EXHIBIT 1
CONFIDENTIAL
STOCK AND ASSET PURCHASE AGREEMENT
dated as of January 16, 1998
by and among
ADVANCED ENERGY SYSTEMS, INC.
MATEP LLC
ADVANCED ENERGY SYSTEMS MANAGEMENT COMPANY, INC.
PRESIDENT AND FELLOWS OF HARVARD COLLEGE
COGENERATION MANAGEMENT COMPANY, INC.
and
MEDICAL AREA TOTAL ENERGY PLANT, INC.
TABLE OF CONTENTS
ARTICLE 1.
PURCHASE AND SALE OF SHARES AND ASSETS
1.1 Shares to be Sold . . . . . . . . . . . . . . . . . . . . . 8
1.2 Sale of Assets; Assignments . . . . . . . . . . . . . . . . 8
1.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . 9
1.4 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.5 Deliveries by Harvard . . . . . . . . . . . . . . . . . . . 10
1.6 Deliveries by CMC . . . . . . . . . . . . . . . . . . . . . 10
1.7 Deliveries by MATEP . . . . . . . . . . . . . . . . . . . . 11
1.8 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . 11
1.9 Deliveries by MATEP LLC . . . . . . . . . . . . . . . . . . 11
1.10 Capital Infusion Commitment . . . . . . . . . . . . . . . . 11
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF HARVARD, MATEP, AND CMC
2.1 Representations and Warranties of Harvard . . . . . . . . . 11
2.1.1 Corporate Organization . . . . . . . . . . . . . . 11
2.1.2 Authorization . . . . . . . . . . . . . . . . . . . 12
2.1.3 Capitalization . . . . . . . . . . . . . . . . . . 12
2.1.4 Ownership of Shares . . . . . . . . . . . . . . . . 12
2.1.5 Harvard Non-Contravention . . . . . . . . . . . . . 12
2.1.6 Harvard Required Filings and Consents . . . . . . . 13
2.1.7 Liquidated Damages . . . . . . . . . . . . . . . . 13
2.1.8 ▇▇▇▇-▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . 13
2.2 Representations and Warranties of MATEP . . . . . . . . . . 13
2.2.1 Corporate Organization . . . . . . . . . . . . . . . 14
2.2.2 Authorization . . . . . . . . . . . . . . . . . . . 14
2.2.3 MATEP Non-Contravention . . . . . . . . . . . . . . 14
2.2.4 MATEP Required Filings and Consents . . . . . . . . 15
2.2.5 Financial Statements . . . . . . . . . . . . . . . 15
2.2.6 Interim Change . . . . . . . . . . . . . . . . . . 15
2.2.7 Proceedings . . . . . . . . . . . . . . . . . . . . 15
2.2.8 No Breach . . . . . . . . . . . . . . . . . . . . . 16
2.2.9 Title to Assets . . . . . . . . . . . . . . . . . . 16
2.2.10 Contracts and Commitments . . . . . . . . . . . . . 16
2.2.11 Environmental Matters . . . . . . . . . . . . . . . 17
2.2.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . 20
2.2.13 Employee Benefit Plans . . . . . . . . . . . . . . 20
2.2.14 Labor and Employment . . . . . . . . . . . . . . . 22
2.2.15 Insurance . . . . . . . . . . . . . . . . . . . . . 23
2.2.16 Books and Records . . . . . . . . . . . . . . . . . 23
2.3 Representations and Warranties of CMC . . . . . . . . . . . 23
2.3.1 Corporate Organization . . . . . . . . . . . . . . 24
2.3.2 Authorization . . . . . . . . . . . . . . . . . . . 24
2.3.3 CMC Non-Contravention . . . . . . . . . . . . . . . 24
2.3.4 CMC Required Filings and Consents . . . . . . . . . 24
2.4 Electric Regulatory Matters . . . . . . . . . . . . . . . . 25
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF BUYER
AND MATEP LLC
3.1 Representations and Warranties of Buyer . . . . . . . . . . 25
3.1.1 Corporate Organization . . . . . . . . . . . . . . 25
3.1.2 Authorization . . . . . . . . . . . . .. . . . . . . 25
3.1.3 Non-Contravention . . . . . . . . . . . . . . . . . 26
3.1.4 Buyer Required Filings and Consents . . . . . . . . 26
3.1.5 Proceedings . . . . . . . . . . . . . . . . . . . . 26
3.1.6 Equity Commitment . . . . . . . . . . . . . . . . . 26
3.1.7 Acquisition of Shares for Investment . . . . . . . . 27
3.1.8 Access to Information; Reliance . . . . . . . . . . 27
3.2 Representations and Warranties of MATEP LLC . . . . . . . . 27
3.2.1 Corporate Organization . . . . . . . . . . . . . . . 27
3.2.2 Authorization . . . . . . . . . . . . . . . . . . . 27
3.2.3 Non-Contravention . . . . . . . . . . . . . . . . . 28
3.2.4 MATEP LLC Required Filings and Consents . . . . . .. 28
3.2.5 Proceedings . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 4.
COVENANTS
4.1 Conduct of the Business . . . . . . . . . . . . . . . . . . 29
4.2 [intentionally omitted] . . . . . . . . . . . . . . . . . . 29
4.3 Real Estate Matters . . . . . . . . . . . . . . . . . . . . 29
4.4 Regulatory Compliance . . . . . . . . . . . . . . . . . . . 30
4.5 Certain Transfers . . . . . . . . . . . . . . . . . . . . . 30
4.6 MATEP Charter . . . . . . . . . . . . . . . . . . . . . . . 31
4.7 Certain Employment and Employee Benefit Matters . . . . . . 31
4.8 WARN Act . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.9 Reasonable Efforts . . . . . . . . . . . . . . . . . . . . 34
4.10 Transition Plan; Access to Information . . . . . . . . . . 34
4.11 The MOAs . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.12 Electric Regulatory Matters . . . . . . . . . . . . . . . . 36
4.13 Acquisition of Shares for Investment . . . . . . . . . . . 36
4.14 Financial Covenants . . . . . . . . . . . . . . . . . . . . 36
4.15 Post-Closing Transactions . . . . . . . . . . . . . . . . . 37
ARTICLE 5.
CONDITIONS TO OBLIGATIONS OF THE PARTIES
5.1 Conditions to All Parties' Obligations . . . . . . . . . . 38
5.2 Conditions to Obligations of Harvard, CMC,
and MATEP . . . . . . . . . . . . . . . . . . . . . 38
5.3 Conditions to Obligations of Buyer and MATEP LLC . . . . . 39
ARTICLE 6.
TERMINATION
6.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . 41
6.2 Procedure for Termination . . . . . . . . . . . . . . . . . 41
ARTICLE 7.
EXTENT AND SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
7.1 General Indemnification of Buyer . . . . . . . . . . . . . . 42
7.2 Indemnification of Harvard . . . . . . . . . . . . . . . . . 42
7.3 Special Indemnity . . . . . . . . . . . . . . . . . . . . . 42
7.4 Provisions Regarding Indemnities . . . . . . . . . . . . . 43
7.5 Survival . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.6 Insurance Proceeds; Tax Benefits . . . . . . . . . . . . . 44
7.7 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 44
7.8 Post Closing: Indemnity Exclusive Remedy;
No Rescission . . . . . . . . . . . . . . . . . . . 45
7.9 Pre-Closing: Specific Performance . . . . . . . . . . . . . 45
ARTICLE 8.
TAXES
8.1 Preparation and Filing of Tax Returns Relating
to Pre-Closing Periods . . . . . . . . . . . . . . 45
8.2 Indemnity for Taxes . . . . . . . . . . . . . . . . . . . . 46
8.3 Access to Information . . . . . . . . . . . . . . . . . . . 47
8.3.1 Information . . . . . . . . . . . . . . . . . . . . 47
8.3.2 Preservation of Records . . . . . . . . . . . . . . 47
8.4 Tax Indemnification Procedures . . . . . . . . . . . . . . 47
8.4.1 Notice of Claims . . . . . . . . . . . . . . . . . 47
8.4.2 Control . . . . . . . . . . . . . . . . . . . . . . 47
8.4.3 Refunds . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 9.
GENERAL PROVISIONS
9.1 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . 48
9.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.3 Broker's and Finder's Fees . . . . . . . . . . . . . . . . . 48
9.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.5 Entire Agreement; Binding Effect . . . . . . . . . . . . . 49
9.6 Survival of Confidentiality . . . . . . . . . . . . . . . . 49
9.7 Applicable Law . . . . . . . . . . . . . . . . . . . . . . 49
9.8 Parties in Interest; No Third Party Beneficiary . . . . . . 50
9.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 50
9.10 Interpretation . . . . . . . . . . . . . . . . . . . . . . . 50
9.11 Announcements . . . . . . . . . . . . . . . . . . . . . . . 50
9.12 Waiver of Jury Trial and Certain Damages . . . . . . . . . . 50
Appendix - Definitions
EXHIBITS
Exhibit A Form of MATEP LLC Assignment Agreement
Exhibit B Form of Capital Infusion Agreement
Exhibit C Form of Harvard Assignment Agreement
Exhibit D Title Insurance Commitment
Exhibit E MATEP Charter
Exhibit F Form of Buyer Assignment Agreement
Exhibit G Form of MATEP Guarantee
Exhibit H Form of Users Estoppel Certificates
Exhibit I Form of Users Release
Exhibit ▇-▇ Form of Buyer General Counsel's Opinion
Exhibit J-2 Form of Le Boeuf, Lamb, Green & ▇▇▇▇▇▇, L.L.P Opinion
Exhibit K Form of Buyer's and MATEP LLC's Officer's
Certificate (bring down of representations)
Exhibit L Form of Buyer's Officer's Certificate
(corporate matters)
Exhibit M Form of MATEP LLC's Officer's Certificate
(corporate matters)
Exhibit N Form of Section 1445(b) Affidavit
Exhibit O Form of Harvard's, MATEP's, and CMC's
Officer's Certificate (bring down of representations)
Exhibit P Form of Harvard's Officer's Certificate
(corporate matters)
Exhibit Q Form of MATEP's Officer's Certificate
(corporate matters)
Exhibit R Form of CMC's Officer's Certificate (corporate
matters)
Exhibit S Form of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇, LLP Opinion
Exhibit T Form of Ropes & ▇▇▇▇ Opinion
Exhibit U Form of ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP
Environmental Opinion
Exhibit V Form of ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP
Corporate Opinion
SCHEDULES
1.2.2(ii) CMC Employee Benefit Agreements
1.2.2(iv) CMC Purchaser Contracts
1.2.2(v) CMC Agency Letter Agreements
1.2.3 Collective Bargaining Agreements
1.3(iii) Purchase Price Allocation
1.3(iv) Proration Schedule
2.1.6(i) Harvard Required Filings and Approvals
2.1.6(ii) Harvard Required Consents
2.2.4(i) MATEP Required Filings and Approvals
2.2.4(ii) MATEP Required Consents
2.2.7 Proceedings
2.2.10.1 Material Contracts
2.2.10.1(i) User Contracts
2.2.10.1(ii) Shared Savings Agreements
2.2.10.1(iii) Fuel Contracts
2.2.10.1(iv) Transmission Agreements
2.2.10.1(v) Leases
2.2.10.1(vi) Other Material Contracts
2.2.11.1 Environmental Matters
2.2.11.2 Off-Site Waste Treatment, Storage
and Disposal Locations
2.2.12.1 Taxes
2.2.13 Employee Plans
2.2.14 Labor and Employment
2.2.15 Insurance
2.3.4(i) CMC Required Filings and Approvals
2.3.4(ii) CMC Required Consents
3.1.3 Buyer Non-Contravention
3.1.4(i) Buyer Required Filings and Approvals
3.1.4(ii) Buyer Required Consents
3.2.3 MATEP LLC Non-Contravention
3.2.4(i) MATEP LLC Required Filings and Approvals
3.2.4(ii) MATEP LLC Required Consents
4.5.1 CMC Transferred Permits
4.5.4 Harvard Transferred Permits
4.5.5 Harvard Transferred Leases
4.7.3 Buyer Nonunion Employee Benefits
4.15(i) MATEP Employee Benefit Agreements
STOCK AND ASSET PURCHASE AGREEMENT
This Stock and Asset Purchase Agreement (this "Agreement") is made
and entered into as of the 16th day of January, 1998 by and among the
following parties:
Advanced Energy Systems, Inc., a Massachusetts corporation
("Buyer"), MATEP LLC, a Delaware limited liability company and wholly-owned
subsidiary of Buyer ("MATEP LLC"), and, solely for purposes of Section 4.15(i)
hereof, Advanced Energy Systems Management Company, Inc., a Massachusetts
corporation and wholly-owned subsidiary of Buyer ("Management Company"),
(Buyer, MATEP LLC, and MATEP after the Closing, being herein referred to as
the "Buyer Parties"); and
President and Fellows of Harvard College, an educational and
charitable corporation existing under the laws and the Constitution of The
Commonwealth of Massachusetts ("Harvard"), Cogeneration Management Company,
Inc., a corporation organized under Chapter 180 of the Massachusetts General
Laws and of which Harvard is the sole member ("CMC"), and Medical Area Total
Energy Plant, Inc., a corporation organized under Chapters 121A and 156 of the
Massachusetts General Laws and a wholly-owned subsidiary of Harvard ("MATEP,"
and prior to the Closing, together with Harvard and CMC, the "Seller
Parties"). Each of the Seller Parties is a charitable organization within the
meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
(the "Code"). The parties hereto agree as follows:
ARTICLE 1.
PURCHASE AND SALE OF SHARES AND ASSETS
1.1 Shares to be Sold. Upon the terms and subject to the
conditions contained herein, at the Closing (as hereinafter defined), Harvard
shall sell and transfer to Buyer, and Buyer shall purchase and accept from
Harvard, 3,000 shares of common stock, no par value, of MATEP (the "Shares"),
which collectively constitute and will constitute at the time of the Closing
all of the issued and outstanding shares of capital stock of MATEP.
1.2 Sale of Assets; Assignments. Upon the terms and subject to the
conditions contained herein, at the Closing:
1.2.1 Harvard shall sell and assign to Buyer and
Buyer shall purchase and assume from Harvard, all of Harvard's rights in and
obligations (a) under the utilities contracts between Harvard and the Users
(as defined below) set forth on Schedule 2.2.10.1(i) hereto (collectively, the
"User Contracts"), subject to the obligations of Harvard under the agreements
between Harvard and the Users regarding certain savings set forth on Schedule
2.2.10.1(ii) hereto (collectively, the "Shared Savings Agreements") and (b)
under the MOAs (as defined in Section 4.11 hereof) as provided in Section 4.11
hereof; provided, that at the Closing, Harvard shall assign the User
Contracts, the Shared Savings Agreements and, as provided in Section 4.11
hereof, the MOAs, to MATEP LLC rather than directly to Buyer, and MATEP LLC
shall assume Harvard's obligations thereunder, all as more fully provided for
in the assignment and assumption agreement among MATEP LLC, Harvard, and CMC,
in the form of Exhibit A hereto (the "MATEP LLC Assignment Agreement");
1.2.2 Subject to Section 2.3.4 hereof, CMC, as
Harvard's agent, shall transfer and assign to MATEP LLC, and MATEP LLC shall
accept and assume from CMC, all of CMC's rights in and obligations under the
following:
(i) the contracts set forth in Part A of Schedule
2.2.10.1(iii) between CMC and certain fuel suppliers (collectively, the "CMC
Fuel Contracts");
(ii) the employee benefit agreements set forth on
Schedule 1.2.2(ii) (collectively, the "CMC Employee Benefit Agreements");
(iii) all purchase orders issued by CMC for the
purchase of goods or services which are outstanding and not fully performed by
the parties thereto as of the Closing Date (collectively, the "Purchase
Orders");
(iv) the contracts between CMC and certain purchasers
set forth on Schedule 1.2.2(iv) hereto (collectively, the "CMC Purchaser
Contracts"); and
(v) the letter agreements set forth on Schedule
1.2.2(v) hereto (collectively, the "CMC Agency Letter Agreements");
in each case, except in the case of the CMC Purchaser Contracts, as more fully
provided for in the MATEP LLC Assignment Agreement.
1.2.3 CMC shall use its reasonable efforts to
transfer and assign to MATEP LLC, and MATEP LLC shall accept and assume from
CMC if so transferred and assigned, all of CMC's rights in and obligations
under the CMC collective bargaining agreements set forth on Schedule 1.2.3
hereto (collectively, the "Collective Bargaining Agreements").
1.3 Purchase Price.
(i) The total purchase price for the sales discussed in
Sections 1.1 and 1.2 shall be $146,270,000 (the "Purchase Price").
(ii) Buyer shall make such payment by wire transfer of
immediately available funds to the account or accounts specified by Harvard.
(iii) The Purchase Price shall be allocated between (a) the
Shares, and (b) the User Contracts and the Utilities MOA (as defined in
Section 4.11 hereof) as set forth on Schedule 1.3(iii) (the "Purchase Price
Allocation").
(iv) In addition, the Seller Parties and the Buyer Parties
shall allocate certain revenues and expenses (the "Prorated Amounts") as set
forth in Schedule 1.3(iv). The Prorated Amounts (as detailed in Schedule
1.3(iv)) shall be computed promptly upon receipt by the Seller Parties or the
Buyer Parties, as the case may be, of the payment or ▇▇▇▇ referenced in the
respective items on Schedule 1.3(iv), and payment shall be made promptly from
Buyer Parties to Seller Parties or from Seller Parties to Buyer Parties, as
appropriate, but in no event later than 10 days after receipt of such payment
or ▇▇▇▇.
(v) Except as expressly provided in this Agreement and the
MATEP LLC Assignment Agreement, the Buyer Parties are not assuming any
liabilities or obligations of CMC or Harvard in connection with the
transactions contemplated hereby.
1.4 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") will occur as promptly as practicable after the
satisfaction of the conditions specified in Article 5 of this Agreement. The
Closing will be held at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, One Beacon Street, 31st Floor, Boston, Massachusetts, at such time as the
parties shall mutually agree. The time at which the transactions contemplated
by Section 1.1 are completed is sometimes referred to herein as the "Effective
Time." The date of the Closing is sometimes referred to herein as the "Closing
Date."
1.5 Deliveries by Harvard. On the Closing Date, Harvard will
deliver or cause to be delivered the following:
1.5.1 to Buyer, stock certificates evidencing the Shares,
duly endorsed in blank or accompanied by appropriate stock powers duly
executed in blank, in proper form for transfer;
1.5.2 to Buyer, (a) stock books, stock ledgers, minute
books, and the corporate seal of MATEP and (b) to the extent the following
documents are in the possession of any of the Seller Parties, all land files,
abstracts, title opinions, maps, books of account, and all other records of
MATEP of every type and description that relate solely to the business of
MATEP, the User Contracts, or the Utilities MOA and are used in connection
with the business of MATEP (collectively, the "Books and Records"); provided,
however, that for a period of five years from the Closing Date Buyer shall not
destroy the following categories of Books and Records relating to the period
of time prior to Closing hereunder without first notifying Harvard of such
proposed destruction and affording Harvard the opportunity to take possession
of such Books and Records as are proposed to be destroyed: records relating to
tax filings; personnel records; payroll records; records relating to employee
benefit plans; corporate notes and minute books; filings and correspondence of
MATEP (and CMC, on MATEP's behalf) with government authorities; records needed
for compliance with environmental laws and regulations, including manifests
for hazardous materials; records relating to any claims, threatened claims, or
litigation; insurance policies and correspondence relating thereto; and
correspondence with attorneys; and further provided, that after the Closing
hereunder Harvard, during normal business hours and with reasonable notice,
shall have the right to review any such Books and Records and, at its own
expense, to make copies thereof;
1.5.3 to MATEP LLC, the MATEP LLC Assignment Agreement,
executed by Harvard; and
1.5.4 such other instruments or documents as may be
reasonably necessary to carry out the transactions contemplated by this
Agreement and to comply with the terms hereof.
1.6 Deliveries by CMC. On the Closing Date, CMC will deliver or
cause to be delivered the following:
1.6.1 to MATEP LLC, the MATEP LLC Assignment Agreement,
executed by CMC; and
1.6.2 such other instruments or documents as may be
reasonably necessary to carry out the transactions contemplated by this
Agreement and to comply with the terms hereof.
1.7 Deliveries by MATEP. On the Closing Date, MATEP will
deliver or cause to be delivered the following:
1.7.1 to Buyer, the written resignations of all of the
officers and directors of MATE P from their respective positions as officers
or directors, effective as of the Closing Date; and
1.7.2 such other instruments or documents as may be
reasonably necessary to carry out the transactions contemplated by this
Agreement and to comply with the terms hereof.
1.8 Deliveries by Buyer. On the Closing Date, Buyer will
deliver or cause to be delivered the following:
1.8.1 to Harvard, the Purchase Price; and
1.8.2 such other instruments or documents as may be
reasonably necessary to carry out the transactions contemplated by this
Agreement and to comply with the terms hereof.
1.9 Deliveries by MATEP LLC. On the Closing Date, MATEP LLC
will deliver or cause to be delivered the following:
1.9.1 to Harvard, the MATEP LLC Assignment Agreement,
executed by MATEP LLC; and
1.9.2 such other instruments or documents as may be
reasonably necessary to carry out the transactions contemplated by this
Agreement and to comply with the terms hereof.
1.10 Capital Infusion Commitment. Contemporaneously with the
execution and delivery of this Agreement by Buyer, Buyer's parent,
Commonwealth Energy System, has executed and delivered to Buyer the capital
infusion agreement in the form of Exhibit B hereto (the "Capital Infusion
Agreement"), and Buyer has delivered the assignment agreement in the form of
Exhibit C hereto to Harvard (the "Harvard Assignment Agreement")..
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF
HARVARD, MATEP, AND CMC
2.1 Representations and Warranties of Harvard. Harvard shall
not be deemed to have made any representation or warranty other than as
expressly made in this Article 2 and Section 9.3 hereof. For all purposes of
this Agreement, reference to the "knowledge" of Harvard or to matters of which
Harvard is "aware" shall mean the actual knowledge after reasonable
investigation or inquiry, or the knowledge which would have been obtained
after reasonable investigation or inquiry, of those persons employed by
Harvard in senior management positions having responsibility for the subject
matter in question. Subject to the foregoing and Section 2.4 hereof, Harvard
hereby represents and warrants to Buyer as follows:
2.1.1 Corporate Organization. Harvard is an educational
corporation incorporated on May 31, 1650 by act of the Colony of Massachusetts
Bay confirmed, as amended, in the Constitution of 1780 of The Commonwealth of
Massachusetts, constituting together with certain acts of the General Court of
The Commonwealth of Massachusetts and its predecessors, Harvard's charter (the
"Harvard Charter"). Harvard is a corporation validly existing under the laws
and the Constitution of The Commonwealth of Massachusetts and is a charitable
organization within the meaning of Section 501(c)(3) of the Code.
2.1.2 Authorization. Subject to the making or obtaining of
the Harvard Required Filings and Approvals and the Harvard Required Consents
referred to in Section 2.1.6 hereof, Harvard has the requisite corporate power
and corporate authority to enter into this Agreement and the MATEP LLC
Assignment Agreement and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the MATEP LLC
Assignment Agreement and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by Harvard, and no other
corporate proceedings on the part of Harvard are necessary to authorize the
execution and delivery of this Agreement or the MATEP LLC Assignment Agreement
or the transactions contemplated hereby or thereby. This Agreement and, when
executed and delivered, the MATEP LLC Assignment Agreement are or will be, as
the case may be, the valid and binding obligations of Harvard, enforceable
against Harvard in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, or other similar laws now or hereafter in
effect relating to the rights of creditors generally or by general principles
of equity (regardless of whether such enforcement is sought in a proceeding in
equity or at law).
2.1.3 Capitalization. The authorized capital stock of
MATEP consists solely of 10,000 shares of common stock, no par value, 3,000 of
which have been issued and constitute the Shares. The Shares are duly author-
ized for issuance, have been validly issued, and are fully paid, nonassess-
able, and free of any mortgage, pledge, security interest, encumbrance, lien,
claim, or charge of any kind or right of others of whatever nature ("Liens"),
preemptive rights, or other restrictions with respect thereto, except in
connection with MATEP's status as a corporation organized under Chapter 121A
of the Massachusetts General laws, as amended and the related requirement for
approval by the Boston Redevelopment Authority (the "BRA") and the Mayor of
the City of Boston under the Chapter 121A Agreement dated September 21, 1977,
for transfer of the Shares (the "BRA Approval"). There are no securities out-
standing that are convertible into or exercisable or exchangeable for shares
of capital stock of MATEP, and there are no outstanding options, rights,
contracts, warrants, subscriptions, conversion rights, or other agreements or
commitments (i) pursuant to which MATEP may be required to purchase, redeem,
issue, or sell any shares of its capital stock, or (ii) which in any way
relate to the issuance or voting of the capital stock of MATEP.
2.1.4 Ownership of Shares. Except for the BRA Approval,
Harvard has, and at the Closing, upon delivery by Buyer to Harvard of the
Purchase Price pursuant to Article 1 hereof, will sell and transfer to Buyer,
good and valid record and beneficial ownership of the Shares, free and clear
of any Liens.
2.1.5 Harvard Non-Contravention. Subject to the making or
obtaining of the Harvard Required Filings and Approvals and the Harvard
Required Consents referred to in Section 2.1.6 hereof, neither the execution
and delivery of this Agreement nor of the MATEP LLC Assignment Agreement by
Harvard, nor the consummation by Harvard of the transactions contemplated
hereby or thereby, nor the compliance by Harvard with any of the provisions
hereof or thereof, will (i) violate any provisions of the Harvard Charter as
currently in effect, (ii) violate any order, writ, injunction, decree, or, to
Harvard's knowledge, statute, rule, or regulation applicable to Harvard, or
any of its properties or assets, (iii) result in a violation of, or constitute
(with or without notice or lapse of time or both) a default under, the
Utilities MOA or the User Contracts or the Shared Savings Agreements set forth
on Schedules 2.2.10.1(i) and 2.2.10.1(ii), respectively, except (A) in the
case of clauses (ii) and (iii) of this Section 2.1.5, for such violations or
defaults that would not have a material adverse effect on the ability of
Harvard to consummate the transactions contemplated hereby, or that either
individually or in the aggregate, would not have a material adverse effect on
the results of operation, business, or financial condition of MATEP or on the
revenues generated pursuant to the User Contracts or the Utilities MOA (a
"Material Adverse Effect"), and (B) in the case of clause (ii) of this Section
2.1.5, Harvard warrants but does not make a representation with respect to
such non-contravention.
2.1.6 Harvard Required Filings and Consents. (i) Schedule
2.1.6(i) is a complete and accurate list of all filings, notices, or approvals
by Harvard with any court, arbitral tribunal, administrative agency, commis-
sion, or other governmental or regulatory authority or agency (a "Governmental
Entity") (collectively, "Harvard Required Filings and Approvals"), and (ii)
Schedule 2.1.6(ii) is a complete and accurate list of all non-governmental
permits, authorizations, consents, contract assignments, or notices
(collectively, "Harvard Required Consents"), that, in each case, Harvard must
obtain, provide, or complete in order to consummate the transactions
contemplated by this Agreement or the MATEP LLC Assignment Agreement, except
in the case of clauses (i) and (ii) of this Section 2.1.6, for such filings
and consents that would not have a material adverse effect on the ability of
Harvard to consummate the transactions contemplated hereby, or that either
individually or in the aggregate would not have a Material Adverse Effect.
2.1.7 Liquidated Damages. Harvard does not owe and has not
paid to any user under the User Contracts ("User") any "liquidated damages"
(as that term is described in each of the Third Amendments to the User
Contracts and the Utilities MOA (the "Third Amendments")). Harvard warrants
(but does not make a representation) that no liquidated damages would have
been payable had the Third Amendments been in effect during the period from
June 1, 1995 through October 31, 1997.
2.1.8 ▇▇▇▇-▇▇▇▇▇▇. Harvard warrants (but does not make a
representation) that none of the proceeds of the $86,230,000 Tax-Exempt Series
G-1 bonds issued as part of the $94,230,000 Massachusetts Health and
Educational Facilities Authority Revenue ▇▇▇▇▇, ▇▇▇▇-▇▇▇▇▇▇ Cancer Institute
Issue were used to finance the MATEP chillers located at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇.
2.2 Representations and Warranties of MATEP. MATEP shall not be
deemed to have made any representation or warranty other than as expressly
made in this Article 2 and Section 9.3 hereof. Without limiting the generality
of the foregoing and notwithstanding any other provisions in this Agreement,
MATEP shall not be deemed to have made any representation or warranty with
respect to (i) Environmental Laws, as defined in Section 2.2.11, except as
provided in Section 2.2.11; (ii) Taxes, as defined in Section 2.2.12, except
as provided in Section 2.2.12; or (iii) Employee Plans, as defined in Section
2.2.13, except as provided in Section 2.2.13. For all purposes of this
Agreement, reference to the "knowledge" of MATEP or CMC, as the case may be,
or to matters of which MATEP or CMC, as the case may be, is "aware" shall mean
the actual knowledge, after reasonable investigation or inquiry, or the
knowledge which would have been obtained after reasonable investigation or
inquiry, of (A) those persons employed by MATEP or CMC in the positions of
President, Vice President and General Manager, Engineering Manager, Accounting
Manager, Manager of Administration, Operations Manager, and Maintenance
Manager, or (B) those persons employed by Harvard in senior management
positions having responsibility for the subject matter in question, provided
that, with respect to any representation made in Section 2.2.13 relating to
any Multiemployer Plan, such investigation or inquiry shall be limited to
inquiries directed to individuals employed by MATEP, CMC, or Harvard. Subject
to the foregoing and Section 2.4 hereof and except as disclosed by MATEP to
Buyer in any Schedule hereto, MATEP hereby represents and warrants to Buyer as
follows:
2.2.1 Corporate Organization. MATEP is a Chapter 121A and
Chapter 156 corporation duly organized, validly existing, and in good standing
under the laws of The Commonwealth of Massachusetts, and has all requisite
corporate power and authority to own and lease the properties and assets it
currently owns and leases and to carry on its business as such business is
currently conducted. MATEP is a charitable organization within the meaning of
Section 501(c)(3) of the Code.
2.2.2 Authorization. Subject to the making or obtaining of
the MATEP Required Filings and Approvals and the MATEP Required Consents
referred to in Section 2.2.4 hereof, MATEP has the requisite corporate power
and corporate authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by Harvard and the Board of Directors of MATEP, and no other
corporate proceedings on the part of MATEP or Harvard are necessary to
authorize the execution and delivery of this Agreement or the transactions
contemplated hereby. This Agreement is the valid and binding obligation of
MATEP, enforceable against MATEP in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, or other similar laws now or hereafter in
effect relating to the rights of creditors generally or by general principles
of equity (regardless of whether such enforcement is sought in a proceeding in
equity or at law).
2.2.3 MATEP Non-Contravention. Subject to the making or
obtaining of the MATEP Required Filings and Approvals and the MATEP Required
Consents referred to in Section 2.2.4 hereof and the amendment of the articles
of organization of MATEP pursuant to Section 4.6, neither the execution and
the delivery of this Agreement by MATEP, nor the consummation by MATEP of the
transactions contemplated hereby, nor the compliance by MATEP with any of the
provisions hereof, will (i) violate any provisions of the articles of
organization or by-laws of MATEP as currently in effect, (ii) violate any
order, writ, injunction, decree, or, to MATEP's knowledge, statute, rule, or
regulation applicable to MATEP or any of its properties or assets, (iii)
result in a breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to a right of termination or amendment)
under, or result in the imposition of a Lien upon any property or assets of
MATEP under, the Material Contracts set forth on Schedule 2.2.10.1, except in
the case of clauses (ii) and (iii) of this Section 2.2.3, for such violations,
breaches or defaults that would not have a material adverse effect on the
ability of MATEP to consummate the transactions contemplated hereby, or that
either individually or in the aggregate, would not have a Material Adverse
Effect.
2.2.4 MATEP Required Filings and Consents. (i) Schedule
2.2.4(i) is a complete and accurate list of all filings, notices, or approvals
by MATEP with any Governmental Entity (collectively, the "MATEP Required
Filings and Approvals"), and (ii) Schedule 2.2.4(ii) is a complete and
accurate list of all nongovernmental permits, authorizations, consents, or
notices (collectively, "MATEP Required Consents"), that, in each case, MATEP
must obtain, provide, or complete in order to consummate the transactions
contemplated by this Agreement, except in the case of clauses (i) and (ii) of
this Section 2.2.4, for such filings and consents that would not have a
material adverse effect on the ability of MATEP to consummate the transactions
contemplated hereby, or that either individually or in the aggregate would not
have a Material Adverse Effect.
2.2.5 Financial Statements. The audited balance sheet of
MATEP and the audited statement of operations of MATEP for the fiscal year
ended June 30, 1997, in each case as delivered to Buyer prior to the date
hereof (the "Financial Statements"), are complete and correct in all material
respects and present fairly, in all material respects, the financial position
of MATEP as of the date and for the period indicated, and the results of its
operations and changes in its financial position for the year then ended, in
conformity with generally accepted accounting principles consistently applied.
2.2.6 Interim Change. Since June 30, 1997, MATEP has been
operating only in, and has not engaged in any material transactions other than
in, the ordinary course of business and in connection with the Material
Contracts set forth in Schedule 2.2.10.1. Since June 30, 1997, there has not
been a material adverse change in the business, financial condition, or
results of operations of MATEP, which change was not the result of an
industry-wide development affecting other companies in the businesses in which
MATEP is engaged. Since June 30, 1997, there has not been, (i) except for
ordinary wear and tear and scheduled or necessary repairs or replacements in
the ordinary course of business, consistent with past practice, any damage,
destruction, or loss to or of the properties and assets of MATEP in excess of
$100,000, whether or not covered by insurance; (ii) any issuance by MATEP of
any shares of capital stock or options, warrants, or other rights to acquire
any shares of capital stock; (iii) any sale, lease, or other disposition of
properties and assets of MATEP, (x) other than in the ordinary course of
business or (y) except in the case of steam, chilled water, or electricity,
having a value of $100,000 or more individually, or $1,000,000 or more in the
aggregate; (iv) any merger or consolidation of MATEP with any other person or
any acquisition by MATEP of the stock or business of another person; (v) any
borrowing of, or agreement to borrow, funds by MATEP; (vi) any mortgage,
pledge, or grant of a lien or security interest in any property of MATEP;
(vii) any material increase in the reserves or liabilities for Taxes set forth
or to be set forth prior to the Closing in the financial statements of MATEP;
or (viii) any commitment by MATEP to do any of the foregoing.
2.2.7 Proceedings. Except as set forth in Schedule 2.2.7, there
is no claim, action, suit, inquiry, proceeding, or investigation by or before
any Governmental Entity, pending or, to the knowledge of MATEP, threatened
against or involving MATEP or affecting any of the properties or assets of
MATEP or the User Contracts or the Utilities MOA that, if adversely
determined, could reasonably be expected to have a Material Adverse Effect or
that in any manner seeks to prevent, enjoin, or materially alter or delay the
transactions contemplated hereby. MATEP is not subject to any order, writ,
injunction, or decree that has or in the future could reasonably be expected
to have a Material Adverse Effect. MATEP has not received written notice that
it has been charged with a violation of, or, to the knowledge of MATEP, been
threatened with a charge of a violation of, any legal requirement relating to
any aspect of its business, which violation has not been satisfactorily
resolved or remains outstanding and which could reasonably be expected to have
a Material Adverse Effect.
2.2.8 No Breach.
2.2.8.1 MATEP is not in breach or in default (and no event
has occurred that with notice or lapse of time or both would constitute such a
breach or default) under its articles of organization or by-laws as currently
in effect, any order, writ, injunction, decree, or, to its knowledge, statute,
rule, or regulation, applicable to it or any of its properties or assets,
which breach, violation, or default could reasonably be expected to have a
Material Adverse Effect.
2.2.8.2 With respect to facilities owned by MATEP, MATEP
has, and to its knowledge MATEP is in material compliance with, all licenses,
permits, variances, exemptions, orders, approvals, and other authorizations of
all Governmental Entities having jurisdiction necessary in order to enable
MATEP to conduct its business as currently conducted, the lack of which (A)
would render legally impermissible the transactions contemplated by this
Agreement, or (B) could reasonably be expected to have a Material Adverse
Effect. None of MATEP, Harvard, or CMC has received from any Governmental
Entity any written notice of violation or non-compliance with respect to any
such permit, license, variance, exemption, order, approval, or other
authorization with respect to MATEP or the User Contracts or the Utilities MOA
that has not been satisfactorily resolved or that remains outstanding.
2.2.9 Title to Assets. Subject to the completion of the transfers
contemplated by Section 4.5.2, MATEP has good and valid title in the case of
all property other than real property (about which no representations are
being made herein), free and clear of all Liens (other than Liens for Taxes
(as hereinafter defined) not yet due and payable and minor imperfections of
title or minor encumbrances, if any, that in the aggregate do not (i)
materially detract from the value of its assets, or (ii) materially impair the
continued use by MATEP of the property subject thereto for the use being made
thereof), to the assets of MATEP which it purports to own, including all of
the properties and assets reflected in the Financial Statements and all of the
properties and assets purchased or otherwise acquired by MATEP since the date
of the Financial Statements and not since disposed of in the ordinary course
of business.
2.2.10 Contracts and Commitments.
2.2.10.1 Schedule 2.2.10.1 hereof sets forth a complete and
accurate list of the following contracts and agreements of MATEP, CMC, or
Harvard, as the case may be, relating to the business and operations of MATEP
(collectively, the "Material Contracts"):
(i) the User Contracts;
(ii) the Shared Savings Agreements;
(iii) certain fuel contracts set forth on Schedule 2.2.10.1(iii)
between CMC or MATEP and certain fuel suppliers (collectively, the "Fuel
Contracts");
(iv) certain transmission agreements, as set forth on Schedule
2.2.10.1(iv) (collectively, the "Transmission Agreements");
(v) certain leases, as set forth on Schedule 2.2.10.1(v)
(collectively, the "Leases"); and
(vi) certain other material agreements, as set forth on Schedule
2.2.10.1(vi) (collectively, the "Other Material Contracts").
2.2.10.2 Other than the Material Contracts listed on
Schedule 2.2.10.1 or as otherwise set forth in Section 2.2.10.3 or on Schedule
2.2.15, there is no written contract or agreement that involves aggregate
expenditures by, or payments to, MATEP of more than $100,000 per year or more
than $250,000 in total over the term of the contract, commitment, or
agreement. To the knowledge of MATEP, there are no existing defaults under any
of the Material Contracts by MATEP, CMC, or Harvard, as applicable, which
default could reasonably be expected to have a Material Adverse Effect. None
of MATEP, CMC, or Harvard, as applicable, has given to or received from any
other party to a Material Contract to which it is a party a written notice of
a default under the Material Contract to which it is a party.
2.2.10.3 Except as set forth on Schedule 2.2.10.1, (i)
there is no note or guarantee by MATEP of the obligations of another party
that will survive the Closing Date; (ii) there is no contract or arrangement
between Harvard and CMC or between Harvard and MATEP that will survive the
Closing Date or pursuant to which MATEP obtains the use of or access to
property that is essential to the operation of MATEP's business or perfor-
▇▇▇▇▇ of the User Contracts or the Utilities MOA, other than as indicated in
the Title Insurance Commitment (as defined in Section 4.3); (iii) there is no
note or similar debt instrument under which MATEP has outstanding indebtedness
that will survive the Closing Date; (iv) except as set forth in the Title
Insurance Commitment (as defined in Section 4.3 hereto) there is no lease
requiring payments of more than $100,000 per year or more than $250,000 over
the life of the lease related to MATEP; (v) there are no purchase orders or
similar agreements of $100,000 or more or any fuel supply agreements; and (vi)
to MATEP's knowledge, there are no oral contracts, commitments or agreements
that involve aggregate expenditures by, or payments to, MATEP of more than
$50,000 per year or more than $250,000 in total over the term thereof.
2.2.11 Environmental Matters.
2.2.11.1 Except as disclosed in Schedule ▇.▇.▇▇.▇:
(i) MATEP is in material compliance with all applicable
Environmental Laws (as hereinafter defined), except for non-compliance that
could not reasonably be expected to have a Material Adverse Effect, and MATEP
has and to the knowledge of MATEP is in material compliance with all licenses,
permits, and other authorizations of all Governmental Entities granted or
required pursuant to Environmental Laws;
(ii) MATEP has not received written notice of, nor, to the
knowledge of MATEP, is MATEP the subject of, any outstanding action, cause of
action, claim, investigation, demand, or notice by any person or entity
alleging liability under or non-compliance with any Environmental Law that, in
either case, could reasonably be expected to have a Material Adverse Effect
and that remains outstanding or unresolved;
(iii) MATEP has obtained and will maintain through the Closing
Date, and has taken or will take prior to the Closing Date all reasonable
efforts to facilitate the transfer of all governmental approvals and to
provide any governmental notifications that are required with respect to its
operation under any Environmental Law where the failure to obtain, maintain,
or facilitate the transfer of all such governmental approvals or to provide
such governmental notifications could reasonably be expected to have a
Material Adverse Effect; and
(iv) except where the following could not reasonably be expected
to have a Material Adverse Effect (either alone or in the aggregate), and
except as disclosed in Schedule ▇.▇.▇▇.▇:
(A) MATEP has not, and MATEP has no knowledge of any other
person who has, caused any release, threatened release, or disposal of any
Hazardous Material at or under MATEP's properties;
(B) MATEP has no knowledge that MATEP or any of MATEP's
properties is adversely affected by any release, threatened release, or
disposal of a Hazardous Material originating or emanating from any other
property;
(C) MATEP has not manufactured, used, generated, stored,
treated, transported, disposed of, arranged for disposal of, released, or
otherwise managed any Hazardous Material other than in compliance with
applicable Environmental Laws;
(D) MATEP has no knowledge that underground storage tanks
or surface impoundments presently exist or at any previous time existed upon,
in or under any properties of MATEP other than in compliance with applicable
Environmental Laws;
(E) MATEP: (a) has no liability for response, remedial, or
corrective action, natural resources damage, or any other harm or activity
pursuant to any Environmental Law at its properties or at any other property
and, to the knowledge of MATEP, has not engaged in any activity which would
give rise to such liability or harm; (b) is not subject to, has no notice or
knowledge of, and is not required to give any notice of any Environmental
Claim involving it or any of its properties; (c) has no knowledge of any
condition or occurrence at any of its properties or other properties that
could form the basis of an Environmental Claim against it; and (d) has not
received any written or oral request for information under Section 104 of the
Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. 9604) or comparable state laws;
(F) MATEP has not agreed to any restrictions on its
operations or the ownership, occupancy, use, or transferability of any of its
properties, except as required under current licenses, permits, and other
authorizations issued by Governmental Entities pursuant to any Environmental
Law and is not aware of any pending actions by a Governmental Entity to impose
any such restrictions; and
(G) MATEP has provided or otherwise made available to Buyer
any and all material audits, investigations, reports, records, data, site
assessments, or any other material documents in MATEP's possession or control
concerning MATEP's use of Hazardous Materials or compliance with any
Environmental Law.
2.2.11.2 To the knowledge of MATEP, Schedule 2.2.11.2
contains a true and complete list of all off-site waste treatment, storage,
and disposal locations used in the past and presently by MATEP for the off-
site treatment, storage, or disposal of Hazardous Material.
2.2.11.3 For purposes of this Section 2.2.11, the following
definitions shall apply:
"Environmental Claim" shall mean and include under any
Environmental Law any investigation, notice of violation, demand, allegation,
action, suit, injunction, judgment, order, consent decree, penalty, fine,
lien, proceeding, or claim (whether administrative, judicial or private in
nature) which could reasonably be expected to have a Material Adverse Effect
arising: (A) pursuant to, or in connection with, an actual or alleged
violation of any Environmental Law; (B) in connection with any Hazardous
Material or actual or alleged activity associated with any Hazardous Material;
(C) from any abatement, removal, remedial, corrective, or other response
action in connection with any Hazardous Material, Environmental Law, or other
order or directive of any federal, state, or local Governmental Entity; or (D)
from any actual or alleged damage, injury, threat, or harm to the health or
safety of the general public, natural resources, property damage, or the
environment.
"Environmental Law" shall mean any local, state or federal
statute, rule, regulation, order, code, directive, or ordinance and any
binding judicial or administrative interpretation thereof or requirement
thereunder pertaining to: (A) the regulation or protection of health, safety,
and the outdoor environment; (B) the conservation, management, development,
control, and/or use of natural resources and wildlife; (C) the protection or
use of surface water and ground water; (D) the management, manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal, release, threatened release, abatement, removal, remediation, or
handling of, or exposure to, any Hazardous Material; or (E) pollution or
contamination (including any release to ambient air, land, surface water, and
ground water); and includes, but is not limited to, the following federal
statutes (and their implementing regulations and the analogous state and local
statutes and regulations): the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. 9601 et seq.; the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984,
42 U.S.C. 6901 et seq.; the Federal Water Pollution Control Act of 1972, as
amended by the Clean Water Act of 1977, as amended, 33 U.S.C. 1251 et seq.;
the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. 2601 et
seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air
Act Amendments of 1990, 42 U.S.C. 7401 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. 1801 et seq.; and the Safe Drinking Water Act
of 1974, as amended, 42 U.S.C. 300(f) et seq.
"Hazardous Material" shall mean any substance, chemical, compound,
product, solid, gas, liquid, waste, by-product, pollutant, contaminant, or
material that is hazardous or toxic, and includes without limitation, asbestos
or any material containing asbestos, polychlorinated biphenyls, petroleum
(including crude oil or any fraction thereof), and any hazardous or toxic
waste, material, or substance regulated under the local, state, or federal
statute, rule, regulation, order, directive, or ordinance.
2.2.12 Taxes.
2.2.12.1 Except as set forth in Schedule 2.2.12.1, (A) for
all Taxable periods beginning on or after May 4, 1981 and ending on or before
the Closing Date, MATEP has qualified as an organization described in Section
501(c)(3) of the Code exempt from Federal income Taxes under Section 501(a) of
the Code, and to the knowledge of Harvard or MATEP, no facts or circumstances
exist that likely would adversely affect MATEP's status as a tax-exempt
entity; (B) MATEP has filed or caused to be filed (or has obtained extensions
with respect to filing) in a timely manner all material Tax Returns (as
hereinafter defined) required to be filed and has paid all Taxes shown to be
due and payable on such Tax Returns; (C) there are no material liens for Taxes
upon the assets or properties of MATEP, except for statutory Liens for Taxes
not yet due and payable; (D) no material claims have been asserted in writing
against MATEP by any Taxing Authority (as hereinafter defined) with respect to
any Taxes; (E) there is no material unpaid Tax deficiency, determination, or
assessment currently outstanding against MATEP; (F) neither MATEP nor Harvard
has received any written notice of deficiency or assessment from any Tax
Authority with respect to Taxes of MATEP; (G) the Tax Returns for MATEP are
not currently the subject of any audit by any Tax Authority; (H) there are no
outstanding agreements to extend the statutory period of limitations
applicable to any material Taxes or material deficiencies against MATEP; (I)
neither MATEP nor Harvard has been informed in writing that any Tax Authority
intends to audit, challenge, or assess Taxes with respect to any Tax Returns
filed by MATEP prior to the Closing Date; (J) no power of attorney has been
granted by MATEP or Harvard with respect to any material Taxes of MATEP; (K)
MATEP is not a member of any affiliated group for the purposes of filing any
Tax Return or paying any Taxes; and (L) MATEP has no liability for the Taxes
of any person other than itself and is not a party to any agreement providing
for the allocation or sharing of Taxes.
2.2.12.2 For purposes of this Agreement, "Taxes"
(including, with correlative meaning, the term "Tax") shall mean all taxes,
charges, fees, levies, or other assessments, including all net income, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, excise, estimated, severance,
stamp, occupation, property, or other taxes, customs duties, fees,
assessments, or charges of any kind whatsoever, together with any interest,
penalties, or additions to tax imposed with respect thereto by any taxing
authority, whether foreign or domestic (each, a "Tax Authority"). For purposes
of this Agreement, the term "Tax Return" includes all returns and reports
(including elections, declarations, disclosure, schedules, estimates, and
information returns) required to be filed with a Tax Authority relating to
Taxes.
2.2.13 Employee Benefit Plans.
2.2.13.1 Schedule 2.2.13 hereto contains a true and
complete list of all bonus, vacation pay, holiday pay, dependent care
assistance, pension, profit sharing, retirement, deferred compensation, excess
benefit, health insurance, life insurance, disability, severance pay, salary
continuation, and other similar retirement, welfare, or fringe benefit plans,
whether or not reduced to writing (the "Employee Plans"), in which any
employee of MATEP or CMC participates or participated at any time within the
six calendar year period immediately preceding the date of this Agreement or
under which any such employee has accrued and remains entitled to a benefit
and which are maintained (or to which contributions currently are made or
required to be made) by MATEP or by any other member of any controlled group
of corporations, group of trades, or businesses under common control, or
affiliated service group of which MATEP is also a member, which group would be
treated as a single employer under Section 414(b), (c), or (m) of the Code
(each, a "Benefit Plan Affiliate"). Each Employee Plan described in Section
3(1) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (other than any such plan that is a multiemployer plan within the
meaning of Section 3(37) of ERISA (a "Multiemployer Plan")) is herein referred
to as an "Employee Welfare Plan" and each Employee Plan (other than any such
plan that is a Multiemployer Plan) described in Section 3(2) of ERISA is
herein referred to as an "Employee Pension Plan." The Employee Welfare Plans
and Employee Pension Plans are herein referred to collectively as the "ERISA
Plans." With respect to the Employee Plans, other than Multiemployer Plans,
Harvard or MATEP has provided or made available to Buyer a copy of each such
Plan (including amendments and related funding agreements) that has been
reduced to writing, a description of each such Plan (including amendments)
that has not been reduced to writing, the current summary plan description for
each such Plan that is an ERISA Plan, the most recent Internal Revenue Service
("IRS") Determination Letter for each such Plan that is intended to be
qualified under Section 401(a) of the Code, and, where applicable, the three
most recent IRS Forms 5500 filed and/or actuarial valuation reports prepared
with respect to each such Plan.
2.2.13.2 Each Employee Pension Plan and, to the
knowledge of MATEP, each Employee Plan that is a Multiemployer Plan that is
intended to be qualified under Section 401(a) of the Code is so qualified.
Except for matters that could not reasonably be expected to have a Material
Adverse Effect, each ERISA Plan and, to the knowledge of MATEP, each Employee
Plan that is a Multiemployer Plan has been administered in accordance with its
terms and applicable law, including but not limited to ERISA and the Code, and
neither MATEP nor any Benefit Plan Affiliate has incurred any liability under
Title IV of ERISA (other than for the payment of Pension Benefit Guaranty
Corporation ("PBGC") premiums in the normal course) or Section 412 of the Code
with respect to any ERISA Plan, nor, to the knowledge of MATEP, has any event
occurred that would give rise to any such liability.
2.2.13.3 Except as set forth in Schedule 2.2.13, none
of the Employee Plans is, or has at any time within the five calendar year
period immediately preceding the date of this Agreement been, a Multiemployer
Plan, and MATEP has not incurred any withdrawal liability or liability under
Section 515 of ERISA in connection with any Multiemployer Plan which is
currently outstanding nor reasonably expects to incur such liability.
2.2.13.4 Except for matters that could not reasonably
be expected to have a Material Adverse Effect, there are no lawsuits or claims
(other than claims for benefits in the normal course and domestic relations
litigation involving the assignment of benefits) pending with respect to
benefits under any Employee Plan (other than a Multiemployer Plan) or, to the
knowledge of MATEP, under any Employee Plan that is a Multiemployer Plan. To
the knowledge of MATEP, there is no pending governmental audit or similar
investigation relating to any Employee Plan.
2.2.13.5 No event which constitutes a "reportable
event" (as defined in Section 4043 (c) of ERISA) for which the 30-day notice
requirement has not been waived by the PBGC has occurred with respect to any
ERISA Plan that is subject to Section 4043 (c) or, to the knowledge of MATEP,
with respect to any Employee Plan that is a Multiemployer Plan. Full payment
has been made of all amounts which MATEP was required under the terms of the
Employee Plans to have paid as contributions to such Plans on or prior to the
date hereof (excluding any amounts not yet due). No ERISA Plan which is
subject to Part 3 of Subtitle B of Title I of ERISA and, to the knowledge of
MATEP, no Employee Plan that is a Multiemployer Plan has incurred any
"accumulated funding deficiency" (within the meaning of Section 302 of ERISA
or Section 412 of the Code), whether or not waived. Neither MATEP nor any
other "disqualified person" or "party in interest" (as defined in Section 4975
(e) (2) of the Code and Section 3 (14) of ERISA, respectively) has engaged in
any transaction in connection with any ERISA Plan or, to the knowledge of
MATEP, with respect to any Employee Plan that is a Multiemployer Plan, that
could reasonably be expected to result in the imposition of a material penalty
pursuant to Section 502 (i) of ERISA, material damages pursuant to Section 409
of ERISA or a material tax pursuant to Section 4975 (a) of the Code. Except as
set forth in Schedule 2.2.13, MATEP does not maintain and has not maintained
any Employee Plan (other than an Employee Plan which is intended to be
"qualified" within the meaning of Section 401 (a) of the Code or is intended
to be described in Section 403 (b) of the Code) which provides benefits with
respect to employees or former employees following their termination of
service with MATEP (other than as required pursuant to Section 601 of ERISA).
Each Employee Plan subject to the requirements of Section 601 of ERISA has
been operated in substantial compliance therewith. No individual shall accrue
or receive additional benefits, additional service or accelerated rights to
payment of benefits as a direct result of the transactions contemplated by
this Agreement. With respect to each ERISA Plan and, to the knowledge of
MATEP, each Employee Plan that is a Multiemployer Plan which is subject to
Title IV of ERISA, as of the most recent actuarial valuation report prepared
for each such Plan, the aggregate present value of the benefits accrued under
the Plan did not exceed the aggregate fair market value of the assets
allocable thereto.
2.2.14 Labor and Employment.
2.2.14.1 CMC is a party to the Collective Bargaining
Agreements specified in Schedule 2.2.14. The International Union of Operating
Engineers Local 877 is the only labor organization that represents the
employees of CMC.
2.2.14.2 With respect to MATEP or CMC, to the
knowledge of MATEP and except as set forth in Schedule 2.2.14, (A) no labor
organization or group of employees has filed any representation or union
decertification petition or made any written demand for recognition; (B) no
union organizing campaigns are underway; (C) no labor strike, work stoppage,
or slowdown or other material labor dispute is underway; (D) neither MATEP nor
CMC has received written notice of any employment-related charge, complaint,
or grievance of any kind, pending or threatened in any forum, relating to an
alleged violation by MATEP or CMC, as the case may be, of any law, regulation,
or contract, which charge, complaint, or violation remains unresolved; and (E)
there are no unfair labor practice charges of any kind, pending or threatened
in any forum relating to an alleged violation by MATEP or CMC, as the case may
be, under the National Labor Relations Act.
2.2.14.3 (A) within a period of 90 days preceding the
date of this Agreement or the Closing Date, as the case may be, neither MATEP
nor CMC has implemented any "plant closing" or "mass layoff" of employees with
respect to MATEP or CMC as those terms are defined in the Worker Adjustment
Retraining and Notification Act of 1988, as amended (the "WARN Act"), or any
similar state or local law or regulation, and no layoffs that could implicate
such laws or regulations will be implemented before the Closing Date without
advance notification to Buyer; (B) MATEP and CMC have complied in all respects
with all legal requirements relating to employment, equal employment opportun-
ity, nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar taxes, occupational
safety and health, and plant closing, non-compliance with which (i) would
render legally impermissible the transaction contemplated by this Agreement or
(ii) could reasonably be expected to have a Material Adverse Effect; and (C)
neither MATEP nor CMC has been determined to be liable for the payment of any
compensation, damages, taxes, fines, penalties, or other amounts, however
designated, for failure to comply with any of the foregoing legal
requirements.
2.2.15 Insurance. Schedule 2.2.15 hereto sets forth a list
of all material insurance policies or programs of self-insurance naming MATEP,
CMC, or Harvard as insured, by which MATEP or any of its properties or assets
are covered against present losses, all of which are now in full force and
effect. Schedule 2.2.15 also sets forth for the period since November 1, 1994
(i) a summary of the loss experience under each policy; (ii) a statement
describing each claim under an insurance policy which sets forth the name of
the claimant, a description of the policy, and the amount and a brief
description of the claim; and (iii) a statement describing the loss experience
for (x) all workers compensation claims that were self-insured and exceed
$1,000 and (y) all other claims that were self-insured and exceed $100,000,
including the number and aggregate cost of such claims. Except as set forth on
Schedule 2.2.15, all such policies (i) to the knowledge of MATEP, are issued
by an insurer that is financially sound and reputable; (ii) to the knowledge
of MATEP, taken together, provide adequate insurance coverage for the assets
and operations of MATEP for all risks normally insured against by a person
carrying on the same business or businesses; (iii) are sufficient for
compliance with all legal requirements and contracts to which MATEP is a party
or by which it is bound and for compliance with the requirements of the User
Contracts; and (iv) do not provide for any retrospective premium adjustment or
other experience-based liability on the part of MATEP. MATEP has not received
any refusal of coverage or any notice that a defense will be afforded with
reservation of rights, or any notice of cancellation or any other indication
that any insurance policy is no longer in full force or effect or will not be
renewed or that the issuer of any policy is not willing or able to perform its
obligations thereunder. MATEP has paid all premiums due and has otherwise
performed all of its respective obligations under each policy, and MATEP has
given notice to the insurers of all claims that may be insured thereby. MATEP
is not transferring or assigning any insurance policy to the Buyer or any
Buyer Party.
2.2.16 Books and Records. To the knowledge of MATEP the
Books and Records identified in clause (a) of Section 1.5.2 that have been
made available to Buyer are complete and correct. At the Closing, the Books
and Records shall be located in the offices of MATEP.
2.3 Representations and Warranties of CMC. CMC shall not be
deemed to have made any representation or warranty other than as expressly
made in this Article 2 and Section 9.3 hereof. Subject to the foregoing and
Section 2.4 hereof, CMC hereby represents and warrants to Buyer as follows:
2.3.1 Corporate Organization. CMC is a Chapter 180
corporation duly organized, validly existing and in good standing under the
laws of The Commonwealth of Massachusetts, and has all requisite corporate
power and authority to own and lease the assets it currently owns and leases
and to carry on its business as such business is currently conducted. CMC is a
charitable organization within the meaning of Section 501(c)(3) of the Code
and has acted as Harvard's agent with respect to the operation of MATEP.
2.3.2 Authorization. Subject to the making or obtaining of
the CMC Required Filings and Approvals and the CMC Required Consents referred
to in Section 2.3.4 hereof, CMC has the requisite corporate power and
corporate authority to enter into this Agreement and the MATEP LLC Assignment
Agreement and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the MATEP LLC Assignment
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by Harvard and the Board of Directors of
CMC, and no other corporate proceedings on the part of CMC are necessary to
authorize the execution and delivery of this Agreement or the MATEP LLC
Assignment Agreement or the transactions contemplated hereby or thereby. This
Agreement and, when executed and delivered, the MATEP LLC Assignment Agreement
are or will be, as the case may be, the valid and binding obligations of CMC,
enforceable against CMC in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or hereafter in
effect relating to the rights of creditors generally or by general principles
of equity (regardless of whether such enforcement is sought in a proceeding in
equity or at law).
2.3.3 CMC Non-Contravention. Subject to the making or
obtaining of the CMC Required Filings and Approvals and the CMC Required
Consents referred to in Section 2.3.4 hereof, neither the execution and the
delivery of this Agreement nor of the MATEP LLC Assignment Agreement by CMC,
nor the consummation by CMC of the transactions contemplated hereby or
thereby, nor the compliance by CMC with any of the provisions hereof or
thereof, will (i) violate any provisions of the articles of organization or
by-laws of CMC as currently in effect, (ii) violate any order, writ,
injunction, decree, or, to CMC's knowledge, statute, rule, or regulation
applicable to CMC, or any of its properties or assets, (iii) result in a
violation of, or constitute (with or without notice or lapse of time or both)
a default under, the CMC Fuel Contracts, except in the case of clauses (ii)
and (iii) of this Section 2.3.3, for such violations or defaults that would
not have a material adverse effect on the ability of CMC to consummate the
transactions contemplated hereby, or that either individually or in the
aggregate, would not have a Material Adverse Effect.
2.3.4 CMC Required Filings and Consents. (i) Schedule
2.3.4(i) is a complete and accurate list of all filings, notices or approvals
by CMC with any Governmental Entity (collectively, the "CMC Required Filings
and Approvals"), and (ii) Schedule 2.3.4(ii) is a complete and accurate list
of all non-governmental permits, authorizations, consents, contract
assignments, or notices (collectively, "CMC Required Consents"), that, in each
case, CMC must obtain, provide, or complete in order to consummate the
transactions contemplated by this Agreement or the MATEP LLC Assignment
Agreement, except in the case of clauses (i) and (ii) of this Section 2.3.4,
for such filings and consents that would not have a material adverse effect on
the ability of CMC to consummate the transactions contemplated hereby, or that
either individually or in the aggregate would not have a Material Adverse
Effect.
2.4 Electric Regulatory Matters. Notwithstanding any express or
implied representation or warranty made by Harvard, MATEP, or CMC in this
Article 2 or anything to the contrary contained in this Agreement (provided
this Section 2.4 is not intended to amend the express representations made
with respect to environmental matters in Section 2.2.11 hereof), none of
Harvard, MATEP, or CMC makes any representation or warranty with respect to
any order, consent, approval, writ, injunction, decree, law, statute, rule, or
regulation to which Harvard, MATEP, or CMC or any of the respective facilities
or other assets of any of the foregoing may be subject, or to which Buyer,
MATEP LLC, or Management Company, or any of the respective facilities or
assets of any of the foregoing may be subject with respect to the transactions
contemplated by this Agreement, in each case, which relates to (a) the
generation, transmission, distribution, or sale of electricity, at wholesale
or retail, (b) the ownership, operation, transfer, or control of any facility
used for the generation, transmission, or distribution of electricity, or (c)
holding companies of electric utilities, including, without limitation, in
each case (i) the Public Utility Regulatory Policies Act of 1978, as amended
("PURPA"), (ii) the Federal Power Act, as amended ("FPA"), (iii) the Public
Utility Holding Company Act of 1935, as amended ("PUHCA"), (iv) Chapter 164 of
the Massachusetts General Laws, as amended ("Chapter 164"), (v) Chapter 164 of
the Acts of 1997 of the Massachusetts Legislature, and (vi) any other similar
federal or state law, statute, rule, or regulation (collectively, "Electric
Regulatory Requirements"). None of Harvard, MATEP, or CMC makes any
representation or warranty regarding the existence or consequences of any
violation of any Electric Regulatory Requirements by Harvard, MATEP, or CMC,
or any of their respective facilities or other assets, or by Buyer, MATEP LLC,
or Management Company, or with respect to any of their respective facilities
or assets, with respect to or in connection with the transactions contemplated
by this Agreement.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF BUYER
AND MATEP LLC
3.1 Representations and Warranties of Buyer. Buyer shall not be
deemed to have made any representation or warranty other than as expressly
made in this Article 3 and Section 9.3 hereof. For all purposes of this
Agreement, references to the "knowledge" of Buyer or to matters of which Buyer
is aware shall mean the actual knowledge, after reasonable investigation or
inquiry, or the knowledge which would have been obtained after reasonable
investigation or inquiry, of those persons employed by Buyer in senior
management positions having responsibility for the subject matter in question.
Except as disclosed to Harvard, CMC, and MATEP in any Schedule hereto, Buyer
hereby represents and warrants to Harvard, MATEP, and CMC as follows:
3.1.1 Corporate Organization. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of The
Commonwealth of Massachusetts.
3.1.2 Authorization. Subject to the making or obtaining of
the Buyer Required Filings and Approvals and the Buyer Required Consents
referred to in Section 3.1.4 hereof, Buyer has the requisite corporate power
and corporate authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Buyer, and no other corporate
proceedings on the part of Buyer are necessary to authorize the execution and
delivery of this Agreement or the transactions contemplated hereby. This
Agreement is the valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, or other similar laws now or hereafter in effect relating to the
rights of creditors generally or by general principles of equity (regardless
of whether such enforcement is sought in a proceeding in equity or at law).
3.1.3 Non-Contravention. Subject to the making or
obtaining of the Buyer Required Filings and Approvals and the Buyer Required
Consents referred to in Section 3.1.4 hereof, neither the execution and
delivery of this Agreement by Buyer, nor of the Harvard Assignment Agreement
or the Capital Infusion Agreement, nor the consummation by Buyer of the
transactions contemplated hereby or thereby, nor the compliance by Buyer with
any of the provisions hereof or thereof, will (i) violate any provision of the
articles of organization or by-laws of Buyer as currently in effect, (ii)
violate any order, writ, injunction, decree, or to Buyer's knowledge, statute,
rule, or regulation applicable to Buyer, or any of its properties or assets
or, (iii) result in a violation of, or constitute (with or without notice or
lapse of time or both) a default under, the contracts and agreements set forth
on Schedule 3.1.3, except in the case of clauses (ii) and (iii) of this
Section 3.1.3, for such violations or defaults that would not have a material
adverse effect on the ability of Buyer to consummate the transactions
contemplated hereby, or that either individually or in the aggregate, would
not have a Material Adverse Effect.
3.1.4 Buyer Required Filings and Consents. (i) Schedule
3.1.4(i) is a complete and accurate list of all filings, notices, or approvals
by Buyer with any Governmental Entity (collectively, "Buyer Required Filings
and Approvals"), and (ii) Schedule 3.1.4(ii) is a complete and accurate list
of all non-governmental permits, authorizations, consents or notices
(collectively, "Buyer Required Consents"), that, in each case, Buyer must
obtain, provide, or complete in order to consummate the transactions
contemplated under this Agreement, except in the case of clauses (i) and (ii)
of this Section 3.1.4, for such filings and consents that would not have a
material adverse effect on the ability of Buyer to consummate the transactions
contemplated hereby, or that either individually or in the aggregate would not
have a Material Adverse Effect.
3.1.5 Proceedings. There is no claim, action, suit,
inquiry, proceeding, or investigation by or before any Governmental Entity,
pending or, to the knowledge of Buyer, threatened against or involving Buyer
or affecting any of the properties or assets of Buyer that, if adversely
determined, could reasonably be expected to have a material adverse effect on
the ability of Buyer to consummate the transactions contemplated hereby or
that in any manner seeks to prevent, enjoin, or materially alter or delay any
transaction contemplated hereby. Buyer is not subject to any order, writ,
injunction, or decree that has or in the future could reasonably be expected
to have a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby.
3.1.6 Equity Commitment. Not less than 25% of the Purchase
Price will be paid by Buyer from equity funds available to Buyer and not from
borrowings by Buyer. Notwithstanding this Section 3.1.6 or any other provision
of this Agreement, in no event shall Buyer's obligations hereunder be
conditioned upon it or any Buyer Party obtaining debt financing.
3.1.7 Acquisition of Shares for Investment. Buyer is
acquiring the Shares for investment and not (i) as nominee or agent for any
other person, firm, corporation, or entity, or (ii) with a view toward, or for
sale in connection with, any distribution thereof, or (iii) with any present
intention of distributing or selling any of the Shares.
3.1.8 Access to Information; Reliance. (i) To Buyer's
knowledge, Buyer has been furnished by Harvard, MATEP, or CMC during the
course of this transaction with all information regarding MATEP and CMC that
Buyer has requested or that Buyer considers necessary or advisable to enable
it to make a decision concerning the purchase of the Shares; (ii) to its
knowledge, all documents that have been requested by Buyer have been made
available for inspection and review by Buyer or its counsel; (iii) Buyer has
been afforded the opportunity to ask questions of and receive answers from
duly authorized officers or other representatives of Harvard, MATEP, or CMC
concerning the terms and conditions of the sale of the Shares by Harvard to
Buyer; (iv) to its knowledge, any other additional information that Buyer has
requested has been provided; (v) Buyer is a sophisticated investor and capable
of evaluating the merits and risks of acquiring the Shares; (vi) Buyer is not
relying on any representation or warranty by Harvard, MATEP, or CMC, other
than as expressly made in Article 2, and subject to the restrictions on such
representations and warranties contained therein, and Section 9.3 hereof or in
any certificate, instrument, or other document to be delivered by Harvard,
MATEP, or CMC to Buyer at the Closing, as contemplated by Article 5 hereof;
and (vii) Buyer has performed extensive due diligence with respect to MATEP,
the User Contracts, the Utilities MOA, and related matters, and Buyer has made
an independent evaluation of the foregoing.
3.2 Representations and Warranties of MATEP LLC. MATEP LLC
shall not be deemed to have made any representation or warranty other than as
expressly made in this Article 3 and Section 9.3 hereof. For all purposes of
this Agreement references to the "knowledge" of MATEP LLC or the matters of
which MATEP LLC is "aware" shall mean the actual knowledge, after reasonable
investigation or inquiry, or the knowledge which would have been obtained
after reasonable investigation or inquiry of those persons employed by MATEP
LLC in senior management positions having responsibility for the subject
matter in question. Except as disclosed to Harvard, CMC, and MATEP in a
Schedule, MATEP LLC hereby represents and warrants to Harvard, MATEP and CMC
as follows:
3.2.1 Corporate Organization. MATEP LLC is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Delaware.
3.2.2 Authorization. Subject to the making or obtaining of
the MATEP LLC Required Filings and Approvals or the MATEP LLC Required
Consents referred to in Section 3.2.4 hereof, MATEP LLC has the requisite
corporate power and corporate authority to enter into this Agreement and the
MATEP LLC Assignment Agreement and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and the MATEP
LLC Assignment Agreement and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the members of MATEP LLC, and
no other corporate proceedings on the part of MATEP LLC are necessary to
authorize the execution and delivery of this Agreement or the MATEP LLC
Assignment Agreement or the transactions contemplated hereby or thereby. This
Agreement and, when executed and delivered, the MATEP LLC Assignment Agreement
are or will be, as the case may be, the valid and binding obligations of MATEP
LLC, enforceable against MATEP LLC in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to the rights of creditors generally or by
general principles of equity (regardless of whether such enforcement is sought
in a proceeding in equity or at law).
3.2.3 Non-Contravention. Subject to the making or
obtaining of the MATEP LLC Required Filings and Approvals or the MATEP LLC
Required Consents referred to in Section 3.2.4 hereof, neither the execution
and delivery of this Agreement nor of the MATEP LLC Assignment Agreement by
MATEP LLC, nor the consummation by MATEP LLC of the transactions contemplated
hereby or thereby, nor the compliance by MATEP LLC with any of the provisions
hereof or thereof, will (i) violate any provision of the operating agreement
of MATEP LLC as currently in effect, (ii) violate any order, writ, injunction,
decree, or to the knowledge of MATEP LLC, statute, rule, or regulation
applicable to MATEP LLC, or any of its properties or assets or, (iii) result
in a violation of, or constitute (with or without notice or lapse of time or
both) a default under, the contracts and agreements set forth on Schedule
3.2.3, except in the case of clauses (ii) and (iii) of this Section 3.2.3, for
such violations or defaults that would not have a material adverse effect on
the ability of MATEP LLC to consummate the transactions contemplated hereby,
or that either individually or in the aggregate, would not have a Material
Adverse Effect.
3.2.4 MATEP LLC Required Filings and Consents.
(i) Schedule 3.2.4(i) is a complete and accurate list of all filings, notices,
or approvals by MATEP LLC with any Governmental Entity (collectively, "MATEP
LLC Required Filings and Approvals"), and (ii) Schedule 3.2.4(ii) is a
complete and accurate list of all non-governmental permits, authorizations,
consents or notices (collectively, "MATEP LLC Required Consents"), that, in
each case, MATEP LLC must obtain, provide, or complete in order to consummate
the transactions contemplated under this Agreement or the MATEP LLC Assignment
Agreement, except in the case of clauses (i) and (ii) of this Section 3.2.4,
for such filings and consents that would not have a material adverse effect on
the ability of MATEP LLC to consummate the transactions contemplated hereby,
or that either individually or in the aggregate would not have a Material
Adverse Effect.
3.2.5 Proceedings. There is no claim, action, suit,
inquiry, proceeding, or investigation by or before any Governmental Entity,
pending or, to the knowledge of MATEP LLC, threatened against or involving
MATEP LLC or affecting any of the properties or assets of MATEP LLC that, if
adversely determined, could reasonably be expected to have a material adverse
effect on the ability of MATEP LLC to consummate the transactions contemplated
hereby or that in any manner seeks to prevent, enjoin, or materially alter or
delay any transaction contemplated hereby. MATEP LLC is not subject to any
order, writ, injunction, or decree that has or in the future could reasonably
be expected to have a material adverse effect on the ability of MATEP LLC to
consummate the transactions contemplated hereby.
ARTICLE 4.
COVENANTS
4.1 Conduct of the Business. Harvard, MATEP, and CMC agree
that, between the date of this Agreement and the Closing Date, except as (i)
otherwise contemplated by this Agreement, (ii) disclosed by Harvard to Buyer
in writing, or (iii) consented to by Buyer, which consent shall not be
unreasonably withheld or delayed:
4.1.1 MATEP shall, and Harvard shall cause MATEP to, use
its reasonable efforts to cause the business operations of MATEP to be
conducted in the ordinary course of business and consistent with past practice
and to preserve intact the organization of MATEP in all material respects;
4.1.2 MATEP and CMC shall not, and Harvard shall cause
MATEP and CMC not to; (i) sell or dispose of any of its respective assets
except in the ordinary course of business and not involving a value of more
than $100,000 individually, or $1,000,000 in the aggregate; (ii) except as may
be required by existing contracts, make any loans, advances (other than
advances in the ordinary course of business), or capital contributions to, or
investments in, any other person or entity; (iii) incur any indebtedness for
borrowed money or grant or suffer to exist any encumbrance on its assets; (iv)
except in the ordinary course of business and consistent with past practices,
enter into, assign, terminate, or amend in any material respect any employment
or consulting agreement to which MATEP or CMC is a party; (v) issue any equity
securities, or repurchase, redeem, or otherwise acquire any such securities or
make or propose to make any other change in its capitalization; (vi) merge
into or with or consolidate with any other entity or acquire all or
substantially all of the business or assets of any person; (vii) make any
change in its charter or by-laws, except as otherwise required by this
Agreement; (viii) purchase any securities of any person; (ix) permit an
increase in the base annual rate of compensation of any of the employees
referred to in Section 4.7 below, whose base annual rate of compensation is
$20,000 or more as of the date of this Agreement, other than in the ordinary
course of business, nor adopt any new benefit plan of any kind for any such
employees other than normal and customary bonuses paid to employees in the
ordinary course of business; (x) fail to maintain in full force and effect all
insurance policies referred to in Section 2.2.15 except that the Seller
Parties may replace such policies with other policies providing substantially
equivalent or greater coverage in the ordinary course of business; (xi) except
in the ordinary course of business and consistent with past practice, except
as contemplated by this agreement, or except as could not reasonably be
expected to have a Material Adverse Effect, enter into, assign, terminate or
amend in any material respect any existing permits, licenses, or approvals
relating to the operation of the MATEP facilities; or (xii) commit itself or
themselves to do any of the foregoing; and
4.1.3 Harvard shall not and shall not permit MATEP to,
solicit from any person any proposals or offers, or enter into any
negotiations or discussions relating to the disposition of all or
substantially all of MATEP's assets or business, the acquisition of the
Shares, the merger or consolidation of MATEP with any entity, the assignment
of the User Contracts, or the assignment of rights under the Utilities MOA.
4.2 [intentionally omitted]
4.3 Real Estate Matters. Prior to the date hereof, Harvard has
delivered to Buyer a title insurance commitment in the form attached hereto as
Exhibit D (the "Title Insurance Commitment"). Prior to the Closing, Harvard or
MATEP, as the case may be, shall take such actions as may be specified in the
Title Insurance Commitment that are to be performed by MATEP so as to enable
Old Republic to issue the title insurance policy referred to therein.
4.4 Regulatory Compliance.
4.4.1 Subject to the terms and conditions of this
Agreement:
(i) Harvard shall make or make application to obtain all
Harvard Required Filings and Approvals.
(ii) MATEP shall make or make application to obtain all
MATEP Required Filings and Approvals.
(iii) CMC shall make or make application to obtain all CMC
Required Filings and Approvals.
(iv) Buyer shall make or make application to obtain all
Buyer Required Filings and Approvals. In addition, and subject to the terms
and conditions of this Agreement, Buyer shall, as part of the Harvard Required
Filings and Approvals with the BRA, submit to the BRA such applications and
other information requested by the BRA in order to enable the BRA to determine
that Buyer will perform or cause to be performed the obligations and the
duties imposed by Chapter 121A of the Massachusetts General Laws, as amended
("Chapter 121A") with respect to the purchase of the Shares pursuant to the
Agreement. In addition, for a period of at least six months following the
Closing, Buyer shall not take any action which will cause the termination of
MATEP's status as a corporation organized under, and subject to the provisions
of, Chapter 121A.
(v) MATEP LLC shall make or make application to obtain all
MATEP LLC Required Filings and Approvals.
Each of the filings required in (i) through (v) above shall be
made as promptly as practicable in order to facilitate prompt consummation of
the transactions contemplated hereby. Each of the parties hereto will furnish
to the other parties such necessary information and reasonable assistance as
such other party may reasonably request in connection with the foregoing.
4.4.2 Subject to the Confidentiality Agreement, the
parties hereto will coordinate and cooperate with one another in exchanging
such information and providing such assistance as any other party may
reasonably request in connection with the foregoing and in seeking such
regulatory approvals and consents. The parties hereto each agree to respond
promptly to, and comply fully with, any request for additional information or
documents by a Governmental Entity, including, but not limited to, any request
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvement Act of 1976, as amended (the
"HSR Act"), Chapter 121A, and Chapter 180 of the Massachusetts General Laws,
as amended.
4.5 Certain Transfers. At or prior to the Closing:
4.5.1 CMC will transfer to MATEP, and MATEP will assume
from CMC, CMC's rights in and obligations under, or CMC will otherwise cause
to be reissued in the name of MATEP, the permits set forth on Schedule 4.5.1
hereto (the "CMC Transferred Permits");
4.5.2 If the Contract for Unit Dispatch and Non-Firm Power
Sales dated as of May 30, 1996 between Boston Edison Company and CMC, as
amended (the "BECO Contract") has not been cancelled, CMC will transfer to
MATEP, and MATEP will assume from CMC, CMC's rights in and obligations under
the BECO Contract.
4.5.3 Harvard will transfer to MATEP all equipment and
personal property owned by Harvard that is used by MATEP or CMC for the
business of MATEP and that is located on the premises of MATEP. Such equipment
and personal property shall remain on the premises of MATEP for the
unrestricted use thereof by MATEP;
4.5.4 Harvard will transfer to MATEP, and MATEP will
assume from Harvard, Harvard's rights in and obligations under, or Harvard
will otherwise cause to be reissued in the name of MATEP, the permits and
licenses set forth on Schedule 4.5.4 hereto (the "Harvard Transferred
Permits"); and
4.5.5 Harvard will transfer to MATEP, and MATEP will
assume from Harvard, Harvard's rights in and obligations under the leases set
forth on Schedule 4.5.5 hereto (the "Harvard Transferred Leases").
4.6 MATEP Charter. Prior to the Closing, MATEP will cause to be
filed with the Secretary of State of The Commonwealth of Massachusetts amended
and restated articles of organization of MATEP approved by the Boston
Redevelopment Authority, if required by Chapter 121A, which articles of
organization shall be effective at or prior to the Closing Date, substantially
in the form attached hereto as Exhibit E.
4.7 Certain Employment and Employee Benefit Matters.
4.7.1 Buyer agrees to offer employment (or cause MATEP or
another Buyer affiliate to offer employment) effective on the Closing Date to
all persons employed by CMC or MATEP immediately prior to the Closing Date,
including any such person absent from active service by reason of illness,
disability, or leave of absence whether paid or unpaid, who are covered by the
Collective Bargaining Agreements (the "Union Employees") on such terms and
with such pay and benefits as are provided for in the Collective Bargaining
Agreements if such Collective Bargaining Agreements are assigned to Buyer or
MATEP or another Buyer affiliate as of the Closing Date. Buyer agrees to
recognize or cause MATEP or another Buyer affiliate to recognize the
International Union of Operating Engineers Local 877 as the bargaining
representative of the Union Employees from and after the Closing Date. If such
Collective Bargaining Agreements and the Participating Agreement among CMC,
the International Union of Operating Engineers, and the Administrator for
Trustees of Central Pension Fund of the International Union of Operating
Engineers and Participating Employers (the "Participating Agreement") are
assigned to Buyer or MATEP or another Buyer affiliate as of the Closing Date,
Buyer agrees to assume or cause MATEP or another Buyer affiliate to assume
from and after the Closing Date all obligations of CMC under the Collective
Bargaining Agreements and the Participating Agreement and, if CMC or Harvard
so requests in writing prior to the Closing Date, to take such actions as may
be necessary under Section 4204 of ERISA to avoid a complete or partial
withdrawal from said Central Pension Fund. Buyer agrees to recognize the Union
Employees' service with CMC for all purposes under the Collective Bargaining
Agreements.
4.7.2 Buyer agrees to offer employment (or cause MATEP or
another Buyer affiliate to offer employment) to all persons, other than Union
Employees, who are employed by MATEP or CMC immediately prior to the Closing
Date, including any such person absent from active service by reason of
illness, disability, or leave of absence whether paid or unpaid (the "Nonunion
Employees"), which offer shall specify that Nonunion Employees who accept such
offer shall be employed by Buyer, MATEP, or another affiliate of Buyer, for a
period of not less than six months from and after the Closing Date, at salary
and wage rates not less than those paid to each such Nonunion Employee
immediately prior to the Closing Date, provided that the Nonunion Employee
accepts Buyer's (or MATEP's or another Buyer affiliate's) offer of employment
and agrees to waive any right he or she may have to immediate payment of
accrued vacation and sick leave, any right to severance pay, and any other
rights provided by Harvard's personnel policies. Nothing in the preceding
sentence shall preclude Buyer or MATEP or another Buyer affiliate from
terminating the employment of any Nonunion Employee for cause after the
Closing Date or from terminating the employment of any Nonunion Employee for
any reason, with or without cause, after six months from and after the Closing
Date, the employment of all such Nonunion Employees being "at will" except as
otherwise expressly provided in this Section 4.7.2.
4.7.3 For a period of not less than six months from and
after the Closing Date, Buyer (or MATEP or another Buyer affiliate) shall make
available to the Nonunion Employees and their spouses and dependents the
benefits set forth on Schedule 4.7.3 hereto and at a cost to the Nonunion
Employees that is no greater than the cost for benefits charged to Nonunion
Employees for the same or comparable benefits in effect immediately before the
Closing Date; provided, that the eligibility of a Nonunion Employee (and his
or her spouse and dependents) for such benefits from and after the Closing
Date shall be determined without regard to any preexisting condition, waiting-
period, actively-at-work, or similar exclusion or condition except for any
such exclusion or condition to which such Nonunion Employee is subject under
the applicable Employee Welfare Plans immediately prior to the Closing Date,
and Nonunion Employees shall receive credit under Buyer's plans toward
coinsurance and deductibles for any payments made by them during the calendar
year in which the Closing Date occurs under the applicable Employee Welfare
Plans.
4.7.4 Buyer (or, if applicable, MATEP or another Buyer
affiliate) shall, from and after the Closing Date, for purposes of its
retirement, welfare, medical, dental, life insurance, disability, severance,
vacation, and other similar plans or policies, take into account a Nonunion
Employee's service with CMC, MATEP, Harvard, and any of their Benefit Plan
Affiliates prior to the Closing Date as if it were service with Buyer (or, if
applicable, MATEP or another Buyer affiliate), for all purposes other than
computing the amount of benefits to which a Nonunion Employee is entitled
under a defined benefit pension plan.
4.7.5 From and after the Closing Date, Harvard shall be
liable for and shall indemnify MATEP and Buyer against all welfare-benefit and
fringe-benefit claims that were incurred prior to the Closing Date by the
Union Employees or Nonunion Employees (collectively, the "Employees") (or
their eligible spouses and dependents), to the extent not paid by an insurer
or other third party. Buyer shall be responsible for and shall indemnify CMC,
Harvard, and their Benefit Plan Affiliates against all welfare-benefit or
fringe-benefit claims of Employees (or their eligible spouses and dependents)
incurred on or after the Closing Date, to the extent not paid by an insurer or
other third party. For purposes of the foregoing, a claim will be deemed to
have been incurred when an individual is provided with medical, dental, or
other services that are covered expenses and give rise to the claim; provided,
that a claim for life insurance or similar death benefits will be deemed to
have been incurred at time of death. In addition, Harvard shall provide and
remain liable for and shall indemnify MATEP and Buyer against continuation of
coverage required under Sections 601 through 608 of ERISA and Section 4980B of
the Code ("COBRA") with respect to any Employee (and/or his or her eligible
spouses and dependents) as to whom the qualifying event (as defined in Section
603 of ERISA) occurred prior to the Closing Date. Buyer shall defend and
indemnify MATEP, CMC, Harvard, and their Benefit Plan Affiliates from any and
all claims, premiums, administrative fees, costs, and expenses incurred by
MATEP, CMC, Harvard, or any Benefit Plan Affiliate in connection with or
relating to COBRA continuation coverage provided to, or claimed by, any
Employee (and/or any dependent of any such Employee) with respect to a
qualifying event occurring on or after the Closing Date, including any such
coverage in respect of Employees whose group health plan coverage is
eliminated, reduced, curtailed, or otherwise modified on or after the Closing
Date. Harvard shall defend and indemnify Buyer and its affiliates from any and
all claims, premiums, administrative fees, costs, and expenses incurred by
Buyer and its affiliates in connection with or related to COBRA continuation
coverage provided to, or claimed by, any Employee (and/or any dependent of any
such Employee) with respect to a qualifying event occurring prior to the
Closing Date, including any such coverage in respect of employees whose group
health plan coverage is eliminated, reduced, curtailed, or otherwise modified
prior to the Closing Date.
4.7.6 Harvard shall on and after the Closing Date continue
to provide and be liable for, and shall indemnify MATEP and Buyer against,
long-term disability benefits in accordance with the terms of the applicable
Employee Welfare Plan to each individual whose claim for such long-term
disability benefits was incurred prior to the Closing Date. For purposes of
this Section 4.7.6, a long-term disability benefit claim shall be treated as
having been incurred prior to the Closing Date only if the disability arises
solely from an injury or illness that occurred prior to the Closing Date.
Harvard, on and after the Closing Date, shall continue to provide and be
liable for, and shall indemnify MATEP and Buyer against, workers' compensation
benefits in accordance with the terms of the applicable worker's compensation
program and applicable law to each individual who immediately prior to the
Closing Date was legally entitled to workers' compensation benefits from
Harvard, or any of its Benefit Plan Affiliates (whether or not such legal
entitlement has been established as of the Closing Date) arising solely from
an injury or illness that occurred prior to the Closing Date. Buyer shall be
responsible for, and shall indemnify CMC, Harvard, and their Benefit Plan
Affiliates against, all other long-term disability benefit claims and claims
for workers' compensation benefits incurred on or after the Closing Date. In
accordance with past practices of Harvard and its Benefit Plan Affiliates,
Buyer (or MATEP) shall make reasonable efforts to encourage and accommodate
the return to employment of Employees described in this Section 4.7.6.
4.7.7 Employees, other than Employees of MATEP or CMC who
decline Buyer's (or MATEP's or another Buyer affiliate's) offer of employment,
shall not be entitled to payment by CMC, MATEP, Harvard, Buyer, or any of
their Benefit Plan Affiliates for accrued vacation or sick leave or severance
pay as a result of the transactions provided for in this Agreement. In
addition to any vacation or sick leave earned under Buyer's (or MATEP's or
another Buyer affiliate's) plans, policies, or agreements after the Closing
Date, Buyer (or MATEP or another Buyer affiliate) shall credit each such
Employee referred to in the immediately preceding sentence with the number of
days of vacation and sick leave that are credited to the Employee under plans,
policies, and agreements of CMC, MATEP, Harvard, and their Benefit Plan
Affiliates immediately prior to the Closing Date. Upon termination of
employment with Buyer (or MATEP or another Buyer affiliate), an Employee shall
be entitled to receive payment for such vacation and sick days, other than
days previously used, to the extent provided by vacation and sick leave plans,
policies, and agreements of CMC, MATEP, Harvard, and their Benefit Plan
Affiliates as in effect throughout the six month period ending on the Closing
Date. For this purpose, an Employee shall be treated as using such vacation
and sick leave only after using in full the vacation and sick leave accrued
after the Closing Date under Buyer's or MATEP's or another Buyer affiliate's
vacation and sick leave plans, policies, or agreements.
4.7.8 In connection with any benefits that may be paid or
payable to an Employee following the Closing Date under any Employee Plan,
from and after the Closing Date, Buyer and MATEP shall cooperate with and
assist CMC, Harvard, and their Benefit Plan Affiliates at the sole cost and
expense of CMC, Harvard, or such Benefit Plan Affiliates in obtaining all
necessary consents and in providing to the Employee all necessary disclosures.
4.7.9 CMC shall remain liable for unemployment
compensation claims that arise prior to the Closing Date with respect to
Employees of CMC (and Harvard shall, or shall cause a designated subsidiary
to, indemnify and hold Buyer harmless with respect thereto) and shall have no
responsibility for any such claims arising from and after the Closing Date
(with respect to which Buyer shall indemnify and hold Harvard and CMC
harmless). CMC and its Benefit Plan Affiliates shall have no responsibility
for payment of unemployment compensation with respect to Employees of MATEP,
whether the claims of such Employees arise before or after the Closing Date,
and Buyer shall indemnify and hold Harvard and CMC harmless with respect
thereto.
4.8 WARN Act. Buyer shall not, nor shall it cause or permit
MATEP LLC, Management Company, or MATEP to, at any time prior to 90 days after
the Closing Date, without complying fully with the notice and other
requirements of the WARN Act, effectuate (a) a "plant closing" as defined in
the WARN Act affecting any site of employment or one or more facilities or
operating units within any site of employment of MATEP or any of its
subsidiaries, (b) a "mass layoff" as defined in the WARN Act affecting any
site of employment of MATEP or any of its subsidiaries, or (c) in each case,
any similar action under applicable state or local law requiring notice to
employees. This covenant shall survive the Closing.
4.9 Reasonable Efforts. Subject to the terms and conditions of
this Agreement, each of Buyer, MATEP LLC, Management Company, Harvard, CMC,
and MATEP agrees to use its respective reasonable efforts to effect the
Closing and otherwise consummate the transactions contemplated hereby.
4.10 Transition Plan; Access to Information.
4.10.1 Subject to the terms and conditions of this
Agreement, each of Buyer, MATEP LLC, Management Company, Harvard, and MATEP
agrees to cooperate to facilitate an orderly transition from Harvard, MATEP,
and CMC to Buyer, MATEP LLC, and Management Company with respect to the
ownership and operation of MATEP, including but not limited to forgiveness of
MATEP's notes and Buyer's obtaining new tax ID numbers.
4.10.2 For purposes of achieving an orderly transition,
between the date of this Agreement and the Closing Date, MATEP and CMC shall,
and Harvard shall cause MATEP and CMC to, (i) subject to applicable statutory
and regulatory requirements relating to privacy, give to Buyer and its
authorized representatives reasonable access to all MATEP's or CMC's books,
records, offices, and, subject to MATEP's or CMC's standard procedures
regarding safety and security, inspect all facilities and properties of MATEP
and CMC, and shall permit Buyer and its authorized representatives to complete
Buyer's "Phase 1" environmental review of the MATEP facility site; and (ii)
give access to Buyer to such financial and operating data and other
information with respect to the business and properties of MATEP and CMC as
Buyer may from time to time reasonably request; provided, however, that any
such investigation shall be conducted during normal business hours under the
supervision of MATEP or CMC personnel or their representatives and in such a
manner as not to interfere materially with the business and operations of
MATEP or CMC.
4.10.3 All information concerning Harvard, MATEP, or CMC,
whether written or oral, furnished or provided by Harvard, MATEP, or CMC or
their respective affiliates or representatives to Buyer or its respective
affiliates including, without limitation, Commonwealth Energy System, MATEP
LLC, and Management Company or representatives (whether furnished before or
after the date of this Agreement) shall be held subject to the Confidentiality
Agreement dated April 25, 1997, by and between Harvard and the Buyer (then
known as Commonwealth Energy Enterprises, Inc. (the "Confidentiality
Agreement").
4.11 The MOAs. With respect to the Memorandum of Agreement for
Utilities Contract, dated as of October 31, 1997, by and between University
Operations Services, as "Seller" (as defined therein) and Harvard Medical
School and Harvard School of Public Health, as the "User" (as defined therein)
(the "Utilities MOA"), and the Memorandum of Agreement for Shared Savings,
dated as of November 1, 1997, by and between University Operations Services,
as "Seller" (as defined therein) and Harvard Medical School and Harvard School
of Public Health, as the "User" (as defined therein) (the "Shared Savings
MOA", and together with the Utilities MOA, the "MOAs"):
(i) Harvard shall assign to MATEP LLC the rights of University
Operations Services as the "Seller" under the MOAs;
(ii) MATEP LLC shall assume the obligations of such Seller under
the MOAs arising after the Closing;
(iii) Harvard, on behalf of Harvard Medical School and Harvard
School of Public Health, shall retain its rights as "User"
under the MOAs arising after the Closing;
(iv) Harvard, on behalf of Harvard Medical School and Harvard
School of Public Health, shall retain its obligations as
User under the MOAs arising after the Closing; and
(v) the MOAs shall remain in full force and effect in
accordance with their terms,
all as more fully set forth in the MATEP LLC Assignment Agreement.
4.12 Electric Regulatory Matters.
4.12.1 Notwithstanding any covenant, agreement, or other
undertaking contained in this Agreement to the contrary, prior to the Closing,
MATEP reserves to itself and its affiliates the right to take all such actions
and omit to take all such actions, as MATEP and its affiliates in their
reasonable discretion deem necessary or appropriate in connection with comp-
liance by MATEP or its affiliates with any Electric Regulatory Requirement.
4.12.2 (i) MATEP or an affiliate shall give Buyer prior
written notice (an "Electric Regulatory Notice") at least 5 business days
before taking an action (or omitting to take an action) pursuant to Section
4.12.1.
(ii) Within 10 business days of receiving an
Electric Regulatory Notice, if Buyer reasonably objects to the proposed action
or inaction on the ground that it will have a Material Adverse Effect, Buyer
shall send a written objection to MATEP stating in detail the basis for its
objection and proposing any modifications it believes are necessary to avoid
such Material Adverse Effect (an "Objection").
(iii) If MATEP receives an Objection, MATEP or its
affiliate will consider it in good faith and may in its sole reasonable
discretion modify the proposed action or inaction to make it reasonably
acceptable to Buyer, or it may proceed as it originally intended.
(iv) If Buyer sends MATEP an Objection and MATEP
or its affiliates proceed pursuant to Section 4.12.2(iii) as it originally had
intended, then Buyer may terminate this Agreement pursuant to Section 6.1.4.
4.13 Acquisition of Shares for Investment. Buyer agrees that the
Shares may only be sold, transferred, offered for sale, pledged, hypothecated,
or otherwise disposed of if registered under applicable law (including the
Securities Act of 1933, as amended) or, if so sold, transferred, offered for
sale, pledged, hypothecated, or otherwise disposed of, pursuant to an
available exemption from all applicable registration requirements.
4.14 Financial Covenants.
4.14.1 During the five-year period following the Closing
Date, Buyer will cause MATEP not to pay any dividends or distributions on its
capital stock, or repurchase any shares of its capital stock, or make any
payments of principal on any indebtedness of MATEP or any of MATEP's subsid-
iaries to any of MATEP's corporate affiliates, if at the time of the proposed
dividend, distribution, repurchase or principal payment, or as a result
thereof, MATEP's Total Debt would exceed 75% of MATEP's Total Capitalization.
4.14.2 For purposes of this Section 4.14: "Total Debt"
shall mean the aggregate principal amount of all indebtedness of MATEP and its
subsidiaries for borrowed money other than unsecured short-term debt to meet
normal working capital requirements. "Total Capitalization" shall mean the sum
of (i) the aggregate amount of capital stock, paid-in-capital accounts and
surplus accounts of MATEP, plus (ii) the Total Debt of MATEP. "Corporate
affiliate" of MATEP shall mean any partnership, corporation, limited liability
company or business trust which directly or indirectly owns fifty percent or
more of the capital stock of MATEP.
4.14.3 During the five-year period following the Closing
Date, Buyer shall also cause MATEP and MATEP LLC to observe and perform all
financial covenants contained in the agreements, if any, entered into by MATEP
or MATEP LLC with lenders on or following the Closing Date with respect to
indebtedness, if any, incurred by MATEP or MATEP LLC to finance in part the
transactions contemplated by this Agreement (the "Debt Agreements"). This
covenant shall apply with respect to the financial covenants contained in the
original Debt Agreements (without regard to any amendments thereto or
termination thereof during such five-year period), and shall be an independent
obligation of Buyer, MATEP LLC and (following the Closing Date) MATEP to
Harvard, and may be enforced by Harvard against Buyer and MATEP or MATEP LLC
notwithstanding any actions or failures to act of the lenders under the Debt
Agreements. Any waiver of the requirements of such Debt Agreements by Harvard
shall be in writing and shall set forth with specificity the covenants with
respect to which such waiver applies and the terms and conditions (if any) of
such waiver. For purposes of this Section 4.14.3, the determination of the
agreements constituting the "Debt Agreements" shall be made by mutual
agreement of Buyer and Harvard in the exercise of their respective reasonable
judgments, it being the intention of the parties that the Debt Agreements be
only those agreements entered into by MATEP or MATEP LLC for purposes of debt
financing of the purchase by Buyer of the Shares and assets contemplated
hereby, and not any other agreements which may thereafter be entered into by
MATEP or MATEP LLC with respect to the incurrence of indebtedness of any
nature.
4.15 Post-Closing Transactions. On the Closing Date, but
immediately following the transactions contemplated in Sections 1.1, 1.2.1,
and 1.2.2:
(i) MATEP shall transfer to Management Company, and Management
Company shall accept from MATEP, all of MATEP's rights in and obligations
under the employee benefit agreements set forth on Schedule 4.15(i) (collec-
tively, the "MATEP Employee Benefit Agreements"), as more fully provided for
in the assignment and assumption agreement between MATEP and Management
Company (the "Buyer Assignment Agreement") in the form of Exhibit F hereto.
(ii) MATEP and MATEP LLC shall enter into a wholesale power
contract providing for the sale by MATEP to MATEP LLC of electricity from the
MATEP generating facility to enable MATEP LLC to provide electricity under the
User Contracts and the Utilities MOA.
(iii) Buyer shall contribute its membership interest in MATEP LLC
to MATEP.
(iv) Following Buyer's contribution of its membership interest
in MATEP LLC to MATEP, MATEP shall issue to each of the Users and to Harvard a
guarantee (the "MATEP Guarantee") in the form of Exhibit G hereto.
(v) MATEP LLC will enter into a user contract with Harvard on
the same terms and conditions as, and in substitution for, the Utilities MOA
and MATEP will issue the MATEP Guarantee to Harvard with respect to this user
contract.
(vi) The provisions of this section shall survive the Closing.
ARTICLE 5.
CONDITIONS TO OBLIGATIONS OF THE PARTIES
5.1 Conditions to All Parties' Obligations. The respective
obligations of all of the parties to consummate the transactions contemplated
hereby are subject to the satisfaction at or prior to the Closing of the
following conditions:
5.1.1 (i) Harvard shall have made or obtained all Harvard
Required Filings and Approvals, MATEP shall have made or obtained all MATEP
Required Filings and Approvals, CMC shall have made or obtained all CMC
Required Filings and Approvals, Buyer shall have made or obtained all Buyer
Required Filings and Approvals, MATEP LLC shall have made or obtained all
MATEP LLC Required Filings and Approvals, and all other governmental
authorizations and approvals required by this Agreement to be obtained or
given in connection with the transactions contemplated hereby shall have been
obtained or given in final and nonappealable form; and (ii) specifically, and
without limiting the generality of (i), (A) the waiting period under the HSR
Act shall have expired or been terminated, (B) the BRA and the Mayor of the
City of Boston, acting pursuant to the terms of Chapter 121A and Chapter 652
of the Acts of 1960 shall have approved the transfer from Harvard to Buyer of
the Shares, subject to and with the benefit of the rights and obligations
accorded to MATEP under Chapter 121A and all existing agreements with the City
of Boston regarding the Chapter 121A status of MATEP, and such approval shall
have become final, and the appeal period therefrom shall have expired without
an appeal having been taken therefrom, and (C) effective from and after the
Closing, the guarantee by Harvard contained in paragraph l(c) of the Contract
Required by Section 6A of Chapter 121A dated as of September 21, 1977 (the
"Guarantee"), shall have been terminated and Harvard shall have been fully and
unconditionally released by the BRA from the Guarantee.
5.1.2 no litigation, proceeding, investigation, or inquiry
shall be pending or threatened seeking to enjoin or prevent the consummation
of the transactions contemplated by this Agreement or to obtain damages or
other relief by reason of such consummation.
5.1.3 there shall have been an interim closing of the
books of MATEP as required by Section 8.1.2.
5.1.4 Harvard shall have assigned the rights of University
Operations Services as "Seller" under the Utilities MOA and the Shared Savings
MOA to MATEP LLC, and MATEP LLC shall have assumed the obligations of the
Seller under the MOAs, as required by Section 4.11.
5.1.5 each of Harvard and Buyer shall have received from
each of the Users estoppel certificates in the form attached as Exhibit H.
5.2 Conditions to Obligations of Harvard, CMC, and MATEP. The
obligations of Harvard, CMC, and MATEP to consummate the transactions
contemplated hereby are further subject to the satisfaction (or waiver) at or
prior to the Closing of the following conditions:
5.2.1 the representations and warranties of Buyer and
MATEP LLC contained in this Agreement shall be true and correct at the date
hereof and as of the Closing Date as if made at and as of such time, except
(i) for changes permitted or contemplated hereby, (ii) that representations
that are expressly made only as of a specific date, which representations
shall be true and correct as of such date, and (iii) for failures to be true
and correct that (in the aggregate) could not reasonably be expected to have a
material adverse effect on the ability of Buyer or MATEP LLC to perform their
obligations hereunder and under the User Contracts;
5.2.2 (i) Buyer shall have delivered to Harvard the
Purchase Price, as required by Section 1.8; (ii) MATEP LLC shall have
delivered to Harvard and CMC the MATEP LLC Assignment Agreement, executed by
MATEP LLC, as required by Section 1.9; (iii) Buyer shall have delivered to
Harvard a certificate evidencing the insurance requirement to be provided
under Section 11(a) of each of the Third Amendments; and (iv) Buyer and MATEP
LLC shall have delivered to Harvard, MATEP, and CMC such other documents
necessary to carry out the transactions contemplated by this Agreement;
5.2.3 no statute, rule, or regulation shall have been
enacted, entered, promulgated, or enforced by any court or Governmental Entity
that prohibits or restricts the consummation of the transactions contemplated
hereby other than those that would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect;
5.2.4 Harvard shall have received from each of the Users a
release substantially in the form of Exhibit I;
5.2.5 Harvard shall have received opinions of counsel from
the General Counsel of Buyer and from Le Boeuf, Lamb, Green & ▇▇▇▇▇▇, L.L.P.,
each dated the Closing Date, in the forms attached hereto as Exhibits J-1 and
J-2, and an opinion from ▇▇▇▇▇▇ & Dodge LLP in form and substance satisfactory
to Harvard; and
5.2.6 Harvard shall have received certificates, dated the
Closing Date, of an executive officer of Buyer and MATEP LLC certifying as to
the matters specified in Section 5.2.1., and as to certain corporate matters
in the forms attached hereto as Exhibits K, L, and M; and
5.2.7 Harvard shall have received the consent of the
Massachusetts Health and Education Facilities Authority to the transactions
contemplated hereby.
5.3 Conditions to Obligations of Buyer and MATEP LLC. The
obligations of Buyer and MATEP LLC to consummate the transactions contemplated
hereby are further subject to the satisfaction (or waiver) at or prior to the
Closing of the following conditions:
5.3.1 subject to Section 2.4 hereof, the representations
and warranties of Harvard, MATEP, and CMC contained in this Agreement shall be
true and correct at the date hereof and as of the Closing Date as if made at
and as of such time, except (i) for changes permitted or contemplated hereby,
(ii) for representations that are expressly made only as of a specific date,
which representations shall be true and correct as of such date, and (iii) for
failures to be true and correct that (in the aggregate) could not reasonably
be expected to have a Material Adverse Effect; provided that such failures did
not result from an industry-wide development affecting other companies in the
business in which MATEP is engaged;
5.3.2 subject to Section 4.12 hereof, (i) Harvard shall
have delivered to Buyer the stock certificates, the Books and Records, and the
MATEP LLC Assignment Agreement, executed by Harvard, as required by Section
1.5; (ii) CMC shall have delivered to MATEP LLC the MATEP LLC Assignment
Agreement, executed by CMC, as required by Section 1.6; (iii) MATEP shall have
delivered to Buyer the written resignations of MATEP officers and directors,
as required by Section 1.7; (iv) MATEP shall have received all governmental
approvals and provided any governmental notifications required with respect to
its operation under any Environmental Law, as required by Section
2.2.11.1(iii); (v) MATEP shall have ensured that the Books and Records shall
be located in the offices of MATEP at the time of closing, as required by
Section 2.2.16; (vi) Harvard or MATEP, as the case may be, shall have taken
such actions specified in the Title Insurance Commitment so as to enable Old
Republic to issue the title insurance policy, as required by Section 4.3;
(vii) each of the transfers contemplated by Section 4.5 shall have been
consummated; (viii) MATEP shall have filed its amended and restated articles
of organization with the Secretary of The Commonwealth of Massachusetts, as
required by Section 4.6; and (ix) Harvard, MATEP, and CMC shall have delivered
to Buyer and MATEP LLC such other documents necessary to carry out the
transactions contemplated by this Agreement;
5.3.3 no statute, rule, or regulation shall have been
enacted, entered, promulgated, or enforced by any court or Governmental Entity
that prohibits or restricts the consummation of the transactions contemplated
hereby other than those that could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect;
5.3.4 Harvard shall have provided or caused to be provided
to Buyer an affidavit, in the form attached as Exhibit N, and complying with
Section 1445 (b) of the Code, that Harvard is not a foreign person within the
meaning of Section 1445 (b) of the Code;
5.3.5 Buyer shall have received the approval of the
Federal Energy Regulatory Commission ("FERC") of the wholesale power contract
referred to in Section 4.15 (iii);
5.3.6 Buyer shall have received certificates, dated the
Closing Date, of an executive officer of Harvard, MATEP, and CMC certifying as
to the matters specified in Sections 5.3.1, and as to certain corporate
matters in the forms attached hereto as Exhibits O, P, Q, and R; and
5.3.7 Buyer shall have received from Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, Ropes & ▇▇▇▇, and ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP, opinions
dated the Closing Date, in the forms attached as Exhibits S, T, U, and V.
5.3.8 Harvard shall have cancelled that certain Note,
properly classified as equity for Federal Income Tax purposes and issued on
March 22, 1984, in the outstanding principal amount of $210 million between
MATEP and Harvard without the issuance of additional shares of MATEP stock.
5.3.9 (i) The Massachusetts Department of
Telecommunications and Energy (the "Department") shall have issued an initial,
interim or final order or orders with respect to Cambridge Electric Light
Company ("Cambridge") and Commonwealth Electric Company ("Commonwealth") that
approves a restructuring plan or plans for Cambridge and Commonwealth, which
plans provide inter alia, for direct access to end-use customers within the
service territories of Cambridge and Commonwealth, (ii) no appeal of such
order or orders shall be pending on the issue of direct access to end-use
customers within the service territories of Cambridge and Commonwealth, and
(iii) none of the Department, the Attorney General of the Commonwealth of
Massachusetts, or a court of competent jurisdiction shall have issued an
order, opinion, or judgment, as applicable, holding that Cambridge and
Commonwealth have not satisfied Section 1B(c) of the Restructuring Act.
ARTICLE 6.
TERMINATION
6.1 Termination. This Agreement may be terminated prior to the
Closing and the transactions contemplated hereby thereupon may be abandoned:
6.1.1 at any time, by mutual written consent of Buyer,
MATEP LLC, Harvard, MATEP, and CMC;
6.1.2 by Buyer or MATEP LLC on the one hand, or Harvard,
MATEP, or CMC, on the other hand, in the event that the conditions precedent
to their respective obligations hereunder contained in Article 5 have not been
satisfied or waived by eighteen months from the date of this Agreement; or
6.1.3 by Buyer or MATEP LLC on the one hand, or Harvard,
MATEP, or CMC, on the other hand, in the event any court of competent
jurisdiction in the United States or other Governmental Entity shall have
issued an order, decree, or ruling or taken any other action permanently
restraining, enjoining, or otherwise prohibiting the transactions contemplated
hereby, and such order, decree, ruling, or other action shall have become
final and nonappealable.
6.1.4 by Buyer or MATEP LLC if Harvard, MATEP, or CMC
takes an action pursuant to Section 4.12.2(iv) hereof.
6.2 Procedure for Termination. In the event of the termination
of this Agreement and the abandonment of the transactions contemplated hereby
pursuant to Section 6.1 hereof, written notice thereof shall forthwith be
given by the party so terminating to the other parties and this Agreement
shall terminate and the transactions contemplated hereby shall be abandoned,
without further action. If this Agreement is terminated pursuant to Section
6.1 hereof:
6.2.1 each party shall redeliver all documents, work
papers, and other materials of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof,
to the party furnishing the same, and all confidential information received by
Buyer or any of its affiliates, including, without limitation, MATEP LLC, and
Management Company with respect to Harvard, MATEP, or CMC shall be treated in
accordance with Section 4.2.2 hereof;
6.2.2 all filings, applications, and other submissions to
Governmental Entities made pursuant hereto shall, at the option of Harvard,
MATEP, or CMC and to the extent practicable, be withdrawn from the agency or
other person to which they are made; and
6.2.3 there shall be no liability or obligation hereunder
on the part of Buyer, MATEP LLC, Harvard, MATEP, CMC or any of their
respective directors, officers, employees, affiliates, controlling persons,
governing boards, agents, or representatives, except that Buyer or MATEP LLC,
on the one hand, or Harvard, MATEP, or CMC, on the other hand, may have
liability to the other if the basis of termination is a negligent or willful
failure by Buyer or MATEP LLC, or by Harvard, MATEP, or CMC, as the case may
be, to perform its obligations under this Agreement, and except that the
obligation to treat information in a confidential manner, as set forth in
Section 4.10.3 hereof, and the provisions of this Section 6.2 and Sections
9.2, 9.6, 9.7, 9.10, and 9.11 hereof shall survive any such termination.
ARTICLE 7.
EXTENT AND SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
7.1 General Indemnification of Buyer. Harvard agrees to
indemnify the Buyer Parties against, and hold the Buyer Parties harmless from,
any Buyer Indemnified Loss (as defined in Section 7.7); provided, however,
that the Buyer Parties shall not be entitled to assert rights of
indemnification under any section of this Article 7 for Buyer Indemnified
Losses unless and until the Closing occurs and unless and until the aggregate
of all such Buyer Indemnified Losses and amounts otherwise payable to the
Buyer Parties under Article 8 exceeds the Three Million Dollar Basket (as
defined in Section 7.7), it being understood that such Buyer Indemnified
Losses and amounts otherwise payable to the Buyer Parties under Article 8
shall accumulate until such time or times as the aggregate of all such Buyer
Indemnified Losses and amounts otherwise payable to the Buyer Parties under
Article 8 exceed the Three Million Dollar Basket, whereupon the Buyer Parties
shall be entitled to indemnification hereunder for any such Buyer Indemnified
Losses and amounts otherwise payable to the Buyer Parties under Article 8 in
excess of the Three Million Dollar Basket. Notwithstanding any other language
in this Agreement, the maximum aggregate of all Buyer Indemnified Losses for
which the Buyer Parties collectively shall be entitled to indemnification in
connection with the transactions contemplated hereunder, for all purposes
whatsoever, and payments to the Buyer Parties collectively under Article 8,
shall not exceed the Aggregate Indemnity Cap (as defined in Section 7.7). The
Aggregate Indemnity Cap shall apply to any indemnity obligations of Harvard,
CMC, and MATEP taken together under the provisions of this Agreement
referenced in the preceding sentence. Solely for purposes of determining
whether the Buyer Indemnified Losses exceed the Three Million Dollar Basket
and for determining whether the Aggregate Indemnity Cap has been reached, the
term Buyer Indemnified Loss shall include any amounts payable to the Buyer
Parties collectively pursuant to Article 8.
7.2 Indemnification of Harvard. The Buyer Parties agree jointly
and severally to indemnify Harvard against, and hold Harvard harmless from,
any Harvard Indemnified Loss (as defined in Section 7.7); provided, however,
that the Buyer Parties' obligation under this Article 7 for Harvard
Indemnified Losses shall be subject to the Three Million Dollar Basket and
shall be available only after the Closing occurs; and provided, further, that
the maximum aggregate of all Harvard Indemnified Losses for which Harvard
shall be entitled to seek indemnification hereunder shall not exceed an amount
equal to the Aggregate Indemnity Cap.
7.3 Special Indemnity.
(a) Subject to Section 7.1 and 7.3(c) hereof, Harvard agrees to
indemnify the Buyer Parties against, and hold the Buyer Parties harmless from,
any loss, damage or expense (including reasonable attorneys' fees) sustained
by the Buyer Parties, their respective officers or directors arising out of or
resulting from the invalidity or unenforceability of a User Contract (and,
following the Closing Date, of the Utilities MOA) or any part thereof, which
invalidity or unenforceability is due solely to (i) the failure of Harvard,
MATEP, or CMC or any of their respective affiliates to comply with any
Electric Regulatory Requirement, whether such failure occurs before the
Closing or in connection with the transactions contemplated by this Agreement
prior to the Closing, (ii) the failure by Harvard to obtain a required consent
or approval, if any, from the Users for any or all of the transactions
contemplated by this Agreement prior to the Closing, or (iii) any "Event of
Default" (as defined in each respective User Contract) by Harvard in the
performance of its obligations under a User Contract prior to the Closing.
(b) Subject to Section 7.1 and 7.3(c) hereof, Harvard agrees to
indemnify the Buyer Parties against and hold the Buyer Parties harmless from,
any loss, damage, or expense (including reasonable attorneys' fees) sustained
by the Buyer Parties or their respective officers or directors arising solely
out of or resulting solely from the failure of Harvard, MATEP, or CMC to
comply with any Electric Regulatory Requirement, whether such failure occurs
before the Closing or in connection with the transactions contemplated by this
Agreement prior to the Closing, including any loss, damage, or expense
(including reasonable attorneys' fees) resulting from a typographical error in
Section 188 of the Electric Restructuring Act in the definition of "Electric
company", wherein the seventh line thereof, the words "a distribution company"
inadvertently appear instead of the words "an electric company".
(c) The special indemnity obligation described in this Section
7.3 (the "Special Indemnity") (i) is subject to the Three Million Dollar
Basket, (ii) shall not take effect unless and until the Closing occurs, (iii)
shall survive the Closing for a period of three years from the Closing, and
(iv) shall be subject to the Aggregate Indemnity Cap.
7.4 Provisions Regarding Indemnities. The party or parties
being indemnified are referred to herein as the "Indemnified Party," and the
indemnifying party is referred to herein as the "Indemnifying Party." The
Indemnified Party shall promptly notify the Indemnifying Party in reasonable
detail outlining the basis for indemnification with reference to the
applicable provision(s) of this Agreement, of any claim, demand, action, or
proceeding for which indemnification will be sought under this Agreement, and
if such claim, demand, action, or proceeding is a third-party claim, demand,
action, or proceeding, the Indemnifying Party will have the right at its
expense to assume the defense thereof using counsel reasonably acceptable to
the Indemnified Party. The Indemnified Party shall have the right to
participate, at its own expense, with respect to any such third-party claim,
demand, action, or proceeding. In connection with such third-party claim,
demand, action, or proceeding, the parties shall cooperate with each other and
provide each other with access to relevant books and records in their
possession. No such third-party claim, demand, action, or proceeding shall be
settled without the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed. If a firm written offer
is made to settle any such third-party claim, demand, action, or proceeding
and the Indemnifying Party proposes to accept such settlement and the
Indemnified Party refuses to consent to such settlement, then: (i) the
Indemnifying Party shall be excused from, and the Indemnified Party shall be
solely responsible for, all further defense of such third-party claim, demand,
action, or proceeding; (ii) the maximum liability of the Indemnifying Party
relating to such third-party claim, demand, action, or proceeding shall be the
amount of the proposed settlement if the amount thereafter recovered from the
Indemnified Party on such third-party claim, demand, action, or proceeding is
greater than the amount of the proposed settlement; and (iii) the Indemnified
Party shall pay all attorneys' fees and legal costs and expenses incurred
after rejection of such settlement by the Indemnified Party, but if the amount
thereafter recovered by such third party from the Indemnified Party is less
than the amount of the proposed settlement, the Indemnified Party shall be
reimbursed by the Indemnifying Party for such attorneys' fees and legal costs
and expenses up to a maximum amount equal to the difference between the amount
recovered by such third party and the amount of the proposed settlement.
7.5 Survival. The representations and warranties and
indemnities set forth in this Agreement (other than the indemnities set forth
in Sections 4.7.5, 4.7.6, 4.7.9, and 7.3) and in any certificate or instrument
delivered in connection herewith shall survive the Closing for eighteen months
after the Closing Date, following which date none of the parties may bring any
action or present any claim for a breach of such representations and warran-
ties or for indemnification; provided, that there shall be no termination of
any representation or warranty or indemnity as to which a bona fide claim has
been asserted if the Indemnifying Party has received notice of such claim
prior to the first anniversary of the Closing Date. Notwithstanding any other
language in this Agreement, the representations and warranties (and any
indemnification obligation consequent to any breach thereof) set forth in
Section 2.2.12 shall not survive the Closing, the representations, warranties,
and indemnification obligations set forth in Sections 2.2.13, 4.7.5, 4.7.6,
and 4.7.9 shall survive the Closing until the expiration of the applicable
statutes of limitations, and the representations and warranties set forth in
Section 2.2.11 (and any indemnification obligations consequent to any breach
thereof), to the extent and only to the extent that such representations and
warranties pertain to the off-site treatment, storage, or disposal of
Hazardous Material by MATEP, shall survive the Closing for a period of five
years after the Closing Date.
7.6 Insurance Proceeds: Tax Benefits. In determining the amount
of any loss, liability or expense for which any party is entitled to
indemnification under this Article 7 or under Section 4.7.5, 4.7.6, or 4.7.9,
the gross amount thereof will be reduced by any insurance proceeds and tax
benefits realized or to be realized by such party. Such correlative insurance
benefit shall be net of any insurance premium that becomes due as a result of
such claim.
7.7 Definitions. For purposes of this Article 7 the following
definitions shall apply:
"Harvard Indemnified Loss": Any loss, damage, or expense
(including reasonable attorneys' fees) sustained by Harvard, MATEP, or CMC,
arising out of or resulting from any inaccuracy in or breach of any of the
representations, warranties or covenants made by Buyer or MATEP LLC in this
Agreement; provided, that "Harvard Indemnified Loss" shall not include any
amounts payable to Harvard under Section 4.7.5, 4.7.6, or 4.7.9 hereof.
"Buyer Indemnified Loss": Any loss, damage, or expense (including
reasonable attorneys' fees) sustained by Buyer, or MATEP LLC arising out of or
resulting from any inaccuracy in or breach of any of the representations,
warranties or covenants made by Harvard, MATEP or CMC in this Agreement;
provided, that "Buyer Indemnified Loss" shall not include any amounts payable
to Buyer under Section 4.7.5, 4.7.6, or 4.7.9 hereof.
"Three Million Dollar Basket": The first $3,000,000 of Harvard
Indemnified Loss or the first $3,000,000 of Buyer Indemnified Loss, as the
case may be.
"Aggregate Indemnity Cap": An amount equal to one-half of the
Purchase Price, this is the maximum amount of Harvard Indemnified Loss or
Buyer Indemnified Loss, as the case may be, which may be claimed by Harvard,
MATEP, or CMC or by Buyer or MATEP LLC respectively, in connection with this
Agreement.
7.8 Post-Closing: Indemnity Exclusive Remedy; No Rescission.
After the Closing Date, except for breaches, if any, involving knowing and
willful fraud, the exclusive remedy of any party under or with respect to this
Agreement shall be indemnity payments under this Article 7, or as provided for
in Section 4.7.5, 4.7.6, or 4.7.9 or in Article 8.
7.9 Pre-Closing: Specific Performance. Prior to the Closing
Date, the parties to this Agreement agree that irreparable damage would occur
in the event any provision of this Agreement was not performed in accordance
with the terms of this Agreement. If a party fails to perform in accordance
with the terms of this Agreement, the other parties shall be entitled to
specific performance.
ARTICLE 8.
TAXES
8.1 Preparation and Filing of Tax Returns Relating to Pre-
Closing Periods.
8.1.1 With respect to each Tax Return covering a taxable
period ending on or before the Closing Date that is required to be filed after
the Closing Date for, by, or with respect to MATEP, Harvard shall cause such
Tax Return to be prepared, shall cause to be included in such Tax Return all
items of income, gain, loss, deduction, and credit or other items
(collectively "Tax Items") required to be included therein, and shall deliver
the original of such Tax Return to Buyer at least 30 days prior to the due
date (including extensions) of such Tax Return. To the extent that the amount
of the Tax shown to be due on such Tax Return exceeds the amount of any
reserves or liabilities for Taxes set forth in the financial statements of
MATEP as of the Closing Date, Harvard shall pay to Buyer the amount of such
excess not less than five days prior to the due date of such Tax Return. Buyer
shall cause MATEP to file timely such Tax Return with the appropriate taxing
authority and to pay the amount of Taxes shown to be due on such Tax Return.
For purposes of this provision MATEP shall file a final Form 990 and any
related state or local return for a tax exempt entity for the period ending on
the Closing Date. For periods beginning on or after the Closing Date, MATEP
shall obtain a new employer identification number.
8.1.2 With respect to each Tax Return covering a taxable
period beginning on or before the Closing Date and ending after the Closing
Date that is required to be filed after the Closing Date for, by, or with
respect to MATEP, Buyer shall cause such Tax Return to be prepared and shall
cause to be included in such Tax Return all Tax Items required to be included
therein. Buyer and Harvard shall jointly determine (by an interim closing of
the books as of the Closing Date except for ad valorem Taxes and franchise
Taxes based on capital, which shall be prorated on a daily basis) the portion,
if any, of the Tax due with respect to the period covered by such Tax Return
that is attributable to MATEP for the portion of such period through to the
Effective Time (the "Pre-Closing Period"). At least 30 days prior to the due
date (including extensions) of such Tax Return, Buyer shall deliver to Harvard
a copy of such Tax Return. To the extent that the amount of Tax so determined
to be attributable to the Pre-Closing Period exceeds the amount of any
reserves or liabilities for Taxes set forth in the financial statements of
MATEP as of the Closing Date (such reserves reduced, but not below zero, by
the amount of Tax on the Tax Returns covered by Section 8.1.1 hereof), Harvard
shall pay to Buyer the amount of such excess not less than five days prior to
the due date of such Tax Return. Buyer shall cause MATEP to file timely such
Tax Return with the appropriate Taxing Authority and to pay timely the amount
of Taxes shown to be due on such Tax Return.
8.1.3 Any Tax Return to be prepared pursuant to the
provisions of Section 8.1.1 and Section 8.1.2 (to the extent it applies to the
Pre-Closing Period) shall be prepared in a manner consistent with practices
followed in prior years with respect to similar Tax Returns including the
determination of the basis of any asset which shall not be adjusted as a
result of changes in the value of such assets, except for changes required by
changes in law.
8.2 Indemnity for Taxes.
8.2.1 Except to the extent that any such Taxes have been
paid, and subject to Section 7.1, Harvard shall be responsible for and shall
indemnify and hold harmless Buyer and MATEP from and against (a) all Taxes of
MATEP attributable to any Pre-Closing Period and (b) any Taxes of any
corporation (other than MATEP) that is or was a member of any other affiliated
group of corporations of which MATEP was a member at any time during any Pre-
Closing Period; in each case, in excess of the amount of any reserves or
liabilities for Taxes set forth in the financial statements of MATEP as of the
Closing Date (such reserves or liabilities reduced, but not below zero by the
amount of Tax for which Harvard is responsible on the Tax Returns covered by
Sections 8.1.1 and 8.1.2), provided, however, that Harvard shall not be
responsible for and shall not indemnify either Buyer or MATEP against any
Taxes arising out of transactions (including the making of elections)
undertaken by MATEP occurring after the Effective Time other than at the
direction of Harvard. The obligation of Harvard to indemnify and hold harmless
Buyer and MATEP for Taxes pursuant to this Article 8 shall terminate upon the
expiration of the relevant statute of limitations. Notwithstanding anything to
the contrary in this Agreement, Buyer's sole remedy for losses in respect of
Taxes shall be the provisions of this Article 8. Notwithstanding anything in
this Agreement to the contrary, Buyer shall not be entitled to be indemnified
pursuant to this Article 8 until the amount of Buyer Indemnified Losses (as
specially defined for purposes of Section 7.1) exceeds the Three Million
Dollar Basket, and then only to the extent that such loss exceeds the Three
Million Dollar Basket.
8.2.2 Buyer and Harvard shall treat any payments made
pursuant to this Section 8.2 as adjustments to the Purchase Price. To the
extent that any payments made pursuant to this Section 8.2 are not permitted
by law to be treated as purchase price adjustments, the amount of such payment
shall be increased by the amount, if any, of any additional Tax liability
incurred by the recipient as a result of the receipt of such payment less the
amount any Tax benefit realized by the recipient as a result of the payment of
such Tax to which such indemnity payment relates.
8.2.3 There is no tax allocation agreement or arrangement
between Harvard or any Harvard affiliates, on the one hand, and MATEP, on the
other hand.
8.2.4 The treatment and reporting of the Note by Harvard
or MATEP for all periods during which the Note is outstanding for financial
reporting and accounting, and Tax purposes, and the treatment and reporting of
the depreciation and basis of the Medical Area Total Energy plant by Harvard
or MATEP for financial reporting and accounting, and Tax purposes, shall not
give rise to a breach of any representation, warranty, or covenant under this
Agreement.
8.3 Access to Information.
8.3.1 Information. Each party shall grant the other party
access at all reasonable times to all of the information, books and records
relating to MATEP within the possession of such party (including work papers
and correspondence with taxing authorities), and shall afford the other party
the right (at such other party's expense) to take extracts therefrom and to
make copies thereof, and shall provide such other assistance as such other
party shall reasonably request, to the extent reasonably necessary to permit
such other party to prepare Tax Returns, to conduct negotiations with Tax
authorities, and to implement the provisions of, or to investigate or defend
any claims between the parties arising under, this Agreement.
8.3.2 Preservation of Records. All of the parties hereto
will preserve and retain all schedules, work papers, and other documents
relating to any Tax Returns of or with respect to MATEP or to any claims,
audits or other proceedings affecting MATEP until the expiration of the
statute of limitations (including extensions) applicable to the taxable period
to which such documents relate or until the final determination of any
controversy with respect to such taxable period, and until the final
determination of any payments that may be required with respect to such
taxable period under this Agreement.
8.4 Tax Indemnification Procedures.
8.4.1 Notice of Claims. If a claim shall be made by any
Tax Authority that, if successful, would result in the indemnification of
Buyer, any Buyer affiliate, or MATEP under this Article 8, Buyer shall notify
Harvard in writing of such fact. Buyer shall promptly, and in any event within
ten days following receipt thereof, forward to Harvard all written
notifications and other written communications from any Taxing Authority
received by Buyer or MATEP relating to any liability for Taxes for any period
for which Harvard may be responsible under this Article 8. Notwithstanding the
foregoing, the failure of Buyer to timely forward such notification to Harvard
shall not relieve Harvard of its obligation to pay such liability for Taxes
unless such failure to timely forward such notification has materially
impaired Harvard's ability to contest such liability for Taxes or has
materially increased the amount of such liability for Taxes.
8.4.2 Control. Harvard shall have the right to control
any audit or examination by any Tax Authority, initiate any claim for refund,
file any amended return, pay, settle, or compromise any claim, and contest,
resolve, and defend against any assessment, notice of deficiency, or other
adjustment or proposed adjustment, relating to any Taxes of MATEP for all Pre-
Closing Periods. Buyer and Harvard shall jointly control any proceedings in
respect of Taxes for any period that begins before and ends after the Closing
Date (a "Straddle Period") and neither Buyer nor Harvard shall pay, settle, or
compromise any claim in respect of Taxes for a Straddle Period involving
claims for Taxes for which both Buyer and Harvard shall be liable, without the
consent of the other party. Harvard shall not pay, settle, or compromise any
claim with respect to any Taxes for a Straddle Period which would adversely
affect MATEP's liability for Taxes in any Post-Closing period without the
written consent of Buyer or MATEP. Each party shall be responsible for any
expenses accrued by it in defending or prosecuting any claim for Taxes.
8.4.3 Refunds. If, after actual receipt by either party
of an indemnification payment in respect of Taxes from the other party, the
extent of the liability of such party with respect to the claim is established
by the final judgment or decree of a court or other tribunal or a final and
binding settlement with an administrative agency having jurisdiction thereof
and is less than the amount previously paid by the other party, such party
shall promptly repay to the other party the amount of any excess, together
with any interest received thereon from the applicable Tax Authority.
ARTICLE 9.
GENERAL PROVISIONS
9.1 Amendment and Waiver. No amendment of any provision of
this Agreement shall in any event be effective, unless the same shall be in
writing and signed by each of the parties hereto. Subject to Section 4.12
hereof, and without limiting the provisions of Section 2.4 hereof, any failure
of any party to comply with any obligation, agreement, or condition hereunder
may only be waived in writing by the other party or parties, but such waiver
shall not operate as a waiver of, or estoppel with respect to, any subsequent
or other failure. No failure by any party to take any action against any
breach of this Agreement or default by any other party shall constitute a
waiver of such party's right to enforce any provision hereof or to take any
such action.
9.2 Expenses. Whether or not the transactions contemplated by
this Agreement shall be consummated, each of the parties hereto agrees to pay
all costs and expenses incurred by it in connection with this Agreement and
the transactions contemplated hereby, including the fees of its counsel,
accountants, and consultants, it being understood that the costs and expenses
incurred by MATEP before the Closing hereunder shall be for the account of
Harvard, and those incurred by MATEP after the Closing shall be for the
account of Buyer.
9.3 Broker's and Finder's Fees. Harvard, MATEP, and CMC hereby
represent and warrant to Buyer and MATEP LLC with respect to Harvard, MATEP,
and CMC, and Buyer and MATEP LLC hereby represent and warrant to Harvard,
MATEP, and CMC with respect to Buyer and MATEP LLC, that no person or entity
is entitled to receive from Harvard, MATEP, or CMC, on the one hand, or from
Buyer or MATEP LLC, on the other hand, any investment banking, brokerage, or
finder's fee or fees for financial consulting or advisory services in
connection with this Agreement or the transactions contemplated hereby, except
for a financial advisory fee payable by Harvard to Harvard's financial
advisor, and a financial advisory fee payable by Buyer to Buyer's financial
advisor, in connection with this Agreement and the transactions contemplated
hereby, as previously disclosed by Harvard and Buyer to each other.
9.4 Notices. All notices, requests, and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally (and a signed receipt obtained), sent by facsimile (if confirmed),
sent by registered or certified mail (postage prepaid, return receipt
requested), or sent by overnight courier service, in any event to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice, as specified below):
(a) If to Buyer, MATEP LLC, or Management Company:
Advanced Energy Systems, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Le Boeuf, Lamb, Green & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ (2)
(b) If to Harvard, MATEP, or CMC:
Harvard University
Office of the General Counsel
Holyoke Center, Suite 980
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notice may also be given by a sheriff or constable or by any method permitted
by the Rules of Civil Procedure of The Commonwealth of Massachusetts. The
address of a party for the purposes of this Section 9.4 may be changed by
giving written notice to the other party of such change in the manner provided
herein for giving notice. Unless and until such written notice is received,
the addresses as provided herein shall be deemed to continue in effect for all
purposes hereunder.
9.5 Entire Agreement; Binding Effect. This Agreement and the
other agreements, documents, and instruments referred to herein to be executed
and delivered contemporaneously herewith or on or after the Closing Date (a)
constitute the entire agreement, and supersede all other agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof (provided that the Confidentiality Agreement shall
survive the execution of this Agreement) and (b) shall not be assigned by any
party (by operation of law or otherwise).
9.6 Survival of Confidentiality. The Confidentiality Agreement
shall survive any termination of this Agreement, and the provisions of such
Confidentiality Agreement shall apply to all information and material
delivered to Buyer hereunder.
9.7 Applicable Law. This Agreement shall take effect as an
instrument under seal and shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts, without giving effect to
the principles thereof relating to conflicts of law.
9.8 Parties in Interest: No Third Party Beneficiary. This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto and their respective successors and permitted assigns, and nothing in
this Agreement, express or implied, is intended to confer upon any other
person any rights or remedies of any nature whatsoever under or by reason of
this Agreement.
9.9 Counterparts. This Agreement may be executed in any two or
more counterparts (by the different parties hereto on separate counterparts),
each of which, when so executed and delivered, shall be deemed an original,
but both of which together shall constitute one and the same instrument.
9.10 Interpretation. The section and other 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." Unless otherwise
indicated herein or the context otherwise requires, the singular shall include
the plural. The word "or" shall not be deemed exclusive.
9.11 Announcements. No disclosure or announcement of this
Agreement or the transactions contemplated hereby shall be made to any person
or entity, including any employee, customer, or supplier of MATEP, or any
Governmental Entity, by any party hereto without the prior written consent of
the other parties hereto, except for any such disclosure that may be required
by or pursuant to applicable law or in connection with securing any consents
or approvals contemplated hereby, in which case the party making such
disclosure shall provide notice in advance of such disclosure to the other
parties hereto.
9.12 Waiver of Jury Trial and Certain Damages. Each party to
this Agreement waives, to the fullest extent permitted by applicable law, (a)
any right it may have to a trial by jury in respect of any action, suit or
proceeding arising out of or relating to this Agreement and (b) any right it
may have to receive damages from any other party based on any theory of
liability for any special, indirect, consequential (including lost profits) or
punitive damages.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement
as of the date first written above.
ADVANCED ENERGY SYSTEMS, INC.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
MATEP LLC
By: ADVANCED ENERGY SYSTEMS, INC.
(its sole member)
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
ADVANCED ENERGY SYSTEMS MANAGEMENT
COMPANY, INC.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
PRESIDENT AND FELLOWS
OF HARVARD COLLEGE
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President for
Administration
COGENERATION MANAGEMENT COMPANY, INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Associate Vice President
for Facilities and
Environmental Services
MEDICAL AREA TOTAL ENERGY PLANT, INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Associate Vice President
for Facilities and
Environmental Services