CONTRIBUTION AND ASSUMPTION AGREEMENT*
BY AND AMONG
PACIFIC GAS TURBINE CENTER, INCORPORATED,
▇▇▇▇▇▇ LEASE FINANCE CORPORATION
AND
PACIFIC GAS TURBINE CENTER, LLC
DATED AS OF MAY 28, 1999
------------------------
* Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment and the material has been filed separately with
the Commission.
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS..................................................................................2
1.01. Definitions..................................................................................2
1.02. Index of Other Defined Terms.................................................................4
ARTICLE II. CONTRIBUTION AND SALE OF ASSETS..............................................................5
2.01. Agreement to Contribute, Sell, Accept and Purchase...........................................5
2.02. Assumption of Liabilities....................................................................6
ARTICLE III. CONTRIBUTION CONSIDERATION...................................................................6
3.01. Contribution Consideration...................................................................6
ARTICLE IV. THE CLOSING..................................................................................6
4.01. The Closing..................................................................................6
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PGTC.......................................................7
5.01. Corporate Existence and Power................................................................7
5.02. Authorization................................................................................7
5.03. Non-Contravention............................................................................7
5.04. Financial Statements.........................................................................7
5.05. Properties; Leases...........................................................................8
5.06. Litigation...................................................................................8
5.07. Brokers......................................................................................8
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF LLC........................................................8
6.01. Organization and Existence...................................................................8
6.02. LLC Authorization............................................................................8
ARTICLE VII. CONDITIONS TO CLOSING........................................................................8
7.01. Conditions to Obligations of PGTC and LLC....................................................8
ARTICLE VIII. MUTUAL COVENANTS.............................................................................9
8.01. Taxes........................................................................................9
8.02. Employee Matters.............................................................................9
8.03. Further Assurances...........................................................................9
i
Page
----
ARTICLE IX. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS AND INDEMNIFICATION....................9
9.01. Agreement Survival of Representations, Warranties and Covenants..............................9
9.02. Indemnification by WLFC......................................................................9
9.03. Indemnification by LLC......................................................................10
9.04. Limitations on Indemnification..............................................................10
9.05. Procedure for Indemnification...............................................................11
ARTICLE X. MISCELLANEOUS...............................................................................12
10.01. Notices.....................................................................................12
10.02. Amendments; No Waivers......................................................................13
10.03. Rights and Remedies Cumulative..............................................................13
10.04. Rights and Remedies of LLC..................................................................14
10.05. Construction; Interpretation................................................................14
10.06. Severability................................................................................14
10.07. Counterparts................................................................................14
10.08. Entire Agreement............................................................................14
10.09. Governing Law...............................................................................14
10.10. Expenses....................................................................................14
10.11. Third-Party Beneficiaries...................................................................14
10.12. Dispute Resolution..........................................................................15
10.13. Press Release...............................................................................15
ii
SCHEDULES
---------
Schedule 2.01(a) Transferred Assets
Schedule 2.01(n) Excluded Assets
Schedule 2.02 Assumed Liabilities
Schedule 5.06 Litigation
iii
CONTRIBUTION AND ASSUMPTION AGREEMENT
-------------------------------------
This CONTRIBUTION AND ASSUMPTION AGREEMENT (this
"Agreement"), is dated as of May 28, 1999, by and among PACIFIC GAS TURBINE
CENTER, INCORPORATED, a Delaware corporation ("PGTC"), and a wholly-owned
subsidiary of ▇▇▇▇▇▇ LEASE FINANCE CORPORATION, a Delaware corporation
("WLFC") and PACIFIC GAS TURBINE CENTER, LLC, a Delaware limited liability
company ("LLC").
R E C I T A L S
A. PGTC is currently engaged in the business of
storage and distribution of aircraft and engine spare parts inventory,
overhaul and testing of jet engines, including the dismantling, cleaning,
repair and testing of said jet engines (the "PGTC Business").
B. PGTC, on behalf of WLFC, has formed LLC to
develop, own, operate and maintain the PGTC Business.
C. PGTC, on behalf of WLFC, and LLC are entering into
this Contribution and Assumption Agreement, pursuant to which PGTC is
contributing to LLC certain Transferred Assets, including the PGTC Business,
in exchange for which, upon PGTC's dissolution pursuant to applicable law,
WLFC will receive a Member Interest in LLC.
D. (i) Concurrently herewith, Chromalloy Gas Turbine
Corporation, a Delaware corporation ("CGTC") and LLC are entering into a
Contribution and Assumption Agreement (the "CGTC Contribution Agreement"),
which is substantially similar to this Agreement, pursuant to which CGTC is
contributing to LLC $__________* in cash and (ii) CGTC shall contribute an
additional amount in cash pursuant to Section 4.3(b) of the Operating
Agreement (the sum of (i) and (ii), the "CGTC Cash Contribution"), in
exchange for which CGTC Cash Contribution CGTC will also receive a Member
Interest in LLC.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, and the
mutual representations, warranties, covenants and agreements hereinafter set
forth, the parties hereto agree as follows.
----------------------
* The material has been omitted pursuant to a request for confidential
treatment and the material has been filed separately with the Commission.
ARTICLE I.
DEFINITIONS
1.01. DEFINITIONS. In addition to the terms defined
elsewhere in this Agreement, the following capitalized terms shall have the
following meanings when used herein:
"AFFILIATE" has the meaning given to it in the Operating
Agreement.
"ANCILLARY DOCUMENTS" means the agreements, certificates,
instruments or other documents to be executed and delivered in connection
with this Agreement, including without limitation the Exhibits hereto and the
Operating Agreement.
"APPLICABLE LAW" means, with respect to any Person, any
domestic or foreign, federal, state or local statute, law, ordinances, rule,
administrative interpretation, regulation, order, writ, injunction,
directive, judgment, decree or other requirement of any Governmental
Authority (including any Environmental Law) applicable to such Person or any
of its Affiliates or any of their respective properties, assets, officers,
directors, employees, consultants or agents (in connection with such
officer's, director's, employee's, consultant's or agent's activities on
behalf of such Person or any of its Affiliates).
"ASSUMED LIABILITIES" has the meaning given to it in
Section 2.02.
"CONTRACTS" means all material contracts, agreements,
leases, licenses, sales and purchase orders, commitments and other
instruments of any kind, whether written or oral, to which PGTC is a party as
of the Closing Date and which relate to the PGTC Business.
"CONTRIBUTION CONSIDERATION" has the meaning given to it in
Section 3.01.
"EXCLUDED ASSETS" means those assets of PGTC set forth on
SCHEDULE 2.01(n).
"EXCLUDED LIABILITIES" means those Liabilities that are not
Assumed Liabilities and are not incurred in the ordinary course of business
by PGTC or by WLFC, as the successor to PGTC.
"FACILITIES" means all offices, warehouses, administration
buildings and all real property and all related facilities leased by PGTC or
WLFC in connection with the PGTC Business.
"GAAP" means generally accepted accounting principles in
the United States, consistently applied.
"GOVERNMENTAL AUTHORITY" means any foreign, domestic,
federal, territorial, state or local governmental authority,
quasi-governmental authority, instrumentality, court, government or
self-regulatory organization, commission, tribunal or organization or any
regulatory, administrative or other agency, or any political or other
subdivision, department or branch of any of the foregoing.
2
"LIABILITY" means, with respect to any Person, any
liability or obligation of such Person of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined, determinable or
otherwise and whether or not the same is required to be accrued on the
financial statements of such Person.
"LIEN" includes any mortgage, lien, pledge, security
interest, conditional sale agreement, charge, claim, easement, right,
condition, restriction or other encumbrance or defect of title of any nature
whatsoever (including without limitation, any assessment, charge or other
type of notice which is levied or given by any Governmental Authority and for
which a lien could be filed).
"LOSSES" means all damages, judgments, and amounts paid in
settlement (net of insurance proceeds and any tax-related benefits received).
"MEMBERS" has the meaning given to it in the Operating
Agreement.
"MEMBER INTEREST" has the meaning given to it in the
Operating Agreement.
"OPERATING AGREEMENT" means the Operating Agreement, of
even date herewith, by and between WLFC and CGTC, as may be amended from time
to time.
"PGTC INDEMNITEES" has the meaning given to it in Section
9.03.
"PERCENTAGE INTEREST" has the meaning given to it in the
Operating Agreement.
"PERMITTED LIENS" means (a) Liens securing the repayment of
Assumed Liabilities, (b) Liens for Taxes or governmental charges or claims
(i) not yet due and payable, or (ii) being contested in good faith, if a
reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor, (c) statutory Liens of landlords, Liens of
carriers, warehousepersons, mechanics and materialpersons and other Liens
imposed by law incurred in the ordinary course of business for sums (i) not
yet due and payable, or (ii) being contested in good faith, if a reserve or
other appropriate provision, if any, as shall be required by GAAP shall have
been made therefor, (d) Liens incurred or deposits made in connection with
workers' compensation, unemployment insurance and other similar types of
social security programs or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return of money bonds and similar obligations, in each case
in the ordinary course of business, consistent with past practice and (e)
easements, rights of way and other imperfections of title or encumbrances
that are a matter of public record and do not materially affect the
marketability of the property subject thereto or materially interfere with
the present or proposed use of such property.
"PERSON " has the meaning given to it in the Operating
Agreement.
3
"PREPAID EXPENSES" means the prepaid charges and expenses
of PGTC relating to the PGTC Business, including, without limitation, any
such charges and expenses with respect to ad valorem taxes, leases and
rentals and utilities.
"REQUIRED CONSENTS" means (a) each governmental or other
material registration, filing, application, notice, transfer, consent,
approval, order, qualification and waiver required under Applicable Law to be
obtained by PGTC by virtue of the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby to avoid the loss of
any material permit or otherwise, and (b) each consent of the other party or
parties to any Contract which must be obtained by PGTC pursuant to an express
term or provision thereof by virtue of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby to
avoid the invalidity of the transfer of such Contract, the termination
thereof, a material breach or default thereunder or any other material change
or modification to the terms thereof.
"TAX" means all taxes imposed of any nature including
federal, state, local or foreign net income tax, alternative or add-on
minimum tax, profits or excess profits tax, franchise tax, gross income,
adjusted gross income or gross receipts tax, employment related tax
(including employee withholding or employer payroll tax, FICA or FUTA), real
or personal property tax or ad valorem tax, sales or use tax, excise tax,
stamp tax or duty, any withholding or back up withholding tax, value added
tax, severance tax, prohibited transaction tax, premiums tax, occupation tax,
together with any interest or any penalty, addition to tax or additional
amount imposed by any governmental authority (domestic or foreign)
responsible for the imposition of any such tax.
1.02. INDEX OF OTHER DEFINED TERMS. In addition to those
terms defined above, the following terms shall have the respective meanings
given thereto in the sections indicated below:
DEFINED TERM SECTION
"AAA" 10.13
"Agreement" Preamble
"Balance Sheet" 5.04
"CGTC Contribution Agreement" Recitals
"CGTC" Recitals
"Claimant" 9.05(a)
"Closing Date" 4.01
"Indemnifying Party" 9.05(a)
"LLC" Preamble
"PGTC Business" Recitals
"Proceedings" 5.12
"Transferred Assets" 2.01
4
ARTICLE II.
CONTRIBUTION AND SALE OF ASSETS
2.01. AGREEMENT TO CONTRIBUTE, SELL, ACCEPT AND
-----------------------------------------
PURCHASE. Upon the terms and subject to the conditions of this Agreement and
in reliance upon the representations, warranties and agreements herein set
forth, PGTC is contributing and delivering to LLC on the Closing Date, and
LLC is accepting from PGTC, free and clear of all Liens, other than Permitted
Liens, the following, except for any Excluded Assets set forth on SCHEDULE
2.01(n) that are included in any of the following:
(a) The fixtures and equipment set forth on
SCHEDULE 2.01(a);
(b) Any Contracts;
(c) The accounts receivable set forth on
SCHEDULE 2.01(a);
(d) The inventory set forth on SCHEDULE
2.01(a);
(e) The prepaid expenses set forth on
SCHEDULE 2.01(a);
(f) All leasehold interests in the Facilities;
(g) All rights of PGTC to insurance coverage
covering or relating to the PGTC Business with respect to events occurring or
claims arising prior to the Closing Date, but only to the extent such
coverage and any proceeds therefrom covers or relates to any of the Assumed
Liabilities or any pre-Closing liabilities or obligations of the PGTC
Business which LLC becomes subject to notwithstanding the provisions of this
Agreement;
(h) The phone numbers used by the PGTC
Business;
(i) All goodwill associated with the PGTC
Business or the Transferred Assets;
(j) All of PGTC's rights, claims, credits,
causes of action or rights of setoff against third parties relating to the
Transferred Assets of PGTC, whether liquidated or unliquidated, fixed or
contingent, including claims pursuant to all warranties, representations and
guaranties made by suppliers, manufacturers, contractors and other third
parties in connection with products or services purchased by or furnished to
PGTC in connection with the PGTC Business and affecting any of the
Transferred Assets of PGTC;
(k) All transferable franchises, licenses,
permits or other authorizations issued or granted by any Governmental
Authority that are owned by, granted to or held or used by PGTC in connection
with the PGTC Business, whether or not actually utilized by PGTC;
(l) All books, records, files and papers of
PGTC related to the conduct of the PGTC Business at any time prior to the
Closing Date (except records relating to federal
5
and state income tax and accounting), whether in hard copy or computer
format, including bank account records, books of account, invoices, sales and
promotional literature, manuals and data, sales and purchase correspondence,
lists of present and former suppliers, personnel and employment records of
employees to be hired by LLC pursuant to Section 8.02 and documentation
developed or used for marketing, manufacturing or any other purpose;
(m) All cash and cash equivalents set forth
on SCHEDULE 2.01(a); and
(n) All other assets and properties of PGTC
that exist on the Closing Date and are used in connection with the PGTC
Business, whether tangible or intangible, real or personal.
The collective assets, properties, rights,
licenses, permits, contracts, causes of action, claims, operations and
business to be transferred to LLC by PGTC pursuant hereto, exclusive of any
Excluded Assets, are referred to collectively herein as the "Transferred
Assets." The parties acknowledge and agree that each of the Excluded Assets
shall remain property of PGTC or any successor in interest to PGTC (including
WLFC) following the Closing Date.
2.02. ASSUMPTION OF LIABILITIES. Upon the terms and
subject to the conditions of this Agreement and in reliance upon the
representations, warranties and agreements herein set forth, LLC, effective
as of the Closing Date, will assume and perform and in due course pay and
discharge all obligations, Contracts and other Liabilities of PGTC as they
exist on the Closing Date, including all trade payables and accrued expenses
arising in the ordinary course of business as set forth on SCHEDULE 2.02 (the
"Assumed Liabilities").
ARTICLE III.
CONTRIBUTION CONSIDERATION
3.01. CONTRIBUTION CONSIDERATION. In consideration for
the contribution and assignment to LLC of the Transferred Assets hereunder,
in addition to LLC's assumption of the Assumed Liabilities, LLC will issue to
PGTC a Member Interest in LLC (the "Contribution Consideration") pursuant to
the Operating Agreement having a Percentage Interest equal to 50%.
ARTICLE IV.
THE CLOSING
4.01. THE CLOSING.
(a) The Closing shall take place on May 28,
1999, at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP located at ▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, unless another date, time or place is agreed to in
writing by the parties hereto.
(b) As of the Closing Date, PGTC and WLFC, as
applicable, shall deliver to LLC the following, in form and substance
reasonably satisfactory to LLC and its
6
counsel: (i) a duly executed ▇▇▇▇ of sale in the form attached hereto as
EXHIBIT A; (ii) duly executed assignment and assumption agreements with
respect to the Contracts, in the form attached hereto as EXHIBIT B; (iii) a
duly executed assignment agreement with respect to the Facilities, in the
form attached hereto as EXHIBIT C; and (iv) a duly executed Operating
Agreement in the form attached hereto as EXHIBIT D.
(c) As of the Closing Date, LLC shall deliver
to PGTC (i) duly executed assignment and assumption agreements with respect
to the Contracts, duly executed by LLC, in the form attached hereto as
EXHIBIT B; and (ii) a duly executed assignment agreement with respect to the
Facilities, in the form attached hereto as EXHIBIT C.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PGTC
As an inducement to LLC to enter into this Agreement and to
consummate the transactions contemplated herein, PGTC represents and warrants
to LLC as follows:
5.01. CORPORATE EXISTENCE AND POWER. Until the date on
which the Certificate of Dissolution with the Secretary of State of Delaware
is filed to dissolve PGTC (as set forth in the Recitals to the Operating
Agreement), PGTC is a corporation duly organized and validly existing and in
good standing under the laws of the state of Delaware, and has all corporate
power and authority required to carry on the PGTC Business as now conducted
and to own and operate the Transferred Assets as now owned and operated.
5.02. AUTHORIZATION. The execution, delivery and
performance by PGTC of this Agreement and the Ancillary Documents and the
consummation by PGTC of the transactions contemplated hereby and thereby are
within PGTC's corporate powers and have been duly authorized by all necessary
corporate action on the part of PGTC. This Agreement and the Ancillary
Documents have been duly and validly executed by PGTC and constitute the
legal, valid and binding agreements of PGTC, enforceable against PGTC in
accordance with their terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and subject to general principles of equity.
5.03. NON-CONTRAVENTION. Assuming the Required Consents
are obtained, to the knowledge of PGTC, the execution, delivery and
performance by PGTC of this Agreement and the Ancillary Documents does not
and will not materially conflict with, constitute a material default under or
be prevented by the terms of any Contract.
5.04. FINANCIAL STATEMENTS. The unaudited balance sheet
of PGTC as of December 31, 1998, the unaudited income statement for the year
ended December 31, 1998, the unaudited balance sheet of PGTC as of April 30,
1999 (the "Balance Sheet") and the unaudited income statement for the
four-month period ended April 30, 1999, a copy of each of which has been
delivered to LLC, present fairly the financial position and assets and
liabilities of PGTC in all material respects as of such date.
7
5.05. PROPERTIES; LEASES. PGTC holds title to all of
the Transferred Assets owned by it and WLFC has a valid leasehold interest in
all of the Facilities.
5.06. LITIGATION. Except as set forth on SCHEDULE 5.06,
there are no (a) actions, suits, hearings, arbitrations, proceedings (public
or private) or investigations that have been brought by or against any
Governmental Authority or any other Person (collectively, "Proceedings")
pending or, to the knowledge of PGTC, any threatened material Proceedings,
against or affecting the PGTC Business or any of the Transferred Assets or
which seek to enjoin or rescind the transactions contemplated by this
Agreement or otherwise prevent PGTC from complying with the terms and
provisions of this Agreement or (b) existing orders, judgments or decrees of
any Governmental Authority affecting any of the Transferred Assets or the
PGTC Business.
5.07. BROKERS. PGTC is not a party to any contract,
agreement, arrangement or understanding with any Person which will result in
the obligation of LLC to pay any finder's fee, brokerage commission or
similar payment in connection with the transactions contemplated hereby.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF LLC
As an inducement to PGTC to enter into this Agreement and
to consummate the transactions contemplated herein, LLC hereby represents and
warrants to PGTC that:
6.01. ORGANIZATION AND EXISTENCE. LLC is a limited
liability company duly organized, validly existing under the laws of the
State of Delaware and has all corporate power and authority to enter into
this Agreement and consummate the transactions contemplated hereby.
6.02. LLC AUTHORIZATION. The execution, delivery and
performance by LLC of this Agreement and the Ancillary Documents and the
consummation by LLC of the transactions contemplated hereby and thereby are
within the powers of LLC and have been duly authorized by all necessary
action on the part of LLC. This Agreement and the Ancillary Documents
constitute a legal, valid and binding agreement of LLC, enforceable in
accordance with their terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and subject to general principles of equity.
ARTICLE VII.
CONDITIONS TO CLOSING
7.01. CONDITIONS TO LLC'S OBLIGATIONS. The respective
obligations of each party under this Agreement shall be subject to the
satisfaction (or waiver by each such party) on or prior to the Closing Date
of the following conditions:
8
(a) Executed copies of each of the Ancillary
Documents;
(b) Evidence that all conditions to the closing
of the transactions contemplated by the CGTC Contribution Agreement have been
satisfied.
ARTICLE VIII.
MUTUAL COVENANTS
LLC and PGTC hereby covenant and agree as follows:
8.01. TAXES. All sales, value added, use, transfer,
registration, stamp and similar Taxes imposed in connection with the transfer
of the Transferred Assets will be borne by PGTC.
8.02. EMPLOYEE MATTERS. LLC shall offer employment to each
employee of PGTC.
8.03. FURTHER ASSURANCES. At any time or from time to time
after the Closing Date, each party shall, at the request of the other party
or the other party's counsel, execute and deliver any further instruments or
documents and take all such further action as the other party or the other
party's counsel may reasonably request in order to evidence or otherwise
facilitate the consummation of the transactions contemplated hereby.
ARTICLE IX.
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS AND INDEMNIFICATION
9.01. AGREEMENT SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. All representations, warranties and covenants contained in this
Agreement and any certificate, document or instrument delivered hereunder or
in connection herewith shall be deemed continuing representations, warranties
and covenants and shall survive the Closing Date for a period equal to the
statute of limitations applicable thereto.
9.02. INDEMNIFICATION BY WLFC. WLFC shall indemnify and
hold LLC harmless against and with respect to, and shall reimburse LLC for:
(a) Any and all Losses resulting from a breach of
any representation or warranty or nonfulfillment of any covenant of PGTC
contained herein or in any ▇▇▇▇ of sale or assignment and assumption
agreements delivered to LLC hereunder or in connection herewith; and
(b) Any and all Losses constituting the payment by
LLC of obligations and liabilities of PGTC that are Excluded Liabilities.
9
9.03. INDEMNIFICATION BY LLC. LLC shall indemnify and hold
PGTC and WLFC (together, the "PGTC Indemnitees") harmless against and with
respect to, and shall reimburse the PGTC Indemnitees for:
(a) Any and all Losses resulting from a breach of
any representation or warranty or nonfulfillment of any covenant or agreement
by it contained herein or in any assignment and assumption agreements
delivered to PGTC hereunder or in connection herewith;
(b) Any and all Liabilities, accruals, deferments,
debts, duties and obligations incurred or arising after the Closing Date in
connection with the operation of the PGTC Business or any other business of
LLC; and
(c) Any and all Losses constituting the payment by
PGTC or WLFC of obligations and liabilities of LLC that are Assumed
Liabilities.
9.04. LIMITATIONS ON INDEMNIFICATION.
(a) Notwithstanding Sections 9.02 and 9.03 hereto,
the rights and obligations under this Article IX of the PGTC Indemnitees and
LLC are subject to the following:
(i) neither the PGTC Indemnitees nor
LLC shall be entitled to any recovery unless a claim for
indemnification is made in accordance with Section 9.05(a),
the claim for indemnification is made within the time period
of survival set forth in Section 9.01 and the entity seeking
indemnification complies with the procedures set forth in
Section 9.05;
(ii) the PGTC Indemnitees, on the one
hand, and LLC, on the other hand, shall not be entitled to any
indemnification hereunder unless and until the Losses that the
relevant party is entitled to be indemnified for hereunder
exceed, in the aggregate, $250,000, in which event the
relevant party shall only be entitled to recover Losses that
are in excess of $250,000; PROVIDED, HOWEVER, that any Losses
with respect to the items set forth on SCHEDULE 5.06 shall not
be subject to the limitations of this Section 9.04(a)(ii); and
(iii) neither the PGTC Indemnitees nor
LLC shall be entitled to recover Losses from the other
totaling in excess of the sum of $__________* PLUS the amount
of the additional cash capital contribution made by CGTC to
LLC pursuant to Section 4.3(b) of the Operating Agreement.
--------------------
* The material has been omitted pursuant to a request for confidential
treatment and the material has been filed separately with the Commission.
10
(b) The indemnification provisions in this Article IX
shall be the exclusive remedy for any breach of the representations and
warranties set forth in this Agreement.
9.05. PROCEDURE FOR INDEMNIFICATION. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the
"Claimant") shall promptly give written notice to the party from whom
indemnification is claimed (the "Indemnifying Party") of any claim, whether
between the parties or brought by a third party, specifying (i) in reasonable
detail, the factual basis for such and (ii) in good faith, the estimated
amount of the claim. If the claim relates to an action, suit or proceeding
filed by a third party against the Claimant, such notice shall be given by
Claimant within ten business days after written notice of such action, suit
or proceeding was received by Claimant. The failure of the Claimant to
provide such written notice within the time period specified shall not
relieve the Indemnifying Party of its indemnification liability under
Section 9.02 or Section 9.03, unless such failure materially prejudices the
rights of the Indemnifying Party in defending against the claim or action.
(b) Following receipt of notice from the Claimant of
a claim, the Indemnifying Party shall have 30 days to make such investigation
of the claim as the Indemnifying Party deems necessary or desirable. For the
purposes of such investigation, the Claimant agrees to make available to the
Indemnifying Party and/or its authorized representative(s) the information
relied upon by the Claimant to substantiate the claim. If the Claimant and
the Indemnifying Party agree at or prior to the expiration of said 30-day
period (or any mutually agreed upon extension thereof) to the validity and
amount of such claim, the Indemnifying Party shall immediately pay to the
Claimant the full amount of the claim. If the Claimant and the Indemnifying
Party do not agree within said period (or any mutually agreed upon extension
thereof), subject to clause (c) below with respect to third party claims, the
Claimant may seek appropriate legal remedy.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification hereunder, the Indemnifying
Party shall have the right, at its own expense, to participate in or assume
control of the defense of such claim, and the Claimant shall cooperate fully
with the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim with legal counsel of its
own selection; PROVIDED, HOWEVER, that the Claimant shall pay the fees and
expenses of such counsel. If the Indemnifying Party does not elect to assume
control or otherwise participate in the defense of any third party claim, it
shall be bound by the results obtained by the Claimant with respect to such
Claim; PROVIDED, HOWEVER, that no settlement or compromise of any claim which
may result in any indemnification liability may be made by the Claimant
without the prior written consent of the Indemnifying Party.
11
(d) If a claim, whether between the parties or by a
third party, requires immediate action, the parties will make every effort to
reach a decision with respect thereto as expeditiously as possible.
(e) Upon satisfaction of any third party claim
pursuant to this Article IX, the Indemnifying Party shall be subrogated to
all rights and remedies of the Claimant against any third party with respect
to such claim.
ARTICLE X.
MISCELLANEOUS
10.01. NOTICES. All notices and other communications
required or permitted to be made under this Agreement shall be in writing and
shall be deemed duly given upon actual receipt if (a) delivered personally or
by confirmed telecopier transmission, (b) delivered on by overnight carrier
or (c) sent by United States registered mail, return receipt requested,
postage prepaid, and addressed as follows:
IF TO LLC:
Pacific Gas Turbine Center, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO PGTC:
Pacific Gas Turbine Center, Incorporated,
c/o WLFC Lease Finance Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO WLFC:
12
▇▇▇▇▇▇ Lease Finance Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
IN EACH CASE, WITH A COPY TO:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO CGTC:
Chromalloy Gas Turbine Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Sequa Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
10.02. AMENDMENTS; NO WAIVERS. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver
is in writing and is duly executed by LLC and PGTC. No failure or delay by
any party in exercising any right, power or privilege under this Agreement
shall operate as a waiver thereof nor shall any single or partial waiver or
exercise thereof preclude the enforcement of any other right, power or
privilege.
10.03. RIGHTS AND REMEDIES CUMULATIVE. The rights and
remedies provided by this Agreement are cumulative and the use of any one
right or remedy by any party shall not preclude or waive its right to use any
or all other remedies. Said rights and remedies are given in addition to any
other rights the parties may have by law, statute, ordinance or otherwise.
13
10.04. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. No party may assign or delegate or
otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the other party.
10.05. CONSTRUCTION; INTERPRETATION. The headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Article, section,
schedule, exhibit, recital and party references are to this Agreement unless
otherwise stated. No party, nor its counsel, shall be deemed the drafter of
this Agreement for purposes of construing the provisions of this Agreement,
and all provisions of this Agreement shall be construed in accordance with
their fair meaning, and not strictly for or against any party.
10.06. SEVERABILITY. Any term or provision of this
Agreement that is or becomes invalid or unenforceable shall be ineffective to
the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement.
10.07. COUNTERPARTS. This Agreement may be executed and
delivered in any number of counterparts and via facsimile with the same
effect as if all parties hereto had signed the same document. All
counterparts shall be consumed together and shall constitute one instrument.
10.08. ENTIRE AGREEMENT. This Agreement, together with the
Exhibits and Schedules and the Ancillary Documents, constitute the entire
agreement among the parties pertaining to the subject matter hereof, and
supersedes all prior oral and written, and all contemporaneous oral,
agreements and understandings pertaining thereto.
10.09. GOVERNING LAW. This Agreement, and the application
or interpretation hereof, shall be governed exclusively by its terms and by
the laws of the State of California.
10.10. EXPENSES. WLFC shall pay all costs and expenses
incurred by or on behalf of WLFC in connection with the negotiation of this
Agreement and the performance of the transactions contemplated hereby,
including, without limiting the generality of the foregoing, fees and
expenses of its legal counsel; PROVIDED, HOWEVER, that all costs and expenses
incurred in connection with the formation of LLC, including fees and expenses
of legal counsel in connection therewith, shall be paid 50% by WLFC and 50%
by CGTC.
10.11. THIRD-PARTY BENEFICIARIES. Nothing herein expressed
or implied is intended to or shall be construed to confer upon or give any
person or entity, other than the parties hereto, and their respective
successors and permitted assigns, any rights or remedies under or by reason
of this Agreement.
14
10.12. DISPUTE RESOLUTION.
(a) Any controversy or claim arising out of or
relating to this Agreement (or breach thereof), whether arising in tort,
contract or otherwise, shall be settled in accordance with the following
procedures:
(i) The parties shall first attempt to
resolve such controversy or claim by meeting with an
independent mediator chosen by both parties.
(ii) If the parties are unable to
mutually agree upon a mediator, then the mediator shall be
appointed by the American Arbitration Association in the
San Diego, California metropolitan area ("AAA") in accordance
with then-current commercial rules of mediation thereof.
(iii) If such controversy or claim cannot
be resolved by mediation within sixty (60) days after the
party raising the controversy or claim first notifies the
other party thereof in writing, then the controversy or claim
shall be submitted to AAA for binding arbitration, to be held
in San Diego, California metropolitan area in accordance with
the then-current commercial rules of arbitration of AAA.
(b) The award from any binding arbitration shall be
binding upon the parties and their successors and permitted assigns, whether
or not any party fails or refuses to participate therein, and judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
(c) The arbitrator shall have the power to issue
injunctions and otherwise to grant equitable relief, and shall award legal
fees and costs (including fees and costs incurred by AAA and by the
arbitrator) to the prevailing party. The arbitrator shall not have the power
to award punitive, exemplary or indirect damages.
(d) Except as otherwise provided in Article IX and
as may be otherwise ordered by the arbitrator in accordance with
Section 10.12(c), each party shall bear its own costs and expenses in
connection with any proceeding commenced under this Section 10.12, including,
without limitation, legal fees and disbursements, travel expenses, witness
fees and costs, photocopying and other preparation expenses. The costs and
other fees charged by the independent mediator or AAA, whether in connection
with a mediation and/or arbitration, shall be shared generally by the parties.
10.13. PRESS RELEASE. Neither party shall make any press
release or otherwise announce to the public the transactions described herein
without the other party's written approval of the form and content of the
press release or other announcement. If a public statement is required to be
made by law, the parties shall consult with each other in advance as to the
contents and timing thereof.
15
IN WITNESS WHEREOF, the parties hereto have caused this
Contribution and Assumption Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
PGTC:
PACIFIC GAS TURBINE CENTER,
INCORPORATED
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
WLFC:
▇▇▇▇▇▇ LEASE FINANCE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
LLC:
PACIFIC GAS TURBINE CENTER, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
16
