Exhibit 2
[CONFORMED COPY]
ACQUISITION AGREEMENT
by and between
CALENERGY COMPANY, INC.,
and
KIEWIT DIVERSIFIED GROUP INC.
Dated as of September 10, 1997
TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS
1.1 Defined Terms 2
1.2 Terms Defined in Agreement 4
1.3 Certain Interpretative Matters 6
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale of the Shares 6
2.2 Consideration 6
2.3 Purchase Price Allocation 6
ARTICLE III
CLOSING
3.1 Closing 6
3.2 Steps at Closing 7
3.3 Deliveries at Closing 7
3.3.1 Deliveries by Seller and its Affiliates 7
3.3.2 Deliveries by Buyer. 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Buyer 8
4.1.1 Due Organization 8
4.1.2 Authorization 8
4.1.3 Non-Contravention 9
4.1.4 Consents and Approvals 9
4.1.5 Litigation 9
4.2 Representations and Warranties of Seller 9
4.2.1 Due Organization of Seller 9
4.2.2 Due Organization of KEG and KEC 9
4.2.3 Authorization 10
4.2.4 Non-Contravention 10
4.2.5 Consents and Approvals 10
4.2.6 Capitalization of KEC 10
4.2.7 Capitalization of the Kiewit Companies 11
4.2.8 Capitalization of Holdco 12
4.2.9 Title to KEC Shares 12
4.2.10 Title to CE Shares, Holdco Shares,
KEUK Shares and Options 12
4.2.11 Title to Related Project Interests and
Subordinated Debt Interest 12
4.2.12 Organization of the Kiewit Companies;
No Activities 13
4.2.13 Organization of Holdco; No Activities 13
4.2.14 Ownership of Project Entities and
Electric Holdings 13
4.2.15 Litigation, Proceedings 13
4.2.16 No Activities Following Execution 13
4.2.17 Tax Matters 14
4.2.18 Insurance 16
ARTICLE V
COVENANTS OF THE PARTIES
5.1 Prohibition of Certain Actions by Seller Pending
the Closing 17
5.2 Prohibition of Certain Actions by Buyer Pending
the Closing 17
5.3 Best Efforts 17
5.4 Consents 17
5.5 Notification of Certain Matters 18
5.6 Convertible Debt 18
5.7 Equity Offering 18
5.8 Debt Offering 18
5.9 Kiewit Commitments 18
5.10 Seller SEC Filings 19
5.11 Buyer SEC Filings 19
5.12 Existing Agreements 19
5.13 Termination of Buyer's Approval of Acquisitions
of Shares Under Rights Agreement 19
5.14 Confidentiality, Standstill and Noncompetition
Agreement 19
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions of Buyer's Obligations at Closing 20
6.1.1 Accuracy of Representations and
Warranties 20
6.1.2 Performance 20
6.1.3 Compliance Certificates 20
6.1.4 No Injunctions or Restraints; Illegality 20
6.1.5 Consents 20
6.1.6 Termination Agreement 20
6.2 Conditions of Seller's Obligations at Closing 20
6.2.1 Accuracy of Representations and
Warranties 20
6.2.2 Performance 21
6.2.3 Compliance Certificates 21
6.2.4 No Injunctions or Restraints; Illegality 21
6.2.5 Consents 21
6.2.6 Termination Agreement 21
ARTICLE VII
TAX MATTERS
7.1. Preparation and Filing of Tax Returns;
Payment of Taxes 21
7.2. Tax Indemnification 22
7.3 Consent Provisions 23
7.4. Transfer and Similar Taxes 23
7.5. Assistance and Cooperation 23
7.6. Termination of Tax Sharing Agreements 24
7.7. Characterization of Tax Indemnification
Payments 24
7.8. Indemnity Payments 24
7.9. Survival of Obligations 24
ARTICLE VIII
POST-CLOSING COVENANTS
8.1. Litigation Support 24
8.2 Further Assurances 24
8.3 Seller Keep Well. 25
8.4 Use of Kiewit Name 25
ARTICLE IX
SURVIVAL; INDEMNIFICATION
9.1 Survival of Representations, Covenants, Etc. 25
9.2 Indemnification 25
9.2.1 Seller's Agreement to Indemnify 25
9.2.2 Buyer's Agreement to Indemnify 26
9.2.3 Conditions of Indemnification 26
ARTICLE X
TERMINATION OF AGREEMENT
10.1 Termination 26
10.2 Effect of Termination 27
10.2.1 Procedure and Effect of Termination 27
10.2.2 Termination Fee 28
ARTICLE XI
MISCELLANEOUS
11.1 Notices 28
11.2 Assignment 29
11.3 Entire Agreement; Amendments and Waivers 30
11.4 Brokers. 30
11.5 Multiple Counterparts 30
11.6 Headings 30
11.7 Schedules 30
11.8 Publicity; Confidentiality 30
11.9 Governing Law 30
11.10 Construction 30
11.11 Expenses 31
SCHEDULES
Schedule I Project Entities
Schedule II EPC Contracts
Schedule III Related Project Interests
Schedule IV Subordinated Debt Interests
Schedule V Purchase Price Allocations
Schedule VI Equity Commitments
Schedule VII Lists of Terminated Agreements
Schedule VIII Consents
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (this "Agreement") is made and
entered into as of the 10th day of September, 1997, by and
between CalEnergy Company, Inc., a Delaware corporation
("Buyer"), and Kiewit Diversified Group Inc., a Delaware
corporation ("Seller").
RECITALS
A. Seller, through its indirect wholly owned subsidiary,
Kiewit Energy Group, Inc., a Delaware corporation ("KEG"),
owns all of the outstanding shares of common stock, par value
$100 per share (the "KEC Shares"), of Kiewit Energy Company,
a Delaware corporation ("KEC").
B. KEC owns 19,231,065 shares of common stock, par value
$.0675 per share ("Common Stock"), of Buyer (the "CE Shares")
and options (the "Options") to purchase 1,000,000 shares of
Common Stock.
C. KEC, through its wholly owned subsidiary, Kiewit Energy
Pacific Holdings Corp., a Delaware corporation ("Holdco"),
owns Kiewit Energy International (Bermuda) Ltd., a Bermuda
company ("▇▇▇▇"), which together with other investors, owns
certain entities identified on Schedule I hereto (the
"Philippine and Indonesian Entities") that are in the
business of developing electricity generating plants in the
Republic of the Philippines and the Republic of Indonesia,
which plants are in various stages of development.
D. Buyer, through two wholly owned subsidiaries, and Kiewit
Energy U.K., Inc., a Delaware corporation and wholly owned
subsidiary of KEC ("KEUK"), together own CE Electric U.K.
Holdings ("Electric Holdings"), which owns CE Electric U.K.
plc ("Electric plc"), which, in turn, owns Northern Electric
plc, a distributor and supplier of electricity in the United
Kingdom ("Northern" and, together with the Philippine and
Indonesian Entities, the "Project Entities").
E. Buyer desires to purchase, and Seller desires to cause to
be sold to Buyer, all of the outstanding shares of common
stock, par value $1.00 per share (the "Holdco Shares"), of
Holdco, upon the terms and subject to the conditions of this
Agreement.
F. Buyer desires to purchase, and Seller desires to cause to
be sold to Buyer, all of the outstanding shares of common
stock, par value $1.00 per share (the "KEUK Shares"), of
KEUK, upon the terms and subject to the conditions of this
Agreement.
G. Buyer desires to purchase, and Seller desires to cause to
be sold to Buyer, all of the KEC Shares (and thereby acquire
the CE Shares and the Options owned by KEC), upon the terms
and subject to the conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the representations,
warranties, covenants, agreements and conditions set forth in
this Agreement, and intending to be legally bound hereby, the
parties agree as follows:
ARTICLE I
DEFINED TERMS
1.1 Defined Terms. The following defined terms shall, unless
the context otherwise requires, have the meanings specified
below.
"Affiliate" shall mean, when used with reference to a
specified Person, (i) any Person who directly or indirectly
controls, is controlled by or is under common control with the
specified Person, (ii) any Person who is an officer, partner or
trustee of, or serves in a similar capacity with respect to, the
specified Person, or for which the specified Person is an
officer, partner or trustee or serves in a similar capacity,
(iii) any Person who, directly or indirectly, is the beneficial
owner of 10% or more of any class of equity securities of the
specified Person, or of which the specified Person, directly or
indirectly, is the owner of 10% or more of any class of equity
securities, or (iv) any relative of the specified Person.
Notwithstanding the foregoing, for purposes of this Agreement,
Buyer shall not be deemed an Affiliate of Seller and Seller shall
not be deemed an Affiliate of Buyer.
"Ancillary Agreements" shall mean the Confidentiality,
Standstill and Noncompetition Agreement, the Termination
Agreement and the Withdrawal Agreement.
"Bali" shall mean Bali Energy Ltd., a Bermuda company.
"Buyer Disclosure Schedule" shall mean a schedule delivered
by Buyer to Seller on the date hereof, which sets forth
exceptions to the representations and warranties contained in
Section 4.1 and certain information called for by this Agreement.
"Buyer Indemnified Parties" shall mean Seller and its
respective Affiliates and, if applicable, its directors,
officers, attorneys, accountants and agents and their respective
heirs, successors and assigns.
"Casecnan Bonds" shall mean the debt securities of CE
Casecnan issued under an Indenture dated as of November 27, 1995.
"CE Casecnan" shall mean CE Casecnan Water and Energy
Company, Inc., a corporation organized under the laws of the
Republic of the Philippines.
"CE Luzon" shall mean CE Luzon Geothermal Power Company,
Inc., a corporation organized under the laws of the Republic of
the Philippines.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations thereunder.
"Confidentiality, Standstill and Noncompetition Agreement"
shall mean that certain Confidentiality, Standstill and
Noncompetition Agreement to be entered into by Seller and Buyer
concurrently herewith.
"Debt Offering" shall mean the registered public offering of
high yield debt securities of Buyer to be commenced by Buyer as
promptly as reasonably practicable following consummation of the
Equity Offering, the proceeds of which will be utilized to pay a
portion of the Purchase Price at Closing.
"Effective Date" shall mean the date upon which this
Agreement is executed and delivered by all of the parties hereto.
"Encumbrances" shall mean any claim, lien, pledge, option,
charge, easement, security interest, mortgage, right-of-way,
encumbrance, restriction, reservation or other similar right or
interest of any nature of any third party or any liability of any
nature to a third party.
"EPC Contracts" shall mean each of the agreements listed on
Schedule II hereto.
"Equity Offering" shall mean an underwritten public offering
by Buyer of up to 14,000,000 shares of Common Stock to be
commenced by Buyer as promptly as reasonably practicable
following the Effective Date.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Financing "shall mean financing that can be drawn only
subject to conditions satisfiable through the use of reasonable
best efforts by Buyer.
"GAAP" shall mean United States generally accepted accounting
principles and practices in effect from time to time as
consistently applied.
"Governmental Authority" shall mean any court,
administrative agency or commission or other governmental entity,
authority or instrumentality, domestic or foreign.
"Himpurna" shall mean Himpurna California Energy Ltd., a
Bermuda company.
"Kiewit Companies" shall mean ▇▇▇▇ and KEUK, together.
"Option Exercise Price" shall mean $11,625,000, representing
the aggregate exercise price payable upon exercise of the
Options.
"Patuha" shall mean Patuha Power, Ltd., a Bermuda company.
"Permit" shall mean any approval, consent, waiver, exemption,
variance, franchise, certificate, order, permit, authorization or
license of or from any federal, state, local or foreign
government, governmental agency, board, tribunal, commission,
court or other agency or body with regulatory or governmental
authority, including any federal, state, local or foreign zoning,
health, environmental protection, pollution, sanitation, safety,
siting or building Permit or license or authorization.
"Person" shall mean any individual, corporation, partnership,
association, trust, estate or other entity or organization.
"Purchase Price" shall mean an aggregate of One Billion One
Hundred Fifty-Five Million Dollars ($1,155,000,000).
"Related Project Interests" shall mean all insurance policies
and rights thereunder, all project contracts, capital stock,
instruments and rights (except those relating to the rights of
the contractor under EPC Contracts), in each case, comprising or
associated with the rights and interests in the Project Entities,
Electric Holdings or Electric plc of Seller and its Affiliates or
any other right or interest of Seller and its Affiliates arising
or existing under the Joint Venture Agreement, including the
rights and interests referenced on Schedule III hereto; provided,
however, that Related Project Interests do not include shares of
capital stock or other rights or interests in the Project
Entities, Electric Holdings or Electric plc that are not directly
or indirectly owned by KEC, ▇▇▇▇ or KEUK.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Seller Disclosure Schedule" shall mean a schedule delivered
by Seller to Buyer on the date hereof, which sets forth
exceptions to the representations and warranties contained in
Section 4.2 and certain information called for by this Agreement.
"Seller Indemnified Parties" shall mean Buyer and its
Affiliates (including KEC, Holdco and the Kiewit Companies after
the Closing) and, if applicable, their respective directors,
officers, attorneys, accountants and agents and their respective
heirs, successors and assigns.
"Subordinated Debt Interests" shall mean the PKS Facility and
certain subordinated debt interests of one or more Project
Entities, Electric Holdings or Electric plc held indirectly by
the Kiewit Companies, including the interests as set forth on
Schedule IV hereto. The Subordinated Debt Interests do not
include the Casecnan Bonds.
"Taxes" shall mean all taxes, charges, fees, levies or other
assessments, including, without limitation, all net income, gross
income, gross receipts, sales, use, service, service use, ad
valorem, transfer, franchise, profits, license, lease,
withholding, social security, payroll, employment, excise,
estimated, severance, stamp, recording, occupation, real and
personal property, gift, value added, windfall profits or other
taxes, customs duties, fees, assessments or charges of any kind
whatsoever, whether computed on a separate consolidated, unitary,
combined or other basis, together with any interest, fines,
penalties, additions to tax or other additional amounts imposed
thereon or with respect thereto imposed by any taxing authority
(domestic or foreign).
"Tax Return" shall mean any return, report or other document
required to be filed or in fact filed with any taxing authority
with respect to Taxes.
1.2 Terms Defined in Agreement. Defined terms contained in
this Agreement shall have the meaning set forth in this
Agreement. Each of the following terms is defined in the Section
set forth opposite such term:
Term Section
Acquired Companies 4.2.17
Agreement Preamble
Allocation Schedule 2.3
Buyer Preamble
Buyer Consents 10.2.2
Buyer Indemnified Claims 9.2.2
Buyer Return Amount 7.1
CE Shares Recital B
Claim 9.2.2
Closing 3.1
Closing Date 3.1
Closing Date Amount 2.2
Common Stock Recital B
Consents 4.1.4
Damages 9.2.1
Due Date 7.1
Electric Holdings Recital D
Electric plc Recital D
Holdco Recital C
Holdco Allocation 2.3
Holdco Sale 3.2
Holdco Shares Recital E
Indemnity Payments 7.8
Insurance Policies 4.2.18
Joint Venture Agreement 5.12
KEC Recital A
KEC Allocation 2.3
KEC Shares Recital A
KEG Recital A
▇▇▇▇ Recital C
▇▇▇▇ Shares 4.2.4
KEUK Recital D
KEUK Allocation 2.3
KEUK Sale 3.2
KEUK Shares Recital F
Northern Recital D
Options Recital B
Philippine and Indonesian Entities Recital C
PKS 4.2.11
PKS Facility 4.2.11
Pre-Closing Periods 7.1
Pre-Closing Straddle Period 7.2
Post-Closing Periods 7.2
Post Closing Straddle Period 7.2
Project Entities Recital D
Required Consents 6.1.5
Rights Agreement 5.13
Seller Preamble
Seller Consents 10.2.2
Seller Indemnified Claims 9.2.1
Straddle Periods 7.2
Tax Arbitrator 7.1
Tax Claim 7.3
Termination Agreement 5.6
Transfer Taxes 7.4
Withdrawal Agreement 5.12
1.3 Certain Interpretative Matters. In this Agreement,
unless the context otherwise requires, the singular shall include
the plural, the masculine shall include the feminine and neuter,
and vice versa. The terms "includes" or "including" shall mean
"including without limitation." Except as otherwise stated
herein, references to a Section, Article, Exhibit or Schedule
shall mean a Section, Article, Exhibit or Schedule of this
Agreement, and reference to a given agreement or instrument shall
be a reference to that agreement or instrument as modified,
amended, supplemented and restated through the date as of which
such reference is made.
ARTICLE IIPURCHASE AND SALE OF SHARES
2.1 Purchase and Sale of the Shares. Upon the terms and
subject to the conditions of this Agreement, at the Closing,
Buyer shall purchase, and Seller shall cause its appropriate
Affiliates to sell, convey, assign, transfer and deliver to
Buyer, free and clear of any and all Encumbrances, the following:
2.1.1 All of Seller's and its Affiliates' right, title
and interest in and to the Holdco Shares;
2.1.2 All of Seller's and its Affiliates' right, title
and interest in and to the KEUK Shares; and
2.1.3 All of Seller's and its Affiliates' right, title
and interest in and to the KEC Shares.
2.2 Consideration. Upon the terms and subject to the
conditions of this Agreement, in consideration of the aforesaid
sale, assignment, transfer and delivery of the Holdco Shares, the
KEUK Shares and the KEC Shares, at the Closing, Buyer shall pay,
in accordance with Section 3.2, an amount equal to the Purchase
Price less the Option Exercise Price, subject to adjustment
pursuant to Section 5.7(b) (as so adjusted, the "Closing Date
Amount").
2.3 Purchase Price Allocation. Set forth on Schedule V
hereto (the "Allocation Schedule") is an allocation of the
Purchase Price among the Holdco Shares, the KEUK Shares and the
KEC Shares. Prior to Closing, Buyer may revise the Allocation
Schedule consistent with applicable tax valuation methodology,
subject to Seller's consent, which consent will not be
unreasonably withheld (the allocations to the Holdco Shares, KEUK
Shares and KEC Shares, as the same may be revised as aforesaid,
are referred to as the "Holdco Allocation", "KEUK Allocation" and
"KEC Allocation", respectively). Buyer and Seller shall allocate
the Purchase Price in accordance with the Allocation Schedule (as
the same may have been revised as aforesaid) and shall be bound
by such allocations for and report the purchases and sales
contemplated hereby for federal and state Tax purposes in
accordance with such allocations, and shall not take any position
(whether in Tax Returns or Tax audits), which is inconsistent
with such allocations without the prior written consent of the
other party, except to the extent, if any, required by applicable
law.
ARTICLE III
CLOSING
3.1 Closing. Buyer shall give prompt notice to Seller upon
Buyer's raising an aggregate of $800 million in cash or Financing,
or a combination thereof, for purposes of funding the
Purchase Price. Upon delivery of such notice, the parties will
set a mutually agreeable date to close the transactions contemplated
hereby (the "Closing"). Such date shall be as promptly as practicable
after such notice (but not prior to January 2, 1998), subject to
satisfaction or waiver of the conditions set forth in Article VI,
or as soon as practicable after such conditions shall have been
satisfied or waived. The Closing shall take place at the offices
of Skadden, Arps, Slate ▇▇▇▇▇▇▇ and ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 a.m., Eastern time on such date or
such other time or place as may be agreed by the parties. The
date on which the Closing actually occurs is referred to
herein as the Closing Date. If Buyer shall not have raised an
aggregate of $800 million in cash or Financing, or a combination
thereof, for purposes of funding the Purchase Price by
January 2, 1998, and Buyer is satisfying its obligations under
Sections 5.7 and 5.8, then the Closing Date may be extended, without
interest or penalty, subject to Article X.
3.2 Steps at Closing. At the Closing, the following events
shall occur in the following order:
(a) Seller shall cause KEC to sell, assign, transfer
and deliver to Buyer all of its right, title and
interest in the Holdco Shares, and Buyer shall pay to
KEC, by wire transfer of immediately available funds,
the amount of the Holdco Allocation (the "Holdco Sale);
(b) Seller shall cause KEC to sell, assign, transfer
and deliver to Buyer all of its right, title and interest
in the KEUK Shares, and Buyer shall pay to KEC, by
wire transfer of immediately available funds, the amount
of the KEUK Allocation (the "KEUK Sale");
(c) Seller shall cause KEC to distribute to its
parent corporation, KEG, the cash proceeds of the Holdco
Sale and the KEUK Sale; and
(d) Seller shall cause KEG to sell, assign, transfer
and deliver to Buyer all of its right, title and
interest in the KEC Shares, and Buyer shall pay to KEG,
by wire transfer of immediately available funds, the
amount of the KEC Allocation.
3.3 Deliveries at Closing.
3.3.1 Deliveries by Seller and its Affiliates. At the
Closing, Seller or its Affiliates at the direction of Seller
shall deliver to Buyer (unless delivered previously) the
following:
(a) stock certificates representing the Holdco
Shares, duly endorsed or accompanied by stock powers
duly executed in blank by KEC or instruments of transfer
duly executed by KEC, and any other documents that are
necessary to transfer title to the Holdco Shares to
Buyer;
(b) stock certificates representing the KEUK Shares,
duly endorsed or accompanied by stock powers duly
executed in blank by KEC or instruments of transfer duly
executed by KEC, and any other documents that are
necessary to transfer title to the KEUK Shares to Buyer;
(c) stock certificates representing the KEC Shares,
duly endorsed or accompanied by stock powers duly
executed in blank by KEG, or duly executed instruments
of transfer duly executed by KEG, and any other
documents that are necessary to transfer title to the
KEC Shares to Buyer;
(d) the minute books, stock books, stock ledgers, and
corporate seals, as applicable, of each of KEC, Holdco,
▇▇▇▇ and KEUK;
(e) the compliance certificate referred to in Section
6.1.3;
(f) the Termination Agreement, duly executed by
Seller;
(g) any amounts due to Buyer under Section 5.9(c);
and
(h) all other documents, certificates, instruments or
writings, including any representing Related Project
Interests, required to be delivered by Seller at or
prior to the Closing pursuant to the Agreement or
otherwise required in connection herewith (other than
any such items that may be pledged to and in possession
of lenders to the Project Entities as set forth in
Section 4.2.14 of the Seller Disclosure Schedule ).
3.3.2 Deliveries by Buyer. At the Closing, Buyer shall
deliver to or at the direction of Seller (unless previously
delivered) the following:
(a) funds in an amount equal to the Closing Date
Amount; such delivery to be made by wire transfers of
immediately available funds in accordance with Section
3.2 to a bank account or bank accounts designated by
Seller, such designation to be made not less than five
business days prior to the Closing;
(b) the compliance certificate referred to in Section
6.2.3;
(c) the Termination Agreement, duly executed by
Buyer;
(d) any amounts due to Seller under Section 5.9(b);
and
(e) all other documents, certificates, instruments or
writings required to be delivered by Buyer at or prior
to the Closing pursuant to the Agreement or otherwise
required in connection herewith.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Buyer. Buyer hereby
represents and warrants to Seller as follows:
4.1.1 Due Organization. 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 corporate authority to own, lease and
operate its properties and conduct its business as it is
presently being conducted.
4.1.2 Authorization. Buyer has all necessary corporate
power and corporate authority, and has taken all necessary
corporate action, to execute and deliver this Agreement and
the Ancillary Agreements, to consummate the transactions
contemplated hereby and thereby and to perform its
obligations hereunder and thereunder upon the terms and
subject to the conditions hereof. The execution and delivery
of this Agreement and the Ancillary Agreements by Buyer and
the consummation by Buyer of the transactions contemplated
hereby and thereby upon the terms and subject to the
conditions hereof and thereof, have been duly authorized by
all necessary corporate action on the part of Buyer. No
other corporate proceedings or other corporate actions on the
part of Buyer are necessary to authorize this Agreement, the
Ancillary Agreements or the transactions contemplated hereby
or thereby. This Agreement has been duly executed and
delivered by Buyer and is a valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its
terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject to the
general principles of equity, including concepts of
materiality, reasonableness, good faith and the possible
unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or
at law.
4.1.3 Non-Contravention. Subject to the provisions of
Section 4.1.4 below regarding Consents, the execution,
delivery and performance of this Agreement and the Ancillary
Agreements by Buyer and the consummation by Buyer of the
transactions contemplated hereby or thereby do not violate or
conflict with Buyer's certificate of incorporation or bylaws,
or any law, rule, regulation or statute to which Buyer is
subject.
4.1.4 Consents and Approvals. Except as set forth in
Section 4.1.4 of the Buyer Disclosure Schedule, no consent,
approval or authorization of, or declaration, filing or
registration with ("Consents"), any Governmental Authority,
or any Person, is required to be made or obtained by Buyer or
any of its Affiliates in connection with the execution,
delivery and performance of this Agreement or the Ancillary
Agreements or the consummation of the transactions
contemplated hereby or thereby, except where the failure to
obtain such consent, approval or authorization or to make
such declaration, filing or registration would not materially
impair Buyer's ability to consummate the transactions
contemplated hereby.
4.1.5 Litigation. There is no claim, action, suit or
proceeding pending of which Buyer has received notice by or
before any Governmental Authority, or by or on behalf of any
third party, which challenges the validity of this Agreement
or any Ancillary Agreement or which, if adversely determined,
could reasonably be expected to adversely affect the ability
of Buyer to consummate the transactions contemplated by this
Agreement or any Ancillary Agreement.
4.1.6 Buyer Discussions. None of Buyer or anyone
acting on its behalf is engaged presently in discussions
with, or is considering any proposal from, or since January
1997 has engaged in discussions with or has considered any
proposal from, any Person or group of Persons with respect to
the possible acquisition (whether by merger or otherwise) of
all of the outstanding shares of, or a majority equity
interest in, or all or a substantial part of the assets of,
Buyer, which discussions or proposals are reasonably expected
by Buyer to be likely to result in consummation of any such
acquisition in the next nine months.
4.2 Representations and Warranties of Seller. Seller hereby
represents and warrants to Buyer as follows:
4.2.1 Due Organization of Seller. Seller 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 corporate authority to own,
lease and operate its properties and conduct its business as
it is presently being conducted.
4.2.2 Due Organization of KEG and KEC. Each of KEG and
KEC is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and
corporate authority to own, lease and operate its properties
and conduct its business as it is presently being conducted.
4.2.3 Authorization. Seller has all necessary
corporate power and corporate authority, and has taken all
necessary corporate action, to execute and deliver this
Agreement and the Ancillary Agreements, to consummate the
transactions contemplated hereby and thereby and to perform
its obligations hereunder and thereunder, upon the terms and
subject to the conditions hereof. The execution and delivery
of this Agreement and the Ancillary Agreements by Seller and
the consummation by it of the transactions contemplated
hereby and thereby, upon the terms and subject to the
conditions hereof and thereof, have been duly authorized by
all necessary corporate action on the part of Seller. No
other corporate proceedings or other corporate actions on the
part of Seller are necessary to authorize this Agreement, the
Ancillary Agreements or the transactions contemplated hereby
or thereby. This Agreement has been duly executed and
delivered by Seller and is a valid and binding obligation of
Seller, enforceable against Seller in accordance with its
terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject to the
general principles of equity, including concepts of
materiality, reasonableness, good faith and the possible
unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or
at law.
4.2.4 Non-Contravention. Subject to the provisions of
Section 4.2.5 below regarding Consents, the execution,
delivery and performance of this Agreement and the Ancillary
Agreements by Seller and the consummation by Seller of the
transactions contemplated hereby and thereby do not violate
or conflict with the certificate of incorporation or bylaws
of any of Seller, KEG, KEC, Holdco, KEUK or ▇▇▇▇, or any law,
rule, regulation or stipulation to which any of them is
subject, or result in the creation of any Encumbrance upon
any of the Holdco Shares, KEUK Shares, KEC Shares, CE Shares,
Options or outstanding shares of capital stock of ▇▇▇▇ ("▇▇▇▇
Shares").
4.2.5 Consents and Approvals. Except as set forth in
Section 4.2.5 of the Seller Disclosure Schedule, no Consent
of any Governmental Authority, or any Person, is required to
be made or obtained by Seller or any of its Affiliates in
connection with the execution, delivery and performance of
this Agreement or the Ancillary Agreements by Seller or the
consummation of the transactions contemplated hereby or
thereby, except where the failure to obtain such consent,
approval or authorization or to make such declaration, filing
or registration would not result in the creation of any
Encumbrance upon any of the Holdco Shares, KEUK Shares, KEC
Shares, ▇▇▇▇ Shares, CE Shares or Options or materially
impair Seller's ability to consummate the transactions
contemplated hereby or by the Ancillary Agreements.
4.2.6 Capitalization of KEC
(a) Section 4.2.6 of the Seller Disclosure Schedule
sets forth a true, correct and complete description of
the authorized and outstanding capitalization of KEC.
No shares of capital stock of KEC are held in the
treasury of KEC. Each issued and outstanding share of
capital stock of KEC has been duly authorized and
validly issued, is fully paid and nonassessable, and has
not been issued in violation of, and is not subject to,
any preemptive or subscription rights.
(b) Except as set forth in Section 4.2.6 of the
Seller Disclosure Schedule, (i) there is no option,
warrant or other right, agreement, arrangement, or
commitment of any kind whatsoever relating to the issued
or nonissued capital stock of KEC or obligating KEC to
grant, issue or sell any share of its capital stock by
sale, lease, license or otherwise; (ii) there is no
obligation, contingent or otherwise, of KEC to (A)
repurchase, redeem or otherwise acquire any share of its
capital stock, or (B) provide funds to, or make any
investment in (in the form of a loan, capital
contribution or otherwise), or provide any guarantee
with respect to the obligations of, Holdco, either
Kiewit Company or any other Person; (iii) KEC does not,
directly or indirectly, own, and has not agreed to
purchase or otherwise acquire, the capital stock,
partnership interests or other equity interests of, or
any interest convertible into or exchangeable or
exercisable for such capital stock, partnership
interests or other equity interest of, any corporation,
partnership, joint venture or other entity (other than
ownership of the Holdco Shares, the KEUK Shares, the CE
Shares and the Options); (iv) there is no agreement,
arrangement, contract or other commitment of any kind
whatsoever (contingent or otherwise) pursuant to which
any Person is or may become entitled to receive any
payment based on the revenues or earnings, or calculated
in accordance therewith, of KEC; and (v) there is no
voting trust, proxy or other agreement, arrangement,
contract or other commitment of any kind whatsoever to
which KEC is a party, or by which KEC, or any of its
properties or assets, is bound with respect to the
voting of any share of capital stock, partnership
interests or other equity interest of KEC.
4.2.7 Capitalization of the Kiewit Companies.
(a) Section 4.2.7 of the Seller Disclosure Schedule
sets forth a true, correct and complete description of
the authorized and outstanding capitalization of each
Kiewit Company. No shares of capital stock of any
Kiewit Company are held in the treasury of such Kiewit
Company. Each issued and outstanding share of capital
stock of each Kiewit Company has been duly authorized
and validly issued, is fully paid and nonassessable, and
has not been issued in violation of, and is not subject
to, any preemptive or subscription rights.
(b) (i) Except as set forth in Section 4.2.7 of the
Seller Disclosure Schedule, there is no option, warrant
or other right, agreement, arrangement or commitment of
any kind whatsoever relating to the issued or unissued
capital stock of either Kiewit Company or obligating
either Kiewit Company to grant, issue or sell any share
of its capital stock by sale, lease, license or other
wise; (ii) there is no obligation, contingent or other
wise, of either Kiewit Company to (A) repurchase, redeem
or otherwise acquire any share of its capital stock, or
(B) provide funds to, or make any investment in (in the
form of a loan, capital contribution or otherwise), or
provide any guarantee with respect to the obligations
of, Holdco, the other Kiewit Company or any other
Person; (iii) no Kiewit Company, directly or indirectly,
owns, or has agreed to purchase or otherwise acquire,
the capital stock, partnership interests or other equity
interests of, or any interest convertible into or
exchangeable or exercisable for such capital stock,
partnership interests or other equity interests of, any
corporation, partnership, joint venture or other entity
(other than ownership of shares of any Project Entity as
reflected on Schedule I hereto); (iv) there is no agree
ment, arrangement, contract or other commitment of any
kind whatsoever (contingent or otherwise) pursuant to
which any Person is or may become entitled to receive
any payment based on the revenues or earnings, or calculated
in accordance therewith, of either Kiewit Company;
and (v) there is no voting trust, proxy or other agree
ment, arrangement, contract or other commitment of any
kind whatsoever to which either Kiewit Company is a
party, or by which either Kiewit Company, or any of
their respective properties or assets, is bound with
respect to the voting of any share of capital stock,
partnership interests or other equity interests of either
Kiewit Company.
4.2.8 Capitalization of Holdco
(a) Section 4.2.8 of the Seller Disclosure Schedule
sets forth a true, correct and complete description of
the authorized and outstanding capitalization of Holdco.
No shares of capital stock of Holdco are held in the
treasury of Holdco. Each issued and outstanding share
of capital stock of Holdco has been duly authorized and
validly issued, is fully paid and nonassessable, and has
not been issued in violation of, and is not subject to,
any preemptive or subscription rights.
(b) Except as set forth in Section 4.2.8 of the
Seller Disclosure Schedule (i) there is no option, warrant
or other right, agreement, arrangement or commit
ment of any kind whatsoever relating to the issued or
unissued capital stock of Holdco or obligating Holdco to
grant, issue or sell any share of its capital stock by
sale, lease, license or otherwise; (ii) there is no obligation,
contingent or otherwise, of Holdco to (A) repurchase,
redeem or otherwise acquire any share of its
capital stock or (B) provide funds to, or make any in
vestment in (in the form of a loan, capital contribution
or otherwise), or provide any guarantee with respect to
the obligations of either Kiewit Company or any other
Person; (iii) Holdco does not, directly or indirectly,
own, and has not agreed to purchase or otherwise
acquire, the capital stock, partnership interests or other
equity interests of, or any interest convertible into or
exchangeable or exercisable for such capital stock,
partnership interests or other equity interests of, any
corporation, partnership, joint venture or other entity
(other than ownership of ▇▇▇▇ Shares); (iv) there is no
agreement, arrangement, contract or other commitment of
any kind whatsoever (contingent or otherwise) pursuant
to which any Person is or may become entitled to receive
any payment based on the revenues or earnings, or calculated
in accordance therewith, of Holdco; and (v) there
is no voting trust, proxy or other agreement, arrangement,
contract or other commitment of any kind whatsoever
to which Holdco is a party, or by which Holdco, or
any of its properties or assets, is bound with respect
to the voting of any share of capital stock or other
equity interests of Holdco.
4.2.9 Title to KEC Shares. KEG is the record and
beneficial owner of the KEC Shares and such KEC Shares are
owned by KEG free and clear of all Encumbrances. Upon
Closing, valid title to the KEC Shares, free and clear of all
Encumbrances, shall pass to Buyer.
4.2.10 Title to CE Shares, Holdco Shares, KEUK Shares
and Options. KEC is the record and beneficial owner of the
CE Shares, the Holdco Shares, the KEUK Shares and the
Options, and such CE Shares, Holdco Shares, KEUK Shares and
Options are owned by KEC free and clear of all Encumbrances.
Upon Closing, valid title to the Holdco Shares and the KEUK
Shares, free and clear of all Encumbrances, shall pass to
Buyer.
4.2.11 Title to Related Project Interests and
Subordinated Debt Interest.
Contemporaneous with the execution and delivery of this
Agreement, Seller's parent company, ▇▇▇▇▇ ▇▇▇▇▇▇ Sons', Inc.
("PKS"), is assigning and transferring to KEUK all of its
right, title and interest in the Subordinated Debt Facility
between PKS and Electric Holdings dated October 28, 1996 (the
"PKS Facility"). After giving effect to such assignment,
KEC, through Holdco, ▇▇▇▇ and KEUK, possesses all right,
title and interest in and to the Related Project Interests
and the Subordinated Debt Interests, free and clear of all
Encumbrances, except as set forth in Section 4.2.14 of the
Seller Disclosure Schedule. Upon the purchase by Buyer of
the Holdco Shares, the KEUK Shares and the KEC Shares at
Closing, Buyer shall obtain, through such entities, all
right, title and interest to the Related Party Interests and
the Subordinated Debt Interests.
4.2.12 Organization of the Kiewit Companies; No
Activities.
(a) Each Kiewit Company is a corporation duly
organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation.
(b) Except as set forth in Section 4.2.12 of the
Seller Disclosure Schedule, neither Kiewit Company has
(i) acquired any property or asset, whether real, person
al or mixed, tangible or intangible, other than the
capital stock of the Project Entities owned by it, (ii)
incurred any liability or obligation, direct or
indirect, fixed or contingent, other than for current
Taxes which are covered by Article VII, (iii) engaged in
any business or activity of any kind whatsoever, other
than the ownership of the capital stock of the Project
Entities and Electric Holdings owned by it, or (iv)
entered into, or become subject to or bound by, any
Encumbrance.
4.2.13 Organization of Holdco; No Activities.
(a) Holdco is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation.
(b) Holdco has not (i) acquired any property or
asset, whether real, personal or mixed, tangible or
intangible, other than the ▇▇▇▇ Shares owned by it, (ii)
incurred any liability or obligation, direct or
indirect, fixed or contingent, other than for current
Taxes which are covered by Article VII, (iii) engaged in
any business or activity of any kind whatsoever, other
than the ownership of the ▇▇▇▇ Shares owned by it, or
(iv) entered into, or become subject to or bound by, any
agreement, arrangement, contract or other commitment.
4.2.14 Ownership of Project Entities and Electric
Holdings. Except as set forth in Section 4.2.14 of the
Seller Disclosure Schedule, the shares of capital stock of
each of the Philippine and Indonesian Entities owned by ▇▇▇▇
are owned of record and beneficially by ▇▇▇▇ free and clear
of all Encumbrances, and the shares of capital stock of
Electric Holdings owned by KEUK are owned of record and
beneficially by KEUK free and clear of all Encumbrances.
4.2.15 Litigation, Proceedings. There is no claim,
action, suit or proceeding pending of which Seller has
received notice by or before any Governmental Authority, or
by or on behalf of any third party, which challenges the
validity of this Agreement or any Ancillary Agreement or
which, if adversely determined, could reasonably be expected
to adversely affect the ability of Seller to consummate the
transactions contemplated by this Agreement or the Ancillary
Agreements.
4.2.16 No Activities Following Execution. Except as
set forth in Section 4.2.16 of the Seller Disclosure
Schedule, KEC (i) does not own any property or asset, whether
real, personal or mixed, tangible or intangible, other than
the Holdco Shares, the KEUK Shares, the CE Shares and the
Options, (ii) has not incurred and does not have any
liability or obligation, direct or indirect, fixed or
contingent which will not have been discharged as of the
Closing Date, other than for current Taxes which are covered
by Article VII, (iii) does not engage in any business or
activity of any kind whatsoever, other than the ownership of,
the Holdco Shares, the KEUK Shares, the CE Shares and the
Options or (iv) has not entered into, or become subject to or
bound by, any Encumbrance.
4.2.17 Tax Matters
(a) Except as set forth on Section 4.2.17 of the
Seller Disclosure Schedule:
(i) each of KEC, Holdco and the Kiewit Companies
(collectively, the "Acquired Companies") has (x) duly
and timely filed (or there has been filed on its
behalf, including any consolidated or combined Tax
Return of which an Acquired Company is a member) with
the appropriate taxing authorities all Tax Returns
required to be filed by it, and all such Tax Returns
are true, correct and complete and (y) timely paid
(or there has been paid on its behalf) all Taxes due
from it to any taxing authority;
(ii) each of the Acquired Companies has complied
in all respects with all applicable laws relating to
the payment and withholding of Taxes (including with
holding of Taxes pursuant to Sections 1441, 1442 and
1491-1494 of the Code or similar provisions under any
foreign laws) and has, within the time and manner
prescribed by law, withheld and paid over to the proper
taxing authorities all amounts required to be
withheld and paid over under all applicable laws;
(iii) there are no Encumbrances for Taxes upon
the assets or properties of any of the Acquired
Companies except for statutory Encumbrances for Taxes
not yet due;
(iv) there are no outstanding waivers or comparable
consents regarding the application of the statute
of limitations with respect to any Taxes or Tax
Returns of any of the Acquired Companies;
(v) None of KEC, KEUK and Holdco has been a
member of an affiliated group (or similar state or
local filing group) other than a group in which PKS
or one of its Affiliates is or was the common parent;
(vi) none of the Acquired Companies has request
ed an extension of time within which to file any Tax
Return in respect of any taxable year, which Tax
Return has not since been filed;
(vii) no federal, state, local or foreign audits
or other administrative proceedings are presently
pending with regard to any Taxes or Tax Returns of or
including the Acquired Companies, and no written
notification has been received by any of the Acquired
Companies that such an audit or other proceeding is
pending or threatened;
(viii) the federal income Tax Returns of the
Acquired Companies for the taxable periods ended
before 1993 have been examined by the appropriate
taxing authority (or the applicable statute of limitations
for the assessment of Taxes for such periods
has expired) and, a list of all audits, examinations
or investigations commenced or completed with respect
to the Acquired Companies commenced with respect to
Taxable periods ending after 1989 is set forth on Section
4.2.17 of the Seller Disclosure Schedule;
(ix) none of the Acquired Companies has changed
any method of accounting, received a ruling from any
taxing authority or signed an agreement with any
taxing authority which would have an adverse effect
on any of the Acquired Companies (including Tax
attributes of the Acquired Companies);
(x) no deficiency for any Tax has been claimed,
proposed, asserted or assessed in writing with
respect to any of the Acquired Companies which has
not been paid in full, and all Tax deficiencies which
have been claimed, proposed or asserted in writing
against any of the Acquired Companies have been fully
paid or finally settled, and no issue has been raised
in writing in any examination by any taxing authority,
which, by application of similar principles,
could reasonably be expected to result in the
proposal or assertion of a deficiency for Taxes for
another year not so examined;
(xi) none of the Acquired Companies is required
to include in income any adjustment pursuant to
Section 481(a) of the Code (or a similar provision of
other law), by reason of the voluntary change in
accounting method (nor has any taxing authority
proposed in writing any such adjustment or change of
accounting method);
(xii) none of the Acquired Companies is a party
to, is bound by, or has an obligation under, any Tax
sharing agreement, Tax indemnification agreement or
similar contract or arrangement (including any agreement,
contract or arrangement providing for the
sharing or ceding of credits or losses) or has a
potential liability or obligation to any Person as a
result of, or pursuant to, any such agreement, contract,
arrangement or commitment;
(xiii) no power of attorney (or similar
document) which is currently in force has been
granted by any of the Acquired Companies with respect
to any matter relating to Taxes;
(xiv) none of the Acquired Companies is a party
to any agreement, plan, contract or arrangement that
would result, individually or in the aggregate, in
the payment of any "excess parachute payments" within
the meaning of Section 280G of the Code or a similar
provision under other law;
(xv) no closing agreement pursuant to Section
7121 of the Code (or any predecessor provision) or
any similar provision of any state, local or foreign
law has been entered into by or on behalf of any of
the Acquired Companies;
(xvi) none of the Acquired Companies has filed a
consent pursuant to Section 341(f) of the Code (or
any predecessor provision) or agreed to have Section
341(f)(2) of the Code apply to any disposition of a
subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by any of the
Acquired Companies;
(xvii) the Acquired Companies have filed all Tax
Returns in accordance with all leasing and other
agreements entered into by any of them;
(xviii) no jurisdiction where an Acquired Company
has not filed a Tax Return has made a written
claim that such Acquired Company is required to file
a Tax Return in such jurisdiction;
(xix) no QEF elections (as defined in Section
1295 of the Code) have been filed by or on behalf of
KEC, KEUK or Holdco; and
(xx) none of KEC, KEUK or Holdco has an overall
foreign loss (as defined in Section 904 of the Code
and allocated under Treasury Regulation Section
1.1502-9) as of the taxable year ending in December
of 1996. For all periods subsequent to the taxable
year ending in December of 1996, through the Closing
Date, Seller and its Affiliates (other than the
Project Entities, Electric Holdings or Electric plc)
have not and will not take any action or engage in
any transaction including, without limitation,
causing such companies to incur additional liabilities
and/or additional expenses (other than (i) any
actions or transactions made in the ordinary course
of business, or (ii) any transactions contemplated by
this Agreement) with respect to KEC, KEUK or Holdco
that would create an overall foreign loss allocable
to such companies under Treasury Regulation Section
1.1502-9.
(b) All material elections with respect to Taxes of
the Acquired Companies are set forth on Section 4.2.17
of the Seller Disclosure Schedule.
(c) Each of the Acquired Companies has previously
delivered or made available to Buyer complete and accurate
copies of each of: (i) all audit reports, letter
rulings and technical advice memoranda relating to
United States federal, state, local and foreign Taxes
due with respect to the income or business of the
Acquired Companies, (ii) federal income Tax Returns and
the income Tax Returns of each of the state of
California, New York and Nebraska (or the relevant
portions of a consolidated or combined Tax Return filed
in such jurisdictions of which an Acquired Company is a
member, including but not limited to information
relating to the computation of taxable income) filed by
the Acquired Companies for the last three years (with
the understanding that similar portions of other state
income Tax Returns with respect to the income or
business of the Acquired Companies which may be
reasonably requested by the Buyer shall be provided to
the Buyer within 10 business days prior to the Closing),
(iii) any closing agreement, settlement agreement or
similar agreement or arrangement entered into by any of
the Acquired Companies with any taxing authority, (iv)
any Tax election or agreement entered into by any of the
Acquired Companies providing for the sharing or ceding
of losses and credits, and (v) any Tax sharing agree
ment, Tax indemnification or similar contract or arrange
ment entered into by any of the Acquired Companies.
(d) Section 4.2.17 of the Seller Disclosure Schedule
sets forth the net operating losses, capital losses,
charitable contributions, foreign tax credits, general
business credits and minimum tax credits (for federal,
state, local, foreign and all other purposes, as
applicable) of each of the Acquired Companies and the
date on which net operating loss carryovers and such
other tax attributes will expire.
4.2.18 Insurance. Section 4.2.18 of the Seller
Disclosure Schedule sets forth a complete and accurate list
of all insurance policies maintained by or for the benefit of
Seller or any of its controlled Affiliates, with respect to
the Project Entities (the "Insurance Policies"), together
with the name of the policyholder, carriers and insureds,
additional insureds and loss payees, and the liability limits
and expiration date for each such policy. Each policy is in
full force and effect, and no notice has been received by
Seller or any of its controlled Affiliates from any insurance
carrier purporting to cancel or refuse renewal, reduce or
dispute coverage under any such policy. All premiums or
other payments due under all such policies have been timely
paid in full. Seller (or the relevant controlled Affiliate)
is not in default under any of such policies or binders, and
Seller (or the relevant controlled Affiliate) has not failed
to give any notice or to present any claim under any such
policy or binder in a due and timely fashion. Such policies
and binders shall be kept in full force and effect by Seller
(or the relevant controlled Affiliate) through the Closing
Date. Such Insurance Policies are included in the Related
Project Interests.
ARTICLE V
COVENANTS OF THE PARTIES
5.1 Prohibition of Certain Actions by Seller Pending the
Closing. During the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement
and the Closing, Seller covenants and agrees that it shall not
take and shall cause its controlled Affiliates not to take any
action or fail to take any action which causes or could
reasonably be expected to cause (i) any representation or
warranty of Seller contained in this Agreement to be untrue or
inaccurate at or prior to the Closing or (ii) Seller to fail to
comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder. Without limiting the
generality of the foregoing, Seller shall not, directly or
indirectly, sell, pledge, dispose of or encumber, or authorize
the sale, pledge, disposition or Encumbrance of, the KEC Shares,
the Holdco Shares, the KEUK Shares, the ▇▇▇▇ Shares, the CE
Shares, the Options, the Related Project Interests, the
Subordinated Debt Interests or its interests in the Project
Entities or any options, warrants, convertible securities or
other rights of any kind to acquire any such shares or interests.
5.2 Prohibition of Certain Actions by Buyer Pending the
Closing. During the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement
and the Closing, Buyer covenants and agrees that it shall not
take any action or fail to take any action which causes or could
reasonably be expected to cause (i) any representation or
warranty of Buyer contained in this Agreement to be untrue or
inaccurate at or prior to the Closing or (ii) Buyer to fail to
comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder.
5.3 Best Efforts. Subject to the terms and conditions of
this Agreement, each of the parties hereto will 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 and regulations to
consummate the transactions contemplated by this Agreement and
the Ancillary Agreements by January 2, 1998, or the earliest practicable
date thereafter.
5.4 Consents. Without limiting the generality of Section 5.3
hereof, each of the parties hereto will use its reasonable best
efforts to obtain all Permits and all Consents necessary in
connection with the consummation of the transactions contemplated
by this Agreement and the Ancillary Agreements prior to the Closing;
provided, however, that, any provision hereof to the
contrary notwithstanding, none of Seller or Buyer shall have any
obligation to pay any fee to any third party for the purpose of
obtaining any Permit or Consent or any costs and expenses of any
third party resulting from the process of obtaining such consent
or approval. Each of the parties hereto will make or cause to be
made all filings and submissions under laws and regulations applicable
to it as may be required for the consummation of the transactions
contemplated by this Agreement and the Ancillary
Agreements. Buyer and Seller will coordinate and cooperate with
each other in exchanging such information and assistance as any
of the parties hereto may reasonably request in connection with
the foregoing.
5.5 Notification of Certain Matters. Each of the parties
shall give prompt notice to the other party of (i) the occurrence
or nonoccurrence of any event the occurrence or nonoccurrence of
which would be likely to cause any representation or warranty of
such party contained in this Agreement to be materially untrue or
inaccurate, or (ii) any failure of such party materially to
comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it or them hereunder or under any
of the Ancillary Agreements; provided, however, that the delivery
of any notice pursuant to this Section 5.5 shall not limit or
otherwise affect the remedies available hereunder to either
party.
5.6 Convertible Debt. Upon the written direction of Buyer
and upon the consent of Seller (which consent will not be
unreasonably withheld), Seller shall cause the appropriate
controlled Affiliate of Seller, prior to the Closing, to convert
any convertible debt included in the Subordinated Debt Interests
into shares of capital stock of the issuer thereof.
5.7 Equity Offering.
(a) Buyer shall use its reasonable best efforts to
conclude the Equity Offering on or before the Closing Date
and Seller covenants not to, and shall cause its controlled
Affiliates not to, make any public announcement (which shall
not include filings required to be made with the Securities
and Exchange Commission or any Governmental Authority, which
filings shall be governed by Section 5.10) regarding the
Equity Offering without Buyer's prior written consent (which
consent will not be unreasonably withheld).
(b)In the event that the gross proceeds per share of the
Equity Offering (i) exceed $35.99, the Purchase Price shall
be increased by an amount equal to the product of (x) fifty
percent (50%) of such excess multiplied by (y) the number of
shares of Common Stock sold in the Equity Offering, up to a
maximum of $20,000,000, or (ii) are less than $34.96, the
Purchase Price shall be decreased by an amount equal to the
product of (x) fifty percent (50%) of such deficiency
multiplied by (y) the number of shares of Common Stock sold
in the Equity Offering, up to a maximum of $20,000,000.
(c)Seller hereby waives its rights pursuant to those
certain Registration Rights Agreements, dated as of February
18, 1991 and June 19, 1991, each as amended, between Buyer
and KEC to register CE Shares in connection with the Equity
Offering.
5.8 Debt Offering. Buyer shall use its reasonable best
efforts to conclude the Debt Offering on or before the Closing
Date.
5.9 Kiewit Commitments
(a)Seller (or one or more of its controlled Affiliates)
has existing letters of credit, guarantees or other
contractual commitments in satisfaction of its equity
obligations in respect of the Project Entities as referenced
on Schedule VI hereto. Except as set forth in Section
5.9(b), at or prior to Closing, Seller shall replace or cause
to be replaced such letters of credit, guarantees or other
contractual commitments with cash deposits in full
satisfaction of its equity obligations under all applicable
project financing agreements.
(b)None of Seller or any of its controlled Affiliates
shall be obligated to fund any other project funding
requirements accrued on or after August 1, 1997, except for
maintaining until Closing the $18,928,000 letter of credit on
Patuha, which Buyer shall replace at Closing, and any draws
thereon made prior to Closing will be refunded to Seller by
Buyer at Closing.
(c)After August 1, 1997, none of Seller or any of its
controlled Affiliates shall be entitled to receive any
further payments or distributions in respect of the Kiewit
Companies or the Project Entities except for one half of the
balance of $2,996,000, remaining in the KEC escrow account
established for CE Luzon Geothermal Power Company, Inc. as
reflected on the June 30, 1997 balance sheet of KEC. Any
payments or distributions of any kind received after August
1, 1997 by Seller or its controlled Affiliates in respect of
the Kiewit Companies or the Project Entities shall be held in
trust and (together with any earnings thereon) paid to Buyer
at Closing.
5.10 Seller SEC Filings. Seller shall make or cause to be
made all filings required to be made by it with the Securities
and Exchange Commission or any other Governmental Authority as a
result of the transactions contemplated hereby, including Forms 4
and 5 and amendments to Schedule 13D and shall provide such
filings to Buyer in advance for review and comment.
5.11 Buyer SEC Filings. Buyer shall make or cause to be
made all filings required to be made by it with the Securities
and Exchange Commission or any other Governmental Authority as a
result of the transactions contemplated hereby and shall provide
those portions of such filings describing matters relating to
Seller or its controlled Affiliates to Seller in advance for
review and comment.
5.12 Existing Agreements
(a)Contemporaneous with the execution and delivery of
this Agreement, Buyer and Seller are entering into an
agreement (the "Withdrawal Agreement") pursuant to which
Seller shall withdraw from all participation in that certain
Joint Venture Agreement dated as of December 4, 1996 (the
"Joint Venture Agreement"), between Seller and Buyer, and all
development projects thereunder. Notwithstanding anything to
the contrary in the Joint Venture Agreement or otherwise,
Seller shall not be entitled to any compensation or
recoupment of costs attributable to the Project Entities or
the Joint Venture Agreement as a result of such withdrawal,
subject to Section 10.2.1(e).
(b)As of the Closing Date, the parties shall enter into
a mutually satisfactory agreement (the "Termination
Agreement") pursuant to which each of the agreements set
forth in Schedule VII hereto shall terminate and be of no
further force or effect.
5.13 Termination of Buyer's Approval of Acquisitions of
Shares Under Rights Agreement. As of the Effective Date, the
approval of Buyer's board of directors exempting Seller's
acquisition of shares of Common Stock other than the CE Shares
and the shares issuable upon the exercise of the Options from the
effect of that certain Rights Agreement dated December 1, 1988,
as amended (the "Rights Agreement"), shall terminate, subject to
Section 10.2.1(d).
5.14 Confidentiality, Standstill and Noncompetition
Agreement. Contemporaneous with the execution and delivery of
this Agreement, Seller and Buyer are executing the
Confidentiality, Standstill and Noncompetition Agreement.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions of Buyer's Obligations at Closing. The
obligations of Buyer to consummate the transactions contemplated
by this Agreement are subject to the fulfillment, at or prior to
the Closing, of each of the following conditions:
6.1.1 Accuracy of Representations and Warranties. The
representations and warranties of Seller contained in this
Agreement that are qualified as to materiality shall be true,
complete and accurate, and the representations and warranties
of Seller contained in this Agreement that are not so
qualified shall be true, complete and accurate in all
material respects, in each case, as of the date when made and
at and as of the Closing Date as though such representations
and warranties were made at and as of the Closing Date.
6.1.2 Performance. Seller shall have performed and
complied in all material respects with all agreements,
obligations, covenants and conditions contained in this
Agreement, the Confidentiality, Standstill and Noncompetition
Agreement and all other agreements contemplated hereby or
thereby that are required to be performed or complied with by
Seller on or before the Closing.
6.1.3 Compliance Certificates. At the Closing, Seller
shall deliver to Buyer a certificate, dated the Closing Date,
certifying that the conditions specified in Sections 6.1.1
and 6.1.2 have been fulfilled.
6.1.4 No Injunctions or Restraints; Illegality. No
temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition
restraining or prohibiting the consummation of the
transactions contemplated by this Agreement or the Ancillary
Agreements shall be in effect, and there shall not be any
action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the
transactions contemplated by this Agreement or the Ancillary
Agreements which makes the consummation of such transactions
illegal.
6.1.5 Consents. All Permits and Consents necessary to
the consummation of the transactions contemplated hereby or
by the Ancillary Agreements, as set forth on Schedule VIII
hereto ("Required Consents"), shall have been obtained.
6.1.6 Termination Agreement. Seller shall have
executed and delivered, effective upon consummation of the
Closing, the Termination Agreement.
6.2 Conditions of Seller's Obligations at Closing. The
obligations of Seller under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following
conditions:
6.2.1 Accuracy of Representations and Warranties. The
representations and warranties of Buyer contained in this
Agreement that are qualified as to materiality shall be true,
complete and accurate, and the representations and warranties
of Buyer contained in this Agreement that are not so
qualified shall be true, complete and accurate in all
material respects, in each case, as of the date when made and
at and as of the Closing Date as though such representations
and warranties were made at and as of the Closing Date.
6.2.2 Performance. Buyer shall have performed and
complied in all material respects with all agreements,
obligations, covenants and conditions contained in this
Agreement, the Confidentiality, Standstill and Noncompetition
Agreement and all other agreements contemplated hereby or
thereby that are required to be performed or complied with by
them on or before the Closing.
6.2.3 Compliance Certificates. At the Closing, Buyer
shall deliver to Seller a certificate, dated the Closing
Date, certifying that the conditions specified in Sections
6.2.1 and 6.2.2 have been fulfilled.
6.2.4 No Injunctions or Restraints; Illegality No
temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition
preventing the consummation of the transactions contemplated
by this Agreement or the Ancillary Agreements shall be in
effect, and there shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced
or deemed applicable to the transactions contemplated by this
Agreement or the Ancillary Agreements which makes the
consummation of such transactions illegal.
6.2.5 Consents. All Required Consents shall have been
obtained.
6.2.6 Termination Agreement. Buyer shall have executed
and delivered, effective upon consummation of the Closing,
the Termination Agreement.
ARTICLE VII
TAX MATTERS
7.1 Preparation and Filing of Tax Returns; Payment of Taxes.
(a) To the extent not filed prior to the
Closing Date, Seller shall prepare or cause to be pre
pared (at its own cost and expense and in a manner con
sistent with past practice) all Tax Returns of the
Acquired Companies for all taxable periods ending on or
before the Closing Date (such periods are hereinafter
referred to as "Pre-Closing Periods"). Provided that
Buyer has complied with its obligations under Section
7.5, not less than ten (10) business days prior to the
date on which any such Tax Return is due to be filed
(taking into account any applicable extensions) (the
"Due Date"), Seller shall deliver a draft of each such
Tax Return (or relevant portion thereof) to Buyer for
its review and comment. Seller or Buyer (as required by
law) shall file the Tax Return and Seller shall pay the
amount due with the Tax Return to the appropriate taxing
authority on a timely basis.
(b) Buyer shall cause each of the Acquired
Companies to prepare and file on a timely basis all Tax
Returns of such companies other than those provided for
in Section 7.1(a) hereof. Buyer shall pay or cause the
appropriate company to pay all Taxes shown to be due and
payable thereon. Not less than twenty (20) business
days prior to the Due Date of any Tax Returns for Taxes
for which Seller has any liability, the Buyer shall
deliver a copy of such Tax Returns (or portion relevant
to any Taxes for which the Seller may be liable) to
Seller. Seller shall pay directly to Buyer its portion
of the Taxes shown to be due on such Tax Return (determined
under Section 7.2 of this Agreement) within ten
days prior to the Due Date for the filing of such Tax
Return. Seller is entitled to object to any items
reflected on such Tax Return relating solely to Taxes for
which Seller is liable pursuant to this Agreement. If
Seller objects (which objection shall be made no later
than fifteen (15) days before the Due Date), the parties
(or each of the parties' accounting firms) shall attempt
to resolve the disagreement. If the parties are unable
to resolve the disagreement, the dispute shall be
referred to an independent Big Six accounting firm
selected by mutual agreement of the parties at such time
(the "Tax Arbitrator"), whose determination shall be
binding on the parties. The fees and expenses of the
Tax Arbitrator shall be borne equally by Seller, on the
one hand, and Buyer, on the other hand. If the dispute
has not been resolved or the Tax Arbitrator has not made
its determination 10 days prior to the Due Date, the Tax
Return shall be filed as originally proposed by Buyer,
reflecting any items previously objected to by Seller
and agreed to by Buyer, and Seller shall pay to Buyer
the amount requested by Buyer (the "Buyer Return
Amount"). When the amount due to Buyer from Seller in
respect of such Tax Return is finally determined by the
Tax Arbitrator, a settlement payment shall be made from
Seller to Buyer in an amount equal to the excess, if
any, of (i) the amount finally determined to be due over
(ii) the Buyer Return Amount or from Buyer to Seller in
an amount equal to the excess, if any, of (x) the Buyer
Return Amount over (y) the amount finally determined to
be due.
7.2. Tax Indemnification.
(a) Seller shall indemnify, defend and hold harmless
Buyer and its Affiliates (including the Acquired
Companies after the Closing) from and against any and
all Damages imposed on, sustained, incurred or suffered
by Buyer and such Affiliates, directly or indirectly, by
reason of or resulting from any and all Taxes imposed
upon the Acquired Companies (other than claims for
Damages arising as a result of any Taxes imposed (x) on
any Project Entity, Electric Holdings or Electric plc,
or (y) due to any failure by any Project Entity,
Electric Holdings or Electric plc, to fully comply with
any applicable law or regulation relating to Taxes) with
respect or pursuant to (i) any Pre-Closing Period, (ii)
any taxable period beginning before the Closing Date and
ending after the Closing Date (such periods referred to
as "Straddle Periods"), but only with respect to the
portion of such Straddle Period ending on the close of
the Closing Date and in the manner provided in Section
7.2(c) hereof (such portion, a "Pre-Closing Straddle
Period"), (iii) Treasury Regulations Section 1.1502-6
(or any comparable provision under state, local, or
foreign law or regulation imposing several liability
upon members of a consolidated, combined, affiliated or
unitary group) for any Pre-Closing Period, or Pre-
Closing Straddle Period and (iv) a breach of or inaccuracy
in any representation contained in Section 4.2.17
hereof and any covenant of the Seller set forth in this
Article VII.
(b) Buyer shall indemnify, defend and hold harmless
Seller and its Affiliates from and against any and all
Damages, resulting to, imposed on, sustained, incurred
or suffered by Seller and such Affiliates, directly or
indirectly, by reason of or resulting from any and all
Taxes imposed upon the Acquired Companies with respect
to (i) any taxable period beginning after the Closing
Date (such periods are hereinafter referred to as "Post-
Closing Periods"), (ii) actions (other than actions
specifically called for by this Agreement) by Buyer, any
of the Acquired Companies, any of the Project Entities,
Electric Holdings or Electric plc on the Closing Date
after the Closing), (iii) any Straddle Period, but only
with respect to the portion of such Straddle Period
beginning the day after the Closing Date and in the
manner provided for in Section 7.2(c) hereof (such
portion, a "Post-Closing Straddle Period"), and (iv)
Taxes imposed as a result of a breach of or inaccuracy
in any covenant of the Buyer set forth in this Article
VII.
(c) For purposes of calculating the Taxes imposed
which relate to a Straddle Period and must be allocated
between a Pre-Closing Straddle Period and a Post-Closing
Straddle Period, the Closing Date shall be treated as
the last day of a taxable period, and the portion of any
such Taxes imposed that are allocable to the Pre-Closing
Straddle Period: (i) in the case of Taxes imposed that
are either (x) based upon or related to income or
receipts up until the Closing Date or (y) imposed in
connection with any sale, transfer, assignment or
distribution of property (real or personal, tangible or
intangible), shall be deemed equal to the amount which would
be assessable if the period for which such Taxes are
imposed ended on and included the Closing Date, and (ii)
in the cases of Taxes imposed other than Taxes imposed
as described in clause (i) hereof, shall be computed on
a per diem basis.
7.3 Consent Provisions.
(a) Except as otherwise provided in this Section 7.3,
if a notice of deficiency, proposed adjustment,
adjustment, assessment, audit, examination or other
administrative or court proceeding, suit, dispute or
other claim (a "Tax Claim") is delivered, sent,
commenced or initiated to or against the Acquired
Companies by any taxing authority, the party responsible
for filing the Tax Return for the period which the Tax
Claim relates shall be solely responsible for
controlling the defense of such Tax Claim.
(b) Seller may, upon timely written notice to Buyer,
assume and control the defense of a Tax Claim involving
Taxes for any Pre-Closing Straddle Periods for which the
Seller is responsible pursuant to Section 7.2(a) of this
Agreement at its own cost and expense and with its own
counsel, and Buyer and its Affiliates agree to cooperate
with Seller in pursuing such contest. Seller shall
reimburse the Buyer for any reasonable out-of-pocket
expenses incurred in connection with such cooperation,
including cost of counsel. If Seller elects to assume
the defense of any such Tax Claim, notwithstanding any
thing to the contrary contained herein, (i) Seller shall
consult with Buyer and shall not enter into any settle
ment with respect to any such Tax Claim without Buyer's
prior written consent, which shall not be unreasonably
withheld; (ii) Seller shall keep Buyer informed of all
material developments and events relating to such Tax
Claim; and (iii) at its own cost and expense, Buyer
shall have the right to participate in (but not to control)
the defense of such Tax Claim.
7.4. Transfer and Similar Taxes. Notwithstanding any other
provision of this Agreement to the contrary, the party bearing
the legal obligation to do so shall promptly pay all sales, use,
privilege, transfer, documentary, gains, stamp, duties, recording
and similar Taxes imposed upon any party incurred in connection
with the transactions contemplated by this Agreement (collectively,
the "Transfer Taxes"). The other party shall indemnify the
paying party for 50% of such Transfer Taxes.
7.5. Assistance and Cooperation. After the Closing, each of
Seller and Buyer shall:
(a) assist (and cause their respective Affiliates
to assist) the other party in preparing any Tax
Returns which such other party is responsible for preparing
and filing in accordance with this Article VII;
(b) cooperate fully in preparing for any
audits of, or disputes or litigation with taxing
authorities regarding, any Tax Returns with respect to
the Acquired Companies;
(c) make available to the other and to any
taxing authority as reasonably requested all information,
records and documents relating to Taxes of the Acquired Companies;
(d) provide timely notice to the other in
writing of any pending or threatened tax audits, assessments
or litigation with respect to the Acquired
Companies for taxable periods for which the other may
have a liability under this Article VII; and
(e) furnish the other with copies of all
correspondence received from any taxing authority in
connection with any tax audit or information request
with respect to any taxable period for which the other
may have a liability under this Article VII.
7.6. Termination of Tax Sharing Agreements. Seller hereby
agrees and covenants that any and all existing Tax sharing agreements
or similar arrangements, written or unwritten (other than
those provided by this Agreement), binding on any of the Acquired
Companies shall be terminated on or before the Closing Date, and
any and all rights and obligations existing thereunder shall be
fully and finally settled without payment by any party thereto.
7.7. Characterization of Tax Indemnification Payments. All
amounts paid by Seller to Buyer or by Buyer to Seller pursuant to
this Article VII shall be treated as adjustments to the Purchase
Price for all Tax purposes.
7.8. Indemnity Payments. All amounts payable or to be paid
to Buyer or to Seller under this Article VII ("Indemnity
Payments") shall be paid in immediately available funds within
five business days after the later of (i) receipt of a written
request from the party entitled to such Indemnity Payment which
demonstrates to the reasonable satisfaction of the party
receiving such request that the party providing such request is
entitled to such payment under the terms of this Agreement and
(ii) the day of payment of the amount that is the subject of the
Indemnity Payment by the party entitled to receive the Indemnity
Payment. All such Indemnity Payments shall be made to the
accounts and in the manner specified in such written notice.
7.9. Survival of Obligations. The obligations of the
parties set forth in this Article VII shall be unconditional and
absolute and, notwithstanding any other provision of this
agreement to the contrary, including Article IX hereof, shall
remain in effect until the later of (i) seven years after the
Closing Date, or (ii) the expiration of the applicable statute of
limitations (taking into account any applicable extensions or
tollings). Notwithstanding any other provision of this Agreement
to the contrary, including Article IX hereof, any indemnification
for or matters relating to Taxes shall be governed by this
Article VII.
ARTICLE VIII
POST-CLOSING COVENANTS
8.1 Litigation Support. In the event and for so long as any
party hereto is actively investigating, contesting or defending
any action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand of third parties after the Closing in
connection with (a) any transaction contemplated by this
Agreement or the Ancillary Agreements or (b) any fact, situation,
circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or
transaction, on or prior to the Closing, involving the
transactions contemplated hereby or thereby or involving or
relating to the operation of the business of the Project Entities
prior to Closing, each of the other parties shall cooperate in
the defense or contest, make available their personnel, and
provide such testimony and access to their books and records as
shall be necessary and reasonably requested in connection with
the defense or contest, all at the sole cost and expense of the
contesting or defending party (unless the contesting or defending
party is entitled to indemnification therefor under Article IX).
8.2 Further Assurances. From time to time after the Closing
Date, at the request of the other party hereto, each of Seller
and Buyer shall execute and deliver to such requesting party such
documents and take such other action as such requesting party may
reasonably request in order to vest in Buyer all right, title and
interest in the KEC Shares, the Holdco Shares and the KEUK Shares
and to consummate more effectively the transactions contemplated
hereby.
8.3 Seller Keep Well. From and after the date hereof, and
until the end of Seller's 2004 fiscal year (the "Keep Well
Period"), Seller shall maintain stockholders' equity (determined
in accordance with GAAP) of at least $500 million at the end of
fiscal 1998, declining annually on a straight line basis to $200
million at the end of fiscal 2004, provided, however, the obligation
to maintain such stockholders' equity shall terminate upon
Seller's achieving a credit rating of no less than BB+ by
Standard and Poors or a comparable rating by ▇▇▇▇▇'▇. For each
fiscal year included in the Keep Well Period, Seller shall
deliver to Buyer, no later than 90 days after the end of such
fiscal year, a copy of its audited financial statements for such
fiscal year.
8.4 Use of Kiewit Name. Seller shall retain all rights to
use the "Kiewit" name and the name of the Kiewit Affiliates
acquired by Buyer pursuant hereto. Buyer shall, as soon as
reasonably practicable, take such commercially reasonable actions
as are necessary to change the name of such Kiewit Affiliates to
another name bearing no similarity to the name "Kiewit". Until
the effectiveness of any such name change, Seller does hereby
grant to KEC and the Kiewit Companies as of the Closing, a non-
exclusive right to continue to use such name (the "License") to
the extent reasonably required for legal or regulatory or Permit
purposes relating to their ownership of the Project Entities and
development opportunities relating to such existing Project
Entities that constitute expansions or additions to the
facilities of such existing Project Entities provided, however,
that Buyer shall use commercially reasonable efforts to minimize
or eliminate all such usage as expeditiously as possible (by
changes of name or otherwise) to the extent reasonably
practicable; it being understood that the License shall terminate
in respect of usage for each applicable Project Entity upon
achievement of such name change or elimination of usage.
ARTICLE IX
SURVIVAL; INDEMNIFICATION
9.1 Survival of Representations, Covenants, Etc. All
statements contained in any certificate, schedule, exhibit or
instrument or conveyance delivered by or on behalf of the parties
pursuant to this Agreement or any Ancillary Agreement or in
connection with the transactions contemplated hereby or thereby
shall be deemed to be representations and warranties by the
parties hereunder. The representations, warranties, covenants
and agreements of Seller and Buyer contained herein shall survive
the consummation of the transactions contemplated hereby and the
Closing.
9.2 Indemnification.
9.2.1 Seller's Agreement to Indemnify. Subject to the
terms and conditions of this Article IX, Seller agrees to
indemnify, defend and hold harmless the Seller Indemnified
Parties at any time after consummation of the Closing, from
and against all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs and
expenses, including interest, penalties and reasonable
attorneys' fees and expenses (collectively, "Damages"),
asserted against, resulting to, imposed upon or incurred by
any Seller Indemnified Party, directly or indirectly, by
reason of or resulting from (a) a breach of any representation,
warranty or agreement of Seller contained in or
made pursuant to this Agreement or any facts or circumstances
constituting such a breach; (b) a breach of any covenant or
agreement of Seller contained in this Agreement; or (c) any
event, occurrence or condition of any nature involving KEC,
Holdco, KEUK or ▇▇▇▇ that arose or accrued on or prior to the
Closing Date, to the extent not related to the business of
the Project Entities (collectively, "Seller Indemnified
Claims").
9.2.2 Buyer's Agreement to Indemnify. Subject to the
terms and conditions of this Article IX, Buyer agrees to
indemnify, defend and hold harmless the Buyer Indemnified
Parties at any time after consummation of the Closing, from
and against all Damages asserted against, resulting to,
imposed upon or incurred by the Buyer Indemnified Parties,
directly or indirectly, by reason of or resulting from (a) a
breach of any representation, warranty or agreement of Buyer
contained in or made pursuant to this Agreement or any facts
or circumstances constituting such a breach; or (b) a breach
of any covenant or agreement of Buyer contained in this
Agreement (collectively, "Buyer Indemnified Claims" and,
together with Seller Indemnified Claims, "Claims").
9.2.3 Conditions of Indemnification. The obligations
and liabilities of each of Seller and Buyer with respect to
Claims made by third parties shall be subject to the
following terms and conditions:
(a) The indemnified party shall give the indemnifying
party prompt notice of any such Claim, and the
indemnifying party shall have the right to undertake the
defense thereof by representatives chosen by it;
(b) If the indemnifying party, within a reasonable
time after notice of any such Claim, fails to defend the
indemnified party against which such Claim has been
asserted, the indemnified party shall (upon further
notice to the indemnifying party) have the right to
undertake the defense, compromise or settlement of such
Claim on behalf of and for the account and risk of the
indemnifying party, subject to the right of the indemnifying
party to assume the defense of such Claim at any
time prior to settlement, compromise or final determination
thereof; and
(c) Anything in this Article IX to the contrary
notwithstanding, (i) if there is a reasonable probability
that a Claim may materially and adversely affect
the indemnified party other than as a result of money
damages or other money payments, the indemnified party
shall have the right, at its own cost and expense, to
defend, compromise or settle such Claim; provided, however,
that if such Claim is settled without the indemnify
ing party's consent, the indemnified party shall be
deemed to have waived all rights hereunder against the
indemnifying party for money damages arising out of such
Claim, and (ii) the indemnifying party shall not,
without the written consent of the indemnified party,
settle or compromise any Claim or consent to the entry
of any judgment which does not include as an
unconditional term thereof the giving by the claimant or
the plaintiff to the indemnified party of a release from
all liability in respect to such Claim.
ARTICLE X
TERMINATION OF AGREEMENT
10.1 Termination. This Agreement may be terminated at any
time prior to the Closing:
10.1.1 by mutual written agreement of Seller and Buyer
duly authorized by their respective boards of directors; or
10.1.2 by either Seller or Buyer, if the Closing shall
not have occurred by February 20, 1998 (provided that the
right to terminate this Agreement under this Section 10.1.2
shall not be available to any party whose failure to fulfill
any obligation under this Agreement has been the cause of or
resulted in the failure of the Closing to occur on or before
such date); or
10.1.3 by either Seller or Buyer, if a court of
competent jurisdiction or a Governmental Authority shall have
issued a final nonappealable order, decree or ruling or taken
any other action having the effect of finally and permanently
restraining, enjoining or otherwise prohibiting the Closing;
or
10.1.4 by Buyer in the event that prior to the date on
which Buyer has raised at least $800 million in cash or
Financing, or a combination thereof for purposes of funding
the Purchase Price there shall have occurred (i) after the
date hereof, any banking moratorium declared by U.S. Federal
or New York authorities; (ii) after the date hereof, any
outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by the
United States Congress or any other substantial national or
international calamity or emergency if the effect of any such
outbreak, escalation, declaration, calamity or emergency
makes it unreasonable to proceed with completion of the
transactions contemplated hereby; or (iii) any decline in the
S&P 500 Index in excess of 25% measured from the close of
business on September 4, 1997.
10.2 Effect of Termination. In the event of termination
of this Agreement:
10.2.1 Procedure and Effect of Termination. In the
event of the termination of this Agreement and the
abandonment of the transactions contemplated hereby pursuant
to Section 10.1 hereof, written notice thereof shall
forthwith be given by the party so terminating to the other
party, and this Agreement shall terminate, and the
transactions contemplated hereby shall be abandoned, without
further action by Seller or Buyer. If this Agreement is
terminated pursuant to Section 10.1 hereof:
(a) All filings, applications and other submissions
made to any Governmental Authority or other Person
shall, to the extent practicable, be withdrawn;
(b) The obligations provided for in this Section 10.2
and Article XI hereof, shall survive any termination of
this Agreement;
(c) Upon termination of this Agreement, Seller shall
pay to Buyer all Project Entity equity funding
requirements for the period from August 1, 1997 to the
date of termination, plus interest thereon at the rate
of 7% per annum; and, in such case, Buyer shall pay to
Seller its share of any Project Entity distributions in
respect of such Project Entities, together with interest
thereon at the same rate Buyer has earned on its share
of such distributions; and
(d) Upon termination of this Agreement, the approval
of Buyer's board of directors under the Rights Agreement
referred to in Section 5.13 shall again be effective to
the same extent as prior to the termination .
(e) Upon termination of this Agreement, the
Withdrawal Agreement shall be null and void and the
Joint Venture Agreement shall be reinstated; provided,
however, that Seller shall have no right or interest in
any project or joint venture for which Buyer has signed
a definitive development or power sales agreement or
acquisition agreement, or for which Buyer has closed on
financing, between the Effective Date and the date of
such termination.
10.2.2 Termination Fee.
(a) In the event that this Agreement is terminated by
Seller or Buyer as a result of a breach by the other
party of its representations, warranties, covenants or
agreements under this Agreement (other than as subject
to subparagraph (b) below), then Seller or Buyer, as the
case may be, shall be entitled to be paid by the
breaching party a termination fee in the amount of
$50,000,000. The termination fee shall constitute
liquidated damages and shall be in full satisfaction of
all rights of a non-breaching party; provided, however,
that, in the event that (i) the termination is a result
of a breach by Buyer of its obligations to use its
reasonable best efforts to consummate the transactions
contemplated hereby, Seller also shall be entitled to
bring a claim against Buyer for money damages; (ii)
Buyer has raised at least $800 million in cash or
Financing, or a combination thereof, for purposes of
funding the Purchase Price, Seller also shall have the
right to seek specific performance of Buyer's
obligations hereunder or (iii) the termination is a
result of a breach by Seller of any of its obligations
under this Agreement, Buyer also shall have the right to
seek specific performance of Seller's obligations hereunder.
(b) Schedule VIII hereto identifies which of the
Required Consents (i) are required to be obtained by
Buyer ("Buyer Consents"), (ii) are required to be
obtained by Seller ("Seller Consents") and (iii) are
required to be obtained by Seller and Buyer jointly. In
the event that this Agreement is terminated by Seller as
a result of the failure by Buyer to obtain any Buyer
Consent, or by Buyer, as a result of the failure by
Seller to obtain any Seller Consent, the terminating
party shall be entitled to be paid by the party that
failed to obtain the Consent a termination fee in the
amount of $50,000,000; provided, however, that (i) in
the event that the failure to obtain a Required Consent
is a result of a breach by Buyer or Seller of its
obligation to use its best efforts to obtain such
Required Consent, then the terminating party also shall
be entitled to bring a claim for money damages against
the breaching party, and if available, to seek specific
performance of the breaching party's obligations
hereunder; provided, further, however, that Seller shall
be entitled to seek specific performance of Buyer's
obligations hereunder only if Buyer has raised at least
$800 million in cash or Financing, or a combination
thereof, for purposes of funding the Purchase Price.
ARTICLE XI
MISCELLANEOUS
11.1 Notices. All notices, requests, demands and other
communications which are required or may be given under this
Agreement shall be in writing and shall be deemed to have been
duly given when received if personally delivered; when
transmitted if transmitted by telecopy, electronic or digital
transmission method; the day after it is sent, if sent for next
day delivery to a domestic address by recognized overnight
delivery service (e.g., Federal Express); and upon receipt, if
sent by certified or registered mail, return receipt requested.
In each case, notice shall be sent to:
If to Buyer, addressed to:
CalEnergy Company, Inc.
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to Seller, addressed to:
Kiewit Diversified Group Inc.
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
with a copy to:
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One Citicorp Center
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇, Esq.
or to such other place and with such other copies as any party
may designate as to itself by written notice to the others.
11.2 Assignment. Except as otherwise expressly provided
herein, neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party without the
prior written consent of the other party; provided, however, that
Buyer may assign all or any portion of its rights and obligations
hereunder to any Affiliate of Buyer, provided that no such
assignment shall release Buyer from any obligations hereunder.
Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, and no other person
shall have any right, benefit or obligation under this Agreement
as a third party beneficiary or otherwise.
11.3 Entire Agreement; Amendments and Waivers.
(a)This Agreement and the Ancillary Agreements, together
with all schedules hereto and thereto (including the Buyer
Disclosure Schedule and the Seller Disclosure Schedule)
constitute the entire agreement among the parties pertaining
to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions,
whether oral or written, of the parties.
(b)This Agreement may not be amended except by an
instrument in writing signed by or on behalf of each of the
parties hereto. No amendment, supplement, modification or
waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any
of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
11.4 Brokers. Each party hereto agrees that it is liable
for, and will pay when due, all brokerage fees, finder's fees and
commissions of all brokers, finders and other representatives and
agents, in each case, that have acted for or on behalf of such
party in connection with this Agreement, any Ancillary Agreement
or any of the transactions contemplated hereby or thereby. Buyer
agrees to indemnify Seller, and Seller agrees to indemnify Buyer,
against any liability, claim, loss, damage or expense incurred by
Seller or Buyer, respectively, as a result of a breach of this
Section 11.4.
11.5 Multiple Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same instrument.
11.6 Headings. The headings of the Articles and Sections
herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation
of this Agreement.
11.7 Schedules. The Schedules attached to this Agreement
are incorporated herein and shall be a part of this Agreement for
all purposes.
11.8 Publicity; Confidentiality. Except as provided
herein or required by law (including the federal securities
laws), neither Buyer nor Seller shall issue any press release or
make any public statement regarding the transactions contemplated
hereby (other than public statements made by Buyer in connection
with the Equity Offering or the Debt Offering) without the prior
written consent of the other party, which consent shall not be
unreasonably withheld. The parties agree that they will not
disclose any information regarding the terms and conditions of,
or the parties to, this Agreement, the Ancillary Agreements and
all other agreements to be entered into in connection herewith to
any third party, except as may be required by law.
11.9 Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State
of New York, without regard to principles of conflict of laws.
11.10 Construction. Differences in language as between
similar provisions covering similar matters may reflect
differences in style rather than a different substantive intent
and should be construed accordingly. Any presumption that an
ambiguity in this Agreement should be construed against the
document drafter or author is hereby waived and shall not apply
with respect to any document interpretation.
11.11 Expenses. Except as otherwise specified in this
Agreement, each party hereto shall pay its own out-of-pocket
expenses, including, but not limited to, legal and accounting
fees, incurred in connection with the negotiation, preparation
and execution of this Agreement and all other agreements,
documents and instruments contemplated hereby, or otherwise in
connection with the preparation for carrying this Agreement into
effect.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first
written above.
BUYER:
CALENERGY COMPANY, INC.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title: Senior Vice President
SELLER:
KIEWIT DIVERSIFIED GROUP INC.,
a Delaware corporation
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name:
Title: