest in the Mesa Assets;
(E) pay to ZP-I $873,913 by wire transfer of immediately
available funds to an account designated in writing by ZP-I in
consideration of the ZP-I Assets;
(F) pay to ZP-II $466,087 by wire transfer of immediately
available funds to an account designated in writing by ZP-II in
consideration of the ZP-II Assets;
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(G) pay the expenses of PAMC and the Closing Agent payable
at Closing in accordance with the Flow of Funds Memo; and
(H) pay each PAMC Shareholder by wire transfer of
immediately available funds to an account designated in the Flow of
Funds Memo an amount equal to (I) such PAMC Shareholder's Pro Rata
Portion, multiplied by (II) the remaining funds held by Closing Agent.
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(d) Post-Closing Working Capital Adjustment.
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(i) After the Closing, the Buyer shall prepare a statement of the
Working Capital of PAMC (the "Draft Statement") as of the close of
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business on the Closing Date. The Draft Statement shall be prepared in
conformity with GAAP applied on a basis consistent with that applied
in the preparation of the Balance Sheet of PAMC, with only such
deviations from GAAP as are referred to in the notes to such Balance
Sheet, if any, except that the Draft Statement shall not reflect
year-end adjustments. The Buyer shall deliver the Draft Statement to
the PAMC Representative not later than ninety (90) calendar days
following the Closing Date.
(ii) The Draft Statement shall be final and binding upon the
Buyer and the PAMC Shareholders unless, within thirty (30) calendar
days of delivery of the Draft Statement to the PAMC Representative,
the PAMC Representative delivers to the Buyer a written report
objecting to the Draft Statement. Any such objections shall be set
forth in reasonable detail in a written report (an "Objection Report")
----------------
that shall indicate the grounds upon which the PAMC Representative
disputes the Draft Statement.
(iii) For purposes of the purchase price adjustment set forth in
Section 2.2(d)(iv) hereof, "Closing Working Capital" shall mean
------------------ -----------------------
Working Capital of PAMC as set forth in the Draft Statement delivered
by the Buyer pursuant to Section 2.2(d)(i) hereof, unless the PAMC
-----------------
Representative delivers an Objection Report, in which case the
determination of the Working Capital of PAMC by the Buyer and the PAMC
Representative or by the Independent Accounting Firm, as the case may
be, pursuant to Section 2.2(d)(v) hereof shall be "Closing Working
----------------- ---------------
Capital" for purposes hereof. Such determination of Closing Working
-------
Capital shall have the legal effect of an arbitral award and shall be
final, binding, and conclusive on the Buyer and the PAMC Shareholders.
(iv) Payment of Purchase Price Adjustment. Within five (5)
------------------------------------
Business Days after the date of the final determination of Closing
Working Capital, the Buyer and the PAMC Representative shall do the
following:
(A) if Closing Working Capital is
greater than Estimated Working Capital, then the Buyer shall
pay each PAMC Shareholder an amount equal to (1) such PAMC
Shareholder's Pro Rata Portion, multiplied by (2) the amount,
-------------
7
on a dollar-for-dollar basis, by which Closing Working Capital
exceeds Estimated Working Capital; or
(B) if Closing Working Capital is less
than Estimated Working Capital, then the Buyer and the PAMC
Representative shall direct the Escrow Agent in writing to
release to the Buyer a portion of the Escrow equal to the
amount, on a dollar-for-dollar basis, by which Estimated
Closing Working Capital exceeds Closing Working Capital.
(v) Post Closing Adjustment Dispute Resolution. If the PAMC
------------------------------------------
Representative delivers an Objection Report pursuant to Section
-------
2.2(d)(ii) hereof, then within thirty (30) calendar days of the
----------
receipt by the Buyer of such Objection Report, the Buyer and the PAMC
Representative shall endeavor to resolve all matters in dispute. If
the Buyer and the PAMC Representative are unable to resolve all
matters in dispute within such thirty (30) calendar day period, the
matters in dispute shall be submitted for resolution to the
Independent Accounting Firm. The Independent Accounting Firm shall,
within thirty (30) calendar days of such submission, determine the
Closing Working Capital in accordance herewith and issue a written
report to the Buyer and the PAMC Representative setting forth such
determination, and such written determination shall be final and
binding upon the Buyer and the PAMC Shareholders. The Buyer and the
PAMC Representative shall cooperate with each other and each other's
representatives and their reasonable requests to enable the
Independent Accounting Firm to render a written determination as
promptly as possible. The fees and disbursements of the Independent
Accounting Firm shall be borne equally by the Buyer and from the
Escrow.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PAMC
--------------------------------------
Except as disclosed in the disclosure letter delivered by PAMC to the Buyer
concurrently with the execution and delivery of this Agreement (the "Disclosure
----------
Letter"), PAMC represents and warrants to the Buyer the following, as of the
------
date hereof and to the extent applicable, as of the Closing Date:
3.1 Organization; Authority and Power of PAMC.
-----------------------------------------
(a) Organization. PAMC is a corporation duly incorporated, validly
------------
existing, and in good standing under the laws of Colorado. PAMC has the
requisite corporate power and authority to own its properties and carry on its
business as it is now being conducted. The copies of the articles of
incorporation and bylaws of PAMC made available to the Buyer prior to the
execution of this Agreement are true and complete copies of such documents in
effect as of the date of this Agreement, and PAMC is not in violation of any
term of such documents.
(b) Authority and Power. Subject to the receipt of any required
-------------------
approvals from the BLM with respect to the BLM Right of Way, PAMC has the
requisite power and authority to enter into each of the Transaction Documents to
8
which it is or will be a party, consummate each of the transactions and
undertakings contemplated thereby, and perform all of the terms and conditions
thereof to be performed by it. The execution, delivery and performance of each
of the Transaction Documents to which PAMC is or will be a party and the
consummation of each of the transactions and undertakings contemplated thereby
have been duly authorized by all necessary corporate action on the part of PAMC.
This Agreement constitutes, and once executed and delivered by PAMC, each other
Transaction Document to which PAMC is a party will constitute, the valid and
legally binding obligation of PAMC, enforceable against PAMC in accordance with
their respective terms and conditions, subject to the effect of bankruptcy,
insolvency, reorganization, arrangement, moratorium, or other similar laws
relating to or affecting the rights of creditors generally, including, without
limitation, laws relating to fraudulent transfers or conveyances, preferences
and equitable subordination, and limitations imposed by general principles of
equity.
3.2 Non-Contravention; Consents. The execution and delivery by PAMC of the
---------------------------
Transaction Documents to which PAMC is a party, PAMC's performance of or
compliance with any such Transaction Documents, and the consummation by PAMC of
the Transactions to which PAMC is a party will not (a) conflict with, result in
any breach of, constitute a default under, give rise to a termination, right of
termination or a material change in, or result in the acceleration of or create
in any party the right to accelerate any agreement or other instrument to which
PAMC is a party or by which it or any of its properties, assets, or rights is
bound or affected, (b) violate the articles of incorporation or bylaws of PAMC,
(c) violate any Laws, (d) result in the imposition of any Encumbrance upon the
PAMC Shares or any asset or property of PAMC, or (e) except as set forth in
Section 3.2 of the Disclosure Letter, require the consent, approval, or
------------------------------------
authorization of, registration, qualification, or filing with, or notice to any
Person; provided, however, with respect to the forgoing, PAMC has advised the
------- -------
Buyer that neither PAMC nor Mesa Wind have registered or are qualified as
"Qualified Facilities" under the Federal Power Act or the Public Utility
Regulatory Policies Act of 1978, each as amended, because such filings appear to
have been made by ZP-I and ZP-II and that, upon production of energy by the
Surviving Corporation, such a filing may be required.
3.3 Financial Statements. The unaudited balance sheets of PAMC as of and
--------------------
for the fiscal years ended September 30, 2003, 2004 and 2005 and an unaudited
balance sheet of PAMC as of and for the eight (8) months ended May 31, 2006 (the
"Most Recent Balance Sheet") have been made available to the Buyer prior to the
-------------------------
date hereof (collectively, the "Financial Statements"). Except as set forth in
--------------------
Section 3.3 of the Disclosure Letter, the Financial Statements have been
------------------------------------
prepared in accordance with GAAP, present truly and fairly in all material
respects the assets, liabilities, and financial condition of PAMC as of the
dates thereof and are correct, complete, and consistent in all material respects
with the books and records of PAMC. The Most Recent Balance Sheet has been
prepared in accordance with GAAP in all material respects, provided that it may
be subject to normal recurring year-end adjustments as listed on Section 3.3 of
--------------
the Disclosure Letter and the absence of footnotes and other presentation items.
---------------------
3.4 Absence of Certain Changes. Since May 31, 2006, PAMC has conducted its
--------------------------
business in the ordinary course consistent with past practice and there has not
occurred: (i) any Material Adverse Effect on PAMC; (ii) any acquisition, sale or
9
transfer of any material asset of PAMC; (iii) any change in accounting methods
or practices (including any change in depreciation or amortization policies or
rates) by PAMC or any revaluation by PAMC of any of its assets; (iv) any
declaration, setting aside, or payment of a dividend or other distribution with
respect to the shares of PAMC (other than the distributions to be made in
accordance with Section 1.1 of this Agreement) or any direct or indirect
redemption, purchase or other acquisition by PAMC of any of its shares of
capital stock; or (v) any agreement by PAMC to do any of the things described in
the preceding clauses (i) through (v) (other than this Agreement).
3.5 Absence of Liabilities. Except as disclosed in Section 3.5 of the
---------------------- ------------------
Disclosure Letter, PAMC has no indebtedness for borrowed money or material
-----------------
obligations or liabilities of any nature (matured or unmatured, fixed or
contingent) other than (i) those set forth or adequately provided for in the
Financial Statements, (ii) those incurred in the ordinary course of business and
not required to be set forth in the Financial Statements in accordance with
GAAP, (iii) liabilities incurred in the ordinary course of business subsequent
to May 31, 2006 and either discharged prior to the Closing or reflected in the
final determination of Closing Working Capital, and (iv) those incurred in
connection with the execution of this Agreement. Except as set forth in Section
-------
3.5 of the Disclosure Letter, PAMC does not have any liabilities to or from any
----------------------------
of its officers, directors, shareholders, or Affiliates.
3.6 Tax Matters. PAMC has timely and properly filed all federal, state, and
-----------
local Tax Returns required to be filed by it through the date hereof, and all
such Tax Returns are true, correct, and complete in all material respects. PAMC
has paid or caused to be paid all federal, state, local, and other taxes
(collectively, "Taxes") required to be paid by it through the date hereof,
-----
except Taxes which have not become due or are being contested in good faith. The
reserve for Tax liability set forth on the Most Recent Balance Sheet is
sufficient as of its date for the payment of any accrued and unpaid Taxes of
PAMC. All Taxes and other assessments and levies which PAMC is required to
withhold or collect have been withheld and collected and have been paid over to
the proper governmental authorities to the extent due and payable. PAMC has made
available to the Buyer copies of all annual Tax Returns, examination reports,
and statements of deficiencies filed by, assessed against, or agreed to by PAMC
since October 1, 2002. PAMC has not waived any statute of limitations in respect
of Taxes or agreed to any extension of time with respect to any Tax payment,
assessment, deficiency, or collection. Since October 1, 1999, (a) PAMC has not
received written notice of any audit or of any proposed deficiencies from the
Internal Revenue Service (the "IRS") or any other taxing authority and (b)
---
except for or with respect to the affiliated group of which PAMC is the "Common
Parent," PAMC has not been a member of an affiliated group of corporations
within the meaning of Section 1504(a) of the Code filing a consolidated federal
income Tax Return nor does PAMC have any liability for Taxes of any other Person
under Treasury Regulations ss. 1.1502-6 (or any similar provision of state or
local law) or otherwise; and (iv) PAMC has not filed a consent under Section
341(f) of the Code, concerning collapsible corporations. PAMC has not been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code. PAMC is not a party to any Tax allocation or
sharing arrangement or any contract, agreement, plan, or arrangement covering
any employee or former employee thereof, that, individually or collectively,
could give rise to the payment of any amount that would not be deductible
pursuant to Section 280G or Section 162 of the Code. PAMC is not a "Foreign
Person" within the meaning of Section 1445 of the Code and Treasury Regulations
10
Section 1.1445-2. PAMC has never been (i) a passive foreign investment company,
(ii) a foreign personal holding company, (iii) a foreign sales corporation, (iv)
a foreign investment company, or (v) a Person other than a United States person,
each within the meaning of the Code.
3.7 PAMC Title and Encumbrances. All of the material tangible assets of
---------------------------
PAMC as of the date hereof are described in Exhibit G hereto. As of the Closing,
---------
PAMC will have good and marketable title to and legal and beneficial ownership
of all of its owned properties and assets other than the Mesa Assets, ZP-I
Assets, and ZP-II Assets, which properties and assets are not subject to any
Encumbrance other than Permitted Encumbrances. PAMC does not own any real
property. For the avoidance of doubt, PAMC makes no representation or warranty
whatsoever as to the title to the Mesa Assets, ZP-I Assets, or ZP-II Assets, or
as to the condition thereof.
3.8 Litigation.
----------
(a) PAMC. There are no pending or, to the knowledge of PAMC,
----
threatened legal actions, suits, arbitrations, proceedings, hearings, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, or local jurisdiction or before any arbitrator
against PAMC or any of its properties, assets, or businesses (other than the
Mesa Assets, ZP-I Assets, and ZP-II Assets), or any of its shareholders,
directors, or officers in their capacities as such, or involving any Person for
whose acts or defaults PAMC is vicariously liable. PAMC is not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge. PAMC has not
received notice from any Governmental Entity of any alleged violation of any
Laws. There is no action, suit, claim or litigation that PAMC has pending
against any other parties.
(b) The Projects and Mesa Wind. To the knowledge of PAMC, there are no
--------------------------
pending or threatened legal actions, suits, arbitrations, proceedings, hearings,
or investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, or local jurisdiction or before any arbitrator
against Projects, Mesa Wind, or any of their respective properties, assets, or
businesses, or any of their respective shareholders, directors, or officers in
their capacities as such, or involving any Person for whose acts or defaults any
such party is vicariously liable. To the knowledge of PAMC, Mesa Wind is not
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge. To the knowledge of PAMC, Mesa Wind has not received notice from any
Governmental Entity of any alleged violation of any Laws. To the knowledge of
PAMC, there is no action, suit, claim or litigation that Mesa Wind has pending
against any other parties.
3.9 Governmental Authorization. PAMC has obtained each federal, state,
--------------------------
county, local or foreign governmental consent, license, permit, grant, or other
authorization of a Governmental Entity that is necessary for the conduct of
PAMC's business as currently conducted or that is necessary for PAMC to hold any
interest in any of its properties (collectively, the "PAMC Authorizations"), and
-------------------
all of such PAMC Authorizations are in full force and effect, except where the
failure to obtain or have any such PAMC Authorizations could not reasonably be
expected to have a Material Adverse Effect on PAMC. Section 3.9 of the
------------------
Disclosure Letter is a list of all material PAMC Authorizations relating to the
-----------------
11
Projects. For the avoidance of doubt, PAMC makes no representation or warranty
whatsoever as to the governmental authorizations obtained, or required to be
obtained, in connection with the Mesa Assets, ZP-I Assets, or ZP-II Assets.
3.10 Capitalization; Subsidiaries.
----------------------------
(a) Capitalization. As of the date hereof, the authorized capital
--------------
stock of PAMC consists of 2,000,000 shares of common stock, no par value, of
which 22,506 shares of common stock, no par value, are issued and outstanding.
Section 3.10 of the Disclosure Letter sets forth the names of the holders
-------------------------------------
thereof, and the number of shares held by each such holder. There are no other
outstanding shares of capital stock or voting securities and no outstanding
commitments to issue any shares of capital stock or voting securities. All of
the issued and outstanding shares of PAMC have been duly authorized and validly
issued, are fully paid and nonassessable, and no such shares or options to
purchase shares granted by PAMC were issued or granted in violation of any
statutory or other preemptive rights or any Laws. There are no outstanding
subscriptions, options, warrants, calls, rights, or other agreements,
arrangements, or commitments under which PAMC is or may become obligated to
issue, sell, transfer, or otherwise dispose of, or purchase, redeem or otherwise
acquire, any shares of, or other equity or voting interests in, PAMC, and there
are no outstanding securities convertible into or exchangeable for any such
shares or other equity or voting interests. There are no outstanding stock
appreciation, phantom stock, profit participation, or similar rights with
respect to PAMC. To the knowledge of PAMC (after review of its corporate
records), there are no voting trusts, proxies, or other agreements or
understandings to which any of PAMC's equity holders is a party with respect to
the voting, disposition, or registration of shares of PAMC. All of the issued
and outstanding shares of PAMC are free and clear of any restrictions on
transfer (other than restrictions under the Securities Act of 1933, as amended
(the "Securities Act"), state securities laws, and other restrictions on
--------------
transfer that have been terminated or waived), Taxes, Encumbrances, options,
warrants, purchase rights, contracts, commitments, equities, claims, demands,
and other third-party rights.
(b) Subsidiaries.
------------
(i) As of the date of this Agreement, PAMC owns and holds 50% of
the partnership interest in PACL, which in turn owns and holds 50% of
the joint venture and partnership interest in Mesa Wind.
(ii) PACL and Enron Wind constitute all of the partners of Mesa
Wind, with each such party holding a 50% partnership interest in Mesa
Wind.
(iii) Section 3.10(b) of the Disclosure Letter lists all
----------------------------------------
corporations, limited liability companies, partnerships, trusts, joint
ventures, associations, and any other business entity in which PAMC
holds an ownership interest as of the date of this Agreement. As of
the Closing, PAMC does not own or control, directly or indirectly, any
interest in any corporation, partnership, trust, joint venture,
association, or other entity.
12
3.11 PAMC Contracts. A complete and correct list of all written contracts,
--------------
agreements, and commitments in effect as of the date hereof, including all
leases, subleases, rights-of-way, easements, licenses, and other agreements
pursuant to which PAMC uses or occupies or has the right to use or occupy any
real property, or which will be assigned to PAMC as of the Closing Date to which
PAMC is a party or is otherwise bound, that involve amounts or commitments in
excess of $5,000 per annum (collectively, the "PAMC Contracts"), other than
--------------
contracts, agreements, or commitments which will be terminated on or prior to
Closing, is set forth in Section 3.11 of the Disclosure Letter. PAMC has made
-------------------------------------
available to the Buyer true, correct, and complete copies of all of the PAMC
Contracts. Each PAMC Contract is a valid and binding obligation of PAMC, and, to
the knowledge of PAMC, of the other party or parties thereto, and is enforceable
in accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium, or other similar laws relating to or
affecting the rights of creditors generally, including, without limitation, laws
relating to fraudulent transfers or conveyances, preferences and equitable
subordination, and limitations imposed by general principles of equity. Except
as set forth in Section 3.11 of the Disclosure Letter, neither PAMC nor, to the
-------------------------------------
knowledge of PAMC, any other party thereto has (a) terminated, canceled, or
waived in any material respect any term or condition of any PAMC Contract, (b)
failed to perform in any material respect its obligations required to be
performed under any PAMC Contract, or (c) given or received any written claim of
violation, default or nonpayment under any PAMC Contract which violation or
default has not been cured or waived. Without limiting the generality of the
foregoing, (i) all amounts payable by Edison pursuant to the Power Purchase
Agreement and Interconnection Agreement have been paid through April 30, 2006;
and (ii) all amounts payable under the BLM Right of Way to the BLM as of the
Closing Date have been paid.
3.12 Intellectual Property. PAMC does not own any patented or registered
---------------------
intellectual property, trademarks or trade secrets.
3.13 Employee Matters. PAMC does not currently have any employees and has
----------------
not had any employees in the five (5) years immediately prior to the Closing
Date.
3.14 Insurance. Set forth in Section 3.14 of the Disclosure Letter is a
--------- -------------------------------------
complete list of the policies and contracts of insurance maintained by PAMC.
There is no material claim pending under any of such policies or bonds as to
which coverage has been questioned, denied or disputed by the underwriters of
such policies or bonds. All premiums due and payable under all such policies and
bonds have been paid and PAMC is otherwise in compliance with the terms of such
policies and bonds in all material respects. PAMC has no knowledge of any
threatened termination of, or material premium increase with respect to, any of
such policies.
3.15 Compliance with Laws. PAMC has complied with, is not in violation of,
--------------------
and has not received any notices of violation with respect to (i) any
Environmental Laws or any Laws relating to Hazardous Materials, or (ii) any
other Laws with respect to the conduct of its business, or the ownership or
operation of its business (except, in either case, for such violations or
failures to comply as could not be reasonably expected to have a Material
Adverse Effect on PAMC or the Projects).
13
3.16 Corporate Approvals.
-------------------
(a) The Board of Directors of PAMC (i) has approved this Agreement,
the Transaction Documents and the Merger and other transactions contemplated
hereby and thereby, (ii) has determined that the Merger is in the best interests
of the stockholders of PAMC, and (iii) has recommended or will have recommended
prior to the Closing that the stockholders of PAMC approve the Merger.
(b) Prior to Closing, (i) two-thirds of the stockholders of PAMC have
approved this Agreement and the Merger and (ii) no other corporate approvals of
PAMC is required to be obtained in connection with this Agreement or the Merger.
3.17 No Brokers or Finders. Except as set forth in Section 3.17 of the
--------------------- -------------------
Disclosure Letter, no Person has or shall have, as a result of any act or
-----------------
omission of PAMC or any of its Affiliates, any right, interest, or valid claim
against or upon any of the Parties for any commission, fee, or other
compensation as a finder or broker, or in any similar capacity, in connection
with the Transactions.
3.18 Sole Business. Since its organization, PAMC's sole business has been
-------------
the organization, development, financing, management and operation of the
Projects.
3.19 Disclosure. To the actual knowledge of PAMC (without independent
----------
investigation), the Sellers have not failed to disclose, whether in the
Disclosure Letter, by oral or written communications, by delivery of documents,
data and other information in any form, or otherwise, any information that is
material to the financial or physical condition of PAMC and its assets or the
physical condition of the Mesa Assets, the ZP-I Assets and the ZP-II Assets.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇ ▇▇▇▇
-------------------------------------------
Except as disclosed in the Disclosure Letter delivered by ▇▇▇▇ ▇▇▇▇ to the
Buyer concurrently with the execution and delivery of this Agreement, ▇▇▇▇ ▇▇▇▇
represents and warrants to the Buyer the following, as of the date hereof and to
the extent applicable, as of the Closing Date:
4.1 Organization; Authority and Power of ▇▇▇▇ ▇▇▇▇.
----------------------------------------------
(a) Organization. ▇▇▇▇ ▇▇▇▇ is a limited liability company duly
------------
organized, validly existing, and in good standing under the laws of Colorado.
▇▇▇▇ ▇▇▇▇ has the requisite limited liability company power and authority to own
its properties, carry on its business as it is now being conducted, enter into
and perform the Transaction Documents to which it is a party, and carry out the
Transactions to which it is a party.
(b) Authority and Power. ▇▇▇▇ ▇▇▇▇ has the requisite power and
-------------------
authority to enter into each of the Transaction Documents to which it is or will
be a party, consummate each of the transactions and undertakings contemplated
14
thereby, and perform all of the terms and conditions thereof to be performed by
it. The execution, delivery and performance of each of the Transaction Documents
to which ▇▇▇▇ ▇▇▇▇ is or will be a party and the consummation of each of the
transactions and undertakings contemplated thereby have been duly authorized by
all necessary limited liability company action on the part of ▇▇▇▇ ▇▇▇▇. This
Agreement constitutes, and once executed and delivered by ▇▇▇▇ ▇▇▇▇, each other
Transaction Document to which ▇▇▇▇ ▇▇▇▇ is a party will constitute, the valid
and legally binding obligation of ▇▇▇▇ ▇▇▇▇, enforceable against ▇▇▇▇ ▇▇▇▇ in
accordance with their respective terms and conditions, subject to the effect of
bankruptcy, insolvency, reorganization, arrangement, moratorium, or other
similar laws relating to or affecting the rights of creditors generally,
including, without limitation, laws relating to fraudulent transfers or
conveyances, preferences and equitable subordination, and limitations imposed by
general principles of equity.
4.2 Non-Contravention; Consents. The execution and delivery by ▇▇▇▇ ▇▇▇▇ of
---------------------------
the Transaction Documents to which ▇▇▇▇ ▇▇▇▇ is a party, ▇▇▇▇ ▇▇▇▇'▇ performance
of or compliance with any such Transaction Documents, and the consummation by
▇▇▇▇ ▇▇▇▇ of the Transactions to which ▇▇▇▇ ▇▇▇▇ is a party will not (a)
conflict with, result in any breach of, constitute a default under, give rise to
a termination, right of termination or a material change in, or result in the
acceleration of or create in any party the right to accelerate any agreement or
other instrument to which ▇▇▇▇ ▇▇▇▇ is a party or by which it or any of its
properties, assets, or rights is bound or affected, (b) violate the articles of
organization or operating agreement of ▇▇▇▇ ▇▇▇▇, (c) violate any Laws, or (d)
except as set forth in Section 4.2 of the Disclosure Letter, require the
------------------------------------
consent, approval, or authorization of, registration, qualification, or filing
with, or notice to any Person.
4.3 Litigation. There are no pending or, to the knowledge of ▇▇▇▇ ▇▇▇▇,
----------
threatened legal actions, suits, arbitrations, proceedings, hearings, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, or local jurisdiction or before any arbitrator
against ▇▇▇▇ ▇▇▇▇ or any of its properties, assets, or businesses, or any of
shareholders, directors, or officers in their capacities as such, or involving
any Person for whose acts or defaults ▇▇▇▇ ▇▇▇▇ is vicariously liable. ▇▇▇▇ ▇▇▇▇
is not subject to any outstanding injunction, judgment, order, decree, ruling,
or charge. ▇▇▇▇ ▇▇▇▇ has not received notice from any Governmental Entity of any
alleged violation of any Laws. There is no action, suit, claim or litigation
that ▇▇▇▇ ▇▇▇▇ has pending against any other parties.
4.4 Financial Statements. The unaudited balance sheet of ▇▇▇▇ ▇▇▇▇ as of
--------------------
and for the fiscal year ended December 31, 2005 has been made available to the
Buyer prior to the date hereof (the "▇▇▇▇ ▇▇▇▇ Balance Sheet"). The ▇▇▇▇ ▇▇▇▇
-----------------------
Balance Sheet presents truly and fairly in all material respects the assets,
liabilities, and financial condition of ▇▇▇▇ ▇▇▇▇ as of the date thereof and is
correct, complete, and consistent in all material respects with the books and
records of ▇▇▇▇ ▇▇▇▇.
4.5 Subsidiaries. As of the date of this Agreement, ▇▇▇▇ ▇▇▇▇ owns and
------------
holds 50% of the partnership interest in PACL, which in turn owns and holds 50%
of the joint venture and partnership interest in Mesa Wind. As of the Closing,
▇▇▇▇ ▇▇▇▇ owns and holds 100% of the partnership interest in PACL.
15
4.6 Compliance with Laws. ▇▇▇▇ ▇▇▇▇ has complied with, is not in violation
--------------------
of, and has not received any notices of violation with respect to (i) any
Environmental Laws or any Laws relating to Hazardous Materials, or (ii) any
other Laws with respect to the conduct of its business, or the ownership or
operation of its business (except, in either case, for such violations or
failures to comply as could not be reasonably expected to have a Material
Adverse Effect on ▇▇▇▇ ▇▇▇▇ or the Projects).
4.7 Sole Business. Since its organization, ▇▇▇▇ ▇▇▇▇'▇ sole business has
-------------
been to own 50% of PACL, approximately 35% of PanAero Alpha, Ltd, and
approximately 35% of PanAero Omega, Ltd.
4.8 No Brokers or Finders. No Person has or shall have, as a result of any
---------------------
act or omission of ▇▇▇▇ ▇▇▇▇ or any of its Affiliates, any right, interest, or
valid claim against or upon any of the Parties for any commission, fee, or other
compensation as a finder or broker, or in any similar capacity, in connection
with the Transactions.
4.9 Disclosure. To the actual knowledge of AltaMesa (without independent
----------
investigation), the Sellers have not failed to disclose, whether in the
Disclosure Letter, by oral or written communications, by delivery of documents,
data and other information in any form, or otherwise, any information that is
material to the financial or physical condition of PAMC and its assets or the
physical condition of the Mesa Assets, the ZP-I Assets and the ZP-II Assets.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MESA WIND
-------------------------------------------
Except as disclosed in the Disclosure Letter delivered by Mesa Wind to the
Buyer concurrently with the execution and delivery of this Agreement, Mesa Wind
represents and warrants to the Buyer the following, as of the date hereof and to
the extent applicable, as of the Closing Date:
5.1 Organization of Mesa Wind.
-------------------------
(a) Organization. Mesa Wind is a general partnership duly organized,
------------
validly existing, and in good standing under the laws of California. Mesa Wind
has the requisite general partnership power and authority to own its properties,
carry on its business as it is now being conducted, enter into and perform the
Transaction Documents to which it is a party, and carry out the Transactions to
which it is a party. The copies of joint venture agreement of Mesa Wind made
available to the Buyer prior to the execution of this Agreement is a true and
complete copy of such document in effect as of the date of this Agreement, and
Mesa Wind is not in violation of any term of such document.
(b) Authority and Power. Mesa Wind has the requisite power and
-------------------
authority to enter into each of the Transaction Documents to which it is or will
be a party, consummate each of the transactions and undertakings contemplated
thereby, and perform all of the terms and conditions thereof to be performed by
16
it. The execution, delivery and performance of each of the Transaction Documents
to which Mesa Wind is or will be a party and the consummation of each of the
transactions and undertakings contemplated thereby have been duly authorized by
all necessary joint venture and partnership action on the part of Mesa Wind.
This Agreement constitutes, and once executed and delivered by Mesa Wind, each
other Transaction Document to which Mesa Wind is a party will constitute, the
valid and legally binding obligation of Mesa Wind, enforceable against Mesa Wind
in accordance with their respective terms and conditions, subject to the effect
of bankruptcy, insolvency, reorganization, arrangement, moratorium, or other
similar laws relating to or affecting the rights of creditors generally,
including, without limitation, laws relating to fraudulent transfers or
conveyances, preferences and equitable subordination, and limitations imposed by
general principles of equity.
5.2 Non-Contravention; Consents. The execution and delivery by Mesa Wind of
---------------------------
the Transaction Documents to which Mesa Wind is a party, Mesa Wind's performance
of or compliance with any such Transaction Documents, and the consummation by
Mesa Wind of the Transactions to which Mesa Wind is a party will not (a)
conflict with, result in any breach of, constitute a default under, give rise to
a termination, right of termination or a material change in, or result in the
acceleration of or create in any party the right to accelerate any agreement or
other instrument to which Mesa Wind is a party or by which it or any of its
properties, assets, or rights is bound or affected, (b) violate the joint
venture or partnership agreement of Mesa Wind, (c) violate any Laws, (d) result
in the imposition of any Encumbrance upon any Mesa Assets, or (e) except as set
forth in Section 5.2 of the Disclosure Letter, require the consent, approval, or
------------------------------------
authorization of, registration, qualification, or filing with, or notice to any
Person; provided, however, with respect to the forgoing, PAMC has advised the
-------- -------
Buyer that neither PAMC nor Mesa Wind have registered or are qualified as
"Qualified Facilities" under the Federal Power Act or the Public Utility
Regulatory Policies Act of 1978, each as amended, because such filings appear to
have been made by ZP-I and ZP-II and that, upon production of energy by the
Surviving Corporation, such a filing may be required.
5.3 Mesa Wind Title and Encumbrances. Immediately prior to the execution
--------------------------------
and delivery of the Mesa Wind ▇▇▇▇ of Sale and the transfer by Mesa Wind of the
Mesa Assets to PAMC, Mesa Wind will have good and marketable title to and legal
and beneficial ownership of all of the Mesa Assets, which properties and assets
are not subject to any Encumbrance other than Permitted Encumbrances. Set forth
in an attachment to the Mesa Wind ▇▇▇▇ of Sale is a true and correct list all
material equipment included in the Mesa Assets.
5.4 Litigation. There are no pending or, to the knowledge of Mesa Wind,
----------
threatened legal actions, suits, arbitrations, proceedings, hearings, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, or local jurisdiction or before any arbitrator
against Mesa Wind, the Projects or any of its respective properties, assets, or
businesses, or any of its shareholders, directors, or officers in their
capacities as such, or involving any Person for whose acts or defaults any such
party is vicariously liable. Mesa Wind is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge. Mesa Wind has not
received notice from any governmental agency or instrumentality of any alleged
violation of any Laws. There is no action, suit, claim or litigation that Mesa
Wind has pending against any other parties.
17
5.5 Mesa Contracts. A complete and correct list of all written contracts,
--------------
agreements, and commitments in effect as of the date hereof, including all
leases, subleases, rights-of-way, easements, licenses, and other agreements
pursuant to which Mesa Wind uses or occupies or has the right to use or occupy
any real property, to which Mesa Wind is a party or is otherwise bound, that
involve amounts or commitments in excess of $5,000 per annum, other than
contracts, agreements, or commitments which will be terminated on or prior to
Closing (collectively, the "Mesa Contracts"), is set forth in Section 5.5 of the
-------------- ------------------
Disclosure Letter. Mesa Wind has made available to the Buyer true, correct, and
-----------------
complete copies of all of the Mesa Contracts. Each Mesa Contract is a valid and
binding obligation of Mesa Wind, and, to the knowledge of Mesa Wind, of the
other party or parties thereto, and is enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, arrangement,
moratorium, or other similar laws relating to or affecting the rights of
creditors generally, including, without limitation, laws relating to fraudulent
transfers or conveyances, preferences and equitable subordination, and
limitations imposed by general principles of equity. Neither Mesa Wind nor, to
the knowledge of Mesa Wind, any other party thereto has (a) terminated,
canceled, or waived in any material respect any term or condition of any Mesa
Contract, (b) failed to perform in any material respect its obligations required
to be performed under any Mesa Contract, or (c) received any written claim of
violation or default under any Mesa Contract which violation or default has not
been cured or waived.
5.6 Capitalization. PACL and Enron Wind constitute all of the partners of
--------------
Mesa Wind, with each such partner holding a 50% partnership interest in Mesa
Wind.
5.7 Compliance with Laws. Mesa Wind has complied with, is not in violation
--------------------
of, and has not received any notices of violation with respect to (i) any
Environmental Laws or any Laws relating to Hazardous Materials, or (ii) any
other Laws with respect to the conduct of its business, or the ownership or
operation of its business (except, in either case, for such violations or
failures to comply as could not be reasonably expected to have a Material
Adverse Effect on Mesa Wind or the Projects).
5.8 Sole Business. Since its organization, Mesa Wind's sole business has
-------------
been related to the organization, development, financing, management, and
operation of the Projects.
5.9 No Brokers or Finders. No Person has or shall have, as a result of any
---------------------
act or omission of Mesa Wind or any of its Affiliates, any right, interest, or
valid claim against or upon any of the Parties for any commission, fee, or other
compensation as a finder or broker, or in any similar capacity, in connection
with the Transactions.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF ZP-I
--------------------------------------
ZP-I represents and warrants to the Buyer the following, as of the date
hereof and to the extent applicable, as of the Closing Date:
18
6.1 Organization; Authority and Power.
---------------------------------
(a) Organization. ZP-I is a limited partnership duly organized,
------------
validly existing, and in good standing under the laws of California. ZP-I has
the requisite partnership power and authority to own its properties, carry on
its business as it is now being conducted, enter into and perform the
Transaction Documents to which it is a party, and carry out the Transactions to
which it is a party, in each such case, to the extent specified to be performed
or carried out by ZP-I in the Transaction Documents.
(b) Authority and Power. ZP-I has the requisite power and authority to
-------------------
enter into each of the Transaction Documents to which it is or will be a party,
consummate each of the transactions and undertakings contemplated thereby, and
perform all of the terms and conditions thereof to be performed by it. The
execution, delivery and performance of each of the Transaction Documents to
which ZP-I is or will be a party and the consummation of each of the
transactions and undertakings contemplated thereby have been duly authorized by
all necessary partnership action on the part of ZP-I. This Agreement
constitutes, and once executed and delivered by ZP-I, each other Transaction
Document to which ZP-I is a party will constitute, the valid and legally binding
obligation of ZP-I, enforceable against ZP-I in accordance with their respective
terms and conditions, subject to the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium, or other similar laws relating to or
affecting the rights of creditors generally, including, without limitation, laws
relating to fraudulent transfers or conveyances, preferences and equitable
subordination, and limitations imposed by general principles of equity.
6.2 Non-Contravention; Consents. The execution and delivery by ZP-I of the
---------------------------
Transaction Documents to which ZP-I is a party, ZP-I's performance of or
compliance with any such Transaction Documents, and the consummation by ZP-I of
the Transactions to which ZP-I is a party will not (a) conflict with, result in
any breach of, constitute a default under, give rise to a termination, right of
termination or a material change in, or result in the acceleration of or create
in any party the right to accelerate any agreement or other instrument to which
ZP-I is a party or by which it or any of its properties, assets, or rights is
bound or affected, (b) violate the certificate of limited partnership or limited
partnership agreement of ZP-I, (c) violate any Laws, (d) result in the
imposition of any Encumbrance upon the ZP-I Assets, or (e) require the consent,
approval, or authorization of, registration, qualification, or filing with, or
notice to any Person.
6.3 Title and Encumbrances. Immediately prior to the execution and delivery
----------------------
of the ZP-I ▇▇▇▇ of Sale and the transfer by ZP-I of the ZP-I Assets to PAMC,
ZP-I will have good and marketable title to and legal and beneficial ownership
of all of the ZP-I Assets, which properties and assets are not subject to any
Encumbrance other than Permitted Encumbrances. Set forth in an attachment to the
ZP-I ▇▇▇▇ of Sale is a true, correct and complete list of all the wind turbines
owned by ZP-I relating to the ZP-I Project.
6.4 Litigation. There are no pending or, to the knowledge of ZP-I,
----------
threatened in writing any legal actions, suits, arbitrations, proceedings,
hearings, or investigation of, in or before any court or quasi-judicial or
administrative agency of any federal, state, or local jurisdiction or before any
19
arbitrator against ZP-I, any of its properties, assets, or businesses, or any of
its partners, directors, or officers in their capacities as such, or involving
any Person for whose acts or defaults ZP-I is vicariously liable. ZP-I is not
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge. ZP-I has received notice from any governmental agency or instrumentality
of any alleged violation of any Laws. There is no action, suit, claim or
litigation that ZP-I has pending against any other parties.
6.5 Partners. The sole general partner of ZP-I is Zond Windsystems
--------
Management, LLC.
6.6. Compliance with Laws. ZP-I has complied with, is not in violation of,
--------------------
and has not received any notices of violation with respect to (i) any
Environmental Laws or any Laws relating to Hazardous Materials, or (ii) any
other Laws with respect to the conduct of its business, or the ownership or
operation of its business (except, in either case, for such violations or
failures to comply as could not be reasonably expected to have a Material
Adverse Effect on ZP-I or the Projects).
6.7 Sole Business. Since its organization, ZP-I's sole business has been
-------------
the ownership and operation of the ZP-I Project.
6.8 No Brokers or Finders. No Person has or shall have, as a result of any
---------------------
act or omission of ZP-I, any right, interest, or valid claim against or upon any
of the Parties for any commission, fee, or other compensation as a finder or
broker, or in any similar capacity, in connection with the Transactions.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF ZP-II
---------------------------------------
ZP-II represents and warrants to the Buyer the following, as of the date
hereof and to the extent applicable, as of the Closing Date:
7.1 Organization; Power and Authority.
---------------------------------
(a) ZP-II is a limited partnership duly organized, validly existing,
and in good standing under the laws of California. ZP-II has the requisite
partnership power and authority to own its properties, carry on its business as
it is now being conducted, enter into and perform the Transaction Documents to
which it is a party, and carry out the Transactions to which it is a party, in
each such case, to the extent specified to be performed or carried out by ZP-II
in the Transaction Documents.
(b) Authority and Power. ZP-II has the requisite power and authority
-------------------
to enter into each of the Transaction Documents to which it is or will be a
party, consummate each of the transactions and undertakings contemplated
thereby, and perform all of the terms and conditions thereof to be performed by
it. The execution, delivery and performance of each of the Transaction Documents
20
to which ZP-II is or will be a party and the consummation of each of the
transactions and undertakings contemplated thereby have been duly authorized by
all necessary partnership action on the part of ZP-II. This Agreement
constitutes, and once executed and delivered by ZP-II, each other Transaction
Document to which ZP-II is a party will constitute, the valid and legally
binding obligation of ZP-II, enforceable against ZP-II in accordance with their
respective terms and conditions, subject to the effect of bankruptcy,
insolvency, reorganization, arrangement, moratorium, or other similar laws
relating to or affecting the rights of creditors generally, including, without
limitation, laws relating to fraudulent transfers or conveyances, preferences
and equitable subordination, and limitations imposed by general principles of
equity.
7.2 Non-Contravention; Consents. The execution and delivery by ZP-II of the
---------------------------
Transaction Documents to which ZP-II is a party, ZP-II's performance of or
compliance with any such Transaction Documents, and the consummation by ZP-II of
the Transactions to which ZP-II is a party will not (a) conflict with, result in
any breach of, constitute a default under, give rise to a termination, right of
termination or a material change in, or result in the acceleration of or create
in any party the right to accelerate any agreement or other instrument to which
ZP-II is a party or by which it or any of its properties, assets, or rights is
bound or affected, (b) violate the certificate of limited partnership or limited
partnership agreement of ZP-II, (c) violate any Laws, (d) result in the
imposition of any Encumbrance upon the ZP-II Assets, or (e) require the consent,
approval, or authorization of, registration, qualification, or filing with, or
notice to any Person.
7.3 Title and Encumbrances. Immediately prior to the execution and delivery
----------------------
of the ZP-II ▇▇▇▇ of Sale and the transfer by ZP-II of the ZP-II Assets to PAMC,
ZP-II Wind will have good and marketable title to and legal and beneficial
ownership of all of the ZP-II Assets, which properties and assets are not
subject to any Encumbrance other than Permitted Encumbrances. Set forth in an
attachment to the ZP-II ▇▇▇▇ of Sale is a true, correct and complete list of the
wind turbines owned by ZP-II relating to the ZP-II Project.
7.4 Litigation. There are no pending or, to the knowledge of ZP-II,
----------
threatened in writing legal actions, suits, arbitrations, proceedings, hearings,
or investigation of, in or before any court or quasi-judicial or administrative
agency of any federal, state, or local jurisdiction or before any arbitrator
against ZP-II, any of its properties, assets, or businesses, or any of its
partners, directors, or officers in their capacities as such, or involving any
Person for whose acts or defaults ZP-II is vicariously liable. ZP-II is not
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge. ZP-II has received notice from any governmental agency or
instrumentality of any alleged violation of any Laws. There is no action, suit,
claim or litigation that ZP-II has pending against any other parties.
7.5 Partners. The sole general partner of ZP-II is Zond Windsystems
--------
Management II, LLC.
7.6 Compliance with Laws. ZP-II has complied with, is not in violation of,
--------------------
and has not received any notices of violation with respect to (i) any
Environmental Laws or any Laws relating to Hazardous Materials, or (ii) any
other Laws with respect to the conduct of its business, or the ownership or
operation of its business (except for such violations or failures to comply as
could not be reasonably expected to have a Material Adverse Effect on ZP-II or
the Projects).
21
7.7 Sole Business. Since its organization, ZP-II's sole business has been
--------------
the ownership and operation of the ZP-II Project.
7.8 No Brokers or Finders. No Person has or shall have, as a result of any
---------------------
act or omission of ZP-II, any right, interest, or valid claim against or upon
any of the Parties for any commission, fee, or other compensation as a finder or
broker, or in any similar capacity, in connection with the Transactions.
ARTICLE VII-A
DISCLAIMER OF REPRESENTATIONS OR WARRANTIES
For the avoidance of doubt, no Seller makes any representation or warranty
of any kind whatsoever with respect to (a) the past, present or future physical
or operating condition of the Mesa Assets, the ZP-I Assets or the ZP-II Assets,
(b) the maintenance or repair that has or has not been performed or is necessary
or desirable (or the cost thereof) with respect to such assets, (c) the
continued operation of such assets or (d) the financial performance of any Party
after the date hereof, the Surviving Corporation or any of their respective
Affiliates, successors or assigns to the extent affected by the status of such
physical or operating condition, maintenance, repair or continued operation of
such assets. Except as expressly set forth herein, each Seller expressly
disclaims all representations and warranties (express, implied or statutory) of
merchantability, fitness for a particular purpose or otherwise, covering the
Mesa Assets, the ZP-I Assets or the ZP-II Assets.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND MERGER SUB
----------------------------------------------------------
The Buyer and Merger Sub represent and warrant to the Sellers the
following, as of the date hereof and to the extent applicable, as of the Closing
Date:
8.1 Organization. The Buyer is a corporation, duly organized, validly
------------
existing, and in good standing under the laws of British Columbia, Canada, and
Merger Sub is a corporation duly organized, validly existing, and in good
standing under the laws of Delaware. Each of the Buyer and Merger Sub has the
requisite power and authority to own its properties, carry on its business as it
is now being conducted, enter into and perform the Transaction Documents, and
carry out the Transactions. This Agreement constitutes, and once executed and
delivered, each other Transaction Document to which the Buyer or Merger Sub is a
party will constitute, the valid and legally binding obligation of the Buyer or
Merger Sub, as applicable, enforceable against the Buyer or Merger Sub, as
applicable, in accordance with their respective terms and conditions, subject to
the effect of bankruptcy, insolvency, reorganization, arrangement, moratorium,
or other similar laws relating to or affecting the rights of creditors
generally, including, without limitation, laws relating to fraudulent transfers
or conveyances, preferences and equitable subordination, and limitations imposed
by general principles of equity.
22
8.2 Non-Contravention; Consents. The execution and delivery by the Buyer
---------------------------
and Merger Sub of the Transaction Documents, the Buyer's and Merger Sub's
performance of or compliance with any such Transaction Documents, and the
consummation by the Buyer and Merger Sub of the Transactions will not (a)
conflict with, result in any breach of, constitute a default under, give rise to
a termination, right of termination or a material change in, or result in the
acceleration of or create in any party the right to accelerate any agreement or
other instrument to which the Buyer or Merger Sub is a party or by which they or
any of their respective properties, assets, or rights is bound or affected, (b)
violate the articles or certificate of incorporation or bylaws of the Buyer or
Merger Sub, (c) violate any Laws, or (d) require the consent, approval, or
authorization of, registration, qualification, or filing with, or notice to any
Person.
8.3 No Brokers or Finders. No Person has or shall have, as a result of any
---------------------
act or omission of the Buyer or Merger Sub or any of their respective
Affiliates, any right, interest, or valid claim against or upon any of the
Parties for any commission, fee, or other compensation as a finder or broker, or
in any similar capacity, in connection with the Transactions.
ARTICLE IX
CLOSING; CLOSING CONDITIONS; CLOSING DELIVERIES
-----------------------------------------------
9.1 Closing. The closing of the Transactions (the "Closing") shall take
------- -------
place at 10:00 a.m., Mountain Time, no later than the third Business Day
following the satisfaction or waiver of all of the conditions to Closing set
forth in this Article IX (other than conditions with respect to actions the
----------
Parties shall take at the Closing), at the offices of Faegre & ▇▇▇▇▇▇ LLP,
Denver, Colorado, unless another time, date, or place is mutually agreed to
among the Parties. The date on which the Closing occurs is referred to as the
"Closing Date."
------------
9.2 Conditions to the Obligations of the Buyer and Merger Sub. The
---------------------------------------------------------
obligations of the Buyer and Merger Sub to consummate the Transactions shall be
subject to the fulfillment on or before the Closing Date of the following, any
one or more of which, to the extent permitted by applicable Laws, may be waived
in writing by the Buyer and Merger Sub:
(a) Representations, Warranties, and Covenants. All of the
------------------------------------------
representations and warranties set forth in Articles III through VII hereof and
------------------------
made as of the Closing Date that are qualified as to "materiality" or Material
Adverse Effect shall be true and correct in all respects, and all of the
representations and warranties set forth in Articles III through VII hereof and
------------------------
made as of the Closing Date that are not so qualified shall be true and correct
in all material respects, in each case as of the Closing Date. The Sellers shall
have performed and complied in all material respects with their respective
obligations under this Agreement to the extent required to be performed or
complied with on or prior to the Closing Date.
(b) Transfer of Mesa Assets. Mesa Wind shall have executed and
-----------------------
delivered the Mesa Wind ▇▇▇▇ of Sale and shall have sold, transferred, conveyed
and assigned the Mesa Assets, including the BLM Right of Way, to PAMC.
23
(c) Transfer of ZP-I Assets. ZP-I shall have executed and delivered
-----------------------
the ZP-I ▇▇▇▇ of Sale and shall have sold, transferred, conveyed and assigned
the ZP-I Assets to PAMC.
(d) Transfer of ZP-II Assets. ZP-II shall have executed and delivered
------------------------
the ZP-II ▇▇▇▇ of Sale and shall have sold, transferred, conveyed and assigned
the ZP-II Assets to PAMC.
(e) Transfer of Subsidiaries; Other Transactions. PAMC and ▇▇▇▇ ▇▇▇▇
--------------------------------------------
shall have executed and delivered the such documents and instruments, in form
and substance reasonably satisfactory to the Buyer, to effect the transfers
described in Section 1.3 and any and all intercompany debt and other liabilities
of PAMC with respect to its Affiliates shall have been cancelled.
(f) Resignation of Directors and Officers. The directors and officers
-------------------------------------
of PAMC in office immediately prior to the Effective Time shall have resigned as
directors and officers, as applicable, of PAMC effective as of the Effective
Time.
(g) Closing Deliveries. The Sellers shall have delivered to the Buyer
------------------
all of the agreements, instruments, certificates, and other documents set forth
in Section 9.5 hereof.
-----------
9.3 Conditions to the Obligations of the Sellers. The obligations of
--------------------------------------------
the Sellers to consummate the Transactions shall be subject to the fulfillment
on or before the Closing Date of the following, any one or more of which, to the
extent permitted by applicable Laws, may be waived in writing by all of the
Sellers:
(a) Representations, Warranties, and Covenants. All of the
------------------------------------------
representations and warranties set forth in Article VIII hereof and made as of
------------
the Closing Date that are qualified as to "materiality" or Material Adverse
Effect shall be true and correct in all respects, and all of the representations
and warranties set forth in Articles VIII hereof and made as of the Closing Date
-------------
that are not so qualified shall be true and correct in all material respects, in
each case as of the Closing Date. The Buyer and Merger Sub shall have performed
and complied in all material respects with their respective obligations under
this Agreement to the extent required to be performed or complied with on or
prior to the Closing Date.
(b) Closing Deliveries. The Buyer and Merger Sub shall have delivered
------------------
to the appropriate Sellers all of the agreements, instruments, certificates, and
other documents set forth in Section 9.5 hereof.
-----------
9.4 Conditions to the Obligations of the Parties. The obligations of the
--------------------------------------------
Parties to consummate the Transactions shall be subject to the fulfillment on or
before the Closing Date of the following, any one or more of which, to the
extent permitted by applicable Laws, may be waived in writing by all of the
Parties:
(a) Consents. The Sellers shall have obtained or provided, as the case
--------
may be, all consents, approvals, authorizations, registrations, qualifications,
filings, and notices set forth in Sections 3.2, 4.2 and 5.2 of the Disclosure
-------------------------------------------
Letter, except such consents, approvals, authorizations, registrations,
------
24
qualifications, filings, and notices which, if not obtained or provided, would
not (i) affect adversely in any material respect the right of the Buyer to own
the Surviving Corporation, or (ii) affect adversely in any material respect the
right of the Surviving Corporation to own the Mesa Assets, the ZP-I Assets, the
ZP-II Assets, or its other assets and to operate its businesses.
(b) No Litigation. No action, claim, arbitration, litigation, or
-------------
governmental proceeding shall be pending or, to the knowledge of the Parties,
threatened against any Party or any officer or director of any Party, and no
legislation, injunction, writ, restraining order, or any other order of any
nature shall have been instituted, threatened, or proposed before any court,
governmental agency, or legislative body, that (i) seeks to restrain or
prohibit, or seeks damages or other relief in connection with, the consummation
of the Transactions, (ii) would be likely to cause the Transactions to be
subject to rescission following consummation, (iii) affect adversely in any
material respect the right of the Buyer to own the Surviving Corporation, the
Mesa Assets, the ZP-I Assets, or the ZP-II Assets, or (iv) affect adversely in
any material respect the right of the Surviving Corporation to own the Mesa
Assets, ZP-I Assets, ZP-II Assets and its other assets and to operate its
respective businesses or has a Material Adverse Effect on the assets of PAMC or
on the Mesa Assets, the ZP-I Assets or the ZP-II Assets.
(c) No Material Adverse Change. Since the date of the Most Recent
--------------------------
Balance Sheet, there shall have been no Material Adverse Change in the business,
financial condition, or operations of PAMC or the Projects; provided, however,
-------- -------
no Material Adverse Change in the business, financial condition, or operations
of PAMC or the Projects shall be deemed to have occurred (i) so long as the
Sellers have complied with their obligations pursuant to Section 10.1(b) hereof
---------------
in all material respects, to the extent attributable to (A) the physical or
operating condition of the Mesa Assets, the ZP-I Assets or the ZP-II Assets to
the extent any adverse change thereto is reasonably determined to be the result
of the past, present or future failure to maintain or repair such assets, (B)
the failure to maintain or repair such assets from the date of the Most Recent
Balance Sheet through Closing, (iii) the financial performance of any Seller to
the extent affected by the status of the physical or operating condition,
maintenance or repair of such assets, (iv) any change (or changes taken
together) or effect generally affecting the international, national, regional or
local electric generation or wind energy businesses generally, including,
without limitation, international, national, regional or local energy prices, or
competitive influences or actions, (v) any change (or changes taken together) or
effect resulting from changes in the general national or regional economic or
financial conditions, or (vi) any change in Laws applicable to electric
generation or wind energy businesses generally.
(d) Shareholder/Member Approval. PAMC shall have complied with Article
---------------------------
113 (Dissenters' Right) of the CBCA and, in particular, Section 201 (Notice of
Dissenters' Rights) thereof. The PAMC Shareholders and members of ▇▇▇▇ ▇▇▇▇
shall have approved the Transactions in accordance with their respective
articles of incorporation or articles of organization and bylaws or operating
agreement and applicable Laws and PAMC shall not have received written notice of
any PAMC Shareholder's intention to demand payment for its PAMC Shares in
connection with the Merger pursuant to Section 202 (Notice of Intent to Demand
Payment) of the CBCA.
25
(e) SeaWest O&M Agreement. The SeaWest O&M Agreement shall have been
---------------------
terminated, such termination shall be effective at or prior to Closing, and such
termination shall not result in any additional cost, expense or liability to the
Buyer.
9.5 Closing Deliveries. In addition to the other obligations to be
-------------------
performed and items to be delivered at Closing as set forth herein, the Parties
shall do the following:
(a) Deliveries of PAMC. At Closing, PAMC shall deliver or cause to be
------------------
delivered to the Buyer the following:
(i) the Merger Filings, duly executed on behalf of PAMC;
(ii) the Escrow Agreement, duly executed on behalf of the PAMC
Representative;
(iii) a certificate from the Secretary of PAMC, in a form
reasonably satisfactory to the Buyer, certifying (A) the names of the
officers of PAMC authorized to execute the Transaction Documents to
which it is a party, together with the true signatures of such
officers, (B) true and complete copies of PAMC's articles of
incorporation and bylaws, and (C) true and complete copies of consent
actions or certified resolutions taken by the board of directors and
shareholders of PAMC approving this Agreement (and the Transactions)
and authorizing the appropriate officers to execute and deliver the
Transaction Documents to which PAMC is a party and to consummate the
Transactions;
(iv) copies of all consents, approvals, authorizations,
registrations, qualifications, filings, and notices set forth in
Section 3.2 of the Disclosure Letter that have been obtained or
------------------------------------
provided pursuant to Section 9.4(a) hereof;
--------------
(v) good standing certificates from the Secretary of State of
California and the Secretary of State of Colorado as to PAMC's good
standing and payment of all applicable taxes.
(vi) a certificate from an officer of PAMC, in a form reasonably
satisfactory to the Buyer, certifying, as of the Closing Date: (A) all
representations and warranties made by PAMC in this Agreement are true
and correct in all material respects (except for such representations
and warranties that are qualified by their terms by a reference to
materiality or Material Adverse Effect which representations and
warranties as so qualified are true in all respects); and (B) all
covenants, obligations and conditions of this Agreement and the other
Transaction Documents to be performed by PAMC on or before such date
have been so performed in all material respects;
(vii) a Foreign Investment in Property Tax Act (FIRPTA)
Certificate, in form and substance reasonably acceptable to the Buyer;
26
(viii) consent of the BLM to assignment to PAMC of the BLM Right
of Way;
(ix) a legal opinion of Faegre & ▇▇▇▇▇▇ LLP, dated as of the
Closing Date, in a form reasonably acceptable to the Buyer; and
(x) such other certificates and closing documents as are
reasonably requested by the Buyer and customary for transactions of
the type contemplated hereby.
(b) Deliveries of ▇▇▇▇ ▇▇▇▇. At Closing, ▇▇▇▇ ▇▇▇▇ shall deliver to
-----------------------
the Buyer the following:
(i) a good standing certificate from the Secretary of State of
Colorado as to ▇▇▇▇ ▇▇▇▇'▇ good standing.
(ii) a certificate from an officer or manager of ▇▇▇▇ ▇▇▇▇, in a
form reasonably satisfactory to the Buyer, certifying (A) the names of
the officers or managers of ▇▇▇▇ ▇▇▇▇ authorized to execute the
Transaction Documents to which it is a party, together with the true
signatures of such officers or managers, (B) true and correct copy of
the limited liability company operating agreement of ▇▇▇▇ ▇▇▇▇, and
(C) copies of consent actions or certified resolutions taken by the
board of directors or manager and members of ▇▇▇▇ ▇▇▇▇ authorizing the
appropriate officers or managers to execute and deliver the
Transaction Documents to which ▇▇▇▇ ▇▇▇▇ is a party and to consummate
the Transactions;
(iii) a certificate from an officer or manager of ▇▇▇▇ ▇▇▇▇, in a
form reasonably satisfactory to the Buyer, certifying, as of the
Closing Date: (A) all representations and warranties made by ▇▇▇▇ ▇▇▇▇
under this Agreement are true and correct in all material respects
(except for such representations and warranties that are qualified by
their terms by a reference to materiality or Material Adverse Effect
which representations and warranties as so qualified are true in all
respects); and (B) all covenants, obligations and conditions of this
Agreement and the other Transaction Documents to be performed by ▇▇▇▇
▇▇▇▇ on or before such date have been so performed in all material
respects; and
(iv) such other certificates and closing documents as are
reasonably requested by the Buyer and customary for transactions of
the type contemplated hereby.
(c) Deliveries of Mesa Wind. At Closing, Mesa Wind shall deliver to
-----------------------
the Buyer the following:
(i) the Mesa Wind ▇▇▇▇ of Sale, duly executed by Mesa Wind,
conveying the Mesa Assets to PAMC;
(ii) copies of all consents, approvals, authorizations,
registrations, qualifications, filings, and notices set forth in
Section 5.2 of the Disclosure Letter that have been obtained or
------------------------------------
provided pursuant to Section 9.4(a) hereof;
--------------
27
(iii) a certificate from Mesa Wind, in a form reasonably
satisfactory to the Buyer, certifying (A) the names of the Persons
authorized to execute on behalf of Mesa Wind the Transaction Documents
to which it is a party, together with the true signatures of such
Persons, (B) true and correct copy of the partnership agreement of
Mesa Wind, and (C) copies of consent actions or certified resolutions
taken by Mesa Wind authorizing the appropriate Persons to execute and
deliver the Transaction Documents to which Mesa Wind is a party and to
consummate the Transactions; and
(iv) a certificate from Mesa Wind, in a form reasonably
satisfactory to the Buyer, certifying, as of the Closing Date: (A) all
representations and warranties made by Mesa Wind under this Agreement
are true and correct in all material respects (except for such
representations and warranties that are qualified by their terms by a
reference to materiality or Material Adverse Effect which
representations and warranties as so qualified are true in all
respects); and (B) all covenants, obligations and conditions of this
Agreement and the other Transaction Documents to be performed by Mesa
Wind on or before such date have been so performed in all material
respects.
(d) Deliveries of ZP-I. At Closing, ZP-I shall deliver to the Buyer
------------------
the following:
(i) the ZP-I ▇▇▇▇ of Sale, duly executed on behalf of ZP-I,
conveying the ZP-I Assets to PAMC;
(ii) a certificate from ZP-I, in a form reasonably satisfactory
to the Buyer, certifying (A) the names of the Persons authorized to
execute on behalf of ZP-I the Transaction Documents to which it is a
party, together with the true signatures of such Persons, (B) true and
correct copy of the partnership agreement of ZP-I, and (C) copies of
consent actions or certified resolutions taken by ZP-I authorizing the
appropriate Persons to execute and deliver the Transaction Documents
to which ZP-I is a party and to consummate the Transactions;
(iii) a good standing certificate from the Secretary of State of
California as to ZP-I's good standing; and
(iv) a certificate from ZP-I, in a form reasonably satisfactory
to the Buyer, certifying, as of the Closing Date: (A) all
representations and warranties made by ZP-I under this Agreement are
true and correct in all material respects (except for such
representations and warranties that are qualified by their terms by a
reference to materiality or Material Adverse Effect which
representations and warranties as so qualified are true in all
respects); and (B) all covenants, obligations and conditions of this
Agreement and the other Transaction Documents to be performed by ZP-I
on or before such date have been so performed in all material
respects.
28
(e) Deliveries of ZP-II. At Closing, ZP-II shall deliver to the Buyer
-------------------
the following:
(i) the ZP-II ▇▇▇▇ of Sale, duly executed on behalf of ZP-II,
conveying the ZP-II Assets to PAMC;
(ii) a certificate from ZP-II, in a form reasonably satisfactory
to the Buyer, certifying (A) the names of the Persons authorized to
execute on behalf of ZP-II the Transaction Documents to which it is a
party, together with the true signatures of such Persons, (B) true and
correct copy of the partnership agreement of ZP-II, and (C) copies of
consent actions or certified resolutions taken by ZP-II authorizing
the appropriate Persons to execute and deliver the Transaction
Documents to which ZP-II is a party and to consummate the
Transactions;
(iii) a good standing certificate from the Secretary of State of
California as to ZP-II's good standing; and
(iv) a certificate from ZP-II, in a form reasonably satisfactory
to the Buyer, certifying, as of the Closing Date: (A) all
representations and warranties made by ZP-II under this Agreement are
true and correct in all material respects (except for such
representations and warranties that are qualified by their terms by a
reference to materiality or Material Adverse Effect which
representations and warranties as so qualified are true in all
respects); and (B) all covenants, obligations and conditions of this
Agreement and the other Transaction Documents to be performed by ZP-II
on or before such date have been so performed in all material
respects.
(f) Deliveries of the Buyer. At Closing, the Buyer shall deliver the
-----------------------
following:
(i) to the PAMC Representative, the Merger Filings, duly executed
on behalf of the Buyer and Merger Sub;
(ii) to the PAMC Representative, the Escrow Agreement, duly
executed on behalf of the Buyer and the Surviving Corporation;
(iii) a certificate from the Secretary of the Buyer, in a form
reasonably satisfactory to the Sellers, certifying (A) the names of
the officers of the Buyer authorized to execute the Transaction
Documents to which it is a party, together with the true signatures of
such officers; (B) copies of consent actions or certified resolutions
taken by the board of directors and, if necessary, shareholders of the
Buyer authorizing the appropriate officers to execute and deliver the
Transaction Documents to which the Buyer is a party and to consummate
the Transactions; and (C) a true, correct and complete copy of the
articles of incorporation and bylaws of the Buyer;
(iv) a certificate from the Secretary of Merger Sub, in a form
reasonably satisfactory to the Sellers, certifying (A) the names of
29
the officers of Merger Sub authorized to execute the Transaction
Documents to which it is a party, together with the true signatures of
such officers; (B) copies of consent actions or certified resolutions
taken by the board of directors and shareholders of Merger Sub
authorizing the appropriate officers to execute and deliver the
Transaction Documents to which Merger Sub is a party and to consummate
the Transactions; and (C) a true, correct and complete copy of the
articles of incorporation and bylaws of Merger Sub; and
(v) legal opinions of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP and Canadian
counsel to the Buyer, dated as of the Closing Date, in a form
reasonably acceptable to the Sellers.
ARTICLE X
COVENANTS
---------
10.1. Pre-Closing Covenants. The applicable Parties shall do the following
---------------------
from the date hereof to the Closing:
(a) General. Each Party shall use commercially reasonable efforts to
-------
take all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the Transactions. Each Party shall promptly notify
the other Parties of any event which could reasonably be expected to have a
Material Adverse Effect on it or could reasonably be expected to materially
impede the ability of such Party to perform its obligations under this Agreement
or the Transaction Agreements to which it is a party or to effect the
transactions contemplated hereby or thereby.
(b) Operation and Preservation of Business. Each Seller shall carry on
--------------------------------------
its business in the ordinary course in substantially the same manner as
heretofore conducted during the prior six-month period; provided, however, that
-------- -------
no Seller shall be required to maintain, repair, replace, or otherwise incur
expenses in connection with the Mesa Assets, the ZP-I Assets or the ZP-II
Assets; provided further, one or more representatives of the Buyer shall be
-------- -------
entitled to be present on the premises of the Project from and after the date
hereof, and at the reasonable request of any such representative, the Sellers
shall cause one or more of the Mesa Assets, ZP-I Assets or ZP-II Assets
identified by such representatives to be disabled for the purpose of minimizing
damage thereto. The Sellers shall be entitled to rely on the written or verbal
instructions of each such representative and shall have no liability to the
Buyer, Merger Sub or the Surviving Corporation with respect to any acts or
omissions in reliance on such instructions. Without the prior written consent of
the Buyer, no Seller shall engage in any practice, take any action, or enter
into any transaction outside the ordinary course of business that involves any
of the assets or liabilities of PAMC, the Mesa Assets, the ZP-I Assets, or the
ZP-II Assets, except as set forth in Section 3.5 of the Disclosure Letter or
------------------------------------
otherwise contemplated herein. Each Seller shall maintain its existing
relationships with the BLM and Edison with respect to the Projects and shall
comply with the terms of the BLM Rights of Way, Power Purchase Agreement and
Interconnection Agreement, all Laws applicable to the Projects, and the PAMC
Authorizations.
(c) Conduct of Business of PAMC. During the period from the date of
---------------------------
this Agreement and continuing until the earlier of the termination of this
30
Agreement or the Effective Time, except as expressly contemplated by this
Agreement, PAMC shall not do, cause or permit any of the following without the
prior written consent of the Buyer:
(i) Charter Documents. Cause or permit any amendments to its
-----------------
articles of incorporation or bylaws;
(ii) Dividends; Changes in Capital Stock. Other than the
-----------------------------------
distributions contemplated under Section 1.1 hereof, declare or pay
-----------
any dividends on or make any other distributions (whether in cash,
stock or property) in respect of any of its capital stock, or split,
combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, or repurchase or
otherwise acquire, directly or indirectly, any shares of its capital
stock;
(iii) Material Contracts. Enter into any material contract or
------------------
commitment, or violate, amend or otherwise modify or waive any of the
terms of any of its material contracts, other than in the ordinary
course of business consistent with past practice;
(iv) Issuance of Securities. Issue, deliver or sell or authorize
----------------------
or propose the issuance, delivery or sale of, or purchase or propose
the purchase of, any shares of its capital stock or securities
convertible into, or subscriptions, rights, warrants or options to
acquire, or other agreements or commitments of any character
obligating it to issue any such shares or other convertible
securities;
(v) Dispositions. Sell, lease, license or otherwise dispose of or
------------
encumber any of its properties or assets, except for sales, leases or
licenses of products in the ordinary course of business; or
(vi) Indebtedness. Incur any indebtedness for borrowed money or
------------
guarantee any such indebtedness or issue or sell any debt securities
or guarantee any debt securities of others.
(d) Access and Completion. The Sellers shall permit the Buyer and its
---------------------
representatives to have access at reasonable times, and in a manner so as not to
unreasonably interfere with the normal business operations of the Sellers, to
the premises, properties, personnel, books, records, contracts, and documents of
or pertaining to the Projects.
10.2 Tax Matters.
-----------
(a) Cooperation on Matters Relating to Taxes. After the Closing Date,
----------------------------------------
the Buyer shall prepare all Tax Returns of PAMC and the Surviving Corporation as
its sole cost and expense. The other Parties shall cooperate and shall cause
their respect affiliates, auditors, and professional advisers to cooperate, in
the preparation of such Tax Returns and shall provide, or cause to be provided,
31
to the requesting party any records or other information requested by such party
in connection with the preparation of such Tax Returns. The Surviving
Corporation shall properly maintain and retain records and information relating
to Tax periods prior to or ending with the Closing Date at least until
expiration of the relevant statute of limitations periods, and shall allow the
PAMC Representative and its agents and professional advisers at times and dates
mutually acceptable to the parties to inspect, review, and make copies of such
records and information relating to Taxes as such requesting party in good faith
may deem necessary or appropriate. The Buyer shall permit the Sellers to review
and comment on all Tax Returns of PAMC or the Surviving Corporation prepared by
the Buyer to the extent they cover any periods prior to Closing, and the Buyer
shall not file such Tax Returns without the prior consent of the Sellers, which
shall not be unreasonably withheld or delayed.
(b) Transfer and Sales Taxes. All customary sales and transfer taxes
------------------------
in connection with the Merger shall be paid by the Buyer. All transfer taxes,
VAT, consumption taxes, sales taxes, excise taxes, stamp duties, recording fees,
or any similar transfer taxes, fees, levies, and duties under applicable Laws
incurred in connection with the conveyance of the Mesa Assets, ZP-I Assets, and
ZP-II Assets to PAMC ("Transfer Taxes") shall be borne and paid by the Sellers
--------------
on a pro-rata basis in proportion to the amount of the Merger Consideration each
Seller receives hereunder. Each Party shall be responsible for the payment of
all other taxes, including, without limitation, income taxes, imposed on it
pursuant to applicable Law in connection with the Transactions.
(c) Tax Obligations. The PAMC Representative shall pay all Taxes and
---------------
Transfer Taxes imposed on PAMC with respect to all periods ending on or prior to
the Closing Date from the Escrow; provided, however, that such Taxes shall not
-------- -------
include Taxes arising from any transaction undertaken by the Buyer, the
Surviving Corporation, or any of their respective Affiliates on or after the
Closing Date.
10.3 Further Assurances. If any further action is necessary to carry out
------------------
the purposes of the Transaction Documents and the Transactions, each Party shall
take such further action (including the execution and delivery of such further
instruments and documents) as any other Party may reasonably request, all at its
own cost and expense (unless the requesting party is entitled to indemnification
therefor).
10.4 Press Releases and Public Announcements. No Party shall issue any
---------------------------------------
press release or make any public announcement relating to the subject matter of
the Transactions without the prior written approval of the other Parties, such
consent not to be unreasonably withheld or delayed; provided, however, that any
-------- -------
Party may make any public disclosure it believes in good faith is required by
applicable Laws (in which case the disclosing Party shall advise the other
parties prior to making the disclosure).
10.5 Books and Records. From and after Closing, (a) the PAMC Representative
-----------------
shall allow the Buyer and the Surviving Corporation to take possession of any
books and records of PAMC and ▇▇▇▇ ▇▇▇▇ to the extent such books and records are
reasonably related to the ongoing operation of the Projects and (b) Mesa Wind,
ZP-I and ZP-II shall allow the Buyer and the Surviving Corporation to take
possession of any books and records of Mesa Wind, ZP-I and ZP-II to the extent
32
such books and records are reasonably related to the ongoing operation of the
Projects and described in Section 1.2(a)(iv), (b)(iv) or (c)(iv).
--------------------------------------
ARTICLE XI
INDEMNIFICATION
---------------
11.1 Indemnification Obligations of the Sellers.
------------------------------------------
(a) PAMC. The PAMC Shareholders and ▇▇▇▇ ▇▇▇▇, jointly and severally,
----
agree to indemnify and hold harmless the Buyer, its Affiliates, and their
respective directors, officers, shareholders, subsidiaries, employees, agents,
and representatives (each a "Buyer Indemnified Person") from and against any and
------------------------
all liabilities, damages, losses (excluding diminution in value), obligations,
actions, suits, proceedings, claims, demands, judgments, settlements, and costs
and expenses (including interest, penalties, and reasonable attorneys' fees)
(collectively, "Damages") arising out of or resulting from (i) any breach of any
-------
representation or warranty in Article III, Article IV, Section 5.3, Section 6.3
----------- ---------- ----------- -----------
or Section 7.3 hereof or (ii) the failure to perform or observe any agreement or
-----------
covenant required to be performed or observed by PAMC or ▇▇▇▇ ▇▇▇▇ in any of the
Transaction Documents.
(b) Mesa Wind, ZP-I, and ZP-II. For the avoidance of doubt, from and
--------------------------
after the Closing, none of Mesa Wind, ZP-I, or ZP-II shall have any
indemnification or other obligations to any Buyer Indemnified Person or any
other Person pursuant to any of the Transaction Documents.
11.2 Indemnification Obligations of the Buyer. The Buyer agrees to
----------------------------------------
indemnify and hold harmless each Seller, their Affiliates, and their respective
directors, officers, shareholders, subsidiaries, employees, agents, and
representatives (each a "Seller Indemnified Person") from and against any and
-------------------------
all Damages arising out of or resulting from (i) any breach of any
representation, warranty, agreement or covenant by the Buyer or Merger Sub
contained herein, or the failure to perform or observe any covenant or
obligation required to be performed or observed by the Buyer or Merger Sub, in
any Transaction Document to which the Buyer or Merger Sub is a party and (ii)
any and all liabilities and obligations of the Surviving Corporation, any of its
Subsidiaries, or with respect to the Mesa Assets, the ZP-I Assets, or the ZP-II
Assets that arise solely with respect to the operation of their businesses or
assets at any time from and after the Closing.
11.3 Limitations. Except in the case of fraud or intentional misconduct,
-----------
after the Closing, the indemnification rights in this Article XI shall be the
----------
sole and exclusive monetary remedies (including, without limitation, for any
claims for negligent misrepresentation) of each Buyer Indemnified Person, each
Seller Indemnified Person, the other Parties hereto, their respective officers,
directors, Affiliates, successors, and assigns, and any other Person making a
claim by or through the foregoing (each, an "Indemnified Person" and
------------------
collectively, the "Indemnified Persons") relating to, arising out of, or in
-------------------
connection with the Transactions and the Transaction Documents.
(a) Time Limitations. Notwithstanding any other provision of this
----------------
Agreement to the contrary, no Person shall have any obligation to any
Indemnified Person pursuant to any of the Transactions Documents or in
33
connection with any of the Transactions unless such Indemnified Person submits a
Claim in accordance with Section 11.5 hereof on or prior to the first
------------
anniversary of the Closing Date; provided, however,
-------- -------
(i) with respect to any Claim arising out of a breach of the
representations and warranties contained in Section 3.6 (Tax Matters)
-----------
hereof or a breach of the covenants and agreements contained in
Section 10.2 (Tax Matters) hereof (each, a "Tax Claim"), no Person
------------ ---------
shall have any obligation to any Indemnified Person pursuant to any of
the Transactions Documents or in connection with any of the
Transactions unless such Indemnified Person submits such Tax Claim in
accordance with Section 11.5 hereof on or prior to the second
------------
anniversary of the date on which PAMC files its U.S. federal income
Tax Return for all periods ending on or prior to the Closing Date; and
(ii) with respect to any Claim arising out of a breach of the
representations and warranties contained in Section 3.1 (Organization;
-----------
Authority and Power of PAMC), Section 3.2 (Non-Contravention;
-----------
Consents), or Section 3.7 (PAMC Title and Encumbrances) hereof, no
-----------
Person shall have any obligation to any Indemnified Person pursuant to
any of the Transactions Documents or in connection with any of the
Transactions unless such Indemnified Person submits a Claim in
accordance with Section 11.5 hereof on or prior to the earlier of (A)
------------
the expiration of the applicable statute of limitations and (B) the
fifth anniversary of the Closing Date.
For the avoidance of doubt, the representations, warranties, covenants, and
agreements made by Mesa Wind, ZP-I, and ZP-II shall not survive beyond the
Closing; provided, however, with respect to any Claim for a breach of any
-------- -------
representations or warranties in Section 5.3, Section 6.3 and Section 7.3
----------- ----------- -----------
against the Escrow, such representations and warranties shall survive until the
first anniversary of the Closing Date.
(b) Basket. Notwithstanding any other provision of this Agreement to
-----
the contrary, no Person shall have any obligation to any Buyer Indemnified
Person pursuant to any of the Transactions Documents or in connection with any
of the Transactions unless the Damages recoverable by all Buyer Indemnified
Persons, in the aggregate, pursuant to this Article XI equal or exceed $50,000,
----------
in which event the full amount of the Damages shall be recoverable.
Notwithstanding any other provision of this Agreement to the contrary, no Person
shall have any obligation to any Seller Indemnified Person pursuant to any of
the Transaction Documents or in connection with any of the Transactions (except
with respect to the payment of the purchase price ands any adjustments thereof
in accordance with Article II hereof) unless the Damages recoverable by all
----------
Seller Indemnified Persons, in the aggregate, pursuant to this Article XI equal
----------
or exceed $50,000, in which event the full amount of the Damages shall be
recoverable.
(c) Cap on Monetary Liability.
-------------------------
(i) Subject to Section 11.3(c)(ii) below, from and after Closing,
-------------------
the aggregate monetary liability of the PAMC Shareholders, ▇▇▇▇ ▇▇▇▇,
and their respective Affiliates, directors, officers, shareholders,
subsidiaries, employees, agents, representatives, successors, and
assigns (collectively, "PAMC/▇▇▇▇ ▇▇▇▇ Indemnifying Parties") to all
-----------------------------------
34
Indemnified Persons pursuant to the Transaction Documents and in
connection with the Transactions, including for indemnification
pursuant to this Article XI and any Tax Claims, shall be limited to,
----------
and shall not exceed, the amount of the Escrow. For the avoidance of
doubt, with respect to any Claims that may be properly asserted after
the balance of the Escrow has been released in accordance with the
Escrow Agreement, each PAMC/▇▇▇▇ ▇▇▇▇ Indemnifying Party's aggregate
monetary liability to all Indemnified Persons pursuant to the
Transaction Documents and in connection with the Transactions,
including for indemnification pursuant to this Article XI, shall be
----------
limited to, and shall not exceed, the amount of the Escrow that was
released to such PAMC/▇▇▇▇ ▇▇▇▇ Indemnifying Party.
(ii) Notwithstanding the foregoing, with respect to any Claim
arising out of a breach of the representations and warranties
contained in Section 3.1 (Organization; Authority and Power of PAMC),
-----------
Section 3.7 (PAMC Title and Encumbrances) or Section 4.1
----------- -----------
(Organization; Authority and Power of ▇▇▇▇ ▇▇▇▇) hereof, the aggregate
monetary liability of each PAMC/▇▇▇▇ ▇▇▇▇ Indemnifying Person shall be
limited to, and shall not exceed, the portion of the Merger
Consideration received by such PAMC/▇▇▇▇ ▇▇▇▇ Indemnifying Person
pursuant to Article II hereof.
----------
(d) Condition of Assets. For the avoidance of doubt, no Seller shall
-------------------
have any liability, for indemnification or otherwise, to any Indemnified Party
with respect to (i) the past, present or future physical or operating condition
of the Mesa Assets, the ZP-I Assets or the ZP-II Assets, (ii) the maintenance or
repair that has or has not been performed or is necessary or desirable (or the
cost thereof) with respect to such assets, (iii) the continued operation of such
assets or (iv) the financial performance of any Party after the date hereof, the
Surviving Corporation, or any of their respective Affiliates, successors or
assigns to the extent affected by the status of such physical or operating
condition, maintenance, repair or continued operation of such assets.
11.4 Escrow. As security for the indemnity obligations of the PAMC
------
Shareholders and ▇▇▇▇ ▇▇▇▇, the Escrow shall be deposited with the Escrow Agent.
Each PAMC Shareholder's interest in the Escrow shall be equal to such PAMC
Shareholder's Pro Rata Portion thereof. Each Buyer Indemnified Person shall be
entitled to indemnification from the Escrow in accordance with this Article XI.
----------
With respect to any Claims, each Buyer Indemnified Person must first proceed
against and exhaust the funds in the Escrow prior to proceeding against any
PAMC/▇▇▇▇ ▇▇▇▇ Indemnifying Person directly.
11.5 Indemnification Procedure.
-------------------------
(a) Notice. Any Buyer Indemnified Person or any Seller Indemnified
------
Person claiming indemnification hereunder (a "Claiming Person") shall deliver to
---------------
the Party obligated to indemnify such Person (the "Responding Party"), with a
----------------
copy to the Escrow Agent pursuant to the Escrow Agreement, notice of any claim
(a "Claim") as to which such Person proposes to demand indemnification hereunder
-----
as soon as reasonably practicable after the Claiming Person has received notice
thereof (provided that failure to give timely notice shall not limit the
35
indemnification obligations of the indemnifying parties hereunder except to the
extent the indemnifying parties demonstrate actual prejudice caused by the delay
in giving, or failure to give, such notice).
(b) Third-Party Claims. If any claim is a third-party claim (a
------------------
"Third-Party Claim"), the following provisions shall apply:
-----------------
(i) The Responding Party shall have the right (but not the
obligation) to assume the defense of the Third-Party Claim with
counsel of such party's choice reasonably satisfactory to the Claiming
Party at any time within 15 days after the Claiming Party has given
notice of the Third-Party Claim; provided, however, that as a
-------- -------
condition to assuming such defense, the Responding Party must
demonstrate reasonable capability (financial and otherwise) to defend
such Third-Party Claim and satisfy any judgment if necessary, and if
the Responding Party so elects to assume such defense, the Responding
Party shall conduct the defense of the Third-Party Claim actively and
diligently thereafter in order to preserve its rights in this regard;
provided further that the Claiming Party may retain separate
-------- -------
co-counsel at its sole cost and expense and participate in the defense
of the Third-Party Claim.
(ii) So long as the Responding Party has assumed and is
conducting the defense of the Third-Party Claim in accordance with
Section 11.5(b)(i) above, (A) the Responding Party shall not consent
------------------
to the entry of any judgment or enter into any settlement with respect
to the Third-Party Claim without the prior written consent of the
Claiming Party (not to be withheld unreasonably) unless the judgment
or proposed settlement involves only the payment of money damages by
the Responding Party and does not impose an injunction or other
equitable relief upon the Claiming Party and (B) the Claiming Party
shall not consent to the entry of any judgment or enter into any
settlement with respect to the Third-Party Claim without the prior
written consent of the Responding Party (not to be withheld
unreasonably).
(iii) In the event the Responding Party does not assume and
conduct the defense of the Third-Party Claim in accordance with
Section 11.5(b)(i) above, (A) the Claiming Party may defend against,
------------------
and consent to the entry of any judgment or enter into any settlement
with respect to, the Third-Party Claim in any manner such party
reasonably may deem appropriate (and the Claiming Party need not
consult with, or obtain any consent from, the Responding Party in
connection therewith) and (B) the Responding Party shall remain
responsible for any Damages the Claiming Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the
Third-Party Claim to the fullest extent provided in this Article XI.
----------
(c) Cooperation. The Responding Person and the Claiming Person shall
-----------
cooperate with each other in the defense of any Claim hereunder and shall make
available to the party or parties defending such Claim such materials and
assistance relating thereto as is reasonably requested from the first such
Person.
36
ARTICLE XII
ARBITRATION
-----------
12.1 Arbitrators. Any controversy, dispute, or claim arising out of or
-----------
relating to any of the Transaction Documents or the Transactions, any breach or
alleged breach thereof, the making of any of the Transaction Documents or fraud
in the inducement, any modification or extension of any of the Transaction
Documents or affecting any of the Transaction Documents in any way shall be
resolved by arbitration in Riverside County, California, in accordance with the
then current rules of the American Arbitration Association (or any successor
organization or in the case of no successor organization similar arbitration
service that principally uses retired judiciary as arbiters), by (a) in the case
of dispute seeking aggregate Damages of less than or equal to $50,000, a single,
independent and impartial arbitrator or (b) in the case of dispute seeking
aggregate Damages of greater than $50,000 (or if any amended claim(s) or
counterclaim(s) causes the aggregate of all Damages being sought to exceed
$50,000), a panel of three arbitrators, one of whom is selected by the Buyer,
one of whom is selected by the Sellers, and one of whom is an independent and
impartial arbitrator selected by the first two arbitrators (the "Arbitrator").
----------
In the event that the dispute concerns any matter involving accounting issues,
the Arbitrator shall be independent certified public accountants affiliated with
national accounting firms; otherwise, the Arbitrator shall be neutral and
impartial lawyers with excellent academic and professional credentials who are
or have been practicing law for at least fifteen (15) years, specializing in
sophisticated business transactions.
12.2 Procedures. The Arbitrator shall conduct such evidentiary or other
----------
hearings as the Arbitrator deems necessary or appropriate, and any arbitration
pursuant hereto may be conducted by the Arbitrator, in the Arbitrator's
discretion, according to the Federal Rules of Evidence as in effect from time to
time. If expert testimony is to be submitted by a party, each other party shall
be entitled to a description of the matter as to which such expert testimony is
to be submitted and the basis therefor. The Arbitrator shall have the power to
issue subpoenas requiring the attendance and testimony of witnesses and the
production of all books, papers, and documents relating to the proceeding,
whether such attendance and production is at the Arbitrator's hearing or at a
deposition prior to such hearing. The Arbitrator may also, in their or his or
her discretion, permit depositions and introduction into evidence of the
transcripts from such depositions if the witness is unavailable for the hearing.
All arbitration proceedings shall be confidential.
12.3 Decision. The Arbitrator shall base its decision and award on
--------
applicable Law and judicial precedent, and shall have the authority to award any
remedy or relief that a Court of the State of California could order or grant,
including specific performance and injunctive relief. The Arbitrator's decision
and award shall be in writing and shall be accompanied by a written statement
containing a summary of the issues in controversy, a description of the award
and an explanation of the reasons for the decision and award, including findings
of fact, conclusions of law, and the reasoned application of applicable Law to
the facts and questions of law presented by the issues in controversy.
12.4 Costs. Each party shall bear all of its costs and fees incurred in
-----
connection with such arbitration proceedings, including administrative fees,
37
attorneys' fees, fees of expert witnesses, and travel expenses (collectively,
"Costs and Fees"), and the Buyer, on one hand, and the Sellers (other than Mesa
--------------
Wind, ZP-I, and ZP-II) involved in the arbitration, on the other hand, shall
bear equally the fees and expenses of the Arbitrator and all other costs and
expenses incurred in connection with the arbitration (collectively, "Arbitration
-----------
Expenses"). Notwithstanding the preceding sentence, the Arbitrator shall be
--------
empowered to require any one (1) or more of the parties to bear all or any
portion of the Costs and Fees and/or Arbitration Expenses in the event that the
Arbitrator determines that such party has acted in bad faith.
12.5 Binding Award. Notwithstanding anything to the contrary provided
-------------
herein, the arbitration shall be governed by the United States Arbitration Act,
9 U.S.C. ss. 1 et seq. The decision of the Arbitrator shall be binding on the
------
parties, and judgment upon the award may be entered in any court having
jurisdiction thereof.
12.6 Injunctive Relief. Notwithstanding anything to the contrary provided
-----------------
herein and without prejudice to the above procedures, any party may apply to any
court of competent jurisdiction for temporary injunctive or other provisional
judicial relief if in such party's sole judgment such action is necessary to
avoid irreparable damage or to preserve the status quo until such time as the
arbitration award is rendered or the controversy is otherwise resolved.
ARTICLE XIII
TERMINATION
-----------
13.1 Termination. Notwithstanding anything to the contrary set forth in
-----------
this Agreement, this Agreement may be terminated and the Transactions may be
abandoned at any time prior to the Closing Date only as follows:
(i) by the mutual written consent of the Parties;
(ii) by any Party if any governmental authority shall have issued
an order, decree, or ruling or taken any other action which
permanently restrains, enjoins, or otherwise prohibits the
Transactions and such order, decree, ruling or other action shall have
become final and non-appealable;
(iii) (A) by any Seller if the Closing shall not have occurred on
or prior to the Termination Date; provided, however, no Seller may
-------- -------
terminate this Agreement pursuant to this Section 13.1(iii)(A) if any
-------------------
Seller's failure to fulfill any of its obligations under this
Agreement or to effect the satisfaction of any of the conditions set
forth in Section 9.2 or 9.4 hereof shall have been a cause for the
------------------
Closing not to have occurred on or before such date; or (B) by the
Buyer if the Closing shall not have occurred on or prior to the
Termination Date; provided, however, the Buyer may not terminate this
-------- -------
Agreement pursuant to this Section 13.1(iii)(B) if the Buyer's failure
--------------------
to fulfill any of its obligations under this Agreement or to effect
the satisfaction of any of the conditions set forth in Section 9.3 or
--------------
9.4 hereof shall have been a cause for the Closing not to have
---
occurred on or before such date;
38
(iv) by any Seller if the Buyer shall have breached in any
material respect any of its representations, warranties, covenants, or
other agreements contained in this Agreement which would give rise to
the failure of a condition set forth in Article IX, which breach has
----------
not been cured within twenty (20) days after the giving of written
notice by the Sellers to the Buyer specifying such breach; provided,
--------
however, a Seller may terminate this Agreement pursuant to this
-------
Section 13.1(iv) only to the extent such Seller has performed and not
----------------
breached (or continues to perform and not breach) in any material
respect any of its representations, warranties, covenants, and
agreements hereunder;
(v) by the Buyer if any Seller shall have breached in any
material respect any of its respective representations, warranties,
covenants, or other agreements contained in this Agreement which would
give rise to the failure of a condition set forth in Article IX, which
----------
breach has not been cured within twenty (20) days after the giving of
written notice by the Buyer to the breaching Seller specifying such
breach; provided, however, the Buyer may terminate this Agreement
-------- -------
pursuant to this Section 13.1(v) only if the Buyer has not breached
---------------
(or continues to breach) in any material respect any of its
representations, warranties, covenants, and agreements hereunder; or
(vi) by any Party if the conditions set forth in Section 9.4
-----------
hereof have not been satisfied or waived on or prior to the
Termination Date.
13.2 Effect of Termination. No Party shall waive any right hereunder as a
---------------------
result of the termination of this Agreement pursuant to this Article XIII.
------------
13.3 Deposit. In the event of the termination of this Agreement pursuant to
-------
Section 13.1(iii) or Section 13.1(iv) hereof, then PAMC, on behalf of the
----------------- ----------------
Sellers, shall be entitled to retain the Break-Up Escrow Amount as liquidated
damages, which the Parties agree sufficiently approximates the Sellers damages
in connection with the negotiation, preparation, and termination of this
Agreement and represents the Sellers sole and exclusive remedy in connection
with such termination. In the event of the termination of this Agreement for any
reason other than as set forth in the preceding sentence, PAMC shall return the
Break-Up Escrow Amount to the Buyer within two (2) Business Days of such
termination. Except upon the termination of this Agreement pursuant to Sections
--------
13.1(v) or (vi) above, the Sellers shall not be required to return to the Buyer
------- ----
the Non-Refundable Deposit. In the event of the termination of this Agreement
pursuant to Sections 13.1(v) or (vi) above, PAMC shall return, in addition to
---------------- ----
the Break-Up Escrow Amount, the Non-Refundable Deposit to the Buyer within two
(2) Business Days of such termination. The return of the Break-Up Escrow Amount
and the Non-Refundable Deposit to the Buyer is the exclusive remedy to which the
Buyer is entitled in the event of the Transaction is not consummated and this
Agreement is terminated pursuant to Section 13.1(vi) above and shall be treated
----------------
as liquidated damages for any such termination.
39
ARTICLE XIV
RELEASE
-------
For and in consideration of the covenants and promises set forth in this
Agreement and the other Transaction Documents, each PAMC Shareholder, ▇▇▇▇ ▇▇▇▇,
and each member of ▇▇▇▇ ▇▇▇▇, on behalf of itself and its assigns, agents, and
Affiliates (collectively, the "Releasing Party"), hereby fully and finally
---------------
releases, acquits, and forever discharges PAMC and ▇▇▇▇ ▇▇▇▇, and the present
and former direct or indirect officers, directors, advisory board members,
managers, trustees, stockholders, members, representatives, employees,
principals, agents, affiliates, subsidiaries, predecessors, successors, assigns,
insurers, and attorneys of PAMC and ▇▇▇▇ ▇▇▇▇, each of whom is intended as a
beneficiary hereof (collectively, the "Released Parties"), from any and all
----------------
actions, debts, claims, counterclaims, demands, liabilities, damages, causes of
action, costs, expenses, and compensation of every kind and nature whatsoever,
past, present, or future, in law or in equity, whether known or unknown, which
the Releasing Party had, has, or may have had at any time in the past until and
including the date of this Agreement against the Released Parties or any of them
in the foregoing capacities. Notwithstanding anything to the contrary contained
herein, the provisions of this Article XIV shall not apply to any rights the
-----------
Sellers may have pursuant to this Agreement or any of the other Transaction
Documents. The Releasing Parties acknowledge they have considered the
availability of the advice of counsel and the possibility that the Releasing
Parties may not fully know the number or magnitude of the claims which they have
or may have against any Released Party, but nevertheless intends to assume the
risk that the Releasing Parties are releasing such unknown claims to the extent
set forth in this Article XIV.
-----------
ARTICLE XV
PAMC REPRESENTATIVE
-------------------
15.1 Appointment. By approving this Agreement and the Transactions, and by
-----------
accepting any consideration in exchange for their PAMC Shareholder hereunder,
each PAMC Shareholder irrevocably make, constitute and appoint ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
as their agent (the "PAMC Representative") and authorize and empower it to
-------------------
fulfill the role of the PAMC Representative hereunder and under the Escrow
Agreement, and each PAMC Shareholder appoints the PAMC Representative as such
Person's true and lawful attorney in fact and agent, for such Person and in such
Person's name, place, and stead for all purposes necessary or desirable in order
for the PAMC Representative to take all actions contemplated by this Agreement
and the Escrow Agreement. The death, incapacity, dissolution, liquidation,
insolvency or bankruptcy of any PAMC Shareholder shall not terminate the
authority and agency of the PAMC Representative. The power-of-attorney granted
in this Section 15.1 is coupled with an interest and is irrevocable.
------------
15.2 Entitlements. The PAMC Representative shall be entitled to (a)
------------
distribute funds of PAMC in an amount not to exceed $50,000 prior to Closing to
a segregated account in the PAMC Representative's name for use in connection
with the exercise of the PAMC Representative's rights and obligations hereunder
and under the Escrow Agreement and the post-Closing liquidation and termination
of ▇▇▇▇ ▇▇▇▇ and its subsidiaries, (b) retain accountants, legal counsel, and
40
other advisors as the PAMC Representative deems reasonably necessary or prudent
in connection with his obligations hereunder and under the Escrow Agreement and
the post-Closing liquidation and termination of ▇▇▇▇ ▇▇▇▇ and its subsidiaries,
and (c) be reimbursed (payable solely out of funds held in segregated account by
the PAMC Shareholders) for all actual out-of-pocket costs and expenses incurred
by the PAMC Representative in connection with the exercise of its rights and
obligations hereunder and under the Escrow Agreement and the post-Closing
liquidation and termination of ▇▇▇▇ ▇▇▇▇ and its subsidiaries (including,
without limitation, accounting fees, legal fees, and fees of other advisors).
15.3 Limitations on Liability.
------------------------
(a) The PAMC Representative shall have no liability whatsoever to any
PAMC Shareholder or any Person claiming by, through, or under any PAMC
Shareholder for or in respect of any of its acts or omissions, except only for
its bad faith. The PAMC Shareholders jointly and severally shall indemnify the
PAMC Representative from and against any and all loss, liability or expense
incurred without bad faith on the part of the PAMC Representative and arising
out of or in connection with its duties as the PAMC Representative, including
the reasonable costs and expenses incurred by the PAMC Representative in
defending against any claim or liability in connection herewith, and its actual
out-of-pocket expenses incurred in performing its duties as such.
(b) The Buyer shall have no liability whatsoever to any PAMC
Shareholder or any Person claiming by, through, or under any PAMC Shareholder
for or in respect of any of its acts or omissions, to the extent any such acts
or omissions were taken at the direction of the PAMC Representative, except only
to the extent of its bad faith.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
------------------------
16.1 Expenses. All expenses incurred by a Party in connection with or
--------
related to the authorization, preparation, and execution of the Transaction
Documents and the closing of the Transactions, including all fees and expenses
of agents, representatives, counsel, and accountants employed by any such Party,
shall be borne solely and entirely by such Party incurring the same.
16.2 Entirety of Agreement. This Agreement, together with the Exhibits
---------------------
attached hereto and the Disclosure Letter, states the entire agreement of the
Parties relating to the Transactions contemplated hereby, merges all prior
negotiations, agreements, and understandings, if any, and states in full all
representations, warranties, and agreements which have induced this Agreement,
there being no representations, warranties, or agreements other than those
herein stated. Each Party agrees that in dealing with third parties no contrary
representations shall be made. Without limiting the generality of the foregoing,
but without limiting the rights of the Buyer, PAMC, the PAMC Shareholders and
the Surviving Corporation with respect to each other, it is understood and
acknowledged by all the Parties that the Mesa Assets, ZP-I Assets and ZP-II
Assets are being transferred on an "as is" and "where is" basis. The Buyer, PAMC
(as the acquirer of the Mesa Assets, ZP-I Assets, and ZP-II Assets), and the
Surviving Corporation acknowledges that, except as expressly provided in this
Agreement, neither Mesa Wind, ZP-I, nor ZP-II has made, and each such Seller
hereby expressly disclaims and negates, and the Buyer, PAMC (as the acquirer of
the Mesa Assets, ZP-I Assets, and ZP-II Assets). Effective as of the Closing,
41
Buyer, PAMC (as the acquirer of the Mesa Assets, ZP-I Assets, and ZP-II Assets),
and the Surviving Corporation hereby expressly waive any other representation or
warranty, express, implied, at common law, by statute or otherwise relating to
the Mesa Assets, ZP-I Assets, and ZP-II Assets and, except as expressly set
forth in this Agreement, effective as of the Closing, the Buyer, PAMC (as the
acquirer of the Mesa Assets, ZP-I Assets, and ZP-II Assets), and the Surviving
Corporation hereby expressly waive and relinquish any and all rights, claims,
and causes of action against Mesa Wind, ZP-I, ZP-II, and their respective
affiliates and representatives in connection with the transfer, sale, and
assignment of Mesa Assets, ZP-I Assets, and ZP-II Assets and each such party
hereby acknowledges that all representations and warranties of Mesa Wind, ZP-I,
and ZP-II shall not survive the Closing.
16.3 Notices. All notices and demands of any kind which any Party may be
-------
required or desire to serve upon another Party under the terms of this Agreement
shall be in writing and shall be served upon such other Party (a) by personal
service upon such other Party at such other Party's address set forth below, (b)
by mailing a copy thereof by certified or registered mail, postage prepaid, with
return receipt requested, addressed to such other Party as set forth below, or
(c) by sending a copy thereof by Federal Express or equivalent courier service,
addressed to such other Party at the address of such other Party as set forth
below. In case of service by mail or by Federal Express or equivalent courier
service, such service shall be deemed complete upon receipt. The addresses to
which notices and demands shall be delivered or sent may be changed from time to
time by notice served, as hereinabove provided, by any Party upon the other
Parties.
(a) If to PAMC prior to Closing, or if to ▇▇▇▇ ▇▇▇▇, Mesa Wind,
or the PAMC Representative prior to or after Closing:
The PAMC Representative
PAMC Management Corporation
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Faegre & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
42
(b) If to ZP-I or ZP-II:
Enron Wind Systems, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
with a copy to:
LN Legal Consulting Group LLP
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇, Esq.
(c) If to the Buyer, Merger Sub, or the Surviving Corporation:
Western Wind Energy Corp.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇ Ciachurski, CEO
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
16.4 Amendment. This Agreement may be modified or amended only by an
---------
instrument in writing, duly executed by the Parties.
16.5 No Waiver. No waiver by any Party of any condition or of any breach of
---------
any term, covenant, representation, or warranty contained in this Agreement
shall be deemed or construed as a further or continuing waiver of any such
condition or breach or as a waiver of any other condition or of the breach of
any other term, covenant, representation, or warranty of this Agreement.
16.6 Counterparts. For the convenience of the Parties, any number of
------------
counterparts hereof may be executed, and each such executed counterpart shall be
deemed an original, and all such counterparts together shall constitute one and
the same instrument. The exchange of copies of this Agreement and of signature
pages by facsimile transmission shall constitute effective execution and
delivery of this Agreement as to the Parties and may be used in lieu of the
original Agreement for all purposes (and such signatures of the parties
transmitted by facsimile shall be deemed to be their original signatures for all
purposes).
43
16.7 Assignment. This Agreement may not be assigned by any Party hereto
----------
without the written consent of the other Parties, provided that nothing herein
shall be deemed to prohibit the assignment of this Agreement by any Party hereto
to its successor in interest in any merger or to any Person who acquires all or
substantially all of such Party's assets (provided that, in such event, such
Party shall not be released or discharged from, and shall remain primarily
liable for, its obligations hereunder).
16.8 Headings. The headings in this Agreement are inserted for convenience
--------
only and shall not constitute a part hereof.
16.9 Governing Law. This Agreement shall be construed and the rights and
-------------
obligations of the Parties governed by the laws of the State of California,
without regard to California choice of law rules; provided, however, the Merger
-------- -------
shall be governed by the laws of the State of Colorado.
16.10 Severability. Any term or provision of this Agreement that is invalid
------------
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with the term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid and unenforceable term or provision, so long as the
overall intent of the Parties is preserved, and this Agreement shall be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed.
16.11 Construction. In this Agreement (i) words denoting the singular
------------
include the plural and vice versa, (ii) words denoting any gender include all
genders, (iii) the word "including" shall mean "including without limitation,"
(iv) any reference to a statute shall mean the statute and any regulations
thereunder in force as of the date of this Agreement or the Closing Date, as
applicable, unless otherwise expressly provided, (v) when calculating the period
of time within which or following which any act is to be done or steps taken,
the date which is the reference day in calculating such period shall be excluded
and if the last day of such period is not a Business Day, then the period shall
end on the next day which is a Business Day, and (vi) any reference to "best
efforts" herein does not include any obligation to pay, or guarantee the payment
of, money or other consideration to any third party relating to obtaining any
consent, approval, or waiver with respect to the transactions contemplated by
this Agreement.
16.12 Nonsurvival of Representations, Warranties and Certain Covenants. All
----------------------------------------------------------------
representations, warranties, covenants, and agreements of each of Mesa Wind,
ZP-I, and ZP-II made herein or in any other document delivered pursuant to this
Agreement shall not survive beyond the Closing Date or a termination of this
Agreement and there shall be no liability in respect thereof, whether such
liability has accrued prior to or after the Closing Date or any such
termination, on the part of Mesa Wind, ZP-I, ZP-II, or any of their respective
officers, employees, agents, representatives or affiliates, following the
44
Closing or such termination; provided, however, that all covenants and
-------- ------
agreements of any such Party hereunder, which by their terms, contemplate
performance after the Closing Date or termination, shall survive in accordance
with their terms, provided that any such survival shall not exceed one year from
the Closing Date or any such termination.
16.13 No Consequential or Punitive Damages. No Party hereto shall under any
------------------------------------
circumstance be liable to any other Party (or its affiliates) for any
consequential, exemplary, special, incidental or punitive damages claimed by
such other Party in connection with or relating to any Transaction Document or
the Transactions, including, but not limited to, loss of revenue or income, cost
of capital or loss of business opportunity.
[Signature Pages Follow]
45
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the date and year first above written.
PAMC MANAGEMENT CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
▇▇▇▇ ▇▇▇▇ ENERGY, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager
MESA WIND DEVELOPERS
By: Enron Wind Systems, LLC, its
general partner
By: Enron Wind LLC, its sole
member
By: Enron Renewable
Energy Corp., its
sole member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and
Chief Executive
Officer
By: Pan Aero California, Ltd., it
general partner
By: PAMC Management
Corporation, its sole
general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
ZOND-PANAERO WINDSYSTEM PARTNERS I,
A CALIFORNIA LIMITED PARTNERSHIP
By: Zond Windsystems Management
LLC, its sole general partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: -------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
ZOND-PANAERO WINDSYSTEM PARTNERS II,
A CALIFORNIA LIMITED PARTNERSHIP
By: Zond Windsystems Management II
LLC, its sole general partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: -------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
WESTERN WIND ENERGY CORP.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
By: -------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
MESA WIND POWER CORPORATION
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
By: -------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
THE PAMC REPRESENTATIVE:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit A
to
Agreement and Plan of Merger
---------------------------
Definitions
-----------
Unless the context otherwise requires, the terms defined in this Exhibit A
---------
shall have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms herein
defined.
"Affiliate" of any Person means any Person controlling, controlled by, or
---------
under common control with such Person, and, in the case of an individual, means
his or her spouse, siblings, ascendants and descendants.
"Agreement" means this Agreement and Plan of Merger.
---------
"▇▇▇▇ ▇▇▇▇" has the meaning set forth in the Preamble to this Agreement.
---------
"▇▇▇▇ ▇▇▇▇ Balance Sheet" has the meaning set forth in Section 4.5.
-----------------------
"Arbitration Expenses" has the meaning set forth in Section 12.4.
--------------------
"Arbitrator" has the meaning set forth in Section 12.1.
----------
"BLM" means the United States Department of Interior Bureau of Land
---
Management.
"BLM Right of Way" means, collectively, the BLM right-of-way grants
----------------
CA-11688-A and CA-13980.
"Break-Up Escrow Amount" has the meaning set forth in Section 2.2(a).
----------------------
"Business Day" means any day that is not a Saturday, Sunday or legal
------------
holiday in Denver, Colorado, U.S.A.
"Buyer" has the meaning set forth in the Preamble to this Agreement.
-----
"Buyer Indemnified Person" has the meaning set forth in Section 11.1(a).
------------------------
"CBCA" has the meaning set forth in Section 1.4.
----
"Claim" has the meaning set forth in Section 11.5(a).
-----
"Claiming Person" has the meaning set forth in Section 11.5(a).
---------------
"Closing" has the meaning set forth in Section 9.1.
-------
A-1
"Closing Agent" has the meaning set forth in Section 2.2(c)(i).
------------
"Closing Date" has the meaning set forth in Section 9.1.
------------
"Closing Working Capital" has the meaning set forth in Section 2.2(d)(iii).
-----------------------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Costs and Fees" has the meaning set forth in Section 12.4.
--------------
"Damages" has the meaning set forth in Section 11.1(a).
-------
"DGCL" has the meaning set forth in Section 1.4.
----
"Disclosure Letter" has the meaning set forth in the preamble to Article
-----------------
III.
"Dollar" or "$" means a dollar of the United States of America.
------ -
"Draft Statement" has the meaning set forth in Section 2.2(d)(i).
---------------
"Edison" means Southern California Edison Company, a California
------
corporation.
"Effective Time" has the meaning set forth in Section 1.4(c).
--------------
"Encumbrance" means any and all mortgages, liens, pledges, security
-----------
interests, charges, encumbrances, claims, easements, rights of way, covenants,
conditions or restrictions or any other adverse claims or rights of any kind or
nature whatsoever or any type of preferential arrangement (including without
limitation a title transfer or retention arrangement) having similar effect.
"Enron" has the meaning set forth in the Recitals to this Agreement.
-----
"Environmental Laws" means any federal, state or local laws, ordinances,
------------------
codes, regulations, rules, policies and orders that are intended to assure the
protection of the environment, or that classify, regulate, call for the
remediation of, require reporting with respect to, or list or define air, water,
groundwater, solid waste, hazardous or toxic substances, materials, wastes,
pollutants or contaminants.
"Escrow" has the meaning set forth in Section 2.2(c)(ii)(B).
------
"Escrow Agent" has the meaning set forth in Section 2.2(c)(ii)(A).
------------
"Escrow Agreement" has the meaning set forth in Section 2.2(c)(ii)(A).
----------------
"Estimated Taxes" has the meaning set forth in Section 2.2(b).
---------------
A-2
"Estimated Working Capital" has the meaning set forth in Section 2.2(b).
-------------------------
"Financial Statements" has the meaning set forth in Section 3.3.
--------------------
"Flow of Funds Memo" has the meaning set forth in Section 2.2(b).
------------------
"GAAP" has the meaning set forth in Section 2.2(b).
----
"Governmental Approval" means any authorization, approval, consent,
---------------------
license, lease, ruling, permit, tariff, certification, exemption, filing or
registration by or with any Governmental Entity.
"Governmental Entity" means any international, national, provincial,
-------------------
regional, state, municipal or local government, any political subdivision of any
thereof or any board, commission, department, division, organ, instrumentality,
court or agency of any thereof.
"Hazardous Materials" means any toxic or hazardous substance, material or
-------------------
waste or any pollutant or contaminant, or infectious or radioactive substance or
material, including without limitation, those substances, materials and wastes
defined in or regulated under any Environmental Laws.
"Indemnified Persons" has the meaning set forth in Section 11.3.
-------------------
"Independent Accounting Firm" means one of the following accounting firms
---------------------------
mutually selected by the Buyer and the PAMC Representative: (i)
PricewaterhouseCoopers LLP, (ii) KPMG LLP, (iii) Ernst & Young LLP, and (iv)
Deloitte & Touche LLP.
"Interconnection Agreement" that certain Interconnection Facilities
-------------------------
Agreement, dated June 23, 2006, by and between Edison and PAMC.
"IRS" has the meaning set forth in Section 3.6.
---
"Laws" means laws (including rules, regulations, codes, plans, injunctions,
----
judgments, orders, decrees, rulings and charges thereunder) of federal,
regional, state or local governments of the U.S. and all agencies thereof.
"Material Adverse Change" or "Material Adverse Effect" means with respect
----------------------- -----------------------
to any Person any change or effect that is materially adverse to the business,
operations, properties, assets of such Person and its subsidiaries, taken as a
whole. The foregoing notwithstanding, with respect to PAMC, "Material Adverse
----------------
Change" or "Material Adverse Effect" means any change or effect that is
------ -----------------------
materially adverse to the business, operations, properties, assets or financial
condition of PAMC and its subsidiaries, taken as a whole.
"Merger" has the meaning set forth in Section 1.4.
------
A-3
"Merger Consideration" has the meaning set forth in Section 2.1.
--------------------
"Merger Escrow" has the meaning set forth in Section 2.2(c)(ii)(A).
-------------
"Merger Filings" has the meaning set forth in Section 1.4(c).
--------------
"Merger Sub" has the meaning set forth in the Preamble to this Agreement.
----------
"Mesa Assets" has the meaning set forth in Section 1.2(a).
-----------
"Mesa Contracts" has the meaning set forth in Section 5.5.
--------------
"Mesa Wind" has the meaning set forth in the Preamble to this Agreement.
---------
"Mesa Wind ▇▇▇▇ of Sale" has the meaning set forth in Section 1.2(a).
----------------------
"Most Recent Balance Sheet" has the meaning set forth in Section 3.3.
-------------------------
"Non-Refundable Deposit" has the meaning set forth in Section 2.2(a).
----------------------
"Objection Report" has the meaning set forth in Section 2.2(d)(ii).
----------------
"PACL" has the meaning set forth in the Recitals to this Agreement.
----
"PAMC" has the meaning set forth in the Preamble to this Agreement.
----
"PAMC/▇▇▇▇ ▇▇▇▇ Indemnifying Persons" has the meaning set forth in Section
-----------------------------------
11.3(c)(i).
"PAMC Authorizations" has the meaning set forth in Section 3.9.
-------------------
"PAMC Contracts" has the meaning set forth in Section 3.11.
--------------
"PAMC Representative" has the meaning set forth in Article XV.
-------------------
"PAMC Shares" has the meaning set forth in Section 1.4(d).
-----------
"PAMC Shareholders" has the meaning set forth in Section 1.4(d).
-----------------
"Party" or "Parties" has the meaning set forth in the Preamble to this
----- -------
Agreement.
"Permitted Encumbrances" means (a) liens for taxes and assessments or
----------------------
governmental charges or levies not at the time due or in respect of which the
validity thereof shall currently be contested in good faith by appropriate
proceedings; (b) liens in respect of pledges or deposits under worker's
compensation Laws or similar legislation, carriers', warehousemen's, mechanics',
A-4
laborers' and materialmen's, landlord's and statutory and similar liens, if the
obligations secured by such liens are not then delinquent or are being contested
in good faith; (c) recorded easements, rights, or other Encumbrances that do not
interfere with existing improvements on the property; (d) recorded building and
use restrictions that do not interfere with existing improvements on the
property; and (e) municipal and zoning ordinances and any agreements entered
into under them that do not interfere with existing improvements on the
property.
"Person" means and include an individual, a partnership, a joint venture, a
------
corporation, a trust, an association, a limited liability company, an
unincorporated organization and a government or any department, political
subdivision or agency thereof.
"Power Purchase Agreement" means that certain Reformed Standard Offer 1
-----------------------
As-Available Capacity and Energy Power Purchase Agreement, dated June 23, 2006,
by and between Edison and PAMC.
"Pro Rata Portion" of a PAMC Shareholder means (A) the number of PAMC
----------------
Shares set forth opposite such PAMC Shareholder's name on Section 3.10 to the
-------------------
Disclosure Letter, divided by the total number of PAMC Shares issued and
----------------- ----------
outstanding immediately prior to the Closing.
"Projects" has the meaning set forth in the Recitals to this Agreement.
--------
"Releasing Party" has the meaning set forth in Article XIV.
---------------
"Released Parties" has the meaning set forth in Article XIV.
----------------
"Responding Party" has the meaning set forth in Section 11.5(a).
----------------
"SeaWest O&M Agreement" means that certain Windsystem Operating and
---------------------
Maintenance Agreement for Enron Wind Systems, LLC, dated as of April 23, 2003,
between Enron Wind Systems, LLC and SeaWest Asset Management Services, LLC, as
amended.
"Securities Act" has the meaning set forth in Section 3.10(a).
--------------
"Seller" or "Sellers" has the meaning set forth in the Recitals to this
------ -------
Agreement.
"Seller Indemnified Person" has the meaning set forth in Section 11.2.
-------------------------
"Surviving Corporation" has the meaning set forth in the Recitals to this
---------------------
Agreement.
"Tax Claims" has the meaning set forth in Section 11.3(a)(i).
----------
"Taxes" has the meaning set forth in Section 3.6.
-----
"Tax Escrow" has the meaning set forth in Section 2.2(c)(ii)(B).
----------
A-5
"Tax Return" means any return, declaration, report, claim for refund, or
----------
information return or statement relating to Taxes (as defined below), including
any schedule or attachment thereto, and including any amendment thereof.
"Termination Date" means July 31, 2006, or such other date as is mutually
----------------
acceptable to the Parties.
"Third-Party Claim" has the meaning set forth in Section 11.5(b).
-----------------
"Transactions" means the transactions contemplated by the Transaction
------------
Documents.
"Transaction Documents" means this Agreement and each other agreement,
---------------------
document and instrumented entered into or executed by any party hereto in
connection with this Agreement.
"Transfer Taxes" has the meaning set forth in Section 10.2(b).
--------------
"Working Capital" means (a) the current assets of PAMC minus (b) the
--------------- -----
current liabilities of PAMC, excluding a reserve for taxes due and payable for
periods occurring prior to the Closing Date, as determined in accordance with
GAAP, applied on a consistent basis.
"ZP-I" has the meaning set forth in the Preamble to this Agreement.
----
"ZP-I Assets" has the meaning set forth in Section 1.2(b).
-----------
"ZP-I ▇▇▇▇ of Sale" has the meaning set forth in Section 1.2(b).
-----------------
"ZP-II ▇▇▇▇ of Sale" has the meaning set forth in Section 1.2(c).
------------------
"ZP-I Project" has the meaning set forth in the Recitals to this Agreement.
------------
"ZP-II" has the meaning set forth in the Preamble to this Agreement.
-----
"ZP-II Assets" has the meaning set forth in Section 1.2(c).
------------
"ZP-II Project" has the meaning set forth in the Recitals to this
-------------
Agreement.
A-6
