EXHIBIT 10-C
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
ATLANTIC CITY ELECTRIC COMPANY
AND
NRG ENERGY, INC.
DATED AS OF JANUARY 18, 2000
(ACE - JOINTLY OWNED STATIONS)
LIST OF EXHIBITS AND SCHEDULES
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EXHIBITS
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Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Form of ▇▇▇▇ of Sale
Exhibit C Form of FIRPTA Affidavit
Exhibit D Form of Limited Warranty Deed
Exhibit E Form of Seller's Legal Opinion
Exhibit F Form of Buyer's Legal Opinion
SCHEDULES
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1.1(17) Capital Expenditures
1.1(28) Description of Conemaugh Station
1.1(66) Description of Keystone Station
1.1(85) Permitted Encumbrances
1.1(115) Target Adjustment Amount Methodology
1.1(121) Transferable Permits
2.1(c) Electrical Transmission Facilities
2.1(f) Emission Allowances to be Transferred to Buyer
2.1(g) Excess Emission Allowances
2.6 Inventories
4.3(a) Seller's Defaults and Violations
4.3(b) Seller's Consents and Approvals
4.4 Insurance Exceptions
4.6 Environmental Matters
4.7 Real Property
4.9(a) Seller's Agreements
4.10 Legal Proceedings
5.3(a) Buyer's Defaults and Violations
5.3(b) Buyer's Consents and Approvals
5.9 Environmental Site Assessments
7.1(c) Buyer's Required Regulatory Approvals
7.2(c) Seller's Required Regulatory Approvals
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
1.1 Definitions......................................................1
1.2 Certain Interpretive Matters....................................13
1.3 U.S. Dollars....................................................13
1.4 Sellers' Interest in Jointly Owned Stations. ..................14
ARTICLE II
PURCHASE AND SALE
2.1 Transfer of Assets..............................................14
2.2 Excluded Assets.................................................15
2.3 Assumed Liabilities.............................................17
2.4 Excluded Liabilities............................................18
2.5 Control of Litigation...........................................20
2.6 Inventories.....................................................20
ARTICLE III
THE CLOSING
3.1 Closing.........................................................20
3.2 Payment of Purchase Price.......................................21
3.3 Adjustment to Purchase Price....................................21
3.4 Tax Reporting and Allocation of Purchase Price..................22
3.5 Prorations......................................................23
3.6 Deliveries by Seller............................................24
3.7 Deliveries by Buyer.............................................25
3.8 Post-Closing Excluded Asset Deliveries..........................26
3.9 Relationship of this Agreement and Related Purchase Agreements..26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
4.1 Organization; Qualification.....................................27
4.2 Authority.......................................................27
4.3 Consents and Approvals; No Violation............................27
4.4 Insurance.......................................................28
4.5 Title and Related Matters.......................................28
4.6 Environmental Matters...........................................28
4.7 Real Property...................................................29
4.8 Condemnation....................................................29
4.9 Contracts and Leases............................................29
4.10 Legal Proceedings...............................................30
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4.11 Permits.........................................................30
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
5.1 Organization; Qualification.....................................30
5.2 Authority.......................................................31
5.3 Consents and Approvals; No Violation............................31
5.4 Buyer's Permits.................................................32
5.5 Availability of Funds...........................................32
5.6 Financial Statements............................................32
5.7 Legal Proceedings...............................................32
5.8 Qualified Buyer.................................................32
5.9 Inspections.....................................................33
5.10 Regulation as a Utility.........................................33
ARTICLE VI
COVENANTS OF THE PARTIES
6.1 Access to Information...........................................33
6.2 Public Statements...............................................34
6.3 Further Assurances..............................................34
6.4 Consents and Approvals..........................................35
6.5 Certain Tax Matters.............................................36
6.6 Advice of Changes...............................................38
6.7 Risk of Loss....................................................38
6.8 PJM; MAAC.......................................................39
6.9 Emission Allowances.............................................39
ARTICLE VII
CONDITIONS
7.1 Conditions to Obligation of Buyer...............................39
7.2 Conditions to Obligation of Seller..............................41
ARTICLE VIII
INDEMNIFICATION AND ARBITRATION
8.1 Indemnification.................................................42
8.2 Defense of Claims...............................................44
8.3 Arbitration.....................................................45
8.4 Remediation of Matters Covered in Section 2.4(g)................46
ARTICLE IX
TERMINATION
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9.1 Termination.....................................................47
9.2 Effect of Termination...........................................48
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Amendment and Modification......................................49
10.2 Expenses........................................................49
10.3 Fees and Commissions............................................49
10.4 Bulk Sales Laws.................................................49
10.5 Waiver of Compliance; Consents................................50
10.6 No Survival.....................................................50
10.7 Disclaimers.....................................................50
10.8 Notices.........................................................51
10.9 Assignment......................................................52
10.10 Governing Law; Forum; Service of Process........................52
10.11 Counterparts....................................................53
10.12 Interpretation..................................................53
10.13 Schedules and Exhibits..........................................53
10.14 Entire Agreement................................................53
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PURCHASE AND SALE AGREEMENT
---------------------------
PURCHASE AND SALE AGREEMENT, dated as of January 18, 2000 (this
"Agreement"), by and between Atlantic City Electric Company, a New Jersey
corporation ("ACE" or "Seller"), and NRG Energy, Inc., a Delaware corporation
("Buyer"). Seller and Buyer may be referred to herein individually as a
"Party," and collectively as the "Parties."
W I T N E S S E T H
-------------------
WHEREAS, Seller owns minority interests in two fossil fuel-fired
electric generating stations (referred to herein as the "Jointly Owned
Stations"), and certain properties and assets associated therewith and
ancillary thereto; and
WHEREAS, Seller possesses certain Emission Allowances (as defined below)
relating to the Jointly Owned Stations; and
WHEREAS, Buyer desires to purchase and assume, and Seller desires to
sell and assign, or cause to be sold and assigned, the Purchased Assets (as
defined below) and certain associated Liabilities (as defined below), upon the
terms and conditions hereinafter set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants, representations, warranties and agreements set forth herein, and
intending to be legally bound hereby, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
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1.1 Definitions. As used in this Agreement, the following capitalized
terms have the meanings specified in this Section 1.1.
(1) "ACE" has the meaning set forth in the preamble to this Agreement.
(2) "ACE Related Purchase Agreement" means the separate Purchase and
Sale Agreement, dated as of the date hereof, entered into by Seller and Buyer,
relating to the purchase and sale of the ▇.▇. ▇▇▇▇▇▇▇ Station, the Deepwater
Station, certain Excess ▇▇▇▇▇▇▇ Creek Interests, certain SO2 Allowances and
NOx Emission Allowances and certain related properties and assets.
(3) "Additional Agreements" means the Limited Warranty Deeds, the
Assignment and Assumption Agreement and the ▇▇▇▇ of Sale.
(4) "Affiliate" has the meaning set forth in Rule 12b-2 of the General
Rules and Regulations promulgated under the Exchange Act.
(5) "Agreement" means this Purchase and Sale Agreement together with the
Schedules and Exhibits hereto.
(6) "Assignment and Assumption Agreements" means the assignment and
assumption agreements between Seller and Buyer, to be delivered at the
Closing, substantially in the form of Exhibit A hereto, pursuant to which
Seller shall assign to Buyer the Seller's Agreements, certain intangible
assets and certain other Purchased Assets, and Buyer shall accept such
assignment and assume the Assumed Liabilities.
(7) "Assumed Liabilities" has the meaning set forth in Section 2.3.
(8) "▇.▇. ▇▇▇▇▇▇▇ Station" means the generating station known as ▇.▇.
▇▇▇▇▇▇▇ Station, located in the Town of ▇▇▇▇▇▇▇'▇ Point, County of Cape May,
State of New Jersey, and certain related properties and assets.
(9) "▇▇▇▇ of Sale" means the ▇▇▇▇ of sale of Seller, to be delivered at
the Closing, substantially in the form of Exhibit B hereto.
(10) "Business Day" means any day other than Saturday, Sunday and any
day on which banking institutions in the State of New York are authorized or
required by law or other governmental action to close.
(11) "Buyer" has the meaning set forth in the preamble to this
Agreement.
(12) "Buyer Material Adverse Effect" has the meaning set forth in
Section 5.3(a).
(13) "Buyer's Financial Statements" has the meaning set forth in Section
5.5.
(14) "Buyer's Indemnitee" has the meaning set forth in Section 8.1(b).
(15) "Buyer's Permits" has the meaning set forth in Section 5.4.
(16) "Buyer's Required Regulatory Approvals" has the meaning set forth
in Section 5.3(b).
(17) "Capital Expenditures" means the total amount of funds paid, or
Liabilities incurred, by Seller (other than such as constitute Assumed
Liabilities) for one or more of the projects listed on Schedule 1.1(17) during
the period commencing on September 1, 1999 and ending on the Closing Date.
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(18) "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to time.
(19) "Closing" has the meaning set forth in Section 3.1.
(20) "Closing Adjustment Amount" means an amount, calculated in a manner
consistent with the calculation of the Target Adjustment Amount, equal to the
sum, as of the Closing Date, of (a) the Net Book Value of Seller's right,
title and interest in and to the Inventories plus (b) Capital Expenditures.
(21) "Closing Date" has the meaning set forth in Section 3.1.
(22) "Closing Payment" has the meaning set forth in Section 3.2(c).
(23) "Closing Statement" has the meaning set forth in Section 3.3(a).
(24) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(25) "Commercial Arbitration Rules" has the meaning set forth in Section
8.3(c).
(26) "Commercially Reasonable Efforts" means efforts which are
reasonably within the contemplation of the Parties at the time of entering
into this Agreement and which do not require the performing Party to expend
funds other than expenditures which are customary and reasonable in
transactions of the kind and nature contemplated by this Agreement in order
for the performing Party to satisfy its obligations hereunder.
(27) "Conemaugh Interest" means Seller's 3.83% undivided interest as
tenant in common in Conemaugh Station.
(28) "Conemaugh Station" means the generating station known as Conemaugh
Station, located in the County of Indiana, Commonwealth of Pennsylvania, and
related properties and assets, all as more fully identified on Schedule
1.1(28) attached hereto.
(29) "Confidentiality Agreement" means the Confidentiality Agreement,
dated July 21, 1999, between Conectiv, a Delaware corporation, and Buyer.
(30) "Courts" has the meaning set forth in Section 10.10.
(31) "Deepwater Station" means the generating station known as Deepwater
Station, located in the Town of Pennsville, County of Salem, State of New
Jersey, and certain related properties and assets.
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(32) "Direct Claim" has the meaning set forth in Section 8.2(c).
(33) "Dorchester Property" means the approximately 247-acre site owned
by DP&L located in the County of Dorchester, State of Maryland, and related
properties and assets.
(34) "DP&L" means Delmarva Power & Light Company, a Delaware and
Virginia corporation.
(35) "DP&L Related Purchase Agreements" means (i) the separate Purchase
and Sale Agreement, dated as of the date hereof, entered into by DP&L and
Buyer, relating to the purchase and sale of the Indian River Station, the
Vienna Station, the Dorchester Property, certain SO2 Allowances and NOx
Emission Allowances, and certain related properties and assets; and (ii) the
separate Purchase and Sale Agreement, dated as of the date hereof, entered
into by DP&L and Buyer, relating to the purchase and sale of DP&L's undivided
3.70% interest as tenant in common in the Keystone Station, DP&L's undivided
3.72% interest as tenant in common in the Conemaugh Station, and certain
related properties and assets.
(36) "Easements" means, collectively, all easements, licenses, rights of
way and other access rights reserved by Seller, or any Affiliate thereof, in
the Limited Warranty Deeds, including such as authorize access, use,
maintenance, construction, repair, replacement and other activities by Seller,
or any Affiliate thereof, or otherwise necessary for Seller, or any Affiliate
thereof, to operate its electrical transmission and distribution facilities,
or information technology and telecommunications assets, or fulfill legal
requirements applicable thereto.
(37) "Emission Allowances" means Emission Reduction Credits, NOx
Emission Allowances and SO2 Allowances.
(38) "Emission Reduction Credits" means credits, in units that are
established by the Governmental Authority with jurisdiction over the relevant
Site that has obtained the credits, resulting from reductions in the emissions
of air pollutants from an emitting source or facility (including, and to the
extent allowable under applicable Law, reductions resulting from shutdowns or
control of emissions beyond that required by applicable Law) that have been
certified by any applicable Governmental Authority as complying with the Law
and regulations governing the establishment of such credits (including
certification that such emissions reductions are enforceable, permanent,
quantifiable and surplus), including air emissions reductions as described
above that have been approved by the applicable Governmental Authority and are
awaiting USEPA approval. The term also includes certified air emissions
reductions, as described above, regardless as to whether the Governmental
Authority certifying such reductions designates such certified air emissions
reductions by a name other than "emission reduction credits."
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(39) "Encumbrances" means any and all mortgages, pledges, liens, claims,
security interests, agreements, easements, activity and use limitations,
restrictions, defects of title or encumbrances of any kind.
(40) "Environmental Claims" has the meaning set forth in Section 8.1(c).
(41) "Environmental Condition" means the presence or Release to the
environment, whether at the Sites or otherwise, of Hazardous Substances,
including any migration of Hazardous Substances through air, soil or
groundwater at, to or from the Sites or at, to or from any Off-Site Location,
regardless of when such presence or Release occurred or is discovered.
(42) "Environmental Laws" means all (a) Laws, in each case, as amended
from time to time, relating to pollution or protection of the environment,
natural resources or human health and safety, including Laws relating to
Releases or threatened Releases of Hazardous Substances or otherwise relating
to the manufacture, formulation, generation, processing, distribution, use,
treatment, storage, Release, transport, Remediation, abatement, cleanup or
handling of Hazardous Substances, (b) Laws with regard to recordkeeping,
notification, disclosure and reporting requirements respecting Hazardous
Substances and (c) Laws relating to the management or use of natural
resources.
(43) "Environmental Permits" means all permits, certificates, licenses
and authorizations of all Governmental Authorities under Environmental Laws.
(44) "Estimated Adjustment Amount" has the meaning set forth in Section
3.2(b).
(45) "Excess Emission Allowances" has the meaning set forth in Section
2.1(g).
(46) "Excess ▇▇▇▇▇▇▇ Creek Interests" means the interests of Seller in
the ▇▇▇▇▇▇▇ Creek Reservoir located in Harmony Township, County of ▇▇▇▇▇▇,
State of New Jersey, which are to be sold to Buyer pursuant to the ACE Related
Purchase Agreement.
(47) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated
thereunder from time to time.
(48) "Excluded Assets" has the meaning set forth in Section 2.2.
(49) "Excluded Liabilities" has the meaning set forth in Section 2.4.
(50) "FERC" means the United States Federal Energy Regulatory
Commission, and any successor agency thereto.
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(51) "FIRPTA Affidavit" means the Foreign Investment in Real Property
Tax Act Certification and Affidavit of Seller, to be delivered at the Closing,
substantially in the form of Exhibit C hereto.
(52) "Governmental Authority" means any executive, legislative,
judicial, regulatory or administrative agency, body, commission, department,
board, court, tribunal, arbitrating body or authority of the United States or
any foreign country, or any state, local or other governmental subdivision
thereof.
(53) "Hazardous Substances" means (a) any petrochemical or petroleum
products, oil or coal ash, radioactive materials, radon gas, asbestos in any
form that is or could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contain dielectric fluid which may
contain polychlorinated biphenyls, (b) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "hazardous constituents," "restricted
hazardous materials," "extremely hazardous substances," "toxic substances,"
"contaminants," "pollutants," "toxic pollutants" or words of similar meaning
and regulatory effect under any applicable Environmental Law and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any applicable Environmental Law.
(54) "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended from time to time.
(55) "Income Tax" means any Tax imposed by any Governmental Authority
(a) based upon, measured by or calculated with respect to net income, profits
or receipts (including capital gains Taxes and minimum Taxes) or (b) based
upon, measured by or calculated with respect to multiple bases (including
corporate franchise taxes) if one or more of such bases is described in clause
(a), in each case, together with any interest, penalties or additions
attributable thereto.
(56) "Indemnifiable Loss" has the meaning set forth in Section 8.1(a).
(57) "Indemnifying Party" has the meaning set forth in Section 8.1(f).
(58) "Indemnitee" has the meaning set forth in Section 8.1(b).
(59) "Independent Accounting Firm" means such nationally recognized,
independent accounting firm as is mutually appointed by Seller and Buyer for
purposes of this Agreement.
(60) "Indian River Station" means the generating station known as Indian
River Power Plant, located in the Town of Millsboro, County of Sussex, State
of Delaware, and related properties and assets.
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(61) "Inspection" means all tests, reviews, examinations, inspections,
investigations, verifications, samplings and similar activities conducted by
Buyer or its Representatives with respect to the Purchased Assets prior to the
Closing.
(62) "Inventories" means coal, oil, tire-derived fuel and other fuel
inventories, limestone, materials, spare parts, capital spare parts,
consumable supplies and chemical and gas inventories (together with related
freight, commodity and handling (other than on-site handling)) which are
located at or in transit to the Jointly Owned Stations relating to the
operation of the Jointly Owned Stations.
(63) "Jointly Owned Stations" means, together, Conemaugh Station and
Keystone Station.
(64) "Jointly Owned Stations Operating Agreements" means, together, (i)
the Operating Agreement, dated December 1, 1967, as amended, among
Pennsylvania Electric Company, ACE, Baltimore Gas and Electric Company, DP&L,
Metropolitan Edison Company, Pennsylvania Power & Light Company, Philadelphia
Electric Company, Potomac Electric Power Company, Public Service Electric and
Gas Company and UGI Corporation, with respect to the ownership and operation
of Conemaugh Station and (ii) the Operating Agreement, dated December 1, 1965,
as amended, among Pennsylvania Electric Company, ACE, Baltimore Gas and
Electric Company, DP&L, Jersey Central Power & Light Company, Pennsylvania
Power & Light Company, Philadelphia Electric Company and Public Service
Electric and Gas Company, with respect to the ownership and operation of the
Keystone Station.
(65) "Keystone Interest" means Seller's 2.47% undivided interest as
tenant in common in Keystone Station.
(66) "Keystone Station" means the generating station known as Keystone
Station located in Plumcreek Township, County of ▇▇▇▇▇▇▇▇▇, Commonwealth of
Pennsylvania, and related properties and assets, all as more fully identified
on Schedule 1.1(66) attached hereto.
(67) "Knowledge" means the actual knowledge of the directors and
executive officers of the specified Person, which directors and executive
officers are charged with responsibility for the particular function as of the
date of this Agreement, or, with respect to any certificate delivered pursuant
to this Agreement, the date of delivery of such certificate.
(68) "Laws" means all laws, statutes, rules, regulations and ordinances
of any Governmental Authority.
(69) "Liability" or "Liabilities" means any liability or obligation
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated
and whether due or to become due), including any liability for Taxes.
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(70) "Like-Kind Exchange" has the meaning set forth in Section 6.5(e).
(71) "Limited Warranty Deeds" means the Limited Warranty Deeds, to be
delivered at the Closing, substantially in the form of Exhibit D hereto,
pursuant to which Seller will convey the Real Property to Buyer.
(72) "MAAC" means the Mid-Atlantic Area Council.
(73) "Material Adverse Effect" means any change in or effect on the
Purchased Assets or the operation of the Purchased Assets after the date
hereof that is materially adverse to the operation or condition (financial or
otherwise) of the Purchased Assets, taken as a whole, other than (i) any
change or effect affecting the international, national, regional or local
electric industry as a whole and not specific and exclusive to the Purchased
Assets, (ii) any change or effect resulting from changes in the international,
national, regional or local wholesale or retail markets for electricity,
including any change in or effect on the structure, operating agreements,
operations or procedures of Pennsylvania-New Jersey-Maryland Interconnection
L.L.C. or its control area, (iii) any change or effect resulting from changes
in the international, national, regional or local markets for any fuel used at
the Jointly Owned Stations, (iv) any change or effect resulting from changes
in the North American, national, regional or local electricity transmission
systems or operations thereof, (v) changes in Law, or any judgments, orders or
decrees that apply generally to similarly situated Persons, (vi) any change or
effect to the extent constituting or involving an Excluded Asset or an
Excluded Liability and (vii) any change in or effect on the Purchased Assets
which is cured (including by payment of money) before the earlier of the
Closing and the termination of this Agreement pursuant to Section 9.1.
(74) "Net Book Value" means, as of any date, original cost (including
related freight, commodity and handling (other than on-site handling)) less
applicable depreciation and amortization, as reflected on Seller's books and
records through such date in accordance with United States generally accepted
accounting principles as applied by Seller on August 31, 1999.
(75) "Net ▇▇▇▇▇ Refund" has the meaning set forth in Section 3.5(c).
(76) "NJBPU" means the New Jersey Board of Public Utilities, and any
successor agency thereto.
(77) "NOx" means oxides of nitrogen.
(78) "NOx Budget Program" means Nitrogen Oxides Budget Program, which is
a statutory or regulatory program promulgated by the United States or a state
pursuant to which the United States or state provides for a limit on the
oxides of nitrogen that can be emitted by all sources covered by the program
and establishes allowances or authorizations, which in total are
8
equal to the amount of oxides of nitrogen allowed by the limit, where each
allowance or authorization represents a "right" to emit a unit of oxides of
nitrogen, as the means for ensuring compliance with the limit.
(79) "NOx Emission Allowance" means (a) an authorization by the PaDEP
under its NOx Budget Program authorizing the emission of one ton of NOx during
the ozone season, as such season is defined by the PaDEP; or (b) an
authorization by the USEPA under any future NOx Budget Program promulgated by
the USEPA, including any future program implemented in lieu of a state NOx
Budget Program, authorizing the emission of one ton of NOx during the ozone
season, as such season is defined by the USEPA.
(80) "Off-Site Location" means any real property other than the Sites.
(81) "PaDEP" means the Pennsylvania Department of Environmental
Protection, and any successor agency thereto.
(82) "PaPUC" means the Pennsylvania Public Utility Commission, and any
successor agency thereto.
(83) "Party" and "Parties" have the respective meanings set forth in the
preamble to this Agreement.
(84) "Pennsylvania Assets" has the meaning set forth in Section 3.5(c).
(85) "Permitted Encumbrances" means: (a) the Easements; (b) those
exceptions to title to the Purchased Assets listed in Schedule 1.1(85); (c)
statutory liens for Taxes or other charges or assessments of Governmental
Authorities not yet due or delinquent, or which are being contested in good
faith by appropriate proceedings; (d) mechanics', carriers', workers',
repairers' and other similar liens arising or incurred in the ordinary course
of business to the extent that they secure payment of obligations which are
not in arrears or otherwise due and which have been incurred under Good
Utility Practices; (e) zoning, entitlement, conservation restriction and other
land use and environmental regulations by Governmental Authorities; and (f)
with respect to any Jointly Owned Station, such non-monetary Encumbrances as
do not materially detract from the value of the Purchased Assets located at
such Jointly Owned Station, taken as a whole, as currently used, or materially
interfere with the present use of the Purchased Assets located at such Jointly
Owned Station, taken as a whole.
(86) "Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization, other
business association or Governmental Authority.
(87) "PJM" means the Pennsylvania-New Jersey-Maryland Power Pool, as
established and administered by Pennsylvania - New Jersey - Maryland
Interconnection L.L.C.
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(88) "PJM Agreement" means the Operating Agreement dated June 2, 1997 of
Pennsylvania-New Jersey-Maryland Interconnection L.L.C., as amended from time
to time.
(89) "Prime Rate" has the meaning set forth in Section 3.3(c).
(90) "Proprietary Information" of a Party means all information about
any Party or its properties or operations furnished to the other Party or its
Representatives by such Party or its Representatives, after the date hereof,
regardless of the manner or medium in which it is furnished. Proprietary
Information does not include information that: (a) is or becomes generally
available to the public, other than as a result of a disclosure by the other
Party or its Representatives; (b) was available to the other Party on a
non-confidential basis prior to its disclosure by the Party or its
Representatives; (c) is or becomes available to the other Party on a
non-confidential basis from a source other than such Party, provided that the
source of such information was not known by such Party or its Representatives,
after reasonable investigation, to be bound by a confidentiality agreement
with or other contractual, legal or fiduciary obligation of confidentiality to
such Party or any of its Representatives with respect to such material; (d) is
independently developed by the other Party; or (e) was disclosed pursuant to
the Confidentiality Agreement and remains subject to the terms and conditions
of the Confidentiality Agreement.
(91) "PUHCA" means the Public Utility Holding Company Act of 1935, as
amended from time to time, and the rules and regulations promulgated
thereunder from time to time.
(92) "Purchase Price" has the meaning set forth in Section 3.2(a).
(93) "Purchased Assets" has the meaning set forth in Section 2.1.
(94) "▇▇▇▇▇" has the meaning set forth in Section 3.5(a)(i).
(95) "▇▇▇▇▇ Assessment" has the meaning set forth in Section 3.5(c).
(96) "Real Property" has the meaning set forth in Section 2.1(a).
(97) "Related Purchase Agreements" means, collectively, the ACE Related
Purchase Agreement and the DP&L Related Purchase Agreements.
(98) "Release" means any release, spill, leak, discharge, disposal of,
pumping, pouring, emitting, emptying, injecting, leaching, dumping or allowing
to escape into or through the environment.
(99) "Remediation" means an action of any kind to address an
Environmental Condition or a Release of Hazardous Substances or the presence
of Hazardous Substances at the Sites or an Off-Site Location, including the
following activities to the extent they relate to, result
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from or arise out of the presence of a Hazardous Substance at the Sites or an
Off-Site Location: (a) monitoring, investigation, assessment, treatment,
cleanup, containment, removal, mitigation, response or restoration work; (b)
obtaining any permits, consents, approvals or authorizations of any Governmental
Authority necessary to conduct any such activity; (c) preparing and implementing
any plans or studies for any such activity; (d) obtaining a written notice from
a Governmental Authority with jurisdiction over the Sites or an Off-Site
Location under Environmental Laws that no material additional work is required
by such Governmental Authority; (e) the use, implementation, application,
installation, operation or maintenance of removal actions on the Sites or an
Off-Site Location, remedial technologies applied to the surface or subsurface
soils, excavation and treatment or disposal of soils at an Off-Site Location,
systems for long-term treatment of surface water or groundwater, engineering
controls or institutional controls; and (f) any other activities reasonably
determined by a Party to be necessary or appropriate or required under
Environmental Laws to address an Environmental Condition or a Release of
Hazardous Substances or the presence of Hazardous Substances at the Sites or an
Off-Site Location.
(100) "Remediation Standard" means a numerical standard (whether
resulting from an enacted statute, promulgated regulation, guidance or policy
document issued by a regulatory agency, or developed on a case-by-case basis
through a risk assessment or other methodology authorized pursuant to an
applicable Environmental Law) that defines the concentrations of Hazardous
Substances that may be permitted to remain in any environmental media after a
Remediation.
(101) "Representatives" of a Person means, collectively, such Person's
Affiliates and its and their respective directors, officers, partners,
members, employees, representatives, agents, advisors (including accountants,
legal counsel, environmental consultants, engineering consultants and
financial advisors), parent entities and other controlling Persons.
(102) "SEC" means the United States Securities and Exchange Commission,
and any successor agency thereto.
(103) "Securities Act" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated thereunder from time
to time.
(104) "Seller" has the meaning set forth in the preamble to this
Agreement.
(105) "Seller's Agreements" means, collectively, (i) the contracts,
agreements, arrangements, licenses and leases of any nature to which, as of
the date hereof, Seller is a party, or by or to which Seller or the Purchased
Assets is bound or subject, (ii) those contracts, agreements, arrangements,
licenses and leases of any nature entered into by Seller on or after the date
of this Agreement consistent with the terms of this Agreement and (iii) those
contracts, agreements, arrangements, licenses and leases entered into by any
party to the Jointly Owned Stations Operating Agreements, for and on behalf of
Seller, with or without Seller's Knowledge, and by or to
11
which Seller or the Purchased Assets are bound or subject as of the date hereof,
or by or to which Seller or the Purchased Assets become bound or subject after
the date hereof, in each case, relating to the ownership, lease, maintenance or
operation of the Purchased Assets.
(106) "Seller's Indemnitee" has the meaning set forth in Section 8.1(a).
(107) "Seller's Interests" means, together, the Conemaugh Interest and
the Keystone Interest.
(108) "Seller's Permits" has the meaning set forth in Section 4.11.
(109) "Seller's Required Regulatory Approvals" has the meaning set forth
in Section 4.3(b).
(110) "Sites" means the Real Property forming a part, or used or usable
in connection with the operation, of the Jointly Owned Stations, including any
real property used for the disposal of solid or hazardous waste that is
included in the Real Property. Any reference to the Sites shall include the
surface and subsurface elements, to the extent owned by or subject to any
interest of Seller, including the soil and groundwater present at the Sites,
and any reference to materials or conditions "at the Sites", including
Hazardous Substances and Environmental Conditions, shall include all materials
and conditions "at, on, in, upon, over, across, under or within" the Sites.
(111) "SO2" means sulfur dioxide.
(112) "SO2 Allowance" means an authorization by the Administrator of the
USEPA under the Clean Air Act, 42 U.S.C. ss. 7401, et seq., to emit one ton of
sulfur dioxide during or after a specified calendar year.
(113) "Subsidiary", when used in reference to any Person, means any
entity of which outstanding securities or interests having ordinary voting
power to elect a majority of the board of directors or other governing body
performing similar functions of such entity are owned directly or indirectly
by such Person.
(114) "Tangible Personal Property" has the meaning set forth in Section
2.1(e).
(115) "Target Adjustment Amount" means $2,271,000, which represents the
Net Book Value, as of August 31, 1999, of Seller's right, title and interest
in and to the Inventories, as calculated in the manner set forth in Schedule
1.1(115).
(116) "Tax" or "Taxes" means all taxes, charges, fees, levies, penalties
and other assessments imposed by any Governmental Authority, including income,
gross receipts, excise, property, sales, transfer, use, franchise, payroll,
withholding, social security and other taxes, together with any interest,
penalties or additions attributable thereto.
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(117) "Tax Return" means any return, report, information return or other
document, together with all amendments and supplements thereto (including any
related or supporting information), required to be supplied to any
Governmental Authority responsible for the administration of Laws governing
Taxes.
(118) "Third-Party Claim" has the meaning set forth in Section 8.2(a).
(119) "Title Commitments" means (i) the Title Commitment provided by
Lawyers Title Insurance Corporation, dated December 20, 1999, relating to the
Conemaugh Station; (ii) the Title Commitment provided by Lawyers Title
Insurance Corporation, dated December 20, 1999, relating to the Keystone
Station; and (iii) the Title Commitment provided by Lawyers Title Insurance
Corporation, dated December 20, 1999, relating to Keystone Lake.
(120) "Transfer Taxes" has the meaning set forth in Section 6.6(a).
(121) "Transferable Permits" means those Permits and Environmental
Permits (and all applications pertaining thereto) which are transferable under
applicable Laws by Seller to Buyer (with or without a filing with, notice to,
consent or approval of any Governmental Authority), as set forth in Schedule
1.1(121).
(122) "Transmission Assets" has the meaning set forth in Section 2.2(a).
(123) "USEPA" means the United States Environmental Protection Agency,
and any successor agency thereto.
(124) "Vienna Station" means the generating station known as Vienna
Power Plant, located in the town of Vienna, County of Dorchester, State of
Maryland, and related properties and assets.
(125) "Year 2000 Compliance" has the meaning set forth in Section 4.14.
1.2 Certain Interpretive Matters. In this Agreement, unless the context
otherwise requires, the singular words include the plural, the masculine
includes the feminine and neuter, and vice versa. In this Agreement, the term
"includes" or "including" shall be deemed followed by the words "including
without limitation." References herein to a section, article, Exhibit or
Schedule mean a section, article, Exhibit or Schedule of this Agreement, and
reference to a given agreement or instrument constitutes a reference to that
agreement or instrument as modified, amended, supplemented and restated
through the date as of which such reference is made.
1.3 U.S. Dollars. When used herein, the term "dollars" and the symbol
"$" refer to the lawful currency of the United States of America.
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1.4 Sellers' Interest in Jointly Owned Stations. The Parties acknowledge
and agree that Seller owns and holds (a) an undivided three and eighty-three
hundredths percent (3.83%) interest as tenant in common in the Conemaugh
Station and (b) an undivided two and forty-seven hundredths percent (2.47%)
interest as tenant in common in the Keystone Station. All references in this
Agreement to Seller's right, title and interest in, to and under the Purchased
Assets, and, in each case, the rights, liabilities and obligations in
connection therewith, shall be construed in this context.
ARTICLE II
PURCHASE AND SALE
2.1 Transfer of Assets. Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing, Seller shall sell, assign, convey,
transfer and deliver to Buyer, and Buyer shall purchase, assume and acquire
from Seller, free and clear of all Encumbrances, except for the Permitted
Encumbrances, all of Seller's right, title and interest in, to and under the
following assets and properties, except as otherwise provided in Section 2.2,
each as of the Closing Date, but only to the extent of the Seller's Interests
(collectively, the "Purchased Assets"):
(a) The real property (including all buildings and other
improvements thereon and all appurtenances thereto) described on Schedule 4.7
(the "Real Property");
(b) The Inventories;
(c) Machinery, equipment, vehicles, furniture and other personal
property owned by Seller, located on the Real Property on the Closing Date
(collectively, "Tangible Personal Property"), including the electrical
transmission facilities (as opposed to generation facilities) set forth on
Schedule 2.1(c);
(d) The Seller's Agreements;
(e) Subject to the receipt of necessary consents and approvals,
the Transferable Permits;
(f) The Emission Allowances identified on Schedule 2.1(f);
(g) Such of the Emission Allowances of Seller as are identified on
Schedule 2.1(g) (the "Excess Emission Allowances");
(h) The names "Conemaugh Station" and "Keystone Station";
provided, however, that Buyer expressly acknowledges and agrees that the
Purchased Assets do not include
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any right, title or interest in or to the names "Atlantic City Electric
Company", "ACE" or any derivation thereof, as well as any related or similar
name, or any other trade names, trademarks, service marks, corporate names and
logos or any part, derivation, colorable imitation or combination thereof; and
(i) All books, operating records, operating, safety and
maintenance manuals, engineering design plans, blueprints and as-built plans,
specifications, procedures and similar items relating specifically to the
Jointly Owned Stations that are in Seller's possession (subject to the right
of Seller to retain copies of same for its use), other than such items as are
proprietary to third parties and accounting records.
(j) The rights of Seller in, to and under all causes of action
against third parties with respect to, arising out of or in connection with
Seller's rights, title and interest in and to the Purchased Assets or the
Assumed Liabilities, or any portion thereof, whether accruing prior to, on or
after the Closing Date, other than any such causes of action as constitute
Excluded Assets or Excluded Liabilities, whether received as payment or credit
against future liabilities.
2.2 Excluded Assets. Notwithstanding anything to the contrary in this
Agreement, nothing in this Agreement shall constitute or be construed as
requiring Seller to sell, assign, convey, transfer or deliver, and Buyer shall
not be entitled to purchase or acquire, any right, title or interest in, to or
under any properties, assets, business, operation or division of Seller, or
any Affiliate thereof, not expressly set forth in Section 2.1, including the
following assets and properties which are hereby specifically excluded from
the definition of Purchased Assets (collectively, the "Excluded Assets"):
(a) The right, title and interest of Seller and its successors,
assigns and Representatives in, to and under all electrical transmission or
distribution facilities (as opposed to generation facilities) or information
technology and communications assets of Seller or any of its Affiliates
located at or forming a part of any of the Jointly Owned Stations (whether or
not regarded as a "transmission" or "generation" asset for regulatory or
accounting purposes), including all switchyard facilities, substation
facilities and support equipment, as well as all permits, contracts and
warranties, to the extent they relate to such transmission and distribution
assets or information technology and communications assets (other than the
electrical transmission facilities identified on Schedule 2.1(c), all of which
are included as Purchased Assets) (collectively, the "Transmission Assets");
(b) The right, title and interest of Seller and its successors,
assigns and Representatives in, to and under certain switches and meters, gas
facilities, revenue meters and remote testing units, drainage pipes and
systems, pumping equipment and associated piping, in each case, located at or
forming a part of the Jointly Owned Stations;
15
(c) All certificates of deposit, shares of stock, securities,
bonds, debentures, evidences of indebtedness, and interests in joint ventures,
partnerships, limited liability companies and other entities;
(d) All cash, cash equivalents, bank deposits, accounts and notes
receivable (trade or otherwise), prepaid expenses relating to the operation of
the Purchased Assets and any income, sales, payroll or other Tax receivables
(in each case, whether held by Seller or any third party, including under any
Jointly Owned Stations Operating Agreements);
(e) The right, title and interest of Seller and its successors,
assigns and Representatives in, to and under all intellectual property,
including the names "Atlantic City Electric Company", "ACE" or any derivation
thereof, as well as any related or similar name, or any other trade names,
trademarks, service marks, corporate names and logos, or any part, derivation,
colorable imitation or combination thereof;
(f) All tariffs, agreements and arrangements to which Seller or
any of its Representatives is a party for the purchase or sale of electric
capacity or energy, or for the purchase of transmission, distribution or
ancillary services;
(g) The rights of Seller and its successors, assigns and
Representatives in, to and under all causes of action against third parties
relating to any Excluded Assets or Excluded Liabilities, if any, whether
accruing prior to, on or after the Closing Date, including all claims for
refunds, prepayments, offsets, recoupment, insurance proceeds, insurance
distributions, dividends or other proceeds, condemnation awards, judgments and
the like, whether received as payment or credit against future Liabilities, in
each case, relating to any period prior to the Closing Date;
(h) All Tax refunds or credits (including refunds or credits of
real property Taxes paid or due with respect to the Jointly Owned Stations),
which refunds or credits are with respect to periods prior to the Closing
Date, whether directly or indirectly, under the Jointly Owned Stations
Operating Agreements or otherwise, regardless of when actually paid;
(i) All employment agreements and personnel records of Seller and
its successors, assigns and Representatives;
(j) The minute books, stock transfer books, corporate seal and
other corporate records of Seller and its successors, assigns and
Representatives;
(k) The right, title and interest of Seller and its successors,
assigns and Representatives in, to and under all contracts, agreements,
arrangements, licenses and leases of any nature, other than the Seller's
Agreements;
16
(l) All insurance policies relating to the ownership, lease,
maintenance or operation of the Purchased Assets;
(m) All other assets and properties owned or leased by Seller or
its successors, assigns and Representatives which are not used in the
operation of the Jointly Owned Stations;
(n) The right, title and interest of Seller and its successors,
assigns and Representatives under this Agreement and the Additional
Agreements; and
(o) The right, title and interest of Seller and its successors,
assigns and Representatives in, to and under all Emission Allowances of Seller
or any of its Affiliates (other than the Emission Allowances identified on
Schedule 2.1(f) and the Excess Emission Allowances identified on Schedule
2.1(g)).
2.3 Assumed Liabilities. On the Closing Date, Buyer shall assume and
agree to pay, perform and otherwise discharge, without recourse to Seller or
its Affiliates, all of the Liabilities of Seller and its Affiliates,
successors, assigns or Representatives which relate, directly or indirectly,
to the Purchased Assets, other than Excluded Liabilities, but only to the
extent of the Seller's Interests (collectively, the "Assumed Liabilities"),
including the following such Liabilities:
(a) All Liabilities of Seller under the Seller's Agreements,
including the Jointly Owned Stations Operating Agreements, and the
Transferable Permits in accordance with the terms thereof, including (i) the
contracts, agreements, arrangements, licenses and leases of whatever nature
entered into by Seller with respect to the Purchased Assets after the date
hereof consistent with the terms of this Agreement and (ii) those contracts,
agreements, arrangements, licenses and leases entered into by any party to the
Jointly Owned Stations Operating Agreements, for and on behalf of Seller, with
or without Seller's Knowledge, and by or to which Seller or the Purchased
Assets are bound or subject as of the date hereof, or by or to which Seller or
the Purchased Assets become bound or subject after the date hereof, in each
case, relating to the ownership, lease, maintenance or operation of the
Purchased Assets, except, in each case, to the extent such Liabilities, but
for a breach or default by Seller, would have been paid, performed or
otherwise discharged prior to the Closing Date;
(b) All Liabilities of Seller which relate to the Purchased Assets
in respect of Taxes for which Buyer is liable pursuant to Section 3.5 or 6.5;
(c) All Liabilities of Seller arising under or relating to
Environmental Laws or relating to any claim in respect of Environmental
Conditions or Hazardous Substances, whether based on common law or
Environmental Laws, whether relating to the Sites or any Off-Site Location,
including (i) any violation or alleged violation of Environmental Laws,
whether prior to, on or after the Closing Date, with respect to the ownership,
lease, maintenance or operation of any of the Purchased Assets, including any
fines or penalties that arise in connection with the
17
ownership, lease, maintenance or operation of the Purchased Assets on or after
the Closing Date (but excluding all fines and penalties that arise in connection
with the ownership, lease, maintenance or operation of the Purchased Assets
prior to the Closing Date), and the costs associated with correcting any such
violations; (ii) loss of life, injury to persons or property or damage to
natural resources (whether or not such loss, injury or damage arose or was made
manifest before the Closing Date or arises or becomes manifest on or after the
Closing Date) caused (or allegedly caused) by any Environmental Condition or the
presence or Release of Hazardous Substances at, on, in, under or migrating from,
the Purchased Assets prior to, on or after the Closing Date, including any
Environmental Condition or Hazardous Substances contained in building materials
at or migrating from the Purchased Assets or in the soil, surface water,
sediments, groundwater, landfill cells, or in other environmental media at or
near the Purchased Assets; (iii) any Remediation (whether or not such
Remediation commenced before the Closing Date or commences on or after the
Closing Date) of any Environmental Condition or Hazardous Substances that are
present or have been Released prior to, on or after the Closing Date at, on, in,
under or migrating from, the Purchased Assets or in the soil, surface water,
sediments, groundwater, landfill cells or in other environmental media at or
migrating from the Purchased Assets; (iv) any bodily injury, loss of life,
property damage, or natural resource damage arising from the storage,
transportation, treatment, disposal, discharge, recycling or Release, at any
Off-Site Location, or arising from the arrangement for such activities, on or
after the Closing Date, of Hazardous Substances generated in connection with the
ownership, lease, maintenance or operation of the Purchased Assets; and (v) any
Remediation of any Environmental Condition or Release of Hazardous Substances
arising from the storage, transportation, treatment, disposal, discharge,
recycling or Release, at any Off-Site Location, or arising from the arrangement
for such activities, on or after the Closing Date, of Hazardous Substances
generated in connection with the ownership, lease, maintenance or operation of
the Purchased Assets; provided that nothing set forth in this Subsection 2.3(c)
shall require Buyer to assume any liabilities or obligations that are Excluded
Liabilities pursuant to Section 2.4(e), 2.4(g), 2.4(h), 2.4(i) or 2.4(j);
(d) With respect to the Purchased Assets, any Tax that may be
imposed by any federal, state or local government on the ownership, lease,
maintenance, use or sale of the Purchased Assets on or after the Closing Date,
except for any Income Taxes attributable to income received by Seller; and
(e) For purposes of clarification, Buyer acknowledges that it
shall assume and be fully responsible for holding in its accounts sufficient
SO2 Allowances and NOx Allowances to cover emissions of SO2 and NOx from all
of the Sites for all of the calendar year in which the Closing occurs,
including the period of such year prior to the Closing Date.
2.4 Excluded Liabilities. Notwithstanding Section 2.3, Buyer shall not
assume or be obligated to pay, perform or otherwise discharge the following
Liabilities of Seller (the "Excluded Liabilities"):
18
(a) Any Liabilities of Seller in respect of any Excluded Assets or
other assets of Seller which are not Purchased Assets, except to the extent
caused by the acts or omissions of Buyer or its Representatives or Buyer's
ownership, lease, maintenance or operation of the Purchased Assets;
(b) Any Liabilities of Seller in respect of Taxes attributable to
the Purchased Assets for taxable periods ending before the Closing Date,
except for Taxes for which Buyer is liable pursuant to Section 3.5 or 6.5;
(c) Any Liabilities of Seller arising from the breach prior to the
Closing Date by Seller of any of the Seller's Agreements;
(d) Any and all Liabilities to third parties for personal injury
or tort, or similar causes of action to the extent arising out of the
ownership, lease, maintenance or operation of the Purchased Assets prior to
the Closing Date, other than the Liabilities assumed by Buyer under Section
2.3(c);
(e) Any fines or penalties imposed by any Governmental Authority
resulting from any violation of law by Seller that occurred prior to the
Closing Date;
(f) Any payment obligations of Seller or its Affiliates for goods
delivered or services rendered prior to the Closing Date, other than the
Liabilities assumed by Buyer under Section 2.3(c);
(g) Liability for Remediation of Environmental Conditions at, on,
under or migrating from, the Purchased Assets, but only to the extent that (i)
such Liability arises out of or derives from the same facts which form the
basis of a conviction, guilty plea or plea of nolo contendere by Seller for a
violation of Environmental Laws by Seller; (ii) Seller's conviction, guilty
plea or plea of nolo contendere was based on Seller's intentional and willful
wrongful actions; and (iii) Seller's conviction, guilty plea or plea of nolo
contendere arises from a matter as to which Seller has received written notice
from a Governmental Authority on or before the sixth anniversary of the
Closing Date.
(h) Any Liability under or related to Environmental Laws or the
common law arising as a result of or in connection with loss of life, injury
to persons or property or damage to natural resources (whether or not such
loss, injury or damage arose or was made manifest before the Closing Date or
arises or becomes manifest on or after the Closing Date) caused (or allegedly
caused) by the disposal, storage, transportation, discharge, migration of,
Release or recycling of Hazardous Substances at an Off-Site Location, or the
arrangement for such activities, prior to the Closing Date, in connection with
the ownership, lease, maintenance or operation of the Purchased Assets,
provided that, for purposes of this Section, "Off-Site Location" does not
include any location to which Hazardous Substances disposed of or Released at
the Purchased Assets have migrated;
19
(i) Any Liability under or related to Environmental Laws or the
common law arising as a result of or in connection with the Remediation
(whether or not such Remediation commenced before the Closing Date or
commences on or after the Closing Date) of Hazardous Substances that are
disposed, stored, transported, discharged, migrating from, Released, recycled,
or the arrangement of such activities, in connection with the ownership,
lease, maintenance or operation of the Purchased Assets, at any Off-Site
Location, prior to the Closing Date; provided that, for purposes of this
Section, "Off-Site Location" does not include any location to which Hazardous
Substances disposed of or Released at the Purchased Assets have migrated; and
(j) Any Liability under or related to Environmental Laws or the
common law arising as a result of or in connection with the ownership, lease,
maintenance or operation by Seller or its Affiliates of the Transmission
Assets prior to, on or after the Closing Date, except to the extent caused by
the acts or omissions of Buyer or Buyer's ownership, lease, maintenance or
operation of the Purchased Assets.
2.5 Control of Litigation. The Parties agree and acknowledge that Seller
shall be entitled exclusively to control, defend and settle any suit, action
or proceeding, and any investigation arising out of or relating to any
Excluded Assets or Excluded Liabilities, and Buyer agrees to cooperate in
connection therewith to the extent Seller reasonably requests; provided,
however, that Buyer shall not be required to incur any out-of-pocket costs and
Seller shall reimburse Buyer for the costs incurred by Buyer in making its
employees available for such purpose, including the allocable amount of
salaries and wages of such employees.
2.6 Inventories. Schedule 2.6 lists the quantities of Inventories
relating to the Jointly Owned Stations that will be transferred to Buyer, but
only to the extent of the Seller's Interest, together with the Net Book Value
of such Inventories, in each case, as of August 31, 1999.
ARTICLE III
THE CLOSING
3.1 Closing. The sale, assignment, conveyance, transfer and delivery of
the Purchased Assets by Seller to Buyer, and the purchase, assumption and
acquisition by Buyer of the Purchased Assets and the Assumed Liabilities, and
the consummation of the other transactions contemplated hereby, shall take
place at a closing (the "Closing") to be held at the offices of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, One ▇▇▇▇▇▇ Square, Wilmington, Delaware, at 10:00
a.m. local time on the first Business Day after August 31, 2000 that is ten
(10) Business Days after the date on which the last of the conditions
precedent to the Closing set forth in Sections 7.1(a) and (c), and Sections
7.2(a) and (c) of this Agreement shall have been satisfied or, to the extent
permitted by applicable Law, waived by the Party for whose benefit such
conditions precedent exist, or at such other date, time and location
thereafter as may be agreed
20
upon in writing between Buyer and Seller. The date on which the Closing actually
occurs is hereinafter called the "Closing Date." The Closing shall be effective
for all purposes as of 12:01 a.m., New York City time, on the Closing Date.
3.2 Payment of Purchase Price.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, in consideration of the aforesaid sale, assignment, conveyance,
transfer and delivery of the Purchased Assets, Buyer shall, at the Closing,
(i) pay to Seller cash in the aggregate amount of $96,136,000 plus the amount,
if any, by which the Closing Adjustment Amount exceeds the Target Adjustment
Amount, or minus the amount, if any, by which the Target Adjustment Amount
exceeds the Closing Adjustment Amount (the "Purchase Price"), and (ii) assume
and agree to pay, perform and otherwise discharge the Assumed Liabilities.
(b) At least five (5) Business Days prior to the Closing Date,
Seller shall provide to Buyer its good faith estimate of the Closing
Adjustment Amount, which estimate shall be certified in writing by an
appropriate officer of Seller (the "Estimated Adjustment Amount").
(c) At the Closing, in furtherance but not in duplication of
Section 3.2(a) and without limiting the generality of Section 3.7, Buyer shall
pay to Seller cash in an aggregate amount equal to $96,136,000 plus the
amount, if any, by which the Estimated Adjustment Amount exceeds the Target
Adjustment Amount, or minus the amount, if any, by which the Target Adjustment
Amount exceeds the Estimated Adjustment Amount (the "Closing Payment"). The
Closing Payment shall be paid to Seller by Buyer at the Closing by wire
transfer of immediately available funds to the account of Seller designated by
Seller at least two (2) Business Days prior to the Closing Date.
3.3 Adjustment to Purchase Price.
(a) Within sixty (60) days after the Closing Date, Seller shall
deliver to Buyer, at Seller's sole cost and expense, a statement setting forth
the Closing Adjustment Amount (the "Closing Statement"). Contemporaneously,
Seller shall deliver to Buyer a schedule setting forth a calculation of the
Purchase Price and the amount of any payment to be made, and by whom, pursuant
to Section 3.3(c).
(b) In the event that Buyer is in disagreement with the Closing
Statement, and in the event that the aggregate amount of such disagreements
exceeds $100,000, Buyer shall, within ten (10) Business Days after receipt of
the Closing Statement, notify Seller of such disagreements setting forth with
specificity the nature and amounts thereof. In the event that Buyer is in
disagreement with only a portion of the Closing Statement, Buyer or Seller, as
the case may be, shall pay all undisputed amounts in the manner set forth in
Section 3.3(c); and all other amounts shall be paid at such time as all
disagreements are resolved in accordance with this Section 3.3(b).
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If (i) the aggregate amount of the disagreements referred to in this Section
3.3(b) does not exceed $100,000 or (ii) Buyer fails to notify Seller of all
disagreements within the ten (10) Business Day period provided for herein, then
the Closing Statement, as delivered by Seller pursuant to Section 3.3(a), shall
be final, binding and conclusive on the Parties hereto. If Buyer is in
disagreement with the Closing Statement and notifies Seller within such ten (10)
Business Day period, then the Parties shall promptly attempt to resolve such
disagreements by negotiation. If the Parties are unable to resolve such
disagreements within thirty (30) days following such notice of disagreement by
Buyer, the Parties shall appoint an Independent Accounting Firm within forty-
five (45) days following such notice, which shall review the Closing Statement
and determine the Closing Adjustment Amount. Resolution of any disagreements
shall be made by the Independent Accounting Firm in a writing addressed to all
Parties within thirty (30) days following referral to it by the Parties of such
disagreements in accordance with this Agreement. The findings of such
Independent Accounting Firm shall be final, binding and conclusive on the
Parties. All costs and fees of the Independent Accounting Firm shall be borne
equally by Buyer and Seller.
(c) No later than the fifth (5th) Business Day following the
determination of the Closing Adjustment Amount pursuant to Section 3.3(b),
either (i) Seller shall pay Buyer the amount, if any, by which the Closing
Payment exceeds the Purchase Price, or (ii) Buyer shall pay Seller the amount,
if any, by which the Purchase Price exceeds the Closing Payment, in either
case, together with simple interest accruing on such payment at the Prime Rate
from the Closing Date through and including the date of payment, by wire
transfer of immediately available funds to an account designated by the
receiving Party. As used herein, "Prime Rate" means, as of any date, the prime
rate as published in The Wall Street Journal on such date or, if not published
on such date, on the most recent date of publication.
3.4 Tax Reporting and Allocation of Purchase Price. Buyer and Seller
shall use their respective reasonable best efforts to agree in good faith upon
an allocation among the Purchased Assets of the sum of the Purchase Price and
the Assumed Liabilities consistent with Section 1060 of the Code and the
Treasury Regulations thereunder within sixty (60) days after the Closing Date.
In the event that the Parties cannot agree on a mutually satisfactory
allocation within such sixty-day period, the Parties shall appoint an
Independent Accounting Firm that shall, at Seller's and Buyer's joint expense,
determine the appropriate allocation. The finding of such Independent
Accounting Firm shall be final, binding and conclusive on the Parties. After
determination of the allocation by agreement of the Parties or by binding
determination of the Independent Accounting Firm, Buyer and Seller shall file,
for the tax year in which the Closing occurs, Internal Revenue Service Form
8594, and all Tax Returns, in accordance with such allocation. Buyer and
Seller shall report the transactions contemplated by this Agreement for United
States federal Income Tax and all other Tax purposes in a manner consistent
with the allocation determined pursuant to this Section 3.4. Buyer and Seller
shall provide the other promptly with any information required to complete
Form 8594. Buyer and Seller shall notify and provide the other with reasonable
assistance in the event of an examination, audit or other proceeding regarding
the agreed-upon allocation of the Purchase Price and the Assumed Liabilities.
22
3.5 Prorations.
(a) Buyer and Seller agree that, except as otherwise provided in
this Agreement, all of the items customarily prorated relating to the
ownership, lease, maintenance or operation of the Purchased Assets, including
those listed below (but not including Income Taxes), shall be prorated as of
the Closing Date, with Seller liable to the extent such items relate to any
period prior to the Closing Date, and Buyer liable to the extent such items
relate to any period on or after the Closing Date (measured in the same units
used to compute the item in question, otherwise measured by calendar days):
(i) Personal property, real estate and occupancy Taxes
(other than any Pennsylvania public utility realty tax pursuant to 72 P.S. ss.
8102-A ("▇▇▇▇▇"), as well as additional assessments and surtaxes relating to
▇▇▇▇▇ (collectively, the "▇▇▇▇▇ Assessment") which are addressed in Section
3.5(c)), assessments and other charges, if any, on or with respect to the
ownership, lease, maintenance or operation of the Purchased Assets;
(ii) Rent, Taxes and all other items (including prepaid
services and goods not included in Inventory), in each case, payable by or to
Seller under any of the Seller's Agreements;
(iii) Any permit, license, registration, compliance
assurance fees or other fees with respect to any Transferable Permit;
(iv) Sewer rents and charges for water, telephone,
electricity and other utilities;
(v) Insurance premiums paid on or with respect to the
ownership, lease, maintenance or operation of the Purchased Assets to the
extent payable under any policy or other arrangement included among the
Seller's Agreements; and
(vi) Prepaid operating and maintenance expenses, whether
arising under the Jointly Owned Stations Operating Agreements or otherwise.
(b) Seller or Buyer, as the case may be, shall promptly reimburse
the other Party that portion of any amount paid by such other Party to the
extent relating to the period for which Seller or Buyer, as the case may be,
is liable under Section 3.5(a), in each case, upon presentation of a statement
setting forth in reasonable detail the nature and amount of any such payment.
In connection with the prorations set forth in Section 3.5(a), if actual
figures are not available on the Closing Date, the proration shall be
calculated based upon the respective amounts accrued through the Closing Date
or paid for the most recent year or other appropriate period for which such
amounts paid are available. All prorated amounts shall be recalculated and
paid to the appropriate Party within sixty (60) days after the date that the
previously unavailable actual figures become available. Seller and Buyer shall
furnish each other with such documents
23
and other records as may be reasonably requested in order to confirm all
proration calculations made pursuant to this Section 3.5. Notwithstanding
anything to the contrary herein, no proration shall be made under this Section
3.5 with respect to (i) real property Tax refunds that are Excluded Assets under
Section 2.2(h) or (ii) Taxes payable by Buyer pursuant to Section 6.5(a).
(c) (i) Seller shall be responsible for and pay the ▇▇▇▇▇
Assessment imposed on any public utilities which are included in the Purchased
Assets located in the Commonwealth of Pennsylvania (the "Pennsylvania Assets")
with respect to the calendar year in which the Closing occurs. Buyer shall
reimburse Seller in accordance with this Section 3.5(c) for its proportionate
share of the ▇▇▇▇▇ Assessment for the calendar year in which the Closing
occurs. Buyer's proportionate share shall be based upon the number of days
within the Closing year that Buyer owned the Pennsylvania Assets. For example,
if the Closing were to occur on December 1, 2000, and $1,000,000 of ▇▇▇▇▇
Assessment for calendar year 2000 had been paid, then Buyer's proportionate
share of such ▇▇▇▇▇ Assessment would be equal to the product obtained by
multiplying $1,000,000 by a fraction, the numerator of which would be the
number of days in calendar year 2000 during which Buyer owned the Pennsylvania
Assets (31), and the denominator of which would be the number of days in
calendar year 2000 (366). Therefore, the aggregate amount of Buyer's
proportionate share of the ▇▇▇▇▇ Assessment would be $1,000,000 multiplied by
31/366, or $84,699.50. Seller shall compute Buyer's obligation hereunder and
notify Buyer of such obligation at least five (5) Business Days before the
Closing. The reimbursement payable by Buyer to Seller hereunder shall be paid
at Closing.
(ii) In the event Seller or Buyer obtains a refund of the
▇▇▇▇▇ Assessment paid with respect to the year in which the Closing occurred,
any such refund, net of any costs incurred by the Party obtaining such refund
(a "Net ▇▇▇▇▇ Refund"), shall be prorated in accordance with this Section
3.5(c). Any prorated Net ▇▇▇▇▇ Refund shall be paid to the Party entitled to
such prorated Net ▇▇▇▇▇ Refund promptly upon final adjudication or settlement
of such Net ▇▇▇▇▇ Refund. Buyer and Seller shall provide each other with such
cooperation and information as either of them reasonably may request of the
other in connection with the filing of any refund claim for a ▇▇▇▇▇
Assessment, or the conduct of any audit, dispute, proceeding, suit or action
concerning any ▇▇▇▇▇ Assessment.
3.6 Deliveries by Seller. At the Closing, Seller shall deliver, or cause
to be delivered, the following to Buyer:
(a) One or more Limited Warranty Deeds, duly executed by Seller
and in recordable form;
(b) The Bills of Sale, duly executed by Seller;
(c) The Assignment and Assumption Agreements, duly executed by
Seller;
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(d) Evidence, in form and substance reasonably satisfactory to
Buyer, demonstrating that Seller has obtained the Seller's Required Regulatory
Approvals set forth on Schedule 7.2(c);
(e) A FIRPTA Affidavit, duly executed by Seller;
(f) Copies, certified by the Secretary or Assistant Secretary of
Seller, of resolutions authorizing the execution and delivery of this
Agreement, each Additional Agreement to which Seller is a party and all of the
other agreements and instruments, in each case, to be executed and delivered
by Seller in connection herewith;
(g) A certificate of the Secretary or Assistant Secretary of
Seller identifying the name and title and bearing the signatures of the
officers of Seller authorized to execute and deliver this Agreement, each
Additional Agreement to which Seller is a party and the other agreements and
instruments contemplated hereby;
(h) All such other agreements, documents, instruments and writings
as shall, in the reasonable opinion of Buyer and its counsel, be necessary to
sell, assign, convey, transfer and deliver to Buyer the Purchased Assets, in
accordance with this Agreement and, where necessary or desirable, in
recordable form, provided that Seller shall not be required to prepare or
obtain any survey, abstract, title opinion or title insurance policy with
respect to the Real Property; and
(i) Such other agreements, documents, instruments and writings as
are required to be delivered by Seller at or prior to the Closing Date
pursuant to this Agreement or otherwise reasonably required in connection
herewith.
3.7 Deliveries by Buyer. At the Closing, Buyer shall deliver, or cause
to be delivered, the following to Seller:
(a) The Closing Payment, by wire transfer of immediately available
funds in accordance with Seller's instructions to the account of Seller
designated by Seller at least two (2) Business Days prior to the Closing Date;
(b) The Assignment and Assumption Agreements, duly executed by
Buyer;
(c) Evidence, in form and substance reasonably satisfactory to
Seller, demonstrating that Buyer has obtained the Buyer's Required Regulatory
Approvals set forth on Schedule 7.1(c);
(d) A copy, certified by the Secretary or Assistant Secretary of
Buyer, of resolutions authorizing the execution and delivery of this
Agreement, each Additional Agreement
25
and all of the agreements and instruments, in each case, to be executed and
delivered by Buyer in connection herewith;
(e) A certificate of the Secretary or Assistant Secretary of Buyer
identifying the name and title and bearing the signatures of the officers of
Buyer authorized to execute and deliver this Agreement, each Additional
Agreement to which Buyer is a party and the other agreements contemplated
hereby;
(f) All such other permits, agreements, documents, instruments and
writings as shall, in the reasonable opinion of Seller and its counsel, be
necessary for Buyer to purchase and acquire the Purchased Assets, and to
assume the Assumed Liabilities, in each case, in accordance with this
Agreement and, where necessary or desirable, in recordable form; and
(g) Such other permits, agreements, documents, instruments and
writings as are required to be delivered by Buyer at or prior to the Closing
Date pursuant to this Agreement or otherwise reasonably required in connection
herewith.
3.8 Post-Closing Excluded Asset Deliveries. In the event that Seller or
Buyer, or any of their respective Representatives, shall determine after the
Closing that any Excluded Asset is in the possession of Buyer or any of its
Representatives, Buyer shall, or shall cause any such Representative to,
promptly, but in no event later than five (5) Business Days following such
determination, pay or deliver, or cause to be paid or delivered, to Seller
such Excluded Asset, at Buyer's sole cost and expense.
3.9 Relationship of this Agreement and Related Purchase Agreements. The
transactions contemplated by this Agreement, together with the transactions
contemplated by the Related Purchase Agreements, are intended by the Parties
to be consummated substantially simultaneously; and if any of the transactions
contemplated hereby or by any of the Related Purchase Agreements are not
consummated simultaneously on the Closing Date in accordance with the terms
and subject to the conditions set forth herein and therein, as applicable,
then each Party shall take, or cause to be taken, all actions, and do, or
cause to be done, all things, in each case, that are necessary to dissolve and
invalidate all transactions contemplated hereby; provided, however, that if
the failure to consummate the transactions contemplated hereby or by the
Related Purchase Agreements results from a default or breach of a party under
this Agreement or any of the Related Purchase Agreements, then nothing in the
foregoing shall preclude or limit the rights or remedies of any Party in
connection with such default or breach. Notwithstanding any provision
contained herein to the contrary, if all conditions to the obligations of all
parties to this Agreement and the ACE Related Purchase Agreement to consummate
the transactions contemplated hereby and thereby have been satisfied or, to
the extent permitted by applicable Law, waived, but, for any reason, the
transactions contemplated by the DP&L Related Purchase Agreements cannot be
consummated simultaneously therewith, then the Parties shall, at Buyer's
option and in its sole discretion, consummate the transactions contemplated by
this Agreement and the ACE Related Purchase Agreement; provided, however, that
nothing contained in this
26
Section 3.9 shall be construed as relieving Buyer of any of its obligations
under the DP&L Related Purchase Agreements, as set forth therein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows (all such
representations and warranties, except those set forth in Sections 4.1 and
4.2, being made to the Knowledge of Seller):
4.1 Organization; Qualification. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of New Jersey and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as it is
now being conducted. Seller is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction in
which its business as now being conducted requires it to be so qualified,
except to the extent that the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect.
4.2 Authority. Seller has full corporate power and authority to execute
and deliver this Agreement and each Additional Agreement to which it is a
party and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by Seller of this Agreement and each Additional
Agreement to which it is a party and the consummation by Seller of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action required on the part of Seller.
This Agreement has been duly and validly executed and delivered by Seller and,
subject to the receipt of Seller's Required Regulatory Approvals, this
Agreement constitutes, and upon the execution and delivery by Seller of each
Additional Agreement to which it is a party, each such Additional Agreement
will constitute, the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar Laws
affecting or relating to enforcement of creditors' rights generally and
general principles of equity (regardless of whether enforcement is considered
in a proceeding at law or in equity).
4.3 Consents and Approvals; No Violation.
(a) Except as set forth on Schedule 4.3(a), subject to obtaining
or making all Seller's Required Regulatory Approvals, neither the execution
and delivery by Seller of this Agreement and the Additional Agreements to
which it is a party nor the consummation by Seller of the transactions
contemplated hereby or thereby will (i) conflict with or result in any breach
of any provision of the certificate or articles of incorporation or bylaws of
Seller; (ii) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the
27
terms, conditions or provisions of any note, bond, mortgage, indenture, material
agreement or other instrument or obligation to which Seller is a party or by
which it, or any of the Purchased Assets, may be bound, except for such defaults
(or rights of termination, cancellation or acceleration) as to which requisite
consents, approvals or waivers have been, or will be prior to the Closing
obtained, or which would not, individually or in the aggregate, have a Material
Adverse Effect; or (iii) constitute violations of any Law, order, judgment or
decree applicable to Seller, which violations, individually or in the aggregate,
would have a Material Adverse Effect.
(b) Except for consents, approvals, filings and notices (i)
required under the HSR Act or (ii) set forth on Schedule 4.3(b) (the consents,
approvals, filings and notices referred to in clause (ii) of this sentence are
collectively referred to herein as the "Seller's Required Regulatory
Approvals"), no consent or approval of, filing with, or notice to, any
Governmental Authority is necessary for the execution and delivery by Seller
of this Agreement and the Additional Agreements to which it is a party or the
consummation by Seller of the transactions contemplated hereby or thereby,
other than (i) such consents, approvals, filings and notices which, if not
obtained or made, would not materially impair Seller's ability to perform its
material obligations under this Agreement or such Additional Agreements; (ii)
such consents, approvals, filings and notices which become applicable to
Seller or the Purchased Assets as a result of the status of Buyer (or any of
its Affiliates) or as a result of any other facts that specifically relate to
the business or activities in which Buyer (or any of its Affiliates) is or
proposes to be engaged; and (iii) such consents, approvals, filings and
notices, the failure of which to obtain or make would not, individually or in
the aggregate, have a Material Adverse Effect.
4.4 Insurance. Except as set forth on Schedule 4.4, all material
policies of fire, liability, workers' compensation and other forms of
insurance owned or held by, or on behalf of, Seller and insuring any Purchased
Assets are in full force and effect, all premiums with respect thereto
covering all periods up to and including the date hereof have been paid (other
than retroactive premiums which may be payable with respect to comprehensive
general liability and workers' compensation insurance policies), and no
written notice of cancellation or termination has been received by Seller with
respect to any such policy which was not replaced on substantially similar
terms prior to the date of such cancellation or termination. Except as set
forth on Schedule 4.4, as of the date of this Agreement, Seller has not been
refused any such insurance with respect to any Purchased Assets.
4.5 Title and Related Matters. Except for Permitted Encumbrances, Seller
has good, valid and marketable title to the Real Property included in the
Purchased Assets and has good and valid title to all other Purchased Assets,
free and clear of all Encumbrances.
4.6 Environmental Matters. Except as set forth on Schedule 4.6:
(a) Seller holds, and is in compliance with, all Environmental
Permits that Seller requires in order to own, lease and operate the Purchased
Assets, and Seller is otherwise in
28
compliance with applicable Environmental Laws with respect to the ownership,
lease, maintenance or operation of the Purchased Assets, except for such
failures to hold or comply with required Environmental Permits, and such
failures to be in compliance with applicable Environmental Laws, as would not,
individually or in the aggregate, materially impair the ability of Buyer to
operate the Purchased Assets after the Closing in the manner operated by Seller
on the date hereof.
(b) Seller has not received any written request for information,
or been notified in writing that it is a potentially responsible party under
CERCLA or any similar state law, with respect to any of the Sites, or any
written notice relating to any Governmental Authority's allegation or
investigation of any criminal violations by Seller of any Environmental Laws,
except for requests or notices with respect to Liabilities as would not,
individually or in the aggregate, materially impair the ability of Buyer to
operate the Purchased Assets after the Closing in the manner operated by
Seller on the date hereof; and
(c) Seller has not entered into or agreed to any consent decree or
order under any Environmental Law relating to the Purchased Assets, and Seller
is not subject to any outstanding judgment, decree or order relating to
compliance with any Environmental Law or to the investigation or cleanup of
Hazardous Substances under any Environmental Law relating to the Purchased
Assets, except for such decrees, orders and judgments as would not,
individually or in the aggregate, materially impair the ability of Buyer to
operate the Purchased Assets after the Closing in the manner operated by
Seller on the date hereof.
4.7 Real Property. Schedule 4.7 sets forth a description of the Real
Property. True and correct copies of all current surveys, abstracts, title
opinions and policies of title insurance currently in force, in each case, in
Seller's possession and relating to the Real Property, have been previously
made available to Buyer.
4.8 Condemnation. As of the date hereof, Seller has not received any
written notice of any pending or threatened proceedings or actions by any
Governmental Authority to condemn or take by power of eminent domain all or
any material part of the Purchased Assets.
4.9 Contracts and Leases.
(a) Schedule 4.9(a) sets forth a list of all written Seller's
Agreements, other than such contracts, licenses, agreements, arrangements and
personal property leases as (i) are set forth in any other Schedule, (ii)
constitute Excluded Assets or Excluded Liabilities, (iii) may be terminated
after the Closing by Buyer upon notice of no more than ninety (90) days, (iv)
involve future annual expenditures by Buyer after the Closing of $1,000,000 or
less, (v) are expected to expire or terminate prior to the Closing, (vi) are
entered into by Seller after the date hereof in accordance with the term of
this Agreement or (vii) are entered into by any party to the Jointly Owned
Stations Operating Agreements, for and on behalf of Seller, with or without
Seller's Knowledge, and by or to which Seller or the Purchased Assets are
bound or subject as of the date
29
hereof, or by or to which Seller or the Purchased Assets become bound or subject
after the date hereof.
(b) Except as set forth on Schedule 4.9(a), each Seller's
Agreement set forth on Schedule 4.9(a): (i) constitutes the valid and binding
obligation of Seller and the other parties thereto and (ii) will continue in
full force and effect after the Closing in accordance with its terms.
(c) Except as set forth on Schedule 4.9(a), there is not under any
Seller's Agreement set forth on Schedule 4.9(a) any default or event which,
with notice or lapse of time or both, would constitute a default, on the part
of Seller or any other party thereto, except such defaults as would not,
individually or in the aggregate, have a Material Adverse Effect.
4.10 Legal Proceedings. Except as set forth on Schedule 4.10, there are
no suits, actions or proceedings pending or, to the Knowledge of Seller,
threatened against Seller by or before any Governmental Authority, which
would, individually or in the aggregate, have a Material Adverse Effect or
would materially impair Seller's ability to consummate the transactions
contemplated hereby or by any Additional Agreement to which it is a party.
Except as set forth on Schedule 4.10, Seller is not subject to any judgment,
order or decree of any Governmental Authority which would, individually or in
the aggregate, have a Material Adverse Effect or would materially impair
Seller's ability to consummate the transactions contemplated hereby or by any
Additional Agreement to which it is a party.
4.11 Permits. Seller holds, and is in compliance with, all permits,
certificates, licenses and other authorizations of all Governmental
Authorities (collectively, "Seller's Permits") that Seller requires in order
to own the Purchased Assets, except for (a) Environmental Permits (which are
governed by Section 4.6) and (b) such failures to hold, or comply with,
Seller's Permits as would not, individually or in the aggregate, have a
Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows (all such
representations and warranties, except those set forth in Sections 5.1 and
5.2, being made to the Knowledge of Buyer):
5.1 Organization; Qualification. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as it is now being conducted.
Buyer is, or by the Closing will be, qualified to do business in the
Commonwealth of Pennsylvania. Buyer has heretofore delivered to Seller true
and correct
30
copies of its certificate or articles of incorporation and bylaws (or other
similar governing documents) as currently in effect.
5.2 Authority. Buyer has full corporate power and authority to execute
and deliver this Agreement and each Additional Agreement to which it is a
party and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and each such Additional Agreement by
Buyer and the consummation by Buyer of the transactions contemplated hereby or
thereby have been duly and validly authorized by all necessary corporate
action required on the part of Buyer. This Agreement has been duly and validly
executed and delivered by Buyer and, subject to the receipt of Buyer's
Required Regulatory Approvals, this Agreement constitutes, and upon the
execution and delivery by Buyer of each Additional Agreement to which it is a
party, each such Additional Agreement will constitute, the legal, valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms, except that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar Laws affecting or relating to enforcement of creditors' rights
generally and general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity).
5.3 Consents and Approvals; No Violation.
(a) Except as set forth on Schedule 5.3(a), and subject to
obtaining or making all Buyer's Required Regulatory Approvals, neither the
execution and delivery by Buyer of this Agreement or the Additional Agreements
to which it is a party nor the consummation by Buyer of the transactions
contemplated hereby or thereby will (i) conflict with or result in any breach
of any provision of the certificate or articles of incorporation or bylaws (or
other similar governing documents) of Buyer or any of its Subsidiaries; (ii)
result in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, material agreement or other instrument or
obligation to which Buyer or any of its Subsidiaries is a party or by which
Buyer, any such Subsidiary or any of their respective properties and assets
may be bound, except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite consents, approvals or waivers have
been or will be prior to the Closing obtained, or which would not,
individually or in the aggregate, materially impair Buyer's ability to
consummate the transactions contemplated hereby or by any Additional
Agreement, or to perform its material obligations hereunder or thereunder (a
"Buyer Material Adverse Effect"); or (iii) constitute violations of any Law,
order, judgment or decree applicable to Buyer or any of its Subsidiaries,
which violations, individually or in the aggregate, would have a Buyer
Material Adverse Effect.
(b) Except for consents, approvals, filings and notices (i)
required under the HSR Act or (ii) set forth on Schedule 5.3(b) (the consents,
approvals, filings and notices referred to in clause (ii) of this sentence are
collectively referred to herein as the "Buyer's Required Regulatory
Approvals"), no consent or approval of, filing with, or notice to, any
Governmental Authority is necessary for the execution and delivery by Buyer of
this Agreement and the
31
Additional Agreements to which it is a party or the consummation by Buyer of the
transactions contemplated hereby or thereby, other than such consents,
approvals, filings or notices, which, if not obtained or made, would not have a
Buyer Material Adverse Effect.
5.4 Buyer's Permits. Buyer holds, and is in compliance with, or on or
prior to the Closing Date will hold, and from and after the Closing Date will
comply with, all permits, certificates, licenses and other authorizations of
all Governmental Authorities that Buyer requires in order to own, lease,
maintain and operate the Purchased Assets (collectively, "Buyer's Permits").
5.5 Availability of Funds. Buyer has sufficient funds and lines of
credit available to it, or has received binding written commitments from
creditworthy financial institutions, true and correct copies of which have
been provided to Seller, to permit Buyer on the Closing Date to pay the
Purchase Price, all other amounts payable by Buyer hereunder or under any
Additional Agreement, and all fees and expenses incurred by Buyer in
connection with the transactions contemplated hereby and by the Additional
Agreements, and to permit Buyer to timely pay or perform all of its other
obligations (including its obligations pursuant to Article VIII) under this
Agreement and the Additional Agreements.
5.6 Financial Statements. Buyer has provided Seller with true and
correct copies of its balance sheet, income statement and statement of changes
in cash flows of Buyer for each of its last three completed fiscal years,
together with the related reports of its independent accountants,
PricewaterhouseCoopers LLP, and for its most recently completed fiscal quarter
("Buyer's Financial Statements"). Such Buyer's Financial Statements have been
prepared in accordance with United States generally accepted accounting
principles consistently applied and fairly reflect, in all material respects,
the financial position, results of operations and cash flow of Buyer at and
for the periods therein.
5.7 Legal Proceedings. There are no suits, actions or proceedings
pending or threatened against Buyer by or before any Governmental Authority,
which would, individually or in the aggregate, have a Buyer Material Adverse
Effect or would materially impair such Buyer's ability to consummate the
transactions contemplated hereby or by any Additional Agreement to which it is
a party. Buyer is not subject to any judgments, orders or decrees of any
Governmental Authority which would, individually or in the aggregate, have a
Buyer Material Adverse Effect or would materially impair such Buyer's ability
to consummate the transactions contemplated hereby or by any Additional
Agreement to which it is a party.
5.8 Qualified Buyer. Buyer is qualified to obtain and, after the
Closing, retain all Buyer Permits, including Environmental Permits, necessary
for Buyer to own, lease, maintain and operate the Jointly Owned Stations,
including, from and after the Closing Date, the Purchased Assets.
32
5.9 Inspections. Buyer has, prior to the execution and delivery of this
Agreement, reviewed the environmental site assessments prepared for Seller and
set forth on Schedule 5.9.
5.10 Regulation as a Utility. Buyer is not subject to regulation as a
public utility or public service company (or similar designation) by any
Governmental Authority.
ARTICLE VI
COVENANTS OF THE PARTIES
6.1 Access to Information.
(a) Between the date of this Agreement and the Closing Date,
Seller shall: (i) use its Commercially Reasonable Efforts to give Buyer and
its Representatives, during ordinary business hours and upon reasonable
notice, reasonable access to all books, records, plans, offices and other
facilities and properties included in the Purchased Assets; (ii) furnish Buyer
with such financial and operating data and other information in the possession
of Seller with respect to the Purchased Assets as Buyer may from time to time
reasonably request; and (iii) furnish Buyer with all such other information in
the possession of Seller as shall be reasonably necessary to enable Buyer to
verify the accuracy of the representations and warranties of Seller contained
in this Agreement; provided, however, that (A) any such inspections and
investigations shall be conducted in such manner as not to interfere
unreasonably with the operation of the Purchased Assets, (B) Seller shall not
be required to take any action which would constitute a waiver of the
attorney-client or other privilege, (C) Seller need not supply Buyer with any
information which Seller is under a legal or contractual obligation not to
supply and (D) Seller shall not be required to supply Buyer with any
information with respect to the Jointly Owned Stations to which Seller is not
entitled pursuant to the terms of the Jointly Owned Stations Operating
Agreements. Notwithstanding anything herein to the contrary, prior to the
Closing Date, Buyer shall not have the right to perform or conduct, or cause
to be performed or conducted, any environmental sampling or testing at, in, on
or underneath any Jointly Owned Station.
(b) All information furnished to or obtained by Buyer and Buyer's
Representatives pursuant to this Section 6.1 shall be Proprietary Information
and shall be kept confidential in accordance with the terms of the
Confidentiality Agreement. Nothing in this Section 6.1 is intended to or shall
be deemed to amend, supplement or otherwise modify the obligations of Buyer,
its Representatives or its Affiliates under the Confidentiality Agreement, all
of which remain in effect until termination of such agreement in accordance
with its terms.
(c) For a period of seven (7) years from and after the Closing
Date, each Party and its Representatives shall have reasonable access to all
of the books and records of the Purchased Assets in the possession of the
other Party to the extent that such access may
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reasonably be required by such Party in connection with the Assumed Liabilities
or the Excluded Liabilities, or other matters relating to or affected by the
operation of the Purchased Assets or the Excluded Assets. Such access shall be
afforded by the Party in possession of any such books and records upon receipt
of reasonable advance notice and during normal business hours. The Party
exercising this right of access shall be solely responsible for any costs or
expenses incurred by it or the other Party with respect to such access pursuant
to this Section 6.1(c). If the Party in possession of such books and records
shall desire to dispose of any books and records upon or prior to the expiration
of such seven-year period, such Party shall, prior to such disposition, give the
other Party a reasonable opportunity, at such other Party's cost and expense, to
segregate and remove such books and records as such other Party may select.
(d) Buyer shall not, prior to the Closing Date, contact any
customer, vendor, supplier or employee of, or any other Person having business
dealings with, Seller or its Affiliates with respect to any aspect of the
Purchased Assets or the transactions contemplated hereby or by any Additional
Agreement, without the prior written consent of Seller, which consent shall
not be unreasonably withheld or delayed.
6.2 Public Statements. Except as required by applicable Law or by
applicable rules of any national securities exchange, in which event the
Parties shall consult with each other in advance, prior to the Closing Date,
no press release or other public announcement, statement or comment in
response to any inquiry relating to the transactions contemplated by this
Agreement shall be issued, made or permitted to be issued or made by any Party
or its Representatives without the prior written consent of the other Party.
6.3 Further Assurances.
(a) Subject to the terms and conditions of this Agreement, each of
the Parties hereto shall use its reasonable best efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable under applicable Laws to consummate and make effective the
purchase and sale of the Purchased Assets pursuant to this Agreement and the
assumption of the Assumed Liabilities, including using its reasonable best
efforts to ensure satisfaction of the conditions precedent to each Party's
obligations hereunder, including obtaining all necessary consents, approvals
and authorizations of, and making all required notices or filings with, third
parties required to be obtained or made in order to consummate the
transactions hereunder, including the transfer of the Transferable Permits to
Buyer. Seller shall cooperate with Buyer in its efforts to obtain all other
Permits and Environmental Permits necessary for Buyer to operate the Purchased
Assets. Buyer shall perform all conditions required of Buyer in connection
with obtaining the Seller's Required Regulatory Approvals. No Party shall,
without prior written consent of the other Party, take or fail to take any
action which might reasonably be expected to prevent or materially impede,
interfere with or delay the transactions contemplated by this Agreement.
(b) Without limiting the generality of Section 6.3(a):
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(i) In the event that any Purchased Asset shall not have
been conveyed to Buyer at the Closing, Seller shall, subject to Section
6.3(b)(ii), use Commercially Reasonable Efforts after the Closing to convey
such asset to Buyer as promptly as practicable.
(ii) To the extent that Seller's rights under any material
Seller's Agreement may not be assigned without the consent, approval or
authorization of any third party which consent, approval or authorization has
not been obtained by the Closing Date, this Agreement shall not constitute an
agreement to assign such right if an attempted assignment would constitute a
breach of such Seller's Agreement or violate any applicable Law. If any
consent, approval or authorization to the assignment of any material Seller's
Agreement shall not be obtained, or if any attempted assignment would be
ineffective or would impair Buyer's rights and obligations under such Seller's
Agreement, such that Buyer would not acquire and assume the benefit and
detriment of all such rights and obligations, Seller, at its option and to the
fullest extent permitted by applicable Law and such Seller's Agreement, shall,
after the Closing Date, appoint Buyer to be Seller's agent with respect to
such Seller's Agreement, or, to the fullest extent permitted by applicable Law
and such Seller's Agreement, enter into such reasonable arrangements with
Buyer or take such other actions as are necessary to provide Buyer with the
same or substantially similar rights and obligations under such Seller's
Agreement.
6.4 Consents and Approvals. Without limiting the generality of Section
6.3(a):
(a) As promptly as practicable after the date of this Agreement,
Seller and Buyer shall each file or cause to be filed with the Federal Trade
Commission and the United States Department of Justice all notifications
required to be filed under the HSR Act and the rules and regulations
promulgated thereunder, as amended from time to time, with respect to the
transactions contemplated hereby and by the Additional Agreements. The Parties
shall use their respective Commercially Reasonable Efforts to respond promptly
to any requests for additional information made by such agencies, and to cause
the applicable waiting period under the HSR Act to terminate or expire at the
earliest possible date after the date of filing. Buyer shall pay all filing
fees payable under the HSR Act but each Party shall bear its own costs and
expenses of the preparation of any filing.
(b) As promptly as practicable after the date of this Agreement,
Seller and Buyer shall take, or cause to be taken, all actions, and do, or
cause to be done, all things necessary, proper or advisable under applicable
Laws to obtain all required consents and approvals of the NJBPU, the PaPUC,
the SEC and all other Governmental Authorities, and make all other filings and
give all other notices required to be made prior to the Closing with respect
to the transactions contemplated hereby and by the Additional Agreements. The
Parties shall respond promptly to any requests for additional information made
by such Persons, and use their respective Commercially Reasonable Efforts to
cause all such consents and approvals to be obtained or waived at the earliest
possible date after the date of filing. Each Party will bear its own costs of
the preparation of any such filing or notice; provided, however, that Buyer
shall
35
bear all costs associated with experts and consultants reasonably necessary for
the preparation of any such filing or notice or reasonably necessary to obtain
such consents and approvals as promptly as practicable.
(c) Seller and Buyer shall cooperate with each other and promptly
prepare and file notifications with, and request Tax clearances from, state
and local taxing authorities in jurisdictions in which a portion of the
Purchase Price may be required to be withheld or in which Buyer would
otherwise be liable for any Tax Liabilities of Seller pursuant to state or
local Tax Law.
(d) Without limiting the generality of Section 6.4(b), as promptly
as practicable after the date hereof, Buyer shall make all filings required by
the Federal Power Act. Prior to filing any application with the FERC, Buyer
shall submit such application to Seller for review and comment and shall
incorporate into such application all revisions reasonably requested. Buyer
shall be solely responsible for the cost of preparing and filing such
application, as well as all petition(s) for rehearing and all reapplications.
If any filing is rejected by the FERC, Buyer shall petition the FERC for
rehearing or permission to re-submit an application with the FERC, provided
that, in either case, such action has been approved by Seller.
6.5 Certain Tax Matters.
(a) All transfer, sales and similar Taxes ("Transfer Taxes")
incurred in connection with this Agreement and the Additional Agreements, and
the transactions contemplated hereby and thereby (including (i) sales Tax on
the sale or purchase of the Purchased Assets imposed by Pennsylvania and (ii)
transfer Tax on conveyances of interests in real property imposed by
Pennsylvania) shall be borne by Buyer (and, to the extent paid by Seller,
Buyer shall reimburse Seller upon request); provided, however, that if,
pursuant to Section 6.6(e), the transactions contemplated by this Agreement
are effectuated as a Like-Kind Exchange, then Seller shall bear such Transfer
Taxes to the extent that they exceed the amount of Transfer Taxes that would
have otherwise been incurred had the transactions not been effectuated as a
Like-Kind Exchange (and all such amounts shall be computed on an after-Tax
basis). Buyer, at its expense, shall prepare and file, to the extent required
by, or permissible under, applicable Law, all necessary Tax Returns and other
documentation with respect to all such Transfer Taxes, and, if required by
applicable Law, Seller shall join in the execution of all such Tax Returns and
other documentation; provided, however, that prior to the Closing Date, to the
extent applicable, Buyer shall provide to Seller appropriate certificates of
Tax exemption from each applicable Governmental Authority.
(b) With respect to Taxes to be prorated in accordance with
Section 3.5, Buyer shall prepare and timely file all Tax Returns required to
be filed after the Closing Date with respect to the Purchased Assets, if any,
and shall duly and timely pay all such Taxes shown to be due on such Tax
Returns. Buyer's preparation of such Tax Returns shall be subject to Seller's
approval, which approval shall not be unreasonably withheld or delayed. Buyer
shall make each
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such Tax Return available for Seller's review and approval (which approval shall
not be unreasonably withheld or delayed) no later than fifteen (15) Business
Days prior to the due date for filing such Tax Return, it being understood that
Seller's failure to approve any such Tax Return shall not limit Buyer's
obligation to timely file such Tax Return and duly and timely pay all Taxes
shown to be due thereon.
(c) Buyer and Seller shall provide the other with such assistance
as may reasonably be requested by the other Party in connection with the
preparation of any Tax Return, audit or other examination, or any proceeding,
by or before any Governmental Authority relating to Liability for Taxes, and
each Party shall retain and provide the requesting Party with all books and
records or other information which may be relevant to such Tax Return, audit,
examination or proceeding. All books, records and information obtained
pursuant to this Section 6.5(c) or pursuant to any other Section that provides
for the sharing of books, records and information or review of any Tax Return
or other instrument relating to Taxes shall be kept confidential by the
parties hereto in accordance with the terms and conditions set forth in the
Confidentiality Agreement.
(d) In the event that a dispute arises between Seller and Buyer
regarding Taxes or any amount due under this Section 6.5, the affected Parties
shall attempt in good faith to resolve such dispute and any agreed-upon amount
shall be promptly paid to the appropriate Party. If any such dispute is not
resolved within thirty (30) days after notice thereof is given to any Party,
the affected Parties shall submit the dispute to an Independent Accounting
Firm for resolution, which resolution shall be final, binding and conclusive
on such Parties. Notwithstanding anything in this Agreement to the contrary,
the fees and expenses of the Independent Accounting Firm in resolving the
dispute shall be borne equally by Seller and Buyer. Any payment required to be
made as a result of the resolution by the Independent Accounting Firm of any
such dispute shall be made within five (5) Business Days after such
resolution, together with any interest determined by the Independent
Accounting Firm to be appropriate.
(e) As reasonably requested by Seller, Buyer shall cooperate with
Seller in effectuating the transactions contemplated by this Agreement in such
a manner as to qualify for deferred like-kind exchange treatment under Section
1031 of the Code ("Like-Kind Exchange") (including the transfer of cash and
other property and the assignment of this Agreement to one or more qualified
intermediaries and the execution of appropriate documentation). In such event,
Seller shall be responsible, and shall indemnify Buyer, for any Transfer Taxes
incurred by Buyer as a result of effectuating such Like-Kind Exchange to the
extent that the amount of such Transfer Taxes exceeds the amount of Transfer
Taxes that the Buyer would have otherwise incurred had the transactions not
been effectuated as a Like-Kind Exchange (and all such amounts shall be
computed on an after-Tax basis). At Buyer's request, Seller shall promptly
provide Buyer copies of all documents prepared by Seller, including proposed
agreements, relating to the Like-Kind Exchange and shall give Buyer a
reasonable opportunity to promptly comment on such documents and agreements.
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(f) To the extent that any Party receives a Tax refund or credit
with respect to a Tax that was paid or incurred by the other Party, such
receiving Party shall promptly pay the amount of such Tax refund or credit to
the other Party.
6.6 Advice of Changes. Prior to the Closing, each Party shall advise the
other in writing with respect to any matter arising after the date of this
Agreement of which that Party obtains Knowledge and which, if existing or
occurring on or prior to the date of this Agreement, would have been required
to be set forth in this Agreement, including any of the Schedules hereto.
Seller shall, from time to time prior to the Closing, promptly supplement or
amend the Schedules to this Agreement with respect to (a) any matter that
existed as of the date of this Agreement and should have been set forth or
described in any of the Schedules hereto and (b) any matter hereafter arising
which, if existing as of the date of this Agreement, would have been required
to be set forth or described in any of the Schedules hereto in order to make
any representation or warranty set forth in this Agreement true and correct as
of such date; provided, however, that, with respect to clause (a) above, any
such supplemental or amended disclosure shall not be deemed to have been
disclosed as of the date of this Agreement unless expressly consented to in
writing by Buyer; and provided further, that, with respect to clause (b)
above, any such supplemental or amended disclosure shall, for purposes of this
Agreement, including for purposes of determining whether the conditions to
Closing set forth in Article VII are satisfied, be deemed to have been
disclosed as of the date of this Agreement.
6.7 Risk of Loss.
(a) From the date hereof through the Closing Date, all risk of
loss or damage to the Tangible Personal Property included in the Purchased
Assets shall be borne by Seller, other than loss or damage caused by the
negligent acts or omissions of Buyer or any Buyer Representative, which loss
or damage shall be the responsibility of Buyer.
(b) Notwithstanding any provision hereof to the contrary, subject
to Section 9.1(g), if, before the Closing Date, all or any portion of the
Purchased Assets is (i) condemned or taken by eminent domain or is the subject
of a pending or threatened condemnation or taking which has not been
consummated, or (ii) materially damaged or destroyed by fire or other
casualty, Seller shall notify Buyer promptly in writing of such fact, and (x)
in the case of a condemnation or taking, Seller shall assign or pay, as the
case may be, any net proceeds thereof to Buyer at the Closing and (y) in the
case of a fire or other casualty, Seller shall either restore such damage or
assign the insurance proceeds therefor to Buyer at the Closing.
Notwithstanding the foregoing, if such condemnation, taking, damage or
destruction results in a Material Adverse Effect, Buyer and Seller shall
negotiate to resolve the loss resulting from such condemnation, taking, damage
or destruction (and such negotiation shall include the negotiation of a fair
and equitable adjustment to the Purchase Price). If no such resolution can be
agreed upon within ninety (90) days after Seller has notified Buyer of such
loss, then Buyer, on the one hand, or Seller, on the other hand, may terminate
this Agreement pursuant to Section 9.1(g).
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6.8 PJM; MAAC. From and after the Closing Date, Buyer shall maintain
membership in good standing in PJM and MAAC, and shall submit to the
governance of the independent system operator established and administered
under the PJM Agreement.
6.9 Emission Allowances. Buyer and Seller shall take all necessary
actions, including executing any required forms or providing appropriate
notices to Governmental Authorities, in a timely fashion, to ensure that (i)
Buyer will obtain all, or the rights to all, (A) Emission Allowances that are
to be transferred to it pursuant to Section 2.1(f) and as set forth on
Schedule 2.1(f), including the right to receive such Emission Allowances that
are to be allocated or issued by a Governmental Authority in the future, and
(B) Excess Emission Allowances that are to be transferred to it pursuant to
Section 2.1(g) and as set forth on Schedule 2.1(g) and (ii) Seller will retain
or obtain all, or the rights to all, Emission Allowances that are defined as
Excluded Assets pursuant to Section 2.2(o), including the right to receive
such Emission Allowances that are to be allocated or issued by a Governmental
Authority in the future. Buyer and Seller further acknowledge and agree that
such actions may be required before, on or after the Closing Date.
ARTICLE VII
CONDITIONS
7.1 Conditions to Obligation of Buyer. The obligation of Buyer to effect
the transactions contemplated by this Agreement shall be subject to the
satisfaction (or the waiver, to the extent permitted by applicable Law, by
Buyer) at or prior to the Closing of the following conditions:
(a) The waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired or
been terminated;
(b) No preliminary or permanent injunction, order or decree by any
Governmental Authority which prevents the consummation of the transactions
contemplated hereby or by the Additional Agreements shall have been issued and
remain in effect (Buyer agreeing to use its reasonable best efforts to have
any such injunction, order or decree lifted), and no applicable Law shall be
in effect which prohibits the consummation of the transactions contemplated
hereby or thereby;
(c) Buyer shall have obtained the Buyer's Required Regulatory
Approvals set forth on Schedule 7.1(c), in form and substance reasonably
satisfactory to Buyer (including any adverse conditions therein); and such
Buyer's Required Regulatory Approvals shall be final and nonappealable;
39
(d) Seller shall have in all material respects performed and
complied with the covenants and agreements contained in this Agreement which
are required to be performed and complied with by Seller on or prior to the
Closing Date;
(e) (i) The representations and warranties of Seller set forth in
this Agreement that are qualified by reference to Material Adverse Effect
shall be true and correct in all respects and (ii) the representations and
warranties of Seller set forth in this Agreement that are not so qualified
shall be true and correct in substantially all respects, in each case, as of
the Closing Date as though made at and as of the Closing Date (other than
representations and warranties that are made as of a specific date which shall
have been true and correct as of such date);
(f) Buyer shall have received a certificate from an authorized
officer of Seller, dated the Closing Date, to the effect that, to such
officer's Knowledge, the conditions set forth in Sections 7.1(d) and (e) have
been satisfied by Seller;
(g) Buyer shall have received an opinion from Seller's counsel,
which counsel shall be reasonably acceptable to Buyer, dated the Closing Date,
substantially in the form of Exhibit E hereto;
(h) There shall not have occurred any Material Adverse Effect
during the period commencing on the date hereof and ending at the Closing;
(i) Buyer shall be able to obtain at Closing an owner's policy or
policies of title insurance issued on the form customarily used in
Pennsylvania insuring title to the Real Property in an amount equal to the
Purchase Price relating to such Real Property, or such lesser amount as Buyer
elects, with exceptions only for Permitted Encumbrances, but without the so-
called "standard" exceptions for (x) the rights of parties in possession, (y)
unfiled mechanics' and materialmens' liens and (z) matters arising after the
dates of the Title Commitments and with the creditors' rights exclusion to
coverage deleted, without Buyer being obligated to pay more than $50,000 in
aggregate additional premium in order for the issuer to delete or insure over
title exceptions which are not Permitted Encumbrances. For purposes hereof
"additional premium" means premium in excess of the amount that the title
insurer has otherwise agreed to accept for issuing the policies of title
insurance to Buyer in the requested amount; and
(j) Subject to the last sentence of Section 3.9, the Related
Purchase Agreements shall be in full force and effect and the valid and
binding obligation of each party thereto (other than Buyer); and all
conditions to the obligations of all parties to the Related Purchase
Agreements to consummate the transactions contemplated thereby shall have been
satisfied or, to the extent permitted by applicable Law, waived.
7.2 Conditions to Obligation of Seller. The obligation of Seller to
effect the transactions contemplated by this Agreement shall be subject to the
satisfaction (or the waiver, to the
40
extent permitted by applicable Law, by Seller) at or prior to the Closing of the
following conditions:
(a) The waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired or
been terminated;
(b) No preliminary or permanent injunction or other order or
decree by any Governmental Authority which prevents the consummation of the
transactions contemplated hereby or by the Additional Agreements shall have
been issued and remain in effect (Seller agreeing to use its reasonable best
efforts to have any such injunction, order or decree lifted), and no
applicable Law shall be in effect which prohibits the consummation of the
transactions contemplated hereby or thereby;
(c) Seller shall have obtained the Seller's Required Regulatory
Approvals set forth on Schedule 7.2(c), in form and substance reasonably
satisfactory to Seller (including any adverse conditions therein), and all
conditions to effectiveness prescribed therein or otherwise by Law shall have
been satisfied in all material respects; and such Seller's Required Regulatory
Approvals shall be final and nonappealable;
(d) Buyer shall have in all material respects performed and
complied with the covenants and agreements contained in this Agreement which
are required to be performed and complied with by Buyer on or prior to the
Closing Date;
(e) (i) The representations and warranties of Buyer set forth in
this Agreement that are qualified by reference to Buyer Material Adverse
Effect shall be true and correct in all respects and (ii) the representations
and warranties of Buyer that are not so qualified shall be true and correct in
substantially all respects, in each case, as of the Closing Date as though
made at and as of the Closing Date (other than representations and warranties
that are made as of a specific date which shall have been true and correct as
of such date);
(f) Seller shall have received a certificate from an authorized
officer of Buyer, dated the Closing Date, to the effect that, to such
officer's Knowledge, the conditions set forth in Sections 7.2(d) and (e) have
been satisfied by Buyer;
(g) The Jointly Owned Stations Operating Agreements shall have
been amended to (i) join Buyer as a party to each of the Jointly Owned
Stations Operating Agreements and (ii) irrevocably release Seller from any and
all liabilities and obligations under the Jointly Owned Stations Operating
Agreements, in each case, effective from and after the Closing Date; the
Jointly Owned Stations Operating Agreements, as amended, shall be in form and
substance satisfactory to Seller; and the Jointly Owned Stations Operating
Agreements, as amended, shall be in full force and effect and the valid and
binding obligation of each signatory thereto, including Buyer, enforceable
against each such signatory in accordance with their respective terms;
41
(h) Seller shall have received an opinion from Buyer's counsel,
which counsel shall be reasonably acceptable to Seller, dated the Closing
Date, substantially in the form of Exhibit F hereto; and
(i) Subject to the last sentence of Section 3.9, the Related
Purchase Agreements shall be in full force and effect and the valid and
binding obligation of each party thereto (other than Seller); and all
conditions to the obligations of all parties to the Related Purchase
Agreements to consummate the transactions contemplated thereby shall have been
satisfied or, to the extent permitted by applicable Law, waived.
ARTICLE VIII
INDEMNIFICATION AND ARBITRATION
8.1 Indemnification.
(a) From and after the Closing Date, Buyer shall indemnify, defend
and hold harmless Seller and its Representatives (each, a "Seller's
Indemnitee"), from and against any and all claims, demands, suits, losses,
liabilities, penalties, damages, obligations, payments, costs and expenses
(including reasonable attorneys' fees and expenses in connection therewith)
(each, an "Indemnifiable Loss"), asserted against or suffered by any Seller's
Indemnitee relating to, resulting from or arising out of (i) any breach by
Buyer of any covenant or agreement of Buyer contained in this Agreement, (ii)
the Assumed Liabilities, (iii) any Inspection or (iv) any Third-Party Claim
against any Seller's Indemnitee in connection with Buyer's ownership, lease,
maintenance or operation of any of the Purchased Assets on or after the
Closing Date (other than to the extent such Third-Party Claim constitutes an
Excluded Liability); provided, however, that Buyer shall be liable to Seller
pursuant to clause (i) of this Section 8.1(a) only for Indemnifiable Losses
for which any Seller's Indemnitee gives written notice to Buyer (setting forth
with reasonable specificity the nature and amount of the Indemnifiable Loss)
during the period for which such covenants or agreements survive the Closing
in accordance with Section 10.6.
(b) From and after the Closing, Seller shall indemnify, defend and
hold harmless Buyer and its Representatives (each, a "Buyer's Indemnitee" and,
together with Seller's Indemnitees, an "Indemnitee"), from and against any and
all Indemnifiable Losses asserted against or suffered by any Buyer's
Indemnitee relating to, resulting from or arising out of (i) any breach by
Seller of any covenant or agreement of Seller set forth in this Agreement or
(ii) the Excluded Liabilities; provided, however, that Seller shall be liable
pursuant to clause (i) of this Section 8.1(b) only for Indemnifiable Losses
for which any Buyer's Indemnitee gives written notice to Seller (setting forth
with reasonable specificity the nature and amount of the Indemnifiable Loss)
during the period for which such covenants or agreements survive the Closing
in accordance with Section 10.6.
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(c) In furtherance, and not in limitation, of the provisions set
forth in Section 8.1(a), Buyer, for itself and on behalf of its
Representatives, hereby irrevocably releases, holds harmless and forever
discharges Seller from any and all Indemnifiable Losses of any kind or
character, whether known or unknown, contingent or accrued, arising under or
relating to Environmental Laws, or relating to any claim in respect of any
Environmental Condition or Hazardous Substance, whether based on common law or
Environmental Laws relating to the Purchased Assets, other than such
Liabilities which have been retained by Seller hereunder (collectively,
"Environmental Claims"). In furtherance of the foregoing, Buyer, for itself
and on behalf of its Representatives, hereby irrevocably waives any and all
rights and benefits with respect to such Environmental Claims that it now has,
or in the future may have conferred upon it by virtue of any Law or common law
principle, which provides that a general release does not extend to claims
which a party does not know or suspect to exist in its favor at the time of
executing the release, if knowledge of such claims would have materially
affected such party's settlement with the obligor. In this connection, Buyer
hereby acknowledges that it is aware that factual matters now unknown to it
may have given, or hereafter may give, rise to Environmental Claims that are
presently unknown, unanticipated and unsuspected, and Buyer further agrees
that this release set forth in this Section 8.1(c) has been negotiated and
agreed upon in light of that awareness, and Buyer, for itself and on behalf of
its Representatives, nevertheless hereby intends irrevocably to release, hold
harmless and forever discharge Seller from all such Environmental Claims.
(d) The rights and remedies of Seller and Buyer set forth in this
Article VIII are exclusive and in lieu of any and all other rights and
remedies which Seller and Buyer may have under this Agreement, under
applicable Law, whether at common law or in equity, including for declaratory,
injunctive or monetary relief, in each case, with respect to any Indemnifiable
Loss.
(e) Notwithstanding anything to the contrary herein, no Person
(including an Indemnitee) shall be entitled to recover from any other Person
(including any Party hereto required to provide indemnification under this
Agreement (an "Indemnifying Party")) any amount in excess of the actual
compensatory damages, court costs and reasonable attorneys' fees suffered by
such Party. Buyer and Seller hereby irrevocably waive any right to recover
punitive, special, exemplary and consequential damages arising in connection
with or with respect to this Agreement (other than with respect to
indemnification for a Third-Party Claim).
(f) Any Indemnitee shall use Commercially Reasonable Efforts to
mitigate all losses, damages and the like relating to a claim under the
indemnification provisions in this Section 8.1, including availing itself of
any defenses, limitations, rights of contribution, claims against third
Persons and other rights at law or equity. For purposes of this Section
8.1(f), the Indemnitee's Commercially Reasonable Efforts shall include the
reasonable expenditure of money to mitigate or otherwise reduce or eliminate
any loss or expenses for which indemnification would otherwise be due, and, in
addition to its other obligations hereunder, the Indemnifying
43
Party shall reimburse the Indemnitee for the Indemnitee's reasonable
expenditures in undertaking the mitigation.
8.2 Defense of Claims.
(a) If any Indemnitee receives notice of the assertion of any
claim or of the commencement of any suit, action or proceeding made or brought
by any Person who is not an Indemnitee (a "Third-Party Claim") with respect to
which indemnification is to be sought from an Indemnifying Party, the
Indemnitee shall give such Indemnifying Party reasonably prompt written notice
thereof, but in no event later than ten (10) Business Days after the
Indemnitee's receipt of notice of such Third-Party Claim. Such notice shall
describe the nature of the Third-Party Claim in reasonable detail and shall
indicate the estimated amount, if practicable, of the Indemnifiable Loss that
has been or may be incurred by the Indemnitee. The Indemnifying Party shall
have the right to participate in or, by giving written notice to the
Indemnitee, to elect to assume the defense of any Third-Party Claim at such
Indemnifying Party's expense and by such Indemnifying Party's own counsel. If
an Indemnifying Party elects not to assume the defense of any Third-Party
Claim, the Indemnitee may defend, compromise or settle such Third-Party Claim
with counsel selected by it, provided that, without the prior written consent
of the Indemnifying Party, the Indemnitee shall not agree to the entry of any
judgment with respect to, or any compromise or settlement of, any Third-Party
Claim, which judgment, compromise or settlement does not include the
unconditional release of the Indemnifying Party.
(b) If, within twenty (20) Business Days after an Indemnitee gives
written notice to the Indemnifying Party of any Third-Party Claim, such
Indemnitee receives written notice from the Indemnifying Party that such
Indemnifying Party has elected to assume the defense of such Third-Party Claim
as provided in Section 8.2(a), then the Indemnifying Party shall not be liable
for any costs, fees or expenses subsequently incurred by the Indemnitee in
connection with the defense, compromise or settlement thereof.
(c) Subject to Section 8.3, any claim by an Indemnitee on account
of an Indemnifiable Loss which does not constitute a Third-Party Claim (a
"Direct Claim") shall be asserted by giving the Indemnifying Party reasonably
prompt written notice thereof, in no event later than twenty (20) Business
Days after the Indemnitee becomes aware of such Direct Claim, stating the
nature of such claim in reasonable detail and indicating the estimated amount,
if practicable, of such Indemnifiable Loss and the Indemnifying Party shall
have a period of twenty (20) Business Days within which to respond to such
Direct Claim. If the Indemnifying Party fails to respond during such twenty
(20) Business Day period, the Indemnifying Party shall be deemed to have
accepted such claim and, subject to this Article VIII, shall promptly
reimburse the Indemnitee for the Indemnifiable Losses set forth in the
Indemnitee's notice.
(d) A failure to give timely notice as provided in this Section
8.2 shall not affect the rights or obligations of any Party hereunder except
to the extent that, as a result of such
44
failure, the Party which was entitled to receive such notice was actually
prejudiced as a result of such failure.
8.3 Arbitration.
(a) Notwithstanding any provision hereof to the contrary, in the
event of any dispute between Seller and Buyer arising after the Closing
(whether relating to facts, events or circumstances occurring or existing
prior to, on or after the Closing Date) and relating to or arising out of any
provision of this Agreement (other than disputes arising under Section 2.3,
2.4, 3.2, 3.3, 3.4, 6.5 or 8.1(a)(ii)), the Party asserting such dispute shall
give written notice to the other of the fact that a dispute has arisen
pursuant hereto. Such notice shall include (i) a statement setting forth in
reasonable detail the facts, events, circumstances, evidence and arguments
underlying such dispute and (ii) proposed arrangements for a meeting to
attempt to resolve the dispute to be held within sixty (60) days after such
notice is given. Within thirty (30) days after such notice is given, the other
Party hereto shall submit to the Party giving such notice a written summary
responding to such statement of facts, events, circumstances, evidence and
arguments contained in the notice and an acceptance of or proposed alternative
to the meeting arrangements set forth in the initial notice.
(b) The chief executive officers (or any other executive officer
or officers directly reporting to, and duly designated by, such chief
executive officers) of each of the Parties shall meet at a mutually acceptable
time and place to attempt to settle any dispute in good faith; provided,
however, that such meeting shall be held at the principal offices of the Party
receiving the notice of dispute unless otherwise agreed; and provided further,
that any such meeting shall be held no later than sixty (60) days after the
written notice of dispute is given pursuant to Section 8.3(a). Each Party
shall bear its own costs and expenses with respect to preparation for,
attendance at and participation in such meeting.
(c) In the event that (i) a meeting has been held in accordance
with Section 8.3(b), (ii) any such dispute of the kind referred to in Section
8.3(a) shall not have been resolved at such meeting and (iii) the aggregate
amount in dispute exceeds $100,000, then either Party may submit such dispute
to binding arbitration pursuant to the Commercial Arbitration Rules of the
American Arbitration Association (the "Commercial Arbitration Rules"). In the
event that such dispute is submitted to arbitration pursuant to the Commercial
Arbitration Rules, then the arbitration tribunal shall be composed of three
arbitrators (one arbitrator selected by each Party within thirty (30) days
after the meeting held in accordance with Section 8.3(b) with the third
selected by the other two arbitrators or, in the absence of agreement between
them, the American Arbitration Association), the venue of the arbitration
shall be Wilmington, Delaware, the language of the arbitration shall be
English and the arbitration shall commence no later than sixty (60) days after
the meeting held in accordance with Section 8.3(b). The decision, judgment and
order of the arbitration tribunal shall be final, binding and conclusive as to
the Parties and their respective Representatives, and may be entered in court
of competent jurisdiction. Other than the fees and expenses of the
arbitrators, which shall be shared equally by the Parties, each Party shall
45
bear its own costs and expenses (including attorneys' fees and expenses)
relating to the arbitration.
8.4 Remediation of Matters Covered in Section 2.4(g). With respect to
the Liabilities as to which Seller has retained responsibility for Remediation
pursuant to Section 2.4(g):
(a) Seller shall have the right, but not the obligation, to
control the management of any Remediation covered by this Section 8.4. With
respect to Liabilities that are potentially covered by this Section 8.4,
Seller must notify Buyer within thirty (30) days of receipt of notice of
Buyer's claim for indemnification for such matter that it intends to undertake
responsibility for said Remediation. Prior to a determination by Seller that
it will undertake Remediation pursuant to this Section 8.4, Buyer shall, at
Seller's expense, take only those actions necessary to comply with applicable
Environmental Laws or as required by Governmental Authorities or address
conditions that pose an immediate and acute environmental or health risk
(unless additional actions are approved by Seller, such approval not to be
unreasonably withheld or delayed).
(b) Seller shall comply with all applicable Laws, including all
applicable Environmental Laws, with respect to its performance pursuant to
this Section 8.4. Seller shall promptly provide copies to Buyer of all
notices, correspondence, draft reports, submissions, work plans, and final
reports and shall give Buyer a reasonable opportunity (at Buyer's own expense)
to promptly comment on any submissions Seller intends to deliver or submit to
the appropriate regulatory body prior to said submission. Buyer may, at its
own expense, hire its own consultants, attorneys or other professionals to
monitor the investigation or remediation, including any field work undertaken
by Seller, and Seller shall provide Buyer with the results of all such field
work. Notwithstanding the foregoing, Buyer shall not take any actions that
shall unreasonably interfere with Seller's performance of the Remediation.
Seller shall undertake any such work required herein in a manner designed to
minimize any disruption, to the greatest extent possible, with the conduct of
operations at the property. Buyer shall allow Seller reasonable access to
conduct any of the work contemplated herein and shall fully cooperate with
Seller in the performance of the Remediation, including providing Seller with
reasonable access to employees and documents as necessary.
(c) If Seller declines to undertake the performance of a
Remediation hereunder, Buyer shall be entitled to control the investigation
and remediation. Buyer shall promptly provide copies to Seller of all notices,
correspondence, draft reports, submissions, work plans, and final reports and
shall give Seller a reasonable opportunity (at Seller's own expense) to
promptly comment on any submissions Buyer intends to deliver or submit to the
appropriate regulatory body prior to said submission. Seller may, at its own
expense, hire its own consultants, attorneys or other professionals to monitor
the Remediation, including any field work undertaken by Buyer, and Buyer shall
provide Seller with the results of all such field work. Notwithstanding the
foregoing, Seller shall not take any actions that shall unreasonably interfere
with Buyer's performance of the Remediation. Seller's decision to allow Buyer
to undertake
46
Remediation hereunder shall not limit or affect Seller's obligation to indemnify
Buyer for said investigation and remediation as otherwise provided in this
Agreement.
(d) Without regard to whether Buyer or Seller is conducting a
Remediation pursuant to this Section 8.4, the Parties agree that such
Remediation will be conducted in a reasonable manner and consistent with the
use of the Site in question as an electric generating station. Without
limiting the foregoing, the Parties agree that they will conduct any such
Remediation so that the Remediation Standard that is applicable to the Site is
the least stringent Remediation Standard that would apply to the Site based on
the current use of the Site, and Buyer furthermore covenants that it will
accept a deed restriction or other reasonable institutional or engineering
controls, if such mechanisms will (A) allow the Remediation of the Site to be
completed in the least cost manner in compliance with applicable Environmental
Law and (B) not unreasonably interfere with operations at the Site.
Notwithstanding the foregoing, if Buyer determines at or after the Closing
that it desires a Remediation such that the Site is remediated to a more
stringent Remediation Standard, it may do so, provided, that (x) if Seller is
managing a Remediation pursuant to this Section 8.4, it has the right, to the
extent permitted by Law, to cease conduct of the Remediation and request Buyer
to assume the conduct of the Remediation and (y) notwithstanding which of the
Parties conducts the Remediation, Buyer shall be liable for the costs and
expenses associated with the Remediation to the extent those costs and
expenses exceed those that would be associated with a Remediation Standard as
determined by the previous sentence.
ARTICLE IX
TERMINATION
9.1 Termination.
(a) This Agreement may be terminated at any time prior to the
Closing by mutual written consent of the Parties.
(b) This Agreement may be terminated by Seller, on the one hand,
or Buyer, on the other hand, upon written notice to the other Party, (i) at
any time prior to the Closing if any court of competent jurisdiction shall
have issued an order, judgment or decree permanently restraining, enjoining or
otherwise prohibiting the Closing, and such order, judgment or decree shall
have become final and nonappealable; (ii) at any time prior to the Closing if
any Law shall have been enacted or issued by any Governmental Authority which,
directly or indirectly, prohibits the consummation of the transactions
contemplated by this Agreement or by any Additional Agreement; or (iii) at any
time after the first anniversary of the date of this Agreement if the Closing
shall not have occurred on or before such date; provided, however, that the
right to terminate this Agreement under this Section 9.1(b)(iii) shall not be
available to any Party whose breach of this Agreement has caused, or resulted
in, the failure of the Closing to occur on or
47
before such date; and provided, further, that if on such date, the conditions to
the Closing set forth in Section 7.1(c) or 7.2(c) shall not have been satisfied
but all other conditions to the Closing shall be satisfied or shall be capable
of being satisfied, then no Party shall be entitled to terminate this Agreement
prior to the date which is 180 days after the first anniversary of the date of
this Agreement.
(c) This Agreement may be terminated by Buyer, upon written notice
to Seller, if any of Buyer's Required Regulatory Approvals, the receipt of
which is a condition to the obligation of Buyer to consummate the Closing as
set forth in Section 7.1(c), shall have been denied (and a petition for
rehearing or refiling of an application initially denied without prejudice
shall also have been denied), and such denial was not caused by or the result
of a breach of this Agreement by Buyer.
(d) This Agreement may be terminated by Seller, upon written
notice to Buyer, if any of the Seller's Required Regulatory Approvals, the
receipt of which is a condition to the obligation of Seller to consummate the
Closing as set forth in Section 7.2(c), shall have been denied (and a petition
for rehearing or refiling of an application initially denied without prejudice
shall also have been denied), and such denial was not caused by or the result
of a breach of this Agreement by Seller.
(e) Except as otherwise provided in this Agreement, this Agreement
may be terminated by Buyer, upon written notice to Seller, if there has been a
breach by Seller of any covenant, agreement, representation or warranty
contained in this Agreement which has had a Material Adverse Effect and such
breach is not cured by the earlier of the Closing Date or the date thirty (30)
days after receipt by Seller of notice specifying in reasonable detail the
nature of such breach, unless Buyer shall have previously waived such breach.
(f) Except as otherwise provided in this Agreement, this Agreement
may be terminated by Seller, upon written notice to Buyer, if there has been a
material breach by Buyer of any covenant, agreement, representation or
warranty contained in this Agreement which has had a Material Adverse Effect
and such breach is not cured by the earlier of the Closing Date or the date
thirty (30) days after receipt by Buyer of notice specifying in reasonable
detail the nature of such breach, unless Seller shall have previously waived
such breach.
(g) This Agreement may be terminated by Seller, on the one hand,
or Buyer, on the other hand, upon written notice to the other Party, in
accordance with the provisions of Section 6.7(b), provided that the Party
seeking to so terminate shall have complied with its obligations under Section
6.7.
9.2 Effect of Termination. Upon termination of this Agreement prior to
the Closing pursuant to Section 9.1, this Agreement shall be null and void and
of no further force or effect (except that the provisions set forth in Section
6.2, this Section 9.2 and Article X, and the Confidentiality Agreement, shall
remain in full force and effect in accordance with their
48
respective terms); and no Party shall have any further Liability under this
Agreement (other than for any wilful breach of its obligations hereunder).
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Amendment and Modification. Subject to applicable Law, this
Agreement may be amended, supplemented or otherwise modified only by written
agreement entered into by all Parties.
10.2 Expenses. Except to the extent provided herein, whether or not the
transactions contemplated hereby are consummated, all costs, fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be borne by the Party incurring such costs, fees and expenses,
including the fees and commissions referred to in Section 10.3.
Notwithstanding the foregoing, Buyer shall be responsible for the payment of,
or reimbursement of Seller for: (a) all actual out-of-pocket costs, fees and
expenses charged by Lawyers Title Insurance Corporation in connection with
obtaining any title insurance policy and all endorsements thereto, including
policy premiums; (b) all survey costs, fees and expenses incurred by Buyer;
(c) all survey costs, fees and expenses incurred by Seller on or prior to the
date hereof, but, together with all such costs, fees and expenses incurred in
connection with the Related Purchase Agreements, not in excess of $600,000;
(d) all filing fees under the HSR Act; and (e) all costs for experts and
consultants in accordance with Section 6.4(b).
10.3 Fees and Commissions. Seller, on the one hand, and Buyer, on the
other hand, represent and warrant to the other that, except for Credit Suisse
First Boston, Inc. and ▇▇▇▇/Navigant Consulting Group, which are acting for
and at the expense of Seller, and CIBC World Markets Corp., which is acting
for and at the expense of Buyer, no broker, finder or other Person is entitled
to any brokerage fees, commissions or finder's fees in connection with the
transactions contemplated hereby by reason of any action taken by such Party
or its Representatives. Seller, on the one hand, and Buyer, on the other hand,
shall pay or otherwise discharge all such brokerage fees, commissions and
finder's fees so incurred by such Parties.
10.4 Bulk Sales Laws. Buyer hereby acknowledges that, notwithstanding
anything in this Agreement to the contrary, Seller will not comply with the
provisions of the bulk sales laws of any jurisdiction in connection with the
transactions contemplated by this Agreement; and Buyer hereby irrevocably
waives compliance by Seller with the provisions of the bulk sales laws of all
applicable jurisdictions.
10.5 Waiver of Compliance; Consents. To the extent permitted by
applicable Law, any failure of any of the Parties to comply with any covenant,
agreement or condition set forth herein may be waived by the Party entitled to
the benefit thereof only by a written instrument
49
signed by such Party, but any such waiver shall not operate as a waiver of, or
estoppel with respect to, any prior or subsequent failure to comply therewith.
10.6 No Survival. No representation or warranty contained in this
Agreement shall survive the delivery of the Limited Warranty Deeds and the
Closing. The covenants and agreements of the Parties contained in this
Agreement shall survive the Closing in accordance with their respective terms.
10.7 Disclaimers. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET
FORTH IN ARTICLE IV, THE PURCHASED ASSETS ARE SOLD "AS IS, WHERE IS", AND
SELLER EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY
KIND OR NATURE, EXPRESS OR IMPLIED, AS TO SELLER AND THE PURCHASED ASSETS.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE IV: SELLER EXPRESSLY
DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES REGARDING LIABILITIES,
OWNERSHIP, LEASE, MAINTENANCE OR OPERATION OF THE PURCHASED ASSETS, THE TITLE,
CONDITION, VALUE OR QUALITY OF THE PURCHASED ASSETS OR THE PROSPECTS
(FINANCIAL AND OTHERWISE), RISKS AND OTHER INCIDENTS OF THE PURCHASED ASSETS;
AND SELLER EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES OF
MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH
RESPECT TO THE PURCHASED ASSETS, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP
THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, OR
COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS, OR THE APPLICABILITY OF ANY
GOVERNMENTAL AUTHORITY, INCLUDING ANY ENVIRONMENTAL LAWS, OR WHETHER SELLER
POSSESSES SUFFICIENT REAL PROPERTY OR PERSONAL PROPERTY TO OPERATE THE
PURCHASED ASSETS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER
FURTHER EXPRESSLY DISCLAIMS ALL REPRESENTATIONS OR WARRANTIES REGARDING THE
ABSENCE OF HAZARDOUS SUBSTANCES OR LIABILITY OR POTENTIAL LIABILITY ARISING
UNDER ENVIRONMENTAL LAWS WITH RESPECT TO THE PURCHASED ASSETS. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED HEREIN, SELLER EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES
OF ANY KIND REGARDING THE CONDITION OF THE PURCHASED ASSETS OR THE SUITABILITY
OF THE PURCHASED ASSETS FOR OPERATION AS A POWER PLANT OR AS A FUEL PROCESSING
FACILITY, AS APPLICABLE, AND NO SCHEDULE OR EXHIBIT TO THIS AGREEMENT, NOR ANY
OTHER MATERIAL OR INFORMATION PROVIDED, OR COMMUNICATIONS MADE, BY SELLER OR
ITS REPRESENTATIVES, INCLUDING ANY BROKER OR INVESTMENT BANKER, WILL CAUSE OR
CREATE ANY SUCH REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, CONDITION, VALUE OR QUALITY OF THE PURCHASED ASSETS.
50
SELLER EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES WITH
RESPECT TO THE NAMES "CONEMAUGH STATION" AND "KEYSTONE STATION", INCLUDING ALL
REPRESENTATIONS AND WARRANTIES OF (1) TITLE; (2) LENGTH, NATURE, EXCLUSIVITY
AND CONTINUITY OF USE; (3) STRENGTH OR FAME; AND (4) NONINFRINGEMENT AND
NONDILUTION OF TRADEMARK, SERVICE ▇▇▇▇, TRADE NAME OR OTHER PROPRIETARY RIGHTS
OF ANY THIRD PARTY. BUYER HEREBY ACKNOWLEDGES THAT THE NAMES "CONEMAUGH
STATION" AND "KEYSTONE STATION" EACH HAVE A GEOGRAPHIC CONNOTATION ASSOCIATED
WITH THE LOCATION OF CERTAIN OF THE PURCHASED ASSETS.
10.8 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given on the day when delivered personally or by
facsimile transmission (with confirmation), on the next Business Day when
delivered to a nationally recognized overnight courier or five (5) Business
Days after deposited as registered or certified mail (return receipt
requested), in each case, postage prepaid, addressed to the recipient Party at
its address set forth below (or at such other address or facsimile number for
a Party as shall be specified by like notice; provided, however, that any
notice of a change of address or facsimile number shall be effective only upon
receipt thereof):
(a) If to Seller, to:
Conectiv
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esquire
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Buyer, to:
NRG Energy, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and General Counsel
51
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇, Plant, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
3400 City Center
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
10.9 Assignment. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors and permitted assigns,
but neither this Agreement nor any of the rights, interests, obligations or
remedies hereunder shall be assigned by any Party hereto, including by
operation of law, without the prior written consent of the other Parties, nor
is this Agreement intended to confer upon any other Person any rights,
interests, obligations or remedies hereunder. Notwithstanding the foregoing,
(i) Seller may assign all or any portion of its rights, interests, obligations
and remedies hereunder to Conectiv, a Delaware corporation, or any of
Conectiv's wholly owned subsidiaries; provided, however, that no such
assignment shall (A) materially impair or delay the consummation of the
transactions contemplated hereby or (B) relieve or discharge Seller from any
of its obligations hereunder; and (ii) Buyer may assign all or any portion of
its rights, interests, obligations and remedies hereunder to (A) any of its
wholly owned subsidiaries or (B) a trustee, lending institution or other
Person solely for purposes of financing the transactions contemplated hereby;
provided, however, that no such assignment shall (A) materially impair or
delay the consummation of the transactions contemplated hereby or (B) relieve
or discharge Buyer from any of its obligations hereunder.
10.10 Governing Law; Forum; Service of Process. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
(without giving effect to conflicts of law principles) as to all matters,
including validity, construction, effect, performance and remedies. Venue in
any and all suits, actions and proceedings related to the subject matter of
this Agreement shall be in the state and federal courts located in and for the
State of Delaware (the "Courts"), which shall have exclusive jurisdiction for
such purpose, and the Parties hereby irrevocably submit to the exclusive
jurisdiction of such courts and irrevocably waive the defense of an
inconvenient forum to the maintenance of any such suit, action or proceeding.
Service of process may be made in any manner recognized by such Courts. Each
of the Parties hereby irrevocably waives its right to a jury trial arising out
of any dispute in connection with this Agreement or the transactions
contemplated hereby.
10.11 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
52
10.12 Interpretation. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
construction of this Agreement. Ambiguities and uncertainties in the wording
of this Agreement shall not be construed for or against any Party, but shall
be construed in the manner that most accurately reflects the Parties' intent
as of the date of this Agreement. Each Party acknowledges that it has been
represented by counsel in connection with the review and execution of this
Agreement, and, accordingly, there shall be no presumption that this Agreement
or any provision hereof be construed against the Party that drafted this
Agreement.
10.13 Schedules and Exhibits. Except as otherwise provided in this
Agreement, all Exhibits and Schedules referred to herein are intended to be
and hereby are made a part of this Agreement.
10.14 Entire Agreement. This Agreement (including the Schedules and
Exhibits), together with the Confidentiality Agreement, embodies the entire
agreement and understanding of the Parties hereto in respect of the
transactions contemplated by this Agreement and the Additional Agreements and
supersedes all prior agreements and understandings between or among the
Parties with respect to such transactions. There are no representations,
warranties, covenants or agreements between or among the Parties with respect
to the subject matter set forth in such agreements, other than those expressly
set forth or referred to herein or therein. Without limiting the generality of
the foregoing, Buyer hereby acknowledges and agrees that there are no
representations, warranties, covenants or agreements between or among the
Parties with respect to the subject matter set forth in such agreements
contained in any material made available to Buyer pursuant to the terms of the
Confidentiality Agreement (including the Offering Memorandum dated June 18,
1999, previously provided to Buyer by or on behalf of Seller, ▇▇▇▇/Navigant
Consulting Group and Credit Suisse First Boston, Inc.).
[SIGNATURE PAGE FOLLOWS]
53
IN WITNESS WHEREOF, Seller and Buyer have caused this Purchase and Sale
Agreement to be duly executed and delivered by their respective duly
authorized officers as of the date first above written.
ATLANTIC CITY ELECTRIC COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
NRG ENERGY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President