Exhibit 10.1
CLINTON NUCLEAR POWER STATION
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
ILLINOIS POWER COMPANY, as SELLER,
AND
AMERGEN ENERGY COMPANY, L.L.C., as BUYER
Dated as of June 30, 1999
REDACTED AREAS IN THIS DOCUMENT CONTAIN CONFIDENTIAL MATERIAL WITHHELD
FROM PUBLIC DISCLOSURE PURSUANT TO 220 ILCS 5/4-404 AND 5-108.
137
REDACTED AREAS CONTAIN CONFIDENTIAL MATERIAL WITHHELD FROM PUBLIC
DISCLOSURE PURSUANT TO 220 ILCS 5/4-404 AND 5-108.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS 1
1.1 Definitions 1
1.2 Certain Interpretive Matters 20
ARTICLE II
PURCHASE AND SALE 21
2.1 Transfer of Assets 21
2.2 Excluded Assets 23
2.3 Assumed Liabilities and Obligations 25
2.4 Excluded Liabilities 26
2.5 Control of Litigation 30
ARTICLE III
THE CLOSING 30
3.1 Closing 30
3.2 Purchase Price; Payment 31
3.3 Adjustment to Cash Purchase Price 31
3.4 Allocation of Purchase Price 33
3.5 Prorations 33
3.6 Deliveries by Seller 34
3.7 Deliveries by Buyer 35
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER 37
4.1 Organization; Qualification 37
4.2 Authority 37
4.3 Consents and Approvals; No Violation 37
4.4 Financial Statements; Reports 38
4.5 Undisclosed Liabilities 38
4.6 Absence of Certain Changes or Events 39
4.7 Title and Related Matters 39
138
REDACTED AREAS CONTAIN CONFIDENTIAL MATERIAL WITHHELD FROM PUBLIC
DISCLOSURE PURSUANT TO 220 ILCS 5/4-404 AND 5-108.
4.8 Real Property Agreements 39
4.9 Insurance 39
4.10 Environmental Matters 40
4.11 Labor Matters 41
4.12 ERISA; Benefit Plans 41
4.13 Real Property; Plant and Equipment 42
4.14 Condemnation; Public Improvements 43
4.15 Certain Contracts and Arrangements 43
4.16 Legal Proceedings, etc 44
4.17 Permits; Compliance with Law 44
4.18 NRC Licenses 44
4.19 Regulation as a Utility 45
4.20 Taxes 45
4.21 Year 2000 Compliance 46
4.22 Qualified Decommissioning Fund 46
4.23 Nonqualified Decommissioning Fund 48
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER 49
5.1 Organization 49
5.2 Authority 50
5.3 Consents and Approvals; No Violation 50
5.4 Availability of Funds 51
5.5 Legal Proceedings 51
5.6 WARN Act 51
5.7 Regulation as a Utility 51
5.8 Qualified Buyer 51
5.9 Limited Liability Company Agreement 51
ARTICLE VI
COVENANTS OF THE PARTIES 52
6.1 Conduct of Business Relating to the Purchased Assets 52
6.2 Access to Information 55
6.3 Expenses 58
6.4 Further Assurances; Cooperation 58
6.5 Public Statements 60
139
REDACTED AREAS CONTAIN CONFIDENTIAL MATERIAL WITHHELD FROM PUBLIC
DISCLOSURE PURSUANT TO 220 ILCS 5/4-404 AND 5-108.
6.6 Consents and Approvals 60
6.7 Brokerage Fees and Commissions 62
6.8 Tax Matters 62
6.9 Advice of Changes 64
6.10 Employees 65
6.11 Risk of Loss 70
6.12 Decommissioning Funds 71
6.13 Spent Nuclear Fuel Fees 77
6.14 Department of Energy Decontamination and Decommissioning Fees 77
6.15 Cooperation Relating to Insurance and Price-Anderson Act 78
6.16 Tax Clearance Certificates 78
6.17 Remediation 78
6.18 NRC License Transfer Requirements 79
6.19 Metering 79
6.20 Right to Participate in Electric Generating Projects 80
6.21 xxxxxxxxxxxxxxxxxxxxxxxxx 82
6.22 Personal Property Insurance 82
ARTICLE VII
CONDITIONS 82
7.1 Conditions to Obligations of Buyer 82
7.2 Conditions to Obligations of Seller 85
ARTICLE VIII
INDEMNIFICATION 87
8.1 Indemnification 87
8.2 Defense of Claims 89
8.3 Waiver and Release 91
ARTICLE IX
TERMINATION 91
9.1 Termination 91
9.2 Procedure and Effect of No-Default Termination 93
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REDACTED AREAS CONTAIN CONFIDENTIAL MATERIAL WITHHELD FROM PUBLIC
DISCLOSURE PURSUANT TO 220 ILCS 5/4-404 AND 5-108.
ARTICLE X
MISCELLANEOUS PROVISIONS 93
10.1 Amendment and Modification 93
10.2 Waiver of Compliance; Consents 93
10.3 Survival of Representations, Warranties, Covenants 93
10.4 Notices 94
10.5 Assignment 95
10.6 Governing Law 96
10.7 Counterparts 96
10.8 Interpretation 96
10.9 Schedules and Exhibits 97
10.10 Entire Agreement 97
10.11 Bulk Sales Laws 97
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REDACTED AREAS CONTAIN CONFIDENTIAL MATERIAL WITHHELD FROM PUBLIC
DISCLOSURE PURSUANT TO 220 ILCS 5/4-404 AND 5-108.
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Form of Bill of Sale
Exhibit C Easements
Exhibit D Form of FIRPTA Affidavit
Exhibit E Form of Interconnection Agreement
Exhibit F Information Technology Service Terms
Exhibit G xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Exhibit H Form of Power Purchase Agreement
Exhibit I Form of Special Warranty Deed
Exhibit J Form of Opinion from Seller's Counsel
Exhibit K Form of Opinion from Buyer's Counsel
Exhibit L xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Exhibit M xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SCHEDULES
1.1 (91) List of Seller's Officers
1.1(112) Exceptions to Title
1.1(158) Transferable Permits
2.1(l) Intellectual Property
2.2(a) Excluded Transmission and other Assets
2.2(k) Excluded Real Property Agreements
2.2(l) Excluded Parcels
2.2(m) Excluded Other Assets
2.3(i) Assumed Liabilities and Claims
4.3(a) Seller's Third Party Consents
4.3(b) Seller's Required Regulatory Approvals
4.4 Financial Statements; Reports
4.5 Liabilities
4.6 Absence of Certain Changes or Events
4.8 Real Property Agreements
4.9 Insurance Policies and Exceptions
4.10 Environmental Matters
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REDACTED AREAS CONTAIN CONFIDENTIAL MATERIAL WITHHELD FROM PUBLIC
DISCLOSURE PURSUANT TO 220 ILCS 5/4-404 AND 5-108.
4.11 Noncompliance with Employment Laws
4.12(a) Benefit Plans
4.12(b) Benefit Plan Exceptions
4.13(a) Description of Real Property
4.13(b) Description of Major Equipment Components and Personal Property
4.14 Notices of Condemnation
4.15(a) List of Seller's Agreements
4.15(b) Agreement Exceptions
4.15(c) Agreement Defaults
4.16 Legal Proceedings and Court Orders
4.17(a) Permit Violations
4.17(b) List of Material Permits (other than Transferable Permits)
4.18(a) License Violations
4.18(b) List of Material NRC Licenses
4.19 Utility Matters regarding Seller
4.20 Tax Matters
4.21 Year 2000 Compliance
4.22 Tax and Financial Matters Relating to Qualified Decommissioning Fund
4.23 Financial Matters Relating to Nonqualified Decommissioning Fund
5.3(a) Buyer's Third Party Consents
5.3(b) Buyer's Required Regulatory Approvals
5.7 Utility Matters regarding Buyer
6.1 Permitted Activities Prior to Closing
6.8(e) Pollution Control Facilities
6.10(d) IBEW Collective Bargaining Agreements
6.15 Buyer's Required Insurance
6.17 Site Remediation
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of June 30, 1999, by and between Illinois
Power Company, an Illinois corporation ("IP" or "Seller"), and AmerGen Energy
Company, L.L.C., a Delaware limited liability company ("Buyer"). Seller and
Buyer are referred to individually as a "Party," and collectively as the
"Parties."
W I T N E S S E T H
WHEREAS, Seller owns the Clinton Power Station ("CPS"), NRC Facility Operating
License No. NPF-62, located near Clinton, Illinois, and certain facilities and
other assets associated therewith and ancillary thereto; and
WHEREAS, Buyer desires to purchase and assume, and Seller desires to sell and
assign, the Purchased Assets (as defined in Section 2.1 below) and certain
associated liabilities, upon the terms and conditions hereinafter set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements hereinafter set forth, and intending to be legally
bound hereby, the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms have the
meanings specified in this Section 1.1.
(1) "Affiliate" has the meaning set forth in Rule 12b-2 of the General
Rules and Regulations under the
Exchange Act.
(2) "Agreement" means this Asset Purchase Agreement together with the
Schedules and Exhibits hereto, as the same may be amended from time to time.
(3) "Ancillary Agreements" means the Assignment and Assumption Agreement,
the Easement Agreement, the Interconnection Agreement, the PPA, the Post-Closing
Decommissioning Trust Agreement, the Electric Service Agreement, the
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Environmental Laboratory Lease, the Emergency Off-Site Facility Lease, and the
IP Service Agreement, as the same may be amended from time to time.
(4) "Assignment and Assumption Agreement" means the Assignment and
Assumption Agreement between Seller and Buyer, substantially in the form of
Exhibit A hereto, by which Seller, subject to the terms and conditions hereof,
shall assign Seller's Agreements, the Real Property Agreements, the Transferable
Permits, certain intangible assets and other Purchased Assets to Buyer and
whereby Buyer shall assume the Assumed Liabilities and Obligations.
(5) "Assumed Liabilities and Obligations" has the meaning set forth in
Section 2.3.
(6) "Atomic Energy Act" means the Atomic Energy Act of 1954, as amended.
(7) "Benefit Plans" has the meaning set forth in Section 4.12(a).
(8) "Bill of Sale" means the Bill of Sale, substantially in the form of
Exhibit B hereto, to be delivered at the Closing, with respect to the Tangible
Personal Property included in the Purchased Assets transferred to Buyer at the
Closing.
(9) "Business Day" means any day other than Saturday, Sunday and any day on
which banking institutions in the State of Illinois are authorized by law or
other governmental action to close.
(10) "Buyer Benefit Plans" has the meaning set forth in Section 6.10(f).
(11) "Buyer Indemnitee" has the meaning set forth in Section 8.1(b).
(12) "Buyer Material Adverse Effect" has the meaning set forth in Section
5.3(a).
(13) "Buyer NQF" has the meaning set forth in Section 6.12(a).
(14) "Buyer QF" has the meaning set forth in Section 6.12(a).
(15) "Buyer's Required Regulatory Approvals" has the meaning set forth in
Section 5.3(b).
(16) "Buyer's Total Basis" has the meaning set forth in Section 6.12(b).
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(17) "Byproduct Material" means any radioactive material (except Special
Nuclear Material) yielded in, or made radioactive by, exposure to radiation in
the process of producing or utilizing Special Nuclear Material.
(18) "Cash Purchase Price" has the meaning set forth in Section 3.2.
(19) "Closing" has the meaning set forth in Section 3.1.
(20) "Closing Adjustment" has the meaning set forth in Section 3.3(b).
(21) "Closing Date" has the meaning set forth in Section 3.1.
(22) "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
(23) "Code" means the Internal Revenue Code of 1986, as amended.
(24) "Commercially Reasonable Efforts" means efforts which are designed to
enable a Party, directly or indirectly, to satisfy a condition to, or otherwise
assist in the consummation of, the transactions contemplated by this Agreement
and which do not require the performing Party to expend any funds or assume
liabilities other than expenditures and liabilities which are customary and
reasonable in nature and amount in the context of the transactions contemplated
by this Agreement.
(25) "Confidentiality Agreement" means the Confidentiality Agreement, dated
March 12, 1999, by and among Seller, Buyer and PECO, as modified by the Interim
Agreement.
(26) "Construction Waste Landfill" means the real property containing the
demolition and construction landfill, which is identified separately on Schedule
4.13(a) but is included as part of the Purchased Assets.
(27) "CPS" has the meaning set forth in the preamble.
(28) "Decommissioning" means the complete retirement and removal of the
Facilities from service and the restoration of the Site, as well as any planning
and administrative activities incidental thereto, including, without limitation,
(a) the dismantlement, decontamination, storage and/or entombment of the
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Facilities, in whole or in part, and any reduction or removal, whether before or
after termination of the NRC license for the Facilities, of radioactivity at the
Site and (b) all activities necessary for the retirement, dismantlement and
decontamination of the Facilities to comply with all applicable Nuclear Laws and
Environmental Laws, including the applicable requirements of the Illinois Public
Utilities Act, Atomic Energy Act and the NRC's rules, regulations, orders and
pronouncements thereunder, the NRC Operating License for the Facilities and any
related decommissioning plan.
(29) "Decommissioning Funds" means the Qualified Decommissioning Fund and
the Nonqualified Decommissioning Fund.
(30) "Department of Energy" means the United States Department of Energy
and any successor agency thereto.
(31) "Department of Energy Decontamination and Decommissioning Fees" means
all fees related to the Department of Energy's Special Assessment of utilities
for the Uranium Enrichment Decontamination and Decommissioning Fund pursuant to
Sections 1801, 1802 and 1803 of the Atomic Energy Act and the Department of
Energy's implementing regulations at 10 C.F.R. Part 766, or any similar fees
assessed under amended or superseding statutes or regulations applicable to
separative work units purchased from the Department of Energy in order to
decontaminate and decommission the Department of Energy's gaseous diffusion
enrichment facilities.
(32) "Department of Justice" means the United States Department of Justice
and any successor agency thereto.
(33) "Direct Claim" has the meaning set forth in Section 8.2(c).
(34) "Easement Agreement" means the Easement Agreement between Buyer and
Seller, to be entered into at the Closing, containing the Easements with respect
to the Real Property referred to on Exhibit C hereto and such other Easements as
shall be mutually acceptable to Buyer and Seller.
(35) "Easements" means, with respect to the Purchased Assets, the
easements, licenses and access rights to be granted by Buyer or Seller or
reserved by Seller pursuant to the Interconnection Agreement or the Easement
Agreement, including, without limitation, easements authorizing access, use,
maintenance, construction, repair, replacement and other activities by Seller or
Buyer, as the case may be.
(36) "Electric Service Agreement" means the service agreement, to be
entered into at the Closing, under which Seller shall provide electric service
to CPS after the Closing Date.
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(37) "Emergency Off-Site Facility Lease" means the lease between Buyer and
Seller, to be entered into at the Closing, under which Buyer shall lease from
Seller certain back-up emergency off-Site facilities and a public information
center in Decatur, Illinois, which lease shall comply with applicable NRC
requirements and shall contain such other terms and conditions as shall be
mutually acceptable to Buyer and Seller.
(38) "Emission Allowance" means all authorizations to emit specified units
of pollutants or Hazardous Substances from the Purchased Assets, which units are
established by the Governmental Authority with jurisdiction over the Purchased
Assets under (a) an air pollution control and emission reduction program
designed to mitigate global warming or interstate or intrastate transport of air
pollutants, (b) a program designed to mitigate impairment of surface waters,
watersheds, or groundwater or (c) any pollution reduction program with a similar
purpose. Allowances include allowances, as described above, regardless of
whether the Governmental Authority establishing such allowances designates such
allowances by a name other than "allowances." The amount of the Emission
Allowances shall be the amount in effect on the date hereof or subsequently
authorized in respect of the Purchased Assets, reduced by the Emission
Allowances consumed in the operation of the Purchased Assets between the date
hereof and the Closing Date in the ordinary course of business.
(39) "Emission Reduction Credits" means credits, in units that are
established by the Governmental Authority with jurisdiction over the Purchased
Assets that has obtained the credits, resulting from reductions in the emissions
of air pollutants from an emitting source or facility (including, without
limitation, and to the extent allowable under applicable law, reductions from
shutdowns or control of emissions beyond that required by applicable law) that
(a) have been identified by the IEPA as complying with applicable Illinois law
governing the establishment of such credits (including, without limitation, that
such emissions reductions are enforceable, permanent, quantifiable and surplus)
and listed in the Emissions Reduction Credit Registry maintained by the IEPA or
with respect to which such identification and listing are pending or (b) have
been certified by any other applicable Governmental Authority as complying with
the law and regulations governing the establishment of such credits (including,
without limitation, certification that such emissions reductions are
enforceable, permanent, quantifiable and surplus). The term includes Emission
Reduction Credits that have been approved by the IEPA and are awaiting USEPA
approval. The term also includes certified air emissions reductions, as
described above, regardless as to whether the Governmental Authority certifying
such reductions designates such certified air emissions reductions by a name
other than "emission reduction credits." The amount of the Emission Reduction
Credits shall be the amount in effect on the date hereof or subsequently
authorized in respect of the Purchased Assets, reduced by the Emission Reduction
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Credits consumed in the operation of the Purchased Assets between the date
hereof and the Closing Date in the ordinary course of business.
(40) "Encumbrances" means any mortgages, pledges, liens, security
interests, conditional and installment sale agreements, activity and use
limitations, conservation easements, deed restrictions, easements, encumbrances
and charges of any kind.
(41) "Energy Reorganization Act" means the Energy Reorganization Act of
1974, as amended.
(42) "Environment" means all air, surface water, groundwater or land,
including land surface or subsurface, including all fish, wildlife, biota and
all other natural resources.
(43) "Environmental Claim" means any and all pending and/or threatened
administrative or judicial actions, suits, orders, claims, liens, notices,
notices of violation, investigations, complaints, requests for information,
proceedings or other written communication, whether criminal or civil, pursuant
to or relating to any applicable Environmental Law by any Person (including,
without limitation, any Governmental Authority, private person and citizens'
group) based upon, alleging, asserting, or claiming any actual or potential (a)
violation of, or liability under any Environmental Law, (b) violation of any
Environmental Permit, or (c) liability for investigatory costs, cleanup costs,
removal costs, remedial costs, response costs, natural resource damages,
property damage, personal injury, fines, or penalties arising out of, based on,
resulting from or related to, the presence, Release, or threatened Release into
the Environment of any Hazardous Substances at any location related to the
Purchased Assets, including, without limitation, any off-Site location to which
Hazardous Substances, or materials containing Hazardous Substances, were sent
for handling, storage, treatment or disposal prior to the Closing Date.
(44) "Environmental Clean-up Site" means any location which is listed or
publicly proposed for listing on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information System, or on any
similar state list of sites requiring investigation or cleanup.
(45) "Environmental Condition" means the presence or Release of Hazardous
Substances at the Site prior to the Closing Date.
(46) "Environmental Laboratory Lease" means the lease between Buyer and Seller,
to be entered into at the Closing, under which Seller shall lease from Buyer the
environmental testing laboratory located on the Site, which lease shall comply
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with applicable NRC requirements and shall contain such other terms and
conditions as shall be mutually acceptable to Buyer and Seller.
(47) "Environmental Laws" means all federal, state and local civil and
criminal laws, regulations, rules, ordinances, codes, decrees, judgments,
directives, or judicial or administrative orders relating to pollution or
protection of the Environment, natural resources or human health and safety,
including, without limitation, laws relating to Releases or threatened Releases
of Hazardous Substances (including, without limitation, Releases to ambient air,
surface water, groundwater, land, surface and subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
Release, transport, disposal or handling of Hazardous Substances. "Environmental
Laws" include, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") (42 U.S.C. sections 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. sections 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. sections 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. sections 1251 et seq.), the Clean
Air Act (42 U.S.C. sections 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. sections 2601 et seq.), the Oil Pollution Act (33 U.S.C. sections 2701 et
seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
sections 11001 et seq.), the Occupational Safety and Health Act (29 U.S.C.
sections 651 et seq.), the Illinois Environmental Protection Act (415 ILCS
5/1-101 et seq.), the Illinois Solid Waste Management Act (415 ILCS 20/1-101 et
seq.), the Illinois Water Pollutant Discharge Act (415 ILCS 25/1-101 et seq.),
the Illinois Groundwater Protection Act (415 ILCS 55/1-101 et seq.), the
Illinois Toxic Pollution Prevention Act (415 ILCS 85/1-101 et seq.), the
Illinois Pollution Prevention Act (415 ILCS 115/1-101 et seq.), the Illinois
Responsible Party Transfer Act (765 ILCS 90/1-101 et seq.), and regulations
promulgated under such federal and state laws, and all other state and local
laws analogous to any of the above, and any common law doctrine, including,
without limitation, negligence, nuisance, trespass, personal injury, or property
damage related to or arising out of the presence, Release or exposure to
Hazardous Substances. Notwithstanding the foregoing, Environmental Laws do not
include Nuclear Laws.
(48) "Environmental Permit" means any federal, state or local permits,
licenses, approvals, consents or authorizations required by any Governmental
Authority under or in connection with any Environmental Law and includes any and
all orders, consent orders or binding agreements issued or entered into by a
Governmental Authority under any applicable Environmental Law.
(49) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
(50) "ERISA Affiliate" has the meaning set forth in Section 2.4(k).
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(51) "ERISA Affiliate Plans" has the meaning set forth in Section 2.4(k).
(52) "Estimated Adjustment" has the meaning set forth in Section 3.3(b).
(53) "Estimated Closing Statement" has the meaning set forth in Section
3.3(b).
(54) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(55) "Excluded Assets" has the meaning set forth in Section 2.2 and
includes, without limitation, the "Excluded Parcels" described in Schedule
2.2(l), and the "Excluded Other Assets" described in Schedule 2.2(m).
(56) "Excluded Liabilities" has the meaning set forth in Section 2.4.
(57) "Exempt Wholesale Generator" means an exempt wholesale generator as
defined in Section 32 of the Holding Company Act and the regulations issued
thereunder.
(58) "Facilities" means the plant, facilities, equipment, materials,
supplies and improvements owned by Seller and included in the Purchased Assets.
(59) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
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(60) "Federal Power Act" means the Federal Power Act, as amended.
(61) "Federal Trade Commission" means the United States Federal Trade
Commission and any successor agency thereto.
(62) "FERC" means the United States Federal Energy Regulatory Commission
and any successor agency thereto.
(63) "FIRPTA Affidavit" means the Foreign Investment in Real Property Tax
Act Certification and Affidavit, substantially in the form of Exhibit D hereto.
(64) "Good Utility Practices" means any of the practices, methods and
activities approved by a significant portion of the electric utility industry as
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good practices applicable to nuclear generating facilities of similar design,
size and capacity or any of the practices, methods or activities which, in the
exercise of reasonable judgment by a prudent nuclear operator in light of the
facts known at the time the decision was made, reasonably could have been
expected to accomplish the desired result consistent with good business
practices, reliability, efficiency, safety, expedition and applicable law. Good
Utility Practices are not intended to be limited to the optimal practices,
methods or acts to the exclusion of all others, but rather to be practices,
methods or acts generally accepted in the electric utility industry.
(65) "Governmental Authority" means any federal, state or local
governmental, regulatory, legislative, executive or administrative agency,
authority, commission, body, department, board, or other governmental
subdivision, court, tribunal, arbitrating body or other governmental authority.
(66) "Hazardous Substances" means (a) any petrochemical or petroleum
products, oil or coal ash, radioactive materials, radon gas, asbestos in any
form that is or could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contains dielectric fluid which contain
levels of polychlorinated biphenyls, (b) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "hazardous constituents," "restricted hazardous
materials," "extremely hazardous substances," "toxic substances,"
"contaminants," "pollutants," "toxic pollutants" or words of similar meaning and
regulatory effect under any applicable Environmental Law, and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any applicable Environmental Law; excluding, however, any Nuclear
Material to the extent regulated under any Nuclear Laws.
(67) "High Level Waste" means (a) irradiated nuclear reactor fuel, (b)
liquid wastes resulting from the operation of the first cycle solvent extraction
system, or its equivalent, and the concentrated wastes from subsequent
extraction cycles, or their equivalent, in a facility for reprocessing
irradiated reactor fuel, and (c) solids into which such liquid wastes have been
converted.
(68) "High Level Waste Repository" means a facility which is designed,
constructed and operated by or on behalf of the Department of Energy for the
storage and disposal of Spent Nuclear Fuel and other High Level Waste in
accordance with the requirements set forth in the Nuclear Waste Policy Act.
(69) "Holding Company Act" means the Public Utility Holding Company Act of
1935, as amended.
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(70) "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
(71) "IBEW" means Locals 51 and 1306 of the International Brotherhood of
Electrical Workers.
(72) "IBEW Collective Bargaining Agreements" has the meaning set forth in
Section 6.10(d).
(73) "ICC" means the Illinois Commerce Commission and any successor agency
thereto.
(74) "IDNR" means the Illinois Department of Natural Resources and any
successor agency thereto.
(75) "IDNS" means the Illinois Department of Nuclear Safety and any
successor agency thereto.
(76) "IEPA" means the Illinois Environmental Protection Agency and any
successor agency thereto.
(77) "IPCB" means the Illinois Pollution Control Board and any successor
agency thereto.
(78) "Income Tax" means any federal, state, local or foreign Tax (a) based
upon, measured by or calculated with respect to net income, profits or receipts
(including, without limitation, capital gains Taxes and minimum Taxes) or (b)
based upon, measured by or calculated with respect to multiple bases (including,
without limitation, corporate franchise taxes) if one or more of the bases on
which such Tax may be based, measured by or calculated with respect to, is
described in clause (a), in each case together with any interest, penalties or
additions to such Tax.
(79) "Indemnifiable Loss" has the meaning set forth in Section 8.1(a).
(80) "Indemnifying Party" has the meaning set forth in Section 8.1(d) .
(81) "Indemnitee" means a Buyer Indemnitee or Seller Indemnitee, as the
case may be.
(82) "Independent Accounting Firm" means such independent accounting firm
of national reputation as is mutually appointed by Seller and Buyer.
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(83) "Inspection" means all tests, reviews, examinations, inspections,
investigations, verifications, samplings and similar activities conducted by
Buyer or its agents or Representatives with respect to the Purchased Assets
prior to the Closing.
(84) "Intellectual Property" means all patents and patent rights,
trademarks and trademark rights, inventions, copyrights and copyright rights
owned by Seller and necessary for the operation and maintenance of the Purchased
Assets, and all pending applications for registrations of patents, trademarks
and copyrights, as set forth in Schedule 2.1(l).
(85) "Interconnection Agreement" means the Interconnection Agreement,
between Seller and Buyer, substantially in the form of Exhibit E hereto.
(86) "Interim Agreement" means the letter agreement, dated March 31, 1999,
addressed to IP and which is by and among Buyer, PECO and IP.
(87) "Inventories" means nuclear fuel (including fuel in the reactor) or
alternative fuel inventories, materials, spare parts, consumable supplies and
chemical and gas inventories relating to the operation of the Facilities located
at, or in transit to, the Facilities.
(88) "IP" has the meaning set forth in the preamble.
(89) "IP Service Agreement" means the IP Service Agreement between Seller
and Buyer, to be entered into at the Closing, containing the terms set forth on
Exhibit F hereto with respect to information technology services, and containing
such other terms and conditions as shall be mutually acceptable to Buyer and
Seller, under which the Seller will provide certain administrative and other
services to Buyer for a specified period after the Closing Date.
(90) "IRS" means the United States Internal Revenue Service and any
successor agency thereto.
(91) "Knowledge" means the actual knowledge of the corporate officers of
the specified Person charged with responsibility for the particular function,
and with respect to the Seller, only those corporate officers and employees of
Seller set forth on Schedule 1.1(91), after reasonable inquiry by them of
selected employees of such Person whom they believe, in good faith, to be the
persons responsible for the subject matter of the inquiry.
(92) "Leased Employee Agreement" means the Leased Employee Agreement, dated
March 31, 1999, by and among PECO, IP and John P. McElwain.
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(93) "Loss" means any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including, without limitation, all
Remediation costs, fees of attorneys, accountants and other experts, or other
expenses of litigation or proceedings or of any claim, default or assessment).
(94) "Low Level Waste" means waste material which contains radioactive
nuclides emitting primarily beta or gamma radiation, or both, in concentrations
or quantities which exceed applicable federal or state standards for
unrestricted release. Low Level Waste does not include waste containing more
than ten (10) nanocuries of transuranic contaminants per gram of material, Spent
Nuclear Fuel, or material classified as either High Level Waste or waste which
is unsuited for disposal by near-surface burial under any applicable federal
regulations.
(95) "Management Agreement" means the Agreement, dated as of January 15,
1998, by and between PECO and IP, as amended by that certain Incentive
Compensation Agreement to Amend the Management Agreement, dated as of May 19,
1998, by Amendment No. 2, dated March 31, 1999, and by Amendment No. 3, dated
April 21, 1999.
(96) "Material Adverse Effect" means any change (or changes taken together)
in, or effect on, the Purchased Assets that is materially adverse to the
operations or condition (financial or otherwise) of the Purchased Assets, taken
as a whole, other than (i) any change or effect (or changes or effects taken
together) generally affecting the international, national, regional or local
electric industry as a whole, or the nuclear power industry as a whole, and not
affecting the Purchased Assets or the Parties in any manner or degree
significantly different than such industries as a whole, including, without
limitation, changes in local wholesale or retail markets for electric power;
national, regional or local electric transmission systems or the operation
thereof, (ii) any change or effect (or changes or effects taken together)
resulting from action or inaction by a Governmental Authority not specifically
relating to the Purchased Assets, or (iii) any change or effect (or changes or
effects taken together) directly arising out of or resulting from a material
breach by PECO under Section 6.2 of the Management Agreement or directly arising
out of or resulting from conduct of a PECO employee that constitutes willful
misconduct or gross negligence; provided, however, that conduct of non-PECO
employees shall not be imputed to PECO for purposes of this Agreement.
(97) "Mortgage Indenture" means the mortgage and deed of trust originally
granted to Harris Trust and Savings Bank, as Trustee, dated as of November 1,
1943, and all supplements thereto; and the deed of trust originally granted to
Harris Trust and Savings Bank, as Trustee, dated as of November 1, 1992, and all
supplements thereto.
(98) "National Labor Relations Board" means the United States National
Labor Relations Board and any successor agency thereto.
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(100) "Non-Union Employees" has the meaning set forth in Section 6.10(b).
(101) "NRC" means the United States Nuclear Regulatory Commission and any
successor agency thereto.
(102) "Nuclear Insurance Policies" means all insurance policies carried by
or for the benefit of Seller with respect to the ownership, operation or
maintenance of the Facilities, including all liability, property damage and
business interruption policies in respect thereof. Without limiting the
generality of the foregoing, the term "Nuclear Insurance Policies" includes all
policies issued or administered by Nuclear Electric Insurance Limited ("NEIL")
or American Nuclear Insurers ("ANI").
(103) "Nuclear Laws" means all federal, state, local, provincial, foreign
and international civil and criminal laws, regulations, rules, ordinances,
codes, decrees, judgments, directives, or judicial or administrative orders
relating to the regulation of nuclear power plants, Source Material, Byproduct
and Special Nuclear Material; the regulation of Low Level Waste and High Level
Waste; the transportation and storage of Nuclear Material; the regulation of
Safeguards Information; the regulation of nuclear fuel; the enrichment of
uranium; the disposal and storage of High Level Waste and Spent Nuclear Fuel;
contracts for and payments into the Nuclear Waste Fund; and, as applicable, the
antitrust laws and the Federal Trade Commission Act to specified activities or
proposed activities of certain licensees of commercial nuclear reactors, but
shall not include Environmental Laws. "Nuclear Laws" include the Atomic Energy
Act of 1954, the Price-Anderson Act, the Energy Reorganization Act, the
Convention on the Physical Protection of Nuclear Material Implementation Act of
1982 (Public Law 97 - 351; 96 Stat. 1663), the Foreign Assistance Act of 1961
(22 U.S.C. section 2429 et seq.), the Nuclear Non-Proliferation Act of 1978 (22
U.S.C. section 3201), the Low-Level Radioactive Waste Policy Act (42 U.S.C.
section 2021b et seq.), the Nuclear Waste Policy Act, the Low-Level Radioactive
Waste Policy Amendments Act of 1985 (42 U.S.C. section 2021d, 471), the Energy
Policy Act of 1992 (4 U.S.C. section 13201 et seq.), and any state or local laws
analogous to the foregoing.
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(104) "Nuclear Material" means Source Material, Special Nuclear Material,
Low Level Waste, High Level Waste, Byproduct Material and Spent Nuclear Fuel.
(105) "Nuclear Waste Fund" means the fund established by the Department of
Energy under the Nuclear Waste Policy Act in which the Spent Nuclear Fuel Fees
to be used for the design, construction and operation of a High Level Waste
Repository and other activities related to the storage and disposal of Spent
Nuclear Fuel and/or High Level Waste are deposited.
(106) "Nuclear Waste Policy Act" means the Nuclear Waste Policy Act of
1982, as amended.
(107) "Observers" has the meaning set forth in Section 6.1(c).
(108) "Party" (and the corresponding term "Parties") has the meaning set
forth in the preamble.
(109) "PBGC" means the Pension Benefit Guaranty Corporation established by
ERISA.
(110) "PECO" means PECO Energy Company, a Pennsylvania corporation.
(111) "Permits" has the meaning set forth in Section 4.17(a).
(112) "Permitted Encumbrances" means (a) the Easements, (b) those
exceptions to title to the Purchased Assets listed in Schedule 1.1(112) with
respect to Real Property and Tangible Personal Property, (c) with respect to any
date before the Closing Date, Encumbrances created by the Mortgage Indenture,
(d) statutory liens for Taxes or other governmental charges or assessments not
yet due or delinquent or the validity of which is being contested in good faith
by appropriate proceedings provided that the aggregate amount being so contested
does not exceed $250,000, (e) mechanics', materialmens', carriers', workers',
repairers' and other similar liens arising or incurred in the ordinary course of
business relating to obligations as to which there is no default on the part of
Seller or the validity of which is being contested in good faith, and which do
not, individually or in the aggregate, exceed $250,000, (f) zoning, entitlement,
conservation restriction and other land use and environmental regulations
imposed by Governmental Authorities which do not, individually or in the
aggregate, materially detract from the value of the Purchased Assets as
currently used and neither secure indebtedness nor, individually or in the
aggregate, result in a Material Adverse Effect, and (g) such other liens,
imperfections in or failure of title, charges, restrictions, encroachments and
defects in title which do not materially, individually or in the aggregate,
detract from the value of the Purchased Assets as currently used or interfere
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with the present use or operation of the Purchased Assets and neither secure
indebtedness, nor individually or in the aggregate, result in a Material Adverse
Effect.
(113) "Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization or
Governmental Authority.
(114) "Pollution Control Bonds" has the meaning set forth in Section
2.4(p).
(115) "Pollution Control Facilities" has the meaning set forth in Section
6.8(e).
(116) "Post-Closing Adjustment" has the meaning set forth in Section
3.3(c).
(117) "Post-Closing Decommissioning Trust Agreement" means the Post-Closing
Decommissioning Trust Agreement between the Buyer and the Trustee, substantially
in the form of Exhibit G hereto, pursuant to which any assets of any of the
Decommissioning Funds to be transferred by Seller at the Closing pursuant to
Section 6.12 hereof will be held in trust.
(118) "Post-Closing Statement" has the meaning set forth in Section 3.3(c).
(119) "PPA" means the Power Purchase Agreement between Seller and Buyer,
substantially in the form of Exhibit H hereto, under which Seller will agree to
purchase capacity and energy from Buyer for a period after the Closing Date.
(120) "Price-Anderson Act" means Section 170 of the Atomic Energy Act and
related provisions of Section 11 of the Atomic Energy Act.
(121) "Proposed Post-Closing Adjustment" has the meaning set forth in
Section 3.3(c).
(122) "Proprietary Information" of a Party means all information about the
Party or its Affiliates, including their respective properties or operations,
furnished to the other Party or its Representatives by such Party or its
Representatives, after the date hereof, regardless of the manner or medium in
which it is furnished, including information provided to a Party pursuant to the
Confidentiality Agreement. In addition, after the Closing Date, "Proprietary
Information" includes any non-public information regarding the Purchased Assets
or the transactions contemplated by this Agreement. Proprietary Information does
not include information that (a) is or becomes generally available to the public
(other than as a result of a disclosure by the other Party or its
Representatives in violation of a confidentiality agreement), (b) was available
to the other Party on a nonconfidential basis prior to its disclosure by the
Party or its Representatives, (c) becomes available to the other Party on a
nonconfidential basis from a Person, other than the disclosing Party or its
Representatives, who is not otherwise bound by a confidentiality agreement with
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the disclosing Party or its Representatives, or is not otherwise under any
obligation to the disclosing Party or any of its Representatives not to transmit
the information to the other Party or its Representatives, or (d) is
independently developed by the other Party.
(123) "Purchased Assets" has the meaning set forth in Section 2.1.
(124) "Purchase Price" has the meaning set forth in Section 3.2.
(125) "Qualified Decommissioning Fund" means the external trust fund that
meets the requirements of Code Section 468A and Treas. Reg. section 1.468A-5,
maintained by Seller with respect to the Facilities prior to the Closing
pursuant to the Seller's Decommissioning Trust Agreement and maintained by Buyer
after the Closing pursuant to the Post-Closing Decommissioning Trust Agreement
to the extent assets are transferred to such fund by Seller pursuant to Section
6.12.
(126) "Real Property" has the meaning set forth in Section 2.1(a).
(127) "Real Property Agreements" has the meaning set forth in Section 4.8.
(128) "Receiving Party" has the meaning set forth in Section 6.6(f).
(129) "Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing of a
Hazardous Substance into the Environment.
(130) "Remediation" means action of any kind required under applicable
Environmental Law to address a Release, the threat of a Release or the presence
of Hazardous Substances at the Site or an off-Site location, including, without
limitation, any or all of the following activities to the extent they relate to
or arise from the presence of a Hazardous Substance at the Site or an off-Site
location: (a) monitoring, investigation, assessment, treatment, cleanup,
containment, removal, mitigation, response or restoration work, (b) obtaining
any permits, consents, approvals or authorizations of any Governmental Authority
necessary to conduct any such activity, (c) preparing and implementing any plans
or studies for any such activity, (d) obtaining a written notice from a
Governmental Authority with jurisdiction over the Site or an off-Site location
under Environmental Laws that no material additional work is required by such
Governmental Authority, (e) the use, implementation, application, installation,
operation or maintenance of remedial or removal actions on the Site or an
off-Site location, remedial technologies applied to the surface or subsurface
soils, excavation and off-Site treatment or disposal of soils, systems for long
term treatment of surface water or groundwater, engineering controls or
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institutional controls, and (f) any other activities reasonably determined by a
Party to be necessary or appropriate or required under Environmental Laws to
address the presence or Release of Hazardous Substances at the Site or an
off-Site location.
(131) "Replacement Welfare Plans" has the meaning set forth in Section
6.10(e).
(132) "Reportable Environmental Condition" means an Environmental Condition
for which a release notification must be made to the National Response Center
pursuant to 40 C.F.R. section 302.6, as may be amended from time to time.
(133) "Representatives" of a Party means the Party and its Affiliates and
their directors, officers, employees, agents, partners, advisors (including,
without limitation, accountants, counsel, environmental consultants, financial
advisors and other authorized representatives) and parents and other controlling
persons.
(134) "Safeguards Information" means information not otherwise classified
as national security information or restricted data under NRC's regulations
which specifically identifies an NRC licensee's detailed (a) security measures
for the physical protection of Special Nuclear Material or (b) security measures
for the physical protection and location of certain plant equipment vital to the
safety of production or utilization facilities.
(135) "SEC" means the United States Securities and Exchange Commission and
any successor agency thereto.
(136) "Securities Act" means the Securities Act of 1933, as amended.
(137) "Seller" has the meaning set forth in the preamble.
(138) "Seller Benefit Plans" has the meaning set forth in Section 6.10(f).
(139) "Seller's Agreements" means those contracts, agreements, licenses and
leases relating to the ownership, operation and maintenance of the Purchased
Assets that are being assigned to Buyer as part of the Purchased Assets, as more
particularly described in Schedule 4.15(a).
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(141) "Seller Indemnitee" has the meaning set forth in Section 8.1(a).
(142) "Seller's Required Regulatory Approvals" has the meaning set forth in
Section 4.3(b).
(143) "Seller's Savings Plans" has the meaning set forth in Section
6.10(g).
(144) "Site" means the parcels of land included in the Real Property. Any
reference to the Site shall include, by definition, the surface and subsurface
elements, including the soils and groundwater present at the Site, and any
reference to items "at the Site" shall include all items "at, on, in, upon,
over, across, under and within" the Site.
(145) "Source Material" means (a) uranium or thorium; or any combination
thereof, in any physical or chemical form or (b) ores which contain by weight
one-twentieth of one percent (0.05%) or more of (i) uranium, (ii) thorium, or
(iii) any combination thereof. Source Material does not include Special Nuclear
Material.
(146) "Special Nuclear Material" means plutonium, uranium-233, uranium
enriched in the isotope-233 or in the isotope-235, and any other material that
the NRC determines to be "Special Nuclear Material." Special Nuclear Material
also refers to any material artificially enriched by any of the above-listed
materials or isotopes. Special Nuclear Material does not include Source
Material.
(147) "Spent Nuclear Fuel" means fuel that has been withdrawn from a
nuclear reactor following irradiation, and has not been chemically separated
into its constituent elements by reprocessing. Spent Nuclear Fuel includes
Special Nuclear Material, Byproduct Material, Source Material and other
radioactive materials associated with nuclear fuel assemblies.
(148) "Spent Nuclear Fuel Fees" means those fees assessed on electricity
generated at CPS and sold pursuant to the Standard Contract for Disposal of
Spent Nuclear Fuel and/or High Level Waste, as provided in Section 302 of the
Nuclear Waste Policy Act and 10 C.F.R. Part 961, as the same may be amended from
time to time.
(149) "Supplemental Payments" has the meaning set forth in Section 6.12.
(150) "Tangible Personal Property" has the meaning set forth in Section
2.1(c).
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(151) "Tax Basis" means the adjusted tax basis determined for federal
income tax purposes under Code Section 1011(a).
(152) "Tax Return" means any return, report, information return,
declaration, claim for refund or other document (including any schedule or
related or supporting information) required to be supplied to any taxing
authority with respect to Taxes including amendments thereto.
(153) "Taxes" means all taxes, charges, fees, levies, penalties or other
assessments imposed by any federal, state, local, provincial or foreign taxing
authority, including, without limitation, income, excise, real or personal
property, sales, transfer, franchise, payroll, withholding, social security,
gross receipts, license, stamp, occupation, employment or other taxes, including
any interest, penalties or additions attributable thereto.
(154) "Technical Specifications" means the technical specifications
included in the NRC Operating License for CPS in accordance with the
requirements of 10 C.F.R. section 50.36.
(155) "Termination Date" has the meaning set forth in Section 9.1(b).
(156) "Third Party Claim" has the meaning set forth in Section 8.2(a).
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(158) "Transferable Permits" means those Permits and Environmental Permits
identified in Schedule 1.1(156), which may be transferred to Buyer without a
filing with, notice to, consent or approval of any Governmental Authority.
(159) "Transferred Employee Records" means all records related to
Transferred Employees, including, without limitation, the following information:
(a) skill and development training, (b) biographies, (c) seniority histories,
(d) salary and benefit information, (e) Occupational, Safety and Health
Administration reports, (f) active medical restriction forms, (g) fitness for
duty, and (h) disciplinary actions.
(160) "Transferred Employees" has the meaning set forth in Section 6.10(b).
(161) "Transferred Non-Union Employees" has the meaning set forth in
Section 6.10(b).
(162) "Transferred Union Employees" has the meaning set forth in Section
6.10(b).
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(163) "Transition Committee" has the meaning set forth in Section 6.1(b).
(164) "Transmission Assets" has the meaning set forth in Section 2.2(a).
(165) "Trustee" means, as the case may be, prior to the Closing the trustee
of the Decommissioning Funds appointed by Seller pursuant to the Seller's
Decommissioning Trust Agreements or after the Closing to the extent the assets
of the Decommissioning Funds are transferred by Seller pursuant to Section 6.12,
the trustee appointed pursuant to the Post-Closing Decommissioning Trust
Agreement.
(166) "Union Employees" has the meaning set forth in Section 6.10(a).
(167) "Updated Safety Analysis Report" or "USAR" means the report, as
updated, that is required to be maintained for CPS in accordance with the
requirements of 10 C.F.R. section 50.71(e).
(168) "USEPA" means the United States Environmental Protection Agency and
any successor agency thereto.
(169) "WARN Act" means the Federal Worker Adjustment Retraining and
Notification Act of 1988, as amended.
(170) "Year 2000 Compliant," "Year 2000 Qualified," "Year 2000 Assets" and
"Year 2000 Ready" have the meanings set forth in Section 4.21. "Year 2000
Compliance" has a meaning correlative to the foregoing.
1.2 Certain Interpretive 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 term "includes" or
"including" shall mean "including without limitation." 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. With respect to
the Schedules under Articles IV and V of this Agreement (other than Schedules
4.8, 4.10, 4.13, 4.15, 4.16, 4.22, 4.23, 5.3(a) and 5.3(b)), matters fully and
adequately disclosed on one Schedule shall be deemed disclosed for purposes of
any other relevant Schedule under such Articles.
ARTICLE II
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PURCHASE AND SALE
2.1 Transfer of Assets. Upon the terms and subject to the satisfaction of
the conditions contained in this Agreement, at the Closing Seller will sell,
assign, convey, transfer and deliver to Buyer, and Buyer will purchase, assume
and acquire from Seller, free and clear of all Encumbrances (except for and
subject to Permitted Encumbrances), all of Seller's right, title and interest in
and to all of the assets constituting, or used in the ordinary course of
business to operate the Facilities (but excluding assets used only incidentally
in the operation of the Facilities and assets or systems which (i) are
ordinarily stored or located off-Site and (ii) are used to service multiple
facilities of Seller or its Affiliates), including, without limitation, those
assets described below (but excluding the Excluded Assets) (collectively,
"Purchased Assets"):
(a) Except for the Excluded Parcels, the land described on Schedule 4.13(a)
(which land comprises the Site), together with all buildings, facilities and
other improvements thereon, including the Facilities, and all appurtenances
thereto, including, without limitation, all related rights of ingress and egress
(collectively, the "Real Property");
(b) All Spent Nuclear Fuel at the Site and all Inventories;
(c) Except for property used in the ordinary course of business to operate
the Transmission Assets (but excluding property used only incidentally in the
operation of the Transmission Assets), other items on Schedule 2.2(a) and the
Excluded Other Assets, all machinery, mobile or otherwise, equipment (including
computer hardware and software and communications equipment), vehicles, tools,
spare parts, fixtures, furniture and furnishings and other personal property
used in the ordinary course of business to operate the Facilities (but excluding
such items used only incidentally in the operation of the Facilities),
including, without limitation, the items of personal property included in
Schedule 4.13(b) (collectively, "Tangible Personal Property");
(d) Subject to the provisions of Section 6.4(c), all Seller's Agreements
other than those identified on Schedules 2.2(k) or 2.2(m);
(e) All Real Property Agreements other than those identified on Schedule
2.2(k);
(f) All Transferable Permits;
(g) All books, operating records, operating, safety and maintenance
manuals, inspection reports, engineering design plans, documents, blueprints and
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as built plans, specifications, procedures and similar items of Seller, wherever
located, to the extent such items relate to the Facilities and the other
Purchased Assets (and subject to the right of Seller to retain copies of same
for its use) other than general ledger accounting records, minutes of meetings
of the Board of Directors and shareholders of Seller and other records having to
do with the corporate organization of Seller;
(h) All Emission Allowances and Emission Reduction Credits, if any (but
only to the extent necessary to operate the Purchased Assets in the ordinary
course of business);
(i) All unexpired, transferable warranties and guarantees from third
parties with respect to any item of Real Property or personal property
constituting part of the Purchased Assets;
(j) The name "Clinton Power Station" and any derivation thereof;
(k) All drafts, memoranda, reports, information, technology and
specifications to the extent relating to Seller's plans for Year 2000 Compliance
with respect to the Facilities (subject to the right of Seller to retain copies
of same for its use);
(l) Except as set forth in Section 2.2(n) or for the Intellectual Property
described on Schedule 2.2(l), (i) all Intellectual Property owned by Seller and
used in the ordinary course of business to operate the Purchased Assets (or, in
common with Seller, a royalty-free, non-exclusive license to use such
Intellectual Property at the Site), and (ii) to the extent transferrable, a
non-assignable (except to Affiliates), royalty-free, non-exclusive site license
to use the Intellectual Property described in Schedule 2.1(l);
(m) The substation equipment set forth in Schedule A to the Interconnection
Agreement and designated therein as being transferred to Buyer;
(n) The assets comprising the Decommissioning Funds together with all
related accounting and other records (subject to the right of Seller to retain
copies of same for its use), including, without limitation, records necessary to
determine the Tax Basis of each asset in the Decommissioning Funds;
(o) All rights in and to any causes of action against third parties
(including indemnification and contribution) relating to any Real Property or
personal property, Permits, Environmental Permits, Taxes, Real Property
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Agreements or Seller's Agreements, if any, including any claims for refunds,
prepayments, offsets, recoupment, insurance proceeds, condemnation awards,
judgments and the like, whether received as payment or credit against future
liabilities, relating specifically to the Facilities or the Site, to the extent
such rights relate to the Assumed Liabilities and Obligations arising prior to
the Closing Date;
(p) The right to proceeds from insurance policies to the extent covering
Assumed Liabilities and Obligations; and
(q) Any claims of Seller related to the Department of Energy's defaults
under the Standard Contract for Disposal of Spent Nuclear Fuel and/or High Level
Waste other than any claim relating to Seller's investment in the Private Fuel
Storage L.L.C. facility in Utah.
2.2 Excluded Assets. Notwithstanding anything to the contrary in this
Agreement, nothing in this Agreement shall be construed as conferring on Buyer,
and Buyer is not acquiring, any right, title or interest in or to the following
specific assets which are associated with the Purchased Assets, but which are
hereby specifically excluded from the sale and the definition of Purchased
Assets herein (the "Excluded Assets"):
(a) Except as expressly identified in Schedule 4.13(b) or Schedule A to the
Interconnection Agreement, the electrical transmission or distribution
facilities (as opposed to generation facilities), the gas transmission and
distribution facilities (and all communication facilities related thereto) of
Seller or any of its Affiliates located at the Site or forming part of the
Facilities (whether or not regarded as a "transmission" or "generation" asset
for regulatory or accounting purposes), including all switchyard facilities,
substation facilities and support equipment, as well as all permits, contracts
and warranties, to the extent they relate to such transmission and distribution
assets (collectively, the "Transmission Assets"), and those certain assets,
facilities and agreements identified in Schedule 2.2(a);
(b) Certain switches and meters in the Facilities, gas facilities, revenue
meters and remote testing units, drainage pipes and systems, as identified in
the special warranty deed or the Easement Agreement;
(c) Certificates of deposit, shares of stock, securities, bonds,
debentures, evidences of indebtedness, and interests in joint ventures,
partnerships, limited liability companies and other entities (including, without
limitation, Seller's investment in the Private Fuel Storage L.L.C. facility in
Utah), except the assets comprising the Decommissioning Funds;
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(d) All cash, cash equivalents, bank deposits, accounts and notes
receivable (trade or otherwise), and any income, sales, payroll or other Tax
receivables, except the assets comprising the Decommissioning Funds;
(e) All rights to distributions, credits (including shutdown credits),
premium refunds or premium returns based upon activities prior to the Closing
Date under any insurance policies of Seller, including, without limitation, all
rights to (i) Seller's member insurance accounts under its Nuclear Insurance
Policies and (ii) Seller's future distributions, credits, refunds or returns
from its Nuclear Insurance Policies;
(f) All claims for refunds of Department of Energy Decontamination and
Decommissioning Fees paid by Seller prior to the Closing;
(g) All tariffs, agreements and arrangements to which Seller is a party for
the purchase or sale of electric capacity and/or energy or for the purchase of
transmission or ancillary services;
(h) Except as provided in Section 2.1(h), (i), (o), (p) and (q), the rights
of Seller in and to any causes of action against third parties (including
indemnification and contribution) relating to any Real Property or personal
property, Permits, Environmental Permits, Taxes, Real Property Agreements or
Seller's Agreements, including without limitation, any claim for refunds,
prepayments, offsets, recoupment, insurance proceeds, condemnation awards,
judgments and the like, whether received as payment or credit against future
liabilities, including, without limitation, any claim relating to Seller's
investment in the Private Fuel Storage L.L.C. facility in Utah;
(i) Any rights that accrue or will accrue to Seller under this Agreement,
the Ancillary Agreements or the Interim Agreement, the Management Agreement or
the Leased Employee Agreement;
(j) Any and all of Seller's rights in any contract representing an
intercompany transaction between Seller and an Affiliate of Seller, whether or
not such transaction relates to the provision of goods and services, payment
arrangements, intercompany charges or balances, or the like;
(k) The Real Property Agreements set forth in Schedule 2.2(k);
(l) The real property described in Schedule 2.2(l) (the "Excluded
Parcels");
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(m) The personal property and other assets of Seller set forth in Schedule
2.2(m) (the "Excluded Other Assets");
(n) The rights of Seller and its Affiliates to the name "Illinova" or
"Illinois Power," or any related or similar trade names, trademarks, service
marks, corporate names or logos, or any part, derivative or combination thereof;
(o) Subject to Section 2.1(h), all Emission Allowances and Emission
Reduction Credits, if any; and
(p) Subject to Section 2.1(p), all insurance policies of Seller related to
the Purchased Assets, including, without limitation, all Nuclear Insurance
Policies.
2.3 Assumed Liabilities and Obligations. On the Closing Date, Buyer shall
deliver to Seller the Assignment and Assumption Agreement pursuant to which
Buyer shall assume and agree to discharge in accordance with their respective
terms, all of the following liabilities and obligations of Seller (collectively,
"Assumed Liabilities and Obligations"):
(a) All liabilities and obligations of Seller arising (or related to
periods) on or after the Closing Date under Seller's Agreements (other than
those identified in Schedule 2.2(m)), the Real Property Agreements (other than
those identified in Schedule 2.2(k)) and the Transferable Permits in accordance
with the terms thereof, including, without limitation, (i) the contracts,
licenses, agreements and personal property leases entered into by Seller with
respect to the Purchased Assets and disclosed on the relevant schedule and (ii)
the contracts, licenses, agreements and personal property leases entered into by
Seller with respect to the Purchased Assets after the date hereof consistent
with the terms of this Agreement, except in each case to the extent such
liabilities and obligations, but for a breach or default by Seller or a related
waiver or extension, would have been paid, performed or otherwise discharged on
or prior to the Closing Date or to the extent the same arise out of any such
breach or default or related waiver or extension or out of any event which after
the giving of notice would constitute a default by Seller;
(b) Except as provided in Sections 2.4(d), 2.4(g), 2.4(q) and 2.4(r) and
except for the Remediation work specifically identified and required by Section
6.17 to be performed by or on behalf of Seller, any liabilities, claims
(including, without limitation, third party claims), obligations or
responsibilities under or related to applicable Environmental Laws, Nuclear Laws
or Environmental Permits with respect to the ownership or operation of the
Purchased Assets, whether such liability, obligation or responsibility is known
or unknown, contingent or accrued, and whether occurring prior to, on or after
the Closing Date;
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(c) All liabilities and obligations associated with the Purchased Assets in
respect of Taxes for which Buyer is liable pursuant to Section 3.5 or 6.8(a)
hereof;
(d) All liabilities and obligations with respect to the Transferred
Employees on and after the Closing Date except for those retained by Seller as
provided in Section 6.10;
(e) With respect to the Purchased Assets, any Tax that may be imposed by
any federal, state or local government on the ownership, sale, operation or use
of the Purchased Assets on or after the Closing Date, except for any Income
Taxes attributable to income received by Seller;
(f) All liabilities and obligations of Seller for Decommissioning of the
Facilities, except for Seller's obligations to make the payments specified in
Section 6.12;
(g) All liabilities and obligations of Seller to dispose of Nuclear
Material located in, on or under the Site on or after the Closing Date;
(h) Subject to Section 6.10, all liabilities and obligations relating to
Buyer's hiring, discrimination in hiring, or unfair labor practices with respect
to the employees of CPS;
(i) All liabilities and obligations of Seller set forth on Schedule 2.3(i);
and
(j) All liabilities or obligations for (i) any insurance premiums
(including deferred premiums or retrospective premium adjustments) under the
nuclear liability and property damage insurance policies which Buyer is required
to maintain pursuant to Section 6.15 hereof, and (ii) any retrospective premium
adjustments under the Price-Anderson Act's secondary layer of financial
protection, in either case arising from events occurring on or after the Closing
Date.
2.4 Excluded Liabilities. Notwithstanding anything to the contrary in this
Agreement, nothing in this Agreement shall be construed to impose on Buyer, and
Buyer shall not assume or be obligated to pay, perform or otherwise discharge
the following liabilities or obligations (the "Excluded Liabilities"):
(a) Any liabilities or obligations of Seller in respect of any Excluded
Assets or other assets of Seller which are not Purchased Assets;
(b) Any liabilities or obligations in respect of Taxes attributable to the
ownership, operation or use of Purchased Assets for taxable periods, or portions
thereof, ending before the Closing Date, except for Taxes for which Buyer is
liable pursuant to Sections 3.5 or 6.8(a) hereof;
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(c) Any liabilities or obligations of Seller accruing under any of Seller's
Agreements prior to the Closing Date;
(d) All liabilities or obligations of Seller arising under or relating to
Nuclear Laws or relating to any claim by third parties based on common law, in
either case arising as a result of the off-Site disposal, treatment, storage,
transportation or recycling of Low Level Waste prior to the Closing Date,
including any and all asserted or unasserted liabilities or obligations to third
parties (including employees) for property damage, personal injury or tort, or
similar causes of action arising with respect thereto;
(e) Any fines, penalties or costs imposed by a Governmental Authority with
respect to the Purchased Assets resulting from (i) an investigation, proceeding,
request for information or inspection before or by a Governmental Authority
relating to actions or omissions of Seller prior to the Closing Date, except for
liabilities and obligations which have been assumed by Buyer under Section
2.3(b), or (ii) criminal acts, willful misconduct or gross negligence of Seller;
(f) Any payment obligations of Seller for goods delivered or services
rendered prior to the Closing Date, including, without limitation, rental or
lease payments pursuant to the Real Property Agreements and any leases relating
to Tangible Personal Property;
(g) Any liability, obligation or responsibility under or related to
Environmental Laws or the common law, whether such liability, obligation or
responsibility is known or unknown, contingent or accrued (whether or not
arising or made manifest before the Closing Date or on or after the Closing
Date), arising as a result of, in connection with or allegedly caused by, the
off-Site disposal, treatment, storage, transportation or recycling of Hazardous
Substances (including any discharge or Release in connection therewith) prior to
the Closing Date in connection with the ownership or operation of the Purchased
Assets;
(h) Except to the extent caused by Buyer or any of its Affiliates, any
liabilities, obligations or responsibilities to the extent relating to (i) the
property, equipment or machinery within the switchyard for which Seller will
retain an Easement, (ii) the transmission lines delineated in the Easements, or
(iii) Seller's operations on, or usage of, the Easements, including, without
limitation, liabilities, obligations or responsibilities arising as a result of
or in connection with (A) any violation or alleged violation of Environmental
Law and (B) loss of life, injury to persons or property or damage to natural
resources;
(i) Except as provided in Section 2.3(h), any liabilities or obligations
relating to personal injury or tort, discrimination, wrongful discharge, unfair
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labor practice or similar claim or cause of action filed with or pending before
any court or administrative agency on the Closing Date with respect to the
Purchased Assets or the Transferred Employees or where the material facts of
such claim or cause of action occurred prior to the Closing Date;
(j) Except as provided in Section 2.3(b) or 2.3(i) any asserted or
unasserted liabilities or obligations to third parties (including employees) for
personal injury or tort, or similar causes of action arising out of the
ownership or operation of the Purchased Assets prior to the Closing Date;
(k) Subject to Section 6.10, any liabilities or obligations relating to any
Benefit Plan maintained by Seller, or any employee benefit plan as defined in
Section 3(3) of ERISA and maintained by any trade or business (whether or not
incorporated) which is or ever has been under common control, or which is or
ever has been treated as a single employer, with Seller under Section 414 (b) ,
(c) , (m) or (o) of the Code ("ERISA Affiliate") or to which Seller or any ERISA
Affiliate contributed (the "ERISA Affiliate Plans"), including any
multi-employer plan contributed to at any time by Seller or any ERISA Affiliate,
or any multi-employer plan to which Seller or any ERISA Affiliate is or was
obligated at any time to contribute, including, without limitation, any such
liability (i) relating to benefits payable under any Benefit Plans, (ii)
relating to the PBGC under Title IV of ERISA, (iii) relating to a multi-employer
plan, (iv) with respect to noncompliance with the notice and benefit
continuation requirements of COBRA, (v) with respect to any noncompliance with
ERISA or any other applicable laws, or (vi) with respect to any suit, proceeding
or claim which is brought against Buyer, any Benefit Plan, ERISA Affiliate Plan,
or any fiduciary or former fiduciary of any such Benefit Plan or ERISA Affiliate
Plan and the basis of which is related to actions of Seller or its ERISA
Affiliates or which is otherwise related to the ownership or operation of the
Purchased Assets prior to the Closing Date;
(l) Subject to Section 6.10 and Section 2.3(h), any liabilities or
obligations relating to the employment or termination of employment, including
discrimination, wrongful discharge, unfair labor practices, or constructive
termination by Seller of any individual, attributable to any actions or
inactions by Seller prior to the Closing Date other than such actions or
inactions taken at the written request or with the written consent of Buyer;
(m) Subject to Section 6.10, any obligations for wages, overtime,
employment Taxes, severance pay, transition payments in respect of compensation
or similar benefits or similar claims or causes of action arising or related to
facts or performance occurring prior to the Closing Date under any term or
provision of any contract, plan, instrument or agreement relating to any of the
Purchased Assets;
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(n) Any liability of Seller arising out of a breach by Seller or any of its
Affiliates of any of its obligations under this Agreement or the Ancillary
Agreements;
(o) Any obligation of Seller to indemnify a Buyer Indemnitee under this
Agreement;
(p) Any liabilities relating to the following bonds (collectively, the
"Pollution Control Bonds") and any agreements relating thereto: (i) $84,710,000
aggregate principal amount of Illinois Development Finance Authority 7 3/8%
Pollution Control Refunding Revenue Bonds, 1991 Series A (Illinois Power Company
Project), (ii) $84,150,000 aggregate principal amount of Illinois Development
Finance Authority 7.40% Pollution Control Refunding Revenue Bonds, 1994 Series B
(Illinois Power Company Project), (iii) $51,770,000 aggregate principal amount
of Illinois Development Finance Authority Adjustable Rate Pollution Control
Revenue Refunding Bonds, 1993 Series A (Illinois Power Company Project), (iv)
$30,000,000 aggregate principal amount of Illinois Development Finance Authority
Adjustable Rate Pollution Control Revenue Refunding Bonds, 1993 Series B
(Illinois Power Company Project), (v) $30,000,000 aggregate principal amount of
Illinois Development Finance Authority Adjustable Rate Pollution Control Revenue
Refunding Bonds, 1993 Series C (Illinois Power Company Project), (vi)
$70,000,000 aggregate principal amount of Illinois Development Finance Authority
Adjustable Rate Pollution Control Revenue Refunding Bonds, 1997 Series A
(Illinois Power Company Project), (vii) $45,000,000 aggregate principal amount
of Illinois Development Finance Authority Adjustable Rate Pollution Control
Revenue Refunding Bonds, 1997 Series B (Illinois Power Company Project), (viii)
$35,000,000 aggregate principal amount of Illinois Development Finance Authority
Adjustable Rate Pollution Control Revenue Refunding Bonds, 1997 Series C
(Illinois Power Company Project), (ix) $18,700,000 aggregate principal amount of
Illinois Development Finance Authority 5.40% Pollution Control Revenue Refunding
Bonds, 1998 Series A (Illinois Power Company Project), (x) $33,755,000 aggregate
principal amount of Illinois Development Finance Authority 5.40% Pollution
Control Revenue Refunding Bonds, 1998 Series B (Illinois Power Company Project),
(xi) $25,000,000 aggregate principal amount of Illinois Development Finance
Authority Pollution Control Revenue Bonds, 1987 Series B (Illinois Power Company
Project) (Adjustable Convertible Exchange Securities), (xii) $25,000,000
aggregate principal amount of Illinois Development Finance Authority Pollution
Control Revenue Bonds, 1987 Series C (Illinois Power Company Project)
(Adjustable Convertible Exchange Securities), (xiii) $25,000,000 aggregate
principal amount of Illinois Development Finance Authority Pollution Control
Revenue Bonds, 1987 Series D (Illinois Power Company Project) (Adjustable
Convertible Exchange Securities) and (xiv) $35,615,000 aggregate principal
amount of Illinois Development Finance Authority 5.70% Pollution Control
Refunding Revenue Bonds, 1994 Series A (Illinois Power Company Project);
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(q) Any Environmental Claim related to or any other liability, obligation
or responsibility attributable to any Environmental Condition at the
Construction Waste Landfill, including any Remediation required by an order of a
Governmental Authority under Environmental Law; provided, however that Seller
shall not have any liability, obligation or responsibility with respect to the
Construction Waste Landfill to the extent arising from or attributable to the
acts of Buyer or its employees, agents or contractors after the Closing Date,
other than for acts required by an order of a Governmental Authority under
Environmental Law;
(r) Subject to Section 6.17, any Remediation work identified on Schedule
6.17;
(s) All liabilities or obligations for (i) any insurance premiums
(including deferred premiums or retrospective premium adjustments) under the
Nuclear Insurance Policies, and (ii) any retrospective premium adjustments under
the Price-Anderson Act's secondary layer of financial protection, in either case
arising from events occurring prior to the Closing Date; and
(t) Any other liability or obligation of Seller not specifically assumed
hereunder.
2.5 Control of Litigation. The Parties agree and acknowledge that Seller
shall be entitled exclusively to control, defend and settle any litigation,
administrative or regulatory proceeding, and any investigation or other
activities arising out of or related to any Excluded Liabilities, and Buyer
agrees to cooperate with Seller (at Seller's expense) in connection therewith,
including, without limitation, providing access to any relevant real or personal
property and staff transferred to Buyer pursuant to this Agreement, so long as
such defense, settlement or other activities do not unreasonably interfere with
Buyer's operation of the Facilities.
ARTICLE III
THE CLOSING
3.1 Closing. Upon the terms and subject to the satisfaction of the
conditions contained in Article VII of this Agreement, the sale, assignment,
conveyance, transfer and delivery of the Purchased Assets to Buyer, the payment
of the Cash Purchase Price to Seller, the assumption of the Assumed Liabilities
and Obligations by Buyer, and the consummation of the other respective
obligations of the Parties contemplated by this Agreement shall take place at a
closing (the "Closing") (except for obligations specifically contemplated hereby
to be completed after the Closing), to be held at the offices of Morgan, Lewis &
Bockius LLP, 1701 Market Street, Philadelphia, Pennsylvania, at 10:00 a.m. local
time, or another mutually acceptable time and location, on the date that is
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fifteen (15) Business Days following the date on which the last of the
conditions precedent to Closing set forth in Article VII of this Agreement have
been either satisfied or waived by the Party for whose benefit such conditions
precedent exist but in any event not after the Termination Date, unless the
Parties mutually agree on another date. The date of Closing is hereinafter
called the "Closing Date." The Closing shall be effective for all purposes as of
12:01 a.m. on the Closing Date.
3.2 Purchase Price; Payment. Upon the terms and subject to the satisfaction
of the conditions contained in this Agreement, in consideration of Seller's
sale, assignment, conveyance, transfer and delivery of the Purchased Assets to
Buyer, at the Closing Buyer will (a) pay or cause to be paid to Seller an
aggregate amount of Twenty Million Dollars ($20,000,000), plus or minus any
adjustments pursuant to the provisions of Section 3.3 (as so adjusted, the "Cash
Purchase Price"), by wire transfer of immediately available funds denominated in
U.S. dollars or by such other means as are agreed upon by Seller and Buyer, and
(b) assume the Assumed Liabilities and Obligations specified in Section 2.3 (the
sum of the Cash Purchase Price and the Assumed Liabilities and Obligations is
referred to herein collectively as the "Purchase Price").
3.3 Adjustment to Cash Purchase Price. (a) Subject to Section 3.3(b), at
the Closing, the Cash Purchase Price shall be adjusted, without duplication, to
account for the items set forth in this Section 3.3(a):
(i) The Cash Purchase Price shall be adjusted to account for the items
prorated as of the Closing Date pursuant to Section 3.5.
(ii) The Cash Purchase Price shall be increased by the amount expended by
Seller between the date hereof and the Closing Date for capital additions to or
replacements of property, plant and equipment included in the Purchased Assets
and other expenditures or repairs on property, plant and equipment included in
the Purchased Assets that are capitalized by Seller in accordance with its
normal accounting policies to the extent that Seller has not been reimbursed by
Buyer prior to the Closing for such expenditures by Seller; provided, that such
expenditures (A) are not described in the capital budgets listed in Schedule
6.1, (B) are not required (1) for the customary operation and maintenance of
CPS, (2) to replace equipment which has failed for any other reason, or (3) to
comply with applicable laws, rules and regulations, and (C) Buyer has
specifically requested or approved such expenditures in writing. Nothing in this
paragraph should be construed to limit Seller's rights and obligations to make
all capital expenditures necessary to comply with NRC licenses and other
Permits.
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(iii) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
(b) At least thirty (30) calendar days prior to the Closing Date, Seller
shall prepare and deliver to Buyer an estimated closing statement (the
"Estimated Closing Statement") that shall set forth Seller's best estimate of
all estimated adjustments to the Cash Purchase Price required by Section 3.3(a)
(the "Estimated Adjustment"). Within ten (10) calendar days after the delivery
of the Estimated Closing Statement by Seller to Buyer, Buyer may object in good
faith to the Estimated Adjustment in writing. If Buyer objects to the Estimated
Adjustment within such ten (10) day period, the Parties shall attempt to resolve
their differences by negotiation. If the Parties are unable to do so prior to
the Closing Date (or if Buyer does not object to the Estimated Adjustment), the
Cash Purchase Price shall be adjusted (the "Closing Adjustment") for the Closing
by the amount of the Estimated Adjustment not in dispute. The disputed portion
shall be resolved in accordance with the provisions of Section 3.3(c) and paid
as part of any Post-Closing Adjustment to the extent required by Section 3.3(c).
(c) Within sixty (60) days after the Closing Date, Seller shall prepare and
deliver to Buyer a final closing statement (the "Post-Closing Statement") that
shall set forth all adjustments to the Cash Purchase Price required by Section
3.3(a) not previously effected by the Closing Adjustment (the "Proposed
Post-Closing Adjustment") and all work papers detailing such adjustments. The
Post-Closing Statement shall be prepared using the same accounting principles,
policies and methods as Seller has historically used in connection with the
calculation of the items reflected on such Post-Closing Statement. Within thirty
(30) days after the delivery of the Post-Closing Statement by Seller to Buyer,
Buyer may object to the Proposed Post-Closing Adjustment in writing, stating in
reasonable detail its objections thereto. Seller agrees to cooperate with Buyer
to provide Buyer with the information used to prepare the Post-Closing Statement
and information relating thereto. If Buyer objects to the Proposed Post-Closing
Adjustment, the Parties shall attempt to resolve such dispute by negotiation. If
the Parties are unable to resolve such dispute within thirty (30) days after any
objection by Buyer, the Parties shall appoint the Independent Accounting Firm,
which shall, at Seller's and Buyer's joint expense, review the Proposed
Post-Closing Adjustment and determine the appropriate adjustment to the Cash
Purchase Price, if any, within thirty (30) days after such appointment. The
Parties agree to cooperate with the Independent Accounting Firm and provide it
with such information as it reasonably requests to enable it to make such
determination. The finding of such Independent Accounting Firm shall be binding
on the Parties hereto. Upon determination of the appropriate adjustment (the
"Post-Closing Adjustment") by agreement of the Parties or by binding
determination of the Independent Accounting Firm, the Party owing the difference
shall deliver such amount to the other Party no later than two (2) Business Days
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after such determination, in immediately available funds or in any other manner
as reasonably requested by the payee.
3.4 Allocation of Purchase Price. Buyer and Seller shall agree upon an
allocation among the Purchased Assets of the Purchase Price consistent with
Section 1060 of the Code and the Treasury Regulations thereunder within sixty
(60) days after the Closing Date, except to the extent any such allocation is
required for the calculation of transfer taxes to be paid at Closing in which
case Buyer and Seller shall agree upon an allocation for Purchased Assets
subject to such transfer taxes at least ten (10) days prior to the Closing Date.
If Buyer and Seller cannot agree on any such allocation, such dispute shall be
resolved in accordance with Section 6.8(d) of this Agreement. The allocation
required by this Section 3.4 shall be revised based on the Post-Closing
Adjustment within one hundred and eighty (180) days after the Closing Date. Each
of Buyer and Seller agrees to file IRS Form 8594, and all federal, state, local
and foreign Tax Returns, in accordance with any such agreed allocation as
adjusted as provided herein. Each of Buyer and Seller shall report the
transactions contemplated by this Agreement for federal Tax and all other Tax
purposes in a manner consistent with any such allocation determined pursuant to
this Section 3.4. Each of Buyer and Seller agrees to provide the other promptly
with any information required to complete Form 8594. Buyer and Seller shall
notify and provide the other with reasonable assistance in the event of an
examination, audit or other proceeding regarding any allocation of the Purchase
Price determined pursuant to this Section 3.4. Buyer and Seller shall not take
any position in any Tax Return, Tax proceeding or audit that is inconsistent
with such allocation. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
3.5 Prorations. (a) Buyer and Seller agree that all of the items normally
prorated, including those listed below (but not including Income Taxes),
relating to the business and operation of the Purchased Assets shall be prorated
as of the Closing Date, with Seller liable to the extent such items relate to
any time period prior to the Closing Date, and Buyer liable to the extent such
items relate to periods commencing with the Closing Date (measured in the same
units used to compute the item in question, otherwise measured by calendar
days):
(i) Personal property, real estate and occupancy Taxes, assessments and
other charges, if any, on or with respect to the business and operation of the
Purchased Assets;
(ii) Rent, Taxes and all other items (including prepaid services or goods
not included in Inventory) payable by or to Seller under any of Seller's
Agreements assigned to Buyer pursuant to Section 2.1(d) hereof;
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(iii) Any permit, license, registration, compliance assurance fees or other
fees with respect to any Transferable Permit;
(iv) Sewer rents and charges for water, telephone, electricity and other
utilities;
(v) Rent and Taxes and other items payable by Seller under the Real
Property Agreements assigned to Buyer; and
(vi) Dues and fees payable to industry organizations under Seller's
Agreements assumed by Buyer pursuant to Section 2.1(d) hereof.
(b) In connection with the prorations referred to in (a) above, in the
event that actual figures are not available at the Closing Date, the proration
shall be based upon the actual Taxes or other amounts accrued through the
Closing Date or paid for the most recent year (or other appropriate period) for
which actual Taxes or other amounts paid are available. Such prorated Taxes or
other amounts shall be re-prorated and paid to the appropriate Party within
sixty (60) days of the date that the previously unavailable actual figures
become available. The prorations shall be based on the number of days in a year
or other appropriate period (i) before the Closing Date and (ii) including and
after the Closing Date. Seller and Buyer agree to furnish each other with such
documents and other records as may be reasonably requested in order to confirm
all adjustment and proration calculations made pursuant to this Section 3.5.
3.6 Deliveries by Seller. At the Closing, Seller will deliver, or cause to
be delivered, the following to Buyer:
(a) The Bill of Sale, duly executed by Seller;
(b) Copies of any and all governmental and other third party consents,
waivers or approvals obtained by Seller with respect to the transfer of the
Purchased Assets, or the consummation of the transactions contemplated by this
Agreement;
(c) The opinion of counsel, officer's certificate and other items
contemplated by Section 7.1;
(d) One or more special warranty deeds conveying the Real Property to
Buyer, substantially in the form of Exhibit I hereto, duly executed and
acknowledged by Seller in recordable form, and any other customary certificates
or other documents reasonably required by the title company;
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(e) All Ancillary Agreements, duly executed by Seller;
(f) A FIRPTA Affidavit, duly executed by Seller;
(g) Copies, certified by the Secretary or Assistant Secretary of Seller, of
corporate resolutions authorizing the execution and delivery of this Agreement
and all of the agreements and instruments to be executed and delivered by Seller
in connection herewith, and the consummation of the transactions contemplated
hereby;
(h) A certificate of the Secretary or Assistant Secretary of Seller
identifying the name and title and bearing the signatures of the officers of
Seller authorized to execute and deliver this Agreement and the other agreements
and instruments to be executed and delivered by Seller in connection herewith;
(i) A certificate of good standing with respect to Seller (dated within
three (3) Business Days of the Closing Date), issued by the Secretary of State
of the State of Illinois;
(j) To the extent available, originals of the IBEW Collective Bargaining
Agreements, all Seller's Agreements, Real Property Agreements and Transferable
Permits to be transferred to Buyer hereunder, and, if not available, true and
correct copies thereof, together with any required notices to and consents by
other Persons which are parties to such Seller's Agreement, Real Property
Agreements and Transferable Permits;
(k) The assets of the Decommissioning Funds to be transferred pursuant to
Section 6.12 shall be delivered to the trustee under the Post-Closing
Decommissioning Trust Agreement;
(l) All such other instruments of assignment, transfer or conveyance as
shall, in the reasonable opinion of Buyer and its counsel, be necessary or
desirable to transfer to Buyer the Purchased Assets, in accordance with this
Agreement and where necessary or desirable in recordable form; and
(m) Such other agreements, consents, documents, instruments and writings as
are required to be delivered by Seller at or prior to the Closing Date pursuant
to this Agreement or otherwise reasonably required in connection herewith.
3.7 Deliveries by Buyer. At the Closing, Buyer will deliver, or cause to be
delivered, the following to Seller:
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(a) The Cash Purchase Price, as adjusted pursuant to Section 3.3;
(b) The opinions of counsel, officer's certificates and other items
contemplated by Section 7.2;
(c) All Ancillary Agreements, duly executed by Buyer;
(d) Copies, certified by the Secretary or Assistant Secretary of Buyer, of
resolutions authorizing the execution and delivery of this Agreement, and all of
the agreements and instruments to be executed and delivered by Buyer in
connection herewith, and the consummation of the transactions contemplated
hereby;
(e) A certificate of the Secretary or Assistant Secretary of Buyer
identifying the name and title and bearing the signatures of the officers of
Buyer authorized to execute and deliver this Agreement, and the other agreements
to be executed and delivered by Buyer in connection herewith;
(f) A certificate of good standing with respect to Buyer (dated within
three (3) Business Days of the Closing Date), issued by the Secretary of State
of the State of Delaware;
(g) All such other instruments of assumption as shall, in the reasonable
opinion of Seller and its counsel, be necessary for Buyer to assume the Assumed
Liabilities and Obligations in accordance with this Agreement and where
necessary or desirable in recordable form;
(h) Copies of any and all governmental and other third party consents,
waivers or approvals obtained by Buyer with respect to the transfer of the
Purchased Assets, or the consummation of the transactions contemplated by this
Agreement;
(i) Letters of assurance from PECO and British Energy plc in substantially
the form of Exhibits L and M, respectively; and
(j) Such other agreements, documents, instruments and writings as are
required to be delivered by Buyer at or prior to the Closing Date pursuant to
this Agreement or otherwise reasonably required in connection herewith.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
4.1 Organization; Qualification. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Illinois
and has all requisite corporate power and authority to own, lease, and operate
its properties and to carry on its business as is now being conducted. Seller
has heretofore delivered to Buyer complete and correct copies of its Articles of
Incorporation and Bylaws as currently in effect.
4.2 Authority. Seller has full corporate power and authority to execute and
deliver this Agreement and the Ancillary Agreements to which it is a party and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and the Ancillary Agreements to which it is a
party and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary corporate action required
on the part of Seller and no other corporate proceedings on the part of Seller
are necessary to authorize this Agreement and the Ancillary Agreements to which
it is a party or to consummate the transactions contemplated hereby and thereby.
This Agreement has been duly and validly executed and delivered by Seller, and
assuming that this Agreement constitutes a valid and binding agreement of Buyer,
and subject to the receipt of Seller's Required Regulatory Approvals,
constitutes the legal, valid and binding agreement of Seller, enforceable
against Seller in accordance with its terms , except that such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting or relating to the
enforcement of creditors rights generally or general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or in
equity).
4.3 Consents and Approvals; No Violation.
(a) Except as set forth in Schedule 4.3(a), and subject to the receipt of
Seller's Required Regulatory Approvals, neither the execution and delivery by
Seller of this Agreement or the Ancillary Agreements to which Seller is a party
nor the consummation of the transactions contemplated hereby or thereby will (i)
conflict with or result in the breach or violation of any provision of the
Articles of Incorporation or Bylaws of Seller, (ii) result in a default (or give
rise to any right of termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which Seller is a party or by
which Seller or any of the Purchased Assets are bound, except for such defaults
(or rights of termination, cancellation or acceleration) as to which requisite
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waivers or consents have been obtained or which would not, individually or in
the aggregate, create a Material Adverse Effect, or (iii) constitute violations
of any order, writ, injunction, decree, statute, rule or regulation applicable
to Seller, or any of its assets, except where such violations, individually or
in the aggregate, would not create a Material Adverse Effect.
(b) Except as set forth in Schedule 4.3(b) (the filings and approvals
referred to in Schedule 4.3(b) are collectively referred to as the "Seller's
Required Regulatory Approvals"), no declaration, filing or registration with, or
notice to, or authorization, consent or approval of any Governmental Authority
is necessary for the consummation by Seller of the transactions contemplated
hereby, other than (i) such declarations, filings, registrations, notices,
authorizations, consents or approvals which, if not obtained or made, will not,
individually or in the aggregate, create a Material Adverse Effect or (ii) such
declarations, filings, registrations, notices, authorizations, consents or
approvals which become applicable to Seller as a result of the specific
regulatory status of Buyer (or any of its Affiliates) or the result of any other
facts that specifically relate to the business or activities in which Buyer (or
any of its Affiliates) is or proposes to be engaged.
4.4 Financial Statements; Reports. Except as set forth in Schedule 4.4,
since January 1, 1996, Seller has filed or caused to be filed with the SEC, the
applicable state or local utility commissions or regulatory bodies, the NRC and
the FERC, as the case may be, all material forms, statements, reports and
documents (including all exhibits, amendments and supplements thereto) required
to be filed by Seller with respect to the Purchased Assets or the operation
thereof under each of the Securities Act, the Exchange Act, the applicable state
public utility laws, the Federal Power Act, the Holding Company Act, the Atomic
Energy Act, the Energy Reorganization Act and the Price-Anderson Act and the
respective rules and regulations thereunder, all of which complied in all
material respects with all applicable requirements of the appropriate act and
the rules and regulations thereunder in effect on the date each such report was
filed, and, to Seller's Knowledge, there were no material misstatements or
omissions relating to the Purchased Assets as of the date of such filings in any
such report; provided however, that Seller shall not be deemed to be making any
representation or warranty to Buyer hereunder concerning the financial
statements of Seller contained in any such reports.
4.5 Undisclosed Liabilities. Except as set forth in Schedule 4.5, to
Seller's Knowledge, the Purchased Assets are not subject to any material
liability or obligation (whether absolute, accrued, contingent or otherwise)
required to be accrued or reserved against in Seller's financial statements as
of the most recent fiscal quarter in accordance with generally accepted
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accounting principles consistently applied and that was not so accrued or
reserved against in Seller's financial statements for such fiscal quarter.
4.6 Absence of Certain Changes or Events. Since January 1, 1999, except as
set forth in Schedule 4.6, there has not been (a) any Material Adverse Effect,
or (b) any damage, destruction or casualty loss, whether or not covered by
insurance, which, individually or in the aggregate, created a Material Adverse
Effect.
4.7 Title and Related Matters. Except for Permitted Encumbrances, to
Seller's Knowledge, Seller has good and marketable title, insurable at regular
rates by a nationally recognized title insurance company, to the Real Property
to be conveyed by it hereunder free and clear of all Encumbrances. The Real
Property constitutes all of the real property necessary to operate the
Facilities as currently operated. Except for Permitted Encumbrances, to Seller's
Knowledge, Seller has good and valid title to each of the Purchased Assets not
constituting Real Property free and clear of all Encumbrances.
4.8 Real Property Agreements. Schedule 4.8 lists, as of the date of this
Agreement, all real property leases, easements, licenses and other rights in
real property (collectively, the "Real Property Agreements") to which Seller is
a party and which (a) are to be transferred and assigned to Buyer on the Closing
Date, (b) affect all or any part of any Real Property, and (c) (i) provide for
annual payments of more than $100,000 or (ii) are material to the ownership or
operation of the Purchased Assets. Except as set forth in Schedule 4.8, all such
Real Property Agreements are valid, binding and enforceable in accordance with
their terms, and are in full force and effect; there are no existing material
defaults by Seller or, to Seller's Knowledge, any other party thereunder; and no
event has occurred which (whether with or without notice, lapse of time or both)
would constitute a material default by Seller or, to Seller's Knowledge, any
other party thereunder.
4.9 Insurance. All material policies of fire, liability, property damage,
worker's compensation and other forms of insurance owned or held by Seller and
insuring the Purchased Assets are listed in Schedule 4.9 along with the amount
of the coverage, the type of insurance, and the policy renewal date. Except as
set forth in Schedule 4.9, to Seller's Knowledge, all of such policies of fire,
liability, worker's compensation and other forms of insurance owned or held by
Seller and insuring the Purchased Assets are in full force and effect, all
premiums with respect thereto covering all periods up to and including the date
as of which this representation is being made have been paid (other than
retrospective premiums which may be payable with respect to nuclear liability
and property insurance policies), and no notice of cancellation or termination
has been received with respect to any such policy which was not replaced on
substantially similar terms prior to the date of such cancellation. Except as
described in Schedule 4.9, as of the date of this Agreement, to Seller's
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Knowledge, Seller has not been refused any insurance with respect to the
Purchased Assets nor has Seller's coverage with respect to the Purchased Assets
been limited by any insurance carrier to which it has applied for any such
insurance or with which it has carried insurance during the last twelve months.
4.10 Environmental Matters. With respect to the Purchased Assets and the
ownership or operation thereof by Seller, to Seller's Knowledge, except as
disclosed in Schedule 4.10:
(a) Seller has obtained and holds all material Environmental Permits used
in or necessary for the ownership or operation of the Purchased Assets as
presently conducted;
(b) Seller is in compliance in all material respects with all terms,
conditions and provisions of (i) all applicable Environmental Laws and (ii) all
material Environmental Permits;
(c) there are no pending or threatened Environmental Claims relating to or
with respect to the Purchased Assets, and Seller is not aware of any facts or
circumstances which could reasonably be expected to form the basis for any
material Environmental Claim with respect to the Purchased Assets;
(d) no Releases of Hazardous Substances have occurred at, from, in, to, on,
adjacent to or under the Site and no Hazardous Substances are present in, on,
about or migrating to or from the Site that would give rise to a material
liability of Seller under applicable Environmental Laws for Remediation of
Hazardous Substances, except for the Remediation contemplated by Section 6.17;
(e) Seller has not transported or arranged for the treatment, storage,
handling, disposal or transportation of any Hazardous Substance from the Site to
any off-Site location which is an Environmental Clean-up Site;
(f) the Site is not a current or proposed Environmental Clean-up Site;
(g) except for Permitted Encumbrances, there are no Encumbrances existing
under or pursuant to any Environmental Law with respect to the Purchased Assets
and there are no facts, circumstances, or conditions that could reasonably be
expected to result in a material Encumbrance under any Environmental Law with
respect to the ownership, occupancy, development, use or transferability of the
Purchased Assets;
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(h) there are not, at the Site (i) any underground storage tanks, active or
abandoned, (ii) polychlorinated-biphenyl-containing equipment or (iii)
asbestos-containing material, in any such case (i), (ii) or (iii) that requires
removal or Remediation under applicable Environmental Law;
(i) there have been no environmental investigations, studies, audits,
tests, reviews or other analyses concerning the Purchased Assets conducted by or
on behalf of Seller, or which are in the possession of Seller, revealing any
violation of applicable Environmental Law or any Release of Hazardous Substances
that have not been made available to Buyer prior to execution of this Agreement;
and
(j) there are no pending claims by Seller against comprehensive general
liability and excess insurance carriers for any Loss resulting from, relating to
or arising from Environmental Claims.
4.11 Labor Matters. Seller has previously delivered to Buyer a true,
correct and complete copy of the IBEW Collective Bargaining Agreements, which
are the only agreements with unionized workers to which Seller is a party or is
subject and which relates to the Purchased Assets. With respect to the ownership
or operation of the Purchased Assets, to Seller's Knowledge, except to the
extent set forth in Schedule 4.11 (which matters shall remain the sole
responsibility of Seller): (a) Seller is in compliance in all material respects
with all applicable laws respecting employment and employment practices, terms
and conditions of employment and wages and hours; (b) Seller has not received
notice of any unfair labor practice complaint pending before the National Labor
Relations Board; (c) there is no labor strike, slowdown or stoppage actually
pending or threatened by any authorized representative of any union or other
representative of employees against or affecting Seller; (d) Seller has not
received notice that any representation petition respecting the employees of
Seller has been filed with the National Labor Relations Board; (e) no
arbitration proceeding arising out of or under collective bargaining agreements
is pending against Seller; and (f) Seller has not experienced any primary work
stoppage since at least December 31, 1995.
4.12 ERISA; Benefit Plans.
(a) Schedule 4.12(a) lists all deferred compensation, profit-sharing,
retirement and pension plans, and all material bonus and other employee benefit
or fringe benefit plans, maintained or with respect to which contributions are
made by Seller in respect of employees employed at the Purchased Assets
("Benefit Plans"). True, correct and complete copies of all such Benefit Plans
have been made available to Buyer.
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(b) Except as set forth in Schedule 4.12(b), Seller and any ERISA
Affiliates have fulfilled their respective obligations under the minimum funding
requirements of Section 302 of ERISA and Section 412 of the Code with respect to
each Benefit Plan which is an "employee pension benefit plan" as defined in
Section 3(2) of ERISA and to which Section 302 of ERISA applies, and each such
plan is in compliance in all material respects with the presently applicable
provisions of ERISA and the Code. Except as set forth in Schedule 4.12(b), to
Seller's Knowledge, neither Seller nor any ERISA Affiliate has incurred any
liability under Sections 4062(b), 4063 or 4064 of ERISA to the PBGC in
connection with any Benefit Plan which is subject to Title IV of ERISA, nor any
withdrawal liability to any multiemployer pension plan under Section 4201 et
seq. of ERISA or to any multiemployer welfare benefit plan, nor is there or has
there been any reportable event (as defined in Section 4043 of ERISA) with
respect to any Benefit Plan except as set forth in Schedule 4.12(b). Except as
set forth in Schedule 4.12(b), the IRS has issued a letter for each Benefit Plan
which is intended to be qualified determining that such plan is exempt from
federal Income Tax under Sections 401(a) and 501(a) of the Code, and, to
Seller's Knowledge, there has been no occurrence since the date of any such
determination letter (including, without limitation, statutory or regulatory
changes to the requirements of Section 401(a) of the Code for which the remedial
amendment period has expired) which has or will have adversely affected such
qualification.
(c) Neither Seller nor any ERISA Affiliate or parent or successor
corporation (within the meaning of Section 4069(b) of ERISA) has engaged in any
transaction which may be disregarded under Section 4069 or Section 4212(c) of
ERISA. Seller does not contribute to and has no liabilities or obligations under
any multiemployer plan (within the meaning of Section 3(37) of ERISA). No
Benefit Plan or ERISA Affiliate Plan is a multiemployer plan.
(d) Seller has complied in all material respects with all reporting,
disclosure, notice, election, coverage and other benefit requirements of
Sections 4980B and 9801-9833 of the Code and Sections 601-734 of ERISA as and
when applicable to any Benefit Plan.
4.13 Real Property; Plant and Equipment.
(a) Schedule 4.13(a) contains a legal description of, and exhibits
indicating the location of, the Real Property owned by Seller and included in
the Purchased Assets. All Encumbrances on the Real Property (other than
Permitted Encumbrances) shall be released on or before the Closing Date.
Complete and correct copies of any current surveys in Seller's possession or any
policies of title insurance currently in force and in the possession of Seller
with respect to the Real Property have heretofore been delivered by Seller to
Buyer. To Seller's knowledge, there are no encroachments onto, overlaps,
boundary line disputes or other similar matters with respect to the Real
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Property and no improvements included in the Real Property encroach upon any
adjacent property or any easement or right-of-way.
(b) Schedule 4.13(b) contains a description of the major equipment
components and personal property comprising the Purchased Assets.
4.14 Condemnation; Public Improvements. Except as set forth in Schedule
4.14, neither the whole nor any part of the Real Property or any other real
property or rights leased, used or occupied by Seller in connection with the
ownership or operation of the Purchased Assets is subject to any pending suit
for condemnation or other taking by any Governmental Authority, and, to Seller's
Knowledge, no such condemnation or other taking has been threatened. No
assessment for public improvements has been served upon Seller with respect to
the Real Property which remains unpaid, including, without limitation, those for
construction of sewer, water, electric, gas or steam lines and mains, streets,
sidewalks and curbing. To Seller's Knowledge, there are no required public
improvements with respect to the Real Property that have not been completed,
assessed and paid for prior to the date hereof.
4.15 Certain Contracts and Arrangements.
(a) Except (i) as listed in Schedule 4.15(a) or the other schedules to this
Agreement (all such agreements being collectively referred to herein as the
"Seller's Agreements") or (ii) for contracts, agreements, personal property
leases, commitments, understandings or instruments in which all obligations of
Seller will expire prior to the Closing Date, Seller is not a party to any
written contract, agreement, personal property lease, commitment, understanding
or instrument which is material to the ownership or operation of the Purchased
Assets.
(b) Except as disclosed in Schedule 4.15(b), each of Seller's Agreements
(i) constitutes the legal, valid and binding obligation of Seller, and, to
Seller's Knowledge, constitutes the legal, valid and binding obligation of the
other parties thereto, (ii) to Seller's Knowledge, is in full force and effect,
and (iii) to Seller's Knowledge, may be transferred or assigned to Buyer at the
Closing without consent or approval of the other parties thereto, in each case
without breaching the terms thereof or resulting in the forfeiture or impairment
of any material rights thereunder.
(c) Except as set forth in Schedule 4.15(c), there is not, to Seller's
Knowledge, any default or event which, with notice or lapse of time or both,
would constitute a default on the part of Seller or any of the other parties
thereto, except such events of default and other events as to which requisite
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waivers or consents have been obtained or which would not, individually or in
the aggregate, create a Material Adverse Effect.
4.16 Legal Proceedings, etc. Except as set forth in Schedule 4.16 or in any
filing made by Seller or any of its Affiliates pursuant to the Securities Act,
the Exchange Act, the Nuclear Waste Policy Act or the Atomic Energy Act, there
are no claims, actions, proceedings or investigations concerning the Purchased
Assets pending or, to Seller's Knowledge, threatened against or relating to
Seller before any Governmental Authority or body which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Except as set forth in Schedule 4.16 or in any filing made by Seller or any of
its Affiliates pursuant to the Securities Act, the Exchange Act, the Nuclear
Waste Policy Act or the Atomic Energy Act, Seller is not subject to any
outstanding judgment, rule, order, writ, injunction or decree of any
Governmental Authority with respect to the Purchased Assets which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
4.17 Permits; Compliance with Law.
(a) Seller has all material permits, licenses, franchises and other
governmental authorizations, consents and approvals, other than with respect to
permits under Environmental Laws referred to in Section 4.10 hereof or permits
issued by the NRC referred to in Section 4.18 hereof (collectively, "Permits"),
used in or necessary for the ownership and operation of the Purchased Assets as
presently conducted. Except as set forth in Schedule 4.17(a), Seller has not
received any written notification that it is in violation of any such Permits,
or any law, statute, order, rule, regulation, ordinance or judgment of any
Governmental Authority applicable to the Purchased Assets, except for
notifications of violations which would not, individually or in the aggregate,
have a Material Adverse Effect. Except with respect to Environmental Laws
referred to in Section 4.10 and NRC matters referred to in Section 4.18, Seller
is in compliance with all Permits, laws, statutes, orders, rules, regulations,
ordinances or judgments of any Governmental Authority applicable to the
Purchased Assets, except for violations which would not, individually or in the
aggregate, have a Material Adverse Effect.
(b) Schedule 4.17(b) sets forth all material Permits and Environmental
Permits other than Transferable Permits (which are set forth in Schedule
1.1(156) applicable to the Purchased Assets.
4.18 NRC Licenses.
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(a) Seller has all material permits, licenses, and other consents and
approvals issued by the NRC necessary to own and operate the Purchased Assets as
presently operated, pursuant to the requirements of all Nuclear Laws. Except as
set forth in Schedule 4.18(a), Seller has not received any written notification
since the CPS shutdown in September 1996, that it is in violation of any such
licenses, or any order, rule, regulation or decision of the NRC with respect to
the Purchased Assets, except for notifications of violations which would not,
individually or in the aggregate, have a Material Adverse Effect. Seller is in
compliance with all Nuclear Laws and all orders, rules, regulations or decisions
of the NRC applicable to Seller with respect to the Purchased Assets, except for
violations which would not, individually or in the aggregate, have a Material
Adverse Effect.
(b) Schedule 4.18(b) sets forth all material permits, licenses, and other
consents and approvals issued by the NRC applicable to the Purchased Assets.
4.19 Regulation as a Utility. Seller is an electric utility company within
the meaning of the Holding Company Act, a public utility within the meaning of
the Federal Power Act and an electric utility within the meaning of the NRC
regulations implementing the Atomic Energy Act. Except as set forth in Schedule
4.19 or with respect to local tax, zoning laws and municipal franchises, Seller
is not, specifically as a result of its ownership or operation of the Purchased
Assets, subject to regulation as a public utility or public service company (or
similar designation) by the United States, any state of the United States, any
foreign country or any municipality or any political subdivision of the
foregoing.
4.20 Taxes. Except as set forth in Schedule 4.20, with respect to the
Purchased Assets (a) all Tax Returns required to be filed have been filed and
(b) all material Taxes shown to be due on such Tax Returns have been paid in
full. Except as set forth in Schedule 4.20, no notice of deficiency or
assessment has been received from any taxing authority with respect to
liabilities for Taxes of Seller in respect of the Purchased Assets, which have
not been fully paid or finally settled, and any such deficiency shown in such
Schedule 4.20 is being contested in good faith through appropriate proceedings.
Except as set forth in Schedule 4.20, there are no outstanding agreements or
waivers extending the applicable statutory periods of limitation for Taxes
associated with the Purchased Assets for any period. Schedule 4.20 sets forth
the taxing jurisdictions in which Seller owns assets or conducts business that
require a notification to a taxing authority of the transactions contemplated by
this Agreement, if the failure to make such notification, or obtain Tax
clearances in connection therewith, would either require Buyer to withhold any
portion of the Purchase Price or would subject Buyer to any liability for any
Taxes of Seller.
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4.21 Year 2000 Compliance. Seller has made available to Buyer its Y2K
Program Manual (the "Y2K Plan"), which complies in all material respects with
the standards set forth in Nuclear Utility Year 2000 Readiness, NEI/NUSMG 97-07.
Subject to the timely completion of the work described in the Y2K Plan and
except as set forth in Schedule 4.21, all of the computer hardware, software and
firmware products (including embedded microcontrollers in non-computer
equipment), interfaces with internal and external systems, and computer systems
(including all constituent programs, processors, controllers, applications,
routines, modules, processes, tools and other components) which are included in
the Purchased Assets and are identified as "mission critical" in the Y2K Plan
(collectively, the "Year 2000 Assets") will be Year 2000 Qualified. For purposes
of this Agreement, "Year 2000 Qualified" means that all Year 2000 Assets are
either "Year 2000 Compliant" or "Year 2000 Ready" as defined in NEI/NUSMG 97-07
and as restated below. Notwithstanding the foregoing definitions, an item
required to be Year 2000 Qualified that does not satisfy the definition of Year
2000 Compliant shall only be considered Year 2000 Ready (and consequently Year
2000 Qualified) if (a) the item maintains its function as it crosses any key
date even if there may be date errors or some form of compensatory action
required to maintain valid functional operation; (b) a deficiency can be
addressed by pre-defined manual action; and (c) the integration of all manual
actions required are confirmed to be reasonably within the capability of the
facility resources and can be accomplished without any risk of loss, damage or
destruction to facility equipment or the operation of the Facilities or material
loss of time. As used herein (and as defined in NEI/NUSMG 97-07) (x) the term
"Year 2000 Compliant" means Year 2000 Assets that accurately process date/time
data (including, without limitation, calculating, comparing, and sequencing)
from, into and between the twentieth and twenty-first centuries, the years 1999
and 2000, and leap years (including accurate leap-year calculations) and (y) the
term "Year 2000 Ready" means a Year 2000 Asset that has been determined to be
suitable for continued use into the year 2000 even though the Year 2000 Asset is
not fully Year 2000 Compliant. For purposes of this Section 4.21, "key dates"
include, without limitation, the following: 12/31/99, 1/1/00, 2/28/00, 2/29/00,
3/1/00, 12/31/00, 1/1/01, 2/28/01, 3/1/01, 2/28/04, 2/29/04 and 3/1/04.
4.22. Qualified Decommissioning Fund.
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EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE IV, THE
PURCHASED ASSETS ARE BEING SOLD AND TRANSFERRED "AS IS, WHERE IS," AND SELLER IS
NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL, STATUTORY,
EXPRESS OR IMPLIED, CONCERNING SUCH PURCHASED ASSETS, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
OTHER IMPLIED WARRANTY, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND
DISCLAIMED.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
5.1 Organization. Buyer is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own, lease and operate its
192
properties and to carry on its business as is now being conducted. Buyer has
heretofore delivered to Seller complete and correct copies of its Certificate of
Formation and Operating Agreement (or other similar governing documents), as
currently in effect.
5.2 Authority. Buyer has full organizational power and authority to execute
and deliver this Agreement and the Ancillary Agreements and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action required on the part of Buyer and no other corporate
proceedings on the part of Buyer are necessary to authorize this Agreement and
the Ancillary Agreements or to consummate the transactions contemplated hereby
and thereby. This Agreement has been duly and validly executed and delivered by
Buyer, and assuming that this Agreement constitutes a valid and binding
agreement of Seller, and subject to the receipt of Buyer's Required Regulatory
Approvals, constitutes a valid and binding agreement of Buyer, enforceable
against Buyer in accordance with its terms.
5.3 Consents and Approvals; No Violation.
(a) Except as set forth in Schedule 5.3(a), and subject to the receipt of
Buyer's Required Regulatory Approvals, neither the execution and delivery by
Buyer of this Agreement and the Ancillary Agreements nor the purchase by Buyer
of the Purchased Assets pursuant to this Agreement will (i) conflict with or
result in any breach of any provision of the Certificate of Formation or
Operating Agreement (or other similar governing documents) of Buyer, (ii)
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, (iii) result in a default (or give
rise to any right of termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
agreement, lease or other instrument or obligation to which Buyer is a party or
by which any of its assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained or which would not, individually or in the
aggregate, have a material adverse effect on the ability of Buyer to perform its
obligations hereunder ("Buyer Material Adverse Effect"), or (iv) violate any
law, regulation, order, judgment or decree applicable to Buyer, which
violations, individually or in the aggregate, would create a Buyer Material
Adverse Effect.
(b) Except as set forth in Schedule 5.3(b) (the filings and approvals
referred to such Schedule are collectively referred to as the "Buyer's Required
Regulatory Approvals"), no declaration, filing or registration with, or notice
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to, or authorization, consent or approval of any Governmental Authority is
necessary for the consummation by Buyer of the transactions contemplated hereby.
5.4 Availability of Funds. Buyer has sufficient funds available to it or
has received binding written commitments from third parties to provide
sufficient funds to enable Buyer on the Closing Date to (i) pay the Cash
Purchase Price as adjusted by Section 3.3 on the Closing Date, (ii) satisfy NRC
financial qualifications requirements contained in 10 C.F.R. section 50.33(f),
(iii) guarantee payment of deferred premiums of $10 million annually pursuant to
10 C.F.R. section 140.21, and (iv) perform all of its obligations under this
Agreement and the Ancillary Agreements.
5.5 Legal Proceedings. There are no domestic or international actions,
suits or proceedings pending against Buyer or its members before any court,
arbitrator or Governmental Authority which, individually or in the aggregate,
could have a Buyer Material Adverse Effect. Neither Buyer nor its members is
subject to any outstanding judgments, rules, orders, writs, injunctions or
decrees of any court, arbitrator or Governmental Authority which, individually
or in the aggregate, have a Buyer Material Adverse Effect.
5.6 WARN Act. Buyer does not intend with respect to the Purchased Assets to
engage in a "plant closing" or "mass layoff," as such terms are defined in the
WARN Act within sixty (60) days after the Closing Date.
5.7 Regulation as a Utility. As of the date hereof, Buyer is a public
utility company within the meaning of the Federal Power Act and may be an
electric utility within the meaning of NRC regulations implementing the Atomic
Energy Act. Except as set forth on Schedule 5.7, or with respect to local tax
and zoning laws, Buyer is not subject to regulation as a public utility or
public services company by the United States, any State of the United States,
any foreign country, or any municipality or any political subdivision of the
foregoing.
5.8 Qualified Buyer. To Buyer's Knowledge, nothing has come to Buyer's
attention that would indicate that Buyer is not legally qualified, or will not
be legally qualified as of the Closing Date, to obtain all Buyer's Required
Regulatory Approvals in a timely manner.
5.9 Limited Liability Company Agreement. Buyer has delivered to Seller a
true and complete copy of the Limited Liability Company Agreement between PECO
and British Energy, Inc., and all amendments thereto in effect on the date of
this Agreement.
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ARTICLE VI
COVENANTS OF THE PARTIES
6.1 Conduct of Business Relating to the Purchased Assets
(a) Except as required by law, any Governmental Authority or the Management
Agreement, or as described in Schedule 6.1 or to the extent Buyer otherwise
consents in writing, during the period from the date of this Agreement to the
Closing Date, Seller (i) shall operate the Purchased Assets in the ordinary
course consistent with Good Utility Practices, (ii) shall use Commercially
Reasonable Efforts to preserve intact the Purchased Assets and preserve the
goodwill and relationships with customers, suppliers and others having business
dealings with Seller with respect to the Purchased Assets, (iii) shall maintain
the insurance coverage described in Section 4.9 or other insurance reasonably
equivalent thereto, (iv) shall comply in all material respects with all
applicable laws, rules and regulations relating to the Purchased Assets,
including, without limitation, all Nuclear Laws and Environmental Laws, and (v)
shall continue to implement in accordance with Good Utility Practices and in
conformity with all applicable legal requirements Seller's Y2K Plan. Without
limiting the generality of the foregoing, and, except as contemplated in this
Agreement or the Management Agreement, or as described in Schedule 6.1, or as
required under applicable law or by any Governmental Authority, prior to the
Closing Date, without the prior written consent of Buyer, Seller will not with
respect to the Purchased Assets:
(i) make any material change in the levels of fuel inventory customarily
maintained by Seller with respect to the Purchased Assets other than the
scheduled November 1999 fuel purchase;
(ii) except for Permitted Encumbrances, sell, lease (as lessor), pledge,
encumber, restrict, transfer or otherwise dispose of, or grant any right with
respect to, (A) any Real Property, or (B) any of the other Purchased Assets
other than assets used, consumed or replaced in the operation of the Facilities
in the ordinary course of business consistent with Good Utility Practices;
(iii) modify, amend or voluntarily terminate prior to the expiration date
thereof any of Seller's Agreements, and leases listed in Schedule 4.8 (or any
other lease to the extent any such extension or amendment thereof would require
the lease to be disclosed in Schedule 4.8) or any material Permit or
Environmental Permit or waive any default by, or release, settle or compromise
any claim against, any other party thereto, other than (A) in the ordinary
course of business, to the extent consistent with Good Utility Practices, (B)
with cause, to the extent consistent with Good Utility Practices or (C) as may
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be required in connection with Seller's obligations to Buyer under this
Agreement;
(iv) enter into any commitment for the purchase or sale of nuclear fuel
having a term that extends beyond December 31, 1999, or such other date that the
Parties mutually agree to be the date on which the Closing is expected to occur;
(v) enter into any power sales agreement with respect to CPS that obligates
or encumbers the Facilities for a term that extends beyond December 31, 1999
(other than with respect to the CPS switchyard so long as there is no impairment
of Buyer's access to Seller's Transmission system), or such other date that the
Parties mutually agree to be the date on which the Closing is expected to occur;
provided, however, that Seller shall be entitled to enter into power sales
agreements involving power to be purchased by Seller under the Power Purchase
Agreement or terminable by Seller (or after the Closing Date by Buyer) on not
more than ten (10) days notice without further liability, or that do not relate
to the Purchased Assets;
(vi) amend in any material respect or cancel any liability or casualty
insurance policies related thereto, or fail to maintain the policies of
insurance required by Section 4.9 or other insurance reasonably equivalent
thereto with financially responsible insurance companies;
(vii) enter into any commitment or contract for goods or services not
addressed in clauses (i) through (vi) above that will be delivered or provided
after December 31, 1999 or such other date that the Parties mutually agree to be
the date on which the Closing is expected to occur that exceeds $250,000 in the
aggregate, unless such commitment or contract is terminable by Seller (or after
the Closing Date by Buyer) without further liability, upon not more than sixty
(60) days notice;
(viii) except as required by the terms of the IBEW Collective Bargaining
Agreements or regulatory requirements (A) other than consistent with past
practice, increase salaries or wages of employees employed in connection with
the Purchased Assets prior to Closing, (B) take any action prior to Closing to
effect a material change in the IBEW Collective Bargaining Agreements or enter
into any other collective bargaining or representation agreement for employees,
or (C) take any action prior to the Closing to increase materially the aggregate
benefits payable to employees; or
(ix) enter into any agreement or settlement with any Governmental Authority
relating to or regarding the tax status of the Purchased Assets for any taxable
period ending after December 31, 1999;
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(x) amend or modify Seller's Decommissioning Trust Agreement except as
contemplated by this Agreement, provided, however, that Buyer's consent shall
not be unreasonably withheld; or
(xi) enter into any written or oral contract, agreement, commitment or
arrangement with respect to any of the transactions set forth in the foregoing
paragraphs (i) through (x).
Notwithstanding the provisions of this Section 6.1(a), Buyer acknowledges
and agrees that Seller shall not be responsible for any breach of this Section
6.1(a) if such breach directly arises out of or results from the performance of
services, or any breach by, PECO under the Management Agreement.
(b) A committee comprised of one or more senior representatives designated
by Seller and one or more senior representatives designated by Buyer (the
"Transition Committee") will be established as soon as practicable after the
execution of this Agreement to permit Buyer to observe the operation of the
Purchased Assets and to facilitate the transfer of the Purchased Assets to Buyer
at the Closing. The Transition Committee will be kept fully apprised by Seller
of all material CPS management and operating developments. The Transition
Committee shall have regular access to the management and Nuclear Oversight
Committee of the Board of Directors of Seller (including any management reports
on CPS operations given to the Board). The Transition Committee shall be
accountable directly to the respective chief executive officers of Buyer and
Seller and shall from time to time report its findings to the senior management
of each of Seller and Buyer. The Transition Committee shall have no authority to
take any action inconsistent with Seller's control of NRC licensed activities or
to enter into a legally binding agreement to bind Seller or Buyer.
(c) Between the date of this Agreement and the Closing Date, in the
interest of cooperation between Seller and Buyer and to permit informed action
by Buyer regarding its rights pursuant to Section 6.1(a), the Parties agree that
at the sole responsibility and expense of Buyer, and subject to compliance with
all applicable NRC rules and regulations and other applicable law, Seller will
permit a reasonable number of designated employees ("Observers") of Buyer to
observe all operations of Seller that relate to the Purchased Assets, and such
observation will be permitted on a cooperative basis in the presence of
personnel of Seller but not restricted to the normal business hours of Seller;
provided, however, that such Observers shall abide by all NRC rules and
regulations with respect to the Site and their actions shall not interfere with
the operation of CPS. Buyer's Observers may recommend or suggest actions be
taken or not be taken by Seller; provided, however, that Seller will be under no
obligation to follow any such recommendations or suggestions and Seller shall be
entitled, subject to this Agreement, to conduct its business in accordance with
its own judgment and discretion. Buyer's Observers shall have no authority to
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bind or make agreements on behalf of Seller; to conduct discussions with or make
representations to third parties on behalf of Seller; or to issue instructions
to or direct or exercise authority over Seller or any of Seller's officers,
employees, advisors or agents. Buyer shall be responsible for any breach by
Buyer's Observers of this Section 6.1(c).
(d) Seller shall advise Buyer regarding implementation of changes in ICC
rules or procedures of which Seller has Knowledge which are reasonably likely to
have a Material Adverse Effect on CPS.
(e) Nothing in this Section 6.1 is intended to amend or modify the
respective duties, liabilities and obligations of the Parties under the Interim
Agreement, the Management Agreement and Leased Employee Agreement.
6.2 Access to Information.
(a) In addition to the rights granted by Sections 6.1 (b), (c) and (d),
between the date of this Agreement and the Closing Date, Seller will, during
ordinary business hours and upon reasonable notice and subject to compliance
with all applicable NRC rules and regulations and other applicable law (i) give
Buyer and Buyer's Representatives reasonable access to all books, records,
plants, offices and other facilities and properties constituting the Purchased
Assets; (ii) make available copies of all insurance policies covering the
Purchased Assets and the Assumed Liabilities and Obligations; (iii) furnish
Buyer with such financial and operating data and other information with respect
to the Purchased Assets as Buyer may from time to time reasonably request; and
(iv) make available to Buyer a copy of each material report, schedule or other
document filed or received by Seller with respect to the Purchased Assets with
the SEC, NRC, FERC, ICC or any other Governmental Authority having jurisdiction
over the Purchased Assets; provided, however, that (A) any such inspection shall
be conducted in such a manner as not to interfere unreasonably with the
operation of the Purchased Assets, (B) Seller shall not be required to take any
action which would constitute a waiver of the attorney-client privilege and (C)
Seller need not supply Buyer with any information that Seller is legally
prohibited from supplying. Seller will provide Buyer with access to the
Transferred Employee Records, but Seller shall not be required to provide access
to other employee records or medical information unless required by law or
specifically authorized by the affected employee.
(b) Buyer and Seller acknowledge that all information furnished to or
obtained by Buyer or Buyer's Representatives pursuant to this Section 6.2 shall
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be subject to the provisions of the Confidentiality Agreement and shall be
treated as "Proprietary Information" (as defined in the Confidentiality
Agreement).
(c) For a period of seven (7) years after the Closing Date and subject to
all applicable NRC rules and regulations, each Party and its respective
Representatives shall have reasonable access to (i) all of the books and records
relating to the Purchased Assets, including all Transferred Employee Records or
other personnel and medical records required by law, legal process or subpoena,
in the possession of the other Party, and (ii) personnel employed by the other
Party, in each case to the extent that such access may reasonably be required by
the requesting Party in connection with the Assumed Liabilities and Obligations
or the Excluded Liabilities, or other matters relating to or affected by the
operation of the Purchased Assets, including, without limitation, compliance
with applicable laws and regulations and any investigations, audits or inquiries
by Governmental Authorities. Such access shall be afforded by the Party in
possession of such books and records or employing such Persons upon receipt of
reasonable advance notice and during normal business hours. The Party exercising
this right of access shall be solely responsible for any costs or expenses
incurred by the Parties pursuant to this Section 6.2(c). If the Party or Parties
in possession of such books and records shall desire to dispose of any such
books and records upon or prior to the expiration of such seven-year period,
such Party or Parties shall, prior to such disposition, give the other Party a
reasonable opportunity at such other Party's expense, to segregate and remove
such books and records as such other Party may select. Notwithstanding the
foregoing, the rights of access to medical records and other confidential
employee records shall be subject to all applicable legal requirements.
(d) Seller agrees (i) not to release any Person (other than Buyer) from any
confidentiality agreement now existing with respect to the Purchased Assets, or
waive or amend any provision thereof and (ii) at Closing, to assign any rights
arising under any such confidentiality agreement (to the extent assignable) to
Buyer.
(e) Notwithstanding the terms of the Confidentiality Agreement and Section
6.2(b) above, the Parties agree that prior to the Closing Buyer may reveal or
disclose Proprietary Information to any other Persons to the extent necessary in
connection with Buyer's financing and risk management of the Purchased Assets,
and, to the extent that Seller consents, which consent shall not be unreasonably
withheld, to (i) existing and potential customers and suppliers, and (ii) to
such Persons with whom Buyer expects it may have business dealings regarding the
Purchased Assets from and after the Closing Date; provided, however, that all
such Persons agree in writing to maintain the confidentiality of the Proprietary
Information on substantially the same terms and conditions as the
Confidentiality Agreement. The Parties further agree that prior to the Closing
Seller may reveal or disclose Proprietary Information to any other Persons in
connection with Seller's financing and risk management and business and
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financing matters involving Seller's parent, Illinova Corporation, and, to the
extent that Buyer consents, which consent shall not be unreasonably withheld,
with other Persons; provided, however, that all such Persons agree in writing to
maintain the confidentiality of the Proprietary Information on substantially the
same terms and conditions as the Confidentiality Agreement.
(f) Except as may be permitted in the Confidentiality Agreement, Interim
Agreement, Management Agreement or Leased Employee Agreement, or during the
course of Buyer's due diligence investigation of the Purchased Assets prior to
the date hereof, Buyer agrees that, prior to the Closing Date, it will not
contact any vendors, suppliers, employees or other contracting parties of Seller
or Seller's Affiliates with respect to any aspect of the Purchased Assets or the
transactions contemplated hereby, without the prior written consent of Seller,
which consent shall not be unreasonably withheld.
(g) Upon the other Party's prior written approval (which approval shall not
be unreasonably withheld or delayed) either Party may provide Proprietary
Information of the other Party to the SEC, NRC, FERC, ICC, IDNS, IPSC or any
other Governmental Authority having jurisdiction over the Purchased Assets or
any stock exchange, as may be necessary to obtain Seller's Required Regulatory
Approvals or Buyer's Required Regulatory Approvals, respectively, or to comply
generally with any relevant law, rule or regulation. The disclosing Party shall
seek confidential treatment for the Proprietary Information provided to any such
Governmental Authority and the disclosing Party shall notify the other Party as
far in advance as practical of its intention to release to any Governmental
Authority any such Proprietary Information.
(h) Except as set forth in Section 6.2(e) or as required by law or
Governmental Authority, or unless otherwise agreed to in writing by the Parties,
the Parties shall keep (i) all Proprietary Information confidential and not
disclose or reveal any Proprietary Information to any Person other than
Representatives of the Parties who are actively and directly participating in
the transactions contemplated hereby or who otherwise need to know the
Proprietary Information for such purpose and to cause those Persons to observe
the terms of this Section 6.2(h) and (ii) not to use Proprietary Information for
any purpose other than consistent with the terms of this Agreement. The Parties
shall continue to hold all Proprietary Information according to the same
internal security procedures and with the same degree of care regarding its
secrecy and confidentiality as currently applicable thereto. Either Party shall
notify the other Party of any unauthorized disclosure to third parties that it
discovers, and shall endeavor to prevent any further such disclosures. Seller
shall be responsible for any breach of the terms of this Section 6.2(h) by
Seller or Seller's Representatives. Buyer's obligations with respect to the
confidentiality of Proprietary Information relating to the Purchased Assets
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shall terminate on the Closing Date except as otherwise provided in the
Confidentiality Agreement.
After the Closing Date, in the event that Seller is requested pursuant to,
or required by, applicable law or regulation or by legal process to disclose any
Proprietary Information, Seller shall provide Buyer with prompt notice of such
request or requirement in order to enable Buyer to seek an appropriate
protective order or other remedy, to consult with Seller with respect to taking
steps to resist or narrow the scope of such request or legal process, or to
waive compliance, in whole or in part, with the terms of this Section 6.2(h).
Seller agrees not to oppose any action by Buyer to obtain a protective order or
other appropriate remedy after the Closing Date. In the event that no such
protective order or other remedy is obtained, or that Buyer waives compliance
with the terms of this Section 6.2(h), Seller shall furnish only that portion of
the Proprietary Information which Seller is advised by counsel is legally
required. In any such event Seller shall use its Commercially Reasonable Efforts
to ensure that all Proprietary Information that is so disclosed will be accorded
confidential treatment.
(i) The Parties agree that the Confidentiality Agreement will terminate in
accordance with its terms, without further act or evidence by the Parties.
6.3 Expenses. Except to the extent specifically provided herein, whether or
not the transactions contemplated hereby are consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby, including the cost of legal, technical and financial consultants and the
cost of filing for and prosecuting applications for Required Regulatory
Approvals, shall be borne by the Party incurring such costs and expenses.
Notwithstanding anything to the contrary herein, Buyer and Seller will share
equally the cost of all filing and other fees with respect to any NRC filings,
and Buyer shall be responsible for all HSR filing fees, required to consummate
the transactions contemplated hereby.
6.4 Further Assurances; Cooperation.
(a) Subject to the terms and conditions of this Agreement, each of the
Parties hereto will use Commercially Reasonable Efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the sale of the Purchased Assets pursuant to this Agreement,
including, without limitation, using Commercially Reasonable Efforts to ensure
satisfaction of the conditions precedent to each Party's obligations hereunder.
Neither of the Parties hereto will, without the prior written consent of the
other Party or as required by applicable law, take or fail to take any action
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which would reasonably be expected to prevent or materially impede, interfere
with or delay the transactions contemplated by this Agreement.
(b) From time to time after the Closing Date, without further
consideration, Seller will, at its own expense, execute and deliver such
documents to Buyer as Buyer may reasonably request in order to more effectively
consummate the sale and purchase of the Purchased Assets or to more effectively
vest in Buyer good and marketable title to the Purchased Assets subject to the
Permitted Encumbrances. Seller shall cooperate with Buyer, at Buyer's expense,
in Buyer's efforts to cure or remove any Permitted Encumbrances that Buyer
reasonably deems objectionable. From time to time after the Closing Date,
without further consideration, Buyer will, at its own expense, execute and
deliver such documents to Seller as Seller may reasonably request in order to
evidence Buyer's assumption of the Assumed Liabilities and Obligations.
(c) To the extent that Seller's rights under any Seller's Agreement to be
transferred to Buyer hereunder may not be assigned without the consent of
another Person which consent has not been obtained, this Agreement shall not
constitute an agreement to assign the same if an attempted assignment would
constitute a breach thereof or be unlawful, and Seller, at its expense, shall
use Commercially Reasonable Efforts to obtain any such required consent(s) as
promptly as possible. Seller and Buyer agree that if any consent to an
assignment of any Seller's Agreement to be transferred hereunder shall not be
obtained or if any attempted assignment would be ineffective or would impair
Buyer's rights and obligations under the applicable Seller's Agreement so that
Buyer would not in effect acquire the benefit of all such rights and
obligations, Seller, to the maximum extent permitted by law and such Seller's
Agreement, shall after the Closing appoint Buyer to be Seller's representative
and agent with respect to such Seller's Agreement, and Seller shall, to the
maximum extent permitted by law and such Seller's Agreement, enter into such
reasonable arrangements with Buyer as are necessary to provide Buyer with the
benefits and obligations of such Seller's Agreement. Seller and Buyer shall
cooperate and shall each use Commercially Reasonable Efforts after the Closing
to obtain an assignment of such Seller's Agreement to Buyer.
(d) For a reasonable time after the Closing Date and in addition to the
services contemplated by the IP Services Agreement, Buyer and Seller agree to
provide services to each other as reasonably required to the extent necessary to
ensure the continuity of support for CPS and the orderly completion of projects
or other work in progress that would be adversely affected if those services
were interrupted. Such support by one Party to the other will not be
unreasonably withheld, provided that requests for such support are made in a
timely manner. The Party providing the requested support will be reimbursed for
all reasonable costs thereof in accordance with established accounting
procedures or on an alternative cost reimbursement basis as mutually agreed by
the Parties.
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6.5 Public Statements. From the date hereof until thirty (30) days after
the Closing Date, the Parties shall not issue any public announcement, statement
or other disclosure with respect to this Agreement or the transactions
contemplated hereby without the prior written consent of the other Party, which
consent will not be unreasonably withheld or delayed, except as may be required
by law or Governmental Authority or the rules or regulations of the New York
Stock Exchange.
6.6 Consents and Approvals.
(a) Seller and Buyer shall each file or cause to be filed with the Federal
Trade Commission and the Department of Justice any notifications required to be
filed under the HSR Act and the rules and regulations promulgated thereunder
with respect to the transactions contemplated hereby. The Parties shall consult
with each other as to the appropriate time of filing such notifications and
shall agree upon the timing of such filings, respond promptly to any requests
for additional information made by either of such agencies, and cause the
waiting periods under the HSR Act to terminate or expire at the earliest
possible date after the date of filing. Each Party will bear its own costs for
the preparation of any such filing.
(b) As promptly as practicable after the date of this Agreement and in any
event by no later than 60 days after the receipt of any findings required to be
made by any other Governmental Authority as a condition to Buyer making the
filings contemplated by this Agreement, Seller and Buyer shall (i) promptly
prepare and file all necessary documentation, (ii) effect all necessary
applications, notices, petitions and filings and execute all agreements and
documents, (iii) use Commercially Reasonable Efforts to obtain the transfer or
reissuance to Buyer of all necessary Permits, Environmental Permits, consents,
approvals and authorizations of all Governmental Authorities, including, without
limitation, Seller's Required Regulatory Approvals and Buyer's Required
Regulatory Approvals, and (iv) use Commercially Reasonable Efforts to obtain all
necessary consents, approvals and authorizations of all other parties necessary
or advisable to consummate the transactions contemplated by this Agreement or
required by the terms of any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, contract, lease or other instrument to
which Seller or Buyer is a party or by which any of them is bound. The Parties
shall respond promptly to any requests for additional information made by such
Governmental Authorities, and use their respective Commercially Reasonable
Efforts to cause regulatory approval to be obtained at the earliest possible
date after the date of filing. Each Party will bear its own costs of the
preparation of such filings. Each of Seller and Buyer shall have the right to
review in advance all characterizations of the information relating to the
transactions contemplated by this Agreement which appear in any filing made in
connection with the transactions contemplated hereby.
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(c) Seller and Buyer shall cooperate with each other and promptly prepare
and file notifications with, and request Tax clearances from, state and local
taxing authorities in jurisdictions in which a portion of the Purchase Price may
be required to be withheld or in which Buyer would otherwise be liable for any
Tax liabilities of Seller pursuant to such state and local Tax law.
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(e) Buyer shall have the primary responsibility for securing the transfer,
reissuance or procurement of the Permits and Environmental Permits (other than
Transferable Permits) effective as of the Closing Date. Seller shall cooperate
with Buyer's efforts in this regard and provide reasonable assistance in any
transfer or reissuance of a Permit or Environmental Permit held by Seller or the
procurement of any other Permit or Environmental Permit when so requested by
Buyer.
(f) Within fifteen (15) days after the receipt of any Buyer's or Seller's
Required Regulatory Approval, the Party receiving such approval (the "Receiving
Party") shall notify the other Party in writing if the approval contains any
condition that the Receiving Party determines could reasonably be expected to
have a Material Adverse Effect on the Receiving Party or, in the case of Buyer,
on the Purchased Assets; provided, however, that if the Receiving Party does not
provide such notice to the other Party within the fifteen (15)-day period
specified in this sentence, the Receiving Party shall be deemed to have accepted
such Required Regulatory Approval, including any condition contained therein,
and the condition to Closing set forth in Section 7.1(c) or Section 7.2(c), as
applicable to such Party with respect to such Required Regulatory Approval,
shall be deemed satisfied, except to the extent such Required Regulatory
Approval is not then final and non-appealable. Within fifteen (15) days after
receipt of any notice specified in the previous sentence, Seller and Buyer shall
meet to consider what commercially reasonable efforts the Receiving Party
intends to take in order to obtain the Required Regulatory Approval or to
eliminate the materially adverse conditions. After the Receiving Party has
completed such agreed upon commercially reasonable efforts with respect to the
materially adverse condition contained in such Required Regulatory Approval,
within fifteen (15) days of such completion, the Receiving Party shall notify
the other Party if the materially adverse condition has been eliminated or
204
remains in effect, and whether the Receiving Party either will accept such
materially adverse condition by a waiver of the applicable Closing condition in
Section 7.1(c) or 7.2(c) with respect to such materially adverse condition or
deem that the applicable Closing condition in Section 7.1(c) or 7.2(c) cannot be
satisfied due to the materially adverse condition in such Required Regulatory
Approval.
6.7 Brokerage Fees and Commissions. Seller and Buyer each represent and
warrant to the other that no broker, finder or other Person is entitled to any
brokerage fees, commissions or finder's fees in connection with the transactions
contemplated hereby by reason of any action taken by the Party making such
representation. Seller and Buyer will pay to the other or otherwise discharge,
and will indemnify and hold the other harmless from and against, any and all
claims or liabilities for all brokerage fees, commissions and finder's fees
incurred by reason of any action taken by the indemnifying party.
6.8 Tax Matters.
(a) All transfer and sales Taxes incurred in connection with this Agreement
and the transactions contemplated hereby shall be borne equally by Buyer and
Seller. Buyer will file, to the extent required by applicable law, all necessary
Tax Returns and other documentation with respect to all such transfer or sales
Taxes, and Seller will be entitled to review such returns in advance and, if
required by applicable law, will join in the execution of any such Tax Returns
or other documentation. Prior to the Closing Date, Buyer will provide to Seller,
to the extent possible, an appropriate exemption certificate in connection with
this Agreement and the transactions contemplated hereby, due from each
applicable taxing authority.
(b) With respect to Taxes to be prorated in accordance with Section 3.5 of
this Agreement, Buyer shall prepare and timely file all Tax Returns required to
be filed after the Closing with respect to the Purchased Assets, if any, and
shall duly and timely pay all such Taxes shown to be due on such Tax Returns.
Buyer's preparation of any such Tax Returns shall be subject to Seller's
approval, which approval shall not be unreasonably withheld. Buyer shall make
such Tax Returns available for Seller's review and approval no later than twenty
(20) Business Days prior to the due date for filing such Tax Return. Not less
than ten (10) Business Days prior to the due date of any such Tax Return, Seller
shall pay to Buyer the amount shown as due on such Tax Return as determined in
accordance with Section 3.5 of this Agreement or shall notify Buyer of any error
on such return. Buyer and Seller shall negotiate in good faith to resolve any
disagreement. If Buyer and Seller are unable to agree to any such Tax Return
within five (5) Business Days following Buyer's receipt of notification of an
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error from Seller, the Parties shall submit the dispute to the Independent
Accounting Firm in accordance with the procedures set forth in Section 6.8(d).
(c) Buyer and Seller shall provide the other Party with such assistance as
may reasonably be requested by the other Party in connection with the
preparation of any Tax Return, any audit or other examination by any taxing
authority, or any judicial or administrative proceedings relating to liability
for Taxes, and each will retain and provide the requesting Party with any
records or information which may be relevant to such return, audit or
examination, proceedings or determination. Any information obtained pursuant to
this Section 6.8(c) or pursuant to any other Section hereof providing for the
sharing of information or review of any Tax Return or other schedule relating to
Taxes shall be kept confidential by the Parties hereto.
(d) In the event that a dispute arises between Seller and Buyer as to the
amount of Taxes, or the amount of any allocation of Purchase Price under Section
3.4, the Parties shall attempt in good faith to resolve such dispute, and any
amount so agreed upon shall be paid to the appropriate party. If such dispute is
not resolved within thirty (30) days thereafter, the Parties shall submit the
dispute to the Independent Accounting Firm for resolution, which resolution
shall be final, conclusive and binding on the Parties. Notwithstanding anything
in this Agreement to the contrary, the fees and expenses of the Independent
Accounting Firm in resolving the dispute shall be borne equally by Seller and
Buyer. Any payment required to be made as a result of the resolution of the
dispute by the Independent Accounting Firm shall be made within ten (10) days
after such resolution, together with any interest determined by the Independent
Accounting Firm to be appropriate.
(e) On and after the Closing Date until the maturity or redemption date of
the Pollution Control Bonds which were issued to finance or refinance all or a
portion of the cost of the Pollution Control Facilities:
(i) Except as otherwise permitted in clauses (ii) and (iv) below, Buyer
will not change or permit to be changed the character or nature of the use of
those facilities listed in Schedule 6.8(e) hereto (the "Pollution Control
Facilities") from the manner Seller has used such facilities prior to the sale
of the Purchased Assets, unless such changed use would constitute a use or
purpose of the Pollution Control Facilities (A) permitted under the tax
compliance documents or the non-arbitrage certificates for the Pollution Control
Bonds or (B) for which tax-exempt bonds have been issued pursuant to Treas. Reg.
section 1.103-8(f) or (g) or its successor Income Tax regulations, unless Buyer
has obtained at its own expense an opinion addressed to Seller of nationally
recognized bond counsel reasonably acceptable to Seller ("Bond Counsel") that
such use will not impair (x) the exclusion from gross income of the interest on
any issue of Pollution Control Bonds for Federal income tax purposes or (y) the
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deductibility of Seller's payments of interest based on the restrictions in
Section 150(b) of the Code;
(ii) Buyer and any transferee which becomes subject to the provisions of
the foregoing clause (i) by reason of this clause (ii) will not sell or
otherwise transfer any portion of the Pollution Control Facilities unless (A)
the transferee covenants to satisfy the conditions of the foregoing clause (i)
with respect to its ownership and use of the Pollution Control Facilities or (B)
the transfer relates to personal property;
(iii) Buyer will cooperate with Seller and use Commercially Reasonable
Efforts to permit Seller to have access to the Pollution Control Facilities at
reasonable times to examine them; and
(iv) The foregoing clause (i) shall not be construed to prevent Buyer (or
any transferee) from maintaining or repairing the Pollution Control Facilities,
ceasing to operate, maintain or repair any element or item of the Pollution
Control Facilities, suspending the operation of the Pollution Control Facilities
on a temporary basis, or from terminating the operation of the Pollution Control
Facilities on a permanent basis and shutting down, retiring, abandoning and/or
decommissioning the Pollution Control Facilities; provided, however, that if the
Pollution Control Facilities, in whole or in part, are dismantled and sold
(including any sale for scrap), and if the operation of the Purchased Assets has
not been terminated, then, to the extent it is possible to do so, the proceeds
of such sale of the Pollution Control Facilities shall within six months from
the date of sale be expended to acquire replacement property to be used for the
same qualifying purpose as the Pollution Control Facilities so sold. Seller
shall notify Buyer when the Pollution Control Bonds have matured or been
redeemed.
6.9 Advice of Changes. Prior to the Closing Date, each Party will promptly
advise the other in writing with respect to any matter arising after execution
of this Agreement which, if existing or occurring at the date of this Agreement,
would have been required to be set forth in this Agreement, including any of the
Schedules hereto. If Seller advises Buyer in writing of any change occurring
after the date of this Agreement but prior to Closing that is material to any
representation, warranty or covenant of Seller under this Agreement, Buyer shall
have the right to terminate this Agreement pursuant to Section 9.1(e). If Buyer
fails to exercise its termination right, Seller's written notice under this
Section 6.9 will be deemed to have amended this Agreement, including the
appropriate schedule, or to have qualified the representations and warranties
contained in Article IV. Seller shall be entitled to amend, substitute or
otherwise modify any Seller's Agreement to the extent that such Seller's
Agreement expires by its terms prior to the Closing Date or is terminable
without liability to Buyer on or after the Closing Date, or if the terms and
conditions of such modified Seller's Agreement constituting the Assumed
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Liabilities and Obligations are on terms and conditions not less favorable to
Buyer than the original Seller's Agreement. Nothing contained herein shall
relieve Seller or Buyer of any breach of representation, warranty or covenant
under this Agreement existing as of the date hereof or any subsequent date as of
which such representation, warranty or covenant shall have been made.
6.10 Employees.
(a) Buyer will offer employment, effective on the Closing Date, to all
employees of Seller who are covered by the IBEW Collective Bargaining Agreements
and are actively employed as of the Closing Date in positions relating to the
Purchased Assets ("Union Employees").
(b) (i) Buyer will offer employment, effective on the Closing Date, to all
CPS employees whose principal place of employment is located at the Purchased
Assets who are not covered by the IBEW Collective Bargaining Agreements on the
Closing Date, and who provide services in support of CPS, but excluding
employees of Seller's Support Services Business Group, and (ii) Buyer may offer
employment to any other employee of Seller provided that Buyer obtains Seller's
written consent prior to any such offer (collectively, the "Non-Union
Employees"). Subject to its obligations hereunder, Seller retains the right to
transfer any of its employees employed at CPS to any other Seller facility prior
to the Closing Date; provided, however, that key employees critical to the
operations of CPS, as determined by Buyer from time to time, shall be
transferred only with the written consent of the Buyer. Each person who becomes
employed by Buyer pursuant to Section 6.10(a) or (b) shall be referred to herein
as a "Transferred Union Employee" or "Transferred Non-Union Employee",
respectively, and collectively as "Transferred Employees".
(c) All offers of employment made by Buyer to any of Seller's employees
will be made subject to the Parties' satisfaction that an employee is (i)
qualified to perform the duties and responsibilities of their current job
assignment with or without reasonable accommodation (or will be capable of doing
so upon return from authorized leave of absence), and (ii) has the appropriate
nuclear power plant access authorization. All offers of employment shall be made
in accordance with all applicable federal, state and local laws and regulations
(including, without limitation, Section 16-128 of the Illinois Public Utilities
Act) and, with respect to Union Employees, the IBEW Collective Bargaining
Agreements. All such offers of employment will be made in accordance with
Section 16-128 of the Illinois Public Utilities Act and will therefore be at no
less than the wage rates, and substantially equivalent fringe benefits and terms
and conditions of employment that are in effect at the time of transfer of
ownership of the Purchased Assets; and such wage rates and substantially
equivalent fringe benefits and terms and conditions of employment shall continue
for at least 30 months from the time of said transfer of ownership unless the
parties mutually agree to different terms and conditions of employment within
that 30-month period. Seller and Buyer shall cooperate in developing a
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transition plan (the "Transition Plan") for Union Employees and Non-Union
Employees in accordance with Section 16-128 of the Illinois Public Utilities
Act. Seller shall be responsible for implementing and funding the Transition
Plan for all such Union Employees and Non-Union Employees who are not
Transferred Employees.
(d) Schedule 6.10(d) sets forth the collective bargaining agreements, and
all amendments thereto, to which Seller is a party with the IBEW in connection
with the Purchased Assets ("IBEW Collective Bargaining Agreements"). Unless
specifically provided for herein, all Transferred Union Employees shall retain
their seniority and receive full credit for service with the Seller for
eligibility and vesting purposes with regard to Benefit Plans with Seller
(including service with a Sponsor to the extent credited by Seller) in
connection with entitlement to compensation, vacation, benefits and rights under
the IBEW Collective Bargaining Agreements, and benefits and rights under each
retirement or employee benefit plan or program Buyer is required to maintain for
Transferred Union Employees pursuant to the IBEW Collective Bargaining
Agreements. Buyer agrees to recognize the IBEW as the collective bargaining
agent for the Transferred Union Employees.
(e) As of the Closing Date, all Transferred Employees shall commence
participation in welfare benefit plans of Buyer or its Affiliates (the
"Replacement Welfare Plans") that will provide benefits or coverage
substantially similar to the benefits or coverage provided to the Transferred
Employees under Seller's plans and programs in effect for the Transferred
Employees immediately prior to the Closing Date. Buyer shall (i) waive all
limitations as to pre-existing condition exclusions and waiting periods with
respect to the Transferred Employees under the Replacement Welfare Plans, other
than, but only to the extent of, limitations or waiting periods that were in
effect with respect to such employees under the welfare benefit plans maintained
by Seller and that have not been satisfied as of the Closing Date, and (ii)
provide each Transferred Employee with credit for any co-payments and
deductibles paid prior to the Closing Date during a plan year under Seller's
plan that has not ended as of the Closing Date, in satisfying any deductible or
out-of-pocket requirements under the Replacement Welfare Plans (on a pro-rata
basis in the event of a difference in plan years).
(f) (i) Effective as of the Closing Date, Buyer shall, in accordance with
Section 16-128 of the Illinois Public Utilities Act, cause to be established
defined benefit pension plans, 401(k) plans, post-retirement medical and life
insurance, and other welfare benefit plans and fringe benefit plans for the
benefit of the Transferred Employees (the "Buyer Benefit Plans"). The Buyer
Benefit Plans shall have substantially the same terms as Seller's defined
benefit plans, 401(k) plans, post-retirement medical and life insurance, and
other welfare benefit plans and fringe benefit plans (the "Seller Benefit
209
Plans") as of the Closing Date provided that no improvements are made after the
date of this Agreement and prior to the Closing Date.
(ii) The Transferred Employees shall be given credit in the Buyer Benefit
Plans for all service with Seller as if it were service with Buyer for purposes
of determining eligibility for and vesting of benefits under the Buyer Benefit
Plans.
(iii) Effective as of the Closing Date, Transferred Employees shall cease
to actively participate in all Seller Benefit Plans.
(iv) Following the Closing Date:
(A) Transferred Employees' accrued benefits under Seller's defined benefit
pension plans shall be frozen and shall not be increased as the result of any
service completed or any compensation received for employment with the Buyer
after the Closing Date. Notwithstanding the preceding sentence, and only for
purposes of determining vesting and eligibility for early retirement subsidies
under the Seller's defined benefit retirement plans, Seller shall recognize the
Transferred Employees' employment with the Buyer after the Closing Date as if
such employment was with the Seller. Transferred Employees shall have a right to
commence benefits in accordance with Seller's defined benefit plans; provided,
however, any subsidies reflecting employment described in this subparagraph
shall be paid only if the Transferred Employee terminates employment with the
Buyer.
(B) Transferred Employees who, on or before the Closing Date, have
satisfied the eligibility requirements for post-retirement health benefits
and/or life insurance benefits under the plans maintained by the Seller shall
remain eligible for post-retirement benefits pursuant to the terms of such
plans. With respect to these Transferred Employees, Seller shall recognize
employment with the Buyer after the Closing Date for purposes of determining the
amount of such post-retirement benefits and the eligibility for commencement of
such post-retirement benefits.
(C) With respect to Transferred Employees who attain age 50 on or before
the Closing Date, Seller shall recognize employment with the Buyer after the
Closing Date for purposes of determining eligibility for post-retirement health
and life insurance benefits under the post-retirement benefit plans maintained
by the Seller. With respect to these Transferred Employees, Seller shall also
recognize employment with the Buyer after the Closing Date for purposes of
determining the amount of such post-retirement benefits and the eligibility for
commencement of such post-retirement benefits.
210
(D) Buyer shall provide Seller with information regarding the employment
status of Transferred Employees no less often than annually. Such data shall be
sufficient to enable Seller to implement the provisions of this Section 6.10.
(E) Nothing in this Section 6.10(f) shall limit Seller's ability to amend
Seller's Benefit Plans after the Closing Date.
(g) To the extent allowable by law, and subject to Seller obtaining written
agreement from the IBEW, Seller shall cause to be transferred assets
representing the account balance of all Transferred Employees under the
qualified defined contribution plans maintained by the Seller (the "Seller's
Savings Plans"). In implementing this Section 6.10(g):
(i) The transfer shall be made as soon as practicable following the Closing
Date, in cash and cash equivalents, and shall be made to Buyer's tax-qualified
401(k) plans in which Transferred Employees participate after the Closing Date.
(ii) Buyer agrees that the assets so transferred may include promissory
notes evidencing loans from the Seller's Savings Plans to Transferred Employees
that are outstanding as of the transfer date. However, except as provided in
Section 6.10(d), any defined contribution plan of Buyer or its Affiliates
accepting such a transfer shall not be required to make any further loans to
Transferred Employees after the Closing Date.
(iii) Buyer agrees that the assets so transferred may include shares of
common stock of Seller or its Affiliates representing Transferred Employees'
investment in such stock as of the Closing Date. Buyer agrees to maintain the
availability to Transferred Employees of an investment in such stock for a
period of at least 30 months from the Closing Date. During such period, no
additional shares of such stock will be purchased either pursuant to employee or
employer contributions to the plan or pursuant to the reinvestment of dividends.
However, Transferred Employees may transfer assets out of such stock fund
pursuant to rules established under Buyer's tax-qualified 401(k) plan.
(h) Buyer shall establish severance plans ("Buyer's Severance Plans") which
will provide (i) benefits to Transferred Union Employees no greater than those
benefits provided to Seller's Union Employees pursuant to the "Utility
Agreement" dated May 9, 1997, and (ii) benefits to Transferred Non-Union
Employees no greater than those benefits provided to Seller's Non-Union
Employees pursuant to the "Illinova Severance Policy for Nonunion Salaried
Employees" dated January 1, 1997. Seller shall reimburse Buyer, on no less than
an annual basis, for the actual severance payments made to any Transferred
Employee who is eligible for a benefit under Buyer's Severance Plans and who is
terminated for reasons other than for cause or disability during the period
211
beginning on the Closing Date and ending on the second anniversary thereof;
provided, however, that if more than 25% of the total number of Transferred
Employees are so terminated during such two-year period, Seller's liability
shall be limited to the actual severance payments made to the first 25% of the
total number of Transferred Employees who are so terminated.
(i) Seller shall be responsible, with respect to the Purchased Assets, for
performing and discharging all requirements to be performed by Seller up to the
Closing Date as set forth under the WARN Act and under applicable state and
local laws and regulations.
(j) Seller is responsible for extending COBRA continuation coverage to all
employees and former employees at CPS, and qualified beneficiaries of such
employees and former employees, who become or became entitled to such COBRA
continuation coverage on or before the Closing Date by reason of the occurrence
of a qualifying event on or before the Closing Date, including those for whom
the Closing Date occurs during their COBRA election period. Buyer shall be
responsible for providing COBRA continuation coverage only to Transferred
Employees and qualified beneficiaries of such employees who become entitled to
such COBRA continuation coverage on or after the Closing Date by reason of the
occurrence of a qualifying event after the Closing Date.
(k) Seller shall remain responsible for paying Transferred Employees: (i)
all salary and wages, and a pro rata portion of any bonuses and/or incentive
compensation that were earned for time worked for Seller prior to the Closing
Date; and (ii) all workers' compensation, disability benefits, or other
insurance benefits that were accrued or for which entitlement to payment is
based upon events occurring prior to the Closing Date, including any incurred
but unreported claims under employee benefit plans maintained by Seller. Seller
shall pay to Buyer as promptly as practicable following the Closing Date, but no
later than the 45th day, the cash equivalent for all accrued and unused vacation
time for Transferred Employees which has accrued as of the Closing Date.
(l) Individuals who are otherwise "Union Employees" or "Non-Union
Employees" but who are not actively at work on the Closing Date due to a leave
of absence covered by the Family and Medical Leave Act, or due to any other
authorized leave of absence, shall nevertheless be treated as "Union Employees"
or as "Non-Union Employees," as the case may be, on such date if they are able
(i) to return to work within the protected period under the Family Medical Leave
Act or such other leave time, whichever is applicable, and (ii) to perform the
essential functions of their job, with or without a reasonable accommodation.
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(m) All Transferred Employee Records shall be delivered promptly after the
Closing Date to Buyer.
6.11 Risk of Loss.
(a) Between the date hereof and the Closing Date, Buyer shall not bear any
risk of loss or damage to the property included in the Purchased Assets except
to the extent arising out of or resulting from a material breach by PECO under
Section 6.2 of the Management Agreement or directly resulting from conduct of a
PECO employee that constitutes willful misconduct or gross negligence; provided,
however, that conduct of non-Peco employees shall not be imputed to PECO for
purposes of this Agreement. Seller shall replace or repair any damage to the
Purchased Assets in accordance with Good Utility Practices, except as otherwise
provided in the following sentence or in paragraphs (b) or (c) below.
(b) If, before the Closing Date all or any portion of the Purchased Assets
are taken by eminent domain or are the subject of a pending or (to the Knowledge
of Seller) contemplated taking which has not been consummated, Seller shall
notify Buyer promptly in writing of such fact. If such taking would create a
Material Adverse Effect, Buyer and Seller shall negotiate in good faith to
settle the loss resulting from such taking (including, without limitation, by
making a fair and equitable adjustment to the Purchase Price) and, upon such
settlement, consummate the transactions contemplated by this Agreement pursuant
to the terms of this Agreement. If no such settlement is reached within sixty
(60) days after Seller has notified Buyer of such taking, then Buyer or Seller
may terminate this Agreement pursuant to Section 9.1(g).
(c) If, before the Closing Date all or any portion of the Purchased Assets
are damaged or destroyed by fire or other casualty, Seller shall notify Buyer
promptly in writing of such fact. If such damage or destruction would create a
Material Adverse Effect and Seller has not notified Buyer of its intention to
cure such damage or destruction within fifteen (15) days after its occurrence,
Buyer and Seller shall negotiate in good faith to settle the loss resulting from
such casualty (including, without limitation, by making a fair and equitable
adjustment to the Purchase Price) and, upon such settlement, consummate the
transactions contemplated by this Agreement pursuant to the terms of this
Agreement. If no such settlement is reached within sixty (60) days after Seller
has notified Buyer of such casualty, then Buyer may terminate this Agreement
pursuant to Section 9.1(g).
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6.12 Decommissioning Funds.
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6.13 Spent Nuclear Fuel Fees. Between the date hereof and the Closing Date,
and at all times thereafter, subject to the terms of the Interim Agreement and
the Management Agreement, Seller will pay all Spent Nuclear Fuel Fees and any
other fees associated with electricity generated at CPS and sold prior to the
Closing Date, and Buyer shall have no liability or responsibility therefor.
Buyer shall pay and discharge all fees and expenses associated with the nuclear
fuel consumed in CPS and sold from and after the Closing Date, including Spent
Nuclear Fuel Fees, calculated based upon electricity generated from such
consumed nuclear fuel, as provided in Department of Energy regulations, and
Seller shall have no liability or responsibility therefor. Buyer shall assume
title to and responsibility for the storage and disposal of the spent nuclear
fuel at the Site as of the Closing Date. Subject to Seller's rights to recover
its investment in the Private Fuel Storage L.L.C. facility in Utah, Seller shall
assign to Buyer the Department of Energy Standard Contract for Disposal of Spent
Fuel and/or High Level Waste and shall provide the required notice to the
Department of Energy within ninety (90) days of transfer of title to spent fuel.
6.14 Department of Energy Decontamination and Decommissioning Fees. Seller
will continue to pay all Department of Energy Decontamination and
220
Decommissioning Fees relating to nuclear fuel purchased and consumed at CPS
prior to the Closing Date, including, without limitation, all annual Special
Assessment invoices to be issued after the Closing Date by the Department of
Energy, as contemplated by its regulations at 10 C.F.R. Part 766 implementing
Sections 1801, 1802 and 1803 of the Atomic Energy Act, relating to such nuclear
fuel purchased and consumed prior to the Closing Date.
6.15 Cooperation Relating to Insurance and Price-Anderson Act. Until the
Closing, Seller will maintain in effect the same level of property damage and
liability insurance for the Facilities as in effect on the date hereof,
including, without limitation, those insurance policies described in Schedule
4.9 (unless substitute policies are obtained under Section 6.1). Buyer shall
obtain prior to or on the Closing Date nuclear insurance and other insurance
policies in accordance with Schedule 6.15 or as otherwise required by law.
Seller shall reasonably cooperate with Buyer's efforts to obtain insurance,
including insurance required under the Price-Anderson Act or other Nuclear Laws
with respect to the Purchased Assets. In addition, Seller agrees to use
reasonable efforts to assist Buyer in making any claims against pre-Closing
insurance policies of Seller that may provide coverage related to Assumed
Liabilities and Obligations. Buyer agrees that it will indemnify Seller for its
reasonable out-of-pocket expenses incurred in providing such assistance and
cooperation.
6.16 Tax Clearance Certificates. Seller and Buyer shall cooperate and use
their best efforts to cause the tax clearance certificates described in Schedule
4.20 of this Agreement to be issued by the appropriate taxing authorities prior
to the Closing Date or as soon as practicable thereafter.
6.17 Remediation. Buyer has previously completed its Phase I and Phase II
environmental site assessments at the Site and has identified those
Environmental Conditions at the Site set forth on Schedule 6.17. Buyer will not
conduct any additional environmental site assessments unless Buyer becomes aware
of any Environmental Condition at the Site that is reasonably likely to give
rise to an Environmental Claim or Remediation activity that would result in a
liability or obligation in excess of $250,000 or unless otherwise required by
law. Buyer agrees to share with Seller all reports, analyses, and other
documents produced or prepared by Buyer, its Affiliates or Buyer's environmental
consultants with respect to Buyer's environmental due diligence at the Site.
Seller hereby agrees to perform the type and scope of Remediation set forth on
Schedule 6.17 in accordance with applicable Environmental Law. Seller shall use
Commercially Reasonable Efforts to complete any such Remediation work prior to
the Closing Date to the extent such Remediation work is capable of being
performed prior to the Closing Date. With respect to any Remediation work, or
portion thereof, which reasonably cannot be completed prior to the Closing Date,
Seller may elect to complete such work or permit Buyer to complete such
Remediation and Seller shall indemnify Buyer for all reasonable costs thereof.
However, Seller shall not be required to perform or indemnify Buyer for any
Remediation (1) which is required as a result of any use of or operations at the
Site other than such use and operations as they existed on or prior to the
Closing Date (including, without limitation, any improvement or expansion of the
current operations or other construction, demolition or excavation activities at
the Site), or (2) which arises from acts of Buyer or its employees, agents or
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independent contractors after the Closing Date. To the extent allowed under
Environmental Law, the Remediation measures under this Section 6.17 may include
reasonable land use controls, as appropriate, to the extent that such controls
do not unreasonably interfere with the use or operation of the Purchased Assets
after the Closing Date. Between the date hereof and the Closing Date, Seller
shall have exclusive authority over the performance of the Remediation set forth
on Schedule 6.17, and except as otherwise required by Environmental Law, Buyer
shall not initiate or permit any communication, orally or in writing, with any
Governmental Authority regarding such Remediation without the prior written
consent of Seller. With respect to any Remediation to be performed by Seller
after the Closing Date, Buyer will grant to Seller and its contractors an
appropriate license to enter the Site at reasonable times and perform the
Remediation work, provided that Seller and its contractors shall comply with all
rules and regulations of Buyer and any Governmental Authority with respect to
the Site and shall not unreasonably interfere with the operations of Buyer at
the Site.
6.18 NRC License Transfer Requirements. Buyer will accept conditions in an
NRC license transfer order that approves transfer of the CPS license to Buyer
that are reasonable, appropriate and similar in scope to the requirements
imposed on Buyer by that certain NRC Order Approving Transfer of License and
Conforming Amendment, and the associated Safety Evaluation Report, dated April
12, 1999, with respect to the transfer of the NRC license for the Three Mile
Island Unit 1 nuclear plant from GPU Nuclear, Inc. to Buyer.
6.19 Metering. The Parties have heretofore engaged a consultant (the
"Metering Consultant") to examine the Facilities and related infrastructure for
the purpose of providing two estimates for the cost of acquiring and installing
"Revenue Grade Metering" (as defined in Amendment No. 3 to the Management
Agreement) at the metering points and in accordance with the proposal set forth
in Amendment No. 3 to the Management Agreement, with one (1) estimate being the
cost of acquiring and installing Revenue Grade Metering on the "low side" of the
main power transformer located in the CPS switchyard (the "Low Side Estimate")
and the other estimate being the cost of acquiring and installing Revenue Grade
Metering on the "high side" of the main power transformer located in the CPS
switchyard (the "High Side Estimate"). The Parties agree to share equally the
fees and expenses of the Metering Consultant and to install Revenue Grade
Metering on the "high side" of the main power transformer as proposed in the
High Side Estimate. Buyer and Seller shall share equally all acquisition and
installation costs equal to the Low Side Estimate; Seller agrees to pay the next
xxxxxxxx of construction costs, and the Parties agree to share equally any
amount above such xxxxxxxx.
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6.20 Right to Participate in Electric Generating Projects.
(a) For a period of ten (10) years following the Closing Date (the
"Restricted Period"), Buyer hereby grants to Seller (i) the first right and
option to participate with Buyer equally in any non-CPS electric generating
facilities or projects to be constructed or developed at the Site for the
generation of electric energy to be transmitted to customers or users off-Site
(each, a "Generating Project") and (ii) a right of first refusal to provide any
transmission services with respect to any Generating Project. For purposes of
determining what constitutes equal participation in a Generating Project, the
value of any land, facilities or other property contributed by Buyer to the
Generating Project which were included in the Purchased Assets shall be deemed
to be zero. Buyer shall promptly notify Seller in writing if during the
Restricted Period Buyer decides to proceed with a Generating Project or enters
into discussions with a third party concerning a Generating Project (including,
without limitation, financial costs and projections). Within ninety (90) days
following receipt of written notice from Buyer, Seller shall notify Buyer
whether or not it desires to participate in the Generating Project; provided,
however, if Seller requires more information concerning the Generating Project
and such information is reasonably available to or can be reasonably generated
by Buyer in order to evaluate participation in the Project, then Seller shall
request such information in writing, and Seller shall have until the later of
(i) thirty (30) days following receipt of such additional information, or (ii)
expiration of the original ninety (90) day period to notify Buyer whether it
desires to participate in the Generating Project. Buyer shall notify Seller at
least five (5) Business Days in advance of any meetings with third parties
concerning the Generating Project which are to be held either during any of
Seller's evaluation periods or after Seller has notified Buyer of its intent to
participate in the Generating Project, and Seller shall have the right to
participate in any such meetings. Following Seller's notification of Buyer that
Seller intends to participate in a Generating Project, Seller and Buyer shall
promptly document their joint participation, seek to obtain all necessary
approvals by Governmental Authorities and agree on schedule, budget and
management responsibilities for the Generating Project. Seller's participation
in any Generating Project may be through Seller or any of its Affiliates, and
all instruments or agreements documenting the Generating Project (and the
Parties' respective rights and obligations with respect to the Project) shall be
reasonably acceptable to Buyer and Seller.
(b) (i) Subject to the exceptions set forth in subsection (ii) of this
Section 6.20(b), Buyer agrees that during the Restricted Period, it will not
sell, transfer, lease or license to a third party any of the Real Property
transferred to Buyer hereunder or enter into any discussions with respect
thereto (a "Transfer") without first offering such Real Property to Seller. In
the event Buyer decides to Transfer any such Real Property, Buyer will promptly
notify Seller of such fact, and Seller shall have the exclusive right to
223
negotiate with Buyer concerning the Transfer of such Real Property for a period
of sixty (60) days (the "Exclusive Negotiation Period"). If Buyer and Seller are
unable to agree on the terms of the Transfer of such Real Property to Seller
during the Exclusive Negotiation Period, or in the event Seller notifies Buyer
in writing that it does not desire to Transfer such Real Property prior to
expiration of the Exclusive Negotiation Period, Buyer may offer such Real
Property to third parties. If Buyer thereafter receives an offer from a third
party with respect to such Real Property (a "Third Party Offer"), Buyer shall
promptly notify Seller in writing (setting forth the terms and condition of the
Third Party Offer) and Seller shall have the right and option (exercisable by
delivery of written notice to Buyer within the thirty (30) day period following
Seller's receipt of written notice of the Third Party Offer) to buy or lease
such Real Property on the same terms and conditions set forth in the Third Party
Offer. If Seller does not notify Buyer that it desires to buy or lease such Real
Property within such thirty (30) day period, Buyer may Transfer such Real
Property to the third party (but only upon the terms and conditions set forth in
the Third Party Offer) within one hundred eighty (180) days following the
earlier of Seller's notification that it does not desire to buy or lease such
Real Property or expiration of the thirty (30) day period. If Buyer fails to
Transfer such Real Property to the third party within such one hundred eighty
(180) day period, such Real Property shall again be subject to the terms and
condition of this Section 6.20. The covenants of Buyer set forth in this Section
6.20(b) shall be covenants running with the land and shall be included in and/or
recorded with the special warranty deed with respect to the Real Property to be
delivered to Buyer at Closing.
(ii) The requirements of Section 6.20(b)(i) shall not apply to any of the
following Transfers during the Restricted Period:
(A) Any Transfer to an Affiliate of Buyer which agrees in the Transfer
documents for the benefit of Seller to be bound in the same manner and degree as
Buyer to the provisions of this Section 6.20;
(B) Any lease respecting the Real Property existing at the time of Closing
and constituting a portion of the Assumed Liabilities and Obligations, but no
extensions or modifications thereof unless such extensions or modifications
specifically contain for the benefit of Seller restrictive covenants consistent
with this Section 6.20; or
(C) Any Transfer of the Real Property to a third party in an arms-length
transaction in which the buyer or lessee agrees not to use, directly or
indirectly, such Real Property during the Restricted Period for the
construction, operation, or use of any electric generating facility or equipment
that produces, individually or in the aggregate, more than 1MW of electricity
for consumption by customers or users off-Site.
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6.22 Personal Property Insurance. Buyer (on behalf of itself and its
Affiliates) agrees to (i) request its insurers to include Seller's Transmission
Assets, Excluded Other Assets, and other items of tangible personal property
owned by Seller at the Site under Buyer's insurance policies after the Closing
Date and to name Seller as an additional insured thereunder, and (ii) waive any
right of recovery against Seller for "accidental property damage" (as defined in
the NEIL policies); provided, however, that Buyer shall provide Seller with
quotes from its insurers regarding any incremental premium or other costs
related to including Seller's assets under such policies, including, without
limitation, any deductible, retention or similar costs, and Buyer shall obtain
Seller's approval before incurring any such incremental premiums or other costs
on Seller's behalf.
ARTICLE VII
CONDITIONS
7.1 Conditions to Obligations of Buyer. The obligations of Buyer to
purchase the Purchased Assets and to consummate the other transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Closing Date (or the waiver in writing by Buyer) of the following
conditions:
(a) The waiting period under the HSR Act applicable to the consummation of
the sale of the Purchased Assets contemplated hereby shall have expired or been
terminated;
(b) No preliminary or permanent injunction or other order or decree by any
federal or state court or Governmental Authority which prevents the consummation
of the sale of the Purchased Assets contemplated herein shall have been issued
and remain in effect (each Party agreeing to cooperate in all efforts to have
any such injunction, order or decree lifted) and no statute, rule or regulation
225
shall have been enacted by any state or federal government or Governmental
Authority which prohibits the consummation of the sale of the Purchased Assets;
(c) Buyer shall have received all of Buyer's Required Regulatory Approvals,
which approvals shall contain no condition which could reasonably be expected to
have a material adverse effect on the Purchased Assets or Buyer, and such
approvals shall be final and non-appealable;
(d) Seller shall have performed and complied in all material respects with
the covenants and agreements contained in this Agreement which are required to
be performed and complied with by Seller on or prior to the Closing Date;
(e) The representations and warranties of Seller set forth in this
Agreement that are qualified by materiality shall be true and correct as of the
Closing Date and all other representations and warranties shall be true and
correct in all material respects as of the Closing Date, in each case as though
made at and as of the Closing Date;
(f) Buyer shall have received certificates from an authorized officer of
Seller, dated the Closing Date, to the effect that, to such officer's Knowledge,
the conditions set forth in Sections 7.1(d), (e), (j), (l), (m), (n), (p), (t)
and (u) have been satisfied by Seller;
(g) Buyer shall have received an opinion as to the matters contained in
Exhibit J hereto from Seller's counsel (which, except as to regulatory matters,
may be delivered by Seller's general counsel), dated the Closing Date and
reasonably satisfactory in form and substance to Buyer and its counsel;
(h) Seller shall have delivered, or caused to be delivered, to Buyer at the
Closing, Seller's closing deliveries described in Section 3.6;
(i) Buyer shall have received from a title insurance company reasonably
acceptable to Buyer ALTA owner's title insurance policies on the Real Property,
in form and substance reasonably satisfactory (including no materially adverse
conditions) to Buyer and containing affirmative insurance as Buyer may
reasonably request with respect to the Permitted Encumbrances and Real Property
Agreements, insuring title as described in Section 4.7, subject only to the
Permitted Encumbrances. Buyer shall provide Seller with a copy of a preliminary
title report and an updated survey for the Real Property to the extent obtained
by Buyer;
226
(j) Since the date of this Agreement, no Material Adverse Effect shall have
occurred and be continuing;
(k) The IRS rulings or opinions of counsel applicable to Buyer as provided
in Section 6.12 shall have been received;
(l) Seller shall have filed, or cause to be filed, in the land records of
Dewitt County, a restrictive covenant, in form and substance reasonably
satisfactory to Buyer, prohibiting the use of the Excluded Parcels for a term of
not less than 25 years for any purpose related to electric generation of more
than 1 MW of electricity for consumption by customers or users off-Site;
(m) Seller shall have completed in accordance with Good Utility Practices
and in conformity with all applicable legal requirements all material work
required to be accomplished by the Closing Date under Seller's Y2K Plan;
(n) All Low Level Waste that has been generated in the operations of the
Facilities more than 60 days prior to the Closing Date shall have been shipped
off-Site by Seller for permanent disposal in accordance with all applicable
legal requirements, and all Low Level Waste generated in the operations of the
Facilities prior to the Closing Date shall have been properly bagged, tagged,
packaged and/or stored by Seller at the Facilities in accordance with Good
Utility Practice for handling Low Level Waste;
(o) The lien of the Mortgage Indenture on the Purchased Assets shall have
been released and any documents necessary to evidence such release shall have
been delivered to the title company;
(p) All consents and approvals for the consummation of the sale of the
Purchased Assets contemplated hereby required under the terms of any note, bond,
mortgage, indenture, material agreement or other instrument or obligation to
which Seller is a party or by which Seller, or any of the Purchased Assets, may
be bound, shall have been obtained, other than those which if not obtained,
would not, individually and in the aggregate, create a Material Adverse Effect;
(q) Buyer and Seller shall have agreed to the terms and conditions of the
Easement Agreement, the Environmental Laboratory Lease, the Emergency Off-Site
Facilities Lease and the Electric Service Agreement; Buyer shall be reasonably
satisfied with the scope and amounts to be charged by Seller under the IP
Service Agreement (other than information technology charges described in
Exhibit F); Seller shall have entered into each of the Ancillary Agreements; and
the Ancillary Agreements shall be in full force and effect;
227
(r) The Total FMV of the Decommissioning Funds shall be as set forth in
Section 6.12;
(s) Buyer shall not have become aware of any Environmental Condition at the
Site (other than those described in Schedules 4.10 or 6.17) that is reasonably
likely to give rise to an Environmental Claim or Remediation activity that would
result in a liability or obligation in excess of $250,000, unless Seller has
agreed to indemnify Buyer for any liability or obligation in excess of such
amount;
(t) Seller shall have completed all Remediation required under Section
6.17, or, alternatively, shall indemnify Buyer for any and all such Remediation
costs to be incurred after the Closing Date; and
(u) Seller shall not be in default of any of its material obligations under
the Management Agreement.
7.2 Conditions to Obligations of Seller. The obligations of Seller to sell
the Purchased Assets and to consummate the other transactions contemplated by
this Agreement shall be subject to the fulfillment at or prior to the Closing
Date (or the waiver in writing by Seller) of the following conditions:
(a) The waiting period under the HSR Act applicable to the consummation of
the sale of the Purchased Assets contemplated hereby shall have expired or been
terminated;
(b) No preliminary or permanent injunction or other order or decree by any
federal or state court or Governmental Authority which prevents the consummation
of the sale of the Purchased Assets contemplated herein shall have been issued
and remain in effect (each Party agreeing to use its best efforts to have any
such injunction, order or decree lifted) and no statute, rule or regulation
shall have been enacted by any state or federal government or Governmental
Authority in the United States which prohibits the consummation of the sale of
the Purchased Assets;
(c) Seller shall have received all of Seller's Required Regulatory
Approvals, which approvals shall contain no condition which could reasonably be
expected to have a material adverse effect on Seller, and such approvals shall
be final and non-appealable;
(d) Buyer shall have performed and complied with in all material respects
the covenants and agreements contained in this Agreement which are required to
be performed and complied with by Buyer on or prior to the Closing Date;
228
(e) The representations and warranties of Buyer set forth in this Agreement
that are qualified by materiality shall be true and correct as of the Closing
Date and all other representations and warranties shall be true and correct in
all material respects as of the Closing Date, in each case as though made at and
as of the Closing Date;
(f) Seller shall have received a certificate from an authorized officer of
Buyer, dated the Closing Date, to the effect that the conditions set forth in
Sections 7.2(d) and (e) have been satisfied by Buyer;
(g) Effective upon Closing, Buyer shall have assumed, as set forth in
Section 6.10, all of the applicable obligations under the IBEW Collective
Bargaining Agreements as they relate to Transferred Union Employees;
(h) Seller shall have received an opinion as to the matters set forth on
Exhibit K hereto from Buyer's counsel (which, except as to regulatory matters,
may be delivered by Buyer's general counsel), dated the Closing Date and
reasonably satisfactory to Seller and its counsel;
(i) Buyer shall have delivered, or caused to be delivered, to Seller at the
Closing, Buyer's closing deliveries described in Section 3.7;
(j) Buyer and Seller shall agreed to the terms and conditions of the
Easement Agreement, the Environmental Laboratory Lease, the Emergency Off-Site
Facilities Lease and the Electric Service Agreement; Seller shall be reasonably
satisfied with the amounts to be paid by Buyer under the IP Service Agreement
(other than information technology charges described in Exhibit F); Buyer shall
have entered into each of the Ancillary Agreements, and the Ancillary Agreements
shall be in full force and effect;
(k) Since the date of this Agreement, no Material Adverse Effect shall have
occurred and be continuing;
(l) The IRS rulings or opinions of counsel applicable to Seller as provided
in Section 6.12 shall have been received;
(m) The lien of the Mortgage Indenture on the Purchased Assets shall have
been released and any documents necessary to evidence such release shall have
been delivered to the title company; and
229
(n) Each of PECO and British Energy plc shall have executed and delivered
the financial assurance letters set forth in Exhibits L and M, respectively; and
(o) PECO shall not be in default of any of its material obligations under
the Management Agreement.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification.
(1) Buyer shall indemnify, defend and hold harmless Seller, its Affiliates, and
their respective officers, directors, employees, shareholders, and agents (each,
a "Seller Indemnitee") from and against any and all claims, demands, suits,
losses, liabilities, damages, obligations, payments, costs and expenses
(including, without limitation, the costs and expenses of any and all actions,
suits, proceedings, assessments, judgments, settlements and compromises relating
thereto and reasonable attorneys' fees and reasonable disbursements in
connection therewith) (each, an "Indemnifiable Loss"), asserted against or
suffered by any Seller Indemnitee relating to, resulting from or arising out of
(i) any breach by Buyer of any representations, warranties or covenants
contained in this Agreement, (ii) the Assumed Liabilities and Obligations, (iii)
any Inspection, or the use by Buyer of the non-exclusive license granted under
Section 2.1(l), (iv) any Third Party Claims against a Seller Indemnitee arising
out of or in connection with Buyer's ownership or operation of CPS and other
Purchased Assets on or after the Closing Date, xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
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(b) Seller shall indemnify, defend and hold harmless Buyer, its officers,
directors, members, employees, shareholders, Affiliates and agents (each, a
"Buyer Indemnitee") from and against any and all Indemnifiable Losses asserted
against or suffered by any Buyer Indemnitee relating to, resulting from or
arising out of (i) any breach by Seller of any representations, warranties or
covenants contained in this Agreement, (ii) the Excluded Liabilities, (iii)
noncompliance by Seller with any bulk sales or transfer laws as provided in
Section 10.11, (iv) any Third Party Claims against a Buyer Indemnitee arising
out of or in connection with Seller's ownership or operation of the Purchased
Assets on or prior to the Closing Date, except for Assumed Liabilities and
Obligations, (v) any Third Party Claims against a Buyer Indemnitee arising out
of or in connection with Seller's ownership or operation of the Excluded Assets,
(vi) all Taxes incurred by reason of any act of Seller that either constitutes
230
an act of "self-dealing" as defined in Treas. Reg. section 1.468A-5(b)(2) or
results in the disqualification of the Qualified Decommissioning Fund under
Treas. Reg. section 1.468A-5 (except as otherwise contemplated by Section 6.12),
or (vii) any claims or attachments of Seller or any creditor of Seller against
the Decommissioning Funds after the Closing Date.
(c) Notwithstanding anything to the contrary contained herein:
(i) Any Person entitled to receive indemnification under this Agreement (an
"Indemnitee") shall use Commercially Reasonable Efforts to mitigate all losses,
damages, and the like relating to a claim under these indemnification
provisions, including availing itself of any defenses, limitations, rights of
contribution, claims against third Persons and other rights at law or equity.
The Indemnitee's Commercially Reasonable Efforts shall include the reasonable
expenditure of money to mitigate or otherwise reduce or eliminate any loss or
expenses for which indemnification would otherwise be due, and the Indemnitee
shall advise Indemnitor promptly of such expenditure (or provide Indemnitor with
the opportunity to pay such expenditures directly). The Indemnitor shall
promptly reimburse Indemnitee for the Indemnitee's reasonable expenditures in
undertaking the mitigation (together with interest thereon from the date of
payment thereof to the date of repayment at the "prime rate" as published in The
Wall Street Journal).
(ii) Any Indemnifiable Loss shall be net of (i) the dollar amount of any
insurance or other proceeds actually received by the Indemnitee or any of its
Affiliates with respect to the Indemnifiable Loss, and (ii) Income Tax benefits
to the Indemnitee to the extent realized by the Indemnitee, but such net amount
shall be increased to give effect to the Income Taxes attributable to the
receipt of any indemnification payment hereunder. Any Party seeking
indemnification hereunder shall use best efforts to make claims (including both
cost of defense and indemnity) under applicable insurance policies with respect
to any such Indemnifiable Loss.
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(d) The expiration or termination of any representation or warranty shall
not affect the Parties' obligations under this Section 8.1 if the Indemnitee
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provided the Person required to provide indemnification under this Agreement
(the "Indemnifying Party") with proper notice of the claim or event for which
indemnification is sought prior to such expiration, termination or
extinguishment.
(e) Except to the extent otherwise provided in Article IX, the rights and
remedies of Seller and Buyer under this Article VIII are exclusive and in lieu
of any and all other rights and remedies which Seller and Buyer may have under
this Agreement or otherwise for monetary relief, with respect to (i) any breach
of or failure to perform any covenant, agreement, or representation or warranty
set forth in this Agreement, after the occurrence of the Closing, or (ii) the
Assumed Liabilities and Obligations or the Excluded Liabilities, as the case may
be. The indemnification obligations of the Parties set forth in this Article
VIII apply only to matters arising out of this Agreement, excluding the
Ancillary Agreements. Any Indemnifiable Loss arising under or pursuant to an
Ancillary Agreement shall be governed by the indemnification obligations, if
any, contained in the Ancillary Agreement under which the Indemnifiable Loss
arises.
(f) Notwithstanding anything to the contrary herein, no Party (including an
Indemnitee) shall be entitled to recover from the other Party (including an
Indemnifying Party) for any liabilities, damages, obligations, payments, losses,
costs or expenses under this Agreement any amount in excess of the actual
compensatory damages, court costs and reasonable attorney's and other advisor
fees suffered by such Party. Buyer and Seller waive any right to recover
punitive, incidental, special, exemplary and consequential damages arising in
connection with or with respect to this Agreement. The provisions of this
Section 8.1(f) shall not apply to indemnification for a Third Party Claim.
8.2 Defense of Claims.
(a) If any Indemnitee receives notice of the assertion of any claim or of
the commencement of any claim, action or proceeding made or brought by any
Person who is not a Party to this Agreement or any Affiliate of a Party to this
Agreement (a "Third Party Claim") with respect to which indemnification is to be
sought from an Indemnifying Party, the Indemnitee shall give such Indemnifying
Party reasonably prompt written notice thereof, but in any event such notice
shall not be given later than twenty (20) calendar days after the Indemnitee's
receipt of notice of such Third Party Claim. Such notice shall describe the
nature of the Third Party Claim in reasonable detail and shall indicate the
estimated amount, if practicable, of the Indemnifiable Loss that has been or may
be sustained by the Indemnitee. The Indemnifying Party will have the right to
participate in or, by giving written notice to the Indemnitee, to elect to
assume the defense of any Third Party Claim at such Indemnifying Party's expense
and by such Indemnifying Party's own counsel, provided that the counsel for the
Indemnifying Party who shall conduct the defense of such Third Party Claim shall
be reasonably satisfactory to the Indemnitee. The Indemnitee shall cooperate in
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good faith in such defense at such Indemnitee's own expense. If an Indemnifying
Party elects not to assume the defense of any Third Party Claim, the Indemnitee
may compromise or settle such Third Party Claim over the objection of the
Indemnifying Party, which settlement or compromise shall conclusively establish
the Indemnifying Party's liability pursuant to this Agreement.
(b) (i) If, within twenty (20) calendar days after an Indemnitee provides
written notice to the Indemnifying Party of any Third Party Claims, the
Indemnitee receives written notice from the Indemnifying Party that such
Indemnifying Party has elected to assume the defense of such Third Party Claim
as provided in Section 8.2(a) , the Indemnifying Party will not be liable for
any legal expenses subsequently incurred by the Indemnitee in connection with
the defense thereof; provided, however, that if the Indemnifying Party shall
fail to take reasonable steps necessary to defend diligently such Third Party
Claim within twenty (20) calendar days after receiving notice from the
Indemnitee that the Indemnitee believes the Indemnifying Party has failed to
take such steps, the Indemnitee may assume its own defense and the Indemnifying
Party shall be liable for all reasonable expenses thereof.
(ii) Without the prior written consent of the Indemnitee, the Indemnifying
Party shall not enter into any settlement of any Third Party Claim which would
lead to liability or create any financial or other obligation on the part of the
Indemnitee for which the Indemnitee is not entitled to indemnification
hereunder. If a firm offer is made to settle a Third Party Claim without leading
to liability or the creation of a financial or other obligation on the part of
the Indemnitee for which the Indemnitee is not entitled to indemnification
hereunder and the Indemnifying Party desires to accept and agree to such offer,
the Indemnifying Party shall give written notice to the Indemnitee to that
effect. If the Indemnitee fails to consent to such firm offer within twenty (20)
calendar days after its receipt of such notice, the Indemnifying Party shall be
relieved of its obligations to defend such Third Party Claim and the Indemnitee
may contest or defend such Third Party Claim. In such event, the maximum
liability of the Indemnifying Party as to such Third Party Claim will be the
amount of such settlement offer plus reasonable costs and expenses paid or
incurred by Indemnitee up to the date of such notice.
(c) Any claim by an Indemnitee on account of an Indemnifiable Loss which
does not result from a Third Party Claim (a "Direct Claim") shall be asserted by
giving the Indemnifying Party reasonably prompt written notice thereof, stating
the nature of such claim in reasonable detail and indicating the estimated
amount, if practicable, but in any event such notice shall not be given later
than twenty (20) calendar days after the Indemnitee becomes aware of such Direct
Claim, and the Indemnifying Party shall have a period of twenty (20) calendar
days within which to respond to such Direct Claim. If the Indemnifying Party
does not respond within such twenty (20) calendar day period, the Indemnifying
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Party shall be deemed to have accepted such claim. If the Indemnifying Party
rejects such claim, the Indemnitee will be free to seek enforcement of its right
to indemnification under this Agreement.
(d) If the amount of any Indemnifiable Loss, at any time subsequent to the
making of an indemnity payment in respect thereof, is reduced by recovery,
settlement or otherwise under or pursuant to any insurance coverage, or pursuant
to any claim, recovery, settlement or payment by, from or against any other
entity, the amount of such reduction, less any costs, expenses or premiums
incurred in connection therewith (together with interest thereon from the date
of payment thereof to the date or repayment at the "prime rate" as published in
The Wall Street Journal) shall promptly be repaid by the Indemnitee to the
Indemnifying Party.
(e) A failure to give timely notice as provided in this Section 8.2 shall
not affect the rights or obligations of any Party hereunder except if, and only
to the extent that, as a result of such failure, the Party which was entitled to
receive such notice was actually prejudiced as a result of such failure.
8.3 Waiver and Release. To the extent any right, cause of action, or claim
hereunder constitutes Assumed Liabilities and Obligations, and subject to any
indemnification rights of Buyer under Section 8.1(b), the Buyer waives,
relinquishes and forgives, effective as of the Closing Date, any statutory or
common law rights that otherwise would relate to such right, cause of action or
claim, including, without limitation, CERLCA.
ARTICLE IX
TERMINATION
9.1 Termination. (a) This Agreement may be terminated at any time prior to
the Closing Date by mutual written consent of Seller and Buyer.
(b) This Agreement may be terminated by Seller or Buyer, if (i) any federal
or state court of competent jurisdiction shall have issued an order, judgment or
decree permanently restraining, enjoining or otherwise prohibiting the Closing,
and such order, judgment or decree shall have become final and nonappealable; or
(ii) any statute, rule, order or regulation shall have been enacted or issued by
any Governmental Authority which, directly or indirectly, prohibits the
consummation of the Closing; or (iii) the Closing contemplated hereby shall have
not occurred on or before the day which is eighteen (18) months from the date of
this Agreement (the "Termination Date"); provided, however, that the right to
terminate this Agreement under this Section 9.1(b) (iii) shall not be available
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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.
(c) Except as otherwise provided in this Agreement, this Agreement may be
terminated by Buyer if (i) any of Buyer's Required Regulatory Approvals, the
receipt of which is a condition to Closing as set forth in Section 7.1(c), shall
have been denied (and a petition for rehearing or refiling of an application
initially denied without prejudice shall also have been denied) or shall have
been granted but such Approval contains conditions (other than the conditions
accepted by Buyer in Section 6.18) that would have a material adverse effect on
the operations or condition (financial or otherwise) of the Purchased Assets or
a material adverse effect on the business, assets, operations or condition
(financial or otherwise) of Buyer or its members; or (ii) the receipt of the IRS
rulings or opinions of counsel, which is a condition to Closing as set forth in
Section 7.1(k), shall not have been satisfied or waived by Buyer on or before
May 30, 2000.
(d) This Agreement may be terminated by Seller, if (i) any of Seller's
Required Regulatory Approvals applicable to Seller, the receipt of which is a
condition to the obligation of Seller to consummate the Closing as set forth in
Section 7.2(c), shall have been denied (and a petition for rehearing or refiling
of an application initially denied without prejudice shall also have been
denied) or shall have been granted but such Approval contains conditions that
would have a material adverse effect on the business, assets, operations or
condition (financial or otherwise) of Seller or its Affiliates; or (ii) the
receipt of the IRS rulings or opinions of counsel, which is a condition to
Closing as set forth in Section 7.2(l), shall not have been satisfied or waived
by Seller on or before May 30, 2000.
(e) This Agreement may be terminated by Buyer if there has been a violation
or breach by Seller of any covenant, representation or warranty contained in
this Agreement which has resulted in a Material Adverse Effect and such
violation or breach is not cured by the earlier of the Closing Date or the date
thirty (30) days after receipt by Seller of written notice specifying
particularly such violation or breach, and such violation or breach has not been
waived by Buyer.
(f) This Agreement may be terminated by Seller if there has been a material
violation or breach by Buyer of any covenant, representation or warranty
contained in this Agreement and such violation or breach is not cured by the
earlier of the Closing Date or the date thirty (30) days after receipt by Buyer
of written notice specifying particularly such violation or breach, and such
violation or breach has not been waived by Seller.
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(g) This Agreement may be terminated by Buyer or Seller in accordance with
the provisions of Sections 6.11(b) or (c).
9.2 Procedure and Effect of No-Default Termination. In the event of
termination of this Agreement by either or both of the Parties pursuant to this
Article 9, written notice thereof shall forthwith be given by the terminating
Party to the other Party, whereupon, if this Agreement is terminated pursuant to
any of Sections 9.1(a) through (d) and 9.1(g), the liabilities of the Parties
hereunder will terminate, except as otherwise expressly provided in this
Agreement, and thereafter neither Party shall have any recourse against the
other by reason of this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Amendment and Modification. Subject to applicable law, this Agreement
may be amended, modified or supplemented only by written agreement of Seller and
Buyer.
10.2 Waiver of Compliance; Consents. Except as otherwise provided in this
Agreement, any failure of any of the Parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the Party entitled to
the benefits thereof only by a written instrument signed by the Party granting
such waiver, but such waiver of such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent failure to comply therewith.
10.3 Survival of Representations, Warranties, Covenants and Obligations.
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(b) The covenants and obligations of Seller and Buyer set forth in this
Agreement, including, without limitation, the indemnification obligations of the
Parties under Article VIII hereof, shall survive the Closing indefinitely
(unless a shorter period is specified herein), and the Parties shall be entitled
to the full performance thereof by the other Parties hereto without limitation
as to time or amount (except as otherwise specifically set forth herein).
10.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by facsimile
transmission, or mailed by overnight courier or registered or certified mail
(return receipt requested), postage prepaid, to the recipient Party at its
address (or at such other address or facsimile number for a Party as shall be
specified by like notice; provided however, that notices of a change of address
shall be effective only upon receipt thereof):
(a) If to Seller, to:
Illinois Power Company
500 South 27th Street
Decatur, IL 62521
Fax No.: 217-362-7417
Attention: David W. Butts
Senior Vice President
with a copy to:
Troutman Sanders LLP
1300 "I" Street, N.W.
Suite 500 East
Washington, D.C. 20004
Fax No.: 404-962-6731
Attention: Kevin C. Fitzgerald, Esquire
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(b) if to Buyer, to:
AmerGen Energy Company, LLC
2301 Market Street
P.O. Box 8699
Philadelphia, PA 19101
Fax No.: 610-640-7566
Attention: Dickinson M. Smith, Chief Executive Officer
with a copy to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
Fax No.: 215-963-5299
Attention: Howard L. Meyers, Esq.
10.5 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by either Party
hereto, including by operation of law, without the prior written consent of the
other Party, such consent not to be unreasonably withheld, nor is this Agreement
intended to confer upon any other Person except the Parties hereto any rights,
interests, obligations or remedies hereunder. No provision of this Agreement
shall create any third party beneficiary rights in any employee or former
employee of Seller (including any beneficiary or dependent thereof) in respect
of continued employment or resumed employment, and no provision of this
Agreement shall create any rights in any such Persons in respect of any benefits
that may be provided, directly or indirectly, under any employee benefit plan or
arrangement except as expressly provided for thereunder. Notwithstanding the
foregoing, but subject to all applicable legal requirements, and provided it
does not materially adversely affect any regulatory approvals required under
this Agreement, (a) Buyer or its permitted assignee may assign, transfer, pledge
or otherwise dispose of (absolutely or as security) its rights and interests
hereunder to a trustee, lending institution or other party for the purposes of
leasing, financing or refinancing the Purchased Assets, including such an
assignment, transfer or other disposition upon or pursuant to the exercise of
remedies with respect to such leasing, financing or refinancing, or by way of
assignments, transfers, pledges, or other dispositions in lieu thereof, (b)
Buyer or its permitted assignee may assign, transfer, pledge or otherwise
dispose of (absolutely or as security) its rights and interests hereunder to a
wholly-owned subsidiary of Buyer (provided that the assignee agrees to be bound
by the terms and conditions hereof), and (c) Buyer or its permitted assignee may
238
assign, transfer, pledge or otherwise dispose of its rights and interests to
cause Seller to perform in accordance with the provisions of Section 6.12 hereof
in connection with any subsequent disposition by Buyer of the Purchased Assets;
provided, however, that no such assignment shall relieve or discharge Buyer from
any of its obligations hereunder. Seller agrees, at Buyer's expense, to execute
and deliver such documents as may be reasonably necessary to accomplish any such
assignment, transfer, pledge or other disposition of rights and interests
hereunder so long as Seller's rights under this Agreement are not thereby
altered, amended, diminished or otherwise impaired.
10.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of Illinois (without giving effect to
conflict of law principles) as to all matters, including, without limitation,
matters of validity, construction, effect, performance and remedies. THE PARTIES
HERETO AGREE THAT VENUE IN ANY AND ALL ACTIONS AND PROCEEDINGS RELATED TO THE
SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN THE STATE AND FEDERAL COURTS IN AND
FOR COOK COUNTY, ILLINOIS, WHICH COURTS SHALL HAVE EXCLUSIVE JURISDICTION FOR
SUCH PURPOSE, AND THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF SUCH COURTS AND IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING. SERVICE OF PROCESS
MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
10.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.8 Interpretation. The articles, section and schedule headings contained
in this Agreement are solely for the purpose of reference, are not part of the
agreement of the Parties and shall not in any way affect the meaning or
interpretation of this Agreement.
10.9 Schedules and Exhibits. Except as otherwise provided in this
Agreement, all Exhibits and Schedules referred to herein are intended to be and
hereby are specifically made a part of this Agreement.
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10.10 Entire Agreement. This Agreement, the Confidentiality Agreement and
the Ancillary Agreements, including the Exhibits, Schedules, documents,
certificates and instruments referred to herein or therein, embody the entire
agreement and understanding of the Parties hereto in respect of the transactions
contemplated by this Agreement and supersedes all prior agreements and
understandings between the Parties (other than the Confidentiality Agreement,
the Management Agreement and the Leased Employee Agreement) with respect to such
transactions. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to
herein or therein. It is expressly acknowledged and agreed that there are no
restrictions, promises, representations, warranties, covenants or undertakings
contained in any material made available to Buyer pursuant to the terms of the
Confidentiality Agreement. This Agreement supersedes all prior agreements and
understandings between the Parties (including, without limitation, the Interim
Agreement) other than the Confidentiality Agreement with respect to such
transactions, the Management Agreement and the Leased Employee Agreement.
10.11 Bulk Sales Laws. Buyer acknowledges that, notwithstanding anything in
this Agreement to the contrary, Seller will not comply with the provision of the
bulk sales laws of any jurisdiction in connection with the transactions
contemplated by this Agreement. Buyer hereby waives compliance by Seller with
the provisions of the bulk sales laws of all applicable jurisdictions.
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REDACTED AREAS IN THIS DOCUMENT CONTAIN CONFIDENTIAL MATERIAL WITHHELD
FROM PUBLIC DISCLOSURE PURSUANT TO 220 ILCS 5/4-404 AND 5-108.
IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.
ILLINOIS POWER COMPANY AMERGEN ENERGY COMPANY, L.L.C.
By:__________________________ By:____________________________
Name: Name:
Title: Title:
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