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EXHIBIT 10.97
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PURCHASE AGREEMENT
between
EAST COAST POWER HOLDING COMPANY L.L.C.,
and
MESQUITE INVESTORS, L.L.C.
AUGUST 2, 1999
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
SECTION 1.01 Definitions.....................................................1
ARTICLE 2
TRANSACTIONS AND CLOSING
SECTION 2.01 Acquisition of Interests........................................5
SECTION 2.02 Closing.........................................................6
SECTION 2.03 Certain Post-Closing Payments...................................7
SECTION 2.04 Amended Credit Support Agreement................................7
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 3.01 Capacity; Organization, Etc.....................................8
SECTION 3.02 Title to Membership Interests; Capitalization...................9
SECTION 3.03 No Violation...................................................10
SECTION 3.04 Approvals......................................................10
SECTION 3.05 Financial Statements; Absence of Certain Changes...............11
SECTION 3.06 Cogen Transaction Agreement....................................13
SECTION 3.07 Certain Actions and Agreements.................................13
SECTION 3.08 Employees; Employee Benefits...................................13
SECTION 3.09 Litigation.....................................................14
SECTION 3.10 Compliance with Law; Environmental Matters.....................14
SECTION 3.11 Regulatory Matters.............................................14
SECTION 3.12 Taxes..........................................................16
SECTION 3.13 Insurance......................................................16
SECTION 3.14 Brokers........................................................16
SECTION 3.15 Year 2000......................................................16
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 4.01 Organization, Etc..............................................17
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SECTION 4.02 No Violation...................................................17
SECTION 4.03 Approvals......................................................17
SECTION 4.04 Investment Intent, Investigation...............................18
SECTION 4.05 Financing......................................................18
SECTION 4.06 Regulatory Matters.............................................18
SECTION 4.07 Brokers. ......................................................19
ARTICLE 5
COVENANTS
SECTION 5.01 Conduct of Business............................................19
SECTION 5.02 Access to Information; Confidentiality.........................19
SECTION 5.03 Public Announcements...........................................20
SECTION 5.04 Best Efforts...................................................20
SECTION 5.05 Exclusivity. .................................................20
SECTION 5.06 Option Agreement. .............................................20
ARTICLE 6
CONDITIONS TO CLOSING
SECTION 6.01 Conditions to the Obligations of Each Party....................21
SECTION 6.02 Conditions to Obligations of the Buyer.........................21
SECTION 6.03 Conditions to Obligations of Seller............................22
ARTICLE 7
TERMINATION
SECTION 7.01 Grounds for Termination........................................22
SECTION 7.02 Effect of Termination..........................................23
ARTICLE 8
SURVIVAL; INDEMNIFICATION
SECTION 8.01 Survival.......................................................24
SECTION 8.02 Indemnification................................................24
SECTION 8.03 Procedures for Third Party Claims..............................25
SECTION 8.04 Exclusive Remedy...............................................25
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ARTICLE 9
MISCELLANEOUS
SECTION 9.01 Notices.......................................................26
SECTION 9.02 Amendments; No Waivers........................................27
SECTION 9.03 Parties in Interest...........................................27
SECTION 9.04 Expenses......................................................27
SECTION 9.05 Successors and Assigns........................................27
SECTION 9.06 Governing Law.................................................27
SECTION 9.07 Counterparts; Effectiveness...................................29
SECTION 9.08 Entire Agreement..............................................29
SECTION 9.09 Captions......................................................29
SECTION 9.10 Further Assurances............................................29
Annex 1.01(a) Class B Contribution Agreement
Annex 2.01-A Amended LLC Agreement
Annex 2.01-B Buyer Security Agreement
Annex 2.04 Amended Credit Support Agreement
Annex 6.02 Opinion of Counsel to Seller
Annex 6.03 Opinion of Counsel to Buyer
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PURCHASE AGREEMENT
This Purchase Agreement ("AGREEMENT") is made this 2nd day of August
1999 between East Coast Power Holding Company L.L.C., a Delaware limited
liability company ("SELLER"), and Mesquite Investors, L.L.C., a Delaware limited
liability company ("BUYER").
A. Seller owns all of the outstanding Class A Membership Interests in
East Coast Power, L.L.C., a Delaware limited liability company (the "COMPANY").
B. Immediately prior to the Closing contemplated by this Agreement, it
is contemplated that 50% of the outstanding Class B Membership Interests in the
Company will be contributed to Seller (the "CLASS B CONTRIBUTION") as set forth
in the Class B Contribution Agreement (as defined herein).
C. Buyer wishes to acquire from Seller 49% of its Class A Membership
Interest in the Company and 98% of the Class B Membership Interest contributed
to it pursuant to the Class B Contribution Agreement (which will represent 49%
of the outstanding Class B Membership Interest), and Seller desires to sell such
Membership Interests to the Buyer, in exchange for the consideration set forth
herein in and accordance with the terms and provisions set forth in this
Agreement.
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.
(a) The following capitalized terms used in this Agreement shall have
the meanings set forth below:
"ACQUISITION CLOSING" means the closing of the transactions
contemplated by the Cogen Transaction Agreement, which occurred on February 4,
1999.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such other Person.
"AMENDED CREDIT SUPPORT AGREEMENT" has the meaning set forth in Section
2.04.
"AMENDED LLC AGREEMENT" has the meaning set forth in Section 2.01(b).
"APPLICABLE LAW" means, with respect to any Person, any domestic or
foreign, federal, state or local statute, law, ordinance, rule, administrative
interpretation, regulation, order, writ, injunction, directive, judgment, decree
or other requirement of any Governmental Authority applicable to such Person or
any of its Affiliates or any of their respective properties or assets.
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"AUDITED FINANCIAL STATEMENTS" has the meaning set forth in Section
3.05.
"BAYONNE PLANT" means the 176 megawatt gas-fired, combined cycle
cogeneration facility owned by NJ Venture and located in Bayonne, New Jersey on
the site of the IMTT Facility.
"BENEFIT PLANS" shall mean employee pension benefit plans (whether or
not insured) as defined in Section 3(2) of ERISA and employee welfare benefit
plans (whether or not insured) as defined in Section 3(1) of ERISA.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day
on which commercial banks in Houston, Texas or New York, New York are authorized
or required by law to close.
"BUYER" has the meaning set forth in the introductory paragraph to this
Agreement.
"BUYER SECURITY AGREEMENT" has the meaning set forth in Section
2.01(b).
"CALPERS" means the California Public Employees' Retirement System, a
unit of the State and Consumer Service Agency of the State of California.
"CAMDEN COGEN" means Camden ▇▇▇▇▇ ▇▇, a Delaware limited partnership.
"CAMDEN PLANT" means the 146 megawatt gas-fired, combined cycle
cogeneration facility owned by Camden Cogen and located in Camden, New Jersey.
"CLASS B CONTRIBUTION" has the meaning set forth in the recitals.
"CLASS B CONTRIBUTION AGREEMENT" means the Contribution Agreement
relating to the Class B Contribution dated the date hereof, a copy of which is
attached hereto as Annex 1.01(a).
"CLOSING" has the meaning set forth in Section 2.02.
"CLOSING DATE" means the date of the Closing.
"COGEN GROUP" has the meaning set forth in Section 3.05.
"COGEN TRANSACTION AGREEMENT" means the Transaction Agreement dated
October 25, 1998, as amended by Amendment No. 1 to Transaction Agreement
effective as of November 6, 1998, Amendment No. 2 to Transaction Agreement
effective as of November 13, 1998, and Amendment No. 3 to Transaction Agreement
effective as of February 1, 1999, between Enron, Enron Capital & Trade Resources
Corp., RCM Holdings, Inc., (formerly Cogen Technologies, Inc.), Cogen
Technologies Camden, Inc.,Cogen Technologies Capital Company, L.P., the ▇▇▇▇▇▇
Group Sellers and Minority Group Sellers listed on the signature page thereto,
the Company, JEDI Linden GP LLC, JEDI Linden LP LLC, JEDI Camden GP LLC, JEDI
Camden LP LLC and JEDI Bayonne GP LLC.
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"COMPANY" has the meaning set forth in the recitals to this Agreement.
"COMPANY EMPLOYEES" shall mean all individuals who are employed by the
Company or who are employed by an Affiliate of Enron other than the Company and
who perform services in connection with the business operations of the Company.
"CONFIDENTIALITY AGREEMENT" has the meaning set forth in Section 5.02.
"CREDIT SUPPORT AGREEMENT" has the meaning set forth in Section 2.04.
"DAMAGES" has the meaning set forth in Section 8.02(a).
"DISCLOSURE SCHEDULE" means the Disclosure Schedule delivered by Seller
to Buyer relating to this Agreement, which contains the disclosures required to
be made under the various terms and provisions of this Agreement.
"DISPUTED CLAIMS" has the meaning set forth in Section 9.06.
"ECT MERCHANT" means ECT Merchant Investments Corp., a Delaware
corporation.
"ENRON" means Enron Corp., an Oregon corporation.
"EL PASO ENERGY" means El Paso Energy Corporation, a Delaware
corporation.
"EL PASO HOLDING" means El Paso Power Holding Company, a Delaware
corporation, which is a party to this Agreement for the purposes set forth on
the signature page hereto.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign law
(including, without limitation, common law), treaty, judicial decision,
regulation, rule, ordinance, judgment, order, decree, injunction, permit or
governmental restriction or any agreement with any Governmental Authority or
other third party, in effect on or prior to the date of this Agreement, relating
to the environment, human health and safety or to the discharge, removal,
remediation, manufacture, release, use, treatment, processing, transportation,
storage or handling of pollutants, contaminants, wastes or any toxic,
radioactive, ignitable, corrosive, reactive or otherwise hazardous substances.
Examples of Environmental Laws include, but are not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
the Resource Conservation and Recovery Act ("RCRA"), the Toxic Substances
Control Act ("TSCA"), the Clean Air Act, the Clean Water Act, the Superfund
Amendments and Reauthorization Act of 1986, the Occupational Safety and Health
Act of 1970, the Hazardous Materials Transportation Act, each as amended from
time to time and all comparable state and local laws.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"FERC" means the United States Federal Energy Regulatory Commission, or
any successor or replacement agency thereto.
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"GOVERNMENTAL AUTHORITY" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
"LIEN" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset.
"LINDEN PLANT" means the 715 megawatt gas-fired, combined cycle
cogeneration facility owned by Linden Venture and located in Linden, New Jersey
on the site of the Bayway Refinery facility.
"LINDEN VENTURE" means Cogen Technologies Linden Venture, L.P., a
Delaware limited partnership.
"LLC AGREEMENT" means the Amended and Restated Limited Liability
Company Agreement of the Company, dated as of February 4, 1999.
"MATERIAL ADVERSE EFFECT" means any event, condition, effect or change
that is or would be materially adverse to the business, results of operations,
prospects, condition (financial or otherwise), assets or liabilities of the
Company and its Subsidiaries, when taken as a whole.
"MEMBERSHIP INTEREST" has the meaning given to such term in the LLC
Agreement.
"NJ VENTURE" Cogen Technologies NJ Venture, a New Jersey general
partnership.
"OPERATING FACILITIES" means the Linden Plant, the Bayonne Plant and
the Camden Plant.
"PERSON" means an individual, corporation, partnership, joint venture,
limited liability company, association, trust, estate or other entity or
organization, including a Governmental Authority.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.
"PURCHASED INTERESTS" means the Class A Membership Interest and Class B
Membership Interests in the Company to be purchased by Buyer from Seller under
this Agreement at the Closing.
"PURPA" means the Public Utility Regulatory Policies Act of 1978, as
amended.
"PURPA REQUIREMENTS" has the meaning set forth in Section 3.12.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER" has the meaning set forth in the introductory paragraph to
this Agreement.
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"SENIOR NOTE SECURITY INTERESTS" means the security interests granted
by Seller, ECT Merchant and CalPERS in their Membership Interests pursuant to
various security agreements dated as of April 20, 1999 between each such entity
and the Trustee, in each case securing the obligations of the Company under the
Senior Secured Notes issued under the Indenture dated as of April 20, 1999
between the Company and the Trustee.
"SUBSIDIARY" has the meaning set forth in Section 3.02.
"TAX" means (i) all taxes or other levies imposed by any Governmental
Authority, domestic or foreign (a "TAXING AUTHORITY") including, without
limitation, any net income, alternative or add-on minimum tax, gross income,
gross receipts, sales, use, ad valorem, value added, transfer, franchise,
profits, license, registration, recording, documentary, conveyancing, gains,
withholding on amounts paid to or by the Company and its Subsidiaries, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom or import duty or other tax or
other like assessment, together with any interest, penalty, addition to tax or
additional amount imposed by any Taxing Authority, or (ii) liability for the
payment of any amounts of the type described in (i) as a result of being a
member of an affiliated, consolidated, combined or unitary group or being a
party to any agreement under which liability is determined or taken account with
reference to the liability of any other Person; or (iii) liability for the
payment of any amounts of the type described in (i) as a result of any express
or implied obligation to indemnify any other Person or as a result of being
party to any other arrangement or agreement.
"TAX RETURNS" means all Tax returns, statements, reports and forms
(including estimated tax or information returns and reports) required to be
filed with any Taxing Authority.
"TRUSTEE" means The Bank of New York, as Trustee under the Indenture
dated as of April 20, 1999 between The Bank of New York, Trustee and the
Company.
"UNAUDITED FINANCIAL STATEMENTS" has the meaning set forth in Section
3.05.
(b) Unless the context otherwise requires, as used in this Agreement:
(a) a term has the meaning ascribed to it; (b) an accounting term not otherwise
defined has the meaning ascribed to it in accordance with generally accepted
accounting principles in the United States as of the date hereof applied on a
consistent basis, (c) "or" is not exclusive; (d) "including" means "including,
without limitation;" (e) words in the singular include the plural; (f) words in
the plural include the singular; (g) words applicable to one gender shall be
construed to apply to each gender; (h) the terms "hereof," "herein," "hereby,"
"hereto" and derivative or similar words refer to this entire Agreement and (i)
the terms "Article" or "Section" shall refer to the specified Article or Section
of this Agreement.
ARTICLE 2
TRANSACTIONS AND CLOSING
SECTION 2.01. Acquisition of Interests. Upon the terms and subject to
the conditions set forth herein, including the consummation of the Class B
Contribution, the parties agree that on the Closing Date:
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(a) El Paso Holding will cause Buyer to buy, and Seller will
sell, assign, transfer and convey to Buyer, a 49% Class A Membership
Interest (as defined in the LLC Agreement) in the Company and a 49%
Class B Membership Interest in the Company (as defined in the LLC
Agreement), in each case subject to the Senior Note Security Interests
but free and clear of all other Liens (other than as set forth in the
Amended LLC Agreement described below), in exchange for a cash payment
of $128,000,000 by Buyer to Seller (which is $133,000,000 less the
$5,000,000 deposit (the "Deposit") paid to Seller prior to the date
hereof).
(b) To evidence the foregoing assignments and admit Buyer as a
Class A and Class B member of the Company:
(i) Seller, Buyer and CalPERS will enter into the
Second Amended and Restated Limited Liability Company
Agreement (the "AMENDED LLC AGREEMENT") of the Company in
substantially the form attached hereto as ANNEX 2.01-A;
(ii) Buyer will enter into a Security Agreement with
the Trustee relating to the Purchased Interests in
substantially the form attached hereto as ANNEX 2.01-B (the
"BUYER SECURITY AGREEMENT"); and
(iii) The Company will cause to be issued in the name
of each party a new certificate evidencing the Membership
Interest of such party as contemplated by the terms of the
Amended LLC Agreement, and the parties shall cause such
certificates to be delivered to the Trustee together with duly
executed transfer powers or assignments satisfactory to the
Trustee, against surrender by the Trustee to the Company of
the old certificates representing such Membership Interests.
SECTION 2.02. Closing.
(a) Subject to the satisfaction of the conditions set forth in
Article 6, the closing (the "CLOSING") of the transactions contemplated
by this Agreement shall take place at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, on August 13, 1999 or at
such other time or place as the Buyer and Seller may agree; provided,
that Buyer at its option may delay the Closing as long as (i) the
Closing shall be on a Business Day no later than September 15, 1999,
(ii) if the Buyer delays Closing past August 13, 1999, then Buyer shall
give at least 3 Business Days notice to Seller of the new Closing Date,
and (iii), if the Closing is after August 13, 1999, at the Closing, El
Paso Holding will cause Buyer to pay to Seller in addition to the
$128,000,000 specified in Section 2.01(a), interest on such amount at
the rate of 12% per annum from August 14, 1999 through the Closing and,
if the Closing has not occurred by August 31, 1999, such interest rate
shall increase to 15% for the period from September 1, 1999 through
Closing, in each case except to the extent the delay in Closing is
caused by Seller.
(b) The parties agree that at the Closing, El Paso Holding
will cause Buyer to pay to Seller the applicable cash consideration (as
set forth in Section 2.01 and 2.02(a)) in immediately available funds
by wire transfer to an account designated by Seller in writing prior to
the Closing.
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SECTION 2.03. Certain Post-Closing Payments.
(a) In the event that any of the distributions to Seller
contemplated by Section 5.01(d)(i) of the Amended LLC Agreement are not
made for any reason within 90 days of the event specified in clauses
(A)-(G) of such Section 5.01(d)(i) that triggers the obligation to pay
such distribution (each, a "PAYMENT EVENT"), then Buyer agrees to pay
to Seller an amount equal to 49% of the difference between (a) the
distribution specified in such Section 5.01(d)(i) with respect to such
Payment Event and (b) any distribution actually made by the Company to
Seller pursuant to such Section 5.01(d)(i) in respect of such Payment
Event. In no event shall the sum of (a) 49% of the distributions made
by the Company to Seller pursuant to Section 5.01(d)(i) of the Amended
LLC Agreement and (b) the payments made by Buyer to Seller pursuant to
this Section 2.03(a) exceed $17,000,000, excluding any interest paid or
owed pursuant to Section 2.03(b).
(b) Any such payment shall be paid within three Business Days
of the end of the 90 day period referred to in the first sentence of
Section 2.03(a), by wire transfer in immediately available funds to an
account designated by Seller. If any such payment is not made timely in
accordance with the foregoing, then the amount of any such payment
shall accrue simple interest at the rate of 12% per annum from the due
date until paid. The obligation to pay interest hereunder may be
satisfied by (i) Buyer paying such amount to Seller or (ii) the Company
making a distribution pursuant to Section 5.01(d)(iv) of the Amended
LLC Agreement in an amount equal to the amount of such interest payment
divided by 0.49.
SECTION 2.04 Amended Credit Support Agreement. Enron is party to a
Credit Support Agreement effective April 20, 1999 (the "CREDIT SUPPORT
AGREEMENT"). At or prior to Closing, Buyer agrees to use its best efforts to
cause El Paso Energy to enter into an Amended and Restated Credit Support
Agreement with Enron and the Company in substantially the form attached hereto
as ANNEX 2.04 (the "AMENDED CREDIT SUPPORT AGREEMENT") pursuant to which El Paso
Energy will agree to bear responsibility for 49% of Enron's obligations under
the Credit Support Agreement and the Company will agree to pay to El Paso
Energy, from and after the Closing, 49% of the compensation or other payments
that are payable by the Company under the Credit Support Agreement. At or prior
to Closing, Seller agrees to use its best efforts to cause Enron to enter into a
security agreement in the form of the pledge of the note under the Amended
Credit Support Agreement to the extent the granting of such security interest is
possible. If the granting of such security interest is not possible, then Buyer
and Seller shall cooperate to amend the form of Amended Credit Support Agreement
to provide to provide that any advances to the Company under the Amended Credit
Support Agreement shall be made directly by Enron and El Paso to the Company
based on their respective Participation Percentages (as defined in the Amended
Credit Support Agreement), with the Company providing a note to repay such
advances to each of El Paso and Enron.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
SECTION 3.01 Capacity; Organization, Etc.
(a) Seller has been duly organized and is validly existing as
a limited liability company under the laws of the State of Delaware,
and has full right, power and authority to enter into and perform its
obligations under this Agreement and the Amended LLC Agreement and to
consummate the transactions contemplated hereby, and has obtained all
requisite corporate or similar authorizations, consents or approvals
applicable to such Seller to do so. This Agreement has been, and the
Amended LLC Agreement, when executed at the Closing, will be, duly
executed and delivered by Seller and constitute the valid and binding
obligations of Seller, enforceable against Seller in accordance with
its terms.
(b) The Company is a limited liability company duly organized,
validly existing and in good standing under the laws of the state of
Delaware and has full limited liability company power and authority to
conduct its business as it is now being conducted and to own, operate
or lease the properties and assets it currently owns, operates or holds
under lease. The Company is duly qualified or licensed to do business
and is in good standing in each jurisdiction where the character of its
business or the nature of its properties makes such qualification or
licensing necessary.
(c) SECTION 3.01(c) OF THE DISCLOSURE SCHEDULE sets forth a
list of each subsidiary of the Company (the "SUBSIDIARIES") and, with
respect only to the Subsidiaries of the Company other than the Acquired
Entities as defined in the Cogen Transaction Agreement that are less
than wholly-owned by the Company and its Subsidiaries, a description of
the ownership interest of the Company in such Subsidiary. Each
Subsidiary is a partnership or limited liability company duly
organized, validly existing and (other than with respect to
partnerships) in good standing under the laws of its jurisdiction of
organization and has full partnership or limited liability company
power and authority to conduct its business as it is now being
conducted and to own, operate or lease the properties and assets it
currently owns, operates or holds under lease. Each Subsidiary is duly
qualified or licensed to do business and, if applicable, is in good
standing in each jurisdiction where the character of its business or
the nature of its properties makes such qualification or licensing
necessary. Except as set forth in SECTION 3.01(c) OF THE DISCLOSURE
SCHEDULE, all issued and outstanding interests of equity capital of
each of the Subsidiaries are owned, directly or indirectly, by the
Company. Except as set forth in SECTION 3.01(c) OF THE DISCLOSURE
SCHEDULE, none of the equity interests in the Subsidiaries have become
subject to any Liens since the Acquisition Closing. Since the
Acquisition Closing, the Company and its Subsidiaries have not issued
or entered into any (i) securities convertible into or exchangeable for
any interests of the equity capital of any of the Subsidiaries, (ii)
options, warrants or other rights to purchase or subscribe for equity
capital of any of the Subsidiaries or (iii) contracts, commitments,
agreements, understandings or arrangements of any kind relating to the
issuance of any equity capital of
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any of the Subsidiaries, any such convertible or exchangeable
securities or any such options, warrants or rights, pursuant to which,
in any of the foregoing cases, any of the Subsidiaries is subject or
bound. Since the Acquisition Closing, except for the agreements listed
in SECTION 3.01(c) OF THE DISCLOSURE SCHEDULE, none of the Subsidiaries
has become party to any voting trusts, member agreements or other
similar instruments restricting or relating to the rights of the
holders of equity interests in such Subsidiary. Except for the
Subsidiaries, the Company does not own, directly or indirectly, any
interest or investment in any corporation, association, joint venture,
partnership or other business organization, firm or enterprise of any
character whatsoever.
SECTION 3.02 Title to Membership Interests; Capitalization.
(a) Seller is, and at the Closing will be, the record and
beneficial owner of 100% of the outstanding Class A Membership Interest
in the Company, which represents a 90% Sharing Ratio (as defined in the
LLC Agreement), and such Membership Interest is owned by such Seller
free and clear of all Liens, except for the Senior Note Security
Interests and except as set forth in the LLC Agreement. Upon
consummation of the Class B Contribution, Seller will be the record and
beneficial owner of 50% of the outstanding Class B Membership Interest
in the Company, which will represent a 5.0% Sharing Ratio, and such
Membership Interest will be owned by Seller free and clear of all
Liens, except for the Senior Note Security Interests and except as set
forth in the LLC Agreement. Seller has full authority to transfer the
portion of its Class A Membership Interest to be transferred pursuant
to this Agreement, and, upon consummation of the Class B Contribution,
Seller will have full authority to transfer the Class B Membership
Interest to be transferred pursuant to this Agreement, in each case
free and clear of all Liens, except for the Senior Note Security
Interests and except as set forth in the Amended LLC Agreement. Except
as contemplated by the Amended LLC Agreement and the Senior Note
Security Interests, there are no outstanding options, warrants,
convertible securities, calls, rights, commitments, preemptive rights
or agreements or instruments or understandings of any character, to
which Seller is a party or by which Seller is bound, obligating Seller
to sell or otherwise transfer any of its Membership Interests. Except
for the agreements listed in SECTION 3.02(a) OF THE DISCLOSURE SCHEDULE
and the Amended LLC Agreement, since the Acquisition Closing, the
Company has not entered into any voting trusts, member agreements or
other similar instruments restricting or relating to the rights of the
holders of equity interests in the Company.
(b) The Membership Interests of CalPERS, ECT Merchant and
Seller set forth on SECTION 3.02(b) OF THE DISCLOSURE SCHEDULE
constitute all of the outstanding equity interests in the Company as of
the date hereof. There are no outstanding options, warrants,
convertible securities, calls, rights, commitments, preemptive rights
or agreements or instruments or understandings of any character, except
as contemplated herein, to which the Company is a party or by which the
Company is bound, obligating the Company to issue, deliver or sell, or
cause to be issued, delivered or sold, equity interests in the Company
or any securities or obligations convertible into or exchangeable for
such equity interests or to grant, extend or enter into any such
option, warrant, convertible security, call, right, commitment,
preemptive right or agreement.
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(c) Upon payment of the consideration specified in Section
2.01, title to the Purchased Interests will pass to Buyer, free and
clear of all Liens except as contemplated by the Amended LLC Agreement
and except for the Senior Note Security Interests.
SECTION 3.03 No Violation.
(a) The execution and delivery of this Agreement by Seller
does not, and the consummation by Seller of the transactions
contemplated by this Agreement and the Amended LLC Agreement will not
(a) violate any permit, concession, grant, franchise, law, rule or
regulation, or any judgment, decree or order of any Governmental
Authority to which Seller is a party or to which Seller or any of its
respective property is subject; or (b) assuming execution and delivery
by all parties of the Amended LLC Agreement, conflict with, or result
in a breach or violation of, or accelerate the performance required by,
the terms of any agreement, contract, indenture or other instrument to
which Seller is a party or to which any of its property is subject,
except in each case such as would not materially impair the ability of
Seller to consummate the transactions contemplated by this Agreement.
(b) The execution and delivery of this Agreement by Seller
does not, and the consummation by Seller of the transactions
contemplated by this Agreement and the execution and delivery of the
Amended LLC Agreement by Seller and the consummation of the transaction
contemplated therein will not (a) violate any permit, concession,
grant, franchise, law, rule or regulation, or any judgment, decree or
order of any Governmental Authority to which the Company or any of its
Subsidiaries is a party or to which the Company or any of its
Subsidiaries or any of their respective properties is subject; or (b)
assuming execution and delivery by all parties of the Amended LLC
Agreement, conflict with, or result in a breach or violation of, or
accelerate the performance required by, the terms of any agreement,
contract, indenture or other instrument to which the Company or any of
its Subsidiaries is a party or to which any of their respective
properties is subject, except in each case such as would not have a
Material Adverse Effect.
SECTION 3.04 Approvals.
(a) The execution and delivery of this Agreement by Seller and
the consummation of the transactions contemplated by this Agreement and
the execution and delivery of the Amended LLC Agreement by Seller and
the consummation of the transactions contemplated therein will not,
require the consent, approval, order or authorization of any
Governmental Authority or regulatory authority or, assuming execution
and delivery by all parties of the Amended LLC Agreement, any other
person under any permit, license, agreement, indenture or other
instrument to which Seller is a party or to which any of its respective
properties are subject, and no declaration, filing or registration with
any Governmental Authority or regulatory authority is required by
Seller in connection with the execution and delivery of this Agreement
and the consummation of such transactions other than notice filings to
be made after the Closing, in each case except such as would not
materially impair the ability of Seller to consummate the transactions
contemplated by this Agreement or for such consents and approvals as
have been received.
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(b) The execution and delivery of this Agreement by Seller and
the consummation of the transactions contemplated by this Agreement and
the execution and delivery of the Amended LLC Agreement by Seller and
the consummation of the transaction contemplated therein will not,
require the consent, approval, order or authorization of any
Governmental Authority or regulatory authority or, assuming execution
and delivery by all parties of the Amended LLC Agreement, any other
person under any permit, license, agreement, indenture or other
instrument to which the Company or any of its Subsidiaries is a party
or to which any of their respective properties is subject, and no
declaration, filing or registration with any Governmental Authority or
regulatory authority is required by the Company or any of its
Subsidiaries in connection with the execution and delivery of this
Agreement and the consummation of such transactions other than notice
filings to be made after the Closing, in each case except such as would
not have a Material Adverse Effect.
SECTION 3.05 Financial Statements; Absence of Certain Changes.
(a) Seller has delivered to Buyer true and complete copies of
the combined financial statements, including an income statement, a
balance sheet and a statement of cash flows, of (i) Cogen Technologies
Linden Ltd., Cogen Technologies Camden GP Limited Partnership and
▇▇▇▇▇▇ Energy Services Corporation and its wholly owned subsidiary
Cogen Technologies NJ, Inc. (collectively, the "COGEN GROUP") as of and
for the year ended December 31, 1998 and (ii) Cogen Technologies NJ
Venture, Camden ▇▇▇▇▇ ▇.▇. and ▇▇▇▇▇ Technologies Linden Venture, L.P.
(collectively, the "COGEN TECHNOLOGIES OPERATING PARTNERSHIPS") as of
and for the year ended December 31, 1998 (collectively, the "AUDITED
FINANCIAL STATEMENTS"). The Audited Financial Statements have been
audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, have been prepared from the books and
records of the Cogen Group and Cogen Technologies Operating
Partnerships, as the case may be, using generally accepted accounting
principles except as set forth in the footnotes thereto, and fairly
present in all material respects the financial position of the Cogen
Group or Cogen Technologies Operating Partnerships, as the case may be,
as of the date thereof and the results of operations and cash flows for
the periods set forth therein.
(b) Seller has delivered to Buyer true and complete copies of
the consolidated financial statements, including an income statement, a
balance sheet and a statement of cash flows, of the Company and its
Subsidiaries for as of and for the six month period ended June 30, 1999
(the "UNAUDITED FINANCIAL STATEMENTS"). The Unaudited Financial
Statements have been prepared using generally accepted accounting
principles from the books and records of the Company and its
Subsidiaries, except that the Unaudited Financial Statements omit
footnote information. The Financial Statements fairly present in all
material respects the financial position of the Company and its
Subsidiaries as at the dates thereof and the results of operations and
cash flows for the periods set forth therein.
(c) Except as set forth in SECTION 3.05 OF THE DISCLOSURE
SCHEDULE, since the Acquisition Closing, there has not occurred:
(i) any material adverse change or, to the knowledge of
Seller, any threatened material adverse change, in the
condition (financial or otherwise) or in the
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properties, assets or liabilities or business or prospects of
the Company and its Subsidiaries;
(ii) any material change in the accounting methods or
practices followed by the Company and its Subsidiaries or
change in the depreciation or amortization policies or rates
of the Company and its Subsidiaries theretofore adopted;
(iii) any incurrence of any debts, obligations or
liabilities, absolute, accrued, contingent or otherwise,
whether due or to become due by the Company or any Subsidiary,
which exceed, in the aggregate, $1,000,000, other than in the
ordinary course of business;
(iv) any discharge or satisfaction of any Liens or
payment of any obligation or liability of the Company or any
Subsidiary, other than in the usual and ordinary course of
business consistent with past practice;
(v) the creation of any Lien on any of the assets,
tangible or intangible, of the Company or any Subsidiary,
other than in the usual and ordinary course of business
consistent with past practice;
(vi) any sale, transfer or lease as lessor or
sublessor of any assets of the Company or any Subsidiary,
other than in the usual and ordinary course of business
consistent with past practice in an aggregate amount not in
excess of $1,000,000;
(vii) any physical damage, restriction or loss
incurred by the Company or any of its Subsidiaries not covered
by insurance (or that is covered by self-insurance) that
individually or in the aggregate would have a Material Adverse
Effect;
(viii) (A) any default by the Company or any of its
Subsidiaries, or, to the knowledge of Seller, any other party,
to any contract to which the Company or any of its
Subsidiaries is a party, or any event which, with the lapse of
time or the giving of notice, or both, would cause the Company
or any of its Subsidiaries, or, to the knowledge of Seller,
any other party, to be in default of such contracts or give
any other party to such contracts the right to terminate such
contracts, or (B) the provision of notice of any material
default under any such contracts, except in each of the above
cases as would not in the aggregate have a Material Adverse
Effect and except that none of the foregoing shall apply to
any default or breach (or condition that with the giving of
notice or lapse of time or both, would constitute a default or
breach) in existence at or prior to the Acquisition Closing;
or
(ix) any distribution by the Company to its Members
(except as contemplated by Section 5.01(a) of the Amended LLC
Agreement).
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SECTION 3.06 Cogen Transaction Agreement.
(a) Seller has delivered to or made available to Buyer a true
and complete copy of the Cogen Transaction Agreement, including the
Disclosure Schedules delivered by the Sellers thereunder, together with
a copy of all documents delivered at the Acquisition Closing. The
Company is one of the "Buyer Entities" under, and as that term is
defined in, the Cogen Transaction Agreement and is entitled to the
benefit of the representations, warranties and indemnities set forth
therein, subject to the terms and conditions thereof.
(b) Since the Acquisition Closing, Seller has not become aware
of any of the representations and warranties made by the Sellers (as
that term is defined in the Cogen Transaction Agreement) in the Cogen
Transaction Agreement being untrue in any material respect.
(c) Seller has delivered to Buyer a true and complete copy of
the Offering Memorandum dated April 14, 1999 with respect to the
issuance and sale by the Company of its 6.737% Senior Secured Notes due
2008, its 7.066% Senior Secured Notes due 2012 and its 7.536% Senior
Secured Notes due 2017 and the prospectus included in the S-4
Registration Statement with respect to the exchange offer relating to
such Senior Notes filed by the Company with the Securities Exchange
Commission on June 25, 1999. Buyer acknowledges that such Offering
Memorandum and prospectus were prepared solely for the purpose of the
offering of the Senior Notes referenced therein and not for the use of
the Buyer in connection with the transactions contemplated hereby.
Neither the Offering Memorandum nor the prospectus, as of the
respective dates thereof, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of
the circumstances in which they were made.
SECTION 3.07 Certain Actions and Agreements.
(a) Except as disclosed on SECTION 3.07 OF THE DISCLOSURE
SCHEDULE, since the Acquisition Closing, neither the Company nor any of
its Subsidiaries has taken any action or entered into, amended or
waived any rights under any agreement that would have required the
unanimous consent of the Class A Members under the Amended LLC
Agreement if the Amended LLC Agreement had been in effect at the time
of such action.
(b) SECTION 3.07 OF THE DISCLOSURE SCHEDULE sets forth a list
of each contract or agreement currently in effect between the Company
or any of its Subsidiaries, on one hand, and Seller or any Affiliate
thereof, on the other hand (other than the Company or any other
Subsidiary of the Company).
SECTION 3.08 Employees; Employee Benefits. Subject to SECTION 5.01 OF
THE DISCLOSURE SCHEDULE, all Company Employees are covered by the Benefit Plans
sponsored and maintained by Enron for its and certain of its Affiliates'
employees on the same basis as similarly situated employees of Enron except that
the Company Employees have temporary coverage under a special severance benefit
plan. Seller has delivered to Buyer a true and complete copy of the agreement
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between Enron and the Company with respect to the coverage of Company Employees
under Enron's benefit plans. To the knowledge of Seller after due inquiry, the
Benefit Plans covering the Company Employees have been maintained and
administered in accordance with their terms and provisions and substantially in
compliance with the requirements of all applicable laws including, but not
limited to, ERISA and the Code, except as in the aggregate would not have a
Material Adverse Effect.
SECTION 3.09 Litigation. Except as set forth on SECTION 3.09 OF THE
DISCLOSURE SCHEDULE, since the Acquisition Closing, no action, suit, or
proceeding has been commenced, or, to the knowledge of Seller, threatened,
against the Company, any of its Subsidiaries or their respective officers,
directors, employees or assets before any Governmental Authority or pursuant to
any agreement to arbitrate, including any action, suit, claim, investigation or
proceeding arising out of or relating to any Environmental Laws, except for any
such matters that, if adversely determined, would not in the aggregate have a
Material Adverse Effect.
SECTION 3.10 Compliance with Law; Environmental Matters. Since the
Acquisition Closing:
(a) None of the Company or its Subsidiaries has violated, or,
to the knowledge of Seller, is under investigation with respect to or
has been threatened to be charged with or given notice of any material
violation of, any Applicable Law, except as would not have a Material
Adverse Effect;
(b) Neither the Company nor any of its Subsidiaries has
received any notice, notification, demand, request for information,
citation, summons or order, and no complaint has been filed, and no
penalty has been assessed by any Governmental Authority or other Person
with respect to matters arising out of or relating to any applicable
Environmental Law that could, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect; and
(c) The Company and its Subsidiaries have complied in all
material respects with all Environmental Laws.
SECTION 3.11 Regulatory Matters.
(a) Assuming that, from the commencement of power generation
at each Operating Facility through the Acquisition Closing, each
Operating Facility had continuously been a "qualifying cogeneration
facility" within the meaning of Section 3(18)(B) of the Federal Power
Act, as amended, and the regulations of the FERC thereunder, at 18
C.F.R. Part 292, interpretations thereof by the FERC and courts of
competent jurisdiction of the PURPA and such regulations (collectively,
PURPA, the regulations and all such interpretations, the "PURPA
REQUIREMENTS"), each Operating Facility is, and since the Acquisition
Closing has been, a "qualifying cogeneration facility" within the
meaning of such requirements. Seller is not aware of any event or
circumstances that would result in a loss by any of the Operating
Facilities of such status. The consummation of the transactions
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contemplated by the Cogen Transaction Agreement and the Class B
Contribution did not result in the loss of such status for such
Operating Facility.
(b) Each of Linden Venture, Camden Cogen and NJ Venture is an
"exempt wholesale generator" as defined in Section 32 of PUHCA.
(c) Since the Acquisition Closing, each of Linden Venture,
Camden Cogen and NJ Venture has been in compliance with the Federal
Power Act, as amended, and the FERC's regulations thereunder.
(d) Except as set forth in SECTION 3.11 OF THE DISCLOSURE
SCHEDULE, each of the Operating Facilities has in effect a contract
with an entity under which such entity has agreed to purchase steam
from such Operating Facility during the term of such contract and use
such steam during such term for an industrial or commercial process or
for heating or cooling, or has agreed to obtain cooling for chilling
service from such Operating Facility, or both, in aggregate amounts
which equal or exceed the projected amount of "useful thermal energy
output" required for continued qualification of the facility as a
qualifying cogeneration facility under the PURPA Requirements. All such
uses of steam satisfy the requirements to be "useful thermal energy
output" as defined in the PURPA Requirements.
(e) None of the Company, Linden Venture, Camden Cogen or NJ
Venture, or any "affiliate" thereof, as defined in section 2(a)(11)(B)
of PUHCA, is subject to regulation as a "public utility" under the
Federal Power Act, other than as contemplated by 18 C.F.R. Section
292.601(c), or under any state law or regulation with respect to the
rates or the financial or organizational regulation of electric
utilities, other than as contemplated by 18 C.F.R. Section
292.602(c)(2). None of the Company or its Subsidiaries, including
Linden Venture, Camden Cogen or NJ Venture, or any "affiliate" thereof,
as defined in section 2(a)(11) of PUHCA, is subject to regulation as a
"public-utility company," a "holding company," a "subsidiary company,"
an "associate company," or an "affiliate" of any of a "public-utility
company," a "holding company" or a "subsidiary company" of a "holding
company," as each such term is defined in PUHCA. Assuming the accuracy
of the representation in Section 4.06(a), none of Seller or the
Company, the Subsidiaries or any "affiliate" thereof, as defined in
section 2(a)(11) of PUHCA, requires any approvals under the Federal
Power Act or PUHCA for the execution, delivery, or performance of the
transactions contemplated by this Agreement.
(f) Assuming the accuracy of the representation set forth in
Section 4.06(c) and assuming that, from the commencement of power
generation at each Operating Facility through the Acquisition Closing,
each Operating Facility had continuously been a "qualifying
cogeneration facility" within the meaning of the PURPA Requirements,
consummation of the transactions contemplated by the Purchase Agreement
and the Amended LLC Agreement by Seller will not result in any of the
Operating Facilities losing its status as a "qualifying cogeneration
facility" within the meaning of the PURPA Requirements.
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SECTION 3.12 Taxes.
(a) (i) All Tax Returns of or with respect to any Tax which is
required to be filed by or with respect to the Company or any
Subsidiary since the Acquisition Closing and on or before the Closing
Date have been or will be duly and timely filed, (ii) all items of
income, gain, loss, deduction and credit or other items required to be
included in each such Tax Return have been or will be so included and
all information provided in each such Tax Return is true, correct and
complete in all material respects, (iii) all material Taxes which have
become or will become due with respect to the period covered by each
such Tax Return have been or will be timely paid in full, and (iv) all
withholding Tax requirements imposed on or with respect to the Company
or its Subsidiaries since the Acquisition Closing have been or will be
satisfied in full in all material respects.
(b) Since the Acquisition Closing, each of the Company and its
Subsidiaries has properly been classified as a partnership or
disregarded entity for federal income tax purposes.
(c) The consummation of any transactions subsequent to the
Acquisition Closing have not caused a termination of the Company
pursuant to Section 708(b) of the Code. The consummation of the
transactions contemplated by this Agreement and the Amended LLC
Agreement will not cause a termination of the Company pursuant to
Section 708(b) of the Code.
(d) Valid elections made pursuant to Section 754 of the Code
are in effect (or will be in effect with respect to the Company's
taxable year that includes the Closing upon the filing of the
applicable tax returns) for each of Company and its Subsidiaries
(except if such Subsidiary is a disregarded entity for federal income
tax purposes).
SECTION 3.13 Insurance. Seller has furnished to Buyer a list of all
insurance policies and fidelity bonds relating to the Company and its
Subsidiaries and their respective businesses and operations and officers and
employees. Except as set forth on SECTION 3.13 OF THE DISCLOSURE SCHEDULE, since
the Acquisition Closing, there has been no claim by the Company or any of its
Subsidiaries pending under any of such policies or bonds as to which coverage
has been questioned, denied or disputed by the underwriters of such policies or
bonds or in respect of which such underwriters have reserved their rights. Since
the Acquisition Closing, all premiums payable under all such policies and bonds
have been timely paid and such policies have been in full force and effect. To
the knowledge of Seller, all such policies satisfy the requirements of and have
been endorsed in accordance with the terms and conditions of all applicable
contracts and/or agreements.
SECTION 3.14 Brokers. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Seller or the Company or its Subsidiaries who might be entitled to any fee or
commission from Buyer or the Company or any of its Subsidiaries in connection
with the transactions contemplated by this Agreement.
SECTION 3.15 Year 2000. SECTION 3.15 OF THE DISCLOSURE SCHEDULE sets
forth Seller's representations as to the Company's Year 2000 compliance plan.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
SECTION 4.01 Organization, Etc. Buyer is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full limited liability power and authority to enter
into and perform its obligations under this Agreement, and has obtained all
requisite corporate or similar authorizations, consents or approvals applicable
to it to do so. El Paso Holding is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
full corporate power and authority to enter into and perform its obligations
under this Agreement, and has obtained all requisite corporate authorizations,
consents or approvals applicable to it to do so. This Agreement constitutes, and
the Amended LLC Agreement, the Buyer Security Agreement and the Amended Credit
Support Agreement, when executed at Closing, will constitute, valid and binding
obligations of Buyer, enforceable against Buyer in accordance with their
respective terms. This Agreement constitutes a valid and binding obligation of
El Paso Holding, enforceable against El Paso Holding in accordance with its
respective terms.
SECTION 4.02 No Violation. The execution and delivery of this
Agreement, the Amended LLC Agreement, the Buyer Security Agreement and the
Amended Credit Support Agreement by Buyer does not, and the consummation by
Buyer of the transactions contemplated hereby and thereby will not, and the
execution and delivery of this Agreement by El Paso Holding does not, and the
consummation by El Paso Holding of the transactions contemplated hereby and
thereby will not (a) violate the organizational documents of Buyer or El Paso
Holding, as applicable, (b) violate any permit, concession, grant, franchise,
law, rule or regulation, or any judgment, decree or order of any Governmental
Authority to which Buyer or El Paso Holding, as applicable, is a party or to
which Buyer or El Paso Holding, as applicable, or any of their property is
subject; or (c) conflict with, or result in a breach or violation of, or
accelerate the performance required by, the terms of any agreement, contract,
indenture or other instrument to which Buyer is a party or to which any of its
property is subject, except in each case such as would not materially impair the
ability of Buyer and El Paso Holding to consummate the transactions contemplated
by this Agreement.
SECTION 4.03 Approvals. The execution and delivery of this Agreement,
the Amended LLC Agreement, the Buyer Security Agreement and the Amended Credit
Support Agreement and the consummation of the transactions contemplated hereby
and thereby by Buyer, and the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and thereby by El Paso
Holding, will not require the consent, approval, order or authorization of any
Governmental Authority or regulatory authority or any other person under any
permit, license, agreement, indenture or other instrument to which Buyer or El
Paso Holding is a party or to which any of its properties are subject, and no
declaration, filing or registration with any Governmental Authority or
regulatory authority is required by Buyer or El Paso Holding in connection with
the execution and delivery of this Agreement and the consummation of such
transactions, except such as would not materially impair the ability of Buyer
and El Paso Holding to consummate the transactions contemplated by this
Agreement.
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SECTION 4.04 Investment Intent, Investigation.
(a) Buyer is capable of evaluating the merits and risks of its
investment in the Purchased Interests. Buyer is taking such Purchased
Interests for its own account and not with a view to or for sale in
connection with any distribution of such securities as such terms are
defined under Securities Act. The Buyer has had an opportunity to
discuss the Company's and its Subsidiaries' business and financial
condition, properties, operations and prospects with the Company's and
its Subsidiaries' management and to ask questions of officers of the
Company and its Subsidiaries, and all requests for information in such
connection have been answered to their satisfaction; provided that
Seller agrees that the foregoing representation shall in no way limit
Buyer's ability to rely on the representations made by Seller herein.
(b) Buyer understand that (i) the Purchased Interests will be
"restricted securities" under the applicable federal securities laws,
(ii) that the Securities Act and the rules of the SEC provide in
substance that a holder may dispose of the Purchased Interests only
pursuant to an effective registration statement under the Securities
Act or in a transaction exempt from the registration requirements of
the Securities Act, and that, accordingly, Buyer may be required to
bear the economic risk of the investment in the Purchased Interests for
a substantial period of time, and (iii) the certificates representing
the Purchased Interests may bear a legend to the foregoing effect.
SECTION 4.05 Financing. El Paso Holding or Buyer has, and will have at
Closing, sufficient cash funds available to pay the consideration to be paid to
Seller at Closing.
SECTION 4.06 Regulatory Matters.
(a) None of the Buyer or any "affiliate" thereof, as defined
in section 2(a)(11)(B) of PUHCA, is subject to regulation as a "public
utility" under the Federal Power Act, other than as contemplated by 18
C.F.R. section 292.601(c), or under any state law or regulation with
respect to the rates or the financial or organizational regulation of
electric utilities, other than as contemplated by 18 C.F. R. section
292.602(c)(2). None of the Buyer or any "affiliate" thereof, as defined
in section 2(a)(11) of PUHCA, is subject to regulation as a
"public-utility company," a "holding company," a "subsidiary company,"
an "associate company," or an "affiliate" of any of a "public-utility
company," a "holding company," or a "subsidiary company" of a "holding
company," as each such term is defined in PUHCA. The Buyer is not
subject to regulation as (i) a "public utility" under the Federal Power
Act; (ii) a "public-utility company," a "holding company," or a
"subsidiary company," "associate company," or "affiliate" of a
"public-utility company" or a "holding company" or an "affiliate" of a
"subsidiary company" of a "holding company," as each such term is
defined in PUHCA. Assuming the accuracy of the representation in
Section 3.11(e), none of the Buyer or any "affiliate" thereof, as
defined in section 2(a)(11) of PUHCA, requires any approvals under the
Federal Power Act or PUHCA for the execution, delivery, or performance
of the transactions contemplated by this Agreement.
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(b) Buyer is not "a person primarily engaged in the generation
or sale of electric power (other than electric power solely from
cogeneration facilities or small power production facilities"), an
"electric utility", an "electric utility holding company", or "a wholly
or partially owned subsidiary of an electric utility or electric
utility holding company", within the meaning of 18 C.F.R. section
292.206.
(c) Assuming the accuracy of the representation set forth in
Section 3.11(f) and assuming that each Operating Facility is as of the
Closing Date, and since the commencement of power generation at each
Operating Facility has continuously been, a "qualifying cogeneration
facility" within the meaning of the PURPA Requirements, consummation of
the transactions contemplated by this Agreement and the Amended LLC
Agreement by Buyer will not result in the loss of such status for such
Operating Facility.
SECTION 4.07 Brokers. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Buyer or its Affiliates who might be entitled to any fee or commission from
Seller or the Company or any of its Subsidiaries in connection with the
transactions contemplated by this Agreement.
ARTICLE 5
COVENANTS
SECTION 5.01 Conduct of Business. Except as contemplated by this
Agreement, from the date of this Agreement until the Closing, Seller will cause
the Company and its Subsidiaries to conduct their respective businesses in the
ordinary course consistent with past practices and use their reasonable efforts
to preserve intact, in all material respects, their respective business
organizations and relationships with third parties. Without limiting the
generality of the foregoing, except as contemplated by this Agreement or as set
forth on SECTION 5.01 OF THE DISCLOSURE SCHEDULE, from the date of this
Agreement until the Closing Date, without the prior written consent of Buyer,
Seller will not and will cause the Company and its Subsidiaries not to take any
action that would require the unanimous consent of the Class A Members pursuant
to the Amended LLC Agreement, if such Amended LLC Agreement were in effect. From
the date of this Agreement until Closing, Seller will cause the Company not to
make any distributions to its members in respect of their Membership Interests,
except for the distribution referred to in Section 5.01(a) of the Amended LLC
Agreement.
SECTION 5.02 Access to Information; Confidentiality.
(a) From the date of this Agreement until the Closing, Seller
will cause the Company and its Subsidiaries to (i) give the Buyer and
its representatives access to their respective properties, books,
records and employees, each during normal business hours and upon
reasonable prior notice; provided that any such access by Buyer or its
representatives shall not unreasonably interfere with the conduct of
business by the Company or any Subsidiary, (ii) furnish to the Buyer
and its representatives such financial and operating data and other
information regarding the Company and its Subsidiaries as Buyer may
reasonably request and (iii) instruct their respective employees to
cooperate with the Buyer in connection with such activities.
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(b) Any information obtained by Buyer and its representatives
pursuant to this Section 5.02 shall be subject to the provisions of the
Confidentiality Agreement dated April 29, 1999 between Buyer and Enron
Capital & Trade Resources Corp. (the "CONFIDENTIALITY AGREEMENT").
SECTION 5.03 Public Announcements. Subject to applicable securities
laws or stock exchange requirements, neither Buyer nor Seller shall, without the
prior approval of the other party, issue or permit any of their respective
partners, directors, officers, employees, agents or Affiliates to issue, any
press release or other public announcement with respect to this Agreement or the
transactions contemplated hereby. If a party is required to disclose information
with respect to this Agreement or the transactions contemplated hereby under
applicable securities laws or stock exchange requirements, to the extent
reasonably practicable under the circumstances, such party shall provide the
other party with prior notice of its intent to make the disclosure and the
general content of the disclosure.
SECTION 5.04 Best Efforts. Prior to the Closing, subject to the terms
and conditions of this Agreement, each of the parties agrees that it shall use
its commercially reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including, but not limited to,
(i) obtaining all consents from governmental authorities and other third parties
required for the consummation of the transactions contemplated hereby and (ii)
having vacated, dismissed or withdrawn any order, stay, decree, judgment or
injunction of any governmental authority which temporarily, preliminarily or
permanently prohibits or prevents the transactions contemplated by this
Agreement. Upon the terms and subject to the conditions hereof, each of the
parties agrees to use its commercially reasonable best efforts to take, or cause
to be taken, all actions to do, or cause to be done, all things necessary to
satisfy the conditions to Closing set forth herein.
SECTION 5.05 Exclusivity. Prior to the earlier of Closing or
termination of this Agreement, Seller will not, and Seller will cause the
Company and its Subsidiaries not to, solicit, initiate or encourage the
submission of any proposal or offer from any Person relating to the acquisition
of any Membership Interest or all or substantially all of the ownership
interests or assets of any of the Subsidiaries (including any acquisition
structured as a merger, consolidation or share exchange).
SECTION 5.06 Option Agreement. Buyer and Seller agree to negotiate in
good faith to reach an agreement acceptable to both parties providing for the
purchase by Buyer from Seller for fair value of an additional 1% of the
outstanding Class A and Class B Membership interests in the Company when and to
the extent that can be done without adversely affecting the Company and its
Subsidiaries.
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ARTICLE 6
CONDITIONS TO CLOSING
SECTION 6.01. Conditions to the Obligations of Each Party. The
obligations of the parties to consummate the transactions contemplated by this
Agreement are subject to the satisfaction of the following conditions:
(a) As of the Closing, no temporary restraining order,
preliminary or permanent injunction or other order or restraint issued
by any court of competent jurisdiction, no order, decree, restraint or
pronouncement by any Governmental Authority, and no other legal
restraint or prohibition that would prevent or have the effect of
preventing the consummation of the transactions described in this
Agreement shall be in effect;
(b) As of the Closing, the permits, approvals, filings and
consents required to be obtained from or made with any Governmental
Authorities, and all waiting periods required or contemplated to expire
prior to the consummation of transactions described in this Agreement
under any Applicable Law shall have been obtained, made or expired, as
the case may be, and all such regulatory approvals shall be in full
force and effect; and
(c) CalPERS shall have entered into the Amended LLC Agreement.
SECTION 6.02. Conditions to Obligations of the Buyer. The obligations
of the Buyer to consummate the transactions contemplated by this Agreement are
subject to the satisfaction of the following further conditions:
(a) Seller shall have performed in all material respects all
of its obligations under this Agreement required to be performed by it
on or prior to the Closing Date;
(b) The representations and warranties of Seller contained in
this Agreement and in any certificate or other writing delivered by
Seller pursuant to this Agreement shall be true in all material
respects at and as of the Closing Date, as if made at and as of such
date, except that representations and warranties made as of a specific
date need be true only as of that date;
(c) The Buyer shall have received certificates signed by an
authorized representative of Seller to the foregoing effect;
(d) The Buyer shall have received an opinion of ▇▇▇▇▇▇ &
▇▇▇▇▇▇ L.L.P. or other counsel to Seller in substantially the form set
forth on ANNEX 6.02 hereto;
(e) Seller shall have entered into the Amended LLC Agreement;
(f) The Class B Contribution shall have been consummated;
(g) Enron and the Company shall have entered into the Amended
Credit Support Agreement and either (i) the security agreement
contemplated by Section 2.04 or (ii) the amendments to the form of
Amended Credit Support Agreement as contemplated by Section 2.04 to the
extent the security agreement cannot be entered into; and
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(h) Seller shall have delivered to Buyer certification of
non-foreign status (as described in Treas. Reg. section 1.1445-2(b))
for purposes of Section 1445 of the Code.
SECTION 6.03. Conditions to Obligations of Seller. The obligation of
Seller to consummate the transactions contemplated by this Agreement is subject
to the satisfaction of the following further conditions:
(a) The Buyer shall have performed in all material respects
all of their obligations under this Agreement required to be performed
by it on or prior to the Closing Date, including entering into the
Buyer Security Agreement;
(b) The representations and warranties of the Buyer contained
in this Agreement and in any certificate or other writing delivered by
the Buyer pursuant to this Agreement shall be true in all material
respects at and as of the Closing Date, as if made at and as of such
date, it being understood and agreed that representations and
warranties made as of a specific date need be true only as of that
date;
(c) Seller shall have received a certificate signed by an
executive officer of Buyer to the foregoing effect;
(d) Seller shall have received the opinion of counsel to Buyer
in substantially the form set forth on ANNEX 6.03 hereto;
(e) El Paso Energy shall have entered into the Amended Credit
Support Agreement and either (i) the security agreement contemplated by
Section 2.04 or (ii) the amendments to the form of Amended Credit
Support Agreement as contemplated by Section 2.04 to the extent the
security agreement cannot be entered into; and
(f) Buyer shall have entered into the Amended LLC Agreement.
ARTICLE 7
TERMINATION
SECTION 7.01. Grounds for Termination. This Agreement may be terminated
at any time prior to the Closing:
(a) by mutual written agreement of Buyer and Seller;
(b) by either Buyer or Seller if the Closing shall not have
been consummated by August 13, 1999 or such later Closing Date as
elected by Buyer pursuant to Section 2.02(a) (the later of such dates
being the "END DATE"); provided, however, that Seller may not terminate
this Agreement pursuant to this Section 7.01(b) if the Closing shall
not have been consummated by the End Date by reason of Seller's failure
to perform in all material respects any of its respective covenants or
agreements contained in this Agreement; and provided, further, that
Buyer may not terminate this Agreement pursuant to this Section 7.01(b)
if the
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Closing shall not have been consummated by the End Date by reason of
Buyer's failure to perform in all material respects any of its
respective covenants or agreements contained in this Agreement;
(c) by Buyer, if a breach of any representation, warranty,
covenant or agreement on the part of Seller set forth in this Agreement
shall have occurred which would cause the condition set forth in
Section 6.02 (a) or (b) not to be satisfied, and such breach is
incapable of being cured or, if capable of being cured, shall not have
been cured within 30 Business Days following receipt by Seller of
notice of such breach from Buyer (or, if earlier, by the End Date);
(d) by Seller, if a breach of any representation, warranty,
covenant or agreement on the part of the Buyer set forth in this
Agreement (including, without limitation, the breach of Buyer's
obligations pursuant to Section 2.02(a) to consummate the Closing on or
before the End Date) shall have occurred which would cause the
condition set forth in Section 6.03 (a) or (b) not to be satisfied, and
such breach is incapable of being cured or, if capable of being cured,
shall not have been cured within 30 Business Days following receipt by
Buyer of notice of such breach from Seller (or, if earlier, by the End
Date); or
(e) by either Buyer or Seller if there shall be any Applicable
Law that makes consummation of the transactions contemplated hereby
illegal or otherwise prohibited or if consummation of the transactions
contemplated hereby would violate any nonappealable final order, decree
or judgment of any Governmental Authority having competent
jurisdiction.
SECTION 7.02. Effect of Termination.
(a) If this Agreement is terminated as permitted by Section
7.01, such termination shall be without liability of any party to any
other party to this Agreement, except that if such termination shall
result from (i) the willful failure of any party to this Agreement to
fulfill a condition to the performance of the obligations of the other
parties that is within the control of such party, (ii) the willful
failure of any party to this Agreement to perform a covenant or
agreement contained in this Agreement or (iii) the willful breach by
any party to this Agreement of any representation or warranty contained
in this Agreement, such party shall be fully liable for any and all
damages incurred or suffered by any other party as a result of such
failure or breach.
(b) In the event this Agreement is terminated for any reason,
other than pursuant to Section 7.01(d), Seller shall immediately refund
following such termination, by wire transfer in immediately available
funds to an account designated in writing by Buyer, the Deposit.
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ARTICLE 8
SURVIVAL; INDEMNIFICATION
SECTION 8.01. Survival. The representations and warranties of the
parties contained in this Agreement or in any certificate or other writing
delivered pursuant to this Agreement shall terminate at and not survive the
Closing; provided that (i) the representations and warranties of Seller
contained in Sections 3.07(a) and 3.07(b) shall each survive the Closing for a
period of one year, (ii) the representations and warranties of Seller contained
in clauses (ii)-(ix) of Section 3.05(c) and Sections 3.08, 3.09, 3.10(a) and
(b), 3.11(a),(b),(c),(e) and (f), each only with respect to actions or events
occurring during the time since the Acquisition Closing through June 30, 1999,
shall each survive the Closing for a period of one year, (iii) the
representations and warranties of Seller contained in Sections 3.01(a), 3.03(a)
and 3.04(a) and the representations and warranties of the Buyer contained in
Article 4 (other than those with respect to El Paso Holdings) shall each survive
the Closing for a period of two years, (iv) the representations and warranties
of Seller contained in Section 3.12 shall each survive the Closing until six
months after the closing of the applicable statute of limitations, and (v) the
representations and warranties of Seller contained in Section 3.02 shall survive
the Closing indefinitely (the representations and warranties of Seller listed in
this proviso being referred to herein as the "SURVIVING SELLER
REPRESENTATIONS"). Notwithstanding the preceding sentence, with respect to any
representation or warranty that survives the Closing in respect of which
indemnity may be sought under this Agreement, such representation or warranty
shall survive the time at which it would otherwise terminate pursuant to the
preceding sentence, if written notice of the inaccuracy of such representation
or warranty giving rise to such right of indemnity (including the specific
nature of such inaccuracy) shall have been given to the party against whom such
indemnity may be sought prior to such time. The covenants and agreements of the
parties (including, without limitation, the covenants and agreements of the
parties set forth in this Article 8) contained in this Agreement shall survive
the Closing.
SECTION 8.02. Indemnification.
(a) Seller hereby agrees to defend, indemnify and hold
harmless Buyer against any and all damages, losses, liabilities and
expenses (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection
with any action, suit or proceeding) ("DAMAGES") incurred or suffered
by it arising out of any misrepresentation or breach of any of the
Surviving Seller Representations or any covenant or agreement made or
to be performed by Seller under this Agreement. Notwithstanding the
foregoing, the total amount of Damages for which Seller may be liable
for breach of any Surviving Seller Representations (other than Section
3.02(c)) shall not in the aggregate exceed $50,000,000 and no claim for
breach of any Surviving Seller Representations referred to in clause
(ii) of the proviso in the first sentence of Section 8.01 may be made
until the aggregate amount of all such claims for breaches of all such
Surviving Seller Representations exceeds $1,000,000, and then only to
the extent of the excess over such $1,000,000 amount. Subject to
Sections 8.01 and 8.04, no claim for indemnification for a breach of a
Surviving Seller Representation may be made after the applicable
survival period set forth in Section 8.01.
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(b) Buyer hereby agrees to defend, indemnify and hold harmless
Seller against any and all Damages incurred or suffered by them arising
out of any misrepresentation or breach of a representation or warranty
in Article 4 or any covenant or agreement made or to be performed by
the Buyer pursuant to this Agreement. Subject to Sections 8.01 and
8.04, no claim for indemnification for a breach of a representation or
warranty in Article 4 may be made after the applicable survival period
set forth in Section 8.01.
(c) For all Tax purposes, the parties shall treat any
indemnification payment made pursuant to this Section 8.02 as an
adjustment to the purchase price paid by Buyer pursuant to Section
2.01(a).
SECTION 8.03. Procedures for Third Party Claims.
(a) The parties seeking indemnification under Section 8.02
(the "INDEMNIFIED PARTIES") agree to give prompt notice to the parties
against whom indemnity is sought (the "INDEMNIFYING PARTIES") of the
assertion of any claim, or the commencement of any suit, action or
proceeding in respect of which indemnity may be sought under Section
8.02 (the "THIRD PARTY CLAIMS"). The failure by any Indemnified Party
so to notify the Indemnifying Parties shall not relieve any
Indemnifying Party from any liability which it may have to such
Indemnified Party with respect to any claim made pursuant to this
Section 8.03, except to the extent such failure shall actually
prejudice an Indemnifying Party.
(b) Upon receipt of notice from the Indemnified Parties
pursuant to Section 8.03(a), the Indemnifying Parties will assume the
defense and control of such Third Party Claims but shall allow the
Indemnified Parties a reasonable opportunity to participate in the
defense of such Third Party Claims with their own counsel and at their
own expense. The Indemnified Parties shall, and shall cause each of
their Affiliates and Representatives to, cooperate fully with the
Indemnifying Parties in the defense of any Third Party Claim defended
by the Indemnifying Parties.
(c) The Indemnifying Parties shall be authorized to consent to
a settlement of, or the entry of any judgment arising from, any Third
Party Claim, without the consent of any Indemnified Party, but only if
the Indemnifying Parties shall pay or cause to be paid all amounts
arising out of such settlement or judgment concurrently with the
effectiveness of such settlement; not encumber any of the assets of any
Indemnified Party or agree to any restriction or condition that would
apply or adversely affect any Indemnified Party or to the conduct of
any Indemnified Party's business; and obtain, as a condition of any
settlement or other resolution, a complete release of any Indemnified
Party potentially affected by such Third Party Claim.
SECTION 8.04. Exclusive Remedy. Each party hereto acknowledges and
agrees that the provisions of this Article 8 shall be the exclusive remedy of
such party with respect to any matter arising under this Agreement or in
connection with the transactions contemplated hereby; provided however that none
of the provisions set forth in this Agreement shall be deemed a waiver by any
party to this Agreement of any right or remedy that such party may have at law
or equity, based on
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any other party's fraudulent acts or omissions, nor shall any such provisions
limit, or be deemed to limit, the time period during which a claim for fraud may
be brought.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications
to any party under this Agreement shall be in writing (including telecopy or
similar writing) and shall be given,
if to Seller:
c/o Enron Capital & Trade Resources Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: W. ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to Buyer:
Mesquite Investors, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. and ▇▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Coudert Brothers
Army Navy Club Building
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or telecopy number and with such other copies, as such
party may hereafter specify for the purpose by notice to the other parties. Each
such notice, request or other
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communication shall be effective (i) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified in this Section and evidence of
receipt is received or (ii) if given by any other means, upon delivery or
refusal of delivery at the address specified in this Section.
SECTION 9.02. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by each party to this Agreement, or in the
case of a waiver, by the party against whom the waiver is to be
effective.
(b) No failure or delay by any party in exercising any right,
power or privilege under this Agreement shall operate as a waiver of
such right, power or privilege nor shall any single or partial exercise
of any right, power or privilege preclude any other or further exercise
of such right, power or privilege or the exercise of any other right,
power or privilege.
SECTION 9.03. Parties in Interest. Nothing in this Agreement is
intended to confer any rights or remedies under or by reason of this Agreement
on any persons other than the Buyer or Seller and their respective successors
and permitted assigns.
SECTION 9.04. Expenses. Except as otherwise provided in this Agreement,
all costs and expenses incurred in connection with the transactions contemplated
by this Agreement shall be paid by the party incurring such cost or expense.
SECTION 9.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
except to a permitted successor and assign under the Amended LLC Agreement,
without the consent of each other party.
SECTION 9.06. Governing Law; Arbitration.
(a) This Agreement (including, but not limited to, the
validity and enforceability hereof) shall be governed by, and construed
in accordance with, the laws of the State of Texas, other than the
conflict of laws rules thereof.
(b) Any and all claims, counterclaims, demands, cause of
action, disputes, controversies, and other matters in question arising
under this Agreement or the alleged breach of any provision hereof,
(all of which are referred to herein as "DISPUTED CLAIMS"), whether
such Disputed Claims arise at law or in equity, under State or federal
law, for damages or any other relief, shall be resolved by binding
arbitration in the manner set forth herein.
(c) The validity, construction, and interpretation of this
agreement to arbitrate, and all procedural aspects of the arbitration
conducted pursuant to this agreement to arbitrate
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and the rules governing the conduct of the arbitration (including the
time for filing an answer, the time for the filing of counter Disputed
Claims, the times for amending the pleadings, the specificity of the
pleadings, the extent and scope of discovery, the issuance of
subpoenas, the times for the designation of experts, whether the
arbitration is to be stayed pending resolution of related litigation
involving third parties not bound by this Agreement, the receipt of
evidence, and the like), shall be decided by the arbitrators. In
deciding the substance of the parties' Disputed Claims, the arbitrators
shall refer to the substantive laws of the State of Texas for guidance
(excluding Texas choice-of-law principles that might call for the
application of some other state's law); provided, however, that IT IS
EXPRESSLY AGREED THAT NOTWITHSTANDING ANY OTHER PROVISION IN THIS
AGREEMENT TO THE CONTRARY, THE ARBITRATORS SHALL HAVE ABSOLUTELY NO
AUTHORITY TO AWARD CONSEQUENTIAL DAMAGES (SUCH AS LOSS OF PROFIT),
TREBLE, EXEMPLARY OR PUNITIVE DAMAGES OF ANY TYPE UNDER ANY
CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE UNDER
TEXAS LAW, THE LAW OF ANY OTHER STATE, OR FEDERAL LAW, OR UNDER THE
UNITED STATES ARBITRATION ACT, OR UNDER ANY OTHER RULES OF ARBITRATION.
The arbitrators shall have the authority to assess the costs and
expenses of the arbitration proceeding (including the arbitrators' fees
and expenses) against either or both parties. However, each party shall
bear its own attorneys fees and the arbitrators shall have no authority
to award attorneys fees.
(d) The arbitration proceedings shall be conducted in Houston,
Texas by three arbitrators in accordance with the CPR Institute for
Dispute Resolution Non-Administered Arbitration rules in effect on the
date of this agreement. Within 30 days of the notice of initiation of
the arbitration procedure, the parties shall select three arbitrators.
If the parties are unable to agree upon the identity of the three
arbitrators, within the time set forth herein, the vacancies in the
selection of agreed arbitrators shall be filled by CPR in the manner
specified in CPR Rule 6. The arbitration shall be governed by the
United States Arbitration Act, 9 U.S.C. Section 1-16, as such Act is
modified by this Agreement and judgment upon the award rendered by the
arbitrators may be entered by any court having jurisdiction thereof.
(e) All fees of the arbitrators and other administrative
charges related to the arbitration shall be borne equally by the
parties.
(f) The parties hereby agree that the arbitration proceeding
and the arbitrators' award are to remain confidential and none of the
parties or their counsel will divulge or discuss, directly or
indirectly, in the newspaper, electronic media, or other public or
private forum, or with any third parties, the arbitration proceeding
and/or the arbitrators' award except: (1) to the extent required by a
court of law or any federal, state, or local government, agency or
regulatory body or to the extent required to comply with applicable
securities laws or stock exchange requirements; (2) to the extent
further agreed to by the parties hereto, which consent will not be
unreasonably withheld; or (3) to the extent necessary under subsection
(g) below.
(g) The award of the arbitrators shall be final and binding on
the parties, and judgment thereon may be entered in a court of
competent jurisdiction.
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SECTION 9.07. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures were upon the same instrument.
SECTION 9.08. Entire Agreement. This Agreement and the agreements
specifically contemplated hereby constitute the entire agreement among the
parties with respect to the subject matter of such documents and supersede all
prior agreements, understandings and negotiations, both written and oral,
between the parties with respect to the subject matter of such documents.
SECTION 9.09. Captions. The captions in this Agreement are included for
convenience of reference only and shall be ignored in the construction or
interpretation of the provisions of this Agreement.
SECTION 9.10. Further Assurances. Following the Closing, each of the
parties will cooperate and use its reasonable efforts to take or cause to be
taken all actions, to cooperate with the other parties hereto with respect to
all actions, and to do or cause to be done all things necessary or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, making the notice filings contemplated by Section
3.04.
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The parties have caused this Agreement to be duly executed individually
or by their authorized representatives on the day and year first above written.
EAST COAST POWER
HOLDING COMPANY L.L.C.
By: Joint Energy Development Investments II
Limited Partnership, its Managing Member
By: Enron Capital Management II Limited
Partnership, its General Partner
By: Enron Capital II Corp., its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
35
MESQUITE INVESTORS, L.L.C.
By: Chaparral Investors, L.L.C., its sole Member
By: El Paso Chaparral Investor, L.L.C., its sole
Member
By: El Paso Chaparral Holding Company, its sole
Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
The undersigned joins this Agreement for the purposes of its agreements
in Sections 2.01 and 2.02, and further joins in the representations applicable
to it in Sections 4.01, 4.02, 4.03 and 4.05.
EL PASO POWER HOLDING COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President