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Exhibit (2)
AGREEMENT AND PLAN OF MERGER
DATED AUGUST 26, 1999
AMONG
CALPINE CORPORATION,
CALPINE EAST ACQUISITION CORP.
AND
COGENERATION CORPORATION OF AMERICA
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TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
ARTICLE I THE MERGER 4
Section 1.1 The Merger 5
Section 1.2 Effective Time 5
Section 1.3 Effects of the Merger 5
Section 1.4 Charter and By-Laws; Directors and Officers 5
Section 1.5 Conversion of Securities 5
Section 1.6 Payment Agent 7
Section 1.7 Transfer Taxes; Withholding 7
Section 1.8 Return of Payment Fund 8
Section 1.9 No Further Ownership Rights in Company Common Stock 8
Section 1.10 Closing of Company Transfer Books 8
Section 1.11 Lost Certificates 8
Section 1.12 Further Assurances 8
Section 1.13 Closing 9
ARTICLE II REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB 9
Section 2.1 Organization, Standing and Power 9
Section 2.2 Authority 9
Section 2.3 Consents and Approvals; No Violation 10
Section 2.4 Information Supplied 11
Section 2.5 Actions and Proceedings 11
Section 2.6 Operations of Sub 12
Section 2.7 Brokers 12
Section 2.8 Financing 12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY 12
Section 3.1 Organization, Standing and Power 12
Section 3.2 Capital Structure 12
Section 3.3 Authority 13
Section 3.4 Consents and Approvals; No Violation 14
Section 3.5 SEC Documents and Other Reports 15
Section 3.6 Information Supplied 15
Section 3.7 Absence of Certain Changes or Events 16
Section 3.8 Permits and Compliance 16
Section 3.9 Tax Matters 17
Section 3.10 Actions and Proceedings 19
Section 3.11 Certain Agreements 19
Section 3.12 ERISA 19
Section 3.13 Compliance with Worker Safety and Environmental Laws 21
Section 3.14 Labor Matters 21
Section 3.15 State Takeover Statute 21
Section 3.16 Required Vote of Company Stockholders 21
Section 3.17 Brokers 22
Section 3.18 Opinion of Financial Advisor 22
Section 3.19 Utility Regulation 22
Section 3.20 Insurance 22
Section 3.21 Related Party Transactions 22
ARTICLE IV COVENANTS OF THE COMPANY 23
Section 4.1 Conduct of Business Pending the Merger 23
Section 4.2 No Solicitation 25
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ARTICLE V ADDITIONAL AGREEMENTS 27
Section 5.1 Stockholder Meeting 27
Section 5.2 Preparation of the Proxy Statement and Schedule 13e-3 27
Section 5.3 Access to Information 28
Section 5.4 Fees and Expenses 28
Section 5.5 Best Efforts 29
Section 5.6 Public Announcements 30
Section 5.7 Real Estate Transfer and Gains Tax 30
Section 5.8 Indemnification; Directors and Officers Insurance 30
Section 5.9 Notification of Certain Matters 31
Section 5.10 Employee Benefit Plans and Agreements 32
Section 5.11 Performance by Sub 32
Section 5.12 Additional Consents and Approvals 32
ARTICLE VI CONDITIONS PRECEDENT TO THE MERGER 33
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger 33
Section 6.2 Conditions to Obligation of the Company to Effect the Merger 34
Section 6.3 Conditions to Obligations of Parent and Sub to Effect the Merger 34
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER 35
Section 7.1 Termination 35
Section 7.2 Effect of Termination 36
Section 7.3 Amendment 36
Section 7.4 Waiver 37
ARTICLE VIII GENERAL PROVISIONS 37
Section 8.1 Non-Survival of Representations and Warranties 37
Section 8.2 Notices 37
Section 8.3 Interpretation 38
Section 8.4 Counterparts 38
Section 8.5 Entire Agreement; No Third-Party Beneficiaries 38
Section 8.6 Governing Law 38
Section 8.7 Assignment 38
Section 8.8 Severability 38
Section 8.9 Enforcement of this Agreement 38
Section 8.10 Consent to Jurisdiction 39
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of August 26, 1999
(the "Agreement"), is executed by and among CALPINE CORPORATION, a Delaware
corporation ("Parent"), CALPINE EAST ACQUISITION CORP., a Delaware corporation
and a subsidiary of Parent ("Sub"), and COGENERATION CORPORATION OF AMERICA, a
Delaware corporation (the "Company") (Sub and the Company being hereinafter
collectively referred to as the "Constituent Corporations").
RECITALS:
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the merger (the "Merger") of Sub with and into the
Company, on the terms and subject to the conditions set forth in this
Agreement, whereby each outstanding share of common stock, par value $.01 per
share, of the Company (the "Company Common Stock") not owned by Parent, Sub or
the Company will be converted into the right to receive $25.00 per share (the
"Merger Price") in cash pursuant to this Agreement;
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Parent and NRG Energy, Inc., a Delaware corporation (the "Principal
Company Stockholder"), are entering into an agreement (the "Company
Stockholder Agreement" and together with this Agreement, the "Transaction
Documents") pursuant to which the Principal Company Stockholder and Parent or
Sub have agreed to take specified actions in connection with the transactions
contemplated by this Agreement;
WHEREAS, the Board of Directors of the Company has duly and
unanimously adopted resolutions approving the transactions contemplated by the
Transaction Documents in form and substance sufficient to render Section 203
of the Delaware General Corporation Law (the "DGCL") inapplicable to Parent
and Sub; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the premises, representations,
warranties and agreements herein contained, the parties agree as follows:
ARTICLE I
THE MERGER
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Section 1.1 The Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the DGCL, Sub shall be merged with and
into the Company at the Effective Time (as hereinafter defined). Following the
Merger, the separate corporate existence of Sub shall cease and the Company
shall continue as the surviving corporation (the "Surviving Corporation") and
shall succeed to and assume all the rights and obligations of Sub in accordance
with the DGCL.
Section 1.2 Effective Time. The Merger shall become effective
when a Certificate of Merger (the "Certificate of Merger"), executed in
accordance with the relevant provisions of the DGCL, is filed with the Secretary
of State of the State of Delaware; provided, however, that, upon the mutual
consent of the Constituent Corporations, the Certificate of Merger may provide
for a later date or time of effectiveness of the Merger. When used in this
Agreement, the term "Effective Time" shall mean the date and time at which the
Certificate of Merger is accepted for record or such later date or time
established by the Certificate of Merger. The filing of the Certificate of
Merger shall be made on the date of the Closing (as hereinafter defined).
Section 1.3 Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
Section 1.4 Certificate of Incorporation and By-Laws;
Directors and Officers.
(a) Certificate of Incorporation and By-Laws. The Certificate
of Incorporation of the Company shall be amended as set forth in Exhibit A to
this Agreement (the "Amendment"), which amendment shall be effective as soon as
practicable after the Company's shareholders have approved the amendment and
prior to the Effective Time. At the Effective Time, the Certificate of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be amended and restated to read as did the Certificate of
Incorporation of Sub immediately prior to the Effective Time. At the Effective
Time, the By-Laws of the Company, as in effect immediately prior to the
Effective Time, shall be amended and restated to read as did the By-Laws of Sub
immediately prior to the Effective Time. As so amended and restated, such
Certificate of Incorporation and By-Laws of the Company shall be the Certificate
of Incorporation and By-Laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) Directors and Officers. From and after the Effective Time,
the directors of Sub at the Effective Time shall be the directors of the
Surviving Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be. From and after the Effective Time, the officers of the Sub at the
Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
Section 1.5 Conversion of Securities. As of the Effective
Time, by virtue of the Merger and without any action on the part of Sub, the
Company or the holders of any securities of the Constituent Corporations:
(a) Each issued and outstanding share of common stock, without
par value, of Sub shall be converted into one validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation with the same
rights, powers and privileges as the shares so converted
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and shall constitute the only outstanding shares of capital stock of the
Surviving Corporation.
(b) All shares of Company Common Stock that are held in the
treasury of the Company or owned by Parent, Sub or any Subsidiary (as defined in
Section 2.1) of either of them shall be canceled and no cash or other
consideration shall be delivered in exchange therefor.
(c) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares to be canceled in
accordance with Section 1.5(b) and Dissenting Shares (as defined in Section
1.5(e)) shall be converted into the right to receive an amount of cash equal to
the Merger Price without interest. All such shares of Company Common Stock, when
so converted, shall no longer be outstanding and shall automatically be canceled
and retired and each holder of a certificate (the "Certificate") formerly
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the cash to be paid to such holder pursuant
to Article I hereof (the "Merger Consideration") upon the surrender of a
Certificate or Certificates in accordance with Section 1.6 hereof.
(d) (i) At the Effective Time, each outstanding option to
purchase Company Common Stock (each a "Company Stock Option") granted under the
Company Stock Plans (as defined herein), whether or not then exercisable, shall
be cancelled and each holder of a cancelled Company Stock Option shall be
entitled to receive at the Effective Time or as soon as practicable thereafter
from the Company, upon execution and delivery to the Payment Agent (as defined
in Section 1.6 below) of an option termination agreement, in form and substance
reasonably acceptable to Parent in consideration for the cancellation of such
Company Stock Option an amount in cash (the "Option Consideration") equal to (x)
the number of shares of Company Common Stock previously subject to such Company
Stock Option that but for the cancellation thereof pursuant to the provisions of
this Section 1.5(d) would have been currently exercisable (after giving effect
to any acceleration of vesting pursuant to the terms of such Company Stock
Option as a result of the consummation of the Merger), multiplied by (y) the
excess, if any, of the Merger Price over the exercise price per share of Company
Common Stock previously subject to such Company Stock Option (such payment to be
net of applicable withholding taxes).
(ii) Except as provided herein or as otherwise agreed to
by the parties and to the extent permitted by the Company Stock Plans, (x) the
Company Stock Plans shall terminate as of the Effective Time and the provisions
in any other plan, program or arrangement providing for the issuance or grant of
any other interest in respect of the capital stock of the Company or any of its
Subsidiaries shall be deleted as of the Effective Time and (y) the Company shall
use all reasonable efforts to ensure that following the Effective Time no holder
of Company Stock Options or any participant in the Company Stock Plans or any
other plans, programs or arrangements shall have any right thereunder to acquire
any equity securities of the Company, the Surviving Corporation or any
subsidiary thereof.
(e) Notwithstanding anything in this Agreement to the
contrary, shares ("Dissenting Shares") of Company Common Stock that are
outstanding immediately prior to the Effective Time and that are held by Persons
who are entitled to demand and have properly demanded dissention rights with
respect to such Dissenting Shares pursuant to, and who comply in all respects
with, Section 262 of the DGCL ("Section 262") shall not be converted into the
Merger Consideration
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as provided in Section 1.5(c), but rather the holders of Dissenting Shares shall
be entitled to payment of the fair market value of such Dissenting Shares in
accordance with Section 262; provided, however, that if any holder of Dissenting
Shares shall fail to perfect or otherwise shall waive, withdraw or lose the
right to Dissenting under Section 262, then the right of such holder to be paid
the fair value of such holder's Dissenting Shares shall cease and such
Dissenting Shares shall be treated as if they had been converted as of the
Effective Time into the Merger Consideration, as provided in Section 1.5(c). The
Company shall serve prompt notice to Parent of any demands received by the
Company for dissenter's rights with respect to any shares of Company Common
Stock, and Parent shall have the right to participate in and direct all
negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of Parent, make any payment with
respect to, or settle or offer to settle, any such demands, or agree to do any
of the foregoing.
Section 1.6 Payment Agent.
(a) Exchange of Certificates. Parent shall authorize a
commercial bank or trust company (or such other Person or Persons as shall be
reasonably acceptable to Parent and the Company) to act as Payment Agent
hereunder (the "Payment Agent"). As soon as practicable after the Effective
Time, Parent shall deposit with the Payment Agent, in trust for the holders of
shares of Company Common Stock converted in the Merger and holders of Company
Stock Options, an amount of cash equal to or exceeding the aggregate Merger
Consideration to be paid to holders of Company Common Stock pursuant to Article
I hereof and any Option Consideration to be paid to holders of Company Stock
Options pursuant to the terms of Section 1.5(d) (such amount hereinafter the
"Payment Fund").
(b) Exchange Procedures. Parent shall instruct the Payment
Agent, as soon as practicable after the Effective Time, to mail to each record
holder of a Certificate or Certificates a letter of transmittal, which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon actual delivery of the Certificates to the
Payment Agent, and shall contain instructions for use in effecting the surrender
of the Certificates in exchange for the Merger Consideration. Upon surrender for
cancellation to the Payment Agent of all Certificates held by any record holder
of a Certificate, together with such letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor a
check representing the Merger Consideration, and any Certificate so surrendered
shall forthwith be canceled. Holders of Company Stock Options shall receive
payment, if any, for such Company Stock Options pursuant to Section 1.5(d).
Section 1.7 Transfer Taxes; Withholding. If any Merger
Consideration is to be paid to any Person other than to the Person named in the
Certificate surrendered in exchange therefor, it shall be a condition of such
exchange that the Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and that the Person requesting such
exchange shall pay to the Payment Agent any transfer or other taxes required by
reason of the payment of the Merger Consideration to a Person other than to the
Person named in the Certificate surrendered, or shall establish to the
satisfaction of the Payment Agent that such tax has been paid or is not
applicable. Parent or the Payment Agent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of shares of Company
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Common Stock or holder of a Company Stock Option such amounts as Parent or the
Payment Agent is required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code of 1986, as amended (the "Code") or
under any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by Parent or the Payment Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the shares of Company Common Stock or the holder of a Company Stock
Option in respect of which such deduction and withholding was made by Parent or
the Payment Agent. For purposes of this Agreement, "Person" shall mean an
individual, corporation, partnership, limited liability company, joint venture,
association, trust, unincorporated organization or other entity.
Section 1.8 Return of Payment Fund. Any portion of the Payment
Fund which remains undistributed for six months after the Effective Time shall
be delivered to Parent, upon demand of Parent, and any such former stockholders
who have not theretofore complied with this Article I and holders of Company
Stock Options who have not yet received the Option Consideration shall
thereafter look only to Parent for payment of their claim for any Merger
Consideration or Option Consideration, as the case may be. Neither Parent nor
the Surviving Corporation shall be liable to any former holder of Company Common
Stock or holder of a Company Stock Option for any cash held in the Payment Fund
which is delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
Section 1.9 No Further Ownership Rights in Company Common
Stock. The payment of the Merger Consideration upon surrender of any Certificate
shall be deemed to constitute full satisfaction of all rights pertaining to the
shares of Company Common Stock represented by such Certificate.
Section 1.10 Closing of Company Transfer Books. At the
Effective Time, the stock transfer books of the Company shall be closed and no
transfer of shares of Company Common Stock shall thereafter be made on the
records of the Company. If, after the Effective Time, Certificates are presented
to the Surviving Corporation, the Payment Agent or the Parent, such Certificates
shall be canceled and exchanged as provided in this Article I.
Section 1.11 Lost Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such Certificate to be lost, stolen or destroyed and, if
required by Parent or the Payment Agent, the posting by such Person of a bond,
in such reasonable amount as Parent or the Payment Agent may direct as indemnity
against any claim that may be made against them with respect to such
Certificate, the Payment Agent will pay the Merger Consideration in exchange for
such lost, stolen or destroyed Certificate.
Section 1.12 Further Assurances. If at any time after the
Effective Time the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either of the Constituent Corporations, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of either of the Constituent Corporations, all such
deeds, bills of sale, assignments and assurances and to do, in the name and on
behalf of either Constituent
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Corporation, all such other acts and things as may be necessary, desirable or
proper to vest, perfect or confirm the Surviving Corporation's right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of such Constituent Corporation and otherwise to carry out
the purposes of this Agreement.
Section 1.13 Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") and all actions specified in this
Agreement to occur at the Closing shall take place at the offices of ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, P.A., 5500 Norwest Center, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, at 10:00 a.m., local time, no later than the second
business day following the day on which the last of the conditions set forth in
Article VI shall have been fulfilled or waived (if permissible) or at such other
time and place as Parent and the Company shall agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as
follows:
Section 2.1 Organization, Standing and Power. Each of Parent
and Sub is a corporation duly organized, validly existing and in good standing
under the laws of its place of incorporation and has the requisite corporate
power and authority to carry on its business as now being conducted. Parent is
duly qualified to do business, and is in good standing in each jurisdiction
where the character of the properties owned or held under lease by it or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect (as hereinafter defined) on Parent. For purposes of this
Agreement (a) "Material Adverse Change" or "Material Adverse Effect" means, when
used with respect to Parent or the Company, as the case may be, any change or
effect that is or could reasonably be expected (as far as can be foreseen at the
time) to be materially adverse to the business, assets, liabilities, financial
condition or results of operations of Parent and its Subsidiaries, taken as a
whole, or the Company and its Subsidiaries, taken as a whole, as the case may
be; provided, however, that in determining whether a Material Adverse Change or
Material Adverse Effect has occurred with respect to either referenced party,
any change or effect, to the extent it is attributable to changes in prevailing
interest rates or to any change in general economic conditions affecting
companies in industries similar to the industries in which the Company and its
Subsidiaries or Parent and its Subsidiaries, as the case may be, operate, shall
not be considered when determining if a Material Adverse Change or Material
Adverse Effect has occurred; and (b) "Subsidiary" means any corporation,
partnership, limited liability company, joint venture or other legal entity of
which Parent or the Company, as the case may be (either alone or through or
together with any other Subsidiary), owns, directly or indirectly, 50% or more
of the stock or other equity interests the holders of which are generally
entitled to vote for the election of the board of directors or other governing
body of such corporation, partnership, limited liability company, joint venture
or other legal entity.
Section 2.2 Authority. On or prior to the date of this
Agreement, Parent and Sub
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have each approved the Transactions and the Transaction Documents. Each of
Parent and Sub has the requisite corporate power and authority to enter into the
Transaction Documents and to consummate the transactions contemplated hereby.
The execution and delivery of the Transaction Documents by Parent and Sub to
which it is a party and the consummation by Parent and Sub of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of Parent or Sub, as the case may be, subject to
the filing of the Certificate of Merger with the Secretary of State of the State
of Delaware. The Transaction Documents to which it is a party have been duly
executed and delivered by Parent and Sub and constitute the valid and binding
obligations of each of Parent or Sub, as the case may be, enforceable against
them in accordance with its terms, except as the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and to judicial limitations on
the enforcement of specific performance and other equitable remedies.
Section 2.3 Consents and Approvals; No Violation. Assuming
that all consents, approvals, authorizations and other actions described in this
Section 2.3 have been obtained and all filings and obligations described in this
Section 2.3 have been made, the execution and delivery of the Transaction
Documents and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give to
others a right of termination, cancellation or acceleration of any obligation or
the loss of a material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Parent or any of its Subsidiaries under, any provision of (i) the Certificate of
Incorporation or the By-Laws of Parent or the Certificate of Incorporation or
By-Laws of Sub, (ii) any provision of the comparable charter or organization
documents of any of Parent's Subsidiaries, (iii) any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to Parent or any of its Subsidiaries
or (iv) any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or any of its Subsidiaries or any of their respective
properties or assets, other than, in the case of clauses (ii), (iii) or (iv),
any such violations, defaults, rights, liens, security interests, charges or
encumbrances that, individually or in the aggregate, would not have a Material
Adverse Effect on Parent, materially impair the ability of Parent or Sub to
perform their respective obligations hereunder or prevent the consummation of
any of the transactions contemplated hereby. No filing or registration with, or
authorization, consent or approval of, any domestic (federal and state), foreign
or supranational court, commission, governmental body, regulatory agency,
authority or tribunal (a "Governmental Entity") is required by or with respect
to Parent or any of its Subsidiaries in connection with the execution, delivery
and performance of any Transaction Agreement by Parent or Sub or is necessary
for the consummation of the Transactions, except for (i) in connection, or in
compliance, with the provisions of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ AntiTrust Improvement
Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇") and the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (ii) the final order of the Federal Energy Regulatory
Commission ("FERC") approving the transfer of jurisdictional facilities under
Section 203 of the Federal Power Act in connection with the power generating
project of one of the Company's subsidiaries in ▇▇▇▇▇▇, New Jersey (the
"Regulatory Approval"), (iii) in connection, or in compliance, with the
provisions of the New Jersey Industrial Site Recovery Act and the New Jersey
Environmental Cleanup Responsibility Act (the "Applicable New Jersey Law"), (iv)
the filing of the Certificate of Merger with the Secretary of State of the State
of Delaware and appropriate documents with the relevant authorities of other
states in which the Company or any of its Subsidiaries is
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qualified to do business, (v) such filings, authorizations, orders, notices and
approvals as may be required by state takeover laws (the "State Takeover
Approvals"), and (vi) such consents, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate, have a Material Adverse Effect on Parent, or
materially impair the ability of Parent or Sub to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated
hereby. Neither the Parent nor the Sub is an electric utility or an electric
utility holding company or companies, or any affiliate of either, in each case
as those terms are utilized by the FERC in regulations or orders implementing
the Public Utility Regulatory Policies Act of 1978, as amended, and its
successors ("PURPA"). Consummation of the Merger will not result in the loss of
the status of any project as a "Qualifying Facility" as defined under PURPA in
which the Company or any of its Subsidiaries, directly or indirectly, have an
equity interest.
Section 2.4 Information Supplied. None of the information to
be supplied by Parent or Sub for inclusion or incorporation by reference in the
Schedule 13e-3 to be filed pursuant to the Exchange Act in connection with the
transactions contemplated by the Transaction Documents (together with any
amendments or supplements thereto, the "Schedule 13e-3") or the proxy statement
relating to the Stockholder Meeting (as hereinafter defined) (together with any
amendments or supplements thereto, the "Proxy Statement") will, (i) in the case
of the Schedule 13e-3, at the time of its filing, at the time of the
dissemination of the Schedule 13e-3 and until the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading or (ii) in the case of the Proxy Statement and at the time of the
mailing of the Proxy Statement and at the time of the Stockholder Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except that no representation is made by Parent or Sub with respect
to statements made or incorporated by reference therein based on information
supplied by or on behalf of the Company or NRG Energy, Inc. for inclusion or
incorporation by reference therein.
Section 2.5 Actions and Proceedings. As of the date of this
Agreement, there are no outstanding orders, judgments, injunctions, awards or
decrees of any Governmental Entity against or involving Parent or any of its
Subsidiaries, or against or involving any of the present or former directors,
officers, employees, consultants, agents or stockholders of Parent or any of its
Subsidiaries, as such, or any of its or their properties, assets or business
that, individually or in the aggregate, would materially impair the ability of
Parent to perform its obligations hereunder. As of the date of this Agreement,
there are no actions, suits or claims or legal, administrative or arbitrative
proceedings or investigations pending or, to the Knowledge of Parent, threatened
against or involving Parent or any of its Subsidiaries or any of its or their
present or former directors, officers, employees, consultants, agents or
stockholders, as such, or any of its or their properties, assets or business
that, individually or in the aggregate, would materially impair the ability of
Parent to perform its obligations hereunder. As of the date hereof, there are no
actions, suits, labor disputes or other litigation, legal or administrative
proceedings or governmental investigations pending or, to the Knowledge of
Parent, threatened against or affecting Parent or any of its Subsidiaries or any
of its or their present or former officers, directors, employees, consultants,
agents or stockholders, as such, or any of its or their properties, assets or
business relating to the transactions contemplated by this Agreement. For
purposes of this Agreement, "Knowledge of Parent" means the actual knowledge of
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the executive officers of Parent after due inquiry.
Section 2.6 Operations of Sub. Sub is a direct subsidiary of
Parent, was formed solely for the purpose of engaging in the transactions
contemplated hereby, has engaged in no other business activities and has
conducted its operations only as contemplated hereby.
Section 2.7 Brokers. No broker, investment banker or other
Person is entitled to any broker's, finder's or other similar fee or commission
in connection with the transaction contemplated by this Agreement based upon the
arrangements made by or on behalf of Parent or Sub.
Section 2.8 Financing. Parent has sufficient capital resources
necessary to perform its obligations under the Transaction Documents, including
but not limited to the advances under Section 5.11.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub that,
subject to the disclosures set forth in the letter dated as of the date hereof
and delivered on the date hereof by Company to Parent (the "Company Letter"):
Section 3.1 Organization, Standing and Power. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority to
carry on its business as now being conducted. Each Subsidiary of the Company is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has the requisite corporate (in the
case of a Subsidiary that is a corporation) or other power and authority to
carry on its business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power or authority would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company. The Company and each of its Subsidiaries are duly qualified to do
business, and are in good standing, in each jurisdiction where the character of
their properties owned or held under lease or the nature of their activities
makes such qualification necessary, except where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company. The Company has delivered or otherwise made available to Parent
true and complete and correct copies of the Company's Certificate of
Incorporation and By-laws and the certificate of incorporation, by-laws or other
constitutive documents of each of the Company's Subsidiaries, in each case as
amended to the date of this Agreement.
Section 3.2 Capital Structure. The authorized capital stock of
the Company consists of 50,000,000 shares of Company Common Stock and 20,000,000
shares of undesignated preferred stock, par value $.01 per share ("Company
Preferred Stock"). As of the date of this Agreement, (i) 6,857,269 shares of
Company Common Stock were issued and outstanding, all of which were duly
authorized, validly issued, fully paid and nonassessable and free of preemptive
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rights, (ii) 39,800 shares of Company Common Stock were held in the treasury of
the Company or by Subsidiaries of the Company, (iii) 877,000 shares of Company
Common Stock were reserved for issuance pursuant to outstanding Company Stock
Options under the Company's stock plans described under Section 3.2 of the
Company Letter (collectively, the "Company Stock Plans"), and (iv) 797,000
Company Stock Options are currently exercisable or will become exercisable upon
consummation of the Transactions. A true and complete list of the options (and
their exercise prices) referred to in clause (iv) above that are entitled to
Option Consideration are set forth on Section 3.2 of the Company Letter. No
Company Stock Options have been granted since May 31, 1999. The Company Stock
Plans are the only benefit plans of the Company or its Subsidiaries under which
any securities of the Company or any of its Subsidiaries are issuable. No shares
of Company Preferred Stock are outstanding. As of the date of this Agreement,
except as set forth above no shares of capital stock or other voting securities
of the Company or any Subsidiary were issued, reserved for issuance or
outstanding. Except as set forth in this Section 3.2, there are no outstanding
equity equivalents or interests in the ownership or earnings of the Company or
any Subsidiary and there are no options, warrants, calls, rights or agreements
to which the Company or any of its Subsidiaries is a party or by which any of
them is bound obligating the Company or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or voting securities of the Company or any of its Subsidiaries or
obligating the Company or any of its Subsidiaries to grant, extend or enter into
any such option, warrant, call, right or agreement. Each outstanding share of
capital stock of each Subsidiary of the Company that is a corporation is duly
authorized, validly issued, fully paid and nonassessable and each such share is
owned by the Company or another Subsidiary of the Company, free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on voting rights, charges and other encumbrances of any
nature whatsoever ("Claims"). With respect to the Grays Ferry Cogeneration
Partnership, which is the only Subsidiary of the Company which is a partnership
(the "Partnership"), CogenAmerica Schuylkill, Inc. has good and valid title to
the partnership interests owned by it in the Partnership, free and clear of all
Claims. There are no outstanding (i) subscriptions or other rights to purchase
or otherwise acquire any partnership interest in the Partnership, (ii)
securities convertible into or exchangeable for any partnership interest in the
Partnership, or (iii) obligations of the Partnership to issue, deliver or sell
any partnership interest, voting securities or securities convertible into or
exchangeable for partnership interests in the Partnership. Except for the
Subsidiaries of the Company disclosed in the Company SEC Documents (as defined
in Section 3.5 below), the Company does not own or control, directly or
indirectly, any capital stock or other securities of, or have any ownership
interest in, any Person. The Company does not have any outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or convertible into or exercisable for securities having the right to
vote) with the stockholders of the Company on any matter. Exhibit 21 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 (the
"Company Annual Report"), as filed with the Securities and Exchange Commission
("SEC"), is a true, accurate and correct statement in all material respects of
all of the information as of December 31, 1998 required to be set forth therein
by the regulations of the SEC.
Section 3.3 Authority. On or prior to the date of this
Agreement, the Board of Directors of the Company has approved this Agreement in
accordance with the DGCL, resolved to recommend the adoption of this Agreement
by the Company's stockholders and directed that this Agreement be submitted to
the Company's stockholders for adoption. The Company has all
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requisite corporate power and authority to enter into each Transaction Document
to which it is a Party and, subject, in the case of the Merger, to approval by
the stockholders of the Company, to consummate the Merger. The execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to (x) approval of this
Agreement by the stockholders of the Company and (y) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware. This
Agreement has been duly executed and delivered by the Company and (assuming the
valid authorization, execution and delivery of this Agreement by Parent and Sub
and the validity and binding effect of the Agreement on Parent and Sub)
constitutes the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and to judicial
limitations on the enforcement of specific performance and other equitable
remedies. The filing of the Proxy Statement with the SEC has been duly
authorized by the Company's Board of Directors.
Section 3.4 Consents and Approvals; No Violation. Assuming
that all consents, approvals, authorizations and other actions described in this
Section 3.4 have been obtained and all filings and obligations described in this
Section 3.4 have been made, the execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby and compliance
with the provisions hereof will not, result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give to others a
right of termination, cancellation or acceleration of any obligation or the loss
of a material benefit under, or result in the creation of any Claim upon any of
the properties or assets of the Company or any of its Subsidiaries under, any
provision of (i) the Certificate of Incorporation or By-Laws of the Company,
(ii) any provision of the comparable charter or organization documents of any of
the Company's Subsidiaries, (iii) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to the Company or any of its Subsidiaries or
(iv) any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries or any of their respective
properties or assets, other than, in the case of clauses (ii), (iii) or (iv),
any such violations, defaults, rights, liens, security interests, charges or
encumbrances that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company, materially impair the ability of the Company to
perform its obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby or thereby. No filing or registration with, or
authorization, consent or approval of, any Governmental Entity is required by or
with respect to the Company or any of its Subsidiaries in connection with the
execution and delivery of any Transaction Document to which it is a party or is
necessary for the consummation of the Transactions, except for (i) in
connection, or in compliance, with the provisions of the HSR Act, the Securities
Act and the Exchange Act, (ii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate documents with the
relevant authorities of other states in which the Company or any of its
Subsidiaries is qualified to do business, (iii) such filings, authorizations,
notices, orders and approvals as may be required to obtain the Regulatory
Approval, the State Takeover Approvals and in connection with the Applicable New
Jersey Laws (collectively, the "Governmental Approvals") and (iv) such other
consents, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, or materially impair
the ability of the
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Company to perform its obligations hereunder or prevent the consummation of any
of the transactions contemplated hereby.
Section 3.5 SEC Documents and Other Reports.
(a) The Company has filed all required documents with the SEC
since April 30, 1996 pursuant to Sections 13(a) and 15(d) of the Exchange Act
(the "Company SEC Documents"). As of their respective dates, the Company SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and, at the respective
times they were filed, none of the Company SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements (including, in each case, any notes thereto) of the Company
included in the Company SEC Documents (the "Financial Statements") complied as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with generally accepted accounting principles (except, in the case
of the unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated therein
or in the notes thereto), are in accordance with the books and records of the
Company and fairly presented in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as at the respective
dates thereof and the consolidated results of their operations and their
consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein). Except as disclosed in the Company SEC Documents
or as required by generally accepted accounting principles, the Company has not,
since December 31, 1998, made any change in the accounting practices or policies
applied in the preparation of financial statements. Except as and to the extent
set forth in the Company Annual Report, neither the Company nor any of its
Subsidiaries had as of December 31, 1998 any liabilities or obligations of any
nature, whether or not accrued, contingent or otherwise, that would be required
by generally accepted accounting principles to be reflected on the consolidated
balance sheet of the Company and its Subsidiaries (including the notes thereto)
included in the Financial Statements that are not so reflected.
(b) The Company has provided to Parent true and complete
copies of the financial statements for its Subsidiaries described in Section 3.5
of the Company Letter (the "Project Financial Statements"). The Project
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be indicated therein or in the notes thereto), are in accordance
with the books and records of the relevant Subsidiary, and fairly present, in
all material respects, the financial position of such Subsidiary as at the
respective dates thereof and the results of its operations and its cash flows
for the periods then ended.
Section 3.6 Information Supplied. Each document required to be
filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement, including, without limitation, the Proxy
Statement and the Schedule 13e-3, and any amendments or supplements thereto will
comply in all material respects with the provisions of the Exchange Act. Neither
the Proxy Statement (other than with respect to information contained in the
Proxy
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Statement provided to the Company by Parent for inclusion in the Proxy
Statement) nor any of the information supplied by the Company for inclusion or
incorporation by reference in the Schedule 13e-3, together with any amendments
or supplements thereto, will (i) in the case of the Proxy Statement, at the time
of the mailing of the Proxy Statement and at the time of the Stockholder Meeting
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, and (ii) in the case of information supplied by the Company for
inclusion or incorporation by reference in the Schedule 13e-3, at the time of
its filing, at the time of the dissemination of the Schedule 13e-3 and until the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading.
Section 3.7 Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents filed with the SEC prior to the date of
this Agreement, since December 31, 1998 to the date hereof, (A) the Company and
its Subsidiaries have not incurred any material liability or obligation
(indirect, direct or contingent), or entered into any material oral or written
agreement or other transaction, that is not in the ordinary course of business
or that would result in a Material Adverse Effect on the Company, (B) there has
been no change in the capital stock of the Company except for the issuance of
shares of the Company Common Stock pursuant to the exercise of Company Stock
Options and no dividend or distribution of any kind declared, paid or made by
the Company on any class of its stock, (C) there has not been (x) any granting
by the Company or any of its Subsidiaries to any executive officer of the
Company or any of its Subsidiaries of any increase in compensation, except in
the ordinary course of business consistent with prior practice or as was
required under employment agreements in effect as of the date of the most recent
audited financial statements included in the Company SEC Documents, (y) any
granting by the Company or any of its Subsidiaries to any such executive officer
of any increase in severance or termination agreements in effect as of the date
of the most recent audited financial statements included in the Company SEC
Documents or (z) any entry by the Company or any of its Subsidiaries into any
employment, deferred compensation, severance or termination agreement with any
such executive officer, and (D) there has been no event causing a Material
Adverse Effect on the Company, nor any development that would, individually or
in the aggregate, result in a Material Adverse Effect on the Company.
Section 3.8 Permits and Compliance. Each of the Company and
its Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
of its Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
failure to have any of the Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, and as of the date of
this Agreement no suspension or cancellation of any of the Company Permits is
pending or, to the Knowledge of the Company (as hereinafter defined),
threatened, except where the suspension or cancellation of any of the Company
Permits would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. Neither the Company nor any of its Subsidiaries is in
violation of (A) its Certificate of Incorporation, by-laws or other
organizational documents, (B) any applicable law, ordinance, administrative or
governmental rule or regulation or (C) any order, decree or judgment of any
Governmental Entity having jurisdiction over the Company or any of its
Subsidiaries, except, in the case of clauses (B) and (C), for any violations
that,
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individually or in the aggregate, would not have a Material Adverse Effect on
the Company. Except as disclosed in the Company SEC Documents filed prior to the
date of this Agreement, as of the date of this Agreement none of the Company or
any of its Subsidiaries is a party to any Material Contract. For purposes of
this Agreement, "Material Contract" shall mean any contract or agreement filed
as an exhibit to the Company SEC Documents or any other contract or agreement
that is material to the business, properties, assets, liabilities, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries, taken as a whole. Except as set forth in the Company SEC Documents
filed prior to the date of this Agreement, no event of default or event that,
but for the giving of notice or the lapse of time or both, would constitute an
event of default exists or, upon the consummation by the Company of the
transactions contemplated by this Agreement, will exist under any indenture,
mortgage, loan agreement, note or other agreement or instrument for borrowed
money, any guarantee of any agreement or instrument for borrowed money, or any
lease, contractual license or other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any such
Subsidiary is bound or to which any of the properties, assets or operations of
the Company or any such Subsidiary is subject, other than any defaults that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company. All Material Contracts (other than the Affiliate Arrangements (as
defined in Section 3.21 below) which will be terminated at the Effective Time)
to which the Company or any of its Subsidiaries is a party are in full force and
effect and are the valid and binding obligations of the Company or the
applicable Subsidiary, enforceable in accordance with their respective terms,
subject to bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and to judicial limitations on
the enforcement of specific performance and other equitable remedies. The
Company has made available or delivered to Parent true and complete copies of
the Material Contracts and all other documents referred to in the Company
Letter, in each case as amended to the date of this Agreement. As of the date of
this Agreement, set forth in Section 3.8 of the Company Letter is a description
of any material changes to the amount and terms of the indebtedness of the
Company and its Subsidiaries as described in the Company Annual Report. For
purposes of this Agreement, "Knowledge of the Company" means the actual
knowledge of the executive officers of the Company after due inquiry.
Section 3.9 Tax Matters. (i) The Company and each of its
Subsidiaries have timely filed all federal, and all material state, local,
foreign and provincial, Tax Returns required to have been filed or appropriate
extensions therefor have been properly obtained, and such Tax Returns are
correct and complete, except to the extent that any failure to so file or any
failure to be correct and complete would not, individually or in the aggregate,
have a Material Adverse Effect on the Company; (ii) all Taxes shown to be due on
such Tax Returns have been timely paid, taking into account extensions for
payment that have been properly obtained, or such Taxes are being timely and
properly contested which contests as of the date of this Agreement have been
disclosed in Section 3.9 of the Company Letter; (iii) the Company and each of
its Subsidiaries have complied in all material respects with all rules and
regulations relating to the withholding of Taxes except to the extent that any
failure to comply with such rules and regulations would not, individually or in
the aggregate, have a Material Adverse Effect on the Company; (iv) neither the
Company nor any of its Subsidiaries has waived any statute of limitations in
respect of its Taxes; (v) any Tax Returns referred to in clause (i) relating to
federal and state income Taxes have been examined by the IRS or the appropriate
state taxing authority or the period for assessment of the Taxes in respect of
which such Tax Returns were required to be filed has expired; (vi) no material
issues that have been raised
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in writing by the relevant taxing authority in connection with the examination
of the Tax Returns referred to in clause (i) are currently pending and each such
examination has been completed; (vii) all deficiencies asserted or assessments
made as a result of any examination of such Tax Returns by any taxing authority
have been paid in full or are being timely and properly contested which contests
as of the date of this Agreement have been disclosed in Section 3.9 of the
Company Letter; and (viii) no withholding is required under Section 1445 of the
Code in connection with the Merger; (ix) neither the Company nor any of its
Subsidiaries is party to or bound by any tax-sharing agreement, tax indemnity
obligation or similar agreement, arrangement or practice with respect to Taxes
(including any advance pricing agreement, closing agreement or other agreement
relating to Taxes with any taxing authority); (x) neither the Company nor any of
its Subsidiaries nor any affiliated group that includes any of them shall be
required to include in a taxable period ending after the Closing Date any
material amount of taxable income attributable to income that accrued in a prior
taxable period but was not recognized in any prior taxable period as a result of
the installment method of accounting, the long-term contract method of
accounting, the cash method of accounting or Section 481 of the Code or any
comparable provision of state, local, or foreign Tax law, or for any other
reason; (xi) neither the Company nor any of its Subsidiaries has made any
consent under Section 341 of the Code, no property of the Company or of any of
its Subsidiaries is "tax exempt use property" within the meaning of Section
168(h) of the Code, neither the Company nor any of its Subsidiaries is a party
to any lease made pursuant to Section 168(f)(8) of the Internal Revenue Code of
1954 and none of the assets of the Company or of any of its Subsidiaries is
subject to a lease under Section 7701(h) of the Code or under any predecessor
section thereof; (xii) neither the Company nor any of its Subsidiaries has
requested any extension of time within which to file any Tax return, which
return has not yet been filed; and (xiii) no power of attorney with respect to
any Taxes has been executed or filed with any taxing authority by or on behalf
of the Company or any of its Subsidiaries. The Company has delivered or made
available to Parent for inspection (A) true and complete copies of all material
Tax returns of the Company and any affiliated group of which the Company is a
member and of any of the Company's Subsidiaries relating to Taxes for all
taxable periods for which the applicable statute of limitations has not yet
expired and (B) complete and correct copies of all material private letter
rulings, revenue agent reports, information document requests, notices of
proposed deficiencies, deficiency notices, protests, petitions, closing
agreements, settlement agreements, pending ruling requests and any similar
documents, submitted by, received by or agreed to by or on behalf of the Company
or any such group or Subsidiary, or, to the extent related to the income,
business, assets, operations, activities or status of the Company or any such
group or Subsidiary, submitted by, received by or agreed to by or on behalf of
any affiliated group of which the Company is or has ever been a member, and
relating to Taxes for all taxable periods for which the statute of limitations
has not yet expired. No material liens exist for Taxes (other than liens for
Taxes not yet due and payable) with respect to any of the assets or properties
of the Company or any of its Subsidiaries. The Federal income Tax returns of the
Company and its Subsidiaries and any affiliated group that includes any of them
have expressly disclosed any Tax positions of the Company, such Subsidiaries or
such group that, if not disclosed, could give rise to material penalties under
Section 6662 of the Code. For purposes of this Agreement: (i) "Taxes" means any
federal, state, local, foreign or provincial income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll, withholding,
alternative or added minimum, ad valorem, value-added, transfer or excise tax,
or other tax, custom, duty, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest or penalty imposed by any
Governmental Entity, and (ii) "Tax Return" means any return, report or similar
statement
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(including the attached schedules) required to be filed with respect to any Tax,
including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
Section 3.10 Actions and Proceedings. Except as set forth in
the Company SEC Documents filed prior to the date of this Agreement, there are,
as of the date of this Agreement, no outstanding orders, judgments, injunctions,
awards or decrees of any Governmental Entity against or involving (i) the
Company or any of its Subsidiaries, (ii) to the Knowledge of the Company, any of
the present or former directors, officers, employees, consultants, agents or
stockholders of the Company or any of its Subsidiaries, as such, (iii) any of
the properties, assets or businesses of the Company or any of its Subsidiaries
or (iv) any Company Plan (as hereinafter defined) that, individually or in the
aggregate, would have a Material Adverse Effect on the Company or materially
impair the ability of the Company to perform its obligations hereunder. As of
the date of this Agreement, there are no actions, suits or claims or legal,
administrative or arbitrative proceedings or investigations pending or, to the
Knowledge of the Company, threatened against or involving (i) the Company or any
of its Subsidiaries, (ii) to the Knowledge of the Company, any of its or their
present or former directors, officers, employees, consultants, agents or
stockholders, as such, (iii) any of the properties, assets or businesses of the
Company or any of its Subsidiaries or (iv) any Company Plan (as hereinafter
defined) that, individually or in the aggregate, would have a Material Adverse
Effect on the Company or materially impair the ability of the Company to perform
its obligations hereunder. As of the date hereof, there are no actions, suits,
labor disputes or other litigation, legal or administrative proceedings or
governmental investigations pending or, to the Knowledge of the Company,
threatened against or affecting (i) the Company or any of its Subsidiaries, (ii)
to the Knowledge of the Company, any of its or their present or former officers,
directors, employees, consultants, agents or stockholders, as such, (iii) any of
the properties, assets or businesses of the Company or any of its Subsidiaries
or (iv) any Company Plan, in each case relating to the transactions contemplated
by this Agreement. The Company is not in default with respect to any material
final judgment, order or decree of any court or any governmental agency or
instrumentality.
Section 3.11 Certain Agreements. Except as set forth in
Section 3.11 of the Company Letter or as provided pursuant to Section 1.7(d)
hereof, neither the Company nor any of its Subsidiaries is a party to any oral
or written agreement or plan, including any employment agreement, severance
agreement, stock option plan, stock appreciation rights plan, restricted stock
plan or stock purchase plan, any of the benefits of which will be increased, or
the vesting of the benefits of which will be accelerated, by the occurrence of
any of the transactions contemplated by this Agreement or the value of any of
the benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement. No holder of any option to purchase shares of
Company Common Stock, or shares of Company Common Stock granted in connection
with the performance of services for the Company or its Subsidiaries, is or will
be entitled to receive cash from the Company or any Subsidiary in lieu of or in
exchange for such option or shares as a result of the transactions contemplated
by this Agreement, other than as provided in Section 1.5(d).
Section 3.12 ERISA
(a) Company Plans. Each Company Plan (as hereinafter defined)
is listed in Section 3.12(a) of the Company Letter. Except as would not have a
Material Adverse Effect on the
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Company, each Company Plan complies in all respects with the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), the Code and all other
applicable statutes and governmental rules and regulations, and (i) no
"reportable event" (within the meaning of Section 4043 of ERISA) has occurred
with respect to any Company Plan that is likely to have individually or in the
aggregate, a Material Adverse Effect on the Company, and (ii) no action has been
taken, or is currently being considered, to terminate any Company Plan subject
to Title IV of ERISA. No Company Plan, nor any trust created thereunder, has
incurred any "accumulated funding deficiency" (as defined in Section 412 of the
Code or Section 302 of ERISA), whether or not waived.
(b) Plan Liabilities. With respect to the Company Plans, no
event has occurred and, to the Knowledge of the Company, there exists no
condition or set of circumstances in connection with which the Company or any
ERISA Affiliate or Company Plan fiduciary could be subject to any liability
under the terms of such Company Plans, ERISA, the Code or any other applicable
law, other than liabilities for benefits payable in the normal course, which
would have a Material Adverse Effect on the Company. All Company Plans that are
intended to be qualified under Section 401(a) of the Code have been determined
by the IRS to be so qualified, or a timely application for such determination is
now pending or a request for such a determination filed within the remedial
amendment period of Section 401(b) of the Code is pending, and the Company is
not aware of any reason why any such Company Plan is not so qualified in
operation. Neither the Company nor any entity which is treated as a single
employer along with the Company under Section 414(b), (c), (m) or (o) of the
Code maintains or contributes to, or has ever maintained or contributed to, or
been required to contribute to or has otherwise incurred any liability with
respect to a "multiemployer plan" within the meaning of Section 3(37) of ERISA
or any plan subject to Title IV of ERISA. Except as disclosed in Section 3.12(b)
of the Company Letter, neither the Company nor any of its ERISA Affiliates has
any liability or obligation under any welfare plan to provide benefits after
termination of employment to any employee or dependent other than as required by
Section 4980B of the Code.
(c) Definitions. As used herein, (i) "Company Plan" means a
"pension plan" (as defined in Section 3(2) of ERISA), a "welfare plan" (as
defined in Section 3(1) of ERISA), or any bonus, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, holiday pay, vacation, severance, death benefit, sick
leave, fringe benefit, personnel policy, insurance or other plan, arrangement or
understanding, in each case established or maintained by the Company or any of
its ERISA Affiliates or as to which the Company or any of its ERISA Affiliates
has contributed or otherwise may have any liability, and (iii) "ERISA Affiliate"
means any corporation or trade or business controlled by, controlling or under
common control with the Company within the meaning of Section 414 of the Code or
Section 4001(a)(14) or 4001(b) of ERISA.
(d) Employment Agreements. Section 3.12(d) of the Company
Letter contains a true and complete list of all (i) severance and employment
agreements with the current and former directors, officers, employees,
independent contractors and consultants of the Company and each ERISA Affiliate
containing any obligation or liability on or after the date of this Agreement,
(ii) severance programs and policies of the Company and each ERISA Affiliate
with or relating to its current and former directors, officers, employees,
independent contractors and consultants containing any obligation or liability
on or after the date of this Agreement, and (iii) plans,
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programs, agreements and other arrangements of the Company and each ERISA
Affiliate with or relating to its current and former directors, officers,
employees, independent contractors and consultants containing change of control,
acceleration of the time of payment or vesting of benefits or similar provisions
currently in effect (collectively, the "Employee Agreements").
Section 3.13 Compliance with Worker Safety and Environmental
Laws. The properties, assets and operations of the Company and its Subsidiaries
are in compliance with all applicable federal, state, local and foreign laws,
rules and regulations, orders, decrees, judgments, permits and licenses relating
to public and worker health and safety (collectively, "Worker Safety Laws") and
the protection and clean-up of the environment and activities or conditions
related thereto, including, without limitation, those relating to the
generation, handling, disposal, transportation or release of hazardous materials
(collectively, "Environmental Laws"), except for any violations that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company. With respect to such properties, assets and operations, including
any previously owned, leased or operated properties, assets or operations, there
are no events, conditions, circumstances, activities, practices, incidents,
actions or plans of the Company or any of its Subsidiaries that may interfere
with or prevent compliance or continued compliance with applicable Worker Safety
Laws and Environmental Laws, other than any such interference or prevention as
would not, individually or in the aggregate with any such other interference or
prevention, have a Material Adverse Effect on the Company. None of the Company
or any of its Subsidiaries has received or is aware of any claim or notice of
violations of any applicable Environmental Laws or Worker Safety Laws other than
such claims or violations as would not individually or in the aggregate have a
Material Adverse Effect on the Company.
Section 3.14 Labor Matters. Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement or labor
contract. Neither the Company nor any of its Subsidiaries has engaged in any
unfair labor practice with respect to any Persons employed by or otherwise
performing services primarily for the Company or any of its Subsidiaries (the
"Company Business Personnel"), and there is no unfair labor practice complaint
or grievance against the Company or any of its Subsidiaries by the National
Labor Relations Board or any comparable state agency pending or threatened in
writing with respect to the Company Business Personnel, except where such unfair
labor practice, complaint or grievance would not have a Material Adverse Effect
on the Company. There is no labor strike, dispute, slowdown or stoppage pending
or, to the Knowledge of the Company, threatened against or affecting the Company
or any of its Subsidiaries which may interfere with the respective business
activities of the Company or any of its Subsidiaries, except where such dispute,
strike or work stoppage would not have a Material Adverse Effect on the Company.
Section 3.15 State Takeover Statute. Section 203 of the DGCL
is not applicable to the Transactions.
Section 3.16 Required Vote of Company Stockholders. The
affirmative vote of the holders of two-thirds of the outstanding shares of
Company Common Stock is required to approve the Merger. No other vote of the
security holders of the Company is required by law, the Certificate of
Incorporation or By-laws of the Company or otherwise in order for the Company to
consummate the Transactions.
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Section 3.17 Brokers. No broker, investment banker or other
Person, other than ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation (the
"Financial Advisor"), is entitled to any broker's, finder's or other similar fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company. The Company has
furnished Parent a true and correct copy of the engagement agreement with the
Financial Advisor.
Section 3.18 Opinion of Financial Advisor. The Company has
received the opinion of the Financial Advisor addressed to the Company's Board
of Directors, dated the date of this Agreement, to the effect that, as of such
date, the consideration to be received in the Merger by the holders of the
shares of Company Common Stock is fair from a financial point of view to the
Company's stockholders, other than NRG Energy, Inc. A signed copy of such
opinion has been delivered to Parent.
Section 3.19 Utility Regulation. None of the Company or any of
its Subsidiaries is (i) subject to regulation under the Public Utility Holding
Company Act of 1935 ("PUHCA") (other than any such regulation contemplated by
Section 9(a)(2), 32 or 33 of PUHCA), (ii) subject to regulation as an "electric
utility" or a "public utility" as such terms are defined in the Federal Power
Act (other than as contemplated by 18 C.F.R. Section 292.601(c) or Section 32 or
33 of PUHCA), or (iii) subject to regulation by any state respecting the rates
of electric utilities or the financial and organizational regulation of electric
utilities as those terms are used in Section 210(e) of the Public Utility
Regulatory Policies Act of 1978 ("PURPA"), except with respect to participation
in, or ownership of, an "exempt wholesale generator" as such term is defined in
Section 32 of PUHCA. Not more than 50% of the ultimate ownership of the projects
operated by the Subsidiaries is held by Persons primarily engaged in the
generation or sale of electric power (other than electric power solely from
qualifying cogeneration facilities, qualifying small power production
facilities, exempt wholesale generators or foreign utilities companies (as
defined in Section 33 of PUHCA)) within the meaning of the Federal Power Act.
Each such project has self-certified itself to be in compliance with such
requirements without objection by FERC or FERC has issued a final order stating
that each such project is a facility which complies with the definition of
"cogeneration facility" as set forth in 18 C.F.R. Section 292.202(c) and which
meets all of the requirements for qualification set forth in 18 C.F.R. Section
292.203(b).
Section 3.20 Insurance. Section 3.20 of the Company Letter
contains a true and complete list of all material insurance policies held by the
Company or any of its Subsidiaries. All such policies are in full force and
effect and all related premiums have been paid to date. As of the date of this
Agreement, there are no pending or, to the Knowledge of the Company, threatened
disputes or communications with or from any insurance carrier denying or
disputing any claim or regarding cancellation or non-renewal of any such policy
which if determined adversely to the Company, would have a Material Adverse
Effect on the Company.
Section 3.21 Related Party Transactions. No director or
officer of the Company or any of its Subsidiaries or any Person which as of the
date of this Agreement has a Schedule 13D or 13G on file with the Securities and
Exchange Commission with respect to the Company Common Stock (each such Person,
a "Significant Holder"), or any member of the immediate family of any
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such director, officer, Significant Holder or any Person in which any such
director, officer, Significant Holder, or any member of the immediate family of
any such director or officer, is an officer, director, trustee, partner or
holder of more than 50% of the outstanding capital stock or equity interests, is
a party to any material executory transaction with the Company or any of its
Subsidiaries. There are not loans, guarantees, letters of credit or other forms
of credit support provided by or on behalf of any director or officer of the
Company or any of its Subsidiaries to or in favor of the Company or any of its
Subsidiaries. For purposes of this Agreement, "Affiliate Arrangements" shall
mean the arrangements identified on Section 3.21 of the Company Letter that will
terminate at the Effective Time.
ARTICLE IV
COVENANTS OF THE COMPANY
Section 4.1 Conduct of Business Pending the Merger. Except as
expressly permitted by clauses (i) through (xvi) of this Section 4.1 or as set
forth in the Company Letter, during the period from the date of this Agreement
through the Effective Time, the Company shall, and shall cause each of its
Subsidiaries to carry on its business in the ordinary course of its business as
currently conducted and, to the extent consistent therewith, use best efforts to
preserve intact its current business organizations, keep available the services
of its current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end that
its goodwill and ongoing business shall be unimpaired at the Effective Time.
Without limiting the generality of the foregoing, and except as otherwise
expressly contemplated by this Agreement or as set forth in the Company Letter,
the Company shall not, and shall not permit any of its Subsidiaries to, without
the prior written consent of Parent (which consent shall not be unreasonably
withheld or delayed):
(i) (A) declare, set aside or pay any dividends on, or make
any other actual, constructive or deemed distributions in respect of,
any of its capital stock, or otherwise make any payments to its
stockholders in their capacity as such (other than dividends and other
distributions by Subsidiaries), (B) split, combine or reclassify any of
its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock or (C) purchase, redeem or otherwise acquire any
shares of capital stock of the Company or any of its Subsidiaries or
any other interests or securities thereof or any rights, warrants or
options to acquire any such shares or other interests or securities;
(ii) issue, deliver, sell, pledge, dispose of or otherwise
encumber any shares of its capital stock or partnership interests, any
other voting securities or equity equivalent or any securities
convertible into, or any rights, warrants or options to acquire any
such shares or interests, voting securities, equity equivalent or
convertible securities, other than the issuance of shares of Company
Common Stock upon the exercise of Company Stock Options outstanding on
the date of this Agreement in accordance with their current terms.
(iii) amend its Certificate of Incorporation or charter or
By-Laws;
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(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of or equity
in, or by any other manner, any business or any corporation, limited
liability company, partnership, association or other business
organization or division thereof or otherwise acquire or agree to
acquire any assets, other than transactions that are in the ordinary
course of business consistent with past practice and that have a
transaction value less than $250,000 individually or $1,000,000 in the
aggregate and not material to the Company and its Subsidiaries taken as
a whole;
(v) sell, lease or otherwise dispose of, or agree to sell,
lease or otherwise dispose of, any of its assets, other than
transactions that are in the ordinary course of business consistent
with past practice and that have a transaction value less than $250,000
individually or $1,000,000 in the aggregate;
(vi) incur any indebtedness for borrowed money, guarantee any
such indebtedness or make any loans, advances or capital contributions
to, or other investments in, any other Person, other than (A) any such
obligations incurred in the ordinary course of business consistent with
past practices and that are less than $500,000 in the aggregate, and
(B) indebtedness, loans, advances, capital contributions and
investments between the Company and any of its Subsidiaries or between
any of such Subsidiaries;
(vii) alter (through merger, liquidation, reorganization,
restructuring or in any other fashion) the corporate structure or
ownership of the Company or of any of its Subsidiaries;
(viii) enter into or adopt any, or amend any existing,
severance plan, agreement or arrangement or enter into or amend any
Company Plan or employment or consulting agreement, except in the case
of any amendments to any Company Plan, for any immaterial changes as
required by applicable law;
(ix) increase the compensation payable or to become payable to
its current or former directors, officers, employees, independent
contractors or consultants or grant any severance or termination pay
to, or enter into or amend any employment or severance agreement with,
any current or former director, officer, employee, independent
contractor or consultant of the Company or any of its Subsidiaries, or
establish, adopt, enter into, or, except in the case of any amendments
to any Company Plan, for any immaterial changes as may be required to
comply with applicable law, amend in any material respect or take
action to enhance in any material respect or accelerate the payment or
vesting of any rights or benefits under, any labor, collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust,
fund, policy or arrangement for the benefit of any director, officer,
employee, consultant or independent contractor;
(x) violate or fail to perform any obligation or duty imposed
upon it or any of its Subsidiaries by any applicable material federal,
state or local law, rule, regulation, guideline or ordinance;
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(xi) make any change to accounting policies or procedures
(other than actions required to be taken by generally accepted
accounting principles);
(xii) prepare or file any Tax Return inconsistent with past
practice or, on any such Tax Return, take any position, make any
election, or adopt any method that is inconsistent with positions
taken, elections made or methods used in preparing or filing similar
Tax Returns in prior periods;
(xiii) make any tax election or settle or compromise any
material federal, state, local or foreign income tax liability;
(xiv) enter into any contract which involves aggregate
payments in excess of $250,000 for individual contracts or $1,000,000
in the aggregate for all contracts or amend, terminate, renew or waive
any rights of material value under, any Material Contract of the
Company or any of its Subsidiaries; or other than as described in
Section 4.1(xiv) of the Company Letter, make or agree to make any new
capital expenditure or expenditures in excess of $250,000 individually
or $500,000 in the aggregate;
(xv) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than (a) the payment, discharge or satisfaction, in
the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved
against in, or contemplated by, the most recent financial statements
(or the notes thereto) of the Company included in the Company SEC
Documents or incurred in the ordinary course of business consistent
with past practice or (b) payments of principal and interest and
related fees on indebtedness owed by the Company or any of its
Subsidiaries under existing revolving credit facilities and scheduled
payments of principal and interest and related fees on any other
indebtedness owed by the Company or any of its Subsidiaries under any
existing credit facility;
(xvi) take any write-down of the value of any asset or take
any write-off as uncollectible of any accounts or notes receivable or
any portion thereof, except to the extent such write-down or write-off
is required by generally accepted accounting principles or is
consistent with the historic accounting policies adhered to by the
Company or its Subsidiaries, as applicable; or
(xvii) authorize, recommend, propose or announce an intention
to do any of the foregoing, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
Section 4.2 No Solicitation.
(a) Takeover Proposals. The Company shall not, nor shall it
permit any of its Subsidiaries to, nor shall it authorize or permit any officer,
director or employee of or any financial advisor, attorney or other advisor or
representative of, the Company or any of its Subsidiaries to, (i) solicit,
initiate or encourage the submission of, any Takeover Proposal (as hereafter
defined), (ii) enter into any agreement with respect to any Takeover Proposal or
(iii) participate in any discussions
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or negotiations regarding, or furnish to any Person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Takeover Proposal; provided, however, that, if the Board of Directors of the
Company reasonably determines the Takeover Proposal constitutes a Superior
Proposal (as defined below), then, to the extent required by the fiduciary
obligations of the Board of Directors of the Company, as determined in good
faith by a majority of the disinterested members thereof after receiving the
advice of independent legal counsel, the Company may, in response to an
unsolicited request therefor, furnish information with respect to the Company
to, and enter into discussions with, any Person that has made such Takeover
Proposal pursuant to a customary confidentiality agreement. For purposes of this
Agreement, (i) "Takeover Proposal" means any proposal for, offer or indication
of interest in a merger or other business combination involving the Company or
any of its Subsidiaries or any proposal or offer to acquire in any manner,
directly or indirectly, a substantial equity interest in, a substantial portion
of the voting securities of, or a substantial portion of the assets of the
Company or any of its Subsidiaries, other than the transactions contemplated by
this Agreement, and (ii) "Superior Proposal" means a bona fide Takeover Proposal
made by a third party which a majority of the disinterested members of the Board
of Directors of the Company determines in its reasonable good faith judgment to
be more favorable to the Company's stockholders than the Merger (after receiving
the opinion, with only customary qualifications, of the Company's independent
financial advisor of nationally recognized reputation that the value of the
consideration provided for in such proposal exceeds the value of the
consideration provided for in the Merger) and for which financing, to the extent
required, is then committed or which, in the reasonable good faith judgment of a
majority of such disinterested members (after receiving the advice of the
Company's independent financial advisor), is highly likely to be financed by
such third party.
(b) Recommendation of the Board of Directors. Except as
expressly permitted by this Section 4.2, neither the Board of Directors of the
Company nor any committee thereof shall (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent or Sub, the approval or
recommendation by such Board of Directors or any such committee of the Merger or
(ii) approve or recommend, propose to approve or recommend, or cause the Company
to enter into any letter of intent, agreement in principle or legally binding
acquisition agreement (the "Company Acquisition Agreement") relating to any
Takeover Proposal. Notwithstanding the foregoing, if the Company has received a
Superior Proposal, the Board of Directors of the Company may (subject to this
and the following sentences) terminate this Agreement, but only at a time that
is more than four (4) business days following Parent's receipt of written notice
advising Parent that the Company's Board of Directors is prepared to accept such
Superior Proposal, specifying the material terms and conditions of such Superior
Proposal and identifying the Person making such Superior Proposal; provided,
however, that (x) at the time of such termination, such proposal continues to be
a Superior Proposal, taking into account any amendment of the terms of the
Merger by Parent or any proposal by Parent to amend the terms of this Agreement,
the Merger or any other Takeover Proposal made by Parent (a "New Parent
Proposal"), and (y) concurrently with or immediately after such termination, the
Company's Board of Directors shall cause the Company to enter into a definitive
agreement with respect to such Superior Proposal.
(c) Notice of Takeover Proposal. The Company shall advise
Parent orally (within one business day) and in writing (as promptly as
practicable) of (i) any Takeover Proposal or any inquiry with respect to or
which could lead to any Takeover Proposal, (ii) the material terms of
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such Takeover Proposal and (iii) the identity of the Person making any such
Takeover Proposal or inquiry. The Company will keep Parent fully informed of the
status and details of any such Takeover Proposal or inquiry.
(d) Permitted Actions or Disclosures by the Company. Nothing
contained in this Section 4.2 shall prohibit the Company from taking and
disclosing to its stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders if, in the good faith judgment of the Board of Directors
of the Company, after consultation with independent counsel, failure so to
disclose would be inconsistent with its obligations under applicable law;
provided, however, that, except as expressly provided in this Section 4.2,
neither the Company nor its Board nor any committee thereof shall withdraw or
modify, or propose publicly to withdraw or modify, its position with respect to
this Agreement or in connection with the Merger, or approve or recommend, or
propose publicly to approve or recommend, a Takeover Proposal.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Stockholder Meeting. The Company will, as soon as
practicable following the date of this Agreement, duly call, give notice of,
convene and hold a stockholder meeting (the "Stockholder Meeting") for the
purpose of considering the approval of this Agreement and the transactions
contemplated hereby. The Company has, through its Board of Directors,
recommended to its stockholders the adoption or approval of this Agreement, the
Merger and the Amendment, shall use all reasonable efforts to solicit such
approvals by its stockholders and shall not withdraw such recommendation.
Without limiting the generality of the foregoing, the Company agrees that its
obligations pursuant to the first sentence of this Section 5.1 shall not be
affected by the commencement, public proposal, public disclosure or
communication to the Company of a Takeover Proposal.
Section 5.2 Preparation of the Proxy Statement and Schedule
13e-3. The Company shall promptly prepare and, after consultation with Parent,
file with the SEC the Proxy Statement and shall use its reasonable best efforts
to obtain and furnish the information required to be included in the Proxy
Statement and, after consultation with Parent, respond promptly to any comments
made by the SEC. In connection with the Company consulting with Parent
concerning the Proxy Statement, the Company shall provide Parent a reasonable
opportunity to review and comment on the Proxy Statement and amendment or
modification thereto prior to filing with the SEC, shall reasonably consider the
comments and suggestions of Parent, shall not change without Parent's consent
any information provided by Parent for inclusion in the Proxy Statement that the
Company requests of Parent, shall promptly notify Parent of the receipt of any
comments or other communications from the SEC regarding the Proxy Statement and
shall provide Parent a reasonable opportunity to review and comment on any
response by the Company to any comments or other communications from the SEC
that requires a response. The Company shall mail the Proxy Statement to its
stockholders at the earliest practical date. Parent, Sub and (to the extent
required by law) their respective affiliates shall promptly prepare and file,
concurrent with the filing of the Proxy
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Statement and after consultation with the Company, with the SEC the Schedule
13e-3 and the Company shall reasonably cooperate with Parent in connection with
the preparation of the Schedule 13e-3. If at any time prior to the Effective
Time any event with respect to Parent, its officers and directors or Sub shall
occur, which is required to be described in the Schedule 13e-3 or the Proxy
Statement, such event shall be so described, and, in the case of the Schedule
13e-3, Parent will promptly give notice of such event to the Company and an
appropriate amendment or supplement shall be promptly filed with the SEC and, as
required by law, disseminated to the stockholders of the Company. If at any time
prior to the Effective Time any event with respect to the Company, its officers
and directors or any of its Subsidiaries shall occur which is required at that
time to be described in the Proxy Statement or the Schedule 13e-3, such event
shall be so described, and, in the case of the Proxy Statement, the Company
shall promptly notify Parent of such event and an appropriate amendment or
supplement shall be promptly filed with the SEC and, as required by law,
disseminated to the stockholders of the Company.
Section 5.3 Access to Information. Subject to currently
existing contractual and legal restrictions applicable to the Company or any of
its Subsidiaries, the Company shall, and shall cause each of its Subsidiaries
to, afford to the accountants, counsel, financial advisors and other
representatives of Parent hereto reasonable access to, and permit them to make
such inspections as they may reasonably require of, during normal business hours
during the period from the date of this Agreement through the Effective Time,
all their respective properties, books, contracts, commitments and records
(including, without limitation, the work papers of independent accountants, if
available and subject to the consent of such independent accountants) and,
during such period, the Company shall, and shall cause each of its Subsidiaries
to, furnish promptly to Parent (i) a copy of each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of federal or state securities laws and (ii) all other information
concerning its business, properties and personnel as Parent may reasonably
request. No investigation pursuant to this Section 5.3 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto. All information obtained by
Parent pursuant to this Section 5.3 shall be kept confidential in accordance
with the Confidentiality Agreement, dated May 17, 1999, between Parent and the
Company (the "Confidentiality Agreement").
Section 5.4 Fees and Expenses.
(a) Expenses. Except as provided below, all fees and expenses
incurred in connection with the Transactions shall be paid by the party
incurring such fees or expenses, whether or not the Merger is consummated.
(b) Termination Fee. The Company shall pay to Parent a
termination fee of $7,500,000 if:
(i) the Company terminates this Agreement pursuant to Section
7.1(d);
(ii) (A) after the date of this Agreement and prior to the
termination of this Agreement, any Person makes a Takeover Proposal,
(B) this Agreement is terminated pursuant to Section 7.1(b)(iii) or (c)
and (C) within 12 months of the date of termination of
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this Agreement, the Company executes a legally binding definitive
agreement or an agreement in principle pursuant to which any Person,
entity or group (other than Parent, Sub or any of their affiliates), in
one transaction or a series of transactions, will acquire more than 50%
of the outstanding Company Common Stock or assets of the Company
through any open market purchases, merger, consolidation, tender or
exchange offer, recapitalization, reorganization or other business
combination and such transaction or series of transactions have been
consummated (an "Third Party Acquisition Event"); or
(iii) (A) after the date of this Agreement and prior to the
termination of this Agreement, any Person makes a Takeover Proposal,
(B) this Agreement is terminated by Parent pursuant to Section 7.1(e)
or (f), and (C) a Third Party Acquisition Event occurs within 12 months
of the date of termination of this Agreement.
Any termination fee due under this Section 5.4(b) shall be paid by wire transfer
of same-day funds on the date of termination of this Agreement in the case of a
fee due under clause (i) of the preceding sentence, or on the date such Third
Party Acquisition Event is consummated in the case of a fee due under clause
(ii) or (iii) of the preceding sentence. The payment of the termination fee
pursuant to this Section 5.4(b) shall constitute liquidated damages and shall be
the sole and exclusive remedy of Parent and Sub if this Agreement is terminated
under the circumstances described above in this Section 5.4(b).
Section 5.5 Best Efforts.
(a) Consummation of the Merger. Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
best efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement,
including, but not limited to: (i) the obtaining of all necessary actions or
non-actions, waivers, consents and approvals from all Governmental Entities and
the making of all necessary registrations and filings (including filings with
Governmental Entities) and the taking of all reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity (including those in connection with the
HSR Act, the Regulatory Approval, the Applicable New Jersey Laws, and State
Takeover Approvals), (ii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement and
the consummation of the transactions contemplated hereby, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed, (iii) the taking of all reasonable
actions to minimize the effects of any State Takeover Approval on the
transactions contemplated hereby, and (iv) the execution and delivery of any
additional instruments necessary to consummate the transactions contemplated by
this Agreement. No party to this Agreement shall consent to any voluntary delay
of the consummation of the Merger at the behest of any Governmental Entity
without the consent of the other parties to this Agreement, which consent shall
not be unreasonably withheld.
(b) Representations and Warranties. Each party shall not take
any action, or enter into any transaction, which would cause any of its
representations or warranties contained in
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this Agreement to be untrue or result in a breach of any covenant made by it in
this Agreement.
(c) Divestiture. Notwithstanding anything to the contrary
contained in this Agreement, in connection with any filing or submission
required or action to be taken by either Parent or the Company to effect the
Merger and to consummate the other transactions contemplated hereby, the Company
shall not, without Parent's prior written consent, commit to any divestiture
transaction, and neither Parent nor any of its Affiliates shall be required to
divest or hold separate or otherwise take or commit to take any action that
limits its freedom of action with respect to, or its ability to retain, the
Company or any of the material businesses, product lines or assets of Parent or
any of its Subsidiaries or that otherwise would have a Material Adverse Effect
on Parent.
(d) Company Stock Option Termination Notices. At least sixty
(60) days prior to the Effective Time, the Company will give the "Acceleration
Notice" as defined in and contemplated by the Company Plans pursuant to which
Company Stock Options were granted, provided that the holders of the Company
Stock Options shall be entitled to the Option Consideration pursuant to Section
1.5(d) if such holder executes and delivers the option termination agreement as
contemplated by Section 1.5(d) above.
Section 5.6 Public Announcements. Parent and the Company will
not issue any press release with respect to the transactions contemplated by
this Agreement or otherwise issue any written public statements with respect to
such transactions without prior consultation with the other party, except as may
be required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange or the Nasdaq National Market.
Section 5.7 Real Estate Transfer and Gains Tax. Parent and the
Company agree that either the Company or the Surviving Corporation will pay any
state or local tax which is attributable to the transfer of the beneficial
ownership of the Company's or its Subsidiaries' real property, if any
(collectively, the "Gains Taxes"), and any penalties or interest with respect to
the Gains Taxes, payable in connection with the consummation of the Merger. The
Company and Parent agree to cooperate with the other in the filing of any
returns with respect to the Gains Taxes, including supplying in a timely manner
a complete list of all real property interests held by the Company and its
Subsidiaries and any information with respect to such property that is
reasonably necessary to complete such returns. The portion of the consideration
allocable to the real property of the Company and its Subsidiaries shall be
determined by Parent in its reasonable discretion.
Section 5.8 Indemnification; Directors and Officers Insurance.
(a) For six years from and after the Effective Time, Parent
agrees to cause the Surviving Corporation to, and shall guarantee the obligation
of the Surviving Corporation to, indemnify and hold harmless all past and
present officers and directors of the Company and of its Subsidiaries to the
same extent such Persons are indemnified as of the date of this Agreement by the
Company pursuant to the Company's Certificate of Incorporation, By-Laws or
agreements in existence on the date hereof for acts or omissions occurring at or
prior to the Effective Time.
(b) Parent shall provide, or shall cause the Surviving
Corporation to provide, for an aggregate period of not less than six years from
the Effective Time, the Company's current
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directors and officers an insurance and indemnification policy that provides
coverage for events occurring prior to the Effective Time (the "D&O Insurance")
that is substantially similar (with respect to limits and deductibles) to the
Company's existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that the Surviving
Corporation shall not be required in any year to expend more than $360,000 for
such coverage (the "Maximum Premium"), and provided, further, that if the
Surviving Corporation is unable to obtain the amount of such insurance required
by this Section 5.8(b) for such aggregate premiums, the Surviving Corporation
shall purchase as much insurance as is obtainable for an aggregate annual
premium of $360,000.
(c) From and after the Effective Time, to the full extent
permitted by the law, Parent shall, and shall cause the Company (or any
successor to the Company) to, indemnify, defend and hold harmless the present
officers and directors of the Company and its Subsidiaries (each an "Indemnified
Party") against all losses, claims, damages, liabilities, fees and expenses
(including reasonable attorneys' fees and disbursements), judgments, fines and
amounts paid in settlement (collectively, "Losses") arising out of actions or
omissions occurring at or prior to the Effective Time in connection with this
Agreement, the Company Stockholder Agreement and the Transactions; provided,
however, that an Indemnified Party shall not be entitled to indemnification
under this Section 5.8(c) for Losses arising out of actions or omissions by the
Indemnified Party constituting (i) a breach of this Agreement or the Company
Stockholder Agreement, (ii) grossly negligent or criminal conduct or fraud, or
(iii) any violation of federal, state or foreign securities laws. In order to be
entitled to indemnification under this Section 5.8(c), an Indemnified Party must
give Parent and the Company prompt written notice of any third party claim which
may give rise to any indemnify obligation under this Section 5.8(c), and Parent
and the Company shall have the right to assume the defense of any such claim
through counsel of their own choosing, subject to such counsel's reasonable
judgment that separate defenses that would create a conflict of interest on the
part of such counsel are not available. If Parent and the Company do not assume
any such defense, they shall be liable for all reasonable costs and expenses of
defending such claim incurred by the Indemnified Party, including reasonable
fees and disbursements of counsel, and shall advance such reasonable costs and
expenses to the Indemnified Party; provided, however, that such advance shall be
made only after receiving an undertaking from the Indemnified Party that such
advance shall be repaid if it is determined that such Indemnified Party is not
entitled to indemnification therefor. Neither Parent nor the Company shall be
liable under this Section 5.8(c) for any Losses resulting from any settlement,
compromise or offer to settle or compromise any such claim or litigation or
other action, without the prior written consent of Parent and the Company.
(d) In the event the Surviving Corporation or any successor to
the Surviving Corporation (i) consolidates with or merges into any other Person
and shall not be the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all its
properties and assets to any Person, then, and in each case, proper provision
shall be made so that the successors of the Surviving Corporation honor the
obligations of the Company set forth in this Section 5.8.
Section 5.9 Notification of Certain Matters. Parent shall use
its best efforts to give prompt notice to the Company, and the Company shall use
its best efforts to give prompt notice to Parent, of: (i) the occurrence, or
non-occurrence, of any event the occurrence, or non-occurrence,
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of which it is aware and which would be reasonably likely to cause (x) any
representation or warranty by it contained in this Agreement to be untrue or
inaccurate in any material respect or (y) any covenant, condition or agreement
contained in this Agreement not to be complied with or satisfied in all material
respects by it, (ii) any failure of Parent or the Company, as the case may be,
to comply in a timely manner with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder or (iii) any change
or event which would be reasonably likely to have a Material Adverse Effect on
the Company; provided, however, that the delivery of any notice pursuant to this
Section 5.9 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
Section 5.10 Employee Benefit Plans and Agreements
(a) Company Plans. Parent shall cause the Surviving
Corporation to perform the obligations of the Company under, and comply with,
the Employee Agreements and to maintain through December 31, 1999 the Company
Plans (other than plans providing for the issuance of Company Common Stock or
based on the value of Company Common Stock) in effect on the date of this
Agreement; provided, however, that Parent shall have no obligation to continue
or renew any Employee Agreement or Company Plan that may be terminated in
accordance with its terms; and provided, further, however, that nothing in this
Agreement shall confer on any individual any right to employment, compensation
for employment, or employee benefits. Notwithstanding the foregoing, Parent
shall have the right, at its option, to replace the Company Plans with its own
benefit plans provided such plans are in the aggregate comparable (taking into
account all relevant factors) with the Company Plans.
(b) Credit for Prior Service; Waiver of Pre-existing
Conditions. In the event that Parent shall merge any Company Plan with any
benefit plan of Parent or otherwise modify any Company Plan, prior service with
the Company or any of its Subsidiaries will be counted for purposes of employee
eligibility, seniority and vesting under such benefit plan, and any pre-existing
condition shall be waived for each employee so long as such employee has had
medical coverage under the Company Plans for at least six months immediately
prior to the Effective Time.
(c) Change of Control. Parent agrees that for purposes of any
of the Company Plans conferring rights on a current or former employee, officer
or director as a result of a change of control of the Company, the consummation
of the Merger shall be deemed to constitute a "Change of Control" (as that term
is defined in such Company Plans).
Section 5.11 Performance by Sub. Parent shall cause Sub to
comply with each of its obligations hereunder and pursuant to the Company
Stockholder Agreement, including, without limitation, causing Sub to consummate
the Merger as contemplated herein, and Parent hereby guarantees the performance
by Sub of such obligations. Parent shall cause Sub to vote any shares of Common
Stock owned by the Sub on the record date for the Stockholder Meeting to be
voted for approval of this Agreement and the Merger.
Section 5.12 Additional Consents and Approvals. The Company
and Parent agree that they will cooperate and use their commercially reasonable
efforts to seek any waiver and/or consent required such that consummation of the
Transactions will not constitute a default under the
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terms of (1) that certain Credit Agreement, by and among NRG Generating (Newark)
Cogeneration Inc. and NRG Generating (▇▇▇▇▇▇) Cogeneration Inc., Credit Suisse,
Greenwich Funding Corporation and any Purchasing Lender as Lender and Credit
Suisse as Agent, dated as of May 17, 1996, as amended by Amendment Number 1,
dated June 28, 1996 and (2) that certain Construction and Term Loan Agreement,
by and among NRG (▇▇▇▇▇▇) Cogen, L.L.C., The Chase Manhattan Bank and other
Banks as Lenders, The Chase Manhattan Bank as Agent and The Chase Manhattan Bank
as Collateral Agent, dated September 15, 1997, as amended by the Amendment and
Consent, dated December 10, 1997.
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
Section 6.1 Conditions to Each Party's Obligation to Effect
the Merger. The respective obligations of each party to effect the Merger shall
be subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. This Agreement shall have been duly
approved by the requisite vote of stockholders of the Company in accordance with
applicable law and the Certificate of Incorporation and By-laws of the Company.
(b) HSR and Other Approvals. (i) The waiting period (and any
extension thereof) applicable to the consummation of the Merger under the HSR
Act shall have expired or been terminated.
(ii) All authorizations, consents, orders,
declarations or approvals of, or filings with, or terminations or expirations of
waiting periods imposed by, any Governmental Entity, which the failure to
obtain, make or occur would have the effect of making the Merger or any of the
transactions contemplated hereby illegal or would have, individually or in the
aggregate, a Material Adverse Effect on Parent (assuming the Merger had taken
place), shall have been obtained, shall have been made or shall have occurred.
(c) Governmental Actions. No statute, rule, regulation,
legislation, interpretation, judgment, order or injunction shall be enacted,
entered, enforced, promulgated, amended or become applicable to this Agreement
or the Merger and no other action shall have been taken by any court or other
Governmental Entity other than the application to the Merger of the waiting
period under the HSR Act, that, in each case, would be reasonably expected to
result in any of the following effects: (i) challenging the acquisition by
Parent or Sub of any Company Common Stock, seeking to restrain or prohibit the
making or consummation of the Merger or any other Transaction, (ii) seeking to
prohibit or limit the ownership or operation by the Company, Parent or any of
their respective Subsidiaries of any material portion of the business or assets
of the Company, Parent or any of their respective Subsidiaries, or to compel the
Company, Parent or any of their respective Subsidiaries to dispose of or hold
separate any material portion of the business or assets of the Company, Parent
or any of their respective Subsidiaries, (iii) seeking to impose limitations on
the ability of Parent or Sub to acquire or hold, or exercise full rights of
ownership of, any shares of Company Common Stock, including the right to vote
the Company Common Stock purchased by it on all matters properly
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presented to the stockholders of the Company, (iv) seeking to prohibit Parent or
any of its Subsidiaries from effectively controlling in any material respect the
business or operations of the Company and its Subsidiaries in connection with
the Offer, the Merger or the Agreement, or (v) which otherwise is reasonably
likely to have a Material Adverse Effect on the Company.
Section 6.2 Conditions to Obligation of the Company to Effect
the Merger. The obligation of the Company to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following additional
conditions:
(a) Performance of Obligations. Each of Parent and Sub shall
have performed in all material respects each of its agreements contained in this
Agreement required to be performed on or prior to the Effective Time.
(b) Representations and Warranties. Each of the
representations and warranties of Parent and Sub contained in this Agreement
shall be true and correct, provided that such representations and warranties
shall be deemed to be true and correct unless the failure of such
representations and warranties to be so true and correct would have a Material
Adverse Effect on Parent or would prevent Parent from consummating the
transactions contemplated by the Agreement, in each case as if such
representations and warranties were made at the time of such termination (except
to the extent such representations or warranties expressly relate to an earlier
date).
(c) Certain Consents. In obtaining any approval or consent
required to consummate any of the transactions contemplated herein, no
Governmental Entity shall have imposed or shall have sought to impose any
condition, penalty or requirement which, in the reasonable opinion of the
Company, individually or in the aggregate, would have a Material Adverse Effect
on Parent (assuming the consummation of the Merger).
Section 6.3 Conditions to Obligations of Parent and Sub to
Effect the Merger. The obligations of Parent and Sub to effect the Merger shall
be subject to the fulfillment at or prior to the Effective Time of the following
additional conditions:
(a) Performance of Obligations. The Company shall have
complied with the provisions of Section 4.1 of the Agreement, and the Company
shall have complied with any agreement or covenant in any material respect of
the Company to be performed or complied with by it under the Agreement.
(b) Representations and Warranties. Each of the
representations and warranties of the Company contained in this Agreement shall
be true and correct, provided that such representations and warranties shall be
deemed to be true and correct unless the failure of such representations and
warranties to be so true and correct would have a Material Adverse Effect on the
Company or would prevent the Company from consummating the transactions
contemplated by the Agreement, in each case as if such representations and
warranties were made at the time of such termination (except to the extent such
representations or warranties expressly relate to an earlier date).
(c) Litigation. There shall not be instituted or pending any
suit, action or proceeding by any Governmental Entity or by any other Person
initiated as a result of this Agreement
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or any transactions contemplated hereby (i) challenging the acquisition by
Parent or Sub of any Company Common Stock, seeking to restrain or prohibit the
making or consummation of the Merger or any other Transaction, (ii) seeking to
prohibit or limit the ownership or operation by the Company, Parent or any of
their respective Subsidiaries of any material portion of the business or assets
of the Company, Parent or any of their respective Subsidiaries, or to compel the
Company, Parent or any of their respective Subsidiaries to dispose of or hold
separate any material portion of the business or assets of the Company, Parent
or any of their respective Subsidiaries, (iii) seeking to impose limitations on
the ability of Parent or Sub to acquire or hold, or exercise full rights of
ownership of, any shares of Company Common Stock, including the right to vote
the Company Common Stock purchased by it on all matters properly presented to
the stockholders of the Company, (iv) seeking to prohibit Parent or any of its
Subsidiaries from effectively controlling in any material respect the business
or operations of the Company and its Subsidiaries in connection with the Merger
or the Agreement, or (v) which otherwise is reasonably likely to have a Material
Adverse Effect on the Company.
(d) Material Adverse Effect. Since the date of the Agreement,
there shall not have occurred any event, change, effect or development that,
individually or in the aggregate, has had or would be reasonably expected to
have a Material Adverse Effect on the Company.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after any approval of
the matters presented in connection with the Merger by the stockholders of the
Company or Parent:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the Merger has not been effected on or prior to the
close of business on February 28, 2000 (the "Outside Date"); provided,
however, that the right to terminate this Agreement pursuant to this
Section 7.1(b)(i) shall not be available to any party whose material
and willful failure to fulfill any of its obligations contained in this
Agreement has been the cause of, or resulted in, the failure of the
Merger to have occurred on or prior to the Outside Date; provided;
however that if the sole reason that the Merger shall not have been
consummated by the Outside Date is the failure to hold the Stockholder
Meeting by February 28, 2000, the Outside Date shall be extended to
March 31, 2000;
(ii) if any court or other Governmental Entity having
jurisdiction over a party hereto shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the transactions contemplated by this Agreement
and such order, decree, ruling or other action shall have become final
and nonappealable; or
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(iii) if the stockholders of the Company fail to approve this
Agreement and the Merger at the Stockholder Meeting or any adjournment
or postponement thereof;
(c) by Parent if prior to the Effective Time, the Company's
Board of Directors or any committee thereof shall have withdrawn or modified in
a manner adverse to Sub or Parent its approval or recommendation of the
Transactions or shall have recommended or approved a Company Superior Proposal,
or shall have resolved to do any of the foregoing;
(d) by the Company, upon approval of its Board of Directors in
accordance with Section 4.2(b); provided, however, that any termination of this
Agreement pursuant to this Section 7.1(d) shall not be effective until the
Company has made full payment of all amounts provided under Section 5.4(b);
(e) by either Parent or the Company if the other party shall
have breached or failed to comply in any material respect with any of its
covenants or agreements other than Section 4.1 contained in this Agreement
required to be performed or complied with prior to the date of such termination,
which failure to comply has not been cured within thirty business days following
receipt by such other party of written notice from the non-breaching party of
such failure to comply or by Parent if the Company shall have breached or failed
to comply with Section 4.1; or
(f) by either Parent or the Company if there has been a breach
by the other party (in the case of Parent, including any material breach by Sub)
of any representation or warranty that individually or in the aggregate has a
Material Adverse Effect on the breaching party or would prevent such breaching
party from consummating the transactions contemplated by this Agreement.
The right of any party hereto to terminate this Agreement
pursuant to this Section 7.1 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any party hereto, any
Person controlling any such party or any of their respective officers or
directors, whether prior to or after the execution of this Agreement.
Section 7.2 Effect of Termination. In the event of termination
of this Agreement by either Parent or the Company, as provided in Section 7.1,
this Agreement shall forthwith become void and there shall be no liability
hereunder on the part of the Company, Parent, Sub or their respective officers
or directors (except for the last sentence of Section 5.3 and the entirety of
Sections 5.4, 8.6, 8.7, 8.9 and 8.10, which shall survive the termination);
provided, however, that nothing contained in this Section 7.2 shall relieve any
party hereto from any liability for any willful breach of a representation or
warranty contained in this Agreement or the breach of any covenant contained in
this Agreement.
Section 7.3 Amendment. This Agreement may be amended by the
parties hereto, by or pursuant to action taken by their respective Boards of
Directors, at any time before or after approval of the matters presented in
connection with the Merger by the stockholders of the Company, but, after any
such approval, no amendment shall be made which by law requires further approval
by such stockholders without such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
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Section 7.4 Waiver. At any time prior to the Effective Time,
the parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties of the other parties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein which may
legally be waived. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Non-Survival of Representations and Warranties.
The representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall terminate at the Effective Time.
Section 8.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally, one day after being delivered to an overnight courier or when sent
via facsimile (with a confirmatory copy sent by overnight courier) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent or Sub, to
Calpine Corporation
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, to
Cogeneration Corporation of America.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 8.3 Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
Section 8.4 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 8.5 Entire Agreement; No Third-Party Beneficiaries.
This Agreement, except and as provided in the last sentence of Section 5.3,
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. Except as provided pursuant to Section 5.8 and 5.10, this
Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 8.6 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
Section 8.7 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties.
Section 8.8 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other terms, conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic and legal substance of the transactions contemplated hereby are not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated by this
Agreement may be consummated as originally contemplated to the fullest extent
possible.
Section 8.9 Enforcement of this Agreement. The parties hereto
agree that
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irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific wording or were
otherwise breached. It is accordingly agreed that the parties hereto shall be
entitled to seek an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, such remedy being
in addition to any other remedy to which any party is entitled at law or in
equity.
Section 8.10 Consent to Jurisdiction. Each of the parties
hereto (a) consents to submit itself to the non-exclusive personal jurisdiction
of any Federal court located in the State of Delaware or any Delaware state
court in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, and (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
COGENERATION CORPORATION OF AMERICA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
CALPINE CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
CALPINE EAST ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
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EXHIBIT A
Form of Certificate of Incorporation
The following sentence shall be added at the end of Article Seventh of
the Company's Amended and Restated Certificate of Incorporation:
The provisions of this Article Seventh shall not apply to the transfer
of shares of the Corporation's common stock by NRG Energy, Inc. to
Calpine East Acquisition Corp. in contemplation of closing the merger
contemplated by the agreement and plan of merger dated August __, 1999
among the Corporation, Calpine Corporation and Calpine East Acquisition
Corp.