DRAFT 11/29/01
[FORM CONTRIBUTION AGREEMENT FOR
ASSET TRANSFERS]
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CONTRIBUTION AGREEMENT
by and between
Carolina Power & Light Company
and
Rowan County Power, LLC
________________, 2001
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is made as of
_______, 2001 by and between Carolina Power & Light Company, a North
Carolina corporation (the "Contributor"), and Rowan County Power, LLC, a
North Carolina limited liability company (the "Recipient").
BACKGROUND
WHEREAS, the Contributor is the sole member of the Recipient; and
WHEREAS, the Contributor desires to contribute to the Recipient
and the Recipient desires to accept the contribution of, all of the rights
and obligations of the Contributor as owner of and obligor under the
Transferred Assets (as defined below) and the Assumed Liabilities (as
defined below) in accordance with the terms and conditions set forth in
this Agreement; and
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Contribution
Section 1.1 Assignment and Transfer of Certain Assets. On and as
of the Effective Date, the Contributor shall contribute, transfer and
assign, irrevocably and without recourse (other than with respect to
liability for the representations and warranties set forth in Article II),
to the Recipient, and the Recipient shall receive, accept and assume,
irrevocably and without recourse, all of the Contributor's right, title and
interest in and to the assets set forth on Schedule A hereto and the
Contracts listed on Schedule B hereto (collectively, the "Transferred
Assets").
Section 1.2 Excluded Assets. Recipient expressly understands and
agrees that the assets and properties set forth on Schedule C hereto
(collectively, the "Excluded Assets") shall be excluded from the
Transferred Assets.
Section 1.3 Assumption of Certain Liabilities by the Recipient. On
and as of the Effective Date, the Recipient shall assume, perform and
otherwise pay, satisfy and discharge and shall forever releases the
Contributor, irrevocably and without recourse (other than with respect to
liability for the representations and warranties set forth in Article II),
from the liabilities and obligations howsoever accrued or incurred arising
from the operation or the ownership of the Transferred Assets from and
after the Effective Date (the "Assumed Liabilities"), including but not
limited to the following Assumed Liabilities:
(a) Responsibility for decommissioning the generating stations in
compliance with all requirements of applicable law, including
responsibility for establishing, maintaining and funding (except to the
extent, and only to the extent, otherwise provided herein) and such
financial assurance mechanisms as shall be required to provide for such
decommissioning under such requirements of law;
(b) Obligations to comply with, and all liabilities connected with
or arising out of, the Permits, exemptions, allowances, approvals and other
items (including applications) obtained or required in connection with the
Transferred Assets, including the obligations and liabilities arising from
or related to emission and discharge allowances, any and all zoning, land
use, building, construction, demolition, setback and subdivision Permits,
approvals and authorizations, and the obligation to cure any violation or
default arose or occurred from and after the Effective Date;
(c) Obligations and liabilities under any and all amendments,
modifications, extensions or renewals of all existing Permits, variances,
certificates, licenses, consents, authorizations and approvals relating to
the Transferred Assets; and
(d) Obligations and liabilities under the assigned Contracts,
including those listed on Schedule B.
Section 1.4 Excluded Liabilities. The Recipient shall not assume
or be obligated to pay, perform or otherwise discharge the following
excluded obligations and liabilities (collectively, the "Excluded
Liabilities"):
(a) the liabilities and obligations howsoever accrued or incurred
arising from the operation of the ownership of the Tranmission Assets prior
to the Effective Date;
(b) the liabilities and obligations howsoever accrued or incurred
arising from the operation or the ownership of the Transmission Assets
prior to the Effective Date;
(c) obligations and liabilities of the Contributor in respect of
any assets of the Contributor which are not Transferred Assets;
(d) obligations and liabilities for personal injury or property
loss or damages (but only to the extent the alleged injury or property loss
or damage occurred before the Effective Date) resulting from or arising out
of the ownership or operation of the Transferred Assets by the Contributor
prior to the Effective Date;
(e) any fines or penalties imposed by a federal, state or local
governmental authority to the extent resulting from acts or omissions of
the Contributor prior to the Effective Date;
(f) liabilities and obligations of the Contributor or any of its
Affiliates (or any of their respective predecessors-in-interest) for any
federal, state or local taxes (collectively, "Taxes") due or becoming due
by reason of the ownership, possession, use, operation, purchase,
acquisition, sale or disposition, of any of the Transferred Assets and
relating to the period prior to the Effective Date or otherwise relating to
the consummation of the transactions contemplated herein, including (i)
Taxes attributable to employee withholding tax obligations, (ii) Taxes
imposed on, or accruing as a result of the contribution of the Transferred
Assets and (iii) Taxes attributable to, or resulting from, recapture of
depreciation, other tax benefit items, or otherwise arising from the
transactions contemplated by this Agreement; and
(g) except as otherwise provided in the preceding clauses (a)
through (f) of this Section 1.4, all liabilities and obligations to the
extent relating to, or based upon events or conditions occurring or
existing in connection with, or arising out of, any and all assets,
properties, rights and interests which are not being acquired by the
Recipient hereunder.
Notwithstanding anything to the contrary contained herein, in the
event of any ambiguity with respect to whether any liability is an Assumed
Liability or an Excluded Liability, such liability shall be considered for
all purposes hereunder, as an Assumed Liability.
ARTICLE II
Representations and Warranties
Section 2.1 Representations and Warranties of Both Parties. The
Contributor and the Recipient each represents and warrants to the other
party, as of the Effective Date, as follows:
(a) Such party is duly incorporated or formed, validly existing
and in good standing under the laws of its jurisdiction of incorporation or
formation and such party has the requisite authority to enter into and
perform this Agreement.
(b) The execution, delivery and performance of this Agreement by
such party has been duly and validly authorized by all necessary action of
such party. This Agreement has been duly executed and delivered by an
authorized officer of such party, and constitutes a legal, valid and
binding obligation of such party, enforceable against such party in
accordance with the terms hereof.
(c) All consents or authorizations of, filings with, or other acts
by or in respect of any other person or any governmental authority or
agency required in connection with the execution, delivery or performance
by it, or the validity or enforceability as to it, of this Agreement
(including consents and approvals required to avoid (i) a violation of law
applicable to or binding on it or any of its properties, (ii) any violation
or default under any material Contract, or (iii) any violation or default
under any Permits).
(d) The execution, delivery and performance by it of this
Agreement will not violate or result in a default under any of its
constituent documents.
Section 2.2 Representations and Warranties of Contributor. The
Contributor represents and warrants to the Recipient that:
(a) the Transferred Assets are being transferred by the
Contributor to the Recipient free and clear of any and all Liens except
such Liens as are stated in any agreement, deed or other document of
conveyance for any or all of the Transferred Assets or any title report
relating to any real property; and
(b) each of the Contracts listed on Schedule B hereto is in full
force and effect and Contributor is not in default under or in violation of
nor is there a valid basis for any claims to default under or violation of
any of the Contracts listed on Schedule B hereto.
ARTICLE III
Indemnification
Section 3.1 Contributor Provides Indemnification. The Contributor
shall defend, protect, indemnify and save harmless the Recipient from and
against any and all liabilities, suits, actions, losses, damages, costs and
expenses, including without limitation reasonable counsel fees, suffered or
incurred by the Recipient resulting from or relating to the operation or
the ownership of the Transferred Assets prior to the Effective Date.
ARTICLE IV
Miscellaneous
Section 4.1 [Real Property Transfer. The transfer of any and all
fee-owned real property shall be subject to the terms and conditions of
that certain [Describe Deed] dated the date hereof between the Contributor
and the Recipient and if any inconsistency shall exist between this
Agreement and that certain [Deed], such [Deed] shall control. The
Contributor shall be responsible for the recording of all such deeds and
related transfer taxes.]
Section 4.2 Remaining Rights. To the extent the Contributor is
viewed as having any rights after the date hereof with respect to the
Transferred Assets, the Contributor shall exercise those rights as directed
by the Recipient.
Section 4.3 Assignment. This Agreement and the rights hereunder
shall not be assignable or transferable by any party hereto (by operation
of law or otherwise) without the prior written consent of the other parties
hereto.
Section 4.4 Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any other
person, other than the parties hereto and such assigns, any legal or
equitable rights hereunder.
Section 4.5 Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs and expenses unless
otherwise provided herein.
Section 4.6 Amendments. The terms and provisions of this Agreement
may not be amended except by a written instrument signed by each of the
parties hereto.
Section 4.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but which
together shall constitute one and the same instrument.
Section 4.8 Captions. The captions of the articles and sections of
this Agreement have been added for convenience only and shall not be deemed
to be a part of this Agreement.
Section 4.9 Severability. Each provision of this Agreement shall
be interpreted in such manner as to validate and give effect thereto to the
fullest lawful extent, but if any provision of this Agreement is determined
by a court of competent jurisdiction to be invalid or unenforceable under
applicable law, such provision shall be ineffective only to the extent so
determined and such invalidity or unenforceability shall not affect the
remainder of such provision or the remaining provisions of this Agreement.
Section 4.10 Governing Law. This Agreement shall be governed by
and interpreted and construed in accordance with the internal laws of the
State of [North Carolina], without giving effect to its conflicts of law
principles.
Section 4.11 Entirety of Agreement. This Agreement embodies the
entire agreement and understanding between the Contributor and the Company
relating to the subject matter hereof and supersedes all prior agreements
and understandings relating to such subject matter.
Section 4.12 Further Assurances. This Agreement is intended to be
a ▇▇▇▇ of sale and assignment and assumption agreement intended to
contribute, transfer and assign all rights, title and interest in the
Transferred Assets, irrevocably and without recourse, to the Recipient and
whereby the Recipient assumes all Assumed Liabilities, irrevocably and
without recourse. In furtherance of the foregoing, the Contributor and the
Recipient each hereby agree, without the payment of further consideration
by either party, that it shall:
(a) execute and deliver such other and further instruments of
conveyance, assignment and transfer, and take such other action as
necessary, appropriate or advisable for the effective contribution,
transfer and assignment of the Transferred Assets; and the Assumed
Liabilities to the Recipient; in furtherance of the foregoing and as an
illustration, each of the Contributor and the Recipient shall take whatever
actions and execute whatever further documents either party deems
necessary, appropriate or advisable to transfer (i) any and all assets and
liabilities of the Contributor which may not be included within the
Transferred Assets or the Assumed Liabilities but, upon further
consideration, should have been so included and transferred to the
Recipient and (ii) any and all assets and liabilities of the Contributor
which were transferred to the Recipient hereunder but, upon further
consideration, should not have been so transferred;
(b) maintain copies of this Agreement and related documents in its
books and records, and make appropriate entries in its books and records to
reflect the contribution and assumption of the Transferred Assets and the
Assumed Liabilities to and by the Recipient, irrevocably and without
recourse;
(c) in the case of the Contributor, not in any way represent that
it owns the Transferred Assets;
(d) in the case of the Recipient, not in any way represent that it
does not own the Transferred Assets or disclaim its obligations under the
Assumed Liabilities; and
(e) if a third party inquires, advise such third party that the
Transferred Assets and the Assumed Liabilities were contributed to and
assumed by the Recipient pursuant to the terms of this Agreement.
Section 4.13 Accounting for Capital Contribution. On the Effective
Date, the Recipient shall record the contribution of the Transferred Assets
and the Assumed Liabilities on its books and records as a capital
contribution of the Contributor in an amount equal to the net fair market
value agreed upon by the Recipient and the Contributor for the Transferred
Assets and the Assumed Liabilities acting on an arm's length basis.
Section 4.14 Effective Date. On the Effective Date, each of the
Contributor and the Recipient shall execute a letter agreement
acknowledging that the Effective Date has occurred and that the
transactions contemplated hereby have been consummated.
Section 4.15 Definitions.
(a) "Affiliate" shall have the meaning set forth in Rule 12b-2
under the Securities Exchange Act of 1934, as amended.
(b) "Contracts" means all contracts, purchase or sale contracts,
fuel contracts, distribution agreements, service agreements, development
agreements, consulting agreements, guarantees, commitments, instruments and
other agreements relating to the acquisition or ownership of any of the
Transferred Assets or primarily used or useful in the operation of the
Transferred Assets.
(c) "Effective Date" shall mean the earliest date upon which all
of the Required Consents have been obtained and all actions necessary for
the transfer of real property pursuant to Section 4.1 shall been completed.
(d) "Liens" means all mortgages, liens, pledges, charges, security
interests, title retention or security agreements, claims, restrictions,
leases, options, rights of first offer or first refusal, defects in title
and other encumbrances or rights of others in respect of real property.
(e) "Permits" means all governmental permits, licenses,
registrations, orders and approvals relating to or primarily used or useful
in the Transferred Assets.
[Signature Page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the date first above written.
CAROLINA POWER & LIGHT COMPANY
By: ____________________________
Name:
Title:
ROWAN COUNTY POWER, LLC
By: ____________________________
Name:
Title:
Schedule A
Transferred Assets
[Description to be Provided]
Schedule B
Assigned Contracts
[Description to be Provided]
Schedule C
Excluded Assets
[Description to be Provided]
(a) all cash and cash equivalents on hand an in banks on the day
prior to the Effective Date;
(b) all loans, accounts receivable, notes or other obligations
receivable by or payable to the Contributor;
(c) [intellectual property rights]
(d) [others]; Progress to develop list of multi-use assets and
categories.
Schedule D
Required Consents