CENTENNIAL POWER, INC. and COLORADO ENERGY MANAGEMENT, LLC PURCHASE AND SALE AGREEMENT BY AND BETWEEN CENTENNIAL ENERGY RESOURCES LLC, as SELLER, and MONTANA ACQUISITION COMPANY LLC, as BUYER Dated as of April 25, 2007 PURCHASE AND SALE AGREEMENT
CENTENNIAL
POWER, INC. and COLORADO ENERGY MANAGEMENT, LLC
BY
AND
BETWEEN
CENTENNIAL
ENERGY RESOURCES LLC,
as
SELLER,
and
MONTANA
ACQUISITION COMPANY LLC, as BUYER
Dated
as
of April 25, 2007
TABLE
OF CONTENTS
ARTICLE
I DEFINITIONS
|
1.1
|
Definitions
|
|
1.2
|
Certain
Interpretive Matters
|
ARTICLE
II PURCHASE AND SALE
|
2.1
|
Transfer
of Stock and Membership Interests
|
|
2.2
|
Excluded
Assets
|
|
2.3
|
Transfer
of Excluded Assets and Discharge of Certain
Liabilities
|
|
2.4
|
Guarantee
Liabilities
|
ARTICLE
III THE CLOSING
|
3.1
|
Closing
|
|
3.2
|
Payment
of Purchase Price
|
|
3.3
|
Purchase
Price Adjustment
|
|
3.4
|
Deliveries
by Seller
|
|
3.5
|
Deliveries
by Buyer
|
|
3.6
|
Mutual
Delivery
|
ARTICLE
IV REPRESENTATIONS, WARRANTIES AND DISCLAIMERS OF SELLER
|
4.1
|
Organization;
Qualification
|
|
4.2
|
Authority
Relative to this Agreement
|
|
4.3
|
Consents
and Approvals; No Violation
|
|
4.4
|
Insurance
|
|
4.5
|
Title
and Related Matters
|
|
4.6
|
Real
Property Leases
|
|
4.7
|
Labor
Matters
|
|
4.8
|
Benefit
Plans
|
|
4.9
|
Contracts
and Leases
|
|
4.10
|
Legal
Proceedings, etc.
|
|
4.11
|
Tax
Matters
|
|
4.12
|
Compliance
With Laws
|
|
4.13
|
Undisclosed
Liabilities
|
|
4.14
|
Subsidiaries
|
|
4.15
|
Capitalization
|
|
4.16
|
Financial
Statements
|
|
4.17
|
Absence
of Certain Changes
|
|
4.18
|
Bankruptcy
|
|
4.19
|
Books
and Records
|
|
4.20
|
Project
Companies
|
|
4.21
|
Disclaimers
|
ARTICLE
V REPRESENTATIONS AND WARRANTIES OF BUYER
|
5.1
|
Organization
|
|
5.2
|
Authority
Relative to this Agreement
|
|
5.3
|
Consents
and Approvals; No Violation
|
|
5.4
|
Legal
Proceedings
|
|
5.5
|
Inspections
|
|
5.6
|
Securities
Laws
|
ARTICLE
VI COVENANTS OF THE PARTIES
|
6.1
|
Conduct
of Business
|
|
6.2
|
Access
to Information
|
|
6.3
|
Public
Statements
|
|
6.4
|
Expenses
|
|
6.5
|
Further
Assurances
|
|
6.6
|
Consents
and Approvals
|
|
6.7
|
Use
of Centennial Marks
|
|
6.8
|
Fees
and Commissions
|
|
6.9
|
Tax
Matters
|
|
6.10
|
Advice
of Changes
|
|
6.11
|
Consents
|
|
6.12
|
Buyer
Financial Assurance
|
|
6.13
|
Financing
Cooperation
|
|
6.14
|
Employee
and Benefit Plans
|
|
6.15
|
Audited
Financial Statements
|
|
6.16
|
▇▇▇▇▇▇▇▇
Partnership Distributions
|
ARTICLE
VII CONDITIONS
|
7.1
|
Conditions
to Obligations of Buyer
|
|
7.2
|
Conditions
to Obligations of Seller
|
ARTICLE
VIII INDEMNIFICATION
|
8.1
|
Indemnification
|
|
8.2
|
Defense
of Claims
|
|
8.3
|
Survival
|
ARTICLE
IX TERMINATION
|
9.1
|
Termination
|
|
9.2
|
Procedure
and Effect of No-Default
Termination
|
|
9.3
|
Termination
Fee; Letter of Credit
|
ARTICLE
X MISCELLANEOUS PROVISIONS
|
10.1
|
Amendment
and Modification
|
|
10.2
|
Waiver
of Compliance; Consents
|
|
10.3
|
Notices
|
|
10.4
|
Assignment
|
|
10.5
|
Governing
Law; Venue; Waiver of Jury Trial
|
|
10.6
|
Counterparts
|
|
10.7
|
Interpretation
|
|
10.8
|
Schedules
and Exhibits
|
|
10.9
|
Entire
Agreement
|
|
10.10
|
U.S.
Dollars
|
PURCHASE
AND SALE AGREEMENT, dated as of April 25, 2007, by and between Centennial Energy
Resources LLC, a Delaware limited liability company (“Seller”) and Montana
Acquisition Company, LLC, a Delaware limited liability company (“Buyer”). Seller
and Buyer are referred to individually as a “Party,” and collectively as the
“Parties.”
W
I T N E S S E T H
WHEREAS,
Seller owns the CPI Stock and the CEM Membership Interests (each as defined
herein);
WHEREAS,
Buyer desires to purchase, and Seller desires to sell, the CPI Stock and the
CEM
Membership Interests upon the terms and conditions hereinafter set forth in
this
Agreement; and
WHEREAS,
in order to induce Seller to enter into this Agreement, and as additional
consideration therefor, concurrently with the execution and delivery hereof,
Buyer is providing to Seller the Buyer LC (as hereinafter defined) in the form
attached as Exhibit
A
hereto,
to secure Buyer’s payment of the Termination Fee (as hereinafter
defined).
NOW,
THEREFORE, in consideration of the mutual covenants, representations, warranties
and agreements hereinafter set forth, and intending to be legally bound hereby,
the Parties agree as follows.
ARTICLE
I
DEFINITIONS
1.1 Definitions.
As
used
in this Agreement, the following terms have the meanings specified in this
Section 1.1.
(1) “338
Allocation”
has
the
meaning set forth in Section 6.9(a)(ii).
(2) “338(h)(10)
Election Entities”
has
the
meaning set forth in Section 6.9(a)(i).
(3) “754
Allocation Schedule”
has
the
meaning set forth in Section 6.9(a)(iii).
(4) “Adjustment”
has
the
meaning set forth in section 3.3(a).
(5) “Affiliate”
has
the
meaning set forth in Rule 12b-2 of the General Rules and Regulations under
the
Securities Exchange Act of 1934, as amended.
(6) “Affiliated
Group”
means,
with respect to any entity, a group of entities required or permitted to file
consolidated, combined or unitary Tax Returns including such
entity.
(7) “Agreement”
means
this Purchase and Sale Agreement together with the Schedules and Exhibits
hereto, as the same may be from time to time amended.
(8) “Assumption
Agreement”
has
the
meaning set forth in Section 2.4.
(9) “AT&T
CAISO ECN Agreement”
has
the
meaning set forth in Section 2.2(i).
(10) “Audits”
has
the
meaning set forth in Section 4.11(iv).
(11) “Benefit
Agreements”
has
the
meaning set forth in Section 4.8.
(12) “Benefit
Plans”
has
the
meaning set forth in Section 4.8.
(13) “BIV
Generation”
means
BIV Generation Company, L.L.C., a Delaware limited liability
company.
(14) “Brush
1&3 Project”
means
that certain 75 megawatt gas-fired facility (consisting of one 50 megawatt
combined-cycle unit and one 25 megawatt simple-cycle unit) located approximately
90 miles northeast of Denver, Colorado near Brush, Colorado.
(15) “Brush
4D Project”
means
that certain 138 megawatt gas-fired combined-cycle facility located
approximately 90 miles northeast of Denver, Colorado near Brush,
Colorado.
(16) “Business
Day”
means
any day other than Saturday, Sunday and any day on which banking institutions
in
the State of New York are authorized by law or other governmental action to
close.
(17) “Buyer”
has
the
meaning set forth in the Preamble.
(18) “Buyer
Fundamental Representations”
means
the representations and warranties contained in Sections 5.1, 5.2 and
5.3.
(19) “Buyer
Indemnitee”
has
the
meaning set forth in Section 8.1(b).
(20) “Buyer
LC”
has
the
meaning set forth in Section 6.12.
(21) “Buyer
Material Adverse Effect”
has
the
meaning set forth in Section 5.3(a).
(22) “Buyer
Required Regulatory Approvals”
has
the
meaning set forth in Section 5.3(b).
(23) “Buyer
338 Liability”
has
the
meaning set forth in Section 6.9(a)(i).
(24) “CEM”
means
Colorado Energy Management, LLC, a Colorado limited liability company and
wholly-owned subsidiary of Seller.
(25) “CEM
Agreements”
means
each contract, license, agreement or personal property lease to which CEM or
any
of its Subsidiaries is a party, other than those which involve expenditures
by
CEM or any such Subsidiary of less than $250,000 per year.
(26) “CEM
Membership Interests”
means
all of the issued and outstanding membership interests in CEM.
(27) “Centennial
Marks”
means
the name “CENTENNIAL” and other registered or unregistered trademarks, services
marks, trade names, logos, designs or color schemes featuring the name
“CENTENNIAL”, or any derivative, abbreviation or variation thereof owned or used
by Seller.
(28) “Closing”
has
the
meaning set forth in Section 3.1.
(29) “Closing
Date”
has
the
meaning set forth in Section 3.1.
(30) “Closing
Statement”
has
the
meaning set forth in Section 3.3(b).
(31) “Code”
means
the Internal Revenue Code of 1986, as amended.
(32) “Commercially
Reasonable Efforts”
means
efforts which are reasonably necessary to cause, or assist in, the consummation
of the transactions contemplated by this Agreement and which do not require
the
performing Party to expend funds, incur expenses or assume liabilities other
than those which are reasonable in nature and amount within the context of
the
transactions contemplated by this Agreement in order for the performing Party
to
satisfy its obligations hereunder.
(33) “Confidentiality
Agreement”
means
the Confidentiality Agreement, dated January 23, 2007, by and between MDU
Resources Group, Inc. and CES Acquisition Corp.
(34) “Continuing
Employees”
has
the
meaning set forth in Section 6.14(a).
(35) “CPI”
means
Centennial Power, Inc., a Delaware corporation and wholly-owned subsidiary
of
Seller.
(36) “CPI
Agreements”
means
each contract, license, agreement or personal property lease to which CPI or
any
of its Subsidiaries (other than the Project Companies) is a party, other than
those which involve expenditures by CPI or any such Subsidiary of less than
$250,000 per year.
(37) “CPI
Stock”
means
all of the issued and outstanding shares of common stock, no par value, of
CPI.
(38) “CPP”
means
Colorado Power Partners, a Colorado general partnership.
(39) “Default
Interest Rate”
means
a
rate of interest payable at the lesser of LIBOR plus 200 basis points, or the
maximum rate permitted by applicable law.
(40) “Direct
Claim”
has
the
meaning set forth in Section 8.2(c).
(41) “Designated
Independent Accounting Firm”
has
the
meaning set forth in Section 3.3(d).
(42) “Election”
has
the
meaning set forth in Section 6.9(a)(i).
(43) “Environmental
Claim”
means
any and all pending and/or threatened administrative or judicial actions, suits,
orders, claims, liens, notices, notices of violations, investigations,
complaints, requests for information, proceedings, or other written
communication, whether criminal or civil, pursuant to or relating to any
applicable Environmental Law based upon, alleging, asserting, or claiming any
actual or potential (a) violation of, or liability under any Environmental
Law,
(b) violation of any Environmental Permit, or (c) liability for investigatory
costs, cleanup costs, removal costs, remedial costs, response costs, natural
resource damages, property damage, personal injury, fines, or penalties arising
out of, based on, resulting from, or related to the presence, Release, or
threatened Release of any Hazardous Substances at any site owned, leased or
operated by CPI, CEM or any of their respective Subsidiaries.
(44) “Environmental
Condition”
means
the presence or Release to
the
environment at the site of the Project Facilities of Hazardous Substances,
including any migration of those Hazardous Substances through air, soil or
groundwater to or from the site of the Project Facilities.
(45) “Environmental
Laws”
means
all applicable Federal, state and local, civil and criminal laws, regulations,
rules, ordinances, codes, decrees, judgments, directives, or judicial or
administrative orders relating to pollution or protection of the environment,
natural resources or human health and safety, including, without limitation,
laws relating to Releases or threatened Releases of Hazardous Substances
(including, without limitation, Releases to ambient air, surface water,
groundwater, land, surface and subsurface strata) or otherwise relating to
the
manufacture, processing, distribution, use, treatment, storage, Release,
transport, disposal or handling of Hazardous Substances. “Environmental Laws”
include, without limitation, CERCLA, the Hazardous Materials Transportation
Act
(49 U.S.C. §§ 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. §§ 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§
1251 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Oil Pollution Act (33
U.S.C. §§ 2701 et seq.), the Emergency Planning and Community Right-to-Know Act
(42 U.S.C. §§ 11001 et seq.), and all applicable other state laws analogous to
any of the above.
(46) “Environmental
Permit”
has
the
meaning set forth in Section 4.20(n)(v).
(47) “Equity
Commitment Letter”
has
the
meaning set forth in Section 6.12.
(48) “Excluded
Assets”
has
the
meaning set forth in Section 2.2.
(49) “Excluded
Agreements”
means
the AT&T CAISO ECN Agreement, the ▇▇▇▇▇ Agreement, the Intercompany Benefit
Plans and the Wolcon Closure Agreement.
(50) “Excluded
Liabilities”
has
the
meaning set forth in Section 8.1(h).
(51) “Excluded
Taxes”
has
the
meaning set forth in Section 8.1(h)(i).
(52) “FERC”
means
the Federal Energy Regulatory Commission or any successor agency
thereto.
(53) “Financial
Statements”
has
the
meaning set forth in Section 4.16.
(54) “GAAP”
means
United States generally accepted accounting principles as in effect on the
date
of this Agreement.
(55) “Governmental
Authority”
means
any federal, state or local governmental, regulatory or administrative agency,
commission, department or board, court or arbitrating body.
(56) “Guarantee
Liabilities”
has
the
meaning set forth in Section 2.4.
(57) “▇▇▇▇▇▇
Project”
means
that certain 120 megawatt (gross) coal-fired facility located approximately
40
miles southeast of Billings, Montana and two miles north of the city of ▇▇▇▇▇▇,
Montana.
(58) “▇▇▇▇▇▇▇▇
Partnership”
means
▇▇▇▇▇▇▇▇ Energy Limited Partnership, a Delaware limited
partnership.
(59) “Hartwell
Project”
means
that certain 310 megawatt simple-cycle gas-fired facility located approximately
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ near ▇▇▇▇▇▇▇▇, Georgia.
(60) “Hazardous
Substances”
means
(a) any petrochemical or petroleum products, oil, radioactive materials, radon
gas, asbestos in any form that is or could become friable, urea formaldehyde
foam insulation and transformers or other equipment that contain dielectric
fluid which may contain levels of polychlorinated biphenyls; (b) any chemicals,
materials or substances defined as or included in the definition of “hazardous
substances,” “hazardous wastes,” “hazardous materials,” “hazardous
constituents,” “restricted hazardous materials,” “extremely hazardous
substances,” “toxic substances,” “contaminants,” “pollutants,” “toxic
pollutants” or words of similar meaning and regulatory effect under any
applicable Environmental Law; and (c) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any applicable
Environmental Law.
(61) “▇▇▇▇▇
Agreement”
has
the
meaning set forth in Section 2.2(c).
(62) “HSR
Act”
means
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended.
(63) “Income
Tax”
means
any federal, state or local Tax (a) based upon, measured by or calculated with
respect to net income, profits or receipts (including, without limitation,
capital gains Taxes and minimum Taxes) or (b) based upon, measured by or
calculated with respect to multiple bases (including, without limitation,
corporate franchise taxes) if one or more of the bases on which such Tax may
be
based, measured by or calculated with respect to, is described in clause (a),
in
each case together with any interest, penalties, or additions to such
Tax.
(64) “Indebtedness”
means,
without duplication, all obligations of CEM, CPI or its Subsidiaries
(a) for borrowed money; (b) evidenced by bonds, debentures, notes or
similar instruments; (c) in respect of the deferred purchase price of property
or services (excluding accounts payable and other current liabilities incurred
in the ordinary course of business consistent with past practice which would
be
reflected in Working Capital); (d) in respect of capital lease obligations;
(e) with respect to interest rate and currency cap, collar, hedging or swap
agreements; (f) conditional sale or other title retention agreements;
(g) reimbursement obligations with respect to letters of credit, bankers
acceptances and surety bonds; and (h) under guarantee by CEM, CPI or any
Subsidiary on account of any of the foregoing types of indebtedness of any
other
Person.
(65) “Indemnifiable
Loss”
has
the
meaning set forth in Section 8.1(a).
(66) “Indemnifying
Party”
has
the
meaning set forth in Section 8.1(d).
(67) “Indemnitee”
has
the
meaning set forth in Section 8.1(c)(i).
(68) “Independent
Accounting Firm”
means
an independent accounting firm of national reputation.
(69) “Initial
Closing Statement”
has
the
meaning set forth in Section 3.3(b).
(70) “Inspection”
means
all tests, reviews, examinations, inspections, investigations, verifications,
samplings and similar activities conducted by Buyer or its agents or
Representatives with respect to the Project Facilities.
(71) “Intellectual
Property Rights”
means
all common law and statutory rights associated with patents and industrial
designs, copyrights, trademarks, trade names, service marks, service names,
know-how, processes, trade secrets, inventions, proprietary rights, formulae,
research, databases and computer programs.
(72) “Intercompany
Benefit Plans”
has
the
meaning set forth in Section 2.2(g).
(73) “Investor
Subsidiaries”
means
the Persons listed as such in Schedule
4.14.
(74) “IRS”
means
the United States Internal Revenue Service or any successor agency
thereto.
(75) “Knowledge”
means
the actual knowledge of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, assuming Commercially
Reasonable Efforts to acquire such knowledge.
(76) “LIBOR”
means
a
rate per annum (rounded upwards if necessary, to the nearest 1/16th of 1%)
equal
to the arithmetic mean of the offered rate for three month deposits in dollars
in the London Interbank Market at approximately 11:00 a.m. (London time), which
appears on the Telerate Screen designated as Page 3570 of the Reuters Monitor
Money Rates Service.
(77) “Liens”
means
any mortgages, pledges, liens, security interests, conditional and installment
sale agreements, activity and use limitations, conservation or other easements,
restrictive covenants, deed restrictions, leases, licenses, other rights of
occupancy and any other encumbrances or charges of any kind.
(78) “Major
Project Contracts”
means
all of the Project Contracts, with respect to each Project Company, other that
those which involve expenditures by such Project Company of less than $250,000
per year.
(79) “Material
Adverse Effect”
means
any matter that individually or taken as a whole with all other matters that
has
had or is reasonably likely to cause a material and adverse change in, or effect
on, the assets or financial condition of CEM and CPI, or the business or
operations of CEM and CPI, provided however,
that
the term Material Adverse Effect shall not include any state of facts,
circumstance, change, development, effect, condition or occurrence to the extent
resulting from: (a) conditions that generally affect the electric generation
industry or the construction services industry, (b) economic conditions
affecting the United States securities markets generally and (c) new legal,
accounting or regulatory requirements or limitations, except to the extent
such
matters have an effect on CPI and CEM that is disproportionate in any material
respect to the effect on other similarly situated participants in their
respective industry.
(80) “Material
Contract”
has
the
meaning set forth in Section 6.1.
(81) “MDU
Affiliated Group”
has
the
meaning set forth in Section 6.9(b)(i).
(82) “Mountain
View Project”
means
that certain 67 megawatt wind power project consisting of 111 wind turbines
and
associated equipment located in the San Gorgonio Pass near Palm Springs,
California.
(83) “MVPP”
means
Mountain View Power Partners, LLC, a Delaware limited liability
company.
(84) “New
125 Plan”
has
the
meaning set forth in Section 6.14(b).
(85) “Objection
Notice”
has
the
meaning set forth in Section 3.3(d).
(86) “Party”
or
“Parties”
has
the
meaning set forth in the Preamble.
(87) “Permitted
Liens”
means
(a) Liens on property existing at the time of the acquisition thereof by a
Project Company, (b) statutory Liens for taxes and other governmental charges
not yet due and payable, (c) Liens securing the payment of Taxes that are either
due but not delinquent or being contested in good faith and for which adequate
reserves in accordance with GAAP have been established, (d) mechanics’,
carriers’, workers’, warehouse and other similar Liens arising in the ordinary
course of business relating to obligations as to which a Project Company is
not
in default, (e) zoning, entitlement, conservation restriction and other land
use
and environmental regulations by Governmental Authorities, (f) Liens,
imperfections in title, charges, easements and restrictions which, in the
aggregate, do not materially detract from the value of the CPI Stock and the
CEM
Membership Interests or materially impair the intended use of the property
subject thereto, and (g) Liens created by or arising by reason of this
Agreement, the Major Project Contracts, the CEM Agreements, the CPI Agreements
or the Project Company Agreements.
(88) “Person”
means
any individual, partnership, limited liability company, joint venture,
corporation, trust, unincorporated organization, or governmental entity or
any
department or agency thereof.
(89) “Pre-Closing
Tax Period”
means
any Tax period ending on or prior to the Closing Date.
(90) “Project”
means
one or all of the following, as the case may require: the Brush 1&3 Project,
the Brush 4D Project, the Mountain View Project, the ▇▇▇▇▇▇ Project, the San
▇▇▇▇▇▇▇ Project, and the ▇▇▇▇▇▇▇▇ Project.
(91) “Project
Companies”
means
BIV Generation, CPP, ▇▇▇▇▇▇▇▇ Partnership, MVPP, RMP and SJC.
(92) “Project
Company Agreement”
means,
for each of the Project Companies, the limited liability company agreement,
partnership agreement, by-laws or other organizational document of such Project
Company.
(93) “Project
Company Interests”
means,
in respect of each Project Company, the ownership interest of each Person listed
as a direct parent with respect to such Project Company as set forth in
Schedule
4.14,
together with all of the rights and obligations of such Person under the Project
Company Agreement for such Project Company, including without limitation, its
rights and obligations as a member, shareholder, or general or limited partner,
as the case may be, under such Project Company Agreement or applicable
law.
(94) “Project
Contracts”
means,
with respect to a Project Company, all contracts, agreements and commitments,
including without limitation, mortgages, indentures and loan agreements, to
which such Project Company is a party.
(95) “Project
Facilities”
means
those facilities, land, fixtures, equipment and other assets owned or leased
by
the Project Companies.
(96) “Project
Permits”
means,
with respect to each Project Company, the material permits, licenses, or similar
authorizations from any Governmental Authority required with respect to the
business or property of such Project Company as presently conducted or
owned.
(97) “Proprietary
Information”
of
a
Party means all information about the Party or its Affiliates, including their
respective properties or operations, furnished to the other Party or its
Representatives by the Party or its Representatives regardless of the manner
or
medium in which it is furnished, including information provided to a Party
pursuant to the Confidentiality Agreement. In addition, after the Closing Date,
Proprietary Information includes any non-public information regarding CEM,
CPI,
the Investor Subsidiaries, the Service Subsidiaries, the Project Companies
or
the transactions contemplated by this Agreement. Proprietary Information does
not include information that: (a) is or becomes generally available to the
public (other than as a result of a disclosure by the other Party or its
Representatives in violation of a confidentiality agreement); (b) was available
to the other Party on a nonconfidential basis prior to its disclosure by the
Party or its Representatives; (c) becomes available to the other Party on a
nonconfidential basis from a person, other than the Party or its
Representatives, who is not otherwise bound by a confidentiality agreement,
or
is not under any obligation not to transmit the information to the other Party
or its Representatives; or (d) is independently developed by the other
Party.
(98) “Purchase
Price”
has
the
meaning set forth in Section 3.2.
(99) “Real
Property Leases”
has
the
meaning set forth in Section 4.6.
(100) “Release”
means
release, spill, leak, discharge, dispose of, pump, pour, emit, empty, inject,
▇▇▇▇▇, dump or allow to escape into or through the environment.
(101) “Replacement
PPA”
has
the
meaning set forth in Section 6.1(b).
(102) “Representatives”
of
a
Party means its directors, officers, employees, agents, partners, advisors
(including, without limitation, accountants, counsel, environmental consultants,
financial advisors and other authorized representatives) and the Party’s
Affiliates, parents and other controlling persons.
(103) “RMP”
means
Rocky Mountain Power, Inc., a Montana corporation.
(104) “San
▇▇▇▇▇▇▇ Project”
means
that certain 48 megawatt simple-cycle gas-fired facility located approximately
73 miles east of San Francisco in Lathrop, California.
(105) “SEC”
means
the Securities and Exchange Commission and any successor agency
thereto.
(106) “Section 338(h)(10)
Elections”
has
the
meaning set forth in Section 6.9(a)(i).
(107) “Securities
Act”
has
the
meaning set forth in Section 5.6.
(108) “Seller”
has
the
meaning set forth in the Preamble.
(109) “Seller
125 Plan”
has
the
meaning set forth in Section 6.14(b).
(110) “Seller
401(k) Plan”
has
the
meaning set forth in Section 6.14(c).
(111) “Seller
Fundamental Representations”
means
the representations and warranties of Seller contained in Sections 4.1, 4.2,
4.3, 4.5, 4.9(a)(A), 4.14, 4.15 and 4.20(a)-(d) and (k)(iv).
(112) “Seller
Health Plan”
has
the
meaning set forth in Section 6.14(a).
(113) “Seller’s
Indemnitee”
has
the
meaning set forth in Section 8.1(a).
(114) “Seller’s
Required Regulatory Approvals”
has
the
meaning set forth in Section 4.3(b).
(115) “Service
Subsidiaries”
means
the Persons listed as such on Schedule
4.14.
(116) “Shared
Assets and Services”
means
(a) any equipment, hardware, software, materials, technologies;
(b) services, including those required for telecommunications, human
resources, logistics and accounting; and (c) their related Intellectual
Property Rights, purchased or licensed by Seller for the benefit of, and/or
which are shared among, CEM, CPI, Seller and/or any Affiliates or Subsidiaries
of Seller.
(117) “SJC”
means
San ▇▇▇▇▇▇▇ ▇▇▇▇▇, L.L.C, a Delaware limited liability company.
(118) “Straddle
Period”
means
any Tax period beginning on or prior to and ending after the Closing
Date.
(119) “Subsidiary”
when
used in reference to any Person means any entity: (a) of which outstanding
securities having ordinary voting power to elect a majority of the Board of
Directors or other Persons performing similar functions of such entity are
owned
directly or indirectly by such Person; or (b) that does not have outstanding
shares or securities but whose ownership interest representing the right to
manage such entity is now or hereafter owned and controlled by such Person
directly or indirectly.
(120) “Target
Entities”
has
the
meaning set forth in Section 6.9(b)(i).
(121) “Tax
Contest”
has
the
meaning set forth in Section 6.9(d)(i).
(122) “Taxes”
means
(a) all taxes, charges, fees, levies, penalties or other assessments imposed
by
any federal, state or local taxing authority, including, but not limited to,
income, excise, real or personal property, sales, transfer, franchise, payroll,
withholding, social security, gross receipts, license, stamp, occupation,
employment or other taxes, including any interest, penalties or additions
imposed with respect thereto, and (b) any transferee liability in respect of
any
items described in clause (a) above resulting from a transfer of assets that
occurred prior to the Closing Date.
(123) “Tax
Return”
means
any return, report, information return, declaration or other document filed
or
required to be filed with a taxing authority with respect to Taxes, including
any schedule or attachment thereto or amendment thereof.
(124) “Termination
Date”
has
the
meaning set forth in Section 9.1(b).
(125) “Third
Independent Accounting Firm”
has
the
meaning set forth in Section 3.3(d).
(126) “Third
Party Claim”
has
the
meaning set forth in Section 8.2(a).
(127) “Transfer
Taxes”
has
the
meaning set forth in Section 6.9(f).
(128) “Treasury
Regulations”
means
the income tax regulations promulgated by the United States Department of
Treasury under the Code, including temporary regulations, as such regulations
may be amended from time to time (including corresponding provisions of
succeeding regulations).
(129) “Wolcon
Closure Agreement”
has
the
meaning set forth in Section 2.2(h).
(130) “Working
Capital”
means
the total current assets less total current liabilities, as determined in
accordance with GAAP, except
that (a)
cash and cash equivalents, cash held by CEM for third parties, loan origination
fees currently being amortized, prepaid insurance that is non-transferable,
Income Tax assets, accounts receivable related to the sale of Lea Power Partners
and all intercompany receivables shall be excluded from the calculation of
current assets and (b) all deferred revenue amounts (billings in excess of
cost)
associated with the sale of Lea Power Partners and revenue recognition for
the
▇▇▇▇▇ project, Brush 4D deferred revenue (EITF 91-6), third party payables
associated with third party cash accounts, accrued interest payable on debt,
current portion of long-term debt due in one year, accrued employee bonuses,
Income Taxes payable, Taxes payable resulting from any transaction or event
that
is not in the ordinary course of business and occurs after the Closing on the
Closing Date, intercompany payables, SO2
emission
credits payable (net of related intangible asset) and accrued allocable payroll
Taxes and employee benefit costs for Seller’s employees shall be excluded from
the calculation of current liabilities.
(131) “Working
Capital Amount”
has
the
meaning set forth in Section 3.3.
1.2 Certain
Interpretive Matters.
In
this
Agreement, unless the context otherwise requires, the singular shall include
the
plural, the masculine shall include the feminine and neuter, and vice versa.
The
term “includes” or “including” shall mean “including without limitation.”
References to a Section, Article, Exhibit or Schedule shall mean a Section,
Article, Exhibit or Schedule of this Agreement, and reference to a given
agreement or instrument shall be a reference to that agreement or instrument
as
modified, amended, supplemented and restated through the date as of which such
reference is made.
ARTICLE
II
PURCHASE
AND SALE
2.1 Transfer
of Stock
and Membership Interests.
Upon
the
terms and subject to the satisfaction of the conditions contained in this
Agreement, at the Closing Seller will sell, assign, convey, transfer and deliver
to Buyer, and Buyer will purchase and acquire from Seller, free and clear of
all
Liens, and subject to Section 2.2 and the other terms and conditions of this
Agreement, all of Seller’s right, title and interest in and to the CPI Stock and
the CEM Membership Interests.
2.2 Excluded
Assets.
Notwithstanding
anything to the contrary in this Agreement, nothing in this Agreement will
constitute or be construed as conferring on Buyer, and Buyer is not acquiring,
any right, title or interest in or to the following specific assets of CPI
and
CEM and their respective Subsidiaries, which are hereby specifically excluded
from the sale (the “Excluded Assets”):
(a) All
cash
and cash equivalents, other than cash accounts maintained by CEM for third
parties, checkbooks, canceled checks and bank deposits;
(b) All
refunds or credits of or against Excluded Taxes or any other Taxes that are
the
responsibility of Seller pursuant to this Agreement;
(c) The
LLC
Membership Interest Purchase and Sale Agreement by and between CPI and ▇▇▇▇▇
Power Funding, LLC, dated October 20, 2006 (the “▇▇▇▇▇ Agreement”), and any and
all rights of CPI thereunder;
(d) Any
and
all rights of CPI to receive distributions or payments, directly or indirectly,
from the ▇▇▇▇▇▇▇▇ Partnership with respect or to the extent allocable to all
periods prior to the Closing Date as provided in Section 6.16;
(e) The
Centennial Marks;
(f) The
assets of any employee benefit plan covering employees of CPI, CEM or any of
their respective Affiliates, other than the assets of the Seller 125 Plan and
the Seller 401(k) Plan held for the benefit of employees of CPI or CEM;
(g) The
Benefit Plans identified as the MDU Plans and the Payflex Agreement on Schedule
4.8 (collectively, the “Intercompany Benefit Plans”);
(h) The
Wolcon Closure Agreement between RMP and Wolcon, dated March 28, 2005 (the
“Wolcon Closure Agreement”), and any and all rights of RMP thereunder;
(i) The
First
Amended and Restated Form of Connected Entity Access Services Agreement between
AT&T Corp. and MVPP, dated July 22, 2004 (the “AT&T CAISO ECN
Agreement”), and any and all rights of MVPP thereunder;
(j) All
Shared Assets and Services;
(k) The
assets set forth on Schedule
2.2(k);
and
(l) The
insurance policies set forth on Schedules
4.4
and
4.20(k)(ii).
2.3 Transfer
of Excluded Assets
and
Discharge of Certain Liabilities.
Not
later
than immediately prior to the Closing, Seller shall cause each of CPI, CEM
and
their respective Affiliates, as applicable, to transfer all Excluded Assets,
except for those portions of the Shared Assets and Services required for
continued use by CPI or CEM (the terms and use of which the Parties shall agree
to in good faith prior to the Closing), to Seller or one or more of Seller’s
Affiliates, and
Seller shall cause CPI, CEM and their respective Affiliates, as applicable,
to
be discharged and released from all liabilities and obligations arising under
the Excluded Agreements.
All
costs and expenses, including Taxes associated with such transfer shall be
for
the Seller’s account.
2.4 Guarantee
Liabilities.
Seller
and Buyer shall use their Commercially Reasonable Efforts to cause the release
and discharge of Seller and any Affiliate of Seller (other than CEM, CPI, the
Investor Subsidiaries, the Service Subsidiaries and the Project Companies)
from
their obligations under the guarantee or other credit support agreements listed
on Schedule
2.4
(the
“Guarantee Liabilities”) as of the Closing Date. To the extent that Seller or
any such Affiliate of Seller is not fully released and discharged from its
obligations under the Guarantee Liabilities, Buyer shall indemnify, defend
and
hold harmless Seller and any such Affiliates of Seller from and against any
and
all Indemnifiable Losses asserted against or suffered by Seller or any such
Affiliates of Seller relating to or arising out of the Guarantee Liabilities
as
provided in Section 8.1, and at the Closing, Buyer shall deliver to Seller
an
Assumption Agreement substantially in the form attached hereto as Exhibit
B
(the
“Assumption Agreement”) pursuant to which Buyer shall assume and agree to
discharge when due each and every obligation and liability arising on or after
the Closing Date under each of the Guarantee Liabilities.
ARTICLE
III
THE
CLOSING
3.1 Closing.
Upon
the
terms and subject to the satisfaction of the conditions contained in Article
VII
of this Agreement, the sale and delivery of the CPI Stock and the CEM Membership
Interests to Buyer, the payment of the Purchase Price to Seller, and the
consummation of the other respective obligations of the Parties contemplated
by
this Agreement shall take place at a closing (the “Closing”), to be held at the
offices of ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 a.m. local time, or another mutually acceptable time
and
location, on the date that is five (5) Business Days (or such later date as
may
be provided by Section 6.15 hereof) following the date on which the last of
the
conditions precedent to Closing set forth in Article VII of this Agreement
have
been either satisfied or waived by the Party for whose benefit such conditions
precedent exist or such other date as the Parties may mutually agree. The date
of Closing is hereinafter called the “Closing Date.” The Closing shall be
effective for all purposes as of 12:01 a.m. on the Closing Date.
3.2 Payment
of Purchase Price.
Upon
the
terms and subject to the satisfaction of the conditions contained in this
Agreement, in consideration of the aforesaid sale, assignment, conveyance,
transfer and delivery of the CPI Stock and CEM Membership Interests, Buyer
will
pay or cause to be paid to Seller at the Closing an aggregate amount of Six
Hundred Million United States Dollars (U.S. $600,000,000) subject to adjustment
as provided in Section 3.3 (the “Purchase Price”) by wire transfer of
immediately available funds denominated in U.S. Dollars or by such other means
as are agreed upon by Seller and Buyer, as adjusted pursuant to Section
3.3.
3.3 Purchase
Price Adjustment.
(a) The
Purchase Price is premised upon CEM and CPI having as of the Closing Date and
delivering to Buyer an aggregate Working Capital of Zero Dollars ($0) (the
“Working Capital Amount”). Accordingly, the Purchase Price shall be (i)
increased by the amount, if any, by which the aggregate Working Capital of
CEM
and CPI as of the Closing Date is greater than the Working Capital Amount,
or
(ii) decreased by the amount, if any, by which the aggregate Working Capital
of
CEM and CPI as of the Closing Date is less than the Working Capital Amount.
Any
such adjustment to the Purchase Price shall be effected in accordance with
this
Section 3.3 (the “Adjustment”).
(b) Seller
agrees to prepare and deliver to Buyer at least five (5) Business Days prior
to
the Closing Date an unaudited consolidated balance sheet and income statement
for each of CEM and CPI reflecting the financial condition of each of CEM and
CPI as of the most recent month end prior to the Closing Date, together with
a
statement setting forth (i) the estimated aggregate Working Capital of CEM
and
CPI as of the Closing Date and (ii) the Adjustment, if any, pursuant to clauses
(i) and (ii) of Section 3.3(a), above (the “Initial Closing Statement”). Within
sixty (60) days after the Closing Date, Buyer shall prepare and deliver to
Seller an unaudited consolidated balance sheet and income statement reflecting
the financial condition of each of CEM and CPI as of the Closing Date, together
with a statement setting forth (i) the aggregate Working Capital of CEM and
CPI
as of the Closing Date and (ii) the Adjustment, if any, pursuant to clauses
(i)
and (ii) of Section 3.3(a) above (the “Closing Statement”). The Initial Closing
Statement and the Closing Statement shall be prepared in a manner consistent
with the application of the accounting principles, practices and procedures
of
the Financial Statements and the provisions of this Agreement.
(c) If
the
Initial Closing Statement sets forth an aggregate Working Capital of CEM and
CPI
greater than the Working Capital Amount and a corresponding upward adjustment
to
the Purchase Price, then the Purchase Price payable on the Closing Date shall
be
increased by an amount equal to such Adjustment. If the Initial Closing
Statement sets forth the aggregate Working Capital of CEM and CPI less than
the
Working Capital Amount and a corresponding downward adjustment to the Purchase
Price, then the Purchase Price payable on the Closing Date shall be decreased
by
an amount equal to such Adjustment. If the aggregate Working Capital of CEM
and
CPI as set forth on the Closing Statement is different than that included on
the
Initial Closing Statement, then (i) to the extent that the Working Capital
on
the Closing Statement is greater than the Working Capital on the Initial Closing
Statement, Buyer shall pay to Seller an amount equal to the absolute value
of
such difference, and (ii) to the extent that the Working Capital on the Closing
Statement is less than the Working Capital on the Initial Closing Statement,
Seller shall pay to Buyer an amount equal to the absolute value of such
difference, subject to Section 3.3(d) below. In each case, such payment shall
be
made in cash in immediately available funds within twenty (20) days after the
date the Closing Statement becomes final under Section 3.3(d). The Purchase
Price shall be deemed to be increased or decreased (as the case may be) by
the
amounts calculated under this Section 3.3(c). The Parties agree that for Income
Tax and all other Tax purposes, the Parties shall and shall cause their
Affiliates to calculate and timely report such increase or decrease with respect
to CPI and CEM on a separate entity basis. The Parties shall promptly agree
upon
revisions to all of the allocations prepared pursuant to Section 6.9(a) to
reflect such increase or decrease, and the Parties shall and shall cause their
Affiliates to not take a position on any Tax Return, with any Tax authority,
or
otherwise that is inconsistent with such calculations and revised allocations,
except to the extent specifically required pursuant to this
Agreement.
(d) Each
Party shall make available to the other Party its work papers used to prepare
its respective closing statement, and shall cooperate with the other Party
in
connection with the preparation thereof. Seller shall notify Buyer in writing
within twenty (20) days after receipt by Seller of the Closing Statement of
any
objection to the items set forth therein, which notice shall include a
reasonably detailed explanation of the reasons for each objection by Seller
(an
“Objection Notice”), provided, that the Seller may only object to the items
contained in the Closing Statement to the extent any such item was not prepared
in accordance with this Agreement or contains mathematical errors. Any item
not
so objected to by Seller shall be conclusively deemed to have been approved
by
Seller and shall be conclusive and binding upon the Parties. If the Parties
are
unable to resolve such dispute within thirty (30) days after the date of receipt
by Seller of the Closing Statement, then Buyer and Seller shall agree upon
and
designate an Independent Accounting Firm (the “Designated Independent Accounting
Firm”) and the Designated Independent Accounting Firm shall, within fifteen (15)
days of its appointment, make a final and binding determination solely of the
matters that remain in dispute and were properly included in the Objection
Notice, and, based on such resolution, a final and binding determination of
the
Adjustment amount, if any. If Buyer and Seller are unable to agree upon a
Designated Independent Accounting Firm, then each of the Buyer and Seller shall
designate one Independent Accounting Firm and the two Independent Accounting
Firms so selected shall, within ten (10) days after the date on which the later
of the two Independent Accounting Firms are appointed, appoint a third
Independent Accounting Firm (the “Third Independent Accounting Firm”) and the
Third Independent Accounting firm shall, within fifteen (15) days of its
appointment, make a final and binding determination solely of the matters that
remain in dispute and were properly included in the Objection Notice, and,
based
on such resolution, a final and binding determination of the Adjustment amount,
if any. The Designated Independent Accounting Firm or the Third Independent
Accounting Firm, as the case may be, shall act on the following basis: such
Independent Accounting Firm shall act as an expert and not as an arbitrator;
its
terms of reference shall be to determine the appropriate Adjustment within
fifteen (15) days of its appointment, having strict regard to the application
of
the terms of this Agreement to the same (and, for the avoidance of doubt,
disregarding other means of calculating the same, to the extent that such means
are inconsistent with or not provided for in this Agreement); Buyer and Seller
shall each provide such Independent Accounting Firm with all such information
as
it reasonably requires and the Independent Accounting Firm shall base its
decision solely on such written submissions by Buyer and Seller and their
respective representatives; such Independent Accounting Firm shall not hold
any
hearings, hear any oral testimony or otherwise seek or require any other
evidence and it may not assign a value greater than the greatest value for
such
item claimed by either Party or smaller than the smallest value for such item
claimed by either Party. The final written determination of such Independent
Accounting Firm shall (in the absence of fraud or manifest error) be conclusive
and binding on the Parties. The Independent Accounting Firms shall not have
the
power to amend or modify any terms of this Agreement. The costs of the
Independent Accounting Firms shall be borne pro rata by Seller and Buyer in
proportion to the difference between the Designated Independent Accounting
Firm’s or the Third Independent Accounting Firm’s, as the case may be, final
determination of any Adjustment amount and each of Buyer’s and Seller’s
determination of such Adjustment amount. For example, if Buyer calculated an
Adjustment amount of $100,000, Seller calculated an Adjustment amount of $50,000
and the
Designated Independent Accounting Firm or the Third Independent Accounting
Firm,
as the case may be, calculated
an Adjustment amount of $60,000, Buyer would pay that portion of the Independent
Accounting Firms’ fees determined by dividing $40,000 ($100,000 - $60,000) by
$50,000 ($100,000 - $50,000) (i.e.,
80%)
and Seller would pay the remaining 20% of such fees.
(e) Any
disputed amounts or any amounts not paid within five (5) days of when due and
owing, plus interest thereon at the Default Interest Rate which shall have
accrued from the due date until the date of payment, shall be paid in accordance
with Section 3.3(c) above within ten (10) days after the date the Designated
Independent Accounting Firm or the Third Independent Accounting Firm, as the
case may be, provides to both Parties its final written determination pursuant
to Section 3(d) above. In addition, any amount not paid within ten (10) days
of
when due if not disputed in accordance with Section 3.3(d) above shall accrue
interest at the Default Interest Rate.
(f) Each
of
the Parties agrees and undertakes to the other to provide all reasonable access,
necessary data and information, and to assist in the calculations referred
to in
this Section 3.3.
3.4 Deliveries
by Seller.
At
the
Closing, Seller will deliver, or cause to be delivered, the following to
Buyer:
(a) A
stock
certificate or certificates representing the CPI Stock accompanied by a stock
power duly endorsed to Buyer;
(b) The
CEM
ownership ledger marked with appropriate notations evidencing the transfer
of
the CEM Membership Interests to Buyer;
(c) Resignations
of all directors and officers of CPI, CEM, the Investor Subsidiaries, the
Service Subsidiaries and the Project Companies (other than the ▇▇▇▇▇▇▇▇
Partnership) effective upon the Closing, and written resignations of any member
of the management committee of the ▇▇▇▇▇▇▇▇ Partnership designated by Seller
or
any Affiliate thereof effective upon the Closing.
(d) Copies
of
any and all governmental and other third party consents, waivers or approvals
required with respect to the transfer of the CPI Stock, the CEM Membership
Interests, or the consummation of the transactions contemplated by this
Agreement;
(e) The
opinions of counsel and officer’s certificates contemplated by
Section 7.1;
(f) Copies,
certified by the Secretary or Assistant Secretary of Seller, of corporate
resolutions authorizing the execution and delivery of this Agreement and all
of
the agreements and instruments to be executed and delivered by Seller in
connection herewith, and the consummation of the transactions contemplated
hereby;
(g) A
certificate of the Secretary or Assistant Secretary of Seller identifying the
name and title and bearing the signatures of the officers of Seller authorized
to execute and deliver this Agreement and the other agreements and instruments
contemplated hereby;
(h) A
Certificate of Good Standing with respect to Seller issued by the Secretary
of
State of the State of Delaware;
(i) A
Certificate of Good Standing with respect to CPI issued by the Secretary of
State of the State of Delaware;
(j) A
Certificate of Good Standing with respect to CEM issued by the Secretary of
State of the State of Colorado;
(k) To
the
extent available, originals of all CPI Agreements, CEM Agreements, Major Project
Contracts, Real Property Leases and corporate and limited liability company
records of CPI and CEM, respectively, and, if not available, true and correct
copies thereof;
(l) Copies
of
all Project Permits and Environmental Permits held by the Project Companies;
and
(m) Such
other agreements, documents, instruments and writings as are required to be
delivered by Seller at or prior to the Closing Date pursuant to this Agreement
or otherwise reasonably required in connection herewith.
3.5 Deliveries
by Buyer.
At
the
Closing, Buyer will deliver, or cause to be delivered, the following to
Seller:
(a) The
Purchase Price by wire transfer of immediately available funds in accordance
with Seller’s instructions or by such other means as may be agreed to by Seller
and Buyer;
(b) The
opinions of counsel and officer’s certificates contemplated by
Section 7.2;
(c) Copies,
certified by the Secretary or Assistant Secretary of Buyer, of resolutions
authorizing the execution and delivery of this Agreement, and all of the
agreements and instruments to be executed and delivered by Buyer in connection
herewith, and the consummation of the transactions contemplated
hereby;
(d) A
certificate of the Secretary or Assistant Secretary of Buyer, identifying the
name and title and bearing the signatures of the officers of Buyer authorized
to
execute and deliver this Agreement, and the other agreements contemplated
hereby;
(e) Copies
of
any and all governmental and other third party consents, waivers or approvals
obtained by Buyer with respect to the transfer of the CPI Stock, the CEM
Membership Interests or the consummation of the transactions contemplated by
this Agreement; and
(f) Such
other agreements, documents, instruments and writings (including without
limitation the Assumption Agreement) as are required to be delivered by Buyer
at
or prior to the Closing Date pursuant to this Agreement or otherwise reasonably
required in connection herewith.
3.6 Mutual
Delivery.
At
the
Closing, Seller and Buyer shall execute and deliver to Barclays Bank PLC a
notice of termination of the Buyer LC signed by an authorized officer of each
of
Seller and Buyer in the form of Annex B to the Buyer LC.
ARTICLE
IV
REPRESENTATIONS,
WARRANTIES AND DISCLAIMERS OF SELLER
Seller
represents and warrants to Buyer as follows (each such representation and
warranty in respect of the ▇▇▇▇▇▇▇▇ Partnership being further limited to the
Knowledge of Seller):
4.1 Organization;
Qualification.
Each
of
Seller, CEM, CPI, the Investor Subsidiaries and the Service Subsidiaries is
a
corporation or limited liability company duly incorporated or formed, validly
existing and in good standing under the laws of the jurisdiction under which
it
was incorporated or formed as indicated on Schedule
4.14.
CEM,
CPI, and each Investor Subsidiary and Service Subsidiary have all requisite
corporate or limited liability company power and authority to own, lease, and
operate their material properties and assets and to carry on their businesses
as
is now being conducted. Each of CEM, CPI, the Investor Subsidiaries and Service
Subsidiaries is duly qualified to do business as a foreign corporation and
is in
good standing under the laws of each jurisdiction in which its business, as
now
being conducted, shall require it to be so qualified, except where the failure
to be so qualified has not had, and is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect. Seller has
heretofore delivered to Buyer true, complete and correct copies of its, CEM’s,
CPI’s, each Investor Subsidiary’s and each Service Subsidiary’s certificate of
incorporation and bylaws or certificate of formation and limited liability
company agreement, as applicable, as currently in effect.
4.2 Authority
Relative to this Agreement.
Seller
has full limited liability company power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated by it hereby.
The
execution and delivery of this Agreement by Seller and the consummation by
Seller of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate or limited liability company action
required on the part of Seller and this Agreement has been duly and validly
executed and delivered by Seller. Subject to the receipt of Seller’s Required
Regulatory Approvals, this Agreement constitutes the legal, valid and binding
agreement of Seller, enforceable against Seller in accordance with its terms,
except that such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws affecting or relating to enforcement of creditors’ rights generally and
general principles of equity (regardless of whether enforcement is considered
in
a proceeding at law or in equity).
4.3 Consents
and Approvals; No Violation.
(a) Except
as
set forth on Schedule
4.3(a),
and
other than obtaining Seller’s Required Regulatory Approvals, neither the
execution and delivery of this Agreement by Seller nor the consummation by
Seller, CEM or CPI of the transactions contemplated hereby will (i) conflict
with or result in any breach or violation of any provision of the Amended and
Restated Certificate of Incorporation or Bylaws of CPI or the Certificate of
Formation or Limited Liability Company Agreement of Seller or CEM, or (ii)
require any material consent, approval, authorization, waiver of any right
of
first refusal, right of first offer or similar preemptive right, or permit
of,
or filing with, any Person, or (iii) result in a default (or give rise to any
right of termination, consent, cancellation or acceleration) under any of the
terms, conditions or provisions of any material note, bond, mortgage, indenture,
material agreement or other instrument or obligation to which Seller, CEM,
CPI,
any Investor Subsidiary or any Service Subsidiary is a party or by which it
may
be bound, or (iv) constitute violations in any material respect of any law,
regulation, order, judgment or decree applicable to Seller, CEM, CPI or any
Investor Subsidiary or Service Subsidiary.
(b) Except
as
set forth on Schedule
4.3(b),
(the
filings and approvals referred to in Schedule
4.3(b)
are
collectively referred to as the “Seller’s Required Regulatory Approvals”), no
consent or approval of, filing with, or notice to, any Governmental Authority
by
or for Seller, CEM, CPI, any Investor Subsidiary or any Service Subsidiary
is
necessary for the execution and delivery of this Agreement by Seller, or the
consummation by Seller of the transactions contemplated hereby, other than
(i)
such consents, approvals, filings or notices which, if not obtained or made,
will not prevent Seller, CEM or CPI from performing its material obligations
hereunder and (ii) such consents, approvals, filings or notices which become
applicable to Seller, CEM, CPI, any Investor Subsidiary or any Service
Subsidiary as a result of the specific regulatory status of Buyer (or any of
its
Affiliates) or as a result of any other facts that specifically relate to the
business or activities in which Buyer (or any of its Affiliates) is or proposes
to be engaged.
4.4 Insurance. Schedule
4.4
lists
all material policies of fire, liability, workers’ compensation and other forms
of insurance owned or held by, or on behalf of, Seller, CEM, CPI, any Investor
Subsidiary or any Service Subsidiary with respect to the business, operations
or
employees of CEM, CPI, any Investor Subsidiary or any Service Subsidiary, each
of which is in full force and effect, all premiums with respect thereto covering
all periods up to and including the date hereof have been paid (other than
retroactive premiums which may be payable with respect to comprehensive general
liability and workers’ compensation insurance policies), and no notice of
cancellation or termination has been received with respect to any such policy
which was not replaced on substantially similar terms prior to the date of
such
cancellation.
4.5 Title
and Related Matters.
Seller
has good and valid title to the CPI Stock and the CEM Membership Interests,
free
and clear of all Liens. Except as set forth on Schedule
4.5,
each
Person listed on Schedule
4.14
as being
the direct parent of the Investor Subsidiaries and the Service Subsidiaries
is
the record and beneficial owner of all of the issued and outstanding shares
of
capital stock or membership interests, as applicable, of the such Investor
Subsidiaries and Service Subsidiaries and has good and valid title to such
capital stock or membership interests, as applicable, free and clear of all
Liens. Except as set forth on Schedule
4.5,
each
Person listed on Schedule
4.14
as being
the direct parent of a Project Company is the record and beneficial owner of
all
such Project Company Interests free and clear of all Liens.
4.6 Real
Property Leases. Schedule
4.6
lists,
as of the date of this Agreement, all real property leases, easements, licenses
and other rights in real property (collectively, the “Real Property Leases”) to
which CEM, CPI, any Investor Subsidiary or any Service Subsidiary is a party
and
which provide for annual payments of more than $50,000. Except as set forth
on
Schedule
4.6,
all
such Real Property Leases are valid, binding and enforceable in accordance
with
their terms, and are in full force and effect; there are no existing material
defaults by CEM, CPI or any Investor Subsidiary or Service Subsidiary or, to
the
Knowledge of Seller, any other party thereunder; and no event has occurred
which
(whether with or without notice, lapse of time or both) would constitute a
material default by CEM, CPI, any Investor Subsidiary or any Service Subsidiary
or, to the Knowledge of Seller, any other party thereunder.
4.7 Labor
Matters.
There
are
no collective bargaining agreements to which CEM, CPI, any Investor Subsidiary
or any Service Subsidiary is a party or is subject. With respect to the business
or operations of CEM, CPI, any Investor Subsidiary or any Service Subsidiary,
except to the extent set forth on Schedule
4.7
and
except such matters as have not had, and are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect, CEM, CPI, each
Investor Subsidiary and each Service Subsidiary is in compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours.
4.8 Benefit
Plans. Schedule
4.8
lists
all (i) deferred compensation, profit-sharing, retirement and pension
plans, including multi-employer plans, and all material bonus, fringe benefit
and other employee benefit plans or arrangements maintained or with respect
to
which contributions are made by CEM or CPI or any of their respective Affiliates
in respect of the current or former employees of CEM or CPI, any of the Investor
Subsidiaries, any of the Service Subsidiaries or any of the Project Companies
connected with the business or operations of CEM and CPI or with respect to
which any of CEM, CPI, any Investor Subsidiary, any Service Subsidiary or
Project Company has any actual or contingent liability (“Benefit Plans”) and
(ii) each employment, consulting, change in control or severance agreement
in respect of the employees of CEM, CPI, any Investor Subsidiary, any Service
Subsidiary or any Project Company and with respect to which CEM, CPI, any
Investor Subsidiary, any Service Subsidiary or any Project Company may have
any
actual or contingent liability (collectively, “Benefit Agreements”). All Benefit
Plans and Benefit Agreements have been operated in accordance with their terms
and applicable law in all material respects. True and complete copies of all
Benefit Agreements have been made available to Buyer.
4.9 Contracts
and Leases.
(a) Schedule
4.9(a)
lists
(i) each CEM Agreement and (ii) each CPI Agreement, other than any contract,
license, agreement or personal property lease which is listed or described
on
another Schedule or which is an Excluded Asset or Excluded Agreement. Schedule
4.9(a) contains a list of all of the following contracts to which CEM, CPI,
any
Investor Subsidiary or any Service Subsidiary is a party or by which their
respective assets are bound:
(A) contracts
respecting Indebtedness; (B) joint venture agreements, partnership
agreements, limited liability company agreements and each similar type of
contract involving a sharing of profits, losses, costs or liabilities with
any
other person; (C) contracts not otherwise disclosed herein which materially
restrict the ability of CEM, CPI or any of their Subsidiaries to engage in
the
type of business in which they are currently principally engaged; (D) stock
option contracts, warrants and convertible securities for the issuance of
capital stock of CEM, CPI or any of their Subsidiaries; (E) contracts
restricting the transfer of capital stock of CEM, CPI or any of their
Subsidiaries, obligating CEM, CPI or any of their Subsidiaries to issue or
repurchase its capital stock or relating to the voting or the election of
directors of CEM or CPI; (F) contracts relating to the acquisition or sale
by CEM, CPI or any of their Subsidiaries of any operating business or the
capital stock or other ownership interest of any other person under which CEM,
CPI or any of their Subsidiaries has a continuing liability or obligation;
(G) contracts under which there is a continuing obligation to pay any
“earnout” payment or deferred or contingent purchase price or any similar
payment respecting the purchase of any business or assets; (H) contracts
with Seller, any officer or director of CEM, CPI or any of their Subsidiaries,
or in the case of any individual any immediate family member of any of the
foregoing; and (I) contracts which CEM, CPI or any of their Subsidiaries
guarantees the liabilities or obligations of another person.
(b) Except
as
disclosed in Schedule
4.9(b),
each
CEM Agreement and CPI Agreement listed on Schedule
4.9(a)
(i)
constitutes a legal, valid and binding obligation of CEM, CPI, the Investor
Subsidiary or the Service Subsidiary party thereto and, to the Knowledge of
Seller, constitutes a valid and binding obligation of the other parties thereto
and (ii) is in full force and effect.
(c) Except
as
set forth on Schedule
4.9(c),
there
are not, under the CEM Agreements or the CPI Agreements, any material defaults
or events which, with notice or lapse of time or both, would constitute a
material default on the part of CEM, CPI, any Investor Subsidiary or any Service
Subsidiary or, to the Knowledge of Seller, any of the other parties
thereto.
4.10 Legal
Proceedings, etc.
Except
as
set forth on Schedule 4.10,
there
are no claims, actions, investigations or proceedings pending (or to the
Knowledge of Seller overtly threatened) against CEM, CPI, any Investor
Subsidiary or any Service Subsidiary before any court, arbitrator or
Governmental Authority and to the Knowledge of Seller, there are no facts or
circumstances that are reasonably expected to give rise to any such claim,
action, proceeding or investigation which, individually or in the aggregate,
(a) would reasonably be expected to result, or has resulted, in
(i) the institution or threat of legal proceedings to prohibit or restrain
the performance by the Seller of this Agreement or the consummation of the
transactions contemplated hereby, or (ii) a material impairment of the
ability of Seller to perform its obligations under this Agreement or
(iii) a material impairment of Buyer’s ability to own, operate and maintain
CEM and CPI in the same manner as it is owned, operated and maintained on the
Closing Date; or (b) would be reasonably likely to result in losses
exceeding One Million Dollars ($1,000,000). Except as set forth on Schedule 4.10,
neither
CEM, CPI, any Investor Subsidiary nor any Service Subsidiary is subject to
any
outstanding judgments, rules, orders, writs, injunctions or decrees of any
court, arbitrator or Governmental Authority which would, individually or in
the
aggregate, create a Material Adverse Effect.
4.11 Tax
Matters.
Except
as
set forth on Schedule
4.11:
(a) CEM,
CPI,
each Investor Subsidiary and each Service Subsidiary has duly and timely filed
(or there has been filed on its behalf) with the appropriate taxing authorities
all material Tax Returns required to be filed by it (after giving effect to
any
valid extension of time in which to make such filings), and all such Tax Returns
were correct in all material respects at the time of filing;
(b) CEM,
CPI,
each Investor Subsidiary and each Service Subsidiary has, complied in all
material respects with applicable laws relating to the withholding of Taxes
on
payments made to employees, independent contractors, creditors, stockholders,
members and third parties and the remittance of such withheld amounts to proper
Governmental Authorities;
(c) There
are
no Liens for Taxes upon the assets or properties of CEM, CPI, any Investor
Subsidiary or any Service Subsidiary, except for Permitted Liens;
(d) No
federal, state or local audits or examinations (“Audits”) have been initiated
and are currently in progress with regard to any Taxes or Tax Returns of CEM,
CPI, any Investor Subsidiary or any Service Subsidiary and, to the Knowledge
of
Seller, none of such entities has received any notice from any taxing authority
that any such Audit is currently pending or threatened;
(e) CEM,
CPI,
the Investor Subsidiaries and the Service Subsidiaries are not parties to, are
not bound by, and have no obligation under, any Tax sharing agreement (other
than an agreement solely among members of an Affiliated Group the common parent
of which is MDU Resources Group, Inc.);
(f) No
power
of attorney has been granted by CEM, CPI, any Investor Subsidiary or any Service
Subsidiary relating to Taxes of such entities, which power of attorney is
currently in force;
(g) CEM,
CPI,
each Investor Subsidiary and each Service Subsidiary have fully and timely
paid
all material Taxes that are due and payable by such companies to Governmental
Authorities (whether or not shown on any Tax Return), and have established
adequate reserves in accordance with GAAP for any material Taxes that are not
yet due and payable to Governmental Authorities, for all taxable periods, or
portions thereof, ending on or before the date hereof;
(h) There
are
no outstanding agreements entered into by Seller or any of its Affiliates
extending or waiving the statutory period of limitations applicable to any
claim
for, or the period for the collection or assessment or reassessment of, Taxes
due from CEM, CPI, any Investor Subsidiary or any Service Subsidiary for any
taxable period and no request by Seller or any of its Affiliates for any such
waiver or extension is currently pending;
(i) None
of
CEM, CPI, the Investor Subsidiaries or the Service Subsidiaries has taken any
reporting position on a Tax Return, which reporting position (i) if not
sustained would be reasonably likely, absent adequate disclosure in accordance
with Section 6662(d)(2)(B) of the Code, to subject such entity to a penalty
for substantial understatement of federal income Tax under Section 6662 of
the Code, and (ii) has not adequately been disclosed on such Tax Return in
accordance with Section 6662(d)(2)(B) of the Code;
(j) None
of
CEM, CPI, the Investor Subsidiaries or the Service Subsidiaries has constituted
a “distributing corporation” or a “controlled corporation” (within the meaning
of Section 355(a)(1)(A) of the Code) in a distribution of shares described
in Section 355 of the Code (i) in the two years prior to the date of
this Agreement or (ii) in a distribution that could otherwise be reasonably
expected to constitute part of a “plan” or “series of related transactions”
(within the meaning of Section 355(e) of the Code) that includes the
purchase by Buyer of the CPI Stock and the CEM Membership Interests pursuant
to
this Agreement;
(k) None
of
CEM, CPI, the Investor Subsidiaries or the Service Subsidiaries (i) has executed
or entered into a closing agreement pursuant to Section 7121 of the Code or
any similar provision of state, local or foreign law that would have continuing
effect after the Closing Date or (ii) has received any private letter ruling
of
the IRS or comparable ruling of any other Governmental Authority, in either
case
that would have continuing effect after the Closing Date;
(l) There
is
no contract, agreement, plan, or arrangement to which CEM, CPI, any Investor
Subsidiary or any Service Subsidiary is a party, covering any employee or former
employee of any such entity that, individually or collectively, could reasonably
be expected to give rise to the payment of any amount that would not be
deductible by Buyer, CEM, CPI, the Investor Subsidiaries or the Service
Subsidiaries by reason of Section 280G of the Code;
(m) The
▇▇▇▇▇▇▇▇ Partnership has made the election to adjust the basis of its assets
described in Section 754 of the Code, and such election is currently in effect;
and
(n) Schedule
4.11(n)
sets
forth the December 31, 2005 adjusted tax basis for federal income tax purposes
of CEM, CPI, the Investor Subsidiaries, the Service Subsidiaries and the Project
Companies.
4.12 Compliance
With Laws.
CEM,
CPI,
each Investor Subsidiary and each Service Subsidiary is in compliance with
all
applicable laws, rules and regulations with respect to its business or
operations except where the failure to be in compliance has not had, and is
not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect.
4.13 Undisclosed
Liabilities.
Except
as
set forth on Schedule
4.13,
neither
CEM nor CPI is subject to any material liability or obligation (whether
absolute, contingent or otherwise) that has not been accrued or reserved against
its Financial Statements, except (a) liabilities arising in the ordinary course
of business under any contract or commitment, (b) those liabilities or
obligations incurred in the ordinary course of business since December 31,
2006,
(c) liabilities that have not had, and are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect and (d) liabilities
or obligations disclosed on any of the Schedules to this Agreement.
4.14 Subsidiaries.
Except
as
set forth on Schedule
4.14,
none of
CPI, CEM, any Investor Subsidiary or any Service Subsidiary owns any preferred,
common or other equity securities of any kind nor any equity or other interests
in any other business, legal entity or arrangement.
4.15 Capitalization.
(a) The
CPI
Stock, which consists of 1,000 shares of common stock, no par value, constitutes
all of the issued and outstanding shares of capital stock of CPI and is owned
beneficially and of record by Seller, free and clear of all Liens. The CPI
Stock
has been duly authorized and validly issued, and is fully paid and
non-assessable. There are no other authorized shares of capital stock of CPI
other than the 1,000 shares of common stock comprising the CPI Stock. Neither
Seller nor CPI has any obligation, contingent or otherwise, to issue, sell,
repurchase, redeem or otherwise acquire any of the CPI Stock or other capital
stock of CPI or any equity or debt securities of CPI.
(b) The
CEM
Membership Interests constitute 100% of the membership interests of CEM and
are
owned beneficially and of record by Seller, free and clear of all Liens. The
CEM
Membership Interests have been duly authorized and validly issued, and are
fully
paid and non-assessable. There are no other authorized membership interests
of
CEM other than the membership interests comprising the CEM Membership Interests.
Seller has no obligation, contingent or otherwise, to issue, sell, repurchase,
redeem or otherwise acquire any of the CEM Membership Interests or other
ownership interests of CEM or any equity or debt securities of CEM.
(c) None
of
the membership interests constituting the CEM Membership Interests nor the
shares of common stock constituting the CPI Stock have been issued in violation
of, or is subject to, any preemptive or subscription rights, rights of first
refusal or offer, options, put or call rights, consent rights, restrictive
covenants or agreements with any third party other than Buyer. There are no
outstanding securities convertible into or exchangeable for the capital stock
of
CPI or the membership interests of CEM. Except as set forth on Schedule 4.15(c),
there
are no outstanding options, warrants or other rights (including conversion
or
preemptive rights and rights of first refusal) or agreements for the purchase
from CEM or CPI of any capital stock or other equity interests.
4.16 Financial
Statements.
Attached
hereto as Schedule
4.16
are the
unaudited balance sheets and income statements of CEM, CPI, each Project
Company, each Investor Subsidiary and each Service Subsidiary and the unaudited
combined statements of cash flows of CEM and CPI as of and for the year ended
December 31, 2006, and the three-month period ending March 31, 2007
(collectively, the “Financial Statements”). The Financial Statements have been
prepared in accordance with GAAP and present fairly the financial condition
of
CEM, CPI, each Project Company, each Investor Subsidiary and each Service
Subsidiary, respectively, as applicable, as of the dates set forth therein
and
their respective results of operations for the periods set forth
therein.
4.17 Absence
of Certain Changes. Except
as
set forth on Schedule
4.17,
since
December 31, 2006:
(a) Neither
CEM, CPI, any Investor Subsidiary nor any Service Subsidiary has suffered any
damage, destruction or loss which has not been disclosed to Buyer, whether
or
not covered by insurance, which has had a Material Adverse Effect;
(b) Without
limiting any other representation made by Seller herein, to the Knowledge of
Seller, neither CEM, CPI, any Investor Subsidiary nor any Service Subsidiary
has
suffered or experienced any Material Adverse Effect which has not been disclosed
to Buyer which would constitute a breach of any other representation made by
Seller herein;
(c) Neither
CEM, CPI, any Investor Subsidiary nor any Service Subsidiary has issued or
agreed to issue any additional common stock, membership interests or general
or
limited partnership interests or other equity interests in such
Person;
(d) Neither
CEM, CPI, any Investor Subsidiary nor any Service Subsidiary has encumbered
any
of its assets or incurred any Indebtedness, other than unsecured liabilities
incurred in the ordinary course of business and consistent with past practice
and Permitted Liens;
(e) Neither
CEM, CPI, any Investor Subsidiary nor any Service Subsidiary has entered into
any contract or agreement, including, without limitation, new loans or capital
expenditures, that will bind such Person beyond the Closing and will involve
aggregate expenditures in excess of $250,000, except the CEM Agreements and
CPI
Agreements;
(f) Neither
CEM, CPI, any Investor Subsidiary nor any Service Subsidiary has acquired,
sold
or transferred any material asset of any such Person other than in the ordinary
course of business and consistent with past practice; and
(g) Neither
CEM, CPI, any Investor Subsidiary nor any Service Subsidiary has amended or
changed any of its governing corporate, limited liability company, general
partnership or limited partnership documents.
4.18 Bankruptcy.
There
are
no bankruptcy, reorganization, or arrangement proceedings pending against,
being
contemplated by, or, to the Knowledge of Seller, threatened against CEM or
CPI.
4.19 Books
and Records. The
company records of CEM and CPI have been made available to Buyer prior to the
execution of this Agreement and contain a true and complete records, in all
material respects, of all material action taken at all meetings and by all
written consents in lieu of meetings of boards of directors and other similar
governing bodies of said entities.
4.20 Project
Companies.
(a) Organization;
Good Standing.
Each of
the Project Companies is a limited partnership, limited liability company or
corporation duly organized, validly existing and in good standing under the
laws
of the state of its formation or incorporation, is qualified to do business
and
is in good standing under the laws of each jurisdiction in which its business
as
now being conducted shall require it to be so qualified, except where the
failure to be so qualified has not had, and is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect.
(b) Validity
of Agreement.
Except
as set forth on Schedule
4.20(b),
the
execution, delivery and performance of this Agreement, and the consummation
of
the transactions contemplated hereby, do not and will not require any material
consent or waiver by any Person, or give rise to any rights of first refusal
or
similar preemptive rights under, conflict with, result in a material breach
of
any provision of, constitute a material default under, result in the material
modification or cancellation of, or give rise to any right of termination or
acceleration in respect of, any Project Contracts.
(c) Subsidiaries.
Except
as set forth on Schedule
4.20(c),
none of
the Project Companies has any Subsidiaries or otherwise owns or controls,
directly or indirectly, any equity interest in any corporation, partnership,
joint venture, limited liability company, association or other business
entity.
(d) No
Options.
Except
as set forth on Schedule
4.20(d),
there
are no outstanding options, warrants or other rights (including conversion
or
preemptive rights and rights of first refusal) or agreements for the purchase
from any Project Company of any general or limited partnership interests,
membership interests, capital stock or other equity interests, other than any
such rights or agreements, if any, set forth in the Project Company Agreement
of
such Project Company.
(e) Financial
Statements; Liabilities.
Except
as and to the extent (A) shown or provided for in the Financial Statements
for
the year ended December 31, 2006 with respect to the Project Companies, (B)
set forth on Schedule
4.20(e),
(C) arising under the Project Contracts, or (D) the existence of which
would not constitute a breach of any other representation or warranty made
herein to by the Knowledge of Seller, each of the Project Companies has no
liabilities or obligations (whether accrued, absolute or contingent) arising
prior to December 31, 2006 which are or which would reasonably be expected
to
become a claim against such Project Company or a Lien, other than a Permitted
Lien, against any of the assets or properties of such Project Company, in each
case, that has not had, and is not reasonably likely to have, individually
or in
the aggregate, a Material Adverse Effect.
(f) Absence
of Certain Changes.
Except
as set forth on Schedule
4.20(f),
since
December 31, 2006:
(i) To
the
Knowledge of Seller, none of the Project Companies has suffered any damage,
destruction or loss which has not been disclosed to Buyer, whether or not
covered by insurance, which has had a Material Adverse Effect;
(ii) Without
limiting any other representation made by Seller herein, to the Knowledge of
Seller, none of the Project Companies has suffered or experienced any Material
Adverse Effect which has not been disclosed to Buyer which would constitute
a
breach of any other representation made by Seller herein;
(iii) None
of
the Project Companies has issued or agreed to issue any additional common stock,
membership interests or general or limited partnership interests or other equity
interests in such Project Company;
(iv) None
of
the Project Companies has encumbered any of its assets or incurred any
Indebtedness, other than unsecured liabilities incurred in the ordinary course
of business and Permitted Liens; and
(v) None
of
the Project Companies has entered into any contract or agreement, including,
without limitation, new loans or capital expenditures, that will bind such
Project Company beyond the Closing and will involve annual expenditures in
excess of $250,000, except the Major Project Contracts and the Replacement
PPA.
(g) Ownership
or Lease of Project Facilities and Equipment.
Each
Project Company owns, leases or otherwise has the right to use all real
property, including all fixtures and improvements situated thereon, and owns,
leases or otherwise has the right to use all equipment and personal property,
tangible and intangible, in each case which is used in the day to day operations
of the business of such Project Company and which is necessary to conduct the
business of such Project Company in the manner in which it is presently
conducted except where the failure to so own, lease or have the right to use
would not materially and adversely effect the business or operation of such
Project Company.
(h) Taxes.
Except
as set forth on Schedule
4.20(h),
each of
the Project Companies has (i) duly and timely filed (or there has been filed
on
its behalf) with the appropriate taxing authorities all material Tax Returns
required to be filed by it, and all such Tax Returns were correct in all
material respects at the time of filing, and (ii) timely paid or caused to
have
been paid on its behalf all Taxes shown as due on filed Tax
Returns.
(i) Rights
of Third Parties.
Except
as set forth on Schedule
4.20(i),
none of
the Project Companies has entered into any leases, licenses, easements or other
agreements, recorded or unrecorded, granting rights to third parties in, or
with
respect to, any real or personal property of such Project Company other than
in
the ordinary course of business, and no person or entity has any right to
possession or occupancy of any property of such Project Company, in each case
except to the extent arising under Permitted Liens, the Major Project Contracts
or any leases, licenses, easements or other agreements entered into in the
ordinary course of business.
(j) Title
to Properties.
(i) Except
as
set forth on Schedule
4.20(j)(i),
each
Project Company has good and valid title to all of the properties which such
Project Company owns as reflected in the Financial Statements as of and for
the
period ended December 31, 2006 with respect to the Project Companies, and such
properties are not subject to any Lien, other than Permitted Liens.
(ii) Except
as
set forth on Schedule
4.20(j)(ii),
all
material leases pursuant to which each Project Company leases personal or real
property are valid and are enforceable against such Project Company and, to
the
Knowledge of Seller, enforceable by such Project Company, in each case in
accordance with their respective terms, except to the extent enforceability
may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or
similar laws now or hereafter in effect, affecting the enforcement of creditors’
rights generally and general equitable principles regardless of whether such
enforceability is considered in a proceeding at law or in equity.
(k) Additional
Information.
The
following additional information concerning the Project Companies is set forth
on Schedule
4.20(k):
(i) Major
Project Contracts.
A list
of all of the Major Project Contracts;
(ii) Insurance.
A list
of all of the current insurance policies for each Project Company;
(iii) Litigation.
A
description of all litigation and other administrative, arbitration, grievance
or other proceedings which, to the Knowledge of Seller, is pending or overtly
threatened, in each such case in which any Project Company is a party or is
reasonably likely to become a party, or involving any Project Company, its
business, its properties, or the Project Company Interests, except actions,
if
any, instituted by Buyer or any of its Affiliates;
(iv) Indebtedness.
A list
of all indebtedness for borrowed money of each Project Company in excess of
$100,000; and
(v) Project
Permits.
A list
of the Project Permits with respect to each Project Company.
(l) Insurance.
The
insurance policies listed on Schedule
4.20(k)
are in
full force and effect.
(m) Default.
Except
as set forth on Schedule
4.20(m),
none of
the Project Companies nor, to the Knowledge of Seller, any of the other parties
to the Project Contracts, is in material default under, nor has any event
occurred which, with notice or the lapse of time or both, would result in a
material default on the part of any Project Company under, any of the material
Project Contracts. Except as set forth on Schedule
4.20(m),
each of
the Project Contracts is valid, legally binding and enforceable against the
Project Company a party thereto and, to the Knowledge of Seller, enforceable
by
such Project Company, in each case in accordance with its terms, except to
the
extent enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect, affecting
the enforcement of creditors’ rights generally and general equitable principles
regardless of whether such enforceability is considered in a proceeding at
law
or in equity.
(n) Environmental
Matters.
Except
as set forth on Schedule
4.20(n):
(i) To
the
Knowledge of Seller, no Releases of Hazardous Substances have occurred at,
onto,
from, under or in any of the Project Facilities with respect to which remedial
action is required by law which has not been completed;
(ii) To
the
Knowledge of Seller, there are no Environmental Conditions at any of the Project
Facilities for which remedial action is required by law which has not been
completed;
(iii) There
are
no Environmental Claims against any Project Company or relating to one or more
of the Project Facilities, which are pending or, to the Knowledge of Seller,
overtly threatened;
(iv) To
the
Knowledge of Seller, no underground storage tanks are currently located at
any
of the Project Facilities;
(v) All
material permits, licenses, approvals, consents and orders required under
Environmental Laws for the operation of the Project Facilities (each an
“Environmental Permit”) as of the date hereof have been obtained, are in effect
and are being complied with in all material respects; and
(vi) Seller
has (A) disclosed, or upon obtaining Knowledge thereof will disclose prior
to
Closing, to Buyer all environmental investigation reports of which Seller has
Knowledge which have been prepared by any third party since January 1, 2004
relating to environmental conditions at the Project Facilities, and (B)
provided, or upon obtaining Knowledge thereof will disclose prior to Closing,
to
Buyer copies of, and have listed in Schedule
4.20(n),
all
such reports which, to the Knowledge of Seller, are currently in the Project
Companies’ possession.
(o) Labor
Matters.
There
are no collective bargaining agreements to which any of the Project Companies
are subject.
(p) Legal
and Regulatory Compliance.
Except
(i) as set forth on Schedule 4.20(p),
each
Project Company operates its businesses in compliance in all material respects
with, and the Project Facilities conform to, all applicable federal, state
and
local laws and all governmental regulations, and none of the Project Companies
has received any written notice of noncompliance with any such laws or
regulations relating to events, conditions or occurrences which if not remedied
would have a Material Adverse Effect. Except as set forth on Schedule
4.20(p),
each
Project Company holds the Project Permits with respect to such Project Company,
each Project Permit is in full force and effect, and each Project Company is
in
material compliance with the terms and conditions of its respective Project
Permits. The consummation of the transactions contemplated by this Agreement
will not give rise to any right of termination, cancellation or consent under
the terms, conditions or provisions of any Project Permit.
4.21 Disclaimers. EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE IV, THE PROJECT
FACILITIES AND ANY OTHER ASSETS OF CPI, CEM, THE INVESTOR SUBSIDIARIES, THE
SERVICE SUBSIDIARIES AND THE PROJECT COMPANIES ARE BEING ACQUIRED BY BUYER
“AS
IS” AND “WHERE IS”, AND EXCEPT FOR SUCH REPRESENTATIONS AND WARRANTIES, SELLER
EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE,
EXPRESS, IMPLIED, AT COMMON LAW, STATUTORY OR OTHERWISE, AS TO LIABILITIES,
OPERATIONS OF THE PROJECT FACILITIES AND ANY OTHER ASSETS OF CPI, CEM, THE
INVESTOR SUBSIDIARIES, THE SERVICE SUBSIDIARIES AND THE PROJECT COMPANIES
(COLLECTIVELY, THE “ACQUIRED ASSETS”), THE TITLE, CONDITION, VALUE OR QUALITY OF
THE ACQUIRED ASSETS OR THE PROSPECTS (FINANCIAL AND OTHERWISE), RISKS AND OTHER
INCIDENTS OF THE ACQUIRED ASSETS, AND SELLER SPECIFICALLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS
FOR
ANY PARTICULAR PURPOSE WITH RESPECT TO THE ACQUIRED ASSETS, OR ANY PART THEREOF,
OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER
LATENT OR PATENT, OR COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS, OR THE
APPLICABILITY OF ANY GOVERNMENTAL REQUIREMENTS, INCLUDING BUT NOT LIMITED TO
ANY
ENVIRONMENTAL LAWS, OR WHETHER SELLER POSSESSES SUFFICIENT REAL PROPERTY OR
PERSONAL PROPERTY TO OPERATE THE PURCHASED ASSETS. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE IV, SELLER FURTHER
SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING THE ABSENCE
OF
HAZARDOUS SUBSTANCES OR LIABILITY OR POTENTIAL LIABILITY ARISING UNDER
ENVIRONMENTAL LAWS WITH RESPECT TO THE FOREGOING.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
represents and warrants to Seller as follows:
5.1 Organization. Buyer
is
a limited liability company,
duly
organized, validly existing and in good standing under the laws of the state
of
its organization and has all requisite limited liability company power and
authority to own, lease and operate its properties and to carry on its business
as is now being conducted. Buyer has heretofore delivered to Seller complete
and
correct copies of its operating agreement (or other similar governing documents)
as currently in effect.
5.2 Authority
Relative to this Agreement.
Buyer
has
full organizational power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Buyer and the consummation by Buyer of the
transactions contemplated hereby have been duly and validly authorized by all
necessary limited liability company action required on the part of Buyer. This
Agreement has been duly and validly executed and delivered by Buyer. Subject
to
the receipt of Buyer Required Regulatory Approvals, this Agreement constitutes
a
legal, valid and binding agreement of Buyer, enforceable against Buyer in
accordance with its terms, except that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws affecting or relating to enforcement of
creditors’ rights generally and general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in
equity).
5.3 Consents
and Approvals; No Violation.
(a) Except
as
set forth on Schedule
5.3(a),
and
other than obtaining Buyer Required Regulatory Approvals, neither the execution
and delivery of this Agreement by Buyer nor the consummation by Buyer of the
transactions contemplated hereby will (i) conflict with or result in any breach
or violation of any provision of the operating agreement (or other similar
governing documents) of Buyer, or (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority prior to the Closing, or (iii) result in a default (or give rise
to
any right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, material
agreement or other instrument or obligation to which Buyer or any of its
Subsidiaries is a party or by which any of their respective assets may be bound,
except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained
or
which do not have, and would not reasonably be expected to have, individually
or
in the aggregate, a material adverse effect on the ability of the Buyer to
consummate the transactions contemplated by this Agreement (“Buyer Material
Adverse Effect”) or (iv) violate any law, regulation, order, judgment or decree
applicable to Buyer, which violations, individually or in the aggregate, would
create a Buyer Material Adverse Effect.
(b) Except
as
set forth on Schedule
5.3(b)
(the
filings and approvals referred to in such Schedule are collectively referred
to
as the “Buyer Required Regulatory Approvals”), no consent or approval of, filing
with, or notice to, any Governmental Authority is necessary for Buyer’s
execution and delivery of this Agreement, or the consummation by Buyer of the
transactions contemplated hereby, other than such consents, approvals, filings
or notices, which, if not obtained or made, will not prevent Buyer from
performing its obligations under this Agreement.
5.4 Legal
Proceedings.
There
are
no actions or proceedings pending against Buyer before any court or arbitrator
or Governmental Authority, which, individually or in the aggregate, would
reasonably be expected to create a Buyer Material Adverse Effect. Buyer is
not
subject to any outstanding judgments, rules, orders, writs, injunctions or
decrees of any court, arbitrator or Governmental Authority which would,
individually or in the aggregate, create a Buyer Material Adverse
Effect.
5.5 Inspections.
Buyer
acknowledges and agrees that it has, prior to its execution of this Agreement,
had full opportunity to conduct and has completed to its satisfaction
Inspections of the Project Facilities. Buyer acknowledges that it is satisfied
through such review and Inspections that no further investigation and study
on
or of the Project Facilities are necessary for the purposes of acquiring the
CPI
Stock and the CEM Membership Interests.
5.6 Securities
Laws.
Buyer
is
an experienced and knowledgeable investor in the U.S. power generation and
development business. Prior to entering into this Agreement, Buyer was advised
by its counsel, accountants, financial advisors, and such other Persons it
has
deemed appropriate concerning this Agreement and has relied solely on Seller’s
representations and warranties expressly contained herein and an independent
investigation and evaluation of, and appraisal and judgment with respect to,
the
CPI Stock and the CEM Membership Interests and the revenue, price, and expense
assumptions applicable thereto. Buyer hereby acknowledges that neither the
CPI
Stock nor the CEM Membership Interests have been registered under the Securities
Act of 1933, as amended (the “Securities Act”), or registered or qualified for
sale under any state securities laws and cannot be resold without registration
thereunder or exemption therefrom. Buyer is an “accredited investor,” as such
term is defined in Regulation D of the Securities Act, and will acquire the
CPI
Stock and the CEM Membership Interests for its own account and not with a view
to a sale or distribution thereof in violation of the Securities Act, and the
rules and regulations thereunder, any applicable state blue sky laws or any
other applicable securities laws. Buyer has sufficient knowledge and experience
in financial and business matters to enable it to evaluate the risks of
investment in the CPI Stock and the CEM Membership Interests and has the ability
to bear the economic risk of this investment for an indefinite period of
time.
ARTICLE
VI
COVENANTS
OF THE PARTIES
6.1 Conduct
of Business.
(a) From
the
date of this Agreement through the Closing Date, except as Buyer may otherwise
approve (which approval shall not be unreasonably withheld) or as otherwise
expressly contemplated by this Agreement, CEM and CPI shall, and shall cause
its
Subsidiaries to, (a) conduct their businesses in the ordinary course in
accordance with past practice, (b) use Commercially Reasonable Efforts to
preserve intact their respective business organizations and goodwill and assets,
(c) use Commercially Reasonable Efforts to keep available the services
provided by their respective present officers and key employees, and
(d) use their Commercially Reasonable Efforts to maintain satisfactory
relationships with others having business relationships with CEM and CPI and
their Subsidiaries. Except as described in Schedule 6.1(a)
or as
expressly contemplated by this Agreement or to the extent Buyer otherwise
consents in writing, during the period from the date of this Agreement to the
Closing Date (which consent shall not be unreasonably withheld), Seller shall
not cause or permit CPI, CEM, any Investor Subsidiary, and Service Subsidiary
or
any Project Company, other than the Hartwell Partnership, to take, and Seller
shall not cause or permit CPI or any Investor Subsidiary to exercise any rights
under the Hartwell Partnership’s Project Company Agreement to cause the Hartwell
Partnership to take, any of the following actions: (i) incur indebtedness
for borrowed money, (ii) grant any Liens on its assets, other than
Permitted Liens, (iii) enter into any Material Contract or terminate or
amend any Material Contract to which any such Person becomes or is a party,
(iv) dispose of any material assets of any such Person, (v) make any
distribution in respect of the equity securities of or other ownership interest
in such Person, except in the ordinary course of business and consistent with
past practice of such Person, or as required by such Person’s Project Company
Agreement or other governing documents, or as contemplated by, or required
to
effectuate the provisions of, Section 2.2 of this Agreement,
(vi) revoke any election under Section 754 of the Code,
(vii) issue any equity or debt securities, (viii) amend its respective
Project Company Agreement or other governing documents, (ix) waive, compromise,
or settle any material claim, or (x) voluntarily incur any material
liability except in the ordinary course of business. For purposes of this
Section 6.1, a “Material Contract” shall mean any Major Project Contract and any
contract entered into in the ordinary course of business that (x) requires
payments by any such Person in excess of $250,000 in the aggregate, or (y)
does
not provide, either, that the term thereof is three (3) months or less, or
that
it may be terminated without liability on three (3) months or less notice.
Notwithstanding the foregoing, Seller may, from the date hereof and prior to
the
Closing, take or cause to be taken any such action with respect to the Project
Facilities which Seller in good faith determines is necessary, appropriate
and
advisable to respond to emergency or similar conditions or, in accordance with
prudent utility practice to avoid substantial impairment to the Project
Facilities. Seller shall give Buyer prompt notice of Seller’s taking any such
action and, to the extent practicable under the circumstances, advance notice
thereof. On or prior to the Closing, Seller shall assign or cause to be assigned
at Seller’s sole cost and expense any Major Project Contracts, CEM Agreements
and CPI Agreements to which Seller or any Affiliates or Subsidiaries of Seller
is a party to the appropriate Project Company, CEM or CPI.
(b) The
Parties hereby acknowledge and agree that Seller shall be entitled to cause
and
permit the Project Companies to enter into a replacement or extension power
purchase agreement for the Brush 4D Project and the right of first offer
agreement referred to therein substantially in the form of the drafts thereof
referenced on Schedule
6.1(b)
with
such changes therein as the Parties shall mutually agree, such agreement not
to
be unreasonably withheld or delayed (collectively, the “Replacement
PPA”).
6.2 Access
to Information.
(a) Between
the date of this Agreement and the Closing Date, Seller will, at reasonable
times and upon reasonable notice and subject to compliance with all applicable
laws and, in the case of the Hartwell Partnership, the Hartwell Partnership’s
Project Company Agreement: (i) give Buyer and its Representatives reasonable
access to CEM and CPI’s managerial personnel and to all books, records, plans,
equipment, offices and other facilities and properties of CEM and CPI and the
Project Facilities; (ii) furnish Buyer with such financial and operating data
and other information with respect to CEM and CPI as Buyer may from time to
time
reasonably request, and permit Buyer to make such reasonable Inspections of
the
properties of CEM and CPI and the Project Facilities as Buyer may request;
(iii)
furnish Buyer at its request a copy of each material report, schedule or other
document filed by CEM or CPI or any of their respective Affiliates with respect
to the business or operations of CEM, CPI and the Project Companies with any
Governmental Authority; and (iv) furnish Buyer with all such other information
as shall be reasonably necessary to enable Buyer to verify the accuracy of
the
representations and warranties of Seller contained in this Agreement; provided,
however, that (A) any such Inspections and investigations shall be conducted
in
such a manner as not to interfere unreasonably with the business or operations
of CEM or CPI or any Project Company, (B) Seller shall not be required to take
any action which would constitute a waiver of the attorney-client privilege,
and
(C) Seller need not supply Buyer with any information which Seller is under
a
legal or contractual obligation not to supply. Buyer shall not, however, have
the right to perform or conduct any environmental sampling or testing at, in,
on
or underneath any of the Project Facilities.
(b) Each
Party shall, and shall use its best efforts to cause its Representatives to,
(i)
keep all Proprietary Information of the other Party confidential and not to
disclose or reveal any such Proprietary Information to any person other than
such Party’s Representatives and (ii) not use such Proprietary Information other
than in connection with the consummation of the transactions contemplated
hereby. The obligations of the Parties under this Section 6.2(b) shall be in
full force and effect for two (2) years from the date hereof and will survive
the termination of this Agreement, the discharge of all other obligations owed
by the Parties to each other and the closing of the transactions contemplated
by
this Agreement.
(c) For
a
period of seven (7) years after the Closing Date (or such longer period as
may
be required by applicable law or by any other provision of this Agreement),
Seller and its Representatives shall have reasonable access to all of the books
and records of CEM and CPI and/or any of their Subsidiaries, in the possession
of Buyer to the extent that such access may reasonably be required by Seller
in
connection with matters relating to or affected by the business of CEM, CPI
or
any of their respective Subsidiaries conducted prior to the Closing Date. Such
access shall be afforded by Buyer upon receipt of reasonable advance written
notice and during normal business hours. Seller shall be solely responsible
for
any costs or expenses incurred by it or Buyer with respect to such access.
If
Buyer shall desire to dispose of any books and records upon or prior to the
expiration of such seven-year period (or any such longer period), Buyer shall,
prior to such disposition, give Seller a reasonable opportunity at Seller’s
reasonable expense, to segregate and remove such books and records as Seller
may
select.
(d) For
a
period of seven (7) years after the Closing Date (or such longer period as
may
be required by applicable law or by any other provision of this Agreement),
Buyer and its Representatives shall have reasonable access to all of the books
and records of Seller and/or any Subsidiaries of Seller, in the possession
of
Seller to the extent that such access may reasonably be required by Buyer in
connection with matters relating to or affected by the business of CEM, CPI
or
any of their respective Subsidiaries. Such access shall be afforded by Seller
upon receipt of reasonable advance written notice and during normal business
hours. Buyer shall be solely responsible for any costs or expenses incurred
by
it or Seller with respect to such access. If Seller shall desire to dispose
of
any books and records upon or prior to the expiration of such seven-year period
(or any such longer period), Seller shall, prior to such disposition, give
Buyer
a reasonable opportunity at Buyer’s reasonable expense, to segregate and remove
such books and records as Buyer may select.
(e) Notwithstanding
the terms of Section 6.2(b) above, the Parties agree that prior to the Closing
Buyer may reveal or disclose Proprietary Information to any other Persons in
connection with Buyer’s financing of its purchase of the CPI Stock and CEM
Membership Interests or any equity participation in Buyer’s purchase of the CPI
Stock and CEM Membership Interests, provided that such Persons are obligated
to
maintain the confidentiality of the Proprietary Information in accordance with
this Agreement.
(f) Upon
the
other Party’s prior written approval (which will not be unreasonably withheld or
delayed), either Party may provide Proprietary Information of the other Party
to
the SEC, FERC or any other Governmental Authority with jurisdiction or any
stock
exchange, as may be necessary to obtain Seller’s Required Regulatory Approvals,
or Buyer Required Regulatory Approvals, respectively, or to comply generally
with any relevant law or regulation. The disclosing Party will seek confidential
treatment for the Proprietary Information provided to any Governmental Authority
and the disclosing Party will notify the other Party as far in advance as is
practicable of its intention to release to any Governmental Authority any
Proprietary Information.
(g) Except
as
specifically provided herein or in the Confidentiality Agreement, nothing in
this Section shall impair or modify any of the rights or obligations of Buyer
or
its Affiliates under the Confidentiality Agreement, all of which remain in
effect until termination of such agreement in accordance with its
terms.
(h) Except
as
may be permitted in the Confidentiality Agreement, Buyer agrees that, prior
to
the Closing Date, it will not contact any vendors, off-takers, suppliers,
employees, or other contracting parties of CEM, CPI or their respective
Affiliates with respect to any aspect of the business or operations of CEM,
CPI
or any Project Company or the transactions contemplated hereby, without the
prior written consent of Seller, which consent shall not be unreasonably
withheld.
(i) Buyer
shall not contact any Governmental Authority regarding any pending, threatened
or potential Environmental Claim or with respect to any Environmental Permit
relating to the Project Companies without Seller’s prior written
consent.
(j) At
Buyer’s request, prior to the Closing Date, Seller shall permit Buyer to have
one representative located at each of CPI’s and CEM’s main offices for the
purpose of observing their business operations. Seller shall cause CPI and
CEM
to provide Buyer’s representatives with reasonable use of office space,
telephone and similar communications and office services and shall provide
Buyer’s representatives with reasonable access to representatives of CPI and CEM
in order to assist Buyer in making an orderly transition of CPI and CEM and
their respective Subsidiaries following the Closing.
6.3 Public
Statements.
Subject
to the requirements imposed by any applicable law or any Governmental Authority
or stock exchange, no press release or other public announcement or public
statement or comment in response to any inquiry relating to the transactions
contemplated by this Agreement shall be issued or made by any Party without
the
prior approval of the other Parties (which approval shall not be unreasonably
withheld). The Parties agree to cooperate in preparing such
announcements.
6.4 Expenses.
Except
to
the extent specifically provided herein, whether or not the transactions
contemplated hereby are consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be
borne by the Party incurring such costs and expenses. Notwithstanding anything
to the contrary herein, Buyer will be responsible for all filing fees under
the
HSR Act.
6.5 Further
Assurances.
Subject
to the terms and conditions of this Agreement, each of the Parties hereto shall
use its best efforts to take, or cause to be taken, all actions, and to do,
or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the purchase and sale
of
the CPI Stock and the CEM Membership Interests pursuant to this Agreement,
including without limitation using its best efforts to ensure satisfaction
of
the conditions precedent to each Party’s obligations hereunder, including
obtaining all necessary consents, approvals, and authorizations of third parties
and Governmental Authorities required to be obtained in order to consummate
the
transactions hereunder. Buyer agrees to perform all conditions required of
Buyer
in connection with Seller’s Required Regulatory Approvals, other than those
conditions which would create a Material Adverse Effect on the Buyer or its
Subsidiaries after giving effect to the transactions contemplated by this
Agreement. None of the Parties hereto shall, without prior written consent
of
the other Party, take or fail to take any action, which might reasonably be
expected to prevent or materially impede, interfere with or delay the
transactions contemplated by this Agreement.
6.6 Consents
and Approvals.
(a) As
promptly as practicable after the date of this Agreement, Seller and Buyer,
as
applicable, shall each file or cause to be filed with the Federal Trade
Commission and the United States Department of Justice any notifications
required to be filed under the HSR Act and the rules and regulations promulgated
thereunder with respect to the transactions contemplated hereby. The Parties
shall use their respective Commercially Reasonable Efforts to respond promptly
to any requests for additional information made by either of such agencies,
and
to cause the waiting periods under the HSR Act to terminate or expire at the
earliest possible date after the date of filing. Buyer will pay all filing
fees
under the HSR Act, but each Party will bear its own costs of the preparation
and
prosecution of any filing.
(b) As
promptly as practicable, and in any case within ten (10) days after the date
of
this Agreement, Seller and Buyer, as applicable, shall file or cause to be
filed
with the FERC such applications as are necessary to obtain required FERC
approval for the various transactions contemplated hereby. The Parties shall
consult with each other regarding such filings and shall consider and
incorporate in such filings all reasonable comments, if any, submitted by the
other Party with respect thereto. If appropriate, the Parties will submit a
joint application to the FERC seeking such required approvals. The Parties
shall
respond promptly to any requests for additional information made by the FERC,
and use their respective best efforts to cause regulatory approval to be
obtained at the earliest possible date after the date of filing. Each Party
will
bear its own costs of the preparation and prosecution of any such
filing.
(c) As
promptly as practicable after the date of this Agreement, Buyer and Seller
shall
make all such other filings and applications with Governmental Authorities
seeking any other approval or authorization as may be required for the
consummation of the transactions contemplated hereby. The Parties shall respond
promptly to any requests for additional information made by any such
Governmental Authority and shall use their respective best efforts to obtain
any
such approval at the earliest possible date after the date of the filing. Each
Party shall bear its own costs of the preparation and prosecution of such
filings.
6.7 Use
of
Centennial Marks. Effective
upon the Closing Date, Seller grants Buyer a perpetual, irrevocable,
royalty-free license to use the name and trademark “CENTENNIAL POWER”. Buyer
acknowledges and agrees that Seller is the owner of the Intellectual Property
Rights in the trademark “CENTENNIAL POWER” when used in connection with the
provision of energy, power and other related services. Buyer further
acknowledges and agrees that it obtains no Intellectual Property Rights to
or
any other right to use the Centennial Marks other than as provided in this
Section 6.7. Buyer agrees never to challenge Seller’s (or its Affiliates’)
ownership of the Centennial Marks or any application for registration thereof
or
any existing registration thereof or any other rights of Seller or its
Affiliates therein as a result, directly or indirectly, of Buyer’s ownership of
the CPI Stock and the CEM Membership Interests. Buyer further agrees never
to
apply for, either directly or through its Affiliates and/or successors and
permitted assigns, any federal or state trademark, service ▇▇▇▇ or any other
Intellectual Property Right featuring the term “CENTENNIAL POWER” or any
variation, deviation, modification or abbreviation thereof. Buyer warrants
that
its provision of services or products under the trade name “CENTENNIAL POWER”
shall conform to the quality and standards adhered to by Seller and that Seller
shall have the right, upon reasonable request, to review and modify, for quality
assurance purposes, Buyer’s use of the trademark “CENTENNIAL POWER” in Buyer’s
advertising and marketing. Within sixty (60) days after the Closing Date, Buyer
shall, except for the trademark “CENTENNIAL POWER”, (i) remove the Centennial
Marks from the assets of CPI, CEM, the Project Companies, the Investor
Subsidiaries and the Service Subsidiaries, including signage at the Project
Facilities, and provide written verification thereof to Seller promptly after
completing such removal and (ii) return or destroy (with proof of destruction)
all other assets of CPI, CEM, the Project Companies, the Investor Subsidiaries
and the Service Subsidiaries that contain any Centennial Marks that are not
removable.
6.8 Fees
and Commissions.
Seller,
on the one hand, and Buyer, on the other hand, represent and warrant to the
other that, no broker, finder or other Person is entitled to any brokerage
fees,
commissions or finder’s fees in connection with the transaction contemplated
hereby by reason of any action taken by the Party making such representation,
except that Seller has engaged, and shall bear the liability for the commissions
and fees of, ▇▇▇▇▇▇▇, Sachs & Co. in connection with the transactions
contemplated hereby. Seller, on the one hand, and Buyer, on the other hand,
will
pay to the other or otherwise discharge, and will indemnify and hold the other
harmless from and against, any and all claims or liabilities for all brokerage
fees, commissions and finder’s fees incurred by reason of any action taken by
the indemnifying party.
6.9 Tax
Matters.
(a) Section
338(h)(10) Elections.
(i) Seller
and Buyer shall jointly make or cause to be made timely and irrevocable
elections under Section 338(h)(10) of the Code (the “Election”) with
respect to the sale of each of CPI and CEM and the deemed sale of each of the
Investor Subsidiaries, the Service Subsidiaries and the Project Companies
constituting corporations for federal income Tax purposes, except that no such
elections shall be made with respect to ▇▇▇▇▇▇▇▇ Power Company (such entities
for which elections shall be made, the “338(h)(10) Election Entities”).
In
addition, Seller and Buyer shall jointly make all elections under state and
local Tax law comparable to the elections under Section 338(h)(10) or
Section 338(g) as available, unless such state or locality does not have a
provision comparable to Section 338(h)(10) or Section 338(g), in which
case no election shall be made in such state or locality (together with the
Election, the “Section 338(h)(10) Elections”). Seller
and Buyer shall and shall cause their respective Subsidiaries and Affiliates
to
(i) treat the Section 338(h)(10) Elections as valid, (ii) file all Tax
Returns in a manner consistent with such Section 338(h)(10) Elections and
(iii) take no position contrary thereto. Seller
shall be responsible for and shall timely pay or cause to be timely paid to
applicable Governmental Authorities all Income Taxes imposed on Seller and
all
338(h)(10) Election Entities that are attributable to the making of the Section
338(h)(10) Elections, provided, however, that for any state or local
jurisdiction that imposes Income Tax on both the sale (or deemed sale) of the
stock of a 338(h)(10) Election Entity and the deemed sale of assets of such
338(h)(10) Election Entity, Seller shall be responsible for only the Income
Tax
imposed on the sale (or deemed sale) of the stock of such 338(h)(10) Election
Entity and Buyer shall be responsible for and shall timely pay or cause to
be
timely paid to applicable Governmental Authorities all Income Taxes imposed
on
the deemed sale of assets of such 338(h)(10) Election Entity (such Taxes for
which Buyer is responsible, the “Buyer 338 Liability”).
(ii) Prior
to
the Closing, Buyer shall (A) determine the amount of the adjusted grossed-up
basis and aggregate deemed sales price with respect to each of the 338(h)(10)
Election Entities and the allocation of such amounts among the assets of each
of
the 338(h)(10) Election Entities on a separate entity basis in accordance with
Section 338(h)(10) of the Code and applicable Treasury Regulations thereunder
and (B) deliver a schedule of all such determinations to Seller and provide
Seller with a reasonable opportunity to review, comment on, and consent to
such
schedule prior to the Closing, which consent shall not be unreasonably withheld
or delayed (the “338 Allocation”). Buyer shall promptly revise the 338
Allocation to reflect the Adjustment, as finally determined pursuant to Section
3.3 of the Agreement and Buyer shall promptly forward a draft of the revised
338
Allocation to Seller for Seller’s consent, which consent shall not be
unreasonably withheld or delayed. Seller and Buyer shall take, and shall cause
their respective Affiliates to take, no action inconsistent with, or fail to
take any action necessary for the validity of each Section 338(h)(10) Election,
and shall adopt and utilize, and cause their respective Affiliates to adopt
and
utilize, the asset values prescribed in the 338 Allocation (as revised by Seller
and Buyer) in making such allocations for the purpose of all Tax Returns filed
by them, and shall not voluntarily take any action inconsistent therewith upon
examination of any Tax Return, in any refund claim, in any litigation or
otherwise with respect to such Tax Returns. Buyer and Seller shall notify and
provide the other with reasonable assistance in the event of an examination,
audit or other proceeding regarding the agreed upon allocations.
(iii) The
Purchase Price allocable to Hartwell Independent Power Partners, Inc. and ▇▇▇▇
County IPP, Inc. and the share of each such entity of the liabilities of the
Hartwell Partnership shall be allocated among the assets of the Hartwell
Partnership as of the Closing Date in accordance with a schedule to be prepared
in accordance with the rules under Code Sections 743(b), 751, 755 and 1060
(the
“754 Allocation Schedule”). Buyer shall deliver a draft of the 754 Allocation
Schedule to Seller and the Hartwell Partnership as soon as practicable after
the
date of this Agreement, and Buyer, Seller and the Hartwell Partnership shall
mutually agree upon the 754 Allocation Schedule at or prior to the Closing.
Buyer and Seller shall not, and Seller shall use all Commercially Reasonable
Efforts to cause the Hartwell Partnership to not, unreasonably withhold its
approval and consent with respect to the 754 Allocation Schedule. Buyer and
Seller agree that the 754 Allocation Schedule shall be amended to reflect any
post-Closing adjustments to the allocation that are required by applicable
federal income Tax law. Unless otherwise required by applicable law, Buyer
and
Seller agree to act, and to cause their Affiliates and the Hartwell Partnership
to act, in accordance with the computations and allocations contained in the
754
Allocation Schedule (taking into account any such amendment thereto) in any
relevant Tax Returns or similar filings (including forms or reports, if any,
required to be filed pursuant to Code Section 1060), to cooperate in the
preparation of any such filings, to timely file such filings in the manner
required by applicable law and to not take any position inconsistent with such
754 Allocation Schedule in any Tax Return, in any refund claim, in any
litigation, or otherwise.
(b) Return
Filing, Payments, Refunds and Credits.
(i) Seller
shall prepare or cause to be prepared and file or cause to be filed all Federal,
state and local Tax Returns for (x) CEM, CPI, the Investor Subsidiaries, the
Service Subsidiaries and the Project Companies (other than Hartwell Partnership)
(the “Target Entities”) for all Pre-Closing Tax Periods of such entities,
including the consolidated federal income Tax Return of MDU Resources Group,
Inc. for the Tax period ending on December 31, 2007, and (y) any Affiliated
Group that includes any of the Target Entities (other than an Affiliated Group
that has no members other than two or more of the Target Entities) (an “MDU
Affiliated Group”). Each such Tax Return shall be prepared in a manner
consistent with past practice. Buyer
shall not, and shall cause its Affiliates not to, amend, refile, modify or
revoke such Tax Returns (or any notification or election relating thereto)
without the prior written consent of Seller, which consent shall not be
unreasonably withheld or delayed; provided,
for the avoidance of doubt, that the Seller shall be deemed to have reasonably
withheld its consent if any such action by Buyer or its Affiliates could
reasonably be expected to have an adverse impact upon any Taxes or Tax Returns
(or Tax attribute) of Seller or any of its Affiliates for any Tax period ending
on or prior to the Closing Date or any Straddle Period. Buyer and Seller shall
act in good faith to resolve any disputes, but in the event Buyer and Seller
do
not resolve any disputed items by agreement, either Buyer or Seller may refer
such dispute to an Independent Accounting Firm for resolution, and the decision
of the Independent Accounting Firm shall be final and binding on Buyer and
Seller and their respective Affiliates. The costs, expenses and fees of the
Independent Accounting Firm shall be borne equally by Seller, on the one hand,
and Buyer, on the other hand.
Buyer
shall and shall cause its Affiliates to timely provide Seller with all
information as Seller shall reasonably request in connection with the
preparation of such Tax Returns. Seller
and its Affiliates shall be responsible for payment of any Income Taxes, and
shall be entitled to any refunds or credits of Income Taxes, shown as due on
such Tax Returns, except that Buyer and its Affiliates shall be responsible
for
the timely payment of any Buyer 338 Liability and any Income Taxes resulting
from any transaction or event that is not in the ordinary course of business
and
occurs after the Closing on the Closing Date. Buyer shall timely pay or cause
to
be timely paid all Taxes (other than Income Taxes) shown as due on such Tax
Returns. The income or loss or other items to be reported on the federal income
Tax Return to be filed for CEM, CPI, the Investor Subsidiaries, the Service
Subsidiaries and the Project Companies (other than the Hartwell Partnership)
for
the period that began on January 1, 2007 and ends on the Closing Date shall
be
based upon a closing of the books as of the close of business on the Closing
Date, consistent with Treasury Regulation Section 1.1502-76(b). Buyer and Seller
shall use Commercially Reasonable Efforts to cause the Investor Subsidiaries’
distributive shares of the income or loss of the Hartwell Partnership for the
fiscal year that includes the Closing Date to be reported in the Tax Return
described in the preceding sentence and determined based upon a hypothetical
closing of the books of Hartwell Partnership as of the Closing Date, consistent
with Treasury Regulation Section 1.1502-76(b)(2)(vi)(A). Notwithstanding
anything in this Agreement to the contrary, Buyer and Seller agree that all
transactions and events in respect of any of the Target Entities and the
Hartwell Partnership that are not in the ordinary course of business and occur
after the Closing on the Closing Date shall be reported on the Tax Return(s)
of
Buyer and its Affiliates to the extent required or permitted by Treasury
Regulation section 1.338-1(d) or 1.1502-76(b)(1)(ii)(B) or other applicable
federal or state Tax law.
(ii) Buyer
shall, except to the extent that such Tax Returns are the responsibility of
Seller under Section 6.9(b)(i), timely prepare and file or cause to be timely
prepared and filed all Tax Returns of CEM, CPI, the Investor Subsidiaries,
the
Service Subsidiaries and the Project Companies (other than ▇▇▇▇▇▇▇▇
Partnership). For any Straddle Period Tax Return that is the responsibility
of
Buyer under this Section 6.9(b)(ii), Buyer shall, and shall cause its
Affiliates to, prepare such Tax Return in a manner consistent with past
practices and with all Tax Returns prepared or caused to be prepared by Seller
pursuant to Section 6.9(b)(i) with respect to the entity in question, and Buyer
shall deliver to Seller for its review, comment and approval (which approval
shall not be unreasonably withheld) a copy of each such proposed Tax Return
(accompanied, in the case of each Income Tax Tax Return, by an allocation of
the
Income Taxes shown to be due on such Tax Return between the portion of such
Straddle Period ending on the Closing Date and the portion of such Straddle
Period beginning after the Closing Date) at least thirty Business Days prior
to
(a) the due date for filing such Tax Return (giving effect to any validly
obtained extensions), or (b) if there is no due date for filing, the actual
filing date thereof. Buyer shall and shall cause its Affiliates to not
unreasonably fail to reflect any comments received from Seller.
Buyer
shall timely pay or cause to be timely paid all Taxes shown as due on such
Tax
Returns. Seller shall reimburse Buyer for Income Taxes shown to be due on such
Tax Returns as filed, to the extent allocable to the portion of such Straddle
Period ending on the Closing Date, and Buyer shall promptly pay to Seller the
amount of Income Taxes allocable to the portion of such Straddle Period
beginning after the Closing Date to the extent such Income Taxes were paid
on or
prior to the Closing Date. Buyer shall promptly pay to Seller the amount of
any
refunds or credits of Income Taxes allocable to the portion of such Straddle
Period ending on the Closing Date. For
purposes of this Agreement, in the case of any Straddle Period, Income Taxes
allocable to the portion of such Straddle Period ending on the Closing Date
shall be computed as if the Tax period ended on the Closing Date, except
that any Buyer 338 Liability and any Income Taxes resulting from any transaction
or event that is not in the ordinary course of business and occurs after the
Closing on the Closing Date shall be allocable to the portion of such Straddle
Period beginning after the Closing Date.
Buyer
shall not, and shall cause its Affiliates to not, amend, refile, modify or
revoke any Straddle Period Tax Return (or any notification or election relating
thereto) without the prior written consent of Seller, which consent shall not
be
unreasonably withheld; provided,
for the avoidance of doubt, that the Seller shall be deemed to have reasonably
withheld its consent if any such action by Buyer or its Affiliates could
reasonably be expected to have an adverse impact upon any Taxes or Tax Returns
(or Tax attribute) of Seller or any of its Affiliates for any Tax period ending
on or prior to the Closing Date or any Straddle Period. Buyer and Seller shall
act in good faith to resolve any disputes, but in the event Buyer and Seller
do
not resolve any disputed items by agreement, either Buyer or Seller may refer
such dispute to an Independent Accounting Firm for resolution, and the decision
of the Independent Accounting Firm shall be final and binding on Buyer and
Seller and their respective Affiliates. The costs, expenses and fees of the
Independent Accounting Firm shall be borne equally by Seller, on the one hand,
and Buyer, on the other hand.
(iii) Seller
and its Affiliates shall be entitled to any refunds or credits of or against
any
Excluded Taxes and any other Taxes for which Seller or its Affiliates are
responsible pursuant to this Agreement. Buyer shall, at Seller's reasonable
request, file or cause the relevant entity to file for and use Commercially
Reasonable Efforts to obtain any refund or credit to which Seller and its
Affiliates are entitled.
(iv) Buyer
shall, and shall cause its Affiliates to, promptly forward to Seller and its
Affiliates or reimburse Seller and its Affiliates for any refunds or credits
of
Taxes due Seller and its Affiliates (pursuant to the terms of this Section
6.9)
after receipt thereof.
(v) Buyer
shall, and shall cause its Affiliates to, elect, where permitted by applicable
law, to carry forward any item of loss, deduction or credit which arises in
any
Tax period beginning after the Closing Date.
(c) Cooperation
on Tax Matters.
(i) Buyer
and
Seller shall (and each shall cause CEM, CPI, the Investor Subsidiaries, the
Service Subsidiaries and the Project Companies to) cooperate fully, as and
to
the extent reasonably requested by the other Party, in connection with the
preparation and filing of Tax Returns pursuant to this Section and in connection
with any audit, litigation or other proceeding with respect to Taxes for any
Tax
period ending on or prior to the Closing Date. Such cooperation shall include
the retention and (upon the other Party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or
other
proceeding and making employees (to the extent such employees were responsible
for the preparation, maintenance or interpretation of information and documents
relevant to Tax matters or to the extent required as witnesses in any Tax
proceedings), available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. The Parties
agree (A) to retain, and (in the case of Buyer) to cause CEM, CPI, the Investor
Subsidiaries, the Service Subsidiaries and the Project Companies to retain,
all
books and records with respect to Income Tax matters pertinent to CEM, CPI,
the
Investor Subsidiaries, the Service Subsidiaries and the Project Companies
relating to any Tax period beginning before the Closing Date until six months
after the expiration of the statute of limitations (and, to the extent notified
by Buyer or Seller, any extensions thereof) of the respective Tax periods,
and
to abide by all record retention obligations imposed by law or pursuant to
agreements entered into with any taxing authority, and (B) to give the
other Party reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if the other Party so requests,
Buyer
or Seller, as the case may be, shall allow the other Party to take possession
of
such books and records.
(ii) Buyer
and
Seller further agree, upon request, to use their best efforts to obtain any
certificate or other document from any Governmental Authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax that could
be imposed with respect to the transactions contemplated hereby.
(iii) At
Seller's request, Buyer shall cause CEM, CPI, the Investor Subsidiaries, the
Service Subsidiaries and the Project Companies to make and/or join with Seller
and any of Seller’s Affiliates in making after Closing any election for which
such entity’s consent is required for any Tax period (or portion thereof) ending
on or prior to the Closing Date, if the making of such election does not have
a
material adverse impact on Buyer (or any of its Affiliates) for any Tax period
beginning after the Closing Date.
(d) Contests.
(i) Seller
and Buyer shall notify the other Party in writing within fourteen (14) days
or
such shorter period as may be required thereby of receipt by it or any of its
Affiliates of written notice of any pending or threatened Tax examination,
audit
or other administrative or judicial proceeding (a “Tax Contest”) that could
reasonably be expected to result in an indemnification obligation of such other
Party pursuant to this Agreement and
such
timely notice shall specify in reasonable detail the basis for any claim
included therein and shall include a copy of the relevant portion of any
correspondence received from the taxing authority.
If the
recipient of such notice of a Tax Contest fails to provide such timely notice
to
such other Party, it shall not be entitled to indemnification for any Taxes
arising in connection with such Tax Contest, but only to the extent, if any,
that such failure or delay shall have adversely affected the indemnifying
Party’s ability to defend against, settle, or satisfy any action, suit or
proceeding against it, or any damage, loss, claim, or demand for which the
indemnified Party is entitled to indemnification hereunder,
and the
indemnifying Party’s indemnity obligations shall be reduced to the extent of any
Tax or other liability incurred as a result of the delay or failure to receive
such timely notice.
(ii) If
a Tax
Contest relates to any Taxes for which Seller is liable in full hereunder,
Seller shall at its expense control the defense and settlement of such Tax
Contest. If such Tax Contest relates to any Taxes for which Buyer is liable
in
full hereunder, Buyer shall at its own expense control the defense and
settlement of such Tax Contest. The Party not in control of the defense shall
have the right to observe the conduct of any Tax Contest at its expense,
including through its own counsel and other professional experts. Buyer and
Seller shall jointly represent CEM, CPI, any Investor Subsidiary, any Service
Subsidiary or any Project Company in any Tax Contest relating to Taxes for
which
both are liable hereunder, and fees and expenses related to such representation
shall be paid equally by Buyer and Seller.
(iii) Notwithstanding
anything to the contrary in Section 6.9(d)(ii), to the extent that an issue
raised in any Tax Contest controlled by one Party or jointly controlled could
materially affect the liability for Taxes of the other Party, the controlling
Party shall not, and neither Party in the case of joint control shall, enter
into a final settlement without the consent of the other Party, which consent
shall not be unreasonably withheld. Where a Party reasonably withholds its
consent to any final settlement, that Party may continue or initiate further
proceedings, at its own expense, and the liability of the Party that wished
to
settle (as between the consenting and the non-consenting Party) shall not exceed
the liability that would have resulted from the proposed final settlement
including interest, additions to Tax, and penalties that have accrued at that
time, and the non-consenting Party shall indemnify the consenting Party for
any
liability in excess of liability that would have resulted from the proposed
final settlement.
(iv) Notwithstanding
any other provision of this Agreement to the contrary, if a Tax Contest results
in an increase in Income Taxes for which Seller is liable hereunder and such
increase is attributable to adjustments based on timing differences which will
reverse in Tax periods ending subsequent to the Closing Date, Buyer shall
promptly pay to Seller, upon Seller's written request, an amount equal to the
present value of the reduction in Income Taxes payable by the Buyer and its
Affiliates in future Tax periods by reason of such reversal, determined by
using
a discount rate of 6% and an assumed Tax rate of 40%, and by assuming that
such
reduction in Income Taxes will occur in the year or years of
reversal.
(e) Tax
Sharing Agreements.
Any Tax
sharing agreement or similar arrangement between Seller or any Affiliate of
Seller (other than CEM, CPI, the Investor Subsidiaries, the Service Subsidiaries
and the Project Companies) on the one hand, and any of CEM, CPI, the Investor
Subsidiaries, the Service Subsidiaries or the Project Companies on the other
hand shall be terminated with respect to CEM, CPI, the Investor Subsidiaries,
the Service Subsidiaries and the Project Companies, as applicable, as of the
Closing Date.
(f) Certain
Taxes.
Notwithstanding anything in this Agreement to the contrary, all transfer,
documentary, sales, use, stamp, registration and other such Taxes and fees
(including any penalties and interest) incurred in connection with this
Agreement, whether imposed upon Seller, Buyer, CEM, CPI, any Investor
Subsidiary, any Service Subsidiary or any Project Company (“Transfer Taxes”),
shall be borne 50 percent by Seller and 50 percent by Buyer. Seller and Buyer
shall, and shall cause their respective Affiliates, to prepare and timely file
all necessary Tax Returns and other documentation with respect to all such
Transfer Taxes, and, if required by applicable law, Buyer shall, and shall
cause
CEM, CPI, the Investor Subsidiaries, Service Subsidiaries and Project Companies
to, join in the execution of all such Tax Returns and other documentation.
All
costs and expenses incurred in connection with the filing of all such Tax
Returns and documentation hereunder shall be borne by Buyer.
(g) Disputes.
In the
event that a dispute arises between Seller and Buyer as to the amount of Taxes,
or indemnification, whether or not attributable to CEM or CPI, the Parties
shall
attempt in good faith to resolve such dispute, and any agreed upon amount shall
be paid to the appropriate Party. If such dispute is not resolved thirty (30)
days thereafter, the Parties shall submit the dispute to an Independent
Accounting Firm mutually appointed by Seller and Buyer for resolution, which
resolution shall be final, conclusive and binding on the Parties.
Notwithstanding anything in this Agreement to the contrary, the fees and
expenses of the Independent Accounting Firm in resolving the dispute shall
be
borne equally by Seller and Buyer. Any payment required to be made as a result
of the resolution of the dispute by the Independent Accounting Firm shall be
made within ten (10) days after such resolution, together with any interest
determined by the Independent Accounting Firm to be appropriate.
(h) Alternative
Structure.
The
Parties agree to discuss in good faith alternative structures to complete the
transactions contemplated by this Agreement, but Buyer acknowledges that
(x) no such alternatives shall delay the Closing Date or increase the risks
or costs of the transactions to Seller or decrease the net after-tax proceeds
received by Seller from the transactions and (y) that Seller shall have no
obligation to agree to any such alternative structure.
6.10 Advice
of Changes.
Prior
to
the Closing, each Party will promptly advise the other in writing with respect
to any matter arising after execution of this Agreement of which that Party
obtains knowledge and which, if existing or occurring at the date of this
Agreement, would have been required to be set forth in this Agreement, including
any of the Schedules hereto, or of any breach of any representation or warranty
or of any other condition or circumstance that would excuse a Party of timely
performance of its obligations hereunder. Subject to Buyer’s consent, Seller may
cause CEM, CPI, the Investor Subsidiaries, the Service Subsidiaries or the
Project Companies to amend, substitute or otherwise modify any CEM Agreement,
CPI Agreement or Project Contract to the extent that any such agreement expires
by its terms prior to the Closing Date. Nothing contained herein shall relieve
Seller or Buyer of any breach of representation, warranty or covenant under
this
Agreement existing as of the date hereof or any subsequent date as of which
such
representation, warranty or covenant shall have been made; provided,
however,
that
Seller shall have no liability to Buyer for any breach of any representation,
warranty or covenant hereunder which results from Buyer withholding its consent
under the immediately preceding sentence. Notwithstanding the foregoing, Seller
shall be entitled to cause BIV Generation and Brush Power, LLC to enter into
the
Replacement PPA subject to Section 6.1(b) hereof.
6.11 Consents. Seller
shall use Commercially Reasonable Efforts to obtain all consents and approvals
for the consummation of the transactions contemplated hereby required under
any
CEM Agreement, CPI Agreement or Major Project Contract, and all required waivers
of any rights of first refusal, rights of first offer, or similar preemptive
rights with respect to any of the Project Company Interests necessary in order
to consummate the transactions contemplated by this Agreement.
6.12 Buyer
Financial Assurance.
Simultaneous with the execution and delivery of this Agreement, Buyer is
providing to Seller (a) an irrevocable standby letter of credit from Barclays
Bank PLC in the stated amount of $50 million (the “Buyer LC”) which shall
permit, subject to the terms and conditions of this Agreement, Seller to draw
up
to $50 million in payment of the Termination Fee, and (b) an equity commitment
letter (the “Equity Commitment Letter”) from Natural Gas Partners VIII L.P.
dated the date hereof, addressed to Buyer confirming the commitment and
availability of not less than $120 million, which funds will be provided to
Buyer on or before the Closing Date in order to fund a portion of the payment
of
the Purchase Price.
6.13 Financing
Cooperation. At
Buyer’s request, Seller shall, and shall use its reasonable efforts to cause
CEM, CPI and their respective Subsidiaries to, provide reasonable cooperation
with Buyer and Buyer’s lenders in connection with Buyer obtaining debt financing
for the consummation of the transactions contemplated hereby, including making
representatives of such parties available at reasonable times in connection
with
the syndication of such debt financing and related activities.
6.14 Employee
and Benefit Plans.
(a) Except
as
specifically provided in this Section 6.14, Seller shall, and shall cause,
CEM,
CPI, the Investor Subsidiaries, the Service Subsidiaries and the Project
Companies to take all necessary actions, including compliance with all
applicable Laws, such that (i) immediately prior to the Closing, none of
these entities shall sponsor, maintain, participate in, contribute to or have
an
obligation to contribute to any Benefit Plan or Benefit Agreement on or after
the Closing, and (ii) Seller shall retain all Liabilities with respect to the
Benefit Plans and Benefit Agreements, including but not limited to liability
for
all employer contributions required to be made to a Benefit Plan which is a
cash
or deferred arrangement qualified under Section 401(a) and 401(k) of the Code.
As of the Closing Date, Buyer shall waive all pre-existing condition limitations
under Buyer’s health care plan for employees continuing in employment with Buyer
on and after the Closing Date (“Continuing Employees”) and covered by the health
care plan in which CEM, CPI, the Investor Subsidiaries, Service Subsidiaries
and
any of the Project Companies participated immediately prior to the Closing
Date
(the “Seller Health Plan”), and shall provide such health care coverage
substantially similar in the aggregate to the Seller Health Plan effective
as of
the Closing Date without the application of any eligibility period for coverage.
In addition, with respect to Continuing Employees, Buyer shall cause its health
care plan to credit all employee payments toward deductible and co-payment
obligations limits under the Seller Health Plan for the plan year that includes
the Closing Date as if such payments had been made for similar purposes under
Buyer’s health care plan during the plan year that includes the Closing
Date.
(b) Notwithstanding
the provisions of Section 6.14(a), Seller shall spin-off and transfer all of
the
obligations and liabilities of any Benefit Plan that is a Section 125 flexible
spending plan (the “Seller 125 Plan”) attributable to employees of CPI and CEM
and their dependents and beneficiaries to a Section 125 flexible spending plan
to be established by CEM (the “New 125 Plan”) immediately prior to the Closing
Date, and the New 125 Plan shall credit each such employee's flexible spending
account with the balance so transferred. Each employee eligible to participate
in the New 125 Plan shall be permitted to continue his or her election in effect
under the New 125 Plan for the remainder of the calendar year in which the
Closing shall occur, subject to the limitation on contributions contained in
the
Seller 125 Plan, and CEM shall honor any such election, and the New 125 Plan
shall honor (and shall be solely liable for) any claims incurred by an employee
in the calendar year, which would otherwise be an eligible expense under the
Seller 125 Plan, whether or not such expense was incurred before, on or after
the Closing Date. Seller shall provide Buyer with all information reasonably
requested by Buyer in order for CEM and the New 125 Plan to satisfy the
obligations set forth in this Section 6.14(b). As soon as administratively
practicable following the Closing Date, Seller shall pay to Buyer the balance
of
CPI and CEM employees’ accounts under the Seller 125 Plan; provided, however,
that if the balance of CPI and CEM employees’ accounts under the Seller 125 Plan
is less than zero, Buyer shall pay to Seller the amount by which such balance
is
less than zero.
(c) Notwithstanding
the provisions of Section 6.14(a), as soon as practicable following the Closing
Date, Seller shall fully vest the account balances of each CPI and CEM employee
who is a participant in the Benefit Plan that is a 401(k) plan (the “Seller
401(k) Plan”) and shall offer each such participant the opportunity to rollover
such participant’s account balance to a defined contribution 401(k) plan
established or maintained by Buyer or CEM that is a qualified tax or deferred
arrangement under Code Sections 401(a) and 401(k). Such rollover shall be in
the
form of a direct rollover in accordance with Section 401(a)(31) of the Code
and
other applicable provisions of ERISA and the Code and shall include the
opportunity for participants to rollover all participant loan accounts and
liabilities under the Seller 401(k) Plan.
6.15 Audited
Financial Statements. Seller
shall deliver to Buyer the audited balance sheet, income statement and statement
of cash flows of CEM and CPI as of and for the year ended December 31, 2006,
(which audited financial statements shall not vary in any material respect
from
the Financial Statements), as promptly as possible, but in no event later than
one (1) Business Day after such audited financial statements are available.
Seller agrees that Buyer may, upon written request, postpone the Closing Date
by
one day for each day beyond May 1, 2007 that Buyer has not received such audited
financial statements.
6.16 ▇▇▇▇▇▇▇▇
Partnership Distributions. Promptly
(but in any event not later than three (3) Business Days) after Buyer’s receipt
thereof, Buyer shall remit to Seller by wire transfer in immediately available
funds, Seller’s share of ▇▇▇▇▇▇▇▇ Partnership distributions or payments with
respect to or to the extent allocable to all periods prior to the Closing Date.
The Parties agree that Seller’s allocable share of such distributions or
payments shall be based on the number of days of Seller’s indirect ownership of
the ▇▇▇▇▇▇▇▇ Partnership during the period to which such distribution or payment
relates divided by the total number of days during such period.
ARTICLE
VII
CONDITIONS
7.1 Conditions
to Obligations of Buyer.
The
obligation of Buyer to effect the purchase of the CPI Stock and the CEM
Membership Interests and the other transactions contemplated by this Agreement
shall be subject to the fulfillment at or prior to the Closing Date (or the
waiver in writing by Buyer) of the following conditions:
(a) The
waiting period under the HSR Act applicable to the consummation of the sale
of
the CPI Stock and the CEM Membership Interests contemplated hereby shall have
expired or been terminated;
(b) No
preliminary or permanent injunction or other order or decree by any federal
or
state court or Governmental Authority which prevents the consummation of the
sale of the CPI Stock and the CEM Membership Interests contemplated herein
shall
have been issued and remain in effect (each Party agreeing to use its best
efforts to have any such injunction, order or decree lifted) and no statute,
rule or regulation shall have been enacted by any state or federal government
or
Governmental Authority which prohibits the consummation of the sale of the
CPI
Stock and the CEM Membership Interests;
(c) Buyer
shall have received all of Buyer’s Required Regulatory Approvals, and such
approvals shall be in form and substance reasonably satisfactory (including
no
materially adverse conditions) to Buyer;
(d) Seller
shall have performed and complied in all material respects with the covenants
and agreements contained in this Agreement which are required to be performed
and complied with by Seller on or prior to the Closing Date;
(e) Each
of
the Seller Fundamental Representations shall have been true and correct as
of
the date of this Agreement and shall be true and correct as of the Closing
Date
as if made at and as of such date (except those representations and warranties
that address matters only as of a specified date, the truth and correctness
of
which shall be determined as of that specified date); and Seller’s other
representations and warranties made in Article IV (without regard to any
materiality or Material Adverse Effect qualification therein) shall have been
true and correct as of the date of this Agreement and shall be true and correct
on the Closing Date as if made at and as of the Closing Date (except those
representations and warranties that address matters only as of a specified
date,
the truth and correctness of which shall be determined as of that specified
date), except for such failures to be true and correct which could not
reasonably be expected to constitute, individually or in the aggregate, a
Material Adverse Effect;
(f) Buyer
shall have received certificates from an authorized officer of Seller, dated
the
Closing Date, to the effect that, to such officer’s knowledge, the conditions
set forth in Section 7.1(d) and (e) have been satisfied by Seller;
(g) Buyer
shall have received an opinion from Seller’s counsel reasonably acceptable to
Buyer, dated the Closing Date and reasonably satisfactory in form and substance
to Buyer and its counsel, substantially to the effect that:
(i) Seller
is
a limited liability company validly existing and in good standing under the
laws
of the State of Delaware and has the limited liability company power and
authority to execute and deliver the Agreement and to consummate the
transactions contemplated thereby; and the execution and delivery of the
Agreement by Seller and the consummation of the sale of the CPI Stock and the
CEM Membership Interests and the other transactions contemplated thereby have
been duly and validly authorized by all necessary limited liability company
action required on the part of Seller;
(ii) The
Agreement has been duly and validly executed and delivered by Seller and
constitutes a legal, valid and binding agreement of Seller enforceable in
accordance with its terms, except that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting or relating to enforcement of
creditors’ rights generally and general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in
equity);
(iii) The
execution, delivery and performance of the Agreement by Seller does not (A)
conflict with the Certificate of Formation or Limited Liability Company
Agreement of Seller or (B) to the knowledge of such counsel, constitute a
violation of or default under those agreements or instruments set forth on
a
schedule attached to the opinion and which have been identified to such counsel
as all the agreements and instruments which are material to the business or
financial condition of Seller;
(iv) No
consent or approval of, filing with, or notice to, any Governmental Authority
is
necessary for the execution and delivery of this Agreement by Seller, or the
consummation by Seller of the transactions contemplated hereby, other than
(i)
such consents, approvals, filings or notices set forth on Schedule
4.3(b)
each of
which have been obtained or made or which, if not obtained or made, will not
prevent Seller from performing its material obligations hereunder and (ii)
such
consents, approvals, filings or notices which become applicable to Seller as
a
result of the specific regulatory status of Buyer (or any of its Affiliates)
or
as a result of any other facts that specifically relate to the business or
activities in which Buyer (or any of its Affiliates) is or proposes to be
engaged; and
(v) The
CPI
Stock and the CEM Membership Interests are owned of record, and to such
counsel’s knowledge, beneficially by Seller free and clear of all Liens. Each of
the CPI Stock and the CEM Membership Interests has been duly authorized and
validly issued, and is fully paid and non-assessable. There are no authorized
shares of capital stock of CPI other than the 1,000 shares of common stock
comprising the CPI Stock and there are no other authorized membership interests
of CEM other than the membership interests comprising the CEM Membership
Interests. Upon the consummation of the transactions contemplated in the
Agreement, Buyer will have good and valid title to the CPI Stock and the CEM
Membership Interests, to such counsel’s knowledge, free and clear of all
Liens.
In
rendering the foregoing opinion, Seller’s counsel may rely on opinions of
in-house counsel and counsel as to local laws reasonably acceptable to
Buyer.
(h) Seller
shall have delivered, or caused to be delivered, to Buyer at the Closing,
Seller’s closing deliveries described in Section 3.4;
(i) Since
the
date of this Agreement, no Material Adverse Effect shall have occurred and
be
continuing;
(j) Seller’s
Required Regulatory Approvals shall contain no conditions or terms which could
reasonably be expected to have a Material Adverse Effect;
(k) All
consents and approvals for the consummation of the transactions contemplated
hereby required under any CEM Agreement, CPI Agreement or Major Project
Contract, and all waivers of any rights of first refusal, rights of first offer,
or similar preemptive rights with respect to any of the Project Company
Interests arising in connection with the transactions contemplated by this
Agreement, shall have been obtained; and
(l) Each
of
CPI, CEM and RMP, as applicable, shall have been discharged and released from
all liabilities and obligations arising under the Excluded
Agreements.
7.2 Conditions
to Obligations of Seller.
The
obligation of Seller to effect the sale of the CPI Stock and CEM Membership
Interests and the other transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date (or the waiver by
Seller) of the following conditions:
(a) The
waiting period under the HSR Act applicable to the consummation of the sale
of
the CPI Stock and the CEM Membership Interests contemplated hereby shall have
expired or been terminated;
(b) No
preliminary or permanent injunction or other order or decree by any federal
or
state court which prevents the consummation of the sale of the CPI Stock and
the
CEM Membership Interests contemplated herein shall have been issued and remain
in effect (each Party agreeing to use its best efforts to have any such
injunction, order or decree lifted) and no statute, rule or regulation shall
have been enacted by any state or federal government or Governmental Authority
in the United States which prohibits the consummation of the sale of the CPI
Stock and the CEM Membership Interests;
(c) Seller
shall have received all of Seller’s Required Regulatory Approvals applicable to
it, in form and substance reasonably satisfactory (including no materially
adverse conditions) to Seller;
(d) All
consents and approvals for the consummation of the sale of the CPI Stock and
the
CEM Membership Interests contemplated hereby required under the terms of any
note, bond, mortgage, indenture, material agreement or other instrument or
obligation to which Seller is a party or by which Seller, CEM or CPI may be
bound, shall have been obtained, other than those which if not obtained, would
not, individually and in the aggregate, create a Material Adverse
Effect;
(e) Buyer
shall have performed and complied in all material respects with the covenants
and agreements contained in this Agreement which are required to be performed
and complied with by Buyer on or prior to the Closing Date;
(f) Each
of
the Buyer Fundamental Representations shall have been true and correct as of
the
date of this Agreement and shall be true and correct as of the Closing Date
as
if made at and as of such date (except those representations and warranties
that
address matters only as of a specified date, the truth and correctness of which
shall be determined as of that specified date); and Buyer’s other
representations and warranties made in Article V (without regard to any
materiality or Material Adverse Effect qualification therein) shall have been
true and correct as of the date of this Agreement and shall be true and correct
on the Closing Date as if made at and as of the Closing Date (except those
representations and warranties that address matters only as of a specified
date,
the truth and correctness of which shall be determined as of that specified
date), except for such failures to be true and correct which could not
reasonably be expected to constitute, individually or in the aggregate, a
Material Adverse Effect;
(g) Seller
shall have received a certificate from an authorized officer of Buyer, dated
the
Closing Date, to the effect that, to such officer’s knowledge, the conditions
set forth in Sections 7.2(e) and (f) have been satisfied by Buyer;
(h) Seller
shall have received an opinion from Buyer’s counsel reasonably acceptable to
Seller, dated the Closing Date and satisfactory in form and substance to Seller
and its counsel, substantially to the effect that:
(i) Buyer
is
a Delaware limited liability company duly organized, validly existing and in
good standing under the laws of the state of its organization and has the full
limited liability company power and authority to own, lease and operate its
material assets and properties and to carry on its business as is now conducted,
and to execute and deliver the Agreement and to consummate the transactions
contemplated thereby; and the execution and delivery of the Agreement by Buyer
and the consummation of the transactions contemplated thereby have been duly
authorized by all necessary corporate action required on the part of
Buyer;
(ii) The
Agreement has been duly and validly executed and delivered by Buyer, and
constitutes a legal, valid and binding agreement of Buyer, enforceable against
Buyer, in accordance with its terms, except that such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws affecting or relating to enforcement
of creditor’s rights generally and general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in equity);
(iii) The
execution, delivery and performance of the Agreement by Buyer does not (A)
conflict with the operating agreement (or other organizational documents),
as
currently in effect, of Buyer or (B) to the knowledge of such counsel,
constitute a violation of or default under those agreements or instruments
set
forth on a Schedule attached to the opinion and which have been identified
to
such counsel as all the agreements and instruments which are material to the
business or financial condition of Buyer; and
(iv) No
consent or approval of, filing with, or notice to, any Governmental Authority
is
necessary for Buyer’s execution and delivery of the Agreement, or the
consummation by Buyer of the transactions contemplated hereby, other than (a)
Buyer’s Required Regulatory Approvals each of which has been obtained or made
and (b) such consents, approvals, filings or notices, which, if not obtained
or
made, will not prevent Buyer from performing its obligations under the
Agreement.
(i) Buyer
shall have delivered, or caused to be delivered, to Seller at the Closing,
Buyer’s closing deliveries described in Section 3.5.
ARTICLE
VIII
INDEMNIFICATION
8.1 Indemnification.
(a) Buyer
shall indemnify, defend and hold harmless Seller, its officers, directors,
employees, shareholders, Affiliates, their respective successors, permitted
assigns and agents (each, a “Seller’s Indemnitee”) from and against any and all
claims, demands, suits, losses, liabilities, damages, obligations, payments,
costs and expenses (including, without limitation, the costs and expenses of
any
and all actions, suits, proceedings, assessments, judgments, settlements and
compromises relating thereto, costs of investigation and enforcement under
this
Article VIII and reasonable attorneys’ fees and reasonable disbursements in
connection therewith) (each, an “Indemnifiable Loss”), asserted against or
suffered by any Seller’s Indemnitee relating to, resulting from or arising out
of (i) any breach by Buyer of any representation, warranty, covenant or
agreement of Buyer contained in this Agreement
or in
any certificate delivered by or on behalf of Buyer pursuant to
this
Agreement, (ii) any loss or damages directly resulting from or arising out
of
any negligent act or omission or willful misconduct of Buyer or Buyer’s
Representatives in connection with Buyer’s Inspections, (iii) any Third Party
Claims against any Seller’s Indemnitee arising out of or in connection with
Buyer’s ownership or operation of CEM or CPI on or after the Closing Date, (iv)
any Third Party Claim asserted against any Seller’s Indemnitee by any member or
partner of any Project Company resulting from or arising out of any deemed
sale
or exchange of an interest in such Project Company resulting from any of the
Section 338(h)(10) Elections made or caused to be made by Seller and Buyer
pursuant to Section 6.9(a) and (v) the Guarantee Liabilities.
(b) Seller
shall indemnify, defend and hold harmless Buyer, its officers, directors,
employees, shareholders, Affiliates, their respective successors, permitted
assigns and agents (each, a “Buyer Indemnitee”) from and against any and all
Indemnifiable Losses asserted against or suffered by any Buyer Indemnitee
relating to, resulting from or arising out of (i) any breach by Seller of any
representation, warranty, covenant or agreement of Seller contained in this
Agreement or in any certificate delivered by or on behalf of Seller pursuant
to
this Agreement, (ii) the Excluded Liabilities and (iii) any Third Party Claims
against a Buyer Indemnitee arising out of or in connection with (x) Seller’s
ownership or operation of CEM or CPI prior to the Closing Date, (y) CEM, CPI
or
Seller’s ownership or operation of the Excluded Assets prior to, on or after the
Closing Date and (z) the Excluded Liabilities.
(c) Notwithstanding
anything to the contrary contained herein:
(i) Any
Person entitled to receive indemnification under this Agreement (an
“Indemnitee”) shall use Commercially Reasonable Efforts to mitigate all losses,
damages and the like relating to a claim under these indemnification provisions,
including availing itself of any defenses, limitations, rights of contribution,
claims against third Persons and other rights at law or equity. The Indemnitee’s
Commercially Reasonable Efforts shall include the reasonable expenditure of
money to mitigate or otherwise reduce or eliminate any loss or expenses for
which indemnification would otherwise be due, and the Indemnitor shall reimburse
the Indemnitee for the Indemnitee’s reasonable expenditures in undertaking the
mitigation; and
(ii) Any
Indemnifiable Loss shall be net of (A) the dollar amount of any insurance or
other proceeds, net of any reasonable expenses, actually received by the
Indemnitee or any of its Affiliates with respect to the Indemnifiable Loss,
and
(B) Tax benefits to the Indemnitee or any of its Affiliates, to the extent
realized or reasonably expected to be realized by the Indemnitee or any of
its
Affiliates. Any Party seeking indemnity hereunder shall use Commercially
Reasonable Efforts to seek coverage (including both costs of defense and
indemnity) under applicable insurance policies with respect to any such
Indemnifiable Loss and the reasonable costs of such Commercially Reasonable
Efforts shall be an indemnifiable claim under this Agreement.
(d) The
expiration or termination of any representation, warranty or covenant or
agreement shall not affect the Parties’ obligations under this Section 8.1 if
the Indemnitee provided the Person required to provide indemnification under
this Agreement (the “Indemnifying Party”) with proper notice of the claim or
event for which indemnification is sought prior to such expiration, termination
or extinguishment.
(e) Except
to
the extent otherwise provided in Article IX, the rights and remedies of Seller
and Buyer under this Article VIII are exclusive and in lieu of any and all
other
rights and remedies which Seller and Buyer may have under this Agreement or
otherwise for monetary relief, with respect to (i) any breach of or failure
to
perform any covenant, agreement, or representation or warranty set forth in
this
Agreement, after the occurrence of the Closing, or (ii) liabilities of CEM
or
CPI being assumed by Buyer or the Excluded Liabilities, as the case may be;
provided, however, that the provisions of this Section 8.1(e) shall not
prevent or limit (i) a claim of, or a cause of action arising from, fraud
or (ii) a cause of action to obtain equitable remedies. The indemnification
obligations of the Parties set forth in this Article VIII apply only to
matters arising out of this Agreement.
(f) Notwithstanding
anything to the contrary herein, no Party (including an Indemnitee) shall be
entitled to recover from any other Party (including an Indemnifying Party)
for
any liabilities, damages, obligations, payments losses, costs, or expenses
under
this Agreement any amount in excess of the actual compensatory damages, court
costs and reasonable attorney’s and other advisor fees suffered by such Party.
Buyer and Seller waive any right to recover punitive, incidental, special,
exemplary and consequential damages arising in connection with or with respect
to this Agreement. The provisions of this Section 8.1(f) shall not apply to
(i)
a claim of or cause of action arising from fraud or (ii) indemnification for
a
Third Party Claim or (iii) with respect to the Guarantee
Liabilities.
(g) Notwithstanding
anything to the contrary herein, (i) except as provided in (ii) -
(iv) below, neither Party shall be liable to the other Party for
Indemnifiable Losses relating to, resulting from or arising out of a breach
of
representation or warranty (other than the Seller Fundamental Representations
and the Buyer Fundamental Representations), unless and until the amount of
such
Indemnifiable Losses exceeds Two Hundred Fifty Thousand Dollars ($250,000),
in
the aggregate, in which event the respective Party shall then only be liable
for
the amount of such excess, but only up to the aggregate amount of 5% of the
Purchase Price, provided that such Party’s liability and obligation must be
asserted by the other Party within the applicable survival period specified
in
Section 8.3, (ii) Seller’s liability and obligation to Buyer for an
Indemnifiable Loss relating to, resulting from or arising out of a breach of
representation or warranty with respect to (A) Sections 4.11 (Tax Matters)
and
4.20(h) (Taxes) and (B) Section 4.8 (Benefit Plans) shall not be limited in
amount but must be asserted by Buyer on or before the termination of the related
survival period set forth in Section 8.3; (iii) Buyer’s liability and
obligation for Indemnifiable Losses arising out of the Guarantee Liabilities
shall not be limited in either amount or the time when Seller may assert a
claim
with respect thereto; and (iv) and Seller’s liability and obligation for
Indemnifiable Losses arising out of the Excluded Liabilities shall not be
limited in either amount or the time when Buyer may assert a claim with respect
thereto.
(h) “Excluded
Liabilities” means
(i) Any
liabilities or obligations in respect of (A) Income Taxes of CEM, CPI, or any
of
the Investor Subsidiaries, Service Subsidiaries or Project Companies for Tax
periods (or portions thereof) beginning before and ending on or before the
Closing Date, determined
in a manner consistent with the provisions of Section 6.9(b) (other than
Buyer 338 Liability and Income Taxes resulting from any transaction or event
that occurs after the Closing on the Closing Date and is not in the ordinary
course of business), (B) Income Taxes payable by CEM, CPI, any Investor
Subsidiary, any
Service Subsidiary
or any Project Company solely by reason of being severally liable for the Income
Tax of Seller or any MDU Affiliated Group pursuant to Treasury Regulation
Section 1.1502-6 or any analogous state or local Tax law, (C) any Income
Taxes arising out of the deemed sale of assets resulting from the
Section 338(h)(10) Elections (other
than Buyer 338 Liability), (D) Transfer Taxes for which Seller is responsible
pursuant to Section 6.9(f), and (E) Taxes (other than Income Taxes and Transfer
Taxes) of CEM, CPI, or any of the Investor Subsidiaries, Service Subsidiaries,
or Project Companies for Tax periods (or portions thereof) beginning before
and
ending on or before the Closing Date, which in the case of any Straddle Period,
shall be deemed to be the amount of
such
Tax for the entire Straddle Period multiplied by a fraction, the numerator
of
which is the number of days during the portion of the Straddle Period ending
on
the Closing Date and the denominator of which is the total number of days in
the
Straddle Period, (F) any
losses incurred by Buyer based upon CEM, CPI or any of their Subsidiaries being
affiliated under Code Section 414 or ERISA Section 4001(a)(14) on or prior
to the Closing Date with Seller and/or any Affiliates or Subsidiaries of
Seller;
provided, however, that in the case of clauses (D) and (E), such liability
or
obligation only to the extent that it exceeds the accrual for such Taxes
reflected as a liability in Working Capital, as finally determined pursuant
to
Section 3.3 (collectively, “Excluded Taxes”) and (G) any liability or obligation
with respect to Indebtedness of CEM, CPI or any of their Subsidiaries, on the
one hand, to their Affiliates, on the other hand (other than Affiliates which
are either Investor Subsidiaries, Project Companies or Service
Subsidiaries);
(ii) Any
fines, penalties or costs imposed by a Governmental Authority resulting from
(A)
an investigation, proceeding, request for information or inspection before
or by
a Governmental Authority either pending prior to or arising after the Closing
Date but only regarding acts which occurred prior to the Closing Date, or (B)
illegal acts, willful misconduct or gross negligence of CEM or CPI prior to
the
Closing Date; and
(iii) Liabilities
and obligations arising at anytime under the Excluded Agreements.
(i) For
purposes of determining the amount of Indemnifiable Losses arising from a breach
of any representation, warranty, covenant or obligation of the Parties to this
Agreement, but not for purposes of determining whether any such representation,
warranty, covenant or obligation has been breached or is inaccurate, limitations
or qualifications as to dollar amount, materiality or Material Adverse Effect
(or similar concept) set forth in such representation, warranty, covenant or
obligation shall be disregarded.
8.2 Defense
of Claims.
(a) If
any
Indemnitee receives notice of the assertion of any claim or of the commencement
of any claim, action, or proceeding made or brought by any Person who is not
a
party to this Agreement or any Affiliate of a Party to this Agreement (a “Third
Party Claim”) with respect to which indemnification is to be sought from an
Indemnifying Party, the Indemnitee shall give such Indemnifying Party reasonably
prompt written notice thereof, but in any event such notice shall not be given
later than ten (10) calendar days after the Indemnitee’s receipt of written
notice of such Third Party Claim. Such notice shall describe the nature of
the
Third Party Claim in reasonable detail and shall indicate the estimated amount,
if practicable, of the Indemnifiable Loss that has been or may be sustained
by
the Indemnitee. The Indemnifying Party will have the right to participate in
or,
by giving written notice to the Indemnitee, to elect to assume the defense
of
any Third Party Claim at such Indemnifying Party’s expense and by such
Indemnifying Party’s own counsel, provided that the counsel for the Indemnifying
Party who shall conduct the defense of such Third Party Claim shall be
reasonably satisfactory to the Indemnitee. The Indemnitee shall cooperate in
good faith in such defense at such Indemnitee’s own expense. If an Indemnifying
Party elects not to assume the defense of any Third Party Claim, the Indemnitee
may compromise or settle such Third Party Claim over the objection of the
Indemnifying Party, which settlement or compromise shall conclusively establish
the Indemnifying Party’s liability pursuant to this Agreement.
(b) If,
within ten (10) calendar days after an Indemnitee provides written notice to
the
Indemnifying Party of any Third Party Claims, the Indemnitee receives written
notice from the Indemnifying Party that such Indemnifying Party has elected
to
assume the defense of such Third Party Claim as provided in Section 8.2(a),
the
Indemnifying Party will not be liable for any legal expenses subsequently
incurred by the Indemnitee in connection with the defense thereof for so long
as
the Indemnifying Party shall continue the diligent defense of such Third Party
Claim. Without the prior written consent of the Indemnitee, the Indemnifying
Party shall not enter into any settlement of any Third Party Claim which would
lead to liability or create any financial or other obligation or restriction
on
the part of the Indemnitee. If a firm offer is made to settle a Third Party
Claim would not lead to liability or the creation of a financial or other
obligation or restriction on the part of the Indemnitee and the Indemnifying
Party desires to accept and agree to such offer, the Indemnifying Party shall
give written notice to the Indemnitee to that effect. If the Indemnitee fails
to
consent to such firm offer within ten (10) calendar days after its receipt
of
such notice, the Indemnifying Party shall be relieved of its obligations to
defend such Third Party Claim and the Indemnitee may contest or defend such
Third Party Claim. In such event, the maximum liability of the Indemnifying
Party as to such Third Party Claim will be the amount of such settlement offer
plus reasonable costs and expenses paid or incurred by Indemnitee up to the
date
of said notice.
(c) Any
claim
by an Indemnitee on account of an Indemnifiable Loss which does not result
from
a Third Party Claim (a “Direct Claim”) shall be asserted by giving the
Indemnifying Party reasonably prompt written notice thereof, stating the nature
of such claim in reasonable detail and indicating the estimated amount, if
practicable, but in any event such notice shall not be given later than ten
(10)
calendar days after the Indemnitee becomes aware of such Direct Claim, and
the
Indemnifying Party shall have a period of thirty (30) calendar days within
which
to respond to such Direct Claim. If the Indemnifying Party does not respond
within such thirty (30) calendar day period, the Indemnifying Party shall be
deemed to have accepted such claim. If the Indemnifying Party fails to accept
such claim, the Indemnitee will be free to seek enforcement of its right to
indemnification under this Agreement.
(d) If
the
amount of any Indemnifiable Loss, at any time subsequent to the making of an
indemnity payment in respect thereof, is reduced by recovery, settlement or
otherwise under or pursuant to any insurance coverage, or pursuant to any claim,
recovery, settlement or payment by, from or against any other entity, the amount
of such reduction, less any costs, expenses or premiums incurred in connection
therewith (together with interest thereon from the date of payment thereof
at
the publicly announced prime rate then in effect as published in the Wall Street
Journal shall promptly be repaid by the Indemnitee to the Indemnifying
Party.
(e) A
failure
to give timely notice as provided in this Section 8.2 shall not affect the
rights or obligations of any Party hereunder except if, and only to the extent
that, as a result of such failure, the Party which was entitled to receive
such
notice was actually prejudiced as a result of such failure.
(f) Notwithstanding
the foregoing, the Parties agree and acknowledge that (i) Seller shall be
entitled exclusively to control, defend and settle any litigation,
administrative or regulatory proceeding arising out of or related to any
Excluded Liabilities, and Buyer agrees to cooperate fully at Seller’s expense in
connection therewith and (ii) Buyer shall be entitled exclusively to control,
defend and settle any litigation, administrative or regulatory proceeding,
arising out of or related to any Guarantee Liabilities, and Seller agrees to
cooperate fully at Buyer’s expense in connection therewith.
8.3 Survival.
The
representations and warranties given or made by any Party to this Agreement
or
in any certificate or other writing furnished in connection herewith shall
survive the Closing for a period of 575 days after the Closing Date and shall
thereafter terminate and be of no further force or effect, except that (i)
the
Seller Fundamental Representations and the Buyer Fundamental Representations
shall survive indefinitely, (ii) all representations and warranties relating
to
Sections 4.11 and 4.20(h) shall survive the Closing for a period of thirty
(30)
days following the applicable statutes of limitation taking into account any
extensions or waivers thereof, and (iii) the representations and warranties
in
Section 4.20(n) shall survive the Closing for a period of 36 months after the
Closing Date.
The
covenants and obligations of Seller and Buyer set forth in this Agreement,
including without limitation the indemnification obligations of the Parties
under Article VIII hereof, shall survive the Closing indefinitely, and each
Party shall be entitled to the full performance thereof by the other Party
hereto without limitation as to time or amount (except as otherwise specifically
set forth herein).
ARTICLE
IX
TERMINATION
9.1 Termination.
(a) This
Agreement may be terminated at any time prior to the Closing Date by mutual
written consent of Seller and Buyer.
(b) This
Agreement may be terminated by Seller or Buyer if (i) any Federal or state
court
of competent jurisdiction shall have issued an order, judgment or decree
permanently restraining, enjoining or otherwise prohibiting the Closing, and
such order, judgment or decree shall have become final and nonappealable or
(ii)
any statute, rule, order or regulation shall have been enacted or issued by
any
Governmental Authority which, directly or indirectly, prohibits the consummation
of the Closing; or (iii) the Closing contemplated hereby shall have not occurred
on or before the day which is 120 days from the date of this Agreement (the
“Termination Date”), provided, however, that so long as such Party has complied
with Section 6.5 of this Agreement, the Termination Date (x) may be extended
by
Buyer for up to thirty (30) days if any of Buyer Required Regulatory Approvals
shall not have been obtained and (y) may be extended by Seller for up to thirty
(30) days if any of Seller Required Regulatory Approvals shall not have been
obtained; and provided, further, that the right to terminate this Agreement
under this Section 9.1(b)(iii) shall not be available to any Party whose failure
to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before such
date.
(c) So
long
as such Party has complied with Section 6.5 of this Agreement, this Agreement
may be terminated by Buyer if any of Buyer Required Regulatory Approvals, the
receipt of which is a condition to the obligation of Buyer to consummate the
Closing as set forth in Section 7.1(c), shall have been denied (and a petition
for rehearing or refiling of an application initially denied without prejudice
shall also have been denied) or shall have been granted but contains terms
or
conditions which do not satisfy the closing condition in Section 7.1(c).
(d) So
long
as such Party has complied with Section 6.5 of this Agreement, this Agreement
may be terminated by Seller, if any of Seller’s Required Regulatory Approvals,
the receipt of which is a condition to the obligation of Seller to consummate
the Closing as set forth in Section 7.2(c), shall have been denied (and a
petition for rehearing or refiling of an application initially denied without
prejudice shall also have been denied) or shall have been granted but contains
terms or conditions which do not satisfy the closing condition in Section
7.2(c).
(e) This
Agreement may be terminated by Buyer if there has been a material violation
or
breach by Seller of any covenant, representation or warranty contained in this
Agreement which has resulted in a Material Adverse Effect and such violation
or
breach is not cured by the earlier of the Closing Date or the date thirty (30)
days after receipt by Seller of notice specifying particularly such violation
or
breach, and such violation or breach has not been waived by Buyer.
(f) This
Agreement may be terminated by Seller, if there has been a material violation
or
breach by Buyer of any covenant, representation or warranty contained in this
Agreement and such violation or breach is not cured by the earlier of the
Closing Date or the date thirty (30) days after receipt by Buyer of notice
specifying particularly such violation or breach, and such violation or breach
has not been waived by Seller.
(g) This
Agreement may be terminated by Seller if either the Equity Commitment Letter
or
the Buyer LC shall no longer remain in full force and effect.
9.2 Procedure
and Effect of No-Default Termination.
In
the
event of termination of this Agreement by either or both of the Parties pursuant
to Section 9.1, written notice thereof shall forthwith be given by the
terminating Party to the other Party, whereupon, if this Agreement is terminated
pursuant to any of Sections 9.1(a) through (d), the liabilities of the Parties
hereunder will terminate, except as otherwise expressly provided in this
Agreement, and thereafter neither Party shall have any recourse against the
other by reason of this Agreement.
9.3 Termination
Fee; Letter of Credit.
Seller
may immediately draw upon the Buyer LC in an amount equal to $50 million (the
“Termination Fee”) if this Agreement is terminated by Seller pursuant to
Sections 9.1(b)(iii), 9.1(f) or 9.1(g); provided, that Seller shall not be
in
breach of this Agreement in such a manner that would entitle Buyer to terminate
this Agreement in accordance with Section 9.1(e), and provided further, that
in
the case of termination pursuant to Section 9.1(b)(iii), the failure of the
Closing Date to occur was due to the breach by Buyer of its obligations to
complete the transactions contemplated hereby when required to do so in
accordance with this Agreement. The Parties acknowledge and agree that if Seller
shall terminate this Agreement as provided immediately above, Seller’s damages
would be difficult or impossible to quantify with reasonable certainty, and
accordingly the payment provided for in this Section 9.3 is a payment of
liquidated damages (and not penalties) which is a based on the Parties’ estimate
of the damages Seller will suffer or incur as a result of the event giving
rise
to such payment and the resultant termination of this Agreement. Buyer
irrevocably waives any right it may have to raise as a defense that any such
liquidated damages are excessive or punitive. For greater certainty, the Parties
agree that the right to receive payment of the amount determined pursuant to
this Section 9.3 in the manner provided herein is the sole and exclusive remedy
of Seller. There shall be no liability of any shareholder, partner, member,
director, officer, employee, advisor or representative of Buyer or Seller or
any
Affiliate thereof, whether to Buyer or Seller, as the case may be, or any other
Person (including any shareholder, partner, member, director, officer, employee,
advisor or representative thereof) in connection with any liability or other
obligation of Buyer or Seller or any Affiliate thereof, whether hereunder or
otherwise in connection with the transactions contemplated hereby.
ARTICLE
X
MISCELLANEOUS
PROVISIONS
10.1 Amendment
and Modification.
Subject
to applicable law, this Agreement may be amended, modified or supplemented
only
by written agreement of Seller and Buyer.
10.2 Waiver
of Compliance; Consents.
Except
as
otherwise provided in this Agreement, any failure of any of the Parties to
comply with any obligation, covenant, agreement or condition herein may be
waived by the Party entitled to the benefits thereof only by a written
instrument signed by the Party granting such waiver, but such waiver of such
obligation, covenant, agreement or condition shall not operate as a waiver
of,
or estoppel with respect to, any subsequent failure to comply
therewith.
10.3 Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission, or mailed
by
overnight courier or registered or certified mail (return receipt requested),
postage prepaid, to the recipient Party at its address (or at such other address
or facsimile number for a Party as shall be specified by like notice;
provided,
however,
that
notices of a change of address shall be effective only upon receipt
thereof):
(a) If
to
Seller, to:
Centennial
Energy Resources LLC
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
General Counsel
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
(b) if
to
Buyer, to:
c/o
CES
Acquisition Corp.
▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
National
Gas Partners
▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇,
Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
10.4 Assignment.
This
Agreement and all of the provisions hereof shall be binding upon and inure
to
the benefit of the Parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by either Party hereto, including by
operation of law, without the prior written consent of the other Party.
Notwithstanding the foregoing, Buyer may (i) assign its rights pursuant to
this Agreement to its Affiliates, (ii) designate one or more of its
Affiliates to perform its obligations hereunder with the prior written consent
of Seller (which consent shall not be unreasonably withheld) and
(iii) assign its rights, but not its obligations, under this Agreement to
any of its financing sources without the consent of the Seller. This Agreement
is not intended to confer upon any other Person except the Parties hereto any
rights, interests, obligations or remedies hereunder. No provision of this
Agreement shall create any third party beneficiary rights in any employee or
former employee of Seller (including any beneficiary or dependent thereof)
in
respect of continued employment or resumed employment, and no provision of
this
Agreement shall create any rights in any such Persons in respect of any benefits
that may be provided, directly or indirectly, under any employee benefit plan
or
arrangement except as expressly provided for thereunder.
10.5 Governing
Law;
Venue; Waiver of Jury Trial.
This
Agreement shall be governed by and construed in accordance with the law of
the
State of New York (without giving effect to conflict of law principles) as
to
all matters, including but not limited to matters of validity, construction,
effect, performance and remedies. THE PARTIES HERETO AGREE THAT VENUE IN ANY
AND
ALL ACTIONS AND PROCEEDINGS RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT
SHALL BE IN THE STATE AND FEDERAL COURTS IN AND FOR NEW YORK COUNTY, NEW YORK,
WHICH COURTS SHALL HAVE EXCLUSIVE JURISDICTION FOR SUCH PURPOSE, AND THE PARTIES
HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND
IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
ANY
SUCH ACTION OR PROCEEDING. SERVICE OF PROCESS MAY BE MADE IN ANY MANNER
RECOGNIZED BY SUCH COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ITS
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
10.6 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
10.7 Interpretation.
The
articles, section and schedule headings contained in this Agreement are solely
for the purpose of reference, are not part of the agreement of the parties
and
shall not in any way affect the meaning or interpretation of this
Agreement.
10.8 Schedules
and Exhibits.
Except
as
otherwise provided in this Agreement, all Exhibits and Schedules referred to
herein are intended to be and hereby are specifically made a part of this
Agreement. Each Schedule to this Agreement shall be deemed to include and
incorporate all disclosures made on the other Schedules to this
Agreement.
10.9 Entire
Agreement.
This
Agreement and the Confidentiality Agreement, including the Exhibits, Schedules,
documents, certificates and instruments referred to herein or therein, embody
the entire agreement and understanding of the Parties hereto in respect of
the
transactions contemplated by this Agreement. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein or therein. It is expressly
acknowledged and agreed that there are no restrictions, promises,
representations, warranties, covenants or undertakings contained in any material
made available to Buyer pursuant to the terms of the Confidentiality Agreement
including, without limitation, the Confidential Information Memorandum dated
January 2007. This Agreement supersedes all prior agreements and understandings
between the Parties (other than the Confidentiality Agreement) with respect
to
such transactions.
10.10 U.S.
Dollars.
Unless
otherwise stated, all dollar amounts set forth herein are United States (U.S.)
dollars.
IN
WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be signed by
their respective duly authorized officers as of the date first above
written.
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CENTENNIAL
ENERGY RESOURCES LLC
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MONTANA
ACQUISITION COMPANY LLC
|
|
By:
/s/
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Title: President
and CEO
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By:
/s/
▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇
▇. ▇▇▇▇▇▇
Title: President
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