EXHIBIT 10-B
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
DELMARVA POWER & LIGHT COMPANY
AND
NRG ENERGY, INC.
DATED AS OF JANUARY 18, 2000
(DP&L - JOINTLY OWNED STATIONS)
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Form of ▇▇▇▇ of Sale
Exhibit C Form of FIRPTA Affidavit
Exhibit D Form of Limited Warranty Deed
Exhibit E Form of Seller's Legal Opinion
Exhibit F Form of Buyer's Legal Opinion
SCHEDULES
1.1(17) Capital Expenditures
1.1(28) Description of Conemaugh Station
1.1(66) Description of Keystone Station
1.1(84) Permitted Encumbrances
1.1(114) Target Adjustment Amount Methodology
1.1(120) Transferable Permits
2.1(c) Electrical Transmission Facilities
2.1(f) Emission Allowances to be Transferred to Buyer
2.1(g) Excess Emission Allowances
2.6 Inventories
4.3(a) Seller's Defaults and Violations
4.3(b) Seller's Consents and Approvals
4.4 Insurance Exceptions
4.6 Environmental Matters
4.7 Real Property
4.9(a) Seller's Agreements
4.10 Legal Proceedings
5.3(a) Buyer's Defaults and Violations
5.3(b) Buyer's Consents and Approvals
5.9 Environmental Site Assessments
7.1(c) Buyer's Required Regulatory Approvals
7.2(c) Seller's Required Regulatory Approvals
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 Definitions......................................................1
1.2 Certain Interpretive Matters....................................13
1.3 U.S. Dollars....................................................13
1.4 Sellers' Interest in Jointly Owned Stations. ..................13
ARTICLE II
PURCHASE AND SALE
2.1 Transfer of Assets..............................................14
2.2 Excluded Assets.................................................15
2.3 Assumed Liabilities.............................................17
2.4 Excluded Liabilities............................................18
2.5 Control of Litigation...........................................20
2.6 Inventories.....................................................20
ARTICLE III
THE CLOSING
3.1 Closing.........................................................20
3.2 Payment of Purchase Price.......................................21
3.3 Adjustment to Purchase Price....................................21
3.4 Tax Reporting and Allocation of Purchase Price..................22
3.5 Prorations......................................................23
3.6 Deliveries by Seller............................................24
3.7 Deliveries by Buyer.............................................25
3.8 Post-Closing Excluded Asset Deliveries..........................26
3.9 Relationship of this Agreement and Related Purchase Agreements..26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
4.1 Organization; Qualification.....................................27
4.2 Authority.......................................................27
4.3 Consents and Approvals; No Violation............................27
4.4 Insurance.......................................................28
4.5 Title and Related Matters.......................................28
4.6 Environmental Matters...........................................28
4.7 Real Property...................................................29
4.8 Condemnation....................................................29
4.9 Contracts and Leases............................................29
4.10 Legal Proceedings...............................................30
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4.11 Permits.........................................................30
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
5.1 Organization; Qualification.....................................30
5.2 Authority.......................................................31
5.3 Consents and Approvals; No Violation............................31
5.4 Buyer's Permits.................................................32
5.5 Availability of Funds...........................................32
5.6 Financial Statements............................................32
5.7 Legal Proceedings...............................................32
5.8 Qualified Buyer.................................................32
5.9 Inspections.....................................................33
5.10 Regulation as a Utility.........................................33
ARTICLE VI
COVENANTS OF THE PARTIES
6.1 Access to Information...........................................33
6.2 Public Statements...............................................34
6.3 Further Assurances..............................................34
6.4 Consents and Approvals..........................................35
6.5 Certain Tax Matters.............................................36
6.6 Advice of Changes...............................................38
6.7 Risk of Loss....................................................38
6.8 PJM; MAAC.......................................................39
6.9 Emission Allowances.............................................39
ARTICLE VII
CONDITIONS
7.1 Conditions to Obligation of Buyer...............................39
7.2 Conditions to Obligation of Seller..............................41
ARTICLE VIII
INDEMNIFICATION AND ARBITRATION
8.1 Indemnification.................................................42
8.2 Defense of Claims...............................................44
8.3 Arbitration.....................................................45
8.4 Remediation of Matters Covered in Section 2.4(g)................46
ARTICLE IX
TERMINATION
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9.1 Termination.....................................................47
9.2 Effect of Termination...........................................48
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Amendment and Modification......................................49
10.2 Expenses........................................................49
10.3 Fees and Commissions............................................49
10.4 Bulk Sales Laws.................................................49
10.5 Waiver of Compliance; Consents................................50
10.6 No Survival.....................................................50
10.7 Disclaimers.....................................................50
10.8 Notices.........................................................51
10.9 Assignment......................................................52
10.10 Governing Law; Forum; Service of Process........................52
10.11 Counterparts....................................................53
10.12 Interpretation..................................................53
10.13 Schedules and Exhibits..........................................53
10.14 Entire Agreement................................................53
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PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT, dated as of January 18, 2000 (this
"Agreement"), by and between Delmarva Power & Light Company, a Delaware and
Virginia corporation ("DP&L" or "Seller"), and NRG Energy, Inc., a Delaware
corporation ("Buyer"). Seller and Buyer may be referred to herein
individually as a "Party," and collectively as the "Parties."
W I T N E S S E T H
WHEREAS, Seller owns minority interests in two fossil fuel-fired
electric generating stations (referred to herein as the "Jointly Owned
Stations"), and certain properties and assets associated therewith and
ancillary thereto; and
WHEREAS, Seller possesses certain Emission Allowances (as defined
below) relating to the Jointly Owned Stations; and
WHEREAS, Buyer desires to purchase and assume, and Seller desires to
sell and assign, or cause to be sold and assigned, the Purchased Assets (as
defined below) and certain associated Liabilities (as defined below), upon
the terms and conditions hereinafter set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants, representations, warranties and agreements set forth herein, and
intending to be legally bound hereby, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following capitalized
terms have the meanings specified in this Section 1.1.
(1) "ACE" means Atlantic City Electric Company, a New Jersey
corporation.
(2) "ACE Related Purchase Agreements" means the separate Purchase and
Sale Agreement, dated as of the date hereof, entered into by ACE and Buyer,
relating to the purchase and sale of the ▇.▇. ▇▇▇▇▇▇▇ Station, the
Deepwater Station, certain Excess ▇▇▇▇▇▇▇ Creek Interests, certain SO2
Allowances and NOx Emission Allowances and certain related properties and
assets; and (ii) the separate Purchase and Sale Agreement, dated as of the
date hereof, entered into by ACE and Buyer, relating to the purchase and
sale of ACE's undivided 2.47% interest as tenant in common in the Keystone
Station, ACE's undivided 3.83% interest as tenant in common in the
Conemaugh Station, and certain related properties and assets.
(3) "Additional Agreements" means the Limited Warranty Deeds, the
Assignment and Assumption Agreement and the ▇▇▇▇ of Sale.
(4) "Affiliate" has the meaning set forth in Rule 12b-2 of the
General Rules and Regulations promulgated under the Exchange Act.
(5) "Agreement" means this Purchase and Sale Agreement together with
the Schedules and Exhibits hereto.
(6) "Assignment and Assumption Agreements" means the assignment and
assumption agreements between Seller and Buyer, to be delivered at the
Closing, substantially in the form of Exhibit A hereto, pursuant to which
Seller shall assign to Buyer the Seller's Agreements, certain intangible
assets and certain other Purchased Assets, and Buyer shall accept such
assignment and assume the Assumed Liabilities.
(7) "Assumed Liabilities" has the meaning set forth in Section 2.3.
(8) "▇.▇. ▇▇▇▇▇▇▇ Station" means the generating station known as ▇.▇.
▇▇▇▇▇▇▇ Station, located in the Town of ▇▇▇▇▇▇▇'▇ Point, County of Cape
May, State of New Jersey, and certain related properties and assets.
(9) "▇▇▇▇ of Sale" means the ▇▇▇▇ of sale of Seller, to be delivered
at the Closing, substantially in the form of Exhibit B hereto.
(10) "Business Day" means any day other than Saturday, Sunday and any
day on which banking institutions in the State of New York are authorized
or required by law or other governmental action to close.
(11) "Buyer" has the meaning set forth in the preamble to this
Agreement.
(12) "Buyer Material Adverse Effect" has the meaning set forth in
Section 5.3(a).
(13) "Buyer's Financial Statements" has the meaning set forth in
Section 5.5.
(14) "Buyer's Indemnitee" has the meaning set forth in Section
8.1(b).
(15) "Buyer's Permits" has the meaning set forth in Section 5.4.
(16) "Buyer's Required Regulatory Approvals" has the meaning set
forth in Section 5.3(b).
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(17) "Capital Expenditures" means the total amount of funds paid, or
Liabilities incurred, by Seller (other than such as constitute Assumed
Liabilities) for one or more of the projects listed on Schedule 1.1(17)
during the period commencing on September 1, 1999 and ending on the Closing
Date.
(18) "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to time.
(19) "Closing" has the meaning set forth in Section 3.1.
(20) "Closing Adjustment Amount" means an amount, calculated in a
manner consistent with the calculation of the Target Adjustment Amount,
equal to the sum, as of the Closing Date, of (a) the Net Book Value of
Seller's right, title and interest in and to the Inventories plus (b)
Capital Expenditures.
(21) "Closing Date" has the meaning set forth in Section 3.1.
(22) "Closing Payment" has the meaning set forth in Section 3.2(c).
(23) "Closing Statement" has the meaning set forth in Section 3.3(a).
(24) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(25) "Commercial Arbitration Rules" has the meaning set forth in
Section 8.3(c).
(26) "Commercially Reasonable Efforts" means efforts which are
reasonably within the contemplation of the Parties at the time of entering
into this Agreement and which do not require the performing Party to expend
funds other than expenditures which are customary and reasonable in
transactions of the kind and nature contemplated by this Agreement in order
for the performing Party to satisfy its obligations hereunder.
(27) "Conemaugh Interest" means Seller's 3.72% undivided interest as
tenant in common in Conemaugh Station.
(28) "Conemaugh Station" means the generating station known as
Conemaugh Station, located in the County of Indiana, Commonwealth of
Pennsylvania, and related properties and assets, all as more fully
identified on Schedule 1.1(28) attached hereto.
(29) "Confidentiality Agreement" means the Confidentiality Agreement,
dated July 21, 1999, between Conectiv, a Delaware corporation, and Buyer.
(30) "Courts" has the meaning set forth in Section 10.10.
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(31) "Deepwater Station" means the generating station known as
Deepwater Station, located in the Town of Pennsville, County of Salem,
State of New Jersey, and certain related properties and assets.
(32) "Direct Claim" has the meaning set forth in Section 8.2(c).
(33) "Dorchester Property" means the approximately 247-acre site
owned by DP&L located in the County of Dorchester, State of Maryland, and
related properties and assets.
(34) "DP&L" means Delmarva Power & Light Company, a Delaware and
Virginia corporation.
(35) "DP&L Related Purchase Agreement" means the separate Purchase
and Sale Agreement, dated as of the date hereof, entered into by Seller and
Buyer, relating to the purchase and sale of the Indian River Station, the
Vienna Station, the Dorchester Property, certain SO2 Allowances and NOx
Emission Allowances, and certain related properties and assets.
(36) "Easements" means, collectively, all easements, licenses, rights
of way and other access rights reserved by Seller, or any Affiliate
thereof, in the Limited Warranty Deeds, including such as authorize access,
use, maintenance, construction, repair, replacement and other activities by
Seller, or any Affiliate thereof, or otherwise necessary for Seller, or any
Affiliate thereof, to operate its electrical transmission and distribution
facilities, or information technology and telecommunications assets, or
fulfill legal requirements applicable thereto.
(37) "Emission Allowances" means Emission Reduction Credits, NOx
Emission Allowances and SO2 Allowances.
(38) "Emission Reduction Credits" means credits, in units that are
established by the Governmental Authority with jurisdiction over the
relevant Site that has obtained the credits, resulting from reductions in
the emissions of air pollutants from an emitting source or facility
(including, and to the extent allowable under applicable Law, reductions
resulting from shutdowns or control of emissions beyond that required by
applicable Law) that have been certified by any applicable Governmental
Authority as complying with the Law and regulations governing the
establishment of such credits (including certification that such emissions
reductions are enforceable, permanent, quantifiable and surplus), including
air emissions reductions as described above that have been approved by the
applicable Governmental Authority and are awaiting USEPA approval. The term
also includes certified air emissions reductions, as described above,
regardless as to whether the Governmental Authority certifying such
reductions designates such certified air emissions reductions by a name
other than "emission reduction credits."
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(39) "Encumbrances" means any and all mortgages, pledges, liens,
claims, security interests, agreements, easements, activity and use
limitations, restrictions, defects of title or encumbrances of any kind.
(40) "Environmental Claims" has the meaning set forth in Section 8.1(c).
(41) "Environmental Condition" means the presence or Release to the
environment, whether at the Sites or otherwise, of Hazardous Substances,
including any migration of Hazardous Substances through air, soil or
groundwater at, to or from the Sites or at, to or from any Off-Site
Location, regardless of when such presence or Release occurred or is
discovered.
(42) "Environmental Laws" means all (a) Laws, in each case, as
amended from time to time, relating to pollution or protection of the
environment, natural resources or human health and safety, including Laws
relating to Releases or threatened Releases of Hazardous Substances or
otherwise relating to the manufacture, formulation, generation, processing,
distribution, use, treatment, storage, Release, transport, Remediation,
abatement, cleanup or handling of Hazardous Substances, (b) Laws with
regard to recordkeeping, notification, disclosure and reporting
requirements respecting Hazardous Substances and (c) Laws relating to the
management or use of natural resources.
(43) "Environmental Permits" means all permits, certificates,
licenses and authorizations of all Governmental Authorities under
Environmental Laws.
(44) "Estimated Adjustment Amount" has the meaning set forth in
Section 3.2(b).
(45) "Excess Emission Allowances" has the meaning set forth in
Section 2.1(g).
(46) "Excess ▇▇▇▇▇▇▇ Creek Interests" means the interests of ACE in
the ▇▇▇▇▇▇▇ Creek Reservoir located in Harmony Township, County of ▇▇▇▇▇▇,
State of New Jersey, which are to be sold to Buyer pursuant to the ACE
Related Purchase Agreements.
(47) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated
thereunder from time to time.
(48) "Excluded Assets" has the meaning set forth in Section 2.2.
(49) "Excluded Liabilities" has the meaning set forth in Section 2.4.
(50) "FERC" means the United States Federal Energy Regulatory
Commission, and any successor agency thereto.
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(51) "FIRPTA Affidavit" means the Foreign Investment in Real Property
Tax Act Certification and Affidavit of Seller, to be delivered at the
Closing, substantially in the form of Exhibit C hereto.
(52) "Governmental Authority" means any executive, legislative,
judicial, regulatory or administrative agency, body, commission,
department, board, court, tribunal, arbitrating body or authority of the
United States or any foreign country, or any state, local or other
governmental subdivision thereof.
(53) "Hazardous Substances" means (a) any petrochemical or petroleum
products, oil or coal ash, radioactive materials, radon gas, asbestos in
any form that is or could become friable, urea formaldehyde foam insulation
and transformers or other equipment that contain dielectric fluid which may
contain 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.
(54) "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended from time to time.
(55) "Income Tax" means any Tax imposed by any Governmental Authority
(a) based upon, measured by or calculated with respect to net income,
profits or receipts (including capital gains Taxes and minimum Taxes) or
(b) based upon, measured by or calculated with respect to multiple bases
(including corporate franchise taxes) if one or more of such bases is
described in clause (a), in each case, together with any interest,
penalties or additions attributable thereto.
(56) "Indemnifiable Loss" has the meaning set forth in Section 8.1(a).
(57) "Indemnifying Party" has the meaning set forth in Section 8.1(f).
(58) "Indemnitee" has the meaning set forth in Section 8.1(b).
(59) "Independent Accounting Firm" means such nationally recognized,
independent accounting firm as is mutually appointed by Seller and Buyer
for purposes of this Agreement.
(60) "Indian River Station" means the generating station known as
Indian River Power Plant, located in the Town of Millsboro, County of
Sussex, State of Delaware, and related properties and assets.
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(61) "Inspection" means all tests, reviews, examinations,
inspections, investigations, verifications, samplings and similar
activities conducted by Buyer or its Representatives with respect to the
Purchased Assets prior to the Closing.
(62) "Inventories" means coal, oil, tire-derived fuel and other fuel
inventories, limestone, materials, spare parts, capital spare parts,
consumable supplies and chemical and gas inventories (together with related
freight, commodity and handling (other than on-site handling)) which are
located at or in transit to the Jointly Owned Stations relating to the
operation of the Jointly Owned Stations.
(63) "Jointly Owned Stations" means, together, Conemaugh Station and
Keystone Station.
(64) "Jointly Owned Stations Operating Agreements" means, together,
(i) the Operating Agreement, dated December 1, 1967, as amended, among
Pennsylvania Electric Company, ACE, Baltimore Gas and Electric Company,
DP&L, Metropolitan Edison Company, Pennsylvania Power & Light Company,
Philadelphia Electric Company, Potomac Electric Power Company, Public
Service Electric and Gas Company and UGI Corporation, with respect to the
ownership and operation of Conemaugh Station and (ii) the Operating
Agreement, dated December 1, 1965, as amended, among Pennsylvania Electric
Company, ACE, Baltimore Gas and Electric Company, DP&L, Jersey Central
Power & Light Company, Pennsylvania Power & Light Company, Philadelphia
Electric Company and Public Service Electric and Gas Company, with respect
to the ownership and operation of the Keystone Station.
(65) "Keystone Interest" means Seller's 3.70% undivided interest as
tenant in common in Keystone Station.
(66) "Keystone Station" means the generating station known as
Keystone Station located in Plumcreek Township, County of ▇▇▇▇▇▇▇▇▇,
Commonwealth of Pennsylvania, and related properties and assets, all as
more fully identified on Schedule 1.1(66) attached hereto.
(67) "Knowledge" means the actual knowledge of the directors and
executive officers of the specified Person, which directors and executive
officers are charged with responsibility for the particular function as of
the date of this Agreement, or, with respect to any certificate delivered
pursuant to this Agreement, the date of delivery of such certificate.
(68) "Laws" means all laws, statutes, rules, regulations and
ordinances of any Governmental Authority.
(69) "Liability" or "Liabilities" means any liability or obligation
(whether known or unknown, whether asserted or unasserted, whether absolute
or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated and whether due or to become due), including any liability for
Taxes.
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(70) "Like-Kind Exchange" has the meaning set forth in Section 6.5(e).
(71) "Limited Warranty Deeds" means the Limited Warranty Deeds, to be
delivered at the Closing, substantially in the form of Exhibit D hereto,
pursuant to which Seller will convey the Real Property to Buyer.
(72) "MAAC" means the Mid-Atlantic Area Council.
(73) "Material Adverse Effect" means any change in or effect on the
Purchased Assets or the operation of the Purchased Assets after the date
hereof that is materially adverse to the operation or condition (financial
or otherwise) of the Purchased Assets, taken as a whole, other than (i) any
change or effect affecting the international, national, regional or local
electric industry as a whole and not specific and exclusive to the
Purchased Assets, (ii) any change or effect resulting from changes in the
international, national, regional or local wholesale or retail markets for
electricity, including any change in or effect on the structure, operating
agreements, operations or procedures of Pennsylvania-New Jersey-Maryland
Interconnection L.L.C. or its control area, (iii) any change or effect
resulting from changes in the international, national, regional or local
markets for any fuel used at the Jointly Owned Stations, (iv) any change or
effect resulting from changes in the North American, national, regional or
local electricity transmission systems or operations thereof, (v) changes
in Law, or any judgments, orders or decrees that apply generally to
similarly situated Persons, (vi) any change or effect to the extent
constituting or involving an Excluded Asset or an Excluded Liability and
(vii) any change in or effect on the Purchased Assets which is cured
(including by payment of money) before the earlier of the Closing and the
termination of this Agreement pursuant to Section 9.1.
(74) "Net Book Value" means, as of any date, original cost (including
related freight, commodity and handling (other than on-site handling)) less
applicable depreciation and amortization, as reflected on Seller's books
and records through such date in accordance with United States generally
accepted accounting principles as applied by Seller on August 31, 1999.
(75) "Net ▇▇▇▇▇ Refund" has the meaning set forth in Section 3.5(c).
(76) "NOx" means oxides of nitrogen.
(77) "NOx Budget Program" means Nitrogen Oxides Budget Program, which
is a statutory or regulatory program promulgated by the United States or a
state pursuant to which the United States or state provides for a limit on
the oxides of nitrogen that can be emitted by all sources covered by the
program and establishes allowances or authorizations, which in total are
equal to the amount of oxides of nitrogen allowed by the limit, where each
allowance or authorization represents a "right" to emit a unit of oxides of
nitrogen, as the means for ensuring compliance with the limit.
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(78) "NOx Emission Allowance" means (a) an authorization by the PaDEP
under its NOx Budget Program authorizing the emission of one ton of NOx
during the ozone season, as such season is defined by the PaDEP; or (b) an
authorization by the USEPA under any future NOx Budget Program promulgated
by the USEPA, including any future program implemented in lieu of a state
NOx Budget Program, authorizing the emission of one ton of NOx during the
ozone season, as such season is defined by the USEPA.
(79) "Off-Site Location" means any real property other than the Sites.
(80) "PaDEP" means the Pennsylvania Department of Environmental
Protection, and any successor agency thereto.
(81) "PaPUC" means the Pennsylvania Public Utility Commission, and
any successor agency thereto.
(82) "Party" and "Parties" have the respective meanings set forth in
the preamble to this Agreement.
(83) "Pennsylvania Assets" has the meaning set forth in Section 3.5(c).
(84) "Permitted Encumbrances" means: (a) the Easements; (b) those
exceptions to title to the Purchased Assets listed in Schedule 1.1(84); (c)
statutory liens for Taxes or other charges or assessments of Governmental
Authorities not yet due or delinquent, or which are being contested in good
faith by appropriate proceedings; (d) mechanics', carriers', workers',
repairers' and other similar liens arising or incurred in the ordinary
course of business to the extent that they secure payment of obligations
which are not in arrears or otherwise due and which have been incurred
under Good Utility Practices; (e) zoning, entitlement, conservation
restriction and other land use and environmental regulations by
Governmental Authorities; and (f) with respect to any Jointly Owned
Station, such non-monetary Encumbrances as do not materially detract from
the value of the Purchased Assets located at such Jointly Owned Station,
taken as a whole, as currently used, or materially interfere with the
present use of the Purchased Assets located at such Jointly Owned Station,
taken as a whole.
(85) "Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization,
other business association or Governmental Authority.
(86) "PJM" means the Pennsylvania-New Jersey-Maryland Power Pool, as
established and administered by Pennsylvania - New Jersey - Maryland
Interconnection L.L.C.
(87) "PJM Agreement" means the Operating Agreement dated June 2, 1997
of Pennsylvania-New Jersey-Maryland Interconnection L.L.C., as amended from
time to time.
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(88) "Prime Rate" has the meaning set forth in Section 3.3(c).
(89) "Proprietary Information" of a Party means all information about
any Party or its properties or operations furnished to the other Party or
its Representatives by such Party or its Representatives, after the date
hereof, regardless of the manner or medium in which it is furnished.
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; (b) was available to
the other Party on a non-confidential basis prior to its disclosure by the
Party or its Representatives; (c) is or becomes available to the other
Party on a non-confidential basis from a source other than such Party,
provided that the source of such information was not known by such Party or
its Representatives, after reasonable investigation, to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to such Party or any of its Representatives
with respect to such material; (d) is independently developed by the other
Party; or (e) was disclosed pursuant to the Confidentiality Agreement and
remains subject to the terms and conditions of the Confidentiality
Agreement.
(90) "PUHCA" means the Public Utility Holding Company Act of 1935, as
amended from time to time, and the rules and regulations promulgated
thereunder from time to time.
(91) "Purchase Price" has the meaning set forth in Section 3.2(a).
(92) "Purchased Assets" has the meaning set forth in Section 2.1.
(93) "▇▇▇▇▇" has the meaning set forth in Section 3.5(a)(i).
(94) "▇▇▇▇▇ Assessment" has the meaning set forth in Section 3.5(c).
(95) "Real Property" has the meaning set forth in Section 2.1(a).
(96) "Related Purchase Agreements" means, collectively, the ACE
Related Purchase Agreements and the DP&L Related Purchase Agreement.
(97) "Release" means any release, spill, leak, discharge, disposal
of, pumping, pouring, emitting, emptying, injecting, leaching, dumping or
allowing to escape into or through the environment.
(98) "Remediation" means an action of any kind to address an
Environmental Condition or a Release of Hazardous Substances or the
presence of Hazardous Substances at the Sites or an Off-Site Location,
including the following activities to the extent they relate to, result
from or arise out of the presence of a Hazardous Substance at the Sites or
an Off-Site Location: (a) monitoring, investigation, assessment, treatment,
cleanup, containment, removal, mitigation, response or restoration work;
(b) obtaining any permits, consents, approvals or authorizations of
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any Governmental Authority necessary to conduct any such activity; (c) preparing
and implementing any plans or studies for any such activity; (d) obtaining a
written notice from a Governmental Authority with jurisdiction over the Sites or
an Off-Site Location under Environmental Laws that no material additional work
is required by such Governmental Authority; (e) the use, implementation,
application, installation, operation or maintenance of removal actions on the
Sites or an Off-Site Location, remedial technologies applied to the surface or
subsurface soils, excavation and treatment or disposal of soils at an Off-Site
Location, systems for long-term treatment of surface water or groundwater,
engineering controls or institutional controls; and (f) any other activities
reasonably determined by a Party to be necessary or appropriate or required
under Environmental Laws to address an Environmental Condition or a Release of
Hazardous Substances or the presence of Hazardous Substances at the Sites or an
Off-Site Location.
(99) "Remediation Standard" means a numerical standard (whether
resulting from an enacted statute, promulgated regulation, guidance or
policy document issued by a regulatory agency, or developed on a
case-by-case basis through a risk assessment or other methodology
authorized pursuant to an applicable Environmental Law) that defines the
concentrations of Hazardous Substances that may be permitted to remain in
any environmental media after a Remediation.
(100) "Representatives" of a Person means, collectively, such
Person's Affiliates and its and their respective directors, officers,
partners, members, employees, representatives, agents, advisors (including
accountants, legal counsel, environmental consultants, engineering
consultants and financial advisors), parent entities and other controlling
Persons.
(101) "SEC" means the United States Securities and Exchange
Commission, and any successor agency thereto.
(102) "Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder
from time to time.
(103) "Seller" has the meaning set forth in the preamble to this
Agreement.
(104) "Seller's Agreements" means, collectively, (i) the contracts,
agreements, arrangements, licenses and leases of any nature to which, as of
the date hereof, Seller is a party, or by or to which Seller or the
Purchased Assets is bound or subject, (ii) those contracts, agreements,
arrangements, licenses and leases of any nature entered into by Seller on
or after the date of this Agreement consistent with the terms of this
Agreement and (iii) those contracts, agreements, arrangements, licenses and
leases entered into by any party to the Jointly Owned Stations Operating
Agreements, for and on behalf of Seller, with or without Seller's
Knowledge, and by or to which Seller or the Purchased Assets are bound or
subject as of the date hereof, or by or to which Seller or the Purchased
Assets become bound or subject after the date hereof, in each case,
relating to the ownership, lease, maintenance or operation of the Purchased
Assets.
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(105) "Seller's Indemnitee" has the meaning set forth in Section
8.1(a).
(106) "Seller's Interests" means, together, the Conemaugh Interest
and the Keystone Interest.
(107) "Seller's Permits" has the meaning set forth in Section 4.11.
(108) "Seller's Required Regulatory Approvals" has the meaning set
forth in Section 4.3(b).
(109) "Sites" means the Real Property forming a part, or used or
usable in connection with the operation, of the Jointly Owned Stations,
including any real property used for the disposal of solid or hazardous
waste that is included in the Real Property. Any reference to the Sites
shall include the surface and subsurface elements, to the extent owned by
or subject to any interest of Seller, including the soil and groundwater
present at the Sites, and any reference to materials or conditions "at the
Sites", including Hazardous Substances and Environmental Conditions, shall
include all materials and conditions "at, on, in, upon, over, across, under
or within" the Sites.
(110) "SO2" means sulfur dioxide.
(111) "SO2 Allowance" means an authorization by the Administrator of
the USEPA under the Clean Air Act, 42 U.S.C. ss. 7401, et seq., to emit one
ton of sulfur dioxide during or after a specified calendar year.
(112) "Subsidiary", when used in reference to any Person, means any
entity of which outstanding securities or interests having ordinary voting
power to elect a majority of the board of directors or other governing body
performing similar functions of such entity are owned directly or
indirectly by such Person.
(113) "Tangible Personal Property" has the meaning set forth in
Section 2.1(e).
(114) "Target Adjustment Amount" means $2,648,000, which represents
the Net Book Value, as of August 31, 1999, of Seller's right, title and
interest in and to the Inventories, as calculated in the manner set forth
in Schedule 1.1(114).
(115) "Tax" or "Taxes" means all taxes, charges, fees, levies,
penalties and other assessments imposed by any Governmental Authority,
including income, gross receipts, excise, property, sales, transfer, use,
franchise, payroll, withholding, social security and other taxes, together
with any interest, penalties or additions attributable thereto.
(116) "Tax Return" means any return, report, information return or
other document, together with all amendments and supplements thereto
(including any related or supporting
12
information), required to be supplied to any Governmental Authority responsible
for the administration of Laws governing Taxes.
(117) "Third-Party Claim" has the meaning set forth in Section 8.2(a).
(118) "Title Commitments" means (i) the Title Commitment provided by
Lawyers Title Insurance Corporation, dated December 20, 1999, relating to
the Conemaugh Station; (ii) the Title Commitment provided by Lawyers Title
Insurance Corporation, dated December 20, 1999, relating to the Keystone
Station; and (iii) the Title Commitment provided by Lawyers Title Insurance
Corporation, dated December 20, 1999, relating to Keystone Lake.
(119) "Transfer Taxes" has the meaning set forth in Section 6.6(a).
(120) "Transferable Permits" means those Permits and Environmental
Permits (and all applications pertaining thereto) which are transferable
under applicable Laws by Seller to Buyer (with or without a filing with,
notice to, consent or approval of any Governmental Authority), as set forth
in Schedule 1.1(120).
(121) "Transmission Assets" has the meaning set forth in Section 2.2(a).
(122) "USEPA" means the United States Environmental Protection
Agency, and any successor agency thereto.
(123) "Vienna Station" means the generating station known as Vienna
Power Plant, located in the town of Vienna, County of Dorchester, State of
Maryland, and related properties and assets.
(124) "Year 2000 Compliance" has the meaning set forth in Section 4.14.
1.2 Certain Interpretive Matters. In this Agreement, unless the
context otherwise requires, the singular words include the plural, the
masculine includes the feminine and neuter, and vice versa. In this
Agreement, the term "includes" or "including" shall be deemed followed by
the words "including without limitation." References herein to a section,
article, Exhibit or Schedule mean a section, article, Exhibit or Schedule
of this Agreement, and reference to a given agreement or instrument
constitutes a reference to that agreement or instrument as modified,
amended, supplemented and restated through the date as of which such
reference is made.
1.3 U.S. Dollars. When used herein, the term "dollars" and the symbol
"$" refer to the lawful currency of the United States of America.
1.4 Sellers' Interest in Jointly Owned Stations. The Parties
acknowledge and agree that Seller owns and holds (a) an undivided three and
seventy-two
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hundredths percent (3.72%) interest as tenant in common in the Conemaugh Station
and (b) an undivided three and seventy hundredths percent (3.70%) interest as
tenant in common in the Keystone Station. All references in this Agreement to
Seller's right, title and interest in, to and under the Purchased Assets, and,
in each case, the rights, liabilities and obligations in connection therewith,
shall be construed in this context.
ARTICLE II
PURCHASE AND SALE
2.1 Transfer of Assets. Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing, Seller shall sell, assign,
convey, transfer and deliver to Buyer, and Buyer shall purchase, assume and
acquire from Seller, free and clear of all Encumbrances, except for the
Permitted Encumbrances, all of Seller's right, title and interest in, to
and under the following assets and properties, except as otherwise provided
in Section 2.2, each as of the Closing Date, but only to the extent of the
Seller's Interests (collectively, the "Purchased Assets"):
(a) The real property (including all buildings and other
improvements thereon and all appurtenances thereto) described on Schedule
4.7 (the "Real Property");
(b) The Inventories;
(c) Machinery, equipment, vehicles, furniture and other
personal property owned by Seller, located on the Real Property on the
Closing Date (collectively, "Tangible Personal Property"), including the
electrical transmission facilities (as opposed to generation facilities)
set forth on Schedule 2.1(c);
(d) The Seller's Agreements;
(e) Subject to the receipt of necessary consents and approvals,
the Transferable Permits;
(f) The Emission Allowances identified on Schedule 2.1(f);
(g) Such of the Emission Allowances of Seller as are identified
on Schedule 2.1(g) (the "Excess Emission Allowances");
(h) The names "Conemaugh Station" and "Keystone Station";
provided, however, that Buyer expressly acknowledges and agrees that the
Purchased Assets do not include any right, title or interest in or to the
names "Delmarva Power & Light Company", "DP&L" or any derivation thereof,
as well as any related or similar name,
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or any other trade names, trademarks, service marks, corporate names and logos
or any part, derivation, colorable imitation or combination thereof; and
(i) All books, operating records, operating, safety and
maintenance manuals, engineering design plans, blueprints and as-built
plans, specifications, procedures and similar items relating specifically
to the Jointly Owned Stations that are in Seller's possession (subject to
the right of Seller to retain copies of same for its use), other than such
items as are proprietary to third parties and accounting records.
(j) The rights of Seller in, to and under all causes of action
against third parties with respect to, arising out of or in connection with
Seller's rights, title and interest in and to the Purchased Assets or the
Assumed Liabilities, or any portion thereof, whether accruing prior to, on
or after the Closing Date, other than any such causes of action as
constitute Excluded Assets or Excluded Liabilities, whether received as
payment or credit against future liabilities.
2.2 Excluded Assets. Notwithstanding anything to the contrary in this
Agreement, nothing in this Agreement shall constitute or be construed as
requiring Seller to sell, assign, convey, transfer or deliver, and Buyer
shall not be entitled to purchase or acquire, any right, title or interest
in, to or under any properties, assets, business, operation or division of
Seller, or any Affiliate thereof, not expressly set forth in Section 2.1,
including the following assets and properties which are hereby specifically
excluded from the definition of Purchased Assets (collectively, the
"Excluded Assets"):
(a) The right, title and interest of Seller and its successors,
assigns and Representatives in, to and under all electrical transmission or
distribution facilities (as opposed to generation facilities) or
information technology and communications assets of Seller or any of its
Affiliates located at or forming a part of any of the Jointly Owned
Stations (whether or not regarded as a "transmission" or "generation" asset
for regulatory or accounting purposes), including all switchyard
facilities, substation facilities and support equipment, as well as all
permits, contracts and warranties, to the extent they relate to such
transmission and distribution assets or information technology and
communications assets (other than the electrical transmission facilities
identified on Schedule 2.1(c), all of which are included as Purchased
Assets) (collectively, the "Transmission Assets");
(b) The right, title and interest of Seller and its successors,
assigns and Representatives in, to and under certain switches and meters,
gas facilities, revenue meters and remote testing units, drainage pipes and
systems, pumping equipment and associated piping, in each case, located at
or forming a part of the Jointly Owned Stations;
(c) All certificates of deposit, shares of stock, securities,
bonds, debentures, evidences of indebtedness, and interests in joint
ventures, partnerships, limited liability companies and other entities;
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(d) All cash, cash equivalents, bank deposits, accounts and
notes receivable (trade or otherwise), prepaid expenses relating to the
operation of the Purchased Assets and any income, sales, payroll or other
Tax receivables (in each case, whether held by Seller or any third party,
including under any Jointly Owned Stations Operating Agreements);
(e) The right, title and interest of Seller and its successors,
assigns and Representatives in, to and under all intellectual property,
including the names "Delmarva Power & Light Company", "DP&L" or any
derivation thereof, as well as any related or similar name, or any other
trade names, trademarks, service marks, corporate names and logos, or any
part, derivation, colorable imitation or combination thereof;
(f) All tariffs, agreements and arrangements to which Seller or
any of its Representatives is a party for the purchase or sale of electric
capacity or energy, or for the purchase of transmission, distribution or
ancillary services;
(g) The rights of Seller and its successors, assigns and
Representatives in, to and under all causes of action against third parties
relating to any Excluded Assets or Excluded Liabilities, if any, whether
accruing prior to, on or after the Closing Date, including all claims for
refunds, prepayments, offsets, recoupment, insurance proceeds, insurance
distributions, dividends or other proceeds, condemnation awards, judgments
and the like, whether received as payment or credit against future
Liabilities, in each case, relating to any period prior to the Closing
Date;
(h) All Tax refunds or credits (including refunds or credits of
real property Taxes paid or due with respect to the Jointly Owned
Stations), which refunds or credits are with respect to periods prior to
the Closing Date, whether directly or indirectly, under the Jointly Owned
Stations Operating Agreements or otherwise, regardless of when actually
paid;
(i) All employment agreements and personnel records of Seller
and its successors, assigns and Representatives;
(j) The minute books, stock transfer books, corporate seal and
other corporate records of Seller and its successors, assigns and
Representatives;
(k) The right, title and interest of Seller and its successors,
assigns and Representatives in, to and under all contracts, agreements,
arrangements, licenses and leases of any nature, other than the Seller's
Agreements;
(l) All insurance policies relating to the ownership, lease,
maintenance or operation of the Purchased Assets;
(m) All other assets and properties owned or leased by Seller
or its successors, assigns and Representatives which are not used in the
operation of the Jointly Owned Stations;
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(n) The right, title and interest of Seller and its successors,
assigns and Representatives under this Agreement and the Additional
Agreements; and
(o) The right, title and interest of Seller and its successors,
assigns and Representatives in, to and under all Emission Allowances of
Seller or any of its Affiliates (other than the Emission Allowances
identified on Schedule 2.1(f) and the Excess Emission Allowances identified
on Schedule 2.1(g)).
2.3 Assumed Liabilities. On the Closing Date, Buyer shall assume and
agree to pay, perform and otherwise discharge, without recourse to Seller
or its Affiliates, all of the Liabilities of Seller and its Affiliates,
successors, assigns or Representatives which relate, directly or
indirectly, to the Purchased Assets, other than Excluded Liabilities, but
only to the extent of the Seller's Interests (collectively, the "Assumed
Liabilities"), including the following such Liabilities:
(a) All Liabilities of Seller under the Seller's Agreements,
including the Jointly Owned Stations Operating Agreements, and the
Transferable Permits in accordance with the terms thereof, including (i)
the contracts, agreements, arrangements, licenses and leases of whatever
nature entered into by Seller with respect to the Purchased Assets after
the date hereof consistent with the terms of this Agreement and (ii) those
contracts, agreements, arrangements, licenses and leases entered into by
any party to the Jointly Owned Stations Operating Agreements, for and on
behalf of Seller, with or without Seller's Knowledge, and by or to which
Seller or the Purchased Assets are bound or subject as of the date hereof,
or by or to which Seller or the Purchased Assets become bound or subject
after the date hereof, in each case, relating to the ownership, lease,
maintenance or operation of the Purchased Assets, except, in each case, to
the extent such Liabilities, but for a breach or default by Seller, would
have been paid, performed or otherwise discharged prior to the Closing
Date;
(b) All Liabilities of Seller which relate to the Purchased
Assets in respect of Taxes for which Buyer is liable pursuant to Section
3.5 or 6.5;
(c) All Liabilities of Seller arising under or relating to
Environmental Laws or relating to any claim in respect of Environmental
Conditions or Hazardous Substances, whether based on common law or
Environmental Laws, whether relating to the Sites or any Off-Site Location,
including (i) any violation or alleged violation of Environmental Laws,
whether prior to, on or after the Closing Date, with respect to the
ownership, lease, maintenance or operation of any of the Purchased Assets,
including any fines or penalties that arise in connection with the
ownership, lease, maintenance or operation of the Purchased Assets on or
after the Closing Date (but excluding all fines and penalties that arise in
connection with the ownership, lease, maintenance or operation of the
Purchased Assets prior to the Closing Date), and the costs associated with
correcting any such violations; (ii) loss of life, injury to persons or
property or damage to natural resources (whether or not such loss, injury
or damage arose or was made manifest before
17
the Closing Date or arises or becomes manifest on or after the Closing Date)
caused (or allegedly caused) by any Environmental Condition or the presence or
Release of Hazardous Substances at, on, in, under or migrating from, the
Purchased Assets prior to, on or after the Closing Date, including any
Environmental Condition or Hazardous Substances contained in building materials
at or migrating from the Purchased Assets or in the soil, surface water,
sediments, groundwater, landfill cells, or in other environmental media at or
near the Purchased Assets; (iii) any Remediation (whether or not such
Remediation commenced before the Closing Date or commences on or after the
Closing Date) of any Environmental Condition or Hazardous Substances that are
present or have been Released prior to, on or after the Closing Date at, on, in,
under or migrating from, the Purchased Assets or in the soil, surface water,
sediments, groundwater, landfill cells or in other environmental media at or
migrating from the Purchased Assets; (iv) any bodily injury, loss of life,
property damage, or natural resource damage arising from the storage,
transportation, treatment, disposal, discharge, recycling or Release, at any
Off-Site Location, or arising from the arrangement for such activities, on or
after the Closing Date, of Hazardous Substances generated in connection with the
ownership, lease, maintenance or operation of the Purchased Assets; and (v) any
Remediation of any Environmental Condition or Release of Hazardous Substances
arising from the storage, transportation, treatment, disposal, discharge,
recycling or Release, at any Off-Site Location, or arising from the arrangement
for such activities, on or after the Closing Date, of Hazardous Substances
generated in connection with the ownership, lease, maintenance or operation of
the Purchased Assets; provided that nothing set forth in this Subsection 2.3(c)
shall require Buyer to assume any liabilities or obligations that are Excluded
Liabilities pursuant to Section 2.4(e), 2.4(g), 2.4(h), 2.4(i) or 2.4(j);
(d) With respect to the Purchased Assets, any Tax that may be
imposed by any federal, state or local government on the ownership, lease,
maintenance, use or sale of the Purchased Assets on or after the Closing
Date, except for any Income Taxes attributable to income received by
Seller; and
(e) For purposes of clarification, Buyer acknowledges that it
shall assume and be fully responsible for holding in its accounts
sufficient SO2 Allowances and NOx Allowances to cover emissions of SO2 and
NOx from all of the Sites for all of the calendar year in which the Closing
occurs, including the period of such year prior to the Closing Date.
2.4 Excluded Liabilities. Notwithstanding Section 2.3, Buyer shall
not assume or be obligated to pay, perform or otherwise discharge the
following Liabilities of Seller (the "Excluded Liabilities"):
(a) Any Liabilities of Seller in respect of any Excluded Assets
or other assets of Seller which are not Purchased Assets, except to the
extent caused by the acts or omissions of Buyer or its Representatives or
Buyer's ownership, lease, maintenance or operation of the Purchased Assets;
18
(b) Any Liabilities of Seller in respect of Taxes attributable
to the Purchased Assets for taxable periods ending before the Closing Date,
except for Taxes for which Buyer is liable pursuant to Section 3.5 or 6.5;
(c) Any Liabilities of Seller arising from the breach prior to
the Closing Date by Seller of any of the Seller's Agreements;
(d) Any and all Liabilities to third parties for personal
injury or tort, or similar causes of action to the extent arising out of
the ownership, lease, maintenance or operation of the Purchased Assets
prior to the Closing Date, other than the Liabilities assumed by Buyer
under Section 2.3(c);
(e) Any fines or penalties imposed by any Governmental
Authority resulting from any violation of law by Seller that occurred prior
to the Closing Date;
(f) Any payment obligations of Seller or its Affiliates for
goods delivered or services rendered prior to the Closing Date, other than
the Liabilities assumed by Buyer under Section 2.3(c);
(g) Liability for Remediation of Environmental Conditions at,
on, under or migrating from, the Purchased Assets, but only to the extent
that (i) such Liability arises out of or derives from the same facts which
form the basis of a conviction, guilty plea or plea of nolo contendere by
Seller for a violation of Environmental Laws by Seller; (ii) Seller's
conviction, guilty plea or plea of nolo contendere was based on Seller's
intentional and willful wrongful actions; and (iii) Seller's conviction,
guilty plea or plea of nolo contendere arises from a matter as to which
Seller has received written notice from a Governmental Authority on or
before the sixth anniversary of the Closing Date.
(h) Any Liability under or related to Environmental Laws or the
common law arising as a result of or in connection with loss of life,
injury to persons or property or damage to natural resources (whether or
not such loss, injury or damage arose or was made manifest before the
Closing Date or arises or becomes manifest on or after the Closing Date)
caused (or allegedly caused) by the disposal, storage, transportation,
discharge, migration of, Release or recycling of Hazardous Substances at an
Off-Site Location, or the arrangement for such activities, prior to the
Closing Date, in connection with the ownership, lease, maintenance or
operation of the Purchased Assets, provided that, for purposes of this
Section, "Off-Site Location" does not include any location to which
Hazardous Substances disposed of or Released at the Purchased Assets have
migrated;
(i) Any Liability under or related to Environmental Laws or the
common law arising as a result of or in connection with the Remediation
(whether or not such Remediation commenced before the Closing Date or
commences on or after the Closing Date) of Hazardous Substances that are
disposed, stored, transported, discharged, migrating from, Released,
recycled,
19
or the arrangement of such activities, in connection with the ownership, lease,
maintenance or operation of the Purchased Assets, at any Off-Site Location,
prior to the Closing Date; provided that, for purposes of this Section, "Off-
Site Location" does not include any location to which Hazardous Substances
disposed of or Released at the Purchased Assets have migrated; and
(j) Any Liability under or related to Environmental Laws or the
common law arising as a result of or in connection with the ownership,
lease, maintenance or operation by Seller or its Affiliates of the
Transmission Assets prior to, on or after the Closing Date, except to the
extent caused by the acts or omissions of Buyer or Buyer's ownership,
lease, maintenance or operation of the Purchased Assets.
2.5 Control of Litigation. The Parties agree and acknowledge that
Seller shall be entitled exclusively to control, defend and settle any
suit, action or proceeding, and any investigation arising out of or
relating to any Excluded Assets or Excluded Liabilities, and Buyer agrees
to cooperate in connection therewith to the extent Seller reasonably
requests; provided, however, that Buyer shall not be required to incur any
out-of-pocket costs and Seller shall reimburse Buyer for the costs incurred
by Buyer in making its employees available for such purpose, including the
allocable amount of salaries and wages of such employees.
2.6 Inventories. Schedule 2.6 lists the quantities of Inventories
relating to the Jointly Owned Stations that will be transferred to Buyer,
but only to the extent of the Seller's Interest, together with the Net Book
Value of such Inventories, in each case, as of August 31, 1999.
ARTICLE III
THE CLOSING
3.1 Closing. The sale, assignment, conveyance, transfer and delivery
of the Purchased Assets by Seller to Buyer, and the purchase, assumption
and acquisition by Buyer of the Purchased Assets and the Assumed
Liabilities, and the consummation of the other transactions contemplated
hereby, shall take place at a closing (the "Closing") to be held at the
offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, One ▇▇▇▇▇▇ Square,
Wilmington, Delaware, at 10:00 a.m. local time on the first Business Day
after August 31, 2000 that is ten (10) Business Days after the date on
which the last of the conditions precedent to the Closing set forth in
Sections 7.1(a) and (c), and Sections 7.2(a) and (c) of this Agreement
shall have been satisfied or, to the extent permitted by applicable Law,
waived by the Party for whose benefit such conditions precedent exist, or
at such other date, time and location thereafter as may be agreed upon in
writing between Buyer and Seller. The date on which the Closing actually
occurs is hereinafter called the "Closing Date." The Closing shall be
effective for all purposes as of 12:01 a.m., New York City time, on the
Closing Date.
3.2 Payment of Purchase Price.
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(a) Upon the terms and subject to the conditions set forth in
this Agreement, in consideration of the aforesaid sale, assignment,
conveyance, transfer and delivery of the Purchased Assets, Buyer shall, at
the Closing, (i) pay to Seller cash in the aggregate amount of $113,136,000
plus the amount, if any, by which the Closing Adjustment Amount exceeds the
Target Adjustment Amount, or minus the amount, if any, by which the Target
Adjustment Amount exceeds the Closing Adjustment Amount (the "Purchase
Price"), and (ii) assume and agree to pay, perform and otherwise discharge
the Assumed Liabilities.
(b) At least five (5) Business Days prior to the Closing Date,
Seller shall provide to Buyer its good faith estimate of the Closing
Adjustment Amount, which estimate shall be certified in writing by an
appropriate officer of Seller (the "Estimated Adjustment Amount").
(c) At the Closing, in furtherance but not in duplication of
Section 3.2(a) and without limiting the generality of Section 3.7, Buyer
shall pay to Seller cash in an aggregate amount equal to $113,136,000 plus
the amount, if any, by which the Estimated Adjustment Amount exceeds the
Target Adjustment Amount, or minus the amount, if any, by which the Target
Adjustment Amount exceeds the Estimated Adjustment Amount (the "Closing
Payment"). The Closing Payment shall be paid to Seller by Buyer at the
Closing by wire transfer of immediately available funds to the account of
Seller designated by Seller at least two (2) Business Days prior to the
Closing Date.
3.3 Adjustment to Purchase Price.
(a) Within sixty (60) days after the Closing Date, Seller shall
deliver to Buyer, at Seller's sole cost and expense, a statement setting
forth the Closing Adjustment Amount (the "Closing Statement").
Contemporaneously, Seller shall deliver to Buyer a schedule setting forth a
calculation of the Purchase Price and the amount of any payment to be made,
and by whom, pursuant to Section 3.3(c).
(b) In the event that Buyer is in disagreement with the Closing
Statement, and in the event that the aggregate amount of such disagreements
exceeds $100,000, Buyer shall, within ten (10) Business Days after receipt
of the Closing Statement, notify Seller of such disagreements setting forth
with specificity the nature and amounts thereof. In the event that Buyer is
in disagreement with only a portion of the Closing Statement, Buyer or
Seller, as the case may be, shall pay all undisputed amounts in the manner
set forth in Section 3.3(c); and all other amounts shall be paid at such
time as all disagreements are resolved in accordance with this Section
3.3(b). If (i) the aggregate amount of the disagreements referred to in
this Section 3.3(b) does not exceed $100,000 or (ii) Buyer fails to notify
Seller of all disagreements within the ten (10) Business Day period
provided for herein, then the Closing Statement, as delivered by Seller
pursuant to Section 3.3(a), shall be final, binding and conclusive on the
Parties hereto. If Buyer is in disagreement with the Closing Statement and
notifies Seller within such ten (10) Business Day period, then the Parties
shall promptly attempt to resolve such disagreements by negotiation.
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If the Parties are unable to resolve such disagreements within thirty (30) days
following such notice of disagreement by Buyer, the Parties shall appoint an
Independent Accounting Firm within forty-five (45) days following such notice,
which shall review the Closing Statement and determine the Closing Adjustment
Amount. Resolution of any disagreements shall be made by the Independent
Accounting Firm in a writing addressed to all Parties within thirty (30) days
following referral to it by the Parties of such disagreements in accordance with
this Agreement. The findings of such Independent Accounting Firm shall be final,
binding and conclusive on the Parties. All costs and fees of the Independent
Accounting Firm shall be borne equally by Buyer and Seller.
(c) No later than the fifth (5th) Business Day following the
determination of the Closing Adjustment Amount pursuant to Section 3.3(b),
either (i) Seller shall pay Buyer the amount, if any, by which the Closing
Payment exceeds the Purchase Price, or (ii) Buyer shall pay Seller the
amount, if any, by which the Purchase Price exceeds the Closing Payment, in
either case, together with simple interest accruing on such payment at the
Prime Rate from the Closing Date through and including the date of payment,
by wire transfer of immediately available funds to an account designated by
the receiving Party. As used herein, "Prime Rate" means, as of any date,
the prime rate as published in The Wall Street Journal on such date or, if
not published on such date, on the most recent date of publication.
3.4 Tax Reporting and Allocation of Purchase Price. Buyer and Seller
shall use their respective reasonable best efforts to agree in good faith
upon an allocation among the Purchased Assets of the sum of the Purchase
Price and the Assumed Liabilities consistent with Section 1060 of the Code
and the Treasury Regulations thereunder within sixty (60) days after the
Closing Date. In the event that the Parties cannot agree on a mutually
satisfactory allocation within such sixty-day period, the Parties shall
appoint an Independent Accounting Firm that shall, at Seller's and Buyer's
joint expense, determine the appropriate allocation. The finding of such
Independent Accounting Firm shall be final, binding and conclusive on the
Parties. After determination of the allocation by agreement of the Parties
or by binding determination of the Independent Accounting Firm, Buyer and
Seller shall file, for the tax year in which the Closing occurs, Internal
Revenue Service Form 8594, and all Tax Returns, in accordance with such
allocation. Buyer and Seller shall report the transactions contemplated by
this Agreement for United States federal Income Tax and all other Tax
purposes in a manner consistent with the allocation determined pursuant to
this Section 3.4. Buyer and Seller shall provide the other promptly with
any information required to complete Form 8594. 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 allocation
of the Purchase Price and the Assumed Liabilities.
3.5 Prorations.
(a) Buyer and Seller agree that, except as otherwise provided
in this Agreement, all of the items customarily prorated relating to the
ownership, lease, maintenance or operation of the Purchased Assets,
including those listed below (but not including Income
22
Taxes), shall be prorated as of the Closing Date, with Seller liable to the
extent such items relate to any period prior to the Closing Date, and Buyer
liable to the extent such items relate to any period on or after the Closing
Date (measured in the same units used to compute the item in question, otherwise
measured by calendar days):
(i) Personal property, real estate and occupancy Taxes
(other than any Pennsylvania public utility realty tax pursuant to 72 P.S.
ss. 8102-A ("▇▇▇▇▇"), as well as additional assessments and surtaxes
relating to ▇▇▇▇▇ (collectively, the "▇▇▇▇▇ Assessment") which are
addressed in Section 3.5(c)), assessments and other charges, if any, on or
with respect to the ownership, lease, maintenance or operation of the
Purchased Assets;
(ii) Rent, Taxes and all other items (including prepaid
services and goods not included in Inventory), in each case, payable by or
to Seller under any of the Seller's Agreements;
(iii) Any permit, license, registration, compliance
assurance fees or other fees with respect to any Transferable Permit;
(iv) Sewer rents and charges for water, telephone,
electricity and other utilities;
(v) Insurance premiums paid on or with respect to the
ownership, lease, maintenance or operation of the Purchased Assets to the
extent payable under any policy or other arrangement included among the
Seller's Agreements; and
(vi) Prepaid operating and maintenance expenses, whether
arising under the Jointly Owned Stations Operating Agreements or otherwise.
(b) Seller or Buyer, as the case may be, shall promptly
reimburse the other Party that portion of any amount paid by such other
Party to the extent relating to the period for which Seller or Buyer, as
the case may be, is liable under Section 3.5(a), in each case, upon
presentation of a statement setting forth in reasonable detail the nature
and amount of any such payment. In connection with the prorations set forth
in Section 3.5(a), if actual figures are not available on the Closing Date,
the proration shall be calculated based upon the respective amounts accrued
through the Closing Date or paid for the most recent year or other
appropriate period for which such amounts paid are available. All prorated
amounts shall be recalculated and paid to the appropriate Party within
sixty (60) days after the date that the previously unavailable actual
figures become available. Seller and Buyer shall furnish each other with
such documents and other records as may be reasonably requested in order to
confirm all proration calculations made pursuant to this Section 3.5.
Notwithstanding anything to the contrary herein, no proration shall be made
under this Section 3.5 with respect to (i) real property Tax refunds that
are Excluded Assets under Section 2.2(h) or (ii) Taxes payable by Buyer
pursuant to Section 6.5(a).
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(c) (i) Seller shall be responsible for and pay the ▇▇▇▇▇
Assessment imposed on any public utilities which are included in the
Purchased Assets located in the Commonwealth of Pennsylvania (the
"Pennsylvania Assets") with respect to the calendar year in which the
Closing occurs. Buyer shall reimburse Seller in accordance with this
Section 3.5(c) for its proportionate share of the ▇▇▇▇▇ Assessment for the
calendar year in which the Closing occurs. Buyer's proportionate share
shall be based upon the number of days within the Closing year that Buyer
owned the Pennsylvania Assets. For example, if the Closing were to occur on
December 1, 2000, and $1,000,000 of ▇▇▇▇▇ Assessment for calendar year 2000
had been paid, then Buyer's proportionate share of such ▇▇▇▇▇ Assessment
would be equal to the product obtained by multiplying $1,000,000 by a
fraction, the numerator of which would be the number of days in calendar
year 2000 during which Buyer owned the Pennsylvania Assets (31), and the
denominator of which would be the number of days in calendar year 2000
(366). Therefore, the aggregate amount of Buyer's proportionate share of
the ▇▇▇▇▇ Assessment would be $1,000,000 multiplied by 31/366, or
$84,699.50. Seller shall compute Buyer's obligation hereunder and notify
Buyer of such obligation at least five (5) Business Days before the
Closing. The reimbursement payable by Buyer to Seller hereunder shall be
paid at Closing.
(ii) In the event Seller or Buyer obtains a refund of the
▇▇▇▇▇ Assessment paid with respect to the year in which the Closing
occurred, any such refund, net of any costs incurred by the Party obtaining
such refund (a "Net ▇▇▇▇▇ Refund"), shall be prorated in accordance with
this Section 3.5(c). Any prorated Net ▇▇▇▇▇ Refund shall be paid to the
Party entitled to such prorated Net ▇▇▇▇▇ Refund promptly upon final
adjudication or settlement of such Net ▇▇▇▇▇ Refund. Buyer and Seller shall
provide each other with such cooperation and information as either of them
reasonably may request of the other in connection with the filing of any
refund claim for a ▇▇▇▇▇ Assessment, or the conduct of any audit, dispute,
proceeding, suit or action concerning any ▇▇▇▇▇ Assessment.
3.6 Deliveries by Seller. At the Closing, Seller shall deliver, or
cause to be delivered, the following to Buyer:
(a) One or more Limited Warranty Deeds, duly executed by Seller
and in recordable form;
(b) The Bills of Sale, duly executed by Seller;
(c) The Assignment and Assumption Agreements, duly executed by
Seller;
(d) Evidence, in form and substance reasonably satisfactory to
Buyer, demonstrating that Seller has obtained the Seller's Required
Regulatory Approvals set forth on Schedule 7.2(c);
(e) A FIRPTA Affidavit, duly executed by Seller;
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(f) Copies, certified by the Secretary or Assistant Secretary
of Seller, of resolutions authorizing the execution and delivery of this
Agreement, each Additional Agreement to which Seller is a party and all of
the other agreements and instruments, in each case, to be executed and
delivered by Seller in connection herewith;
(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, each
Additional Agreement to which Seller is a party and the other agreements
and instruments contemplated hereby;
(h) All such other agreements, documents, instruments and
writings as shall, in the reasonable opinion of Buyer and its counsel, be
necessary to sell, assign, convey, transfer and deliver to Buyer the
Purchased Assets, in accordance with this Agreement and, where necessary or
desirable, in recordable form, provided that Seller shall not be required
to prepare or obtain any survey, abstract, title opinion or title insurance
policy with respect to the Real Property; and
(i) 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.
3.7 Deliveries by Buyer. At the Closing, Buyer shall deliver, or
cause to be delivered, the following to Seller:
(a) The Closing Payment, by wire transfer of immediately
available funds in accordance with Seller's instructions to the account of
Seller designated by Seller at least two (2) Business Days prior to the
Closing Date;
(b) The Assignment and Assumption Agreements, duly executed by
Buyer;
(c) Evidence, in form and substance reasonably satisfactory to
Seller, demonstrating that Buyer has obtained the Buyer's Required
Regulatory Approvals set forth on Schedule 7.1(c);
(d) A copy, certified by the Secretary or Assistant Secretary
of Buyer, of resolutions authorizing the execution and delivery of this
Agreement, each Additional Agreement and all of the agreements and
instruments, in each case, to be executed and delivered by Buyer in
connection herewith;
(e) 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, each
Additional Agreement to which Buyer is a party and the other agreements
contemplated hereby;
25
(f) All such other permits, agreements, documents, instruments
and writings as shall, in the reasonable opinion of Seller and its counsel,
be necessary for Buyer to purchase and acquire the Purchased Assets, and to
assume the Assumed Liabilities, in each case, in accordance with this
Agreement and, where necessary or desirable, in recordable form; and
(g) Such other permits, agreements, documents, instruments and
writings 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.
3.8 Post-Closing Excluded Asset Deliveries. In the event that Seller
or Buyer, or any of their respective Representatives, shall determine after
the Closing that any Excluded Asset is in the possession of Buyer or any of
its Representatives, Buyer shall, or shall cause any such Representative
to, promptly, but in no event later than five (5) Business Days following
such determination, pay or deliver, or cause to be paid or delivered, to
Seller such Excluded Asset, at Buyer's sole cost and expense.
3.9 Relationship of this Agreement and Related Purchase
Agreements. The transactions contemplated by this Agreement, together with
the transactions contemplated by the Related Purchase Agreements, are
intended by the Parties to be consummated substantially simultaneously; and
if any of the transactions contemplated hereby or by any of the Related
Purchase Agreements are not consummated simultaneously on the Closing Date
in accordance with the terms and subject to the conditions set forth herein
and therein, as applicable, then each Party shall take, or cause to be
taken, all actions, and do, or cause to be done, all things, in each case,
that are necessary to dissolve and invalidate all transactions contemplated
hereby; provided, however, that if the failure to consummate the
transactions contemplated hereby or by the Related Purchase Agreements
results from a default or breach of a party under this Agreement or any of
the Related Purchase Agreements, then nothing in the foregoing shall
preclude or limit the rights or remedies of any Party in connection with
such default or breach. Notwithstanding any provision contained herein to
the contrary, if all conditions to the obligations of all parties to the
ACE Related Purchase Agreements to consummate the transactions contemplated
thereby have been satisfied or, to the extent permitted by applicable Law,
waived, but, for any reason, the transactions contemplated by this
Agreement and the DP&L Related Purchase Agreement cannot be consummated
simultaneously therewith, then the Parties shall, at Buyer's option and in
its sole discretion, consummate the transactions contemplated by the ACE
Related Purchase Agreements; provided, however, that nothing contained in
this Section 3.9 shall be construed as relieving Buyer of any of its
obligations under this Agreement or the DP&L Related Purchase Agreement, as
set forth therein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller hereby represents and warrants to Buyer as follows (all such
representations and warranties, except those set forth in Sections 4.1 and
4.2, being made to the Knowledge of Seller):
4.1 Organization; Qualification. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the
States of Delaware and Virginia and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as it is now being conducted. Seller 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 requires it
to be so qualified, except to the extent that the failure to be so
qualified would not, individually or in the aggregate, have a Material
Adverse Effect.
4.2 Authority. Seller has full corporate power and authority to
execute and deliver this Agreement and each Additional Agreement to which
it is a party and to consummate the transactions contemplated hereby and
thereby. The execution and delivery by Seller of this Agreement and each
Additional Agreement to which it is a party and the consummation by Seller
of the transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary corporate action required on the part
of Seller. This Agreement has been duly and validly executed and delivered
by Seller and, subject to the receipt of Seller's Required Regulatory
Approvals, this Agreement constitutes, and upon the execution and delivery
by Seller of each Additional Agreement to which it is a party, each such
Additional Agreement will constitute, the legal, valid and binding
obligation 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), subject to
obtaining or making all Seller's Required Regulatory Approvals, neither the
execution and delivery by Seller of this Agreement and the Additional
Agreements to which it is a party nor the consummation by Seller of the
transactions contemplated hereby or thereby will (i) conflict with or
result in any breach of any provision of the certificate or articles of
incorporation or bylaws of Seller; (ii) 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 Seller is a
party or by which it, or any of the Purchased Assets, may be bound, except
for such defaults (or rights of termination, cancellation or acceleration)
as to which requisite consents, approvals or waivers have been, or will be
prior to the Closing obtained, or which would not, individually or in the
aggregate, have a Material Adverse Effect; or (iii) constitute violations
of any Law, order, judgment or decree applicable to Seller, which
violations, individually or in the aggregate, would have a Material Adverse
Effect.
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(b) Except for consents, approvals, filings and notices (i)
required under the HSR Act or (ii) set forth on Schedule 4.3(b) (the
consents, approvals, filings and notices referred to in clause (ii) of this
sentence are collectively referred to herein as the "Seller's Required
Regulatory Approvals"), no consent or approval of, filing with, or notice
to, any Governmental Authority is necessary for the execution and delivery
by Seller of this Agreement and the Additional Agreements to which it is a
party or the consummation by Seller of the transactions contemplated hereby
or thereby, other than (i) such consents, approvals, filings and notices
which, if not obtained or made, would not materially impair Seller's
ability to perform its material obligations under this Agreement or such
Additional Agreements; (ii) such consents, approvals, filings and notices
which become applicable to Seller or the Purchased Assets as a result of
the 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 (iii) such
consents, approvals, filings and notices, the failure of which to obtain or
make would not, individually or in the aggregate, have a Material Adverse
Effect.
4.4 Insurance. Except as set forth on Schedule 4.4, all material
policies of fire, liability, workers' compensation and other forms of
insurance owned or held by, or on behalf of, Seller and insuring any
Purchased Assets are in full force and effect, all premiums with respect
thereto covering all periods up to and including the date hereof have been
paid (other than retroactive premiums which may be payable with respect to
comprehensive general liability and workers' compensation insurance
policies), and no written notice of cancellation or termination has been
received by Seller with respect to any such policy which was not replaced
on substantially similar terms prior to the date of such cancellation or
termination. Except as set forth on Schedule 4.4, as of the date of this
Agreement, Seller has not been refused any such insurance with respect to
any Purchased Assets.
4.5 Title and Related Matters. Except for Permitted Encumbrances,
Seller has good, valid and marketable title to the Real Property included
in the Purchased Assets and has good and valid title to all other Purchased
Assets, free and clear of all Encumbrances.
4.6 Environmental Matters. Except as set forth on Schedule 4.6:
(a) Seller holds, and is in compliance with, all Environmental
Permits that Seller requires in order to own, lease and operate the
Purchased Assets, and Seller is otherwise in compliance with applicable
Environmental Laws with respect to the ownership, lease, maintenance or
operation of the Purchased Assets, except for such failures to hold or
comply with required Environmental Permits, and such failures to be in
compliance with applicable Environmental Laws, as would not, individually
or in the aggregate, materially impair the ability of Buyer to operate the
Purchased Assets after the Closing in the manner operated by Seller on the
date hereof.
28
(b) Seller has not received any written request for
information, or been notified in writing that it is a potentially
responsible party under CERCLA or any similar state law, with respect to
any of the Sites, or any written notice relating to any Governmental
Authority's allegation or investigation of any criminal violations by
Seller of any Environmental Laws, except for requests or notices with
respect to Liabilities as would not, individually or in the aggregate,
materially impair the ability of Buyer to operate the Purchased Assets
after the Closing in the manner operated by Seller on the date hereof; and
(c) Seller has not entered into or agreed to any consent decree
or order under any Environmental Law relating to the Purchased Assets, and
Seller is not subject to any outstanding judgment, decree or order relating
to compliance with any Environmental Law or to the investigation or cleanup
of Hazardous Substances under any Environmental Law relating to the
Purchased Assets, except for such decrees, orders and judgments as would
not, individually or in the aggregate, materially impair the ability of
Buyer to operate the Purchased Assets after the Closing in the manner
operated by Seller on the date hereof.
4.7 Real Property. Schedule 4.7 sets forth a description of the Real
Property. True and correct copies of all current surveys, abstracts, title
opinions and policies of title insurance currently in force, in each case,
in Seller's possession and relating to the Real Property, have been
previously made available to Buyer.
4.8 Condemnation. As of the date hereof, Seller has not received any
written notice of any pending or threatened proceedings or actions by any
Governmental Authority to condemn or take by power of eminent domain all or
any material part of the Purchased Assets.
4.9 Contracts and Leases.
(a) Schedule 4.9(a) sets forth a list of all written Seller's
Agreements, other than such contracts, licenses, agreements, arrangements
and personal property leases as (i) are set forth in any other Schedule,
(ii) constitute Excluded Assets or Excluded Liabilities, (iii) may be
terminated after the Closing by Buyer upon notice of no more than ninety
(90) days, (iv) involve future annual expenditures by Buyer after the
Closing of $1,000,000 or less, (v) are expected to expire or terminate
prior to the Closing, (vi) are entered into by Seller after the date hereof
in accordance with the term of this Agreement or (vii) are entered into by
any party to the Jointly Owned Stations Operating Agreements, for and on
behalf of Seller, with or without Seller's Knowledge, and by or to which
Seller or the Purchased Assets are bound or subject as of the date hereof,
or by or to which Seller or the Purchased Assets become bound or subject
after the date hereof.
(b) Except as set forth on Schedule 4.9(a), each Seller's
Agreement set forth on Schedule 4.9(a): (i) constitutes the valid and
binding obligation of Seller and the other parties thereto and (ii) will
continue in full force and effect after the Closing in accordance with its
terms.
29
(c) Except as set forth on Schedule 4.9(a), there is not under
any Seller's Agreement set forth on Schedule 4.9(a) any default or event
which, with notice or lapse of time or both, would constitute a default, on
the part of Seller or any other party thereto, except such defaults as
would not, individually or in the aggregate, have a Material Adverse
Effect.
4.10 Legal Proceedings. Except as set forth on Schedule 4.10, there
are no suits, actions or proceedings pending or, to the Knowledge of
Seller, threatened against Seller by or before any Governmental Authority,
which would, individually or in the aggregate, have a Material Adverse
Effect or would materially impair Seller's ability to consummate the
transactions contemplated hereby or by any Additional Agreement to which it
is a party. Except as set forth on Schedule 4.10, Seller is not subject to
any judgment, order or decree of any Governmental Authority which would,
individually or in the aggregate, have a Material Adverse Effect or would
materially impair Seller's ability to consummate the transactions
contemplated hereby or by any Additional Agreement to which it is a party.
4.11 Permits. Seller holds, and is in compliance with, all permits,
certificates, licenses and other authorizations of all Governmental
Authorities (collectively, "Seller's Permits") that Seller requires in
order to own the Purchased Assets, except for (a) Environmental Permits
(which are governed by Section 4.6) and (b) such failures to hold, or
comply with, Seller's Permits as would not, individually or in the
aggregate, have a Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows (all such
representations and warranties, except those set forth in Sections 5.1 and
5.2, being made to the Knowledge of Buyer):
5.1 Organization; Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as it is
now being conducted. Buyer is, or by the Closing will be, qualified to do
business in the Commonwealth of Pennsylvania. Buyer has heretofore
delivered to Seller true and correct copies of its certificate or articles
of incorporation and bylaws (or other similar governing documents) as
currently in effect.
5.2 Authority. Buyer has full corporate power and authority to
execute and deliver this Agreement and each Additional Agreement to which
it is a party and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and each such
Additional Agreement by Buyer and the consummation by Buyer of the
transactions
30
contemplated hereby or thereby have been duly and validly authorized by all
necessary corporate action required on the part of Buyer. This Agreement has
been duly and validly executed and delivered by Buyer and, subject to the
receipt of Buyer's Required Regulatory Approvals, this Agreement constitutes,
and upon the execution and delivery by Buyer of each Additional Agreement to
which it is a party, each such Additional Agreement will constitute, the legal,
valid and binding obligation 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 subject to
obtaining or making all Buyer's Required Regulatory Approvals, neither the
execution and delivery by Buyer of this Agreement or the Additional
Agreements to which it is a party nor the consummation by Buyer of the
transactions contemplated hereby or thereby will (i) conflict with or
result in any breach of any provision of the certificate or articles of
incorporation or bylaws (or other similar governing documents) of Buyer or
any of its Subsidiaries; (ii) 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 Buyer, any such Subsidiary or any of
their respective properties and assets may be bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to
which requisite consents, approvals or waivers have been or will be prior
to the Closing obtained, or which would not, individually or in the
aggregate, materially impair Buyer's ability to consummate the transactions
contemplated hereby or by any Additional Agreement, or to perform its
material obligations hereunder or thereunder (a "Buyer Material Adverse
Effect"); or (iii) constitute violations of any Law, order, judgment or
decree applicable to Buyer or any of its Subsidiaries, which violations,
individually or in the aggregate, would have a Buyer Material Adverse
Effect.
(b) Except for consents, approvals, filings and notices (i)
required under the HSR Act or (ii) set forth on Schedule 5.3(b) (the
consents, approvals, filings and notices referred to in clause (ii) of this
sentence are collectively referred to herein as the "Buyer's Required
Regulatory Approvals"), no consent or approval of, filing with, or notice
to, any Governmental Authority is necessary for the execution and delivery
by Buyer of this Agreement and the Additional Agreements to which it is a
party or the consummation by Buyer of the transactions contemplated hereby
or thereby, other than such consents, approvals, filings or notices, which,
if not obtained or made, would not have a Buyer Material Adverse Effect.
5.4 Buyer's Permits. Buyer holds, and is in compliance with, or on or
prior to the Closing Date will hold, and from and after the Closing Date
will comply with, all permits, certificates, licenses and other
authorizations of all Governmental Authorities that Buyer requires
31
in order to own, lease, maintain and operate the Purchased Assets (collectively,
"Buyer's Permits").
5.5 Availability of Funds. Buyer has sufficient funds and lines of
credit available to it, or has received binding written commitments from
creditworthy financial institutions, true and correct copies of which have
been provided to Seller, to permit Buyer on the Closing Date to pay the
Purchase Price, all other amounts payable by Buyer hereunder or under any
Additional Agreement, and all fees and expenses incurred by Buyer in
connection with the transactions contemplated hereby and by the Additional
Agreements, and to permit Buyer to timely pay or perform all of its other
obligations (including its obligations pursuant to Article VIII) under this
Agreement and the Additional Agreements.
5.6 Financial Statements. Buyer has provided Seller with true and
correct copies of its balance sheet, income statement and statement of
changes in cash flows of Buyer for each of its last three completed fiscal
years, together with the related reports of its independent accountants,
PricewaterhouseCoopers LLP, and for its most recently completed fiscal
quarter ("Buyer's Financial Statements"). Such Buyer's Financial Statements
have been prepared in accordance with United States generally accepted
accounting principles consistently applied and fairly reflect, in all
material respects, the financial position, results of operations and cash
flow of Buyer at and for the periods therein.
5.7 Legal Proceedings. There are no suits, actions or proceedings
pending or threatened against Buyer by or before any Governmental
Authority, which would, individually or in the aggregate, have a Buyer
Material Adverse Effect or would materially impair such Buyer's ability to
consummate the transactions contemplated hereby or by any Additional
Agreement to which it is a party. Buyer is not subject to any judgments,
orders or decrees of any Governmental Authority which would, individually
or in the aggregate, have a Buyer Material Adverse Effect or would
materially impair such Buyer's ability to consummate the transactions
contemplated hereby or by any Additional Agreement to which it is a party.
5.8 Qualified Buyer. Buyer is qualified to obtain and, after the
Closing, retain all Buyer Permits, including Environmental Permits,
necessary for Buyer to own, lease, maintain and operate the Jointly Owned
Stations, including, from and after the Closing Date, the Purchased Assets.
5.9 Inspections. Buyer has, prior to the execution and delivery of
this Agreement, reviewed the environmental site assessments prepared for
Seller and set forth on Schedule 5.9.
5.10 Regulation as a Utility. Buyer is not subject to regulation as a
public utility or public service company (or similar designation) by any
Governmental Authority.
ARTICLE VI
32
COVENANTS OF THE PARTIES
6.1 Access to Information.
(a) Between the date of this Agreement and the Closing Date,
Seller shall: (i) use its Commercially Reasonable Efforts to give Buyer and
its Representatives, during ordinary business hours and upon reasonable
notice, reasonable access to all books, records, plans, offices and other
facilities and properties included in the Purchased Assets; (ii) furnish
Buyer with such financial and operating data and other information in the
possession of Seller with respect to the Purchased Assets as Buyer may from
time to time reasonably request; and (iii) furnish Buyer with all such
other information in the possession of Seller 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
manner as not to interfere unreasonably with the operation of the Purchased
Assets, (B) Seller shall not be required to take any action which would
constitute a waiver of the attorney-client or other privilege, (C) Seller
need not supply Buyer with any information which Seller is under a legal or
contractual obligation not to supply and (D) Seller shall not be required
to supply Buyer with any information with respect to the Jointly Owned
Stations to which Seller is not entitled pursuant to the terms of the
Jointly Owned Stations Operating Agreements. Notwithstanding anything
herein to the contrary, prior to the Closing Date, Buyer shall not have the
right to perform or conduct, or cause to be performed or conducted, any
environmental sampling or testing at, in, on or underneath any Jointly
Owned Station.
(b) All information furnished to or obtained by Buyer and
Buyer's Representatives pursuant to this Section 6.1 shall be Proprietary
Information and shall be kept confidential in accordance with the terms of
the Confidentiality Agreement. Nothing in this Section 6.1 is intended to
or shall be deemed to amend, supplement or otherwise modify the obligations
of Buyer, its Representatives or its Affiliates under the Confidentiality
Agreement, all of which remain in effect until termination of such
agreement in accordance with its terms.
(c) For a period of seven (7) years from and after the Closing
Date, each Party and its Representatives shall have reasonable access to
all of the books and records of the Purchased Assets in the possession of
the other Party to the extent that such access may reasonably be required
by such Party in connection with the Assumed Liabilities or the Excluded
Liabilities, or other matters relating to or affected by the operation of
the Purchased Assets or the Excluded Assets. Such access shall be afforded
by the Party in possession of any such books and records upon receipt of
reasonable advance notice and during normal business hours. The Party
exercising this right of access shall be solely responsible for any costs
or expenses incurred by it or the other Party with respect to such access
pursuant to this Section 6.1(c). If the Party in possession of such books
and records shall desire to dispose of any books and records upon or prior
to the expiration of such seven-year period, such Party shall, prior to
such disposition, give
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the other Party a reasonable opportunity, at such other Party's cost and
expense, to segregate and remove such books and records as such other Party may
select.
(d) Buyer shall not, prior to the Closing Date, contact any
customer, vendor, supplier or employee of, or any other Person having
business dealings with, Seller or its Affiliates with respect to any aspect
of the Purchased Assets or the transactions contemplated hereby or by any
Additional Agreement, without the prior written consent of Seller, which
consent shall not be unreasonably withheld or delayed.
6.2 Public Statements. Except as required by applicable Law or by
applicable rules of any national securities exchange, in which event the
Parties shall consult with each other in advance, prior to the Closing
Date, no press release or other public announcement, statement or comment
in response to any inquiry relating to the transactions contemplated by
this Agreement shall be issued, made or permitted to be issued or made by
any Party or its Representatives without the prior written consent of the
other Party.
6.3 Further Assurances.
(a) Subject to the terms and conditions of this Agreement, each
of the Parties hereto shall use its reasonable 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 to consummate and make
effective the purchase and sale of the Purchased Assets pursuant to this
Agreement and the assumption of the Assumed Liabilities, including using
its reasonable best efforts to ensure satisfaction of the conditions
precedent to each Party's obligations hereunder, including obtaining all
necessary consents, approvals and authorizations of, and making all
required notices or filings with, third parties required to be obtained or
made in order to consummate the transactions hereunder, including the
transfer of the Transferable Permits to Buyer. Seller shall cooperate with
Buyer in its efforts to obtain all other Permits and Environmental Permits
necessary for Buyer to operate the Purchased Assets. Buyer shall perform
all conditions required of Buyer in connection with obtaining the Seller's
Required Regulatory Approvals. No Party 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.
(b) Without limiting the generality of Section 6.3(a):
(i) In the event that any Purchased Asset shall not have
been conveyed to Buyer at the Closing, Seller shall, subject to Section
6.3(b)(ii), use Commercially Reasonable Efforts after the Closing to convey
such asset to Buyer as promptly as practicable.
(ii) To the extent that Seller's rights under any
material Seller's Agreement may not be assigned without the consent,
approval or authorization of any third party which consent, approval or
authorization has not been obtained by the Closing Date, this
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Agreement shall not constitute an agreement to assign such right if an attempted
assignment would constitute a breach of such Seller's Agreement or violate any
applicable Law. If any consent, approval or authorization to the assignment of
any material Seller's Agreement shall not be obtained, or if any attempted
assignment would be ineffective or would impair Buyer's rights and obligations
under such Seller's Agreement, such that Buyer would not acquire and assume the
benefit and detriment of all such rights and obligations, Seller, at its option
and to the fullest extent permitted by applicable Law and such Seller's
Agreement, shall, after the Closing Date, appoint Buyer to be Seller's agent
with respect to such Seller's Agreement, or, to the fullest extent permitted by
applicable Law and such Seller's Agreement, enter into such reasonable
arrangements with Buyer or take such other actions as are necessary to provide
Buyer with the same or substantially similar rights and obligations under such
Seller's Agreement.
6.4 Consents and Approvals. Without limiting the generality of
Section 6.3(a):
(a) As promptly as practicable after the date of this
Agreement, Seller and Buyer shall each file or cause to be filed with the
Federal Trade Commission and the United States Department of Justice all
notifications required to be filed under the HSR Act and the rules and
regulations promulgated thereunder, as amended from time to time, with
respect to the transactions contemplated hereby and by the Additional
Agreements. The Parties shall use their respective Commercially Reasonable
Efforts to respond promptly to any requests for additional information made
by such agencies, and to cause the applicable waiting period under the HSR
Act to terminate or expire at the earliest possible date after the date of
filing. Buyer shall pay all filing fees payable under the HSR Act but each
Party shall bear its own costs and expenses of the preparation of any
filing.
(b) As promptly as practicable after the date of this
Agreement, Seller and Buyer shall take, or cause to be taken, all actions,
and do, or cause to be done, all things necessary, proper or advisable
under applicable Laws to obtain all required consents and approvals of the
PaPUC, the SEC and all other Governmental Authorities, and make all other
filings and give all other notices required to be made prior to the Closing
with respect to the transactions contemplated hereby and by the Additional
Agreements. The Parties shall respond promptly to any requests for
additional information made by such Persons, and use their respective
Commercially Reasonable Efforts to cause all such consents and approvals to
be obtained or waived at the earliest possible date after the date of
filing. Each Party will bear its own costs of the preparation of any such
filing or notice; provided, however, that Buyer shall bear all costs
associated with experts and consultants reasonably necessary for the
preparation of any such filing or notice or reasonably necessary to obtain
such consents and approvals as promptly as practicable.
(c) Seller and Buyer shall cooperate with each other and
promptly prepare and file notifications with, and request Tax clearances
from, state and local taxing authorities in jurisdictions in which a
portion of the Purchase Price may be required to be withheld or in which
35
Buyer would otherwise be liable for any Tax Liabilities of Seller pursuant
to state or local Tax Law.
(d) Without limiting the generality of Section 6.4(b), as
promptly as practicable after the date hereof, Buyer shall make all filings
required by the Federal Power Act. Prior to filing any application with the
FERC, Buyer shall submit such application to Seller for review and comment
and shall incorporate into such application all revisions reasonably
requested. Buyer shall be solely responsible for the cost of preparing and
filing such application, as well as all petition(s) for rehearing and all
reapplications. If any filing is rejected by the FERC, Buyer shall petition
the FERC for rehearing or permission to re-submit an application with the
FERC, provided that, in either case, such action has been approved by
Seller.
6.5 Certain Tax Matters.
(a) All transfer, sales and similar Taxes ("Transfer Taxes")
incurred in connection with this Agreement and the Additional Agreements,
and the transactions contemplated hereby and thereby (including (i) sales
Tax on the sale or purchase of the Purchased Assets imposed by Pennsylvania
and (ii) transfer Tax on conveyances of interests in real property imposed
by Pennsylvania) shall be borne by Buyer (and, to the extent paid by
Seller, Buyer shall reimburse Seller upon request); provided, however, that
if, pursuant to Section 6.6(e), the transactions contemplated by this
Agreement are effectuated as a Like-Kind Exchange, then Seller shall bear
such Transfer Taxes to the extent that they exceed the amount of Transfer
Taxes that would have otherwise been incurred had the transactions not been
effectuated as a Like-Kind Exchange (and all such amounts shall be computed
on an after-Tax basis). Buyer, at its expense, shall prepare and file, to
the extent required by, or permissible under, applicable Law, all necessary
Tax Returns and other documentation with respect to all such Transfer
Taxes, and, if required by applicable Law, Seller shall join in the
execution of all such Tax Returns and other documentation; provided,
however, that prior to the Closing Date, to the extent applicable, Buyer
shall provide to Seller appropriate certificates of Tax exemption from each
applicable Governmental Authority.
(b) With respect to Taxes to be prorated in accordance with
Section 3.5, Buyer shall prepare and timely file all Tax Returns required
to be filed after the Closing Date with respect to the Purchased Assets, if
any, and shall duly and timely pay all such Taxes shown to be
due on such Tax Returns. Buyer's preparation of such Tax Returns shall be
subject to Seller's approval, which approval shall not be unreasonably
withheld or delayed. Buyer shall make each such Tax Return available for
Seller's review and approval (which approval shall not be unreasonably
withheld or delayed) no later than fifteen (15) Business Days prior to the
due date for filing such Tax Return, it being understood that Seller's
failure to approve any such Tax Return shall not limit Buyer's obligation
to timely file such Tax Return and duly and timely pay all Taxes shown to
be due thereon.
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(c) Buyer and Seller shall provide the other with such
assistance as may reasonably be requested by the other Party in connection
with the preparation of any Tax Return, audit or other examination, or any
proceeding, by or before any Governmental Authority relating to Liability
for Taxes, and each Party shall retain and provide the requesting Party
with all books and records or other information which may be relevant to
such Tax Return, audit, examination or proceeding. All books, records and
information obtained pursuant to this Section 6.5(c) or pursuant to any
other Section that provides for the sharing of books, records and
information or review of any Tax Return or other instrument relating to
Taxes shall be kept confidential by the parties hereto in accordance with
the terms and conditions set forth in the Confidentiality Agreement.
(d) In the event that a dispute arises between Seller and Buyer
regarding Taxes or any amount due under this Section 6.5, the affected
Parties shall attempt in good faith to resolve such dispute and any
agreed-upon amount shall be promptly paid to the appropriate Party. If any
such dispute is not resolved within thirty (30) days after notice thereof
is given to any Party, the affected Parties shall submit the dispute to an
Independent Accounting Firm for resolution, which resolution shall be
final, binding and conclusive on such 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 by
the Independent Accounting Firm of any such dispute shall be made within
five (5) Business Days after such resolution, together with any interest
determined by the Independent Accounting Firm to be appropriate.
(e) As reasonably requested by Seller, Buyer shall cooperate
with Seller in effectuating the transactions contemplated by this Agreement
in such a manner as to qualify for deferred like-kind exchange treatment
under Section 1031 of the Code ("Like-Kind Exchange") (including the
transfer of cash and other property and the assignment of this Agreement to
one or more qualified intermediaries and the execution of appropriate
documentation). In such event, Seller shall be responsible, and shall
indemnify Buyer, for any Transfer Taxes incurred by Buyer as a result of
effectuating such Like-Kind Exchange to the extent that the amount of such
Transfer Taxes exceeds the amount of Transfer Taxes that the Buyer would
have otherwise incurred had the transactions not been effectuated as a
Like-Kind Exchange (and all such amounts shall be computed on an after-Tax
basis). At Buyer's request, Seller shall promptly provide Buyer copies of
all documents prepared by Seller, including proposed agreements,
relating to the Like-Kind Exchange and shall give Buyer a reasonable
opportunity to promptly comment on such documents and agreements.
(f) To the extent that any Party receives a Tax refund or
credit with respect to a Tax that was paid or incurred by the other Party,
such receiving Party shall promptly pay the amount of such Tax refund or
credit to the other Party.
6.6 Advice of Changes. Prior to the Closing, each Party shall advise
the other in writing with respect to any matter arising after the date of
this Agreement of which that Party
37
obtains Knowledge and which, if existing or occurring on or prior to the date of
this Agreement, would have been required to be set forth in this Agreement,
including any of the Schedules hereto. Seller shall, from time to time prior to
the Closing, promptly supplement or amend the Schedules to this Agreement with
respect to (a) any matter that existed as of the date of this Agreement and
should have been set forth or described in any of the Schedules hereto and (b)
any matter hereafter arising which, if existing as of the date of this
Agreement, would have been required to be set forth or described in any of the
Schedules hereto in order to make any representation or warranty set forth in
this Agreement true and correct as of such date; provided, however, that, with
respect to clause (a) above, any such supplemental or amended disclosure shall
not be deemed to have been disclosed as of the date of this Agreement unless
expressly consented to in writing by Buyer; and provided further, that, with
respect to clause (b) above, any such supplemental or amended disclosure shall,
for purposes of this Agreement, including for purposes of determining whether
the conditions to Closing set forth in Article VII are satisfied, be deemed to
have been disclosed as of the date of this Agreement.
6.7 Risk of Loss.
(a) From the date hereof through the Closing Date, all risk of
loss or damage to the Tangible Personal Property included in the Purchased
Assets shall be borne by Seller, other than loss or damage caused by the
negligent acts or omissions of Buyer or any Buyer Representative, which
loss or damage shall be the responsibility of Buyer.
(b) Notwithstanding any provision hereof to the contrary,
subject to Section 9.1(g), if, before the Closing Date, all or any portion
of the Purchased Assets is (i) condemned or taken by eminent domain or is
the subject of a pending or threatened condemnation or taking which has not
been consummated, or (ii) materially damaged or destroyed by fire or other
casualty, Seller shall notify Buyer promptly in writing of such fact, and
(x) in the case of a condemnation or taking, Seller shall assign or pay, as
the case may be, any net proceeds thereof to Buyer at the Closing and (y)
in the case of a fire or other casualty, Seller shall either restore such
damage or assign the insurance proceeds therefor to Buyer at the Closing.
Notwithstanding the foregoing, if such condemnation, taking, damage or
destruction results in a Material Adverse Effect, Buyer and Seller shall
negotiate to resolve the loss resulting from such condemnation, taking,
damage or destruction (and such negotiation shall include the negotiation
of a fair and equitable adjustment to the Purchase Price). If no such
resolution can be agreed upon within ninety (90) days after Seller has
notified Buyer of such loss, then Buyer, on the one hand, or Seller, on the
other hand, may terminate this Agreement pursuant to Section 9.1(g).
6.8 PJM; MAAC. From and after the Closing Date, Buyer shall maintain
membership in good standing in PJM and MAAC, and shall submit to the
governance of the independent system operator established and administered
under the PJM Agreement.
6.9 Emission Allowances. Buyer and Seller shall take all necessary
actions, including executing any required forms or providing appropriate
notices to Governmental Authorities, in a
38
timely fashion, to ensure that (i) Buyer will obtain all, or the rights to all,
(A) Emission Allowances that are to be transferred to it pursuant to Section
2.1(f) and as set forth on Schedule 2.1(f), including the right to receive such
Emission Allowances that are to be allocated or issued by a Governmental
Authority in the future, and (B) Excess Emission Allowances that are to be
transferred to it pursuant to Section 2.1(g) and as set forth on Schedule 2.1(g)
and (ii) Seller will retain or obtain all, or the rights to all, Emission
Allowances that are defined as Excluded Assets pursuant to Section 2.2(o),
including the right to receive such Emission Allowances that are to be allocated
or issued by a Governmental Authority in the future. Buyer and Seller further
acknowledge and agree that such actions may be required before, on or after the
Closing Date.
ARTICLE VII
CONDITIONS
7.1 Conditions to Obligation of Buyer. The obligation of Buyer to
effect the transactions contemplated by this Agreement shall be subject to
the satisfaction (or the waiver, to the extent permitted by applicable Law,
by Buyer) at or prior to the Closing of the following conditions:
(a) The waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired or
been terminated;
(b) No preliminary or permanent injunction, order or decree by
any Governmental Authority which prevents the consummation of the
transactions contemplated hereby or by the Additional Agreements shall have
been issued and remain in effect (Buyer agreeing to use its reasonable best
efforts to have any such injunction, order or decree lifted), and no
applicable Law shall be in effect which prohibits the consummation of the
transactions contemplated hereby or thereby;
(c) Buyer shall have obtained the Buyer's Required Regulatory
Approvals set forth on Schedule 7.1(c), in form and substance reasonably
satisfactory to Buyer (including any adverse conditions therein); and such
Buyer's Required Regulatory Approvals shall be final and nonappealable;
(d) Seller shall have in all material respects performed and
complied 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) (i) The representations and warranties of Seller set forth
in this Agreement that are qualified by reference to Material Adverse
Effect shall be true and correct in all respects and (ii) the
representations and warranties of Seller set forth in this Agreement that
are not so qualified shall be true and correct in substantially all
respects, in each case, as of the Closing
39
Date as though made at and as of the Closing Date (other than representations
and warranties that are made as of a specific date which shall have been true
and correct as of such date);
(f) Buyer shall have received a certificate from an authorized
officer of Seller, dated the Closing Date, to the effect that, to such
officer's Knowledge, the conditions set forth in Sections 7.1(d) and (e)
have been satisfied by Seller;
(g) Buyer shall have received an opinion from Seller's counsel,
which counsel shall be reasonably acceptable to Buyer, dated the Closing
Date, substantially in the form of Exhibit E hereto;
(h) There shall not have occurred any Material Adverse Effect
during the period commencing on the date hereof and ending at the Closing;
(i) Buyer shall be able to obtain at Closing an owner's policy
or policies of title insurance issued on the form customarily used in
Pennsylvania insuring title to the Real Property in an amount equal to the
Purchase Price relating to such Real Property, or such lesser amount as
Buyer elects, with exceptions only for Permitted Encumbrances, but without
the so- called "standard" exceptions for (x) the rights of parties in
possession, (y) unfiled mechanics' and materialmens' liens and (z) matters
arising after the dates of the Title Commitments and with the creditors'
rights exclusion to coverage deleted, without Buyer being obligated to pay
more than $50,000 in aggregate additional premium in order for the issuer
to delete or insure over title exceptions which are not Permitted
Encumbrances. For purposes hereof "additional premium" means premium in
excess of the amount that the title insurer has otherwise agreed to accept
for issuing the policies of title insurance to Buyer in the requested
amount; and
(j) Subject to the last sentence of Section 3.9, the Related
Purchase Agreements shall be in full force and effect and the valid and
binding obligation of each party thereto (other than Buyer); and all
conditions to the obligations of all parties to the Related Purchase
Agreements to consummate the transactions contemplated thereby shall have
been satisfied or, to the extent permitted by applicable Law, waived.
7.2 Conditions to Obligation of Seller. The obligation of Seller to
effect the transactions contemplated by this Agreement shall be subject to
the satisfaction (or the waiver, to the extent permitted by applicable Law,
by Seller) at or prior to the Closing of the following conditions:
(a) The waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired or
been terminated;
(b) No preliminary or permanent injunction or other order or
decree by any Governmental Authority which prevents the consummation of the
transactions contemplated hereby or by the Additional Agreements shall have
been issued and remain in effect (Seller
40
agreeing to use its reasonable best efforts to have any such injunction, order
or decree lifted), and no applicable Law shall be in effect which prohibits the
consummation of the transactions contemplated hereby or thereby;
(c) Seller shall have obtained the Seller's Required Regulatory
Approvals set forth on Schedule 7.2(c), in form and substance reasonably
satisfactory to Seller (including any adverse conditions therein), and all
conditions to effectiveness prescribed therein or otherwise by Law shall
have been satisfied in all material respects; and such Seller's Required
Regulatory Approvals shall be final and nonappealable;
(d) Buyer shall have in all material respects performed and
complied 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;
(e) (i) The representations and warranties of Buyer set forth
in this Agreement that are qualified by reference to Buyer Material Adverse
Effect shall be true and correct in all respects and (ii) the
representations and warranties of Buyer that are not so qualified shall be
true and correct in substantially all respects, in each case, as of the
Closing Date as though made at and as of the Closing Date (other than
representations and warranties that are made as of a specific date which
shall have been true and correct as of such date);
(f) 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(d) and (e)
have been satisfied by Buyer;
(g) The Jointly Owned Stations Operating Agreements shall have
been amended to (i) join Buyer as a party to each of the Jointly Owned
Stations Operating Agreements and (ii) irrevocably release Seller from any
and all liabilities and obligations under the Jointly Owned Stations
Operating Agreements, in each case, effective from and after the Closing
Date; the Jointly Owned Stations Operating Agreements, as amended, shall be
in form and substance satisfactory to Seller; and the Jointly Owned
Stations Operating Agreements, as amended, shall be in full force and
effect and the valid and binding obligation of each signatory thereto,
including Buyer, enforceable against each such signatory in accordance with
their respective terms;
(h) Seller shall have received an opinion from Buyer's counsel,
which counsel shall be reasonably acceptable to Seller, dated the Closing
Date, substantially in the form of Exhibit F hereto; and
(i) Subject to the last sentence of Section 3.9, the Related
Purchase Agreements shall be in full force and effect and the valid and
binding obligation of each party thereto (other than Seller); and all
conditions to the obligations of all parties to the Related Purchase
41
Agreements to consummate the transactions contemplated thereby shall have been
satisfied or, to the extent permitted by applicable Law, waived.
ARTICLE VIII
INDEMNIFICATION AND ARBITRATION
8.1 Indemnification.
(a) From and after the Closing Date, Buyer shall indemnify,
defend and hold harmless Seller and its Representatives (each, a "Seller's
Indemnitee"), from and against any and all claims, demands, suits, losses,
liabilities, penalties, damages, obligations, payments, costs and expenses
(including reasonable attorneys' fees and expenses 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 covenant or agreement of Buyer contained in this
Agreement, (ii) the Assumed Liabilities, (iii) any Inspection or (iv) any
Third- Party Claim against any Seller's Indemnitee in connection with
Buyer's ownership, lease, maintenance or operation of any of the Purchased
Assets on or after the Closing Date (other than to the extent such
Third-Party Claim constitutes an Excluded Liability); provided, however,
that Buyer shall be liable to Seller pursuant to clause (i) of this Section
8.1(a) only for Indemnifiable Losses for which any Seller's Indemnitee
gives written notice to Buyer (setting forth with reasonable specificity
the nature and amount of the Indemnifiable Loss) during the period for
which such covenants or agreements survive the Closing in accordance with
Section 10.6.
(b) From and after the Closing, Seller shall indemnify, defend
and hold harmless Buyer and its Representatives (each, a "Buyer's
Indemnitee" and, together with Seller's Indemnitees, an "Indemnitee"), from
and against any and all Indemnifiable Losses asserted against or suffered
by any Buyer's Indemnitee relating to, resulting from or arising out of (i)
any breach by Seller of any covenant or agreement of Seller set forth in
this Agreement or (ii) the Excluded Liabilities; provided, however, that
Seller shall be liable pursuant to clause (i) of this Section 8.1(b) only
for Indemnifiable Losses for which any Buyer's Indemnitee gives written
notice to Seller (setting forth with reasonable specificity the nature and
amount of the Indemnifiable Loss) during the period for which such
covenants or agreements survive the Closing in accordance with Section
10.6.
(c) In furtherance, and not in limitation, of the provisions
set forth in Section 8.1(a), Buyer, for itself and on behalf of its
Representatives, hereby irrevocably releases, holds harmless and forever
discharges Seller from any and all Indemnifiable Losses of any kind or
character, whether known or unknown, contingent or accrued, arising under
or relating to Environmental Laws, or relating to any claim in respect of
any Environmental Condition or Hazardous Substance, whether based on common
law or Environmental Laws relating to the Purchased Assets, other than such
Liabilities which have been retained by Seller hereunder
42
(collectively, "Environmental Claims"). In furtherance of the foregoing, Buyer,
for itself and on behalf of its Representatives, hereby irrevocably waives any
and all rights and benefits with respect to such Environmental Claims that it
now has, or in the future may have conferred upon it by virtue of any Law or
common law principle, which provides that a general release does not extend to
claims which a party does not know or suspect to exist in its favor at the time
of executing the release, if knowledge of such claims would have materially
affected such party's settlement with the obligor. In this connection, Buyer
hereby acknowledges that it is aware that factual matters now unknown to it may
have given, or hereafter may give, rise to Environmental Claims that are
presently unknown, unanticipated and unsuspected, and Buyer further agrees that
this release set forth in this Section 8.1(c) has been negotiated and agreed
upon in light of that awareness, and Buyer, for itself and on behalf of its
Representatives, nevertheless hereby intends irrevocably to release, hold
harmless and forever discharge Seller from all such Environmental Claims.
(d) The rights and remedies of Seller and Buyer set forth in
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, under
applicable Law, whether at common law or in equity, including for
declaratory, injunctive or monetary relief, in each case, with respect to
any Indemnifiable Loss.
(e) Notwithstanding anything to the contrary herein, no Person
(including an Indemnitee) shall be entitled to recover from any other
Person (including any Party hereto required to provide indemnification
under this Agreement (an "Indemnifying Party")) any amount in excess of the
actual compensatory damages, court costs and reasonable attorneys' fees
suffered by such Party. Buyer and Seller hereby irrevocably waive any right
to recover punitive, special, exemplary and consequential damages arising
in connection with or with respect to this Agreement (other than with
respect to indemnification for a Third-Party Claim).
(f) Any Indemnitee shall use Commercially Reasonable Efforts to
mitigate all losses, damages and the like relating to a claim under the
indemnification provisions in this Section 8.1, including availing itself
of any defenses, limitations, rights of contribution, claims against third
Persons and other rights at law or equity. For purposes of this Section
8.1(f), 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, in addition to its other obligations hereunder, the Indemnifying
Party shall reimburse the Indemnitee for the Indemnitee's reasonable
expenditures in undertaking the mitigation.
8.2 Defense of Claims.
(a) If any Indemnitee receives notice of the assertion of any
claim or of the commencement of any suit, action or proceeding made or
brought by any Person who is not an Indemnitee (a "Third-Party Claim") with
respect to which indemnification is to be sought from
43
an Indemnifying Party, the Indemnitee shall give such Indemnifying Party
reasonably prompt written notice thereof, but in no event later than ten (10)
Business Days after the Indemnitee's receipt of notice of such Third-Party
Claim. Such notice shall describe the nature of the Third- Party Claim in
reasonable detail and shall indicate the estimated amount, if practicable, of
the Indemnifiable Loss that has been or may be incurred by the Indemnitee. The
Indemnifying Party shall 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. If an Indemnifying Party elects not to assume the defense of any Third-
Party Claim, the Indemnitee may defend, compromise or settle such Third-Party
Claim with counsel selected by it, provided that, without the prior written
consent of the Indemnifying Party, the Indemnitee shall not agree to the entry
of any judgment with respect to, or any compromise or settlement of, any Third-
Party Claim, which judgment, compromise or settlement does not include the
unconditional release of the Indemnifying Party.
(b) If, within twenty (20) Business Days after an Indemnitee
gives written notice to the Indemnifying Party of any Third-Party Claim,
such 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), then the Indemnifying
Party shall not be liable for any costs, fees or expenses subsequently
incurred by the Indemnitee in connection with the defense, compromise or
settlement thereof.
(c) Subject to Section 8.3, any claim by an Indemnitee on
account of an Indemnifiable Loss which does not constitute a Third-Party
Claim (a "Direct Claim") shall be asserted by giving the Indemnifying Party
reasonably prompt written notice thereof, in no event later than twenty
(20) Business Days after the Indemnitee becomes aware of such Direct Claim,
stating the nature of such claim in reasonable detail and indicating the
estimated amount, if practicable, of such Indemnifiable Loss and the
Indemnifying Party shall have a period of twenty (20) Business Days within
which to respond to such Direct Claim. If the Indemnifying Party fails to
respond during such twenty (20) Business Day period, the Indemnifying Party
shall be deemed to have accepted such claim and, subject to this Article
VIII, shall promptly reimburse the Indemnitee for the Indemnifiable Losses
set forth in the Indemnitee's notice.
(d) 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 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.
8.3 Arbitration.
(a) Notwithstanding any provision hereof to the contrary, in
the event of any dispute between Seller and Buyer arising after the Closing
(whether relating to facts, events or circumstances occurring or existing
prior to, on or after the Closing Date) and relating to or arising out of
any provision of this Agreement (other than disputes arising under Section
2.3, 2.4,
44
3.2, 3.3, 3.4, 6.5 or 8.1(a)(ii)), the Party asserting such dispute shall give
written notice to the other of the fact that a dispute has arisen pursuant
hereto. Such notice shall include (i) a statement setting forth in reasonable
detail the facts, events, circumstances, evidence and arguments underlying such
dispute and (ii) proposed arrangements for a meeting to attempt to resolve the
dispute to be held within sixty (60) days after such notice is given. Within
thirty (30) days after such notice is given, the other Party hereto shall submit
to the Party giving such notice a written summary responding to such statement
of facts, events, circumstances, evidence and arguments contained in the notice
and an acceptance of or proposed alternative to the meeting arrangements set
forth in the initial notice.
(b) The chief executive officers (or any other executive
officer or officers directly reporting to, and duly designated by, such
chief executive officers) of each of the Parties shall meet at a mutually
acceptable time and place to attempt to settle any dispute in good faith;
provided, however, that such meeting shall be held at the principal offices
of the Party receiving the notice of dispute unless otherwise agreed; and
provided further, that any such meeting shall be held no later than sixty
(60) days after the written notice of dispute is given pursuant to Section
8.3(a). Each Party shall bear its own costs and expenses with respect to
preparation for, attendance at and participation in such meeting.
(c) In the event that (i) a meeting has been held in accordance
with Section 8.3(b), (ii) any such dispute of the kind referred to in
Section 8.3(a) shall not have been resolved at such meeting and (iii) the
aggregate amount in dispute exceeds $100,000, then either Party may submit
such dispute to binding arbitration pursuant to the Commercial Arbitration
Rules of the American Arbitration Association (the "Commercial Arbitration
Rules"). In the event that such dispute is submitted to arbitration
pursuant to the Commercial Arbitration Rules, then the arbitration tribunal
shall be composed of three arbitrators (one arbitrator selected by each
Party within thirty (30) days after the meeting held in accordance with
Section 8.3(b) with the third selected by the other two arbitrators or, in
the absence of agreement between them, the American Arbitration
Association), the venue of the arbitration shall be Wilmington, Delaware,
the language of the arbitration shall be English and the arbitration shall
commence no later than sixty (60) days after the meeting held in accordance
with Section 8.3(b). The decision, judgment and order of the arbitration
tribunal shall be final, binding and conclusive as to the Parties and their
respective Representatives, and may be entered in court of competent
jurisdiction. Other than the fees and expenses of the arbitrators, which
shall be shared equally by the Parties, each Party shall bear its own costs
and expenses (including attorneys' fees and expenses) relating to the
arbitration.
8.4 Remediation of Matters Covered in Section 2.4(g). With respect to
the Liabilities as to which Seller has retained responsibility for
Remediation pursuant to Section 2.4(g):
(a) Seller shall have the right, but not the obligation, to
control the management of any Remediation covered by this Section 8.4. With
respect to Liabilities that are potentially covered by this Section 8.4,
Seller must notify Buyer within thirty (30) days of receipt
45
of notice of Buyer's claim for indemnification for such matter that it intends
to undertake responsibility for said Remediation. Prior to a determination by
Seller that it will undertake Remediation pursuant to this Section 8.4, Buyer
shall, at Seller's expense, take only those actions necessary to comply with
applicable Environmental Laws or as required by Governmental Authorities or
address conditions that pose an immediate and acute environmental or health risk
(unless additional actions are approved by Seller, such approval not to be
unreasonably withheld or delayed).
(b) Seller shall comply with all applicable Laws, including all
applicable Environmental Laws, with respect to its performance pursuant to
this Section 8.4. Seller shall promptly provide copies to Buyer of all
notices, correspondence, draft reports, submissions, work plans, and final
reports and shall give Buyer a reasonable opportunity (at Buyer's own
expense) to promptly comment on any submissions Seller intends to deliver
or submit to the appropriate regulatory body prior to said submission.
Buyer may, at its own expense, hire its own consultants, attorneys or other
professionals to monitor the investigation or remediation, including any
field work undertaken by Seller, and Seller shall provide Buyer with the
results of all such field work. Notwithstanding the foregoing, Buyer shall
not take any actions that shall unreasonably interfere with Seller's
performance of the Remediation. Seller shall undertake any such work
required herein in a manner designed to minimize any disruption, to the
greatest extent possible, with the conduct of operations at the property.
Buyer shall allow Seller reasonable access to conduct any of the work
contemplated herein and shall fully cooperate with Seller in the
performance of the Remediation, including providing Seller with reasonable
access to employees and documents as necessary.
(c) If Seller declines to undertake the performance of a
Remediation hereunder, Buyer shall be entitled to control the investigation
and remediation. Buyer shall promptly provide copies to Seller of all
notices, correspondence, draft reports, submissions, work plans, and final
reports and shall give Seller a reasonable opportunity (at Seller's own
expense) to promptly comment on any submissions Buyer intends to deliver or
submit to the appropriate regulatory body prior to said submission. Seller
may, at its own expense, hire its own consultants, attorneys or other
professionals to monitor the Remediation, including any field work
undertaken by Buyer, and Buyer shall provide Seller with the results of all
such field work. Notwithstanding the foregoing, Seller shall not take any
actions that shall unreasonably interfere with Buyer's performance of the
Remediation. Seller's decision to allow Buyer to undertake Remediation
hereunder shall not limit or affect Seller's obligation to indemnify Buyer
for said investigation and remediation as otherwise provided in this
Agreement.
(d) Without regard to whether Buyer or Seller is conducting a
Remediation pursuant to this Section 8.4, the Parties agree that such
Remediation will be conducted in a reasonable manner and consistent with
the use of the Site in question as an electric generating station. Without
limiting the foregoing, the Parties agree that they will conduct any such
Remediation so that the Remediation Standard that is applicable to the Site
is the least stringent Remediation Standard that would apply to the Site
based on the current use of the Site, and
46
Buyer furthermore covenants that it will accept a deed restriction or other
reasonable institutional or engineering controls, if such mechanisms will (A)
allow the Remediation of the Site to be completed in the least cost manner in
compliance with applicable Environmental Law and (B) not unreasonably interfere
with operations at the Site. Notwithstanding the foregoing, if Buyer determines
at or after the Closing that it desires a Remediation such that the Site is
remediated to a more stringent Remediation Standard, it may do so, provided,
that (x) if Seller is managing a Remediation pursuant to this Section 8.4, it
has the right, to the extent permitted by Law, to cease conduct of the
Remediation and request Buyer to assume the conduct of the Remediation and (y)
notwithstanding which of the Parties conducts the Remediation, Buyer shall be
liable for the costs and expenses associated with the Remediation to the extent
those costs and expenses exceed those that would be associated with a
Remediation Standard as determined by the previous sentence.
ARTICLE IX
TERMINATION
9.1 Termination.
(a) This Agreement may be terminated at any time prior to the
Closing by mutual written consent of the Parties.
(b) This Agreement may be terminated by Seller, on the one
hand, or Buyer, on the other hand, upon written notice to the other Party,
(i) at any time prior to the Closing if any 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; (ii) at any time prior to
the Closing if any Law shall have been enacted or issued by any
Governmental Authority which, directly or indirectly, prohibits the
consummation of the transactions contemplated by this Agreement or by any
Additional Agreement; or (iii) at any time after the first anniversary of
the date of this Agreement if the Closing shall not have occurred on or
before such date; provided, however, that the right to terminate this
Agreement under this Section 9.1(b)(iii) shall not be available to any
Party whose breach of this Agreement has caused, or resulted in, the
failure of the Closing to occur on or before such date; and provided,
further, that if on such date, the conditions to the Closing set forth in
Section 7.1(c) or 7.2(c) shall not have been satisfied but all other
conditions to the Closing shall be satisfied or shall be capable of being
satisfied, then no Party shall be entitled to terminate this Agreement
prior to the date which is 180 days after the first anniversary of the date
of this Agreement.
(c) This Agreement may be terminated by Buyer, upon written
notice to Seller, if any of Buyer's 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
47
denied (and a petition for rehearing or refiling of an application initially
denied without prejudice shall also have been denied), and such denial was not
caused by or the result of a breach of this Agreement by Buyer.
(d) This Agreement may be terminated by Seller, upon written
notice to Buyer, if any of the 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), and such denial was not
caused by or the result of a breach of this Agreement by Seller.
(e) Except as otherwise provided in this Agreement, this
Agreement may be terminated by Buyer, upon written notice to Seller, if
there has been a breach by Seller of any covenant, agreement,
representation or warranty contained in this Agreement which has had a
Material Adverse Effect and such breach is not cured by the earlier of the
Closing Date or the date thirty (30) days after receipt by Seller of notice
specifying in reasonable detail the nature of such breach, unless Buyer
shall have previously waived such breach.
(f) Except as otherwise provided in this Agreement, this
Agreement may be terminated by Seller, upon written notice to Buyer, if
there has been a material breach by Buyer of any covenant, agreement,
representation or warranty contained in this Agreement which has had a
Material Adverse Effect and such breach is not cured by the earlier of the
Closing Date or the date thirty (30) days after receipt by Buyer of notice
specifying in reasonable detail the nature of such breach, unless Seller
shall have previously waived such breach.
(g) This Agreement may be terminated by Seller, on the one
hand, or Buyer, on the other hand, upon written notice to the other Party,
in accordance with the provisions of Section 6.7(b), provided that the
Party seeking to so terminate shall have complied with its obligations
under Section 6.7.
9.2 Effect of Termination. Upon termination of this Agreement prior
to the Closing pursuant to Section 9.1, this Agreement shall be null and
void and of no further force or effect (except that the provisions set
forth in Section 6.2, this Section 9.2 and Article X, and the
Confidentiality Agreement, shall remain in full force and effect in
accordance with their respective terms); and no Party shall have any
further Liability under this Agreement (other than for any wilful breach of
its obligations hereunder).
ARTICLE X
MISCELLANEOUS PROVISIONS
48
10.1 Amendment and Modification. Subject to applicable Law, this
Agreement may be amended, supplemented or otherwise modified only by
written agreement entered into by all Parties.
10.2 Expenses. Except to the extent provided herein, whether or not
the transactions contemplated hereby are consummated, all costs, fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by the Party incurring such costs, fees
and expenses, including the fees and commissions referred to in Section
10.3. Notwithstanding the foregoing, Buyer shall be responsible for the
payment of, or reimbursement of Seller for: (a) all actual out-of-pocket
costs, fees and expenses charged by Lawyers Title Insurance Corporation in
connection with obtaining any title insurance policy and all endorsements
thereto, including policy premiums; (b) all survey costs, fees and expenses
incurred by Buyer; (c) all survey costs, fees and expenses incurred by
Seller on or prior to the date hereof, but, together with all such costs,
fees and expenses incurred in connection with the Related Purchase
Agreements, not in excess of $600,000; (d) all filing fees under the HSR
Act; and (e) all costs for experts and consultants in accordance with
Section 6.4(b).
10.3 Fees and Commissions. Seller, on the one hand, and Buyer, on the
other hand, represent and warrant to the other that, except for Credit
Suisse First Boston, Inc. and ▇▇▇▇/Navigant Consulting Group, which are
acting for and at the expense of Seller, and CIBC World Markets Corp.,
which is acting for and at the expense of Buyer, no broker, finder or other
Person is entitled to any brokerage fees, commissions or finder's fees in
connection with the transactions contemplated hereby by reason of any
action taken by such Party or its Representatives. Seller, on the one hand,
and Buyer, on the other hand, shall pay or otherwise discharge all such
brokerage fees, commissions and finder's fees so incurred by such Parties.
10.4 Bulk Sales Laws. Buyer hereby acknowledges that, notwithstanding
anything in this Agreement to the contrary, Seller will not comply with the
provisions of the bulk sales laws of any jurisdiction in connection with
the transactions contemplated by this Agreement; and Buyer hereby
irrevocably waives compliance by Seller with the provisions of the bulk
sales laws of all applicable jurisdictions.
10.5 Waiver of Compliance; Consents. To the extent permitted by
applicable Law, any failure of any of the Parties to comply with any
covenant, agreement or condition set forth herein may be waived by the
Party entitled to the benefit thereof only by a written instrument signed
by such Party, but any such waiver shall not operate as a waiver of, or
estoppel with respect to, any prior or subsequent failure to comply
therewith.
10.6 No Survival. No representation or warranty contained in this
Agreement shall survive the delivery of the Limited Warranty Deeds and the
Closing. The covenants and agreements of the Parties contained in this
Agreement shall survive the Closing in accordance with their respective
terms.
49
10.7 Disclaimers. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET
FORTH IN ARTICLE IV, THE PURCHASED ASSETS ARE SOLD "AS IS, WHERE IS", AND
SELLER EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY
KIND OR NATURE, EXPRESS OR IMPLIED, AS TO SELLER AND THE PURCHASED ASSETS.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE IV: SELLER EXPRESSLY
DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES REGARDING LIABILITIES,
OWNERSHIP, LEASE, MAINTENANCE OR OPERATION OF THE PURCHASED ASSETS, THE
TITLE, CONDITION, VALUE OR QUALITY OF THE PURCHASED ASSETS OR THE PROSPECTS
(FINANCIAL AND OTHERWISE), RISKS AND OTHER INCIDENTS OF THE PURCHASED
ASSETS; AND SELLER EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES
OF MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE WITH RESPECT TO THE PURCHASED 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 AUTHORITY, INCLUDING ANY ENVIRONMENTAL
LAWS, OR WHETHER SELLER POSSESSES SUFFICIENT REAL PROPERTY OR PERSONAL
PROPERTY TO OPERATE THE PURCHASED ASSETS. EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED HEREIN, SELLER FURTHER EXPRESSLY DISCLAIMS ALL REPRESENTATIONS OR
WARRANTIES REGARDING THE ABSENCE OF HAZARDOUS SUBSTANCES OR LIABILITY OR
POTENTIAL LIABILITY ARISING UNDER ENVIRONMENTAL LAWS WITH RESPECT TO THE
PURCHASED ASSETS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER EXPRESSLY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES OF ANY KIND REGARDING THE CONDITION OF THE
PURCHASED ASSETS OR THE SUITABILITY OF THE PURCHASED ASSETS FOR OPERATION
AS A POWER PLANT OR AS A FUEL PROCESSING FACILITY, AS APPLICABLE, AND NO
SCHEDULE OR EXHIBIT TO THIS AGREEMENT, NOR ANY OTHER MATERIAL OR
INFORMATION PROVIDED, OR COMMUNICATIONS MADE, BY SELLER OR ITS
REPRESENTATIVES, INCLUDING ANY BROKER OR INVESTMENT BANKER, WILL CAUSE OR
CREATE ANY SUCH REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, CONDITION, VALUE OR QUALITY OF THE PURCHASED ASSETS.
SELLER EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES WITH
RESPECT TO THE NAMES "CONEMAUGH STATION" AND "KEYSTONE STATION", INCLUDING
ALL REPRESENTATIONS AND WARRANTIES OF (1) TITLE; (2) LENGTH, NATURE,
EXCLUSIVITY AND CONTINUITY OF USE; (3) STRENGTH OR FAME; AND (4)
NONINFRINGEMENT AND NONDILUTION OF TRADEMARK, SERVICE ▇▇▇▇, TRADE NAME OR
OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY. BUYER HEREBY ACKNOWLEDGES THAT
THE NAMES "CONEMAUGH STATION" AND "KEYSTONE STATION" EACH HAVE A GEOGRAPHIC
CONNOTATION
50
ASSOCIATED WITH THE LOCATION OF CERTAIN OF THE PURCHASED ASSETS.
10.8 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given on the day when delivered personally
or by facsimile transmission (with confirmation), on the next Business Day
when delivered to a nationally recognized overnight courier or five (5)
Business Days after deposited as registered or certified mail (return
receipt requested), in each case, postage prepaid, addressed to the
recipient Party at its address set forth below (or at such other address or
facsimile number for a Party as shall be specified by like notice;
provided, however, that any notice of a change of address or facsimile
number shall be effective only upon receipt thereof):
(a) If to Seller, to:
Conectiv
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esquire
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Buyer, to:
NRG Energy, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇, Plant, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
3400 City Center
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
51
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
10.9 Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests,
obligations or remedies hereunder shall be assigned by any Party hereto,
including by operation of law, without the prior written consent of the
other Parties, nor is this Agreement intended to confer upon any other
Person any rights, interests, obligations or remedies hereunder.
Notwithstanding the foregoing, (i) Seller may assign all or any portion of
its rights, interests, obligations and remedies hereunder to Conectiv, a
Delaware corporation, or any of Conectiv's wholly owned subsidiaries;
provided, however, that no such assignment shall (A) materially impair or
delay the consummation of the transactions contemplated hereby or (B)
relieve or discharge Seller from any of its obligations hereunder; and (ii)
Buyer may assign all or any portion of its rights, interests, obligations
and remedies hereunder to (A) any of its wholly owned subsidiaries or (B) a
trustee, lending institution or other Person solely for purposes of
financing the transactions contemplated hereby; provided, however, that no
such assignment shall (A) materially impair or delay the consummation of
the transactions contemplated hereby or (B) relieve or discharge Buyer from
any of its obligations hereunder.
10.10 Governing Law; Forum; Service of Process. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware (without giving effect to conflicts of law principles) as to all
matters, including validity, construction, effect, performance and
remedies. Venue in any and all suits, actions and proceedings related to
the subject matter of this Agreement shall be in the state and federal
courts located in and for the State of Delaware (the "Courts"), which shall
have exclusive jurisdiction for such purpose, and the Parties hereby
irrevocably submit to the exclusive jurisdiction of such courts and
irrevocably waive the defense of an inconvenient forum to the maintenance
of any such suit, action or proceeding. Service of process may be made in
any manner recognized by such Courts. Each of the Parties hereby
irrevocably waives its right to a jury trial arising out of any dispute in
connection with this Agreement or the transactions contemplated hereby.
10.11 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.12 Interpretation. The article and section 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
construction of this Agreement. Ambiguities and uncertainties in the
wording of this Agreement shall not be construed for or against any Party,
but shall be construed in the manner that most accurately reflects the
Parties' intent as of the date of this Agreement. Each Party acknowledges
that it has been represented by counsel in connection with the review and
execution of this Agreement, and, accordingly, there shall be no
presumption that
52
this Agreement or any provision hereof be construed
against the Party that drafted this Agreement.
10.13 Schedules and Exhibits. Except as otherwise provided in this
Agreement, all Exhibits and Schedules referred to herein are intended to be
and hereby are made a part of this Agreement.
10.14 Entire Agreement. This Agreement (including the Schedules and
Exhibits), together with the Confidentiality Agreement, embodies the entire
agreement and understanding of the Parties hereto in respect of the
transactions contemplated by this Agreement and the Additional Agreements
and supersedes all prior agreements and understandings between or among the
Parties with respect to such transactions. There are no representations,
warranties, covenants or agreements between or among the Parties with
respect to the subject matter set forth in such agreements, other than
those expressly set forth or referred to herein or therein. Without
limiting the generality of the foregoing, Buyer hereby acknowledges and
agrees that there are no representations, warranties, covenants or
agreements between or among the Parties with respect to the subject matter
set forth in such agreements contained in any material made available to
Buyer pursuant to the terms of the Confidentiality Agreement (including the
Offering Memorandum dated June 18, 1999, previously provided to Buyer by or
on behalf of Seller, ▇▇▇▇/Navigant Consulting Group and Credit Suisse First
Boston, Inc.).
[SIGNATURE PAGE FOLLOWS]
53
IN WITNESS WHEREOF, Seller and Buyer have caused this Purchase and
Sale Agreement to be duly executed and delivered by their respective duly
authorized officers as of the date first above written.
DELMARVA POWER & LIGHT COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
NRG ENERGY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President