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PURCHASE AND SALE AGREEMENT
for the
SEABROOK NUCLEAR POWER STATION
by and among
NORTH ATLANTIC ENERGY CORPORATION,
THE UNITED ILLUMINATING COMPANY,
GREAT BAY POWER CORPORATION,
NEW ENGLAND POWER COMPANY,
THE CONNECTICUT LIGHT AND POWER COMPANY,
CANAL ELECTRIC COMPANY,
LITTLE BAY POWER CORPORATION,
and
NEW HAMPSHIRE ELECTRIC COOPERATIVE, INC.
as Sellers
and
NORTH ATLANTIC ENERGY SERVICE CORPORATION
and
FPL ENERGY SEABROOK, LLC
as Buyer
dated
APRIL 13, 2002
1. Preamble 1
2. Acquisition of Assets by Buyer 2
2.1. Purchase and Sale of Assets 2
2.2. Excluded Assets 6
2.3. Assumption of Liabilities 7
2.4. Liabilities Not Assumed 9
2.5. Consideration for Acquired Assets 11
2.6. Adjustment to Facility Purchase Price and Fuel Purchase Price 12
2.7. Payment of Purchase Price Adjustments 16
2.8. Allocation of Consideration 16
2.9. Proration 17
2.10. The Closings 18
2.11. Deliveries by the Sellers at the Closings 18
2.12. Deliveries by the Buyer at the Closing Date 23
3. Representations, Warranties and Disclaimers of Each Seller 25
3.1. Organization 25
3.2. Authorization, Execution and Enforceability of Transactions 26
3.3. Noncontravention 26
3.4. Consents and Approvals 26
3.5. Regulation as a Utility 27
3.6. Brokers' Fees 27
3.7. Title to Acquired Assets 27
3.8. Qualified Decommissioning Funds 28
3.9. Nonqualified Decommissioning Funds 30
3.10. Absence of Certain Changes or Events 31
3.11. Legal and Other Compliance 31
3.12. Taxes 31
3.13. Contracts and Leases 31
3.14. Insurance 33
3.15. Litigation 33
3.16. Employees 33
3.17. Environmental Matters 34
3.18. Condemnation 34
3.19. Intellectual Property 35
3.20. Accounting Methods 35
3.21. Complete Copies 35
3.22. Operability 35
3.23. Employee Benefit Programs 35
3.24. Zoning 36
3.25. Real Property; Plant and Equipment 36
3.26. Disclaimers Regarding Acquired Assets 36
4. Representations and Warranties of the Buyer 37
4.1. Organization of the Buyer 37
4.2. Authority, Execution and Enforceability of Transactions 37
4.3. Noncontravention 38
4.4. Consents and Approvals 38
4.5. Brokers' Fees 38
4.6. Litigation 38
4.7. No Knowledge of Seller's Breach 39
4.8. Qualified Buyer 39
4.9. WARN Act 39
4.10. No Implied Warranties 39
4.11. Absence of Certain Events 39
4.12. Availability of Funds 40
5. Covenants 40
5.1. General 40
5.2. Notices, Consents and Approvals 40
5.3. Operation of Business During Interim Period 44
5.4. Access and Investigations During Interim Period 47
5.5. Certain Notices 49
5.6. Further Assurances 50
5.7. Employee Matters 51
5.8. Cooperation after Initial Closing Date 55
5.9. NEPOOL 58
5.10. Funding of the Decommissioning Trusts 59
5.11. Risk of Loss 61
5.12. Discharge of Environmental Liabilities 63
5.13. Nuclear Insurance 63
5.14. Nonwaiver of Third Party Environmental Liabilities 64
5.15. Control of Litigation 64
5.16. Availability of Funds 64
5.17. Department of Energy Decontamination and Decommissioning Fees 65
5.18. Cooperation Relating to Insurance and Price-Anderson Act 65
5.19. Acceptable Credit Support 65
5.20. Private Letter Ruling Requests 66
5.21. Credit Rating of Acceptable Guarantor and Issuing Bank 66
5.22. NRC Commitments 66
5.23. Decommissioning and Funding Assurance 66
5.24. Joint Ownership Agreement, Managing Agent Operating Agreement
and Disbursing Agent Agreement 67
5.25. Memorandum of Understanding with the Town of Seabrook 67
6. Conditions Precedent to Obligation to Close 67
6.1. Conditions Precedent to Obligation of the Buyer to Close 67
6.2. Conditions Precedent to Obligation of the Sellers to Close 70
6.3. Initial and Subsequent Closings 72
7. Confidentiality 74
8. Taxes 76
9. Non-Survival; Effect of Closing and Indemnification 77
9.1. Survival of Representation and Warranties; Survival of
Covenants and Agreements 77
9.2. Effect of Closing 77
9.3. Indemnity by Sellers 78
9.4. Indemnity by Buyer 79
9.5. Exclusive and Limited Remedies 80
9.6. Notice; Defense of Claims 80
9.7. Net of Taxes and Insurance 82
9.8. Release 82
9.9. No Recourse 83
10. Termination 83
10.1. Termination of Agreement 83
10.2. Effect of Termination 87
11. Miscellaneous 87
11.1. Press Releases and Public Announcements 88
11.2. No Third Party Beneficiaries 88
11.3. Appointment of Seller Representatives as Agent for Sellers 88
11.4. No Joint Venture 89
11.5. Time of the Essence 89
11.6. Entire Agreement 89
11.7. Succession and Assignment 89
11.8. Counterparts 90
11.9. Headings 90
11.10. Notices 90
11.11. Governing Law 93
11.12. Change in Law 93
11.13. Consent to Jurisdiction and Venue 93
11.14. Amendments and Waivers 94
11.15. Severability 94
11.16. Expenses 94
11.17. Construction 94
11.18. Incorporation of Exhibits and Schedules 94
11.19. Specific Performance 94
11.20. Dispute Negotiation 95
11.21. Good Faith Covenant 95
11.22. Set-Off 95
11.23. Bulk Transfer Act 95
12. Dispute Resolution 96
13. Definitions 96
Exhibits
- --------
A(i) - Form of Quitclaim Deed for NAEC Real Property
A(ii) - Form of Quitclaim Deed for Jointly Owned Real
Property
B - Form of Bill of Sale
C - Form of Asset Demarcation Agreement
D - Form of Assignment and Assumption Agreement
E - Form of Interconnection Agreement
F - Form of Release of Mortgage Indenture
G - Form of FIRPTA Affidavit
H - Form of Acceptable Guaranty**
I - Reserved
J - Form of Interim Services Agreement
K - Form of Owner Trustee Deed and Bill of Sale
L - Reserved
M - Form of Easement Agreement
N - Form of Agreement to Amend Transmission
Support Agreement
Schedules
- ---------
Schedule 1(a) - Sellers' Ownership Shares
Schedule 2.1(a)(i) - NAEC Real Property
Schedule 2.1(a)(ii) - Jointly Owned Real Property
Schedule 2.1(a)(iii)(A),
2.1(a)(iii)(B) - Permitted Encumbrances
Schedule 2.1(b) - Nuclear Materials, Spent Nuclear Fuel
and Other High Level and Low Level Waste
Schedule 2.1(c) - Personal Property
Schedule 2.1(d) - Unit 2
Schedule 2.1(e) - Leases
Schedule 2.1(f) - Transferable Permits
Schedule 2.1(g) - Material Contracts
Schedule 2.1(l) - Nuclear Fuel
Schedule 2.1(m) - Decommissioning Funds
Schedule 2.1(n)(i) - Emergency Preparedness Assets
Schedule 2.1(n)(ii) - Emergency Preparedness Agreements
Schedule 2.1(o) - Vehicles
Schedule 2.1(q) - Owned Intellectual Property
Schedule 2.1(r) - Nuclear Insurance Policies
Schedule 2.1(s) - Agreements for the Sale of Capacity or
Energy
Schedule 2.1(v) - Other Related Assets
Schedule 2.1(w) - Emission Reduction Credits
Schedule 2.1(x) - Licensed Intellectual Property
Schedule 2.1(y) - 345 kV Substation
Schedule 2.2(c) - Rights to Sellers' Names
Schedule 2.4(m) - Pollution Control Bonds
Schedule 2.5(b)(i - Facility Purchase Price Allocation
Schedule 2.5(b)(ii) - Fuel Purchase Price Allocation
Schedule 2.5(b)(iii) - Unit 2 Purchase Price Allocation
Schedule 2.6(a)(x) - Transmission Credit
Schedule 2.11(a)(viii)- Interim Services
Schedule 2.11(a)(xvi)- Matters for Opinion from Counsel to
Required Sellers on Initial Closing Date
Schedule 2.11(b)(x) - Matters for Opinion from Counsel to
Remaining Seller(s) on Subsequent
Closing Date(s)
Schedule 2.12 - Matters for Opinion from Counsel to
Buyer
Schedule 3.1(i) - Proportionate Ownership
Schedule 3.1(ii) - Organization Under Order of Governmental
Authority
Schedule 3.2 - Authorization, Execution and
Enforceability of Transactions
Schedule 3.3 - Matters of Contravention
Schedule 3.5(i) - Regulation as a Utility
Schedule 3.5(ii) - Regulation Under PUHCA
Schedule 3.5(iii) - Regulation by FERC; NRC
Schedule 3.5(iv) - Qualification for First Refusal Rights
Exemption Under Joint Ownership
Agreement
Schedule 3.7(i) - Title Commitments
Schedule 3.8 - Qualified Decommissioning Funds
Schedule 3.9 - Nonqualified Decommissioning Funds
Schedule 3.10 - Certain Changes or Events
Schedule 3.11(i) - Compliance with Laws
Schedule 3.11(ii) - Other Permits
Schedule 3.11(iii) - Reporting Compliance
Schedule 3.11(iv) - NRC Commitments
Schedule 3.13(d) - Capacity or Energy Non-Assigned Contracts
Schedule 3.13(e) - Restrictions on Transfer, Options and
Other Rights
Schedule 3.14 - Insurance
Schedule 3.15 - Litigation
Schedule 3.16 - Labor Matters
Schedule 3.17 - Environmental
Schedule 3.18 - Condemnation
Schedule 3.19 - Intellectual Property
Schedule 3.21 - Complete Copies
Schedule 3.22 - Operability
Schedule 3.25 - Conformance with Technical Specifications
Schedule 4.3 - Matters of Contravention
Schedule 5.3 - Pre-Approved Capital Expenditures
Schedule 5.3(a)(iv) - Nuclear Fuel Expenditures
Schedule 5.7(a) - Represented Plant Employees
Schedule 5.7(b)(i) - Non-Represented Plant Employees
Schedule 5.7(b)(ii) - Severance Benefits
Schedule 5.7(b)(iii)- Certain Acquired Assets Employee Benefits
and Severance
Schedule 5.7(c)(iv) - Pension Benefits
Schedule 5.7(d) - Employee Benefits Packages
Schedule 5.8(d) - Pollution Control Facilities
Schedule 5.18 - Insurance and Price-Anderson Act
Schedule 6.1(c) - Buyer Regulatory Approvals
Schedule 6.2(c) - Seller Regulatory Approvals
Schedule 6.2(n) - Seller Shareholder Approval
PURCHASE AND SALE AGREEMENT
1. Preamble
This Purchase and Sale Agreement (the "Agreement") is entered into on April 13,
2002, by and among FPL Energy Seabrook, LLC, a Delaware limited liability company
(the "Buyer"), North Atlantic Energy Corporation, a New Hampshire corporation
("NAEC"), The United Illuminating Company, a Connecticut corporation ("UI"), Great
Bay Power Corporation, a New Hampshire corporation ("GBP"), New England Power
Company, a Massachusetts corporation ("NEP"), The Connecticut Light and Power
Company, a Connecticut corporation ("CL&P"), Canal Electric Company, a Massachusetts
corporation ("Canal"), Little Bay Power Corporation, a New Hampshire corporation
("LBP") and New Hampshire Electric Cooperative, Inc., a New Hampshire electric
cooperative ("NHEC") (NAEC, UI, GBP, NEP, CL&P, Canal, LBP and NHEC are each
individually referred to herein as a "Seller" and are referred to collectively herein
as "Sellers") and North Atlantic Energy Service Corporation ("NAESCO"). Each of the
Sellers and the Buyer are referred to herein as a "Party" or, collectively, as the
"Parties." Terms used herein in capitalized form shall have the meanings ascribed to
them in Section 13 hereof or as otherwise set forth in this Agreement.
WHEREAS, each Seller owns, as a tenant-in-common, and, in the case of the
Undivided Interest (as hereinafter defined), UI leases, in the percentage set forth
on Schedule 1(a) hereto, an undivided ownership interest in the Facility (as
hereinafter defined) located at Seabrook Station ("Seabrook"), in Seabrook, New
Hampshire, and certain other facilities and assets associated therewith and ancillary
thereto, excepting the portion thereof consisting of the real property that is owned
solely by NAEC (as described in Section 2.1(a)(i) below);
WHEREAS, the Sellers (other than the Seller Representatives) have appointed the
Seller Representatives (as hereinafter defined) to act as their agents under this
Agreement for purposes of certain of the covenants and agreements contained herein;
WHEREAS, NAESCO manages the Facility for the Participants in accordance with the
Managing Agent Operating Agreement, and, for that reason, the Sellers have requested
and NAESCO has agreed to join in this Agreement solely for the purpose of providing
certain representations and warranties to the Buyer as described in Sections 3 and
11.24 hereof, subject in all respects to the terms and conditions herein, and NAESCO
shall not be deemed a Party to this Agreement for any other purpose; and
WHEREAS, the Buyer desires to purchase and assume, and the Sellers desire to
sell and assign, or cause to be sold or assigned, the Acquired Assets (as defined in
Section 2.1 below) and certain associated liabilities upon the Initial Closing and
each Subsequent Closing as more fully described herein, upon the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants herein
contained, the Parties agree as follows:
2. Acquisition of Assets by Buyer
2.1 Purchase and Sale of Assets. Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement at the Initial Closing and
each Subsequent Closing, each of the Required Sellers or the Remaining Sellers, as
the case may be, shall sell, assign, convey, transfer and deliver or cause to be
sold, assigned, conveyed, transferred and delivered to the Buyer, and the Buyer shall
purchase, assume and acquire, free and clear of any Lien (except for Permitted
Encumbrances), Sellers' Ownership Shares in the properties and assets to the extent
constituting, or to the extent used in the operation of, the Facility, including but
not limited to the following (the "Acquired Assets"):
(a) (i) the real property which is owned solely by NAEC, easements and
other rights in real property as described in Schedule 2.1(a)(i) and all rights
arising out of the ownership thereof or appurtenant thereto, including, without
limitation, all related rights of ingress and egress (the "NAEC Real Property"),
subject to the Permitted Encumbrances, including the matters set forth in Schedule
2.1(a)(iii)(A), and (ii) the real property (other than the NAEC Real Property),
Improvements thereon and Improvements on the NAEC Real Property, easements and other
rights in real property described in Schedule 2.1(a)(ii), and all rights arising out
of the ownership thereof or appurtenant thereto, including, without limitation, all
related rights of ingress and egress (the "Jointly Owned Real Property"), subject to
the Permitted Encumbrances, including the matters set forth in Schedule
2.1(a)(iii)(B) (the NAEC Real Property and the Jointly Owned Real Property are
referred to together as the "Real Property");
(b) all Nuclear Materials, Spent Nuclear Fuel and other High Level Waste
to which the Sellers have title on the Initial Closing Date and each Subsequent
Closing Date, all of which are identified on Schedule 2.1(b) (which shall be updated
as of the Initial Closing Date and each Subsequent Closing Date) and all Low Level
Waste, including without limitation, those items which are identified by type and
amount on Schedule 2.1(b) (which shall be updated as of the Initial Closing Date and
each Subsequent Closing Date);
(c) all machinery, mobile or otherwise, equipment, computer hardware and
software, communications equipment, tools, spare parts, fixtures, furniture,
furnishings, and other personal property owned by the Sellers and which is
principally used in or principally relates to the operation or maintenance of the
Facility, and the Inventories owned by the Sellers which are held at or are in
transit from or to the Site, including, without limitation, the items of personal
property set forth in Schedule 2.1(c), as well as all applicable warranties and
guaranties existing as of such Closing Date from Third Parties relating thereto to
the extent such warranties and guaranties are transferable to the Buyer, or to the
extent any such items are leased, an assignment of the applicable leases for such
items (as well as all applicable warranties and guaranties existing as of such
Closing Date from Third Parties relating thereto to the extent transferable to the
Buyer);
(d) all assets associated with Seabrook Unit 2, including without
limitation, the structures, equipment, components and parts, wherever located,
that were purchased for Unit 2 and not sold, transferred or disposed of prior to
the Initial Closing, to the extent owned by the Sellers as set forth in Schedule
2.1(d) ("Unit 2");
(e) all of the Sellers' rights with respect to leasehold interests
and subleases and rights thereunder to the extent relating to the Real Property,
including, without limitation, with respect to the leases or Leased Property,
those items which are set forth in Schedule 2.1(e) (the "Leases");
(f) all Permits, which, as of such Closing Date, are transferable
by the Sellers to the Buyer by assignment or otherwise (including, without
limitation, upon request or application to a Governmental Authority, or which
will pass to the Buyer as successor in title to the Acquired Assets by operation
of Law), including, without limitation, those Permits set forth in Schedule
2.1(f) (the "Transferable Permits");
(g) except as specifically provided in Section 2.2(h), all rights
of the Sellers under the contracts, agreements, purchase orders, the Joint
Ownership Agreement, the Disbursing Agent Agreement, the DOE Standard Contract
(including all rights to any claims of Sellers related to DOE defaults
thereunder), the Nuclear Fuel Contracts, the Transmission Support Agreement, the
Memorandum of Understanding with the Town of Seabrook, and personal property
leases to the extent relating to the operation of the Facility set forth in
Schedule 2.1(g) and, to the extent transferable to the Buyer, all warranties and
guaranties existing as of such Closing Date from Third Parties relating to the
Acquired Assets (the "Material Contracts");
(h) to the extent permitted by applicable Law, and as promptly as
practicable after such Closing and at such locations and in such form (hard
copy, magnetic or electronic) as shall be agreed upon, all documents,
correspondence, books, records, medical records, operating, safety and
maintenance manuals, inspection reports, drawings, models, engineering designs,
blueprints, as-built plans, specifications, procedures, studies, reports,
quality assurance records, purchasing records and equipment repair data, safety,
maintenance or service records relating to the design, construction, licensing,
regulation, operation or Decommissioning of the Facility and the other Acquired
Assets, wherever located, including, without limitation, all drawings, designs,
specifications and other documents owned by a Third Party and licensed to
Sellers which are used in or necessary to the licensing, operation or
Decommissioning of the Facility;
(i) to the extent permitted by applicable Law, all Acquired Assets
Employee Records;
(j) all rights of the Sellers in and to the words "Seabrook
Station" and any related or similar trade name, trademark, service mark,
copyright, corporate name, logo or any part, derivative or combination;
(k) all assignable right, title and interest of the Sellers to the
NRC Licenses;
(l) all right, title and interest of the Sellers on the Initial
Closing Date and each Subsequent Closing Date in Nuclear Fuel wherever located,
as described on Schedule 2.1(l) (which shall be updated as of the Initial
Closing Date and each Subsequent Closing Date);
(m) all of the Sellers' right, title and interest in the assets
comprising the Decommissioning Funds as of such Closing Date, including, without
limitation, those items identified on Schedule 2.1(m), including all income,
interest and earnings accrued thereon, together with all related tax accounting
and other records;
(n) without limiting the generality of Sections 2.1(a) and 2.1(c),
all rights of the Sellers in the property and assets used or usable in providing
emergency warning or associated with emergency preparedness as set forth in
Schedule 2.1(n)(i) (the "Emergency Preparedness Assets") and all rights of the
Sellers under the contracts and agreements associated with such emergency
preparedness as set forth in Schedule 2.1(n)(ii) (the "Emergency Preparedness
Agreements");
(o) all right, title and interest of the Sellers in the vehicles
set forth in Schedule 2.1(o) (the "Vehicles");
(p) all assignable rights, benefits and interest of the Sellers as
of such Closing Date under purchase orders, licenses or contracts that are not
Emergency Preparedness Agreements, Material Contracts, Intellectual Property
Licenses or Leases but that (i) relate to the operation of the Facility, (ii)
are identified in writing by the Parties between the Effective Date and such
Closing Date, and (iii) are set forth in a schedule to be attached to the
Assignment and Assumption Agreement at such Closing (the "Other Assigned
Contracts");
(q) all Owned Intellectual Property; provided that the Buyer shall
grant to the Sellers an irrevocable, perpetual and fully paid-up license for the
Sellers and their agents to use, copy, modify and create derivative works based
upon and grant sublicenses to their Affiliates to such Owned Intellectual
Property in connection with the operation of Sellers' and their Affiliates'
business and the electric power generation stations or plants operated by the
Sellers and their Affiliates; provided, further, that each Party shall have no
obligation after the relevant Closing Date to provide the other Parties with any
updates, maintenance or technical support with respect to such Intellectual
Property;
(r) to the extent transferable, all Nuclear Insurance Policies set
forth in Schedule 2.1(r) and the rights to proceeds from insurance policies for
coverage of Acquired Assets and Assumed Liabilities, including all rights to
collect premium refunds made on or after the relevant Closing Date pursuant to
the ANI nuclear industry credit rating plan (other than refunds that relate to
premiums paid prior to such Closing Date);
(s) all contracts, instruments or other agreements set forth in
Schedule 2.1(s) relating to the sale by the Sellers of electric capacity, energy
or ancillary products or services from the Facility under wholesale rates or
otherwise subject to regulation by the FERC;
(t) the Sellers' claims, rights or causes of action against any
Third Parties to the extent arising out of or relating to Sellers' right, title
and interest in and to any of the Acquired Assets or the Assumed Liabilities or
any portion thereof, whether received as a payment or credit against future
liabilities, including, without limitation, insurance proceeds, condemnation
awards and cash payments under warranties covering the Acquired Assets to the
extent such payments relate to Assumed Liabilities or the Acquired Assets;
(u) the Sellers' interests in the escrow account established in
accordance with the Memorandum of Understanding with the Town of Seabrook;
(v) all other assets of the Sellers to the extent constituting, or
used or held for use in the operation of, the Facility, as set forth on Schedule
2.1(v), as amended by the Parties pursuant to Section 5.6 (the "Other Related
Assets");
(w) all emission reduction credits owned by the Sellers that
relate to the operation of the Facility, as set forth in Schedule 2.1(w);
(x) an assignment of all Intellectual Property Licenses, as set
forth in Schedule 2.1(x), including any related maintenance agreements for
Licensed Intellectual Property, to the extent assignable to the Buyer on
commercially reasonable terms, as described in Section 5.2(b)(iv);
(y) the property comprising or constituting the 345 kV Substation
located at the Site (notwithstanding how such properties are treated for
regulatory or accounting purposes and whether such assets are real or personal
property) as set forth in Schedule 2.1(y) and as shown in the drawing referenced
therein, as well as all Permits and contracts that relate to the 345 kV
Substation;
(z) with respect to the portion of UI's Ownership Share which
consists of a leasehold interest in the Undivided Interest, UI agrees to
exercise its rights under Section 14(a) and (b) of the Facility Lease and the
Termination Agreement to cause the Facility Lease to be terminated and to cause
the Owner Trustee to sell, assign, convey, transfer and deliver the Undivided
Interest to the Buyer; and
(aa) any other properties or assets constituting or used in the
operation of the Facility that are not specifically identified in Section 2.2
hereof.
2.2 Excluded Assets. Notwithstanding anything to the contrary in this
Agreement, there shall be excluded from the Acquired Assets to be sold,
assigned, transferred, conveyed or delivered to the Buyer hereunder, and there
shall be retained by the Sellers, any and all right, title and interest to the
following assets, properties and rights (collectively, the "Excluded Assets"):
(a) all Cash, accounts and notes receivable, checkbooks and
canceled checks, bank deposits and property or income tax receivables or any
other Tax refunds to the extent allocable to a period ending prior to the
relevant Closing Date (including, without limitation, the Sellers' account
balances with NEIL and any future annual distributions from NEIL that relate to
premiums paid by the Sellers prior to such Closing Date), except the assets
comprising the Decommissioning Funds;
(b) all rights of the Sellers in and to any causes of action,
claims and defenses against Third Parties to the extent arising out of or
relating to any of the Excluded Assets or Excluded Liabilities, whether payable
in Cash or as a credit against future liabilities, including, without
limitation, insurance proceeds and condemnation awards, claims for contribution
or indemnity, tort claims, causes of action, contract rights and refunds accrued
and owing as of the relevant Closing Date;
(c) all rights of the Sellers to the words set forth in Schedule
2.2(c) and any related or similar trade name, trademark, service mark,
copyright, corporate name, logo or any part, derivative or combination;
(d) all rights of the Sellers under any Material Contract, Lease,
Intellectual Property License or Other Assigned Contract to the extent expressly
providing the Sellers with indemnity, defense or exculpation rights for any
claims for which the Sellers remain liable under Section 9;
(e) any and all of the Sellers' rights in any contract
representing an intercompany transaction between a Seller and an Affiliate of
such Seller, whether or not such transaction relates to the provision of goods
and services, payment arrangements, intercompany charges or balances, or the
like;
(f) any Seller Easements to the extent granted to PSNH prior to
the Initial Closing Date pursuant to an Easement Agreement;
(g) all rights, benefits and interest in all purchase orders,
licenses or contracts not included in Acquired Assets and not assigned to the
Buyer (the "Non-Assigned Contracts");
(h) all rights of NEP and PSNH to receive payments under the
Transmission Support Agreement.
2.3 Assumption of Liabilities. On the terms and subject to the
conditions set forth herein, on and after the Initial Closing Date and each
Subsequent Closing Date, the Buyer shall assume, satisfy or perform the
Liabilities attributable to the respective Ownership Shares of the Required
Sellers or the Remaining Sellers participating in such Closing, in each case, in
respect of, or otherwise arising from the operation or use of the Acquired
Assets, other than the Excluded Liabilities (as set forth in Section 2.4 below)
(the "Assumed Liabilities"):
(a) all Environmental Liabilities, other than those included in
the Excluded Liabilities (as set forth in Section 2.4);
(b) except as specifically provided in Sections 2.4(p) and 2.4(q),
all Liabilities under (i) the Material Contracts, Leases, Other Assigned
Contracts, Emergency Preparedness Agreements, Intellectual Property Licenses,
the Transferable Permits and any employment contracts with NAESCO employees, all
in accordance with the terms thereof, except in each case, to the extent such
Liabilities, but for a breach or default by any Seller, would have been paid,
performed or otherwise discharged prior to such Closing Date, or to the extent
the same arise out of any such breach or default and (ii) the contracts, leases,
commitments and other agreements entered into by the Sellers with respect to the
Acquired Assets prior to the final Subsequent Closing pursuant to the terms of
this Agreement;
(c) all Liabilities in respect of or otherwise arising from the
Permitted Encumbrances which do not result from a default or failure to act
under the Permitted Encumbrances by the Sellers prior to the Initial Closing
Date; provided, however, Permitted Encumbrances as to which a Seller's liability
terminates as a matter of law upon such Seller's sale of its interest in the
Real Property shall not be Assumed Liabilities;
(d) with respect to the Acquired Assets, any Tax that may be
imposed by any federal, state or local government on the ownership, sale,
operation or use of the Acquired Assets on or after such Closing Date, and any
Liability to make payments in addition to or in lieu of property taxes, but not
any Income Taxes attributable to income received by the Sellers or any New
Hampshire Business Enterprise Taxes to which any of the Sellers may be subject
prior to such Closing Date;
(e) all Liabilities in respect of (i) the Decommissioning of the
Facility, (ii) the management, storage, transportation and disposal of Spent
Nuclear Fuel (including, without limitation, all fees payable to DOE under the
DOE Standard Contracts accrued after the relevant Closing Date) and Low Level
Waste, and (iii) any other decommissioning or post-operative disposition of the
Facility or any other Acquired Assets;
(f) any Liability for any Price-Anderson secondary financial
protection retrospective premium obligations for (i) the Sellers' nuclear worker
Liability attributable to employment prior to such Closing Date or (ii) any
third-party Nuclear Liability arising out of any nuclear incident prior to such
Closing Date (it being agreed that if the Sellers are unable to cause the
assignment of all or any part of such retrospective premium obligations, the
Sellers shall remain primarily liable for such indemnification obligations and
the Buyer shall indemnify the Sellers therefor pursuant to Section 9.4);
(g) all Liabilities of the Sellers for retrospective premium
obligations under the Sellers' NEIL accounts arising out of any occurrence prior
to such Closing Date;
(h) all Liabilities arising under or relating to Nuclear Laws or
relating to any claim in respect of Nuclear Material arising out of the
ownership or operation of the Acquired Assets whether occurring prior to, on or
after such Closing Date, including liabilities or obligations arising out of or
resulting from exposure to radiation, an "extraordinary nuclear occurrence,"
"nuclear incident" or "precautionary evacuation" (as such terms are defined in
the Atomic Energy Act) at the Site, or any other licensed nuclear reactor site
in the United States, including, without limitation, liability for any deferred
premiums assessed in connection with such an extraordinary nuclear occurrence, a
nuclear incident or precautionary evacuation under any applicable NRC or
industry retrospective rating plan or insurance policy, including any mutual
insurance pools established in compliance with the requirements imposed under
Section 170 of the Atomic Energy Act, 10 C.F.R. Part 140, and 10 C.F.R. section
50.54(w);
(i) except as otherwise specifically addressed in this Section
2.3, all Liabilities accruing after such Closing Date arising under NRC
Regulations or the NRC Licenses including fees or charges;
(j) all other Liabilities expressly allocated to or assumed by the
Buyer in this Agreement or in any of the Related Agreements;
(k) all Liabilities under incentive compensation programs to the
extent applicable to employees of NAESCO or any Affiliate who are employed at
Seabrook; and
(l) all other Liabilities of any nature whatsoever to the extent
arising from the ownership or operation of the Facility, Acquired Assets and
Assumed Liabilities, unless expressly excluded pursuant to Section 2.4.
2.4 Liabilities Not Assumed. Notwithstanding any provision hereof to
the contrary, the Buyer shall not assume, satisfy or perform any of the
following Liabilities (the "Excluded Liabilities"):
(a) any Liability to the extent such Liability is in respect of,
in connection with, or otherwise arising from the operation or use of the
Excluded Assets or any other assets of the Sellers that are not Acquired Assets;
(b) any Liability including, without limitation, any Environmental
Liability, to the extent such Liability is in respect of, in connection with, or
arising from the Seller Easements;
(c) any Liabilities, including, without limitation, any
Environmental Liabilities, to the extent relating to the off-Site disposal,
storage, transportation, discharge, Release, recycling, or the arrangement for
such activities of Hazardous Substances that were generated at the Site, at any
Offsite Hazardous Substance Facility or at a location other than the Site (other
than as a result of subsurface migration from the Site), where the initial
disposal, storage, transportation, discharge, Release or recycling of such
Hazardous Substances at such Offsite Hazardous Substance Facility occurred on or
prior to the Initial Closing Date;
(d) any Liability of the Sellers to the extent arising from the
execution, delivery or performance of this Agreement or a Related Agreement or
the transactions contemplated hereby or thereby;
(e) any Liability in respect of Taxes to the extent attributable
to the Acquired Assets accrued prior to the relevant Closing Date, except those
Taxes expressly allocated to the Buyer pursuant to Section 8;
(f) subject to the provisions of Section 5.7, any Liability,
whether funded or unfunded, to the extent arising out of any Employee Benefit
Plan established or maintained in whole or in part by any Seller (or its
Affiliate) or to which any Seller (or its Affiliate) contributes or contributed,
or is or was required to contribute, at any time prior to the Initial Closing
Date and any Liability for the termination or discontinuance of, or any Seller's
or its Affiliates' withdrawal from, any such Employee Benefit Plan;
(g) any Liabilities of any Seller or any of its Affiliates for any
compensation or any benefits whether in relation to any of the Plant Employees,
independent contractors or any other individuals who are later determined by a
court or governmental agency to have been employees of a Seller or its
Affiliates, including, without limitation, (i) wages, bonuses, incentive
compensation, shift or work schedule adders, on-call pay, call-out pay, vacation
pay, sick pay, paid time off, workers compensation, unemployment compensation,
withholding obligations, unemployment taxes or similar obligations accruing or
related to work performed prior to the Initial Closing Date; (ii) severance pay,
other termination pay, post-retirement benefits and COBRA coverage, accruing or
related to work performed prior to the Initial Closing Date; or (iii) any other
form of compensation or benefits accruing or related to work performed prior to
the Initial Closing Date under the terms or provisions of any Employee Benefit
Plan of any Seller or such Affiliate, or any other agreement, plan, practice,
policy, instrument or document relating to any of the Acquired Assets Employees,
other than the Liabilities expressly assumed by the Buyer under Section 5.7;
(h) with respect to the Acquired Assets Employees or any
independent contractors, or other individuals subject to Section 5.7, except for
liabilities under any employment contracts with NAESCO employees relating to
periods on and after the Closing Date, which Liabilities are assumed only to the
extent set forth in Section 2.3(b), any Liabilities or obligations relating to
the employment or termination of employment, including personal injury, tort,
discrimination (including claims for whistleblowing under the Atomic Energy Act
and the Energy Reorganization Act of 1974 as amended, as well as claims under
Title VII of the Civil Rights Act of 1964, as amended, Executive Order 11246,
the Age Discrimination in Employment Act, as amended, the Americans with
Disabilities Act, and/or any other federal, state or local statute, ordinance,
regulation or order prohibiting discrimination or requiring affirmative action),
wrongful discharge, breach of implied or express contract, unfair labor
practices or any claim asserted in an individual employee grievance procedure,
or constructive termination by any Seller or its Affiliate of any individual, or
similar claim or cause of action attributable to any action or inaction by any
Seller or any of its Affiliates that arise out of wrongful acts or omissions,
occurring prior to the Initial Closing Date or such later date as the individual
may have commenced employment with Buyer pursuant to Section 5.7(a) or (b);
provided that the Sellers shall not have any liability for similar actions or
inactions by any other Person on or after the Initial Closing Date or such later
date as the individual shall have commenced employment with the Buyer;
(i) any Liabilities of Sellers to the extent accrued or related to
or attributable to the period prior to the Initial Closing Date under any
contract, license, Permit or other instrument relating to the Acquired Assets
(including, without limitation, the Leases, Emergency Preparedness Agreements
and Other Assigned Contracts, the Material Contracts and the NRC Licenses);
(j) all Liabilities for assessments for decommissioning and
decontamination fund fees accrued and payable under 42 U.S.C. Section 2297g-1
prior to the Initial Closing Date;
(k) any Liabilities, including, without limitation, any
Environmental Liabilities, resulting from any illegal acts or willful
misconduct of the Sellers or NAESCO or their employees, agents or contractors,
occurring prior to the Initial Closing Date;
(l) all Liabilities for fees payable to DOE under the DOE Standard
Contracts accrued or related to electricity generated and sold prior to the
Initial Closing Date, and interest accrued thereon as set forth in Article VIII
of the DOE Standard Contracts;
(m) any Liabilities to the extent relating to the Business Finance
Authority of the State of New Hampshire Pollution Control Revenue Bonds (as set
forth in Schedule 2.4(m), the "Pollution Control Bonds") and any agreements
relating thereto, other than those arising out of the breach by the Buyer of the
covenants contained in Section 5.8(d);
(n) any Liens on the Acquired Assets, except for Permitted
Encumbrances;
(o) except as otherwise expressly set forth in this Agreement, any
other Liability, obligation, claim, action, complaint, debt, suit, cause of
action, investigation, or proceeding of any kind whatsoever asserted by any
Third Party, against or relating to any of the Buyer, the Sellers or the
Acquired Assets, for damages suffered by such Third Party arising from or
relating to the use, ownership or lease of the Acquired Assets or operation of
the Facility prior to the Initial Closing Date;
(p) all Liabilities of NEP and PSNH under the Transmission Support
Agreement, except for NEP's transmission support payment obligations; and
(q) the escrow account contribution obligation of each Seller
under the Unit 2 Memorandum of Understanding with the Town of Seabrook; and
(r) any Liability which is required to be accrued in accordance
with GAAP by any Seller on the balance sheet of such Seller as of the Initial
Closing Date or a Subsequent Closing Date, as the case may be, , other than
those Liabilities which are specifically identified as Assumed Liabilities in
Section 2.3.
2.5 Consideration for Acquired Assets.
(a) Facility Purchase Price; Fuel Purchase Price; Unit 2 Purchase
Price; NAEC Real Property Purchase Price. Subject to the satisfaction or waiver
of all conditions contained herein, the Buyer shall pay to each Seller based on
its Proportionate Ownership (i) for the Sellers' Ownership Shares in the
Acquired Assets (other than Nuclear Fuel, Unit 2 and the NAEC Real Property), an
aggregate of $746,710,000 (the "Facility Purchase Price"), (ii) for the Sellers'
Ownership Shares in Nuclear Fuel, an aggregate of $61,900,000 (the "Fuel
Purchase Price"), and (iii) for the Sellers' Ownership Shares in Unit 2, an
aggregate of $25,600,000 (the "Unit 2 Purchase Price"). The Buyer shall pay to
NAEC for the NAEC Real Property the amount of $2,400,000 (the "NAEC Real
Property Purchase Price").
(b) Payment of Purchase Price. At each Closing the Buyer shall
pay to or at the direction of each of the Required Sellers or the Remaining
Sellers, as the case may be, (i) for the Acquired Assets other than Nuclear
Fuel, Unit 2 and the NAEC Real Property, a payment in immediately available
funds equal to the Proportionate Ownership of the Facility Purchase Price for
such Sellers participating in such Closing (the "Relevant Facility Purchase
Price") allocated among the Required Sellers or the Remaining Sellers, as the
case may be, as set forth in Schedule 2.5(b)(i), (ii) for the Nuclear Fuel, a
payment in immediately available funds equal to the Proportionate Ownership of
the Fuel Purchase Price for such Sellers participating in such Closing (the
"Relevant Fuel Purchase Price") allocated among the Required Sellers or the
Remaining Sellers, as the case may be, as set forth in Schedule 2.5(b)(ii), and
(iii) for Unit 2, a payment in immediately available funds equal to the
Proportionate Ownership of the Unit 2 Purchase Price for such Sellers
participating in such Closing (the "Relevant Unit 2 Purchase Price") allocated
among the Required Sellers or the Remaining Sellers, as the case may be, as set
forth in Schedule 2.5(b)(iii). At the Closing at which NAEC transfers its
Ownership Share to the Buyer, the Buyer shall pay to NAEC for the NAEC Real
Property, a payment in immediately available funds equal to the NAEC Real
Property Purchase Price.
(c) Acceptable Guaranty. On the Effective Date, the Buyer shall
deliver to the Seller Representatives, on behalf of and for the benefit of the
Sellers, an Acceptable Guaranty and shall, pursuant to Section 5.19, maintain
such Acceptable Guaranty to secure the payments of the Facility Purchase Price,
the Fuel Purchase Price, the Unit 2 Purchase Price and the NAEC Real Property
Purchase Price through the last Subsequent Closing.
2.6 Adjustment to Facility Purchase Price, Fuel Purchase Price and Unit
2 Purchase Price. The Facility Purchase Price, Fuel Purchase Price and Unit 2
Purchase Price shall be increased or decreased as follows:
(a) Facility Payment Adjustments. With respect to the Buyer,
(i) at each Closing, the Relevant Facility Purchase Price
shall be increased by an amount equal to the costs of Required Nuclear
Expenditures and Required Expenditures actually paid by such Sellers
participating in such Closing through the relevant Closing Date;
(ii) at the Initial Closing, the Facility Purchase
Price shall be decreased by an amount equal to the positive difference
between the aggregate amount of Pre-Approved Capital Expenditures
scheduled to be expended prior to the Initial Closing Date (as set forth
in Schedule 5.3) and the aggregate amount of the Pre-Approved Capital
Expenditures actually incurred by Sellers prior to the Initial Closing
Date;
(iii) at each Subsequent Closing, the Relevant Facility
Purchase Price shall be increased by an amount equal to the aggregate
amount of the Pre-Approved Capital Expenditures (as set forth in Schedule
5.3) incurred after the Initial Closing Date, prior to the relevant
Subsequent Closing Date and actually paid by such Sellers participating in
such Subsequent Closing through such Subsequent Closing Date;
(iv) at the Initial Closing, the Facility Purchase Price and
the Fuel Purchase Price shall be adjusted as provided in Section 5.11(c)
in the event of any Major Loss (it being understood that such adjustment
shall be made as of the Initial Closing Date but shall be reflected in the
Relevant Facility Purchase Price paid at each Closing);
(v) at the Initial Closing Date, the Facility Purchase Price
shall be adjusted downward by (x) $10,000,000 in the event this Agreement
is terminated as to any Seller pursuant to the last paragraph of Section
10.1 and (y) $10,000,000 in the event the Buyer would have been permitted
to terminate this Agreement pursuant to Section 10.1(c)(ii) due to the
failure of the condition precedent specified in Section 6.1(e)(ii) and the
Buyer proceeds to consummate the transactions contemplated hereby
notwithstanding such failure (it being understood that each such
adjustment shall be made as of the Initial Closing Date but shall be
reflected in the Relevant Facility Purchase Price paid at each Closing);
(vi) at an Initial Closing that occurs after a Plant Material
Adverse Effect, the Facility Purchase Price shall be adjusted downward by
an amount equal to the amount of the loss and/or expenditure reasonably
anticipated by the Buyer to be incurred within one year following the
Initial Closing Date to remedy such Plant Material Adverse Effect (it
being understood that such adjustment shall be made as of the Initial
Closing Date but shall be reflected in the Relevant Facility Purchase
Price paid at each Closing); provided, however, that if a Plant Material
Adverse Effect of the type specified in Section 6.1(i) exists at the
Initial Closing Date and the Buyer elects to waive the related closing
condition, the Buyer shall be entitled to an adjustment of no more than
$50,000,000 unless all of the Sellers agree to a higher amount;
(vii) at each such Subsequent Closing, the Relevant Facility
Purchase Price shall be increased by an amount equal to the amount
actually paid by such Remaining Seller after the Initial Closing Date and
through the relevant Subsequent Closing Date to remedy the Plant Material
Adverse Effect for which an adjustment has been made pursuant to Section
2.6(a)(vi);
(viii) at each Closing, the Relevant Facility Purchase
Price shall be (A) increased if the book value as maintained by NAESCO of
all Inventories on the relevant Closing Date is greater than $35,800,000
(such difference is referred to as the "Inventory Excess Amount"), in
which case the increase in the Relevant Facility Purchase Price shall
equal the Inventory Excess Amount multiplied by the Proportionate
Ownership of such Sellers participating in such Closing, and (B) decreased
if the book value as maintained by NAESCO of such Inventories on the
relevant Closing Date is less than $35,800,000 (such difference is
referred to as the "Inventory Deficit Amount"), in which case the decrease
in the Relevant Facility Purchase Price shall equal the Inventory Deficit
Amount multiplied by the Proportionate Ownership of such Sellers
participating in such Closing (for purposes hereof, such adjustments shall
be determined in accordance with GAAP, consistent with NAESCO's past
practices);
(ix) at each Closing, the Relevant Facility Purchase Price
shall be increased by an amount equal to the aggregate cost of Proposed
Improvements, to the extent implemented and actually paid by such Sellers
participating in such Closing through the relevant Closing Date;
(x) at each Closing, the Relevant Facility Purchase Price
shall be adjusted downward by an amount equal to such Seller's
Proportionate Ownership of the Transmission Credit;
(xi) at each Closing, the Relevant Facility Purchase Price
shall be increased by an amount equal to the aggregate operation and
maintenance expenses related to a Refueling Outage that are incurred
consistently with Good Utility Practices and actually paid by such Sellers
participating in such Closing through the relevant Closing Date; and
(xii) to the extent the Seller Representatives or NAESCO have
not disposed prior to the Initial Closing Date of all of the Low Level
Waste whether at the Site or at an Offsite Hazardous Substance Facility
and the cost of such disposal is in excess of $500,000, the Facility
Purchase Price shall be decreased by the excess over such amount (the cost
of such disposal to be determined based on the prevailing industry costs
as close to the Initial Closing Date as practicable).
(b) Fuel Purchase Price Adjustments. With respect to the Buyer,
at each Closing, the Relevant Fuel Purchase Price shall be (A) increased if and
to the extent the book value as maintained by NAESCO of the Nuclear Fuel of such
Sellers participating in such Closing on the relevant Closing Date is greater
than the product of $61,900,000 multiplied by the Proportionate Ownership of
such Sellers participating in such Closing, and (B) decreased if and to the
extent the book value as maintained by NAESCO of the Nuclear Fuel of such
Sellers participating in such Closing on the relevant Closing Date is less than
the product of $61,900,000 multiplied by the Proportionate Ownership of such
Sellers participating in such Closing (for purposes hereof, such adjustment
shall be determined in accordance with GAAP, consistent with NAESCO's past
practices).
(c) Unit 2 Purchase Price Adjustments. With respect to the Buyer,
at the Initial Closing, the Unit 2 Purchase Price shall be decreased by an
amount equal to the sale price of each Unit 2 component, part or piece of
equipment sold to a Third Party in an arm's length transaction during the
Interim Period (it being understood that such adjustment shall be made as of the
Initial Closing Date but shall be reflected in the Relevant Unit 2 Purchase
Price paid at each Closing).
(d) Determination of Purchase Price Adjustments.
(i) At least thirty (30) days prior to the Initial Closing
Date and at least twenty (20) days prior to each Subsequent Closing Date, the
Seller Representatives, after consultation with the Required Sellers or the
Remaining Sellers, as the case may be, shall deliver to the Buyer an estimated
closing statement (the "Estimated Closing Statement") prepared by the Sellers
that shall set forth the best estimate of the Sellers of any adjustments to the
Facility Purchase Price required by Section 2.6(a) (the "Estimated Facility
Purchase Price Adjustment"), any adjustments to the Fuel Purchase Price required
by Section 2.6(b) (the "Estimated Fuel Purchase Price Adjustment") and any
adjustments to the Unit 2 Purchase Price required by Section 2.6(c) (the
"Estimated Unit 2 Purchase Price Adjustment," together with the Estimated
Facility Purchase Price Adjustment and the Estimated Fuel Purchase Price
Adjustment, the "Estimated Adjustments") as of the Initial Closing Date or the
Subsequent Closing Date, as the case may be. Within fifteen (15) days following
the delivery of the Estimated Closing Statement by the Seller Representatives to
the Buyer (ten (10) days in the case of a Subsequent Closing), the Buyer may
object in good faith to any or all of the Estimated Adjustments in writing. If
the Buyer objects to any or all of the Estimated Adjustments, the Parties shall
attempt to resolve such dispute by negotiation. If the Parties are unable to
resolve such dispute before five (5) Business Days prior to the relevant Closing
Date or if no objection is made by the Buyer with respect to any or all of the
Estimated Adjustments, the Facility Purchase Price, the Fuel Purchase Price
and/or the Unit 2 Purchase Price shall each be adjusted for the relevant Closing
Date by the net amount of the Estimated Facility Purchase Price Adjustment, the
Estimated Fuel Purchase Price Adjustment and the Estimated Unit 2 Purchase Price
Adjustment respectively, not in dispute, and the amount in dispute shall be
withheld for resolution in accordance with Section 2.6(d)(ii); and
(ii) Within sixty (60) days following the Initial Closing
Date and each Subsequent Closing Date, the Seller Representatives after
consultation with the Required Sellers or the Remaining Sellers, as the case may
be, shall deliver to the Buyer a closing statement (the "Post-Closing
Statement") prepared by the Sellers that shall set forth the computation by the
Sellers of the Facility Purchase Price adjustment in accordance with Section
2.6(a) as of such Closing Date (the "Facility Purchase Price Adjustment") and
the components thereof and the Fuel Purchase Price adjustment in accordance with
Section 2.6(b) as of such Closing Date (the "Fuel Purchase Price Adjustment")
and the components thereof and the Unit 2 Purchase Price adjustment in
accordance with Section 2.6(c) as of such Closing Date (the "Unit 2 Purchase
Price Adjustment") and the components thereof. Within twenty (20) days
following the delivery of the Post-Closing Statement by the Seller
Representatives to the Buyer, the Buyer may object to the Post-Closing Statement
in writing. The Sellers agree to cooperate with the Buyer to provide to the
Buyer or its Representatives information used to prepare the Post-Closing
Statement. If the Buyer objects to the Post-Closing Statement, the Parties
shall attempt to resolve such dispute by negotiation pursuant to Section 11.20.
If the Parties are unable to resolve such dispute within twenty (20) days of any
objection by the Buyer, the Parties shall appoint an Independent Accounting
Firm, who shall review the Post-Closing Statement and determine within thirty
(30) days after its appointment the appropriate Facility Purchase Price
Adjustment, Fuel Purchase Price Adjustment and Unit 2 Purchase Price Adjustment
under this Section 2.6(d) as of such Closing Date. The fees, costs and expenses
of the Independent Accounting Firm shall be borne by the Party which in the
conclusive judgment of the Independent Accounting Firm is not the prevailing
party, or if such Independent Accounting Firm determines that neither Party
could be fairly found to be the prevailing party, then such fees, costs and
expenses shall be borne equally by the Buyer and the Sellers. The agreed upon
Post-Closing Statement or the finding of such Independent Accounting Firm, as
the case may be, shall be the Facility Purchase Price Adjustment as to Section
2.6(a), the Fuel Purchase Price Adjustment as to Section 2.6(b) and the Unit 2
Purchase Price Adjustment as to Section 2.6(c), and shall be binding on the
Parties. The acceptance by the Buyer and the Sellers of such Facility Purchase
Price Adjustment, Fuel Purchase Price Adjustment and Unit 2 Purchase Price
Adjustment shall not constitute or be deemed to constitute a waiver of the
rights of such Party in respect of any other provision of this Agreement.
(c) Notwithstanding the foregoing, no increase or decrease shall
be made in the Facility Purchase Price, Fuel Purchase Price or Unit 2 Purchase
Price to the extent such increase or decrease is related to or results from
changes made by the Buyer in accounting, billing, budgeted spending,
bookkeeping, inventory, recognition or other similar policies or practices from
those used by NAESCO prior to the Initial Closing Date.
2.7 Payment of Purchase Price Adjustments. The Estimated Adjustments,
to the extent not in dispute, shall be aggregated at the Initial Closing Date
and each Subsequent Closing Date and the Party or Parties which owe(s) the
other(s) an adjustment to the Facility Purchase Price, the Fuel Purchase Price
and/or the Unit 2 Purchase Price shall make a cash payment of such adjustment in
immediately available funds by wire transfer to an account designated by the
Buyer or Seller Representatives after consultation with the other Sellers, as
the case may be. Following each Closing Date, if necessary, the Parties shall
aggregate the Facility Purchase Price Adjustment, the Fuel Purchase Price
Adjustment and the Unit 2 Purchase Price Adjustment and if, after taking into
account the payment, if any, made at such Closing Date pursuant to the preceding
sentence, the Party or Parties which owe(s) the other(s) an adjustment to the
Facility Purchase Price, the Fuel Purchase Price and/or the Unit 2 Purchase
Price shall make a cash payment of such adjustment in immediately available
funds by wire transfer to an account designated by the Buyer or the Seller
Representatives after consultation with the other Sellers, as the case may be.
2.8 Allocation of Consideration. The Buyer and the Sellers shall use
Commercially Reasonable Efforts to agree upon an allocation among the Acquired
Assets (other than Nuclear Fuel) of the sum of the Facility Purchase Price and
the Assumed Liabilities consistent with Section 1060 of the Code and the
Treasury Regulations thereunder within one hundred and twenty (120) days of the
Effective Date (or such later date as the Parties may mutually agree) but in no
event fewer than thirty (30) days prior to the Initial Closing Date. The Buyer
and the Sellers may obtain the services of an independent engineer or appraiser
(the "Independent Appraiser") to assist in determining the fair value of the
Acquired Assets solely for purposes of such allocation under this Section 2.8.
If such an appraisal is made, the Buyer and the Sellers agree to accept the
Independent Appraiser's determination of the fair value of the Acquired Assets.
The cost of the appraisal shall be borne equally by the Buyer and the Sellers.
To the extent such filings are required, the Buyer and the Sellers agree to file
IRS Form 8594 and all federal, state, local and foreign Tax Returns in
accordance with such agreed allocation. Except to the extent required to comply
with audit determinations by any Governmental Authority with jurisdiction over a
Party, the Buyer and the Sellers shall report the transactions contemplated by
this Agreement and the Related Agreements for all required federal Income Tax
and all other Tax purposes in a manner consistent with the allocation determined
pursuant to this Section 2.8. The Buyer and the Sellers agree to provide each
other promptly with any other information required to complete IRS Form 8594.
The Buyer and the Sellers shall notify and provide each other with reasonable
assistance in the event of an examination, audit or other proceeding regarding
the agreed upon allocation of the Facility Purchase Price. The Buyer and the
Sellers shall treat the transaction contemplated by this Agreement as the
acquisition by the Buyer of a trade or business for United States federal income
tax purposes and agree that no portion of the consideration therefor shall be
treated in whole or in part as the payment for services or future services.
2.9 Proration.
(a) The Buyer and the Sellers agree that all of the items normally
prorated in a sale of assets of the type contemplated by this Agreement and the
Related Agreements, relating to the business and operations of the Acquired
Assets, will be prorated as of the Initial Closing Date and each Subsequent
Closing Date, with Sellers party to the relevant Closing liable to the extent
such items relate to any period prior to the relevant Closing Date on which such
Seller transfers its Ownership Share, and the Buyer liable to the extent such
items relate to periods after such relevant Closing Date, which items shall
include: (i) any personal property, real property, occupancy and water Taxes,
assessments and other charges of the type that could give rise to a Permitted
Encumbrance, if any, on or associated with the Acquired Assets; (ii) any rent,
Taxes and other items payable by or to the Sellers under any of the Material
Contracts, Emergency Preparedness Agreements, Leases or Other Assigned Contracts
assigned to and assumed by the Buyer hereunder (except for prepayments for
Nuclear Fuel or Inventories); (iii) any Permit, license, registration or fees
with respect to any Transferable Permit assigned to the Buyer associated with
the Acquired Assets; (iv) sewer rents and charges for water, telephone,
electricity and other utilities and insurance; (v) any amounts scheduled to be
paid into the Decommissioning Fund by a Seller relating to the time period that
includes the Initial Closing Date or a Subsequent Closing Date, as the case may
be; (vi) any fees or charges imposed by INPO, NEI, the NRC or any other
Governmental Authority or any association that the Buyer chooses to join; (vii)
ISO-NE VAR capability credits; (viii) credits associated with installed
capability requirements; and (ix) the Utility Property Tax associated with the
Acquired Assets (determined without giving effect to the sale of the Acquired
Assets to the Buyer).
(b) In connection with the prorations referred to in Section
2.9(a), if the actual figures are not available on the Initial Closing Date and
each Subsequent Closing Date, the proration shall be based upon the actual
payments for the preceding year (or appropriate period) for which actual
payments are available and such payments shall be re-prorated upon request of
any Seller or the Buyer made within sixty (60) days of the date the actual
amounts become available. If the Taxes which are apportioned are thereafter
reduced by abatement or award, the amount of such abatement or award, less the
reasonable cost of obtaining the same and any amounts due to tenants under
leases due to such abatement or award, shall be apportioned between the
applicable Parties; provided that no Party shall be obligated to institute or
prosecute an abatement or appellate proceeding unless otherwise agreed in
writing. Notwithstanding the foregoing, with respect to the Utility Property
Tax associated with the Acquired Assets, the initial proration shall be based on
the estimated tax payments made by the Sellers in respect thereof, but if it is
later determined that the actual amount of the Utility Property Tax (determined
without giving effect to the sale of the Acquired Assets to the Buyer) is less
than such estimated payments made by the Sellers, the Buyer shall pay promptly
to each Seller such Seller's Proportionate Ownership of such excess and the
Buyer and Sellers shall take reasonable steps such that the Buyer will succeed
to the Sellers' excess tax payments in respect of the Utility Property Tax. If
it is later determined that the actual amount of the Utility Property Tax
(determined without giving effect to the sale of the Acquired Assets to the
Buyer) is greater than such estimated payments made by the Sellers, each Seller
shall promptly pay to the Buyer its Proportionate Ownership of the amount of
such deficit. The Sellers and the Buyer agree to furnish each other with such
documents and other records that may be reasonably requested in order to confirm
all adjustment and proration calculations made pursuant to this Section 2.9.
2.10 The Closings. Unless otherwise agreed to by the Parties
participating in the applicable Closing, and except for the Closing at which UI
transfers the Undivided Interest to the Buyer which will proceed in accordance
with Section 6.3(a), the Initial Closing and each Subsequent Closing of the
transactions contemplated by this Agreement (collectively, the "Closing") shall
take place at the offices of Brown Rudnick Berlack Israels LLP, at Boston,
Massachusetts, commencing at 9:00 a.m. eastern time on the date that is ten (10)
days (or, if the tenth day is not a Business Day, then the next Business Day
following such tenth day) following the date on which all of the applicable
conditions set forth in Sections 6.1 and 6.2 (excluding deliveries contemplated
by Sections 2.11 and 2.12) have either been satisfied or waived by the Party for
whose benefit such condition exists, such satisfaction or waiver to conform to
Section 11.14; provided that such date shall not be earlier than the
Coordination Date. The date of the Initial Closing (the "Initial Closing Date")
and the date of each Subsequent Closing (the "Subsequent Closing Date") is each
herein called a "Closing Date" and shall be effective for all purposes herein as
of 12:01 a.m. on the Closing Date. The conditions set forth in Sections 6.1 and
6.2 shall be deemed to have been satisfied or waived in writing by a Party upon
a Closing; provided such satisfaction or waiver shall not be deemed to limit a
Party's right to indemnification pursuant to Section 9.
2.11 Deliveries by the Sellers at the Closings.
(a) Initial Closing. At the Initial Closing (unless otherwise
indicated), if appropriate, each Required Seller shall deliver, or cause to be
delivered, the following to the Buyer, duly executed and properly acknowledged,
relating to the Ownership Shares being sold, assigned or transferred at such
Initial Closing:
(i) Deed for the NAEC Real Property, substantially in the
form of Exhibit A(i) hereto and any owner's affidavits or similar
documents reasonably required by the Title Company;
(ii) Deeds for the Ownership Shares of the interests of Each
Required Seller in the Jointly Owned Real Property being transferred at
the Initial Closing substantially in the form of Exhibit A(ii) hereto, and
any owner's affidavits or similar documents required by the Title Company;
(iii) a Bill of Sale, substantially in the form of Exhibit B
hereto;
(iv) an Asset Demarcation Agreement, substantially in the
form of Exhibit C hereto;
(v) if the Undivided Interest is transferred to the Buyer on
the Initial Closing Date, in the case of UI, the Owner Trustee Deed and
Bill of Sale, substantially in the form of Exhibit K hereto;
(vi) an Assignment and Assumption Agreement, substantially in
the form of Exhibit D hereto, in recordable form if necessary;
(vii) an Interconnection Agreement, substantially in the form
of Exhibit E hereto, duly executed by PSNH;
(viii) an Interim Services Agreement, if requested in writing
by the Buyer and if agreed to by a Seller or its Affiliate who will
provide the services, substantially in the form of Exhibit J hereto, which
shall cover those services set forth in Schedule 2.11(a)(viii);
(ix) the Release of Mortgage Indenture, in the case of CL&P
and NAEC, if applicable, substantially in the form of Exhibit F hereto,
and in the case of any other Required Seller, if applicable, in such other
form as meets the requirements of such Seller's mortgage indenture, if
any;
(x) an Easement Agreement, if the same has been executed by
PSNH, NAEC and the other Participants;
(xi) originals, or copies certified to the Buyer's
satisfaction, of the Transferable Permits, Material Contracts, Emergency
Preparedness Agreements, Intellectual Property Licenses, Other Assigned
Contracts and Leases, which shall be delivered to the Buyer at the
Facility;
(xii) all consents, waivers or approvals necessary for the
transfer at such Closing of the Ownership Shares of such Required Sellers
or the consummation of the transactions contemplated by this Agreement and
the Related Agreements;
(xiii) a certificate from an authorized officer of such
Required Seller, dated the Initial Closing Date, to the effect that, to
such officer's Knowledge, the conditions set forth in Sections 6.1(a),
6.1(b), 6.1(d), 6.1(e), 6.1(f), 6.1(g), 6.1(i) and 6.1(j) have been
satisfied and a certificate from an authorized officer of NAESCO, dated
the Initial Closing Date, to the effect that, to such officer's Knowledge,
the conditions set forth in Sections 6.1(a), 6.1(b), 6.1(e) and 6.1(i)
have been satisfied;
(xiv) a copy, certified by an authorized officer of such
Required Seller, of resolutions authorizing the execution and delivery of
this Agreement and the Related Agreements and instruments attached as
exhibits hereto and thereto, and the consummation of the transactions
contemplated hereby and thereby;
(xv) a certificate of an authorized officer of such Required
Seller which shall identify by name and title and bear the signature of
the officers of such Seller authorized to execute and deliver this
Agreement and the Related Agreements and instruments attached as exhibits
hereto and thereto;
(xvi) an opinion or opinions from one or more internal or
outside counsel to such Required Seller (who shall be reasonably
satisfactory to the Buyer), dated the Initial Closing Date and reasonably
satisfactory in form to the Buyer and its counsel, covering substantially
the matters set forth on Schedule 2.11(a)(xvi);
(xvii) the items and documents listed in Sections 2.1(h) and
2.1(i); provided, in the case of documents located at the Facility, the
Required Sellers may furnish a certificate authorizing the Buyer to take
possession thereof in lieu of physical delivery at the Initial Closing
Date, and provided further that in the event that applicable Law prohibits
transfer of the original documents on the Initial Closing Date, the
Required Sellers shall provide certified copies of the items and
documents, and provide the original documents at such time allowable under
applicable Law;
(xviii) the Title Commitments to be delivered by such
Required Seller pursuant to Section 3.7;
(xix) such Required Seller's FIRPTA Affidavit;
(xx) certificates of title for all vehicles listed on
Schedule 2.1(o) acquired by the Buyer;
(xxi) amounts due from each such Required Seller, if any, for
the Estimated Adjustment pursuant to Section 2.6(d);
(xxii) a certificate of good standing with respect to each
such Required Seller, to the extent applicable (dated as of a recent date
prior to the Initial Closing Date), issued by the appropriate Secretary of
State for each such Required Seller;
(xxiii) the assets of each such Required Seller's
Decommissioning Fund in accordance with Section 5.10;
(xxiv) an Agreement to Amend the Transmission Support
Agreement, substantially in the form of Exhibit N hereto, duly executed by
PSNH and NEP;
(xxv) an amendment to the Joint Ownership Agreement signed by
each Seller substituting the Buyer for each of the Sellers, to be
effective with respect to each such Seller as of the Initial Closing Date
or the Subsequent Closing Date in which such Seller participates in form
and substance satisfactory to the Buyer;
(xxvi) evidence of substitution of the Buyer or its designee
for NAESCO under each of the Managing Agent Operating Agreement and the
Disbursing Agent Agreement; and
(xxvii) such other agreements, consents, documents,
instruments and writings as are reasonably required to be delivered by
each such Required Seller at or prior to the Initial Closing Date pursuant
to this Agreement or the Related Agreements or otherwise reasonably
required in connection herewith or therewith, including all such other
instruments of sale, transfer, conveyance, assignment or assumption as the
Buyer or its counsel may reasonably request in connection with the sale
and transfer of the Acquired Assets or the transactions contemplated
hereby; provided, however, that this subsection (xxvii) shall not require
such Required Seller to prepare or obtain any surveys relating to the Real
Property.
(b) Subsequent Closing. At each Subsequent Closing (unless
otherwise indicated), if appropriate, the Remaining Sellers participating in
such Closing shall deliver the following to the Buyer, duly executed and
properly acknowledged, relating to the Ownership Shares being sold, assigned or
transferred at such Subsequent Closing:
(i) with respect to the Remaining Sellers participating in a
particular Subsequent Closing, Deeds for the Ownership Shares of the
interests of each such Remaining Seller in the Jointly Owned Real Property
being transferred at the Subsequent Closing substantially in the form of
Exhibit A(ii) hereto, and any owner's affidavits or similar documents
required by the Title Company;
(ii) a Bill of Sale;
(iii) if the Undivided Interest is transferred to the Buyer
on the Subsequent Closing Date, in the case of UI, the Owner Trustee Deed
and Bill of Sale, substantially in the form of Exhibit K hereto;
(iv) an Assignment and Assumption Agreement, if appropriate;
(v) a Release of Mortgage Indenture, in such form and with
such modifications as may be necessary to meet the requirements of such
Remaining Seller's mortgage, if any;
(vi) the consents, waivers or approvals and all other
consents, waivers and approvals necessary for the transfer at such Closing
of the Ownership Shares of each such Remaining Seller or the consummation
of the transactions contemplated by this Agreement and the Related
Agreements;
(vii) a certificate from an authorized officer of each such
Remaining Seller, dated the relevant Closing Date, to the effect that the
conditions with respect to such Seller in its individual capacity set
forth in Sections 6.1(a), 6.1(b), 6.1(d), 6.1(e), 6.1(f), 6.1(g), 6.1(i)
and 6.1(j) have been satisfied;
(viii) a copy, certified by an authorized officer of each
such Remaining Seller, of resolutions authorizing the execution and
delivery of this Agreement and Related Agreements and instruments attached
as exhibits hereto and thereto, and the consummation of the transactions
contemplated hereby and thereby;
(ix) a certificate of an authorized officer of each such
Remaining Seller which shall identify by name and title and bear the
signature of the officers of such Remaining Seller authorized to execute
and deliver this Agreement and the Related Agreements and instruments
attached as exhibits hereto and thereto;
(x) an opinion or opinions from one or more internal or
outside counsel to each such Remaining Seller (who shall be reasonably
satisfactory to the Buyer), dated the relevant Closing Date and reasonably
satisfactory in form to the Buyer and its counsel, covering matters
relating to such Subsequent Closing substantially as set forth in Schedule
2.11(b)(x);
(xi) the Title Commitments to be delivered by such Remaining
Sellers pursuant to Section 3.7;
(xii) such Remaining Seller's FIRPTA Affidavit;
(xiii) a certificate of good standing with respect to each
such Remaining Seller, to the extent applicable (dated as of a recent date
prior to such Closing Date), issued by the appropriate Secretary of State
for each such Remaining Seller;
(xiv) the assets of each such Remaining Seller's
Decommissioning Funds in accordance with Section 5.10; and
(xv) such other agreements, consents, documents, instruments
and writings as are reasonably required to be delivered by each such
Remaining Seller at or prior to such Closing Date pursuant to this
Agreement or Related Agreements or otherwise reasonably required in
connection herewith or therewith, including all such other instruments of
sale, transfer, conveyance, assignment or assumption as the Buyer or its
counsel may reasonably request in connection with the sale and transfer of
the Acquired Assets or the transactions contemplated hereby; provided,
however, that this subsection (xv) shall not require such Seller to
prepare or obtain any surveys relating to the Real Property.
2.12 Deliveries by the Buyer at the Closing Date.
(a) Initial Closing. At the Initial Closing, if appropriate, the
Buyer shall deliver to or at the direction of the Required Sellers duly executed
and properly acknowledged, relating to the Ownership Shares being sold, assigned
or transferred at such Closing:
(i) the Relevant Facility Purchase Price, the Relevant Fuel
Purchase Price, the Relevant Unit 2 Purchase Price, the NAEC Real Property
Purchase Price and amounts due from the Buyer, if any, for the Estimated
Adjustment pursuant to Section 2.6(d);
(ii) an Assignment and Assumption Agreement;
(iii) the Asset Demarcation Agreement;
(iv) the Interconnection Agreement;
(v) an Interim Services Agreement;
(vi) the Acceptable Guaranty;
(vii) the Agreement to Amend Transmission Support Agreement;
(viii) evidence of the Buyer's membership in NEPOOL;
(ix) a certificate from an authorized officer of the Buyer,
dated the Initial Closing Date, to the effect that, to such officer's
Knowledge, the conditions set forth in Sections 6.2(a), 6.2(b), 6.2(d),
6.2(e), 6.2(f), 6.2(g), 6.2(h), 6.2(i) and 6.2(l) have been satisfied;
(x) a copy, certified by an authorized officer of the Buyer,
of resolutions authorizing the execution and delivery of this Agreement
and the Related Agreements to which the Buyer is a party and instruments
attached as exhibits hereto and thereto, and the consummation of the
transactions contemplated hereby and thereby;
(xi) a certificate of an authorized officer of the Buyer
which shall identify by name and title and bear the signature of the
officers of the Buyer authorized to execute and deliver this Agreement and
the Related Agreements to which the Buyer is a party and instruments
attached as exhibits hereto and thereto;
(xii) a certificate of good standing with respect to the Buyer
(dated as of a recent date prior to the Initial Closing Date) issued by
the Secretary of State of the State of Delaware;
(xiii) a certificate of good standing with respect to the
Buyer (dated as of a recent date prior to the Initial Closing Date) issued
by the Secretary of State of the State of New Hampshire;
(xiv) an opinion or opinions from one or more counsel to the
Buyer (who shall be reasonably satisfactory to the Required Sellers),
dated the Initial Closing Date and reasonably satisfactory in form to the
Sellers and their counsel, covering substantially the matters set forth in
Schedule 2.12;
(xv) such other agreements, consents, documents, instruments
and writings as are reasonably required to be delivered by the Buyer at or
prior to such Closing Date pursuant to this Agreement or the Related
Agreements or otherwise reasonably required in connection herewith or
therewith, including all such other instruments of assumption as the
Seller Representatives or their counsel may reasonably request in
connection with the purchase of the Acquired Assets or the transactions
contemplated hereby; and
(xvi) to the extent no Seller Easements exist at the Initial
Closing Date, an Easement Agreement executed by the Buyer with respect to
the Ownership Shares it acquires at the Initial Closing.
(b) Subsequent Closing. At each Subsequent Closing, if
appropriate, the Buyer shall deliver to or at the direction of each of the
Remaining Sellers participating at such Closing, duly executed and properly
acknowledged, relating to the Ownership Shares being sold, assigned or
transferred at such Closing:
(i) the Relevant Facility Purchase Price, the Relevant Fuel
Purchase Price, the Relevant Unit 2 Purchase Price and amounts due from
the Buyer, if any for the Estimated Adjustment pursuant to Section 2.6(d);
(ii) an Assignment and Assumption Agreement;
(iii) a certificate from an authorized officer of the
Buyer, dated such Closing Date, to the effect that the conditions set
forth in Sections 6.2(a), 6.2(b), 6.2(d), 6.2(e), 6.2(f), 6.2(g), 6.2(h),
6.2(i) and 6.2(l) have been satisfied
(iv) a copy, certified by an authorized officer of the
Buyer, of resolutions authorizing the execution and delivery of this
Agreement and Related Agreements to which the Buyer is a party and
instruments attached as exhibits hereto and thereto, and the consummation
of the transactions contemplated hereby and thereby;
(v) a certificate of an authorized officer of the Buyer
which shall identify by name and title and bear the signature of the
officers of the Buyer authorized to execute and deliver this Agreement and
the Related Agreements to which the Buyer is a party and instruments
attached as exhibits hereto and thereto;
(vi) an opinion or opinions from one or more counsel to the
Buyer (who shall be reasonably satisfactory to the Remaining Sellers),
dated such Closing Date and reasonably satisfactory in form to the
Remaining Sellers and their counsel, covering substantially the matters
set forth in Schedule 2.12;
(vi) a certificate of good standing with respect to the Buyer
(dated as of a recent date prior to such Closing Date) issued by the
Secretary of State of Delaware;
(viii) a certificate of good standing with respect to the
Buyer (dated as of a recent date prior to such Closing Date) issued by the
Secretary of State of New Hampshire;
(ix) such other agreements, consents, documents, instruments
and writings as are reasonably required to be delivered by the Buyer at or
prior to such Closing Date pursuant to this Agreement or the Related
Agreements or otherwise reasonably required in connection herewith or
therewith, including all such other instruments of assumption as the
Remaining Sellers or their counsel may reasonably request in connection
with the purchase of the Acquired Assets or the transactions contemplated
hereby; and
(x) to the extent the Buyer delivered the item specified in
Section 2.12(a)(xvi) at the Initial Closing Date, an Easement Agreement
executed by the Buyer with respect to the Ownership Shares it acquires at
such Closing.
3. Representations, Warranties and Disclaimers of Each Seller. Except as
specifically provided in Section 3.7(a) with respect to the NAEC Real Property,
each of the Sellers, severally as to those representations and warranties
involving such Seller only and severally in accordance with its Proportionate
Ownership set forth in Schedule 3.1(i), which, in the case of UI, shall include
the Undivided Interest, as to all other representations and warranties, hereby
represents and warrants to the Buyer (all such representations and warranties
other than those in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7(b), 3.7(c), 3.8,
3.9, 3.10, 3.17 and 3.23, are being made to the Knowledge of such Seller) and,
in addition thereto, NAESCO, hereby represents and warrants to the Buyer (such
representations and warranties other than those in Sections 3.7(b), 3.7(c),
3.10, 3.17 and 3.23 are being made to the Knowledge of NAESCO and shall exclude
Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6 and 3.7(a)) as follows:
3.1 Organization. Such Seller is duly organized, validly existing and
in good standing under the Laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease, and operate its
properties and to carry on its business as it is now being conducted. Copies of
the charter and by-laws of such Seller, each as amended to date, have been
heretofore made available to the Buyer and are accurate and complete. To the
extent such Seller is not a New Hampshire entity, such Seller is qualified to do
business in New Hampshire. If such Seller is listed on Schedule 3.1(ii), such
Seller is organized by or under the Order of a Governmental Authority.
3.2 Authorization, Execution and Enforceability of Transactions. Such
Seller has the full power and authority to execute and deliver this Agreement
and the Related Agreements and, subject to receipt of its Seller Regulatory
Approvals, to perform its obligations hereunder and thereunder. Except as
described in Schedule 3.2, all necessary actions or proceedings to be taken by
or on the part of such Seller to authorize and permit the due execution and
valid delivery by such Seller of this Agreement and the Related Agreements and
the instruments required to be duly executed and validly delivered by such
Seller pursuant hereto and thereto, the performance by such Seller of its
obligations hereunder and thereunder, and the consummation by such Seller of the
transactions contemplated herein and therein, have been duly and properly taken.
This Agreement has been duly executed and validly delivered by such Seller, and
assuming due execution and delivery by the Buyer and the other Sellers and
receipt of all Seller Regulatory Approvals, constitutes the valid and legally
binding obligation of such Seller, enforceable in accordance with its terms and
conditions, subject to applicable bankruptcy, insolvency, moratorium and other
Laws affecting the rights of creditors generally and the application of general
principles of equity (regardless of whether such enforceability is sought in
equity or at law). When each Related Agreement has been executed and validly
delivered by the Buyer and such Seller and each other party thereto, and
assuming due execution and delivery by the Buyer and the other Sellers and each
other party thereto and receipt of all Seller Regulatory Approvals, such Related
Agreement constitutes a valid and legally binding obligation of such Seller,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium and other Laws affecting the rights of creditors
generally and the application of general principles of equity (regardless of
whether such enforceability is sought in equity or at law). Such Seller
acknowledges the receipt and sufficiency of consideration with respect to this
Agreement and each of the Related Agreements.
3.3 Noncontravention. Subject to such Seller obtaining its Seller
Regulatory Approvals, neither the execution and delivery by such Seller of this
Agreement or any of the Related Agreements, nor the consummation of the
transactions contemplated hereby and thereby will (i) violate any Law to which
such Seller or any of its property is subject or any provision of the charter or
by-laws of such Seller, or (ii) conflict with, result in a breach or forfeiture
of, constitute a default under, result in the acceleration of, create in any
Person the right to accelerate, terminate, modify, revoke, suspend or cancel, or
require any notice under any agreement, contract, lease, Permit, license,
instrument, or other arrangement to which such Seller is bound or to which any
of its assets is subject (or result in the imposition of any Lien upon any of
the Acquired Assets), except for matters that, (x) in the aggregate, would not
be likely to have a Material Adverse Effect on such Seller or its ability to
perform its obligations under this Agreement and the Related Agreements or for
which a consent or waiver shall have been obtained, (y) are disclosed on
Schedule 3.3, or (z) arise in relation to any non-assigned rights under Permits,
Material Contracts, Leases or Other Assigned Contracts or other agreements or
matters which have been expressly disclosed to the Buyer.
3.4 Consents and Approvals. Except for Seller Regulatory Approvals, no
declaration, filing or registration with, or notice to, or authorization,
consent or approval of any Governmental Authority is necessary for the execution
and delivery of this Agreement or the Related Agreements by such Seller, or the
consummation of the transactions contemplated hereby or thereby.
3.5 Regulation as a Utility. To the extent described in Schedule
3.5(i), such Seller is a public service company or an electric company or other
similar entity subject to regulation by a Governmental Authority, as specified
in Schedule 3.5(i). To the extent described in Schedule 3.5(ii), such Seller is
an "electric utility company" and a "subsidiary company" of a "holding company"
which is registered or exempt from registration under the Public Utility Holding
Company Act of 1935, as amended. To the extent described in Schedule 3.5(iii)
such Seller is an "electric utility" subject to regulation by FERC under the
Federal Power Act, as amended, and is a power reactor licensee and materials
licensee subject to regulation by the NRC under the Atomic Energy Act (as such
terms are defined therein). The 345 kV Substation conveyed with the Facility is
an interconnecting transmission facility, necessary to effect wholesale sales of
electricity from the Facility, and any other use of the 345 kV Substation is
incidental thereto. Except as otherwise provided in Schedule 3.5(iv), the sale
of the Ownership Shares to the Buyer pursuant to this Agreement shall constitute
a transfer of substantially all of the properties or all of the generating
facilities of such Seller within the meaning of Paragraph 23.1 of the Joint
Ownership Agreement.
3.6 Brokers' Fees. Such Seller has no Liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
3.7 Title to Acquired Assets.
(a) NAEC hereby represents and warrants to Buyer that, except for
Permitted Encumbrances, NAEC holds good and marketable title to its interest in
the NAEC Real Property to the extent, and only to the extent, specified in the
title insurance commitments attached hereto as in Schedule 3.7(i) (the "Title
Commitments").
(b) Except for Permitted Encumbrances, such Seller holds good and
marketable title to its tenant-in-common interest (as set forth on Schedule 1(a)
hereto) in the Jointly Owned Real Property to the extent, and only to the
extent, specified in the Title Commitments.
(c) Except as set forth in Schedule 3.7(i) and except for
Permitted Encumbrances, such Seller has good and valid title to, or a valid
leasehold interest in, or license for its tenant-in-common interest in the
Acquired Assets other than the Jointly Owned Real Property free and clear of all
Liens. Such Seller owns a tenant-in-common interest in the Acquired Assets,
other than the NAEC Real Property, in a percentage equal to its Ownership Share
as set forth in Schedule 1(a), or, in the case of the Undivided Interest, UI
holds a leasehold interest. There are no Permitted Encumbrances arising out of
any Tax or other charges due from such Seller or NAESCO as assessed by any
Governmental Authority past due on the date the representation is given, except
for those items, if any, as to which such Seller will indemnify the Buyer
pursuant to Section 9.3.
3.8 Qualified Decommissioning Funds. With respect to each Seller other
than a Seller organized by or under the Order of a Governmental Authority:
(a) (i) The Qualified Decommissioning Fund of such Seller is a
trust, validly existing under the Laws of the State of New Hampshire with all
requisite authority to conduct its affairs as it now does; (ii) the Qualified
Decommissioning Fund of such Seller satisfies the requirements necessary for
each such Qualified Decommissioning Fund to be treated as a "Nuclear
Decommissioning Reserve Fund" within the meaning of Section 468A(a) of the Code
and as a "nuclear decommissioning fund" and a "qualified nuclear decommissioning
fund" within the meaning of Treas. Reg. section 1.468A-1(b)(3); (iii) each such
Qualified Decommissioning Fund is in compliance in all material respects with
all applicable rules and regulations of any Governmental Authority having
jurisdiction (including, without limitation, the NRC, the NHPUC, the NDFC, the
DPUC, the FERC, the MDTE, the RIPUC, the VTPSB and the IRS), and the Qualified
Decommissioning Fund of such Seller has not engaged in any material acts of
"self-dealing" as defined in Treas. Reg. section 1.468A-5(b)(2); (iv) no "excess
contribution," as defined in Treas. Reg. section 1.468A-5(c)(2)(ii), has been
made to the Qualified Decommissioning Fund of such Seller which has not been
withdrawn within the period provided under Treas. Reg. section 1.468A-
5(c)(2)(i); and (v) such Seller has made timely and valid elections to make
annual contributions to its Qualified Decommissioning Fund since the first
taxable year after establishment of such fund and has heretofore made available
copies of such elections to the Buyer. Such Seller has heretofore made
available to the Buyer a copy of its Decommissioning Trust Agreement as in
effect on the Effective Date.
(b) Subject only to Seller Regulatory Approvals and approval by
the NDFC of Buyer's Funding Assurance pursuant to RSA 162-F, such Seller and the
Trustee have or shall have prior to the Initial Closing Date or Subsequent
Closing Date, as the case may be, all requisite right, power and authority to
cause the assets of each Qualified Decommissioning Fund to be transferred to the
Buyer's Qualified Decommissioning Fund in accordance with the provisions of this
Agreement.
(c) (i) Such Seller and/or the Trustee of the Qualified
Decommissioning Funds has/have filed or caused to be filed with the NRC, the IRS
and all other applicable Governmental Authorities all material forms,
statements, reports, documents (including all exhibits, amendments and
supplements thereto) required to be filed by such entities; and (ii) there are
no interim rate orders that may be retroactively adjusted or retroactive
adjustments to interim rate orders that may affect amounts to be contributed by
the Buyer to the Qualified Decommissioning Funds or to be distributed from the
Qualified Decommissioning Funds to the Buyer's Qualified Decommissioning Fund.
Such Seller has made available to the Buyer a copy of the schedules of ruling
amounts (the "IRS Ruling Amounts") most recently issued by the IRS for the
Qualified Decommissioning Fund, a copy of the requests that were filed to obtain
such IRS Ruling Amounts and a copy of any pending request for revised IRS Ruling
Amounts, in each case together with all exhibits, amendments and supplements
thereto. Any excess amounts contributed to the Qualified Decommissioning Fund
while such request(s) is/are pending before the IRS which exceed the applicable
amounts provided in the IRS Ruling Amounts issued by the IRS will be withdrawn
by such Seller from the Qualified Decommissioning Fund within the period
provided under Treas. Reg. section 1.468A-5(c)(2)(i), subject to the approval by
the Office of the State Treasurer of New Hampshire of such withdrawal, as
applicable.
(d) Such Seller has made available to the Buyer a statement of
assets and liabilities verified by the Trustee for its Qualified Decommissioning
Fund as of February 28, 2002, and such statement of assets and liabilities will
be verified by such Trustee as of the second Business Day before the Closing
Date on which such Seller transfers its Ownership Share, which statement of
assets and liabilities presents fairly as of February 28, 2002, and will present
as of the second Business Day prior to the Closing Date on which such Seller
transfers its Ownership Share, the financial position of each Qualified
Decommissioning Fund. Each Seller will make available to Buyer information from
which Buyer can determine the Tax Basis of all assets in such Seller's Qualified
Decommissioning Fund as of the second Business Day prior to the Closing Date on
which such Seller transfers its Ownership Share. There are no Liabilities
(whether absolute, accrued, contingent or otherwise and whether due or to become
due), including, but not limited to, any acts of "self-dealing" as defined in
Treas. Reg. section 1.468A-5(b)(2) or agency or other legal proceedings that may
materially affect the financial position of the Qualified Decommissioning Funds
other than those, if any, that are disclosed on Schedule 3.8.
(e) Such Seller has made available to the Buyer copies of all
contracts and agreements to which the Trustee of the Qualified Decommissioning
Fund, in its capacity as such, is a party.
(f) Such Seller's Qualified Decommissioning Fund has filed all Tax
Returns required to be filed and all material Taxes shown to be due on such Tax
Returns have been paid in full. Except as shown in Schedule 3.8, no notice of
deficiency or assessment has been received from any taxing authority with
respect to liability for Taxes of any such Seller's Qualified Decommissioning
Fund which have not been fully paid or Finally settled, and any such deficiency
shown in such Schedule 3.8 is being contested in good faith through appropriate
proceedings. Except as set forth in Schedule 3.8, there are no outstanding
agreements or waivers extending the applicable statutory periods of limitations
for Taxes associated with the Qualified Decommissioning Funds for any period.
(g) To the extent such Seller has pooled the assets of the
Qualified Decommissioning Fund with those of any other assets for investment
purposes in periods prior to Closing, such pooling arrangement is not taxable as
a corporation for federal income tax purposes.
3.9 Nonqualified Decommissioning Funds.
(a) The Nonqualified Decommissioning Fund of such Seller is a
trust validly existing under the Laws of the State of New Hampshire with all
requisite authority to conduct its affairs as it now does. The Nonqualified
Decommissioning Fund of such Seller is in compliance in all material respects
with applicable rules and regulations of any Governmental Authority having
jurisdiction (including, without limitation, the NRC, the NDFC, the NHPUC, the
DPUC, the FERC, the MDTE, the RIPUC, the VTPSB and the IRS).
(b) Subject only to Seller Regulatory Approvals and approval by
the NDFC of Buyer's funding assurance pursuant to RSA 162-F, such Seller and the
Trustee have or shall have prior to the Initial Closing Date or Subsequent
Closing Date, as the case may be, all requisite right, power and authority to
cause the assets of each Nonqualified Decommissioning Fund to be transferred to
the Buyer's Nonqualified Decommissioning Fund in accordance with the provisions
of this Agreement.
(c) Such Seller and the Trustee of the Nonqualified
Decommissioning Fund have filed or caused to be filed with the NRC and any state
or local governmental authority all material forms, statements, reports,
documents (including all exhibits, amendments and supplements thereto) required
to be filed by any of them.
(d) Such Seller has made available to the Buyer a statement of
assets and liabilities verified by the Trustee for its Nonqualified
Decommissioning Fund as of February 28, 2002, and such statement of assets and
liabilities will be verified by such Trustee as of the second Business Day
before the Closing Date on which such Seller transfers its Ownership Share,
which statement of assets and liabilities presents fairly as of February 28,
2002, and will present as of the second Business Day before the Closing Date on
which such Seller transfers its Ownership Share, the financial position of each
Nonqualified Decommissioning Fund. There are no Liabilities (whether absolute,
accrued, contingent or otherwise and whether due or to become due) including,
but not limited to, agency, administrative or other legal proceedings, that may
materially affect the financial position of the Nonqualified Decommissioning
Fund other than those, if any, that are disclosed on Schedule 3.9.
(e) Such Seller has made available to the Buyer all contracts and
agreements to which the Trustee of the Nonqualified Decommissioning Fund, in its
capacity as such, is a party.
(f) To the extent such Seller has pooled the assets of the
Nonqualified Decommissioning Fund with any other assets for investment purposes
in periods ending on or prior to the Closing Date on which such Seller transfers
its Ownership Share, such pooling arrangement is not taxable as a corporation
for federal income tax purposes.
3.10 Absence of Certain Changes or Events. Since December 31, 2001,
except as set forth in Schedule 3.10, there has not occurred (i) any Material
Adverse Effect with respect to such Seller or (ii) any Plant Material Adverse
Effect.
3.11 Legal and Other Compliance. Such Seller has not received any
written notice from any Governmental Authority that such Seller is not in
compliance with all Laws (other than Environmental Laws) applicable to the
Acquired Assets or the Assumed Liabilities other than as disclosed in Schedule
3.11(i) and such Seller is not in violation of such Laws, except for any
violations that, in the aggregate, would not be likely to have a Plant Material
Adverse Effect. All Permits necessary for the ownership and operation of the
Acquired Assets as presently owned and operated have been obtained. Except as
described in Schedule 3.11(iii), all reports and returns required to be filed in
connection with the Acquired Assets with the NRC and other Governmental
Authorities have been filed and all Permits which are required in connection
with the business of owning and/or operating the Acquired Assets have been
obtained, other than those that the failure to file and obtain would not be
likely to have a Plant Material Adverse Effect. Except as set forth on Schedule
3.11(ii), (i) all of such Permits are in full force and effect and no
proceedings for the suspension or cancellation of any of them is pending or
threatened and (ii) no notice of violation of any of such Permits has been
received, except for notices of violation which would not, individually or in
the aggregate, be likely to have a Plant Material Adverse Effect. All Permits
are being complied with, except for violations which would not, individually or
in the aggregate, be likely to have a Plant Material Adverse Effect. Schedule
2.1(f) sets forth all Transferable Permits and Schedule 3.11(ii) sets forth all
other Permits applicable to the Acquired Assets. No Governmental Authority has
taken any action (including NRC rules, regulations, orders or confirmatory
action letters) that would prevent the Facility from operating at its full
licensed thermal power at or after the Initial Closing Date and there has been
no noncompliance with applicable Laws or NRC Commitments that would prevent the
Facility from operating at its full-rated capacity at or after the Initial
Closing Date. The Facility is in compliance with the Emergency Operation
Criteria, adopted by the Northeast Power Coordinating Council ("NPCC"), as
revised through January 1999, as set forth in NPCC Document A-3. All Revenue
Meters (as such term is defined in the Interconnection Agreement) have been
maintained in accordance with applicable ISO-NE and NEPOOL requirements.
3.12. Taxes. All Tax Returns of such Seller required to be filed
regarding the ownership or operation of the Acquired Assets have been filed, and
all Taxes due as indicated thereon have been paid, except where such Taxes are
being contested in good faith by appropriate proceedings, or where the failure
to file or pay, in either case, would not be likely to have a Plant Material
Adverse Effect. There is no unpaid Tax on such Seller's ownership, operation or
use of the Acquired Assets for which the Buyer could reasonably be expected to
become liable. There is no material dispute or claim concerning any Tax claimed
or raised by any Governmental Authority with respect to the Acquired Assets.
3.13. Contracts and Leases.
(a) Except (i) as listed in Schedules 2.1(c), 2.1(e), 2.1(g),
2.1(n)(ii) or 2.1(s) or any other Schedule, (ii) for contracts, agreements,
personal property leases, commitments, understandings or instruments which will
be fully performed or terminated on or prior to the Initial Closing Date, (iii)
for agreements with suppliers entered into in the ordinary course of business
that may be assumed by and assigned to the Buyer in the absence of a Third Party
consent thereto and (iv) the Other Assigned Contracts and Non-Assigned
Contracts, there is no written contract, agreement, personal property lease,
commitment, understanding or instrument which (x) is material to the ownership
or operation of the Acquired Assets or (y) provides for the sale of any amount
of capacity or energy from any of the Acquired Assets (whether or not entered
into in the ordinary course of business). The schedule of Leases attached as
Schedule 2.1(e) (the "Lease Schedule") contains a description of all Leases now
in effect, whether written or oral, including all amendments, extensions,
modifications and supplements thereto.
(b) Each of the Material Contracts, Emergency Preparedness
Agreements, Leases and Other Assigned Contracts constitutes a valid and binding
obligation of the parties thereto and is in full force and effect.
(c) All of the material provisions of each Material Contract
(other than the default of DOE under the DOE Standard Contract), Lease,
Emergency Preparedness Agreement and Other Assigned Contract have been complied
with by such Seller and there does not exist any event of default under any such
Material Contract (other than the default of DOE under the DOE Standard
Contract), Lease, Emergency Preparedness Agreement and Other Assigned Contract
on the part of any party thereto, or any event which after notice or lapse of
time or both, could constitute an event of default under any such Material
Contract, Lease, Emergency Preparedness Agreement and Other Assigned Contract,
for such non-compliance or default as would not, individually or in the
aggregate, be likely to have a Plant Material Adverse Effect. Except as
disclosed in Schedule 3.15, there is no action, suit, proceeding or
investigation pending or threatened before any court or before any Governmental
Authority for the renegotiation of or any other adjustment of any such Material
Contract, Lease, Emergency Preparedness Agreement or Other Assigned Contract
(except for such matters as would not, individually or in the aggregate, be
likely to have a Plant Material Adverse Effect).
(d) None of the Non-Assigned Contracts (except to the extent
permitted by Section 5.2(b)(vi)) is material to the ownership or operation of
the Acquired Assets or, except as specified on Schedule 3.13(d), provide for the
sale of any amount of capacity or energy from any of the Acquired Assets.
(e) Other than as set forth in the Joint Ownership Agreement or
otherwise disclosed in Schedule 3.13(e), there are (A) no restrictions on the
transfer of such Seller's interests in the Facility (other than Buyer Regulatory
Approvals and Seller Regulatory Approvals) and (B) no options or other rights to
acquire such Seller's interests in the Acquired Assets. Except as provided on
Schedule 3.13(e), neither the execution of this Agreement nor the sale of the
Acquired Assets to the Buyer will entitle any Person to exercise any purchase
options, rights of first refusal, or similar rights with respect to the Acquired
Assets or the interests therein to be purchased by the Buyer under this
Agreement. Such Seller has or, in the case of any Seller specified on Schedule
3.5(iv), will have complied with the right of first refusal provisions in
Paragraph 23 of the Joint Ownership Agreement.
3.14 Insurance. Except as set forth in Schedule 3.14, all material
policies of nuclear property damage, Nuclear Liability, public liability,
workers' compensation and other forms of insurance owned or held by such Seller
or its Affiliates and insuring the Acquired Assets or any Assumed Liabilities
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, nuclear property damage, public liability,
workers' compensation insurance and other similar 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 3.14, as of the date of
this Agreement, such Seller has not been refused any insurance with respect to
the Acquired Assets nor has the coverage of such insurance 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.
3.15 Litigation. Except as set forth on Schedule 3.15, (i) there are no
claims, actions, proceedings or investigations pending or threatened before any
court, arbitrator or Governmental Authority which, individually or in the
aggregate, would be likely to have a Plant Material Adverse Effect or that
question the validity of this Agreement or the Related Agreements or of any
action taken or to be taken pursuant to or in connection with the provisions of
this Agreement or the Related Agreements and which, individually or in the
aggregate, would be likely to have a Plant Material Adverse Effect; (ii) such
Seller is not subject to any outstanding judgment, rule, order, citation, fine,
penalty, writ, injunction or decree of any court, arbitrator or Governmental
Authority which, individually or in the aggregate, would be likely to have a
Plant Material Adverse Effect; and (iii) such Seller has not received any
written notification that it is in violation of any Laws or Permits with respect
to the Acquired Assets or Assumed Liabilities, except for notifications of
violations which would not, individually or in the aggregate, be likely to have
a Plant Material Adverse Effect. A petition filed or pending under 10 C.F.R.
Section 2.206 or Section 2.802, or any claim for review of any action thereon,
or a notification filed under 10 C.F.R. Part 21, all of which in the case of 10
C.F.R. Section 2.206 filings and notifications under 10 C.F.R. Part 21 are
listed on Schedule 3.15, shall not be considered to be within the scope of this
representation.
3.16 Employees. Schedule 3.16 contains a list of all collective
bargaining agreements which relate to employees at the Facility where employment
relates primarily to the Acquired Assets (the "Collective Bargaining
Agreements"), true and correct copies of which have heretofore been made
available to the Buyer. Schedule 5.7(a) contains a true and complete list of
the Represented Plant Employees as of April 10, 2002; Schedule 5.7(b)(i)
contains a true and complete list of the Non-Represented Plant Employees as of
April 10, 2002. Except as described in Schedule 3.16: (i) there has been no
work stoppage due to labor disagreements experienced at the Facility in the past
five (5) years; (ii) all applicable Laws respecting employment and employment
practices, terms and conditions of employment (including, without limitation,
Employee Benefit Plans) and wages and hours relating to the Plant Employees have
been complied with in all material respects; (iii) no written notice has been
received from any Governmental Authority of any unfair labor practice charge or
complaint against such Seller or its Affiliates pending or threatened before the
National Labor Relations Board or any other Governmental Authority with respect
to such Plant Employees; (iv) no arbitration proceeding arising out of or under
any Collective Bargaining Agreement with respect to the Acquired Assets other
than proceedings arising in connection with individual employee grievance
procedures, is pending against such Seller or its Affiliates and (v) there is no
labor strike, slowdown or stoppage actually pending or threatened by any
authorized representative of any union or other representative of employees of
such Seller or its Affiliates related to the Acquired Assets against or
affecting such Seller or its Affiliates.
3.17 Environmental Matters. Except as disclosed in Schedule 3.17 and/or
the environmental audits or assessments referred to in the last sentence of this
Section 3.17, (i) there does not exist any violation of any Environmental Laws
applicable to the Acquired Assets, the violation of which would be likely to
have a Plant Material Adverse Effect, (ii) neither such Seller nor its
Affiliates have transported or arranged for the treatment, storage, handling,
disposal or transportation of any Hazardous Substance from the Facility to or at
any off-Site location that is an Environmental Clean-Up Site; (iii) the Site is
not an Environmental Clean-Up Site; (iv) no Releases of Hazardous Substances
have occurred at, from, on or under the Site; (v) to the Knowledge of such
Seller and NAESCO, no Hazardous Substances are present on or migrating from the
Site that are reasonably likely to give rise to a material Environmental Claim;
(vi) there are no Environmental Claims pending or, to the Knowledge of such
Seller and NAESCO, threatened against such Seller with respect to the Acquired
Assets; and (vii) there are no other facts or circumstances of which such Seller
has Knowledge that are reasonably likely to form the basis for an Environmental
Claim against such Seller with respect to the Acquired Assets. Except as
disclosed in Schedule 3.17, there are no underground storage tanks, active or
abandoned or polychlorinated-biphenyl containing equipment located on the Site.
All environmental audits or assessments regarding the Site conducted on or after
January 1, 1996 by, or on behalf of, or which are in the possession of such
Seller or its Affiliates, have been provided to the Buyer prior to execution of
this Agreement and all environmental audits or assessments regarding the Site
conducted prior to such date by, on behalf of, or which are in the possession of
such Seller or its Affiliates have also been provided to the Buyer prior to
execution of this Agreement.
3.18 Condemnation. Except as set forth on Schedule 3.18, such Seller has
received no written notice from any Governmental Authority of any pending
proceeding to condemn or take by power of eminent domain or otherwise, by any
Governmental Authority, all or any part of the Acquired Assets, which would be
likely to have a Plant Material Adverse Effect.
3.19 Intellectual Property. Except as set forth in Schedule 3.19, one or
more of the Sellers or their Affiliates has ownership of, or license to use, all
of the Intellectual Property reasonably necessary for the operation of the
Acquired Assets and the rights of such Seller or its Affiliate in such (i) Owned
Intellectual Property relating to the Acquired Assets are freely transferable
and (ii) Licensed Intellectual Property relating to the Acquired Assets are
freely assignable. Except as set forth in Schedule 3.19, such Seller has not
received written notice of any claims or demands of any other Person pertaining
to any such Intellectual Property and no proceedings have been instituted, or
are pending or threatened, which challenge the rights of such Seller in respect
thereof. All licenses or other agreements under which the Sellers have granted
rights to Third Parties in Owned Intellectual Property are listed on Schedule
3.19. Except as set forth in Schedule 3.19, all of such licenses or other
agreements are in full force and effect, there is no material default by any
party thereto, and all of such Seller's rights thereunder are freely assignable.
The business and activities of such Seller related primarily to the Facility do
not infringe any Intellectual Property of any other Person. Such Seller is not
making unauthorized use of any confidential information or trade secrets of any
Person, including without limitation any former employer of any past or present
employee of such Seller.
3.20 Accounting Methods. Since December 31, 2001, accounting methods and
practices, credit practices and collection policies relating to the Facility
have not materially changed. During the three-year period ending December 31,
2001, all books and records relating to the Facility have been kept in
conformity with the Joint Ownership Agreement and the Managing Agent Operating
Agreement, using consistently applied methodology and principles of preparation,
and with all applicable requirements of Governmental Authorities.
3.21 Complete Copies. Except as specified in Schedule 3.21, true,
complete and unredacted copies of the Material Contracts, the Emergency
Preparedness Agreements, the Transferable Permits, the Title Commitment, the
Leases, NRC Commitments and the Other Assigned Contracts have been provided to
the Buyer.
3.22 Operability. The Acquired Assets constitute all of the material
assets necessary for the operation of the Facility in the manner in which it has
been operated during the 12-month period prior to the Effective Date, and,
except as disclosed in Schedule 3.22, said Acquired Assets are currently in a
condition sufficient to operate the Facility at full licensed thermal power
operation.
3.23 Employee Benefit Programs. Schedule 5.7(d) lists, as of the
Effective Date, all Employee Benefit Plans established, sponsored, maintained or
contributed to (or to which there is an obligation to contribute) in respect of
the Plant Employees. Accurate and complete copies of all such Employee Benefit
Plans (excluding Multiemployer Plans) have been made available to the Buyer.
Except as disclosed in Schedule 5.7(d) with respect to the Acquired Assets
Employees, there is no obligation to contribute to, any Multiemployer Plan with
respect to Plant Employees. No liability under Title IV or Section 302 of ERISA
or Section 412 of the Code has been incurred with respect to the Acquired Assets
Employees that has not been satisfied in full, other than liability for premiums
due the Pension Benefit Guaranty Corporation, which premiums have been paid to
the extent due on or prior to the Effective Date.
3.24 Zoning. The Real Property is currently zoned in zoning categories
which permit the operation of the Facility as operated as of the Effective Date.
Such Seller has not requested, applied for, or given its consent to, any pending
zoning variance or change with respect to the zoning of the Real Property.
There exist no outstanding covenants or agreements in connection with the zoning
of the Real Property or any portion thereof which would bind or require Buyer to
perform any actions or pay any monies in connection therewith.
3.25 Real Property; Plant and Equipment. Schedule 2.1(c) contains a
complete description of the major equipment components and personal property
comprising the Acquired Assets. Except for the exceptions listed in Schedule
3.25, the Acquired Assets conform in all respects to the Technical
Specifications and the Final Safety Analysis Report (FSAR) and are being
operated in all respects in conformance with all applicable requirements under
Nuclear Laws, and the rules, regulations, orders and licenses issued thereunder,
except for such non-conformance thereof which, individually or in the aggregate,
would not be likely to have a Plant Material Adverse Effect.
3.26 Disclaimers Regarding Acquired Assets. EXCEPT FOR ANY
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, THE
RELATED AGREEMENTS OR ANY CERTIFICATES, EXHIBITS OR SCHEDULES HERETO AND
THERETO, (A) THE ACQUIRED ASSETS ARE SOLD "AS IS, WHERE IS AND WITH ALL FAULTS,"
(B) THE SELLERS AND NAESCO EXPRESSLY DISCLAIM ANY REPRESENTATION OR WARRANTY OF
ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO LIABILITIES, OPERATIONS OF THE
FACILITY, TITLE, CONDITION, VALUE OR QUALITY OF THE ACQUIRED ASSETS OR ANY PART
THEREOF OR THE PROSPECTS (FINANCIAL AND OTHERWISE), RISKS AND OTHER INCIDENTS OF
THE ACQUIRED ASSETS, (C) THE SELLERS AND NAESCO SPECIFICALLY DISCLAIM ANY
REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE WITH RESPECT TO THE ACQUIRED ASSETS, OR ANY PART THEREOF,
OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER
LATENT OR PATENT, AND (D) THE SELLERS AND NAESCO MAKE NO FURTHER REPRESENTATION
OR WARRANTY WITH RESPECT TO COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS, OR
WHETHER THE SELLERS POSSESS SUFFICIENT REAL PROPERTY OR PERSONAL PROPERTY TO
OPERATE THE ACQUIRED ASSETS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT OR IN ANY RELATED AGREEMENT, THE SELLERS AND NAESCO FURTHER
SPECIFICALLY DISCLAIM ANY REPRESENTATION OR WARRANTY REGARDING THE ABSENCE OF
HAZARDOUS SUBSTANCES OR LIABILITY OR POTENTIAL LIABILITY ARISING UNDER
ENVIRONMENTAL LAWS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT OR IN ANY RELATED AGREEMENT, THE SELLERS
AND NAESCO EXPRESSLY DISCLAIM ANY REPRESENTATION OR WARRANTY OF ANY KIND
REGARDING THE SUITABILITY OF THE FACILITY FOR OPERATION AS A POWER PLANT. NO
OTHER MATERIAL OR INFORMATION PROVIDED BY OR COMMUNICATIONS MADE BY THE SELLERS
OR ANY REPRESENTATIVE, OR BY ANY BROKER OR INVESTMENT BANKER, INCLUDING WITHOUT
LIMITATION ANY INFORMATION OR MATERIAL CONTAINED IN ANY OFFERING MEMORANDUM OR
REQUEST FOR BIDS AND ANY ORAL, WRITTEN OR ELECTRONIC RESPONSE TO ANY INFORMATION
REQUEST PROVIDED TO THE BUYER, WILL CAUSE OR CREATE ANY WARRANTY, EXPRESS OR
IMPLIED, AS TO THE TITLE, CONDITION, VALUE OR QUALITY OF THE ACQUIRED ASSETS OR
ANY PART THEREOF.
THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES HERETO
AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION
OF ANY REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED OR STATUTORY,
OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE RELATED AGREEMENTS OR ANY CERTIFICATE, EXHIBITS OR SCHEDULES
HERETO AND THERETO THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN
EFFECT. The disclaimers contained in this section are "conspicuous"
disclaimers. Any covenants implied by law or by the use of the words
"contribute," "grant," "convey," "assign," "transfer," or "deliver," or any
other words used in this Agreement are hereby expressly excluded, disclaimed,
waived and negated.
4. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Sellers as follows:
4.1 Organization of the Buyer. The Buyer is a limited liability
company, duly organized, validly existing and in good standing under the Laws of
the State of Delaware. Copies of the certificate of formation and operating
agreement of the Buyer, as amended to date, have been heretofore made available
to the Sellers and are accurate and complete. The Buyer is, or on the Initial
Closing Date will be, qualified to conduct business in the State of New
Hampshire.
4.2 Authority, Execution and Enforceability of Transactions. The Buyer
has the power and authority to execute and deliver this Agreement and the
Related Agreements and, subject only to receipt of all Buyer Regulatory
Approvals, to perform its obligations hereunder and thereunder. All actions or
proceedings to be taken by or on the part of the Buyer to authorize and permit
the due execution and valid delivery by the Buyer of this Agreement, the Related
Agreements and the instruments required to be duly executed and validly
delivered by Buyer pursuant hereto and thereto, the performance by the Buyer of
its obligations hereunder and thereunder, and the consummation by the Buyer of
the transactions contemplated herein and therein, have been duly and properly
taken (and true and valid evidence thereof has been provided to Sellers). This
Agreement has been duly executed and validly delivered by the Buyer, and
assuming due execution and delivery by the Sellers, constitutes the valid and
legally binding obligation of the Buyer, enforceable in accordance with its
terms and conditions, subject to applicable bankruptcy, insolvency, moratorium
and other Laws affecting the rights of creditors generally and the application
of general principles of equity (regardless of whether such enforceability is
sought in equity or at law). When each Related Agreement has been executed and
validly delivered by the Buyer and the Sellers and each other party thereto,
such Related Agreement will constitute a valid and legally binding obligation of
the Buyer, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium and other Laws affecting the rights of
creditors generally and the application of general principles of equity
(regardless of whether such enforceability is sought in equity or at law). The
Buyer acknowledges receipt and sufficiency of consideration in regard to this
Agreement and each of the Related Agreements.
4.3 Noncontravention. Subject to the Buyer's obtaining its Buyer
Regulatory Approvals, neither the execution and delivery of this Agreement or
any of the Related Agreements, nor the consummation of the transactions
contemplated hereby and thereby, will (a) violate any Law to which the Buyer is
subject or any provision of its organizational documents or (b) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, Permit, license,
instrument, or other arrangement to which Buyer is bound or to which any of its
assets is subject, except for matters that would not be likely to have a
Material Adverse Effect on Buyer or its ability to perform its obligations under
this Agreement and the Related Agreements or that are disclosed on Schedule 4.3.
4.4 Consents and Approvals. Except for Buyer Regulatory Approvals, no
declaration, filing or registration with, or notice to, or authorization,
consent or approval of any Governmental Authority is necessary for the execution
and delivery of this Agreement or the Related Agreements by the Buyer, or the
consummation of the transactions contemplated hereby or thereby by the Buyer.
4.5 Brokers' Fees. The Buyer has no Liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Sellers could become
liable or obligated.
4.6 Litigation. There are no claims, actions, proceedings or
investigations pending or, to the Buyer's Knowledge, threatened before any
Governmental Authority which, individually or in the aggregate, would be likely
to have a Material Adverse Effect on Buyer's ability to perform its obligations
under this Agreement and the Related Agreements or that question the validity of
this Agreement or the Related Agreements or of any action taken or to be taken
pursuant to or in connection with the provisions of this Agreement or the
Related Agreements and which, individually or in the aggregate would be likely
to have a Material Adverse Effect on Buyer's ability to perform its obligations
under this Agreement and the Related Agreements. The Buyer is not subject to
any outstanding judgment, rule, order, citation, fine, penalty, writ, injunction
or decree of any court or Governmental Authority which, individually or in the
aggregate, would be likely to have a Material Adverse Effect on Buyer's ability
to perform its obligations under this Agreement and the Related Agreements, and
the Buyer has not received any written notification that it is in violation of
any Laws or Permits with respect to its assets, except for notifications which
would not, individually or in the aggregate, be likely to have a Material
Adverse Effect on Buyer's ability to perform its obligations under this
Agreement and the Related Agreements. A petition filed or pending under 10
C.F.R. Section 2.206 or Section 2.802, or any claim for review of any action
thereon, or a notification filed under 10 C.F.R. Part 21, shall not be
considered to be within the scope of this representation.
4.7 No Knowledge of Breach. On the Effective Date, the Buyer has no
Knowledge of any breach by NAESCO or any Seller of any representation or
warranty contained in Section 3 hereof, or of any condition or circumstance that
would excuse the Buyer from performance of its obligations under this Agreement
or the Related Agreements.
4.8 Qualified Buyer. The Buyer has obtained or will obtain any Permits
necessary for the Buyer to own and operate the Acquired Assets as of the Initial
Closing Date, to the extent such operation is either required by any Related
Agreement or this Agreement, or is contemplated by the Buyer.
4.9 WARN Act. The Buyer does not intend with respect to the Acquired
Assets or Acquired Assets Employees to engage in a "plant closing" or "mass
layoff," as such terms are defined in the WARN Act, within sixty (60) days after
the Initial Closing Date.
4.10 No Implied Warranties. THE BUYER IS NOT RELYING ON ANY
REPRESENTATION OR WARRANTY MADE BY NAESCO OR ANY SELLER OR ITS AGENTS OR
REPRESENTATIVES, OR ANY BROKER OR INVESTMENT BANKER, EXCEPT FOR REPRESENTATIONS
AND WARRANTIES EXPRESSLY SET FORTH HEREIN, IN THE RELATED AGREEMENTS, IN
CERTIFICATES, EXHIBITS AND SCHEDULES HERETO AND THERETO AND IN THE INSTRUMENTS
OF TRANSFER AND CONVEYANCE (SUBJECT TO THE DISCLAIMERS AND LIMITATIONS OF
WARRANTIES SET FORTH HEREIN OR THEREIN).
4.11 Absence of Certain Events. Since December 31, 2001, to the Buyer's
Knowledge, there has not been any event which would be likely to have a Material
Adverse Effect on the Buyer's ability to perform this Agreement or any Related
Agreement.
4.12 Availability of Funds. The Buyer has provided the Sellers with true
and valid (a) evidence that it will have sufficient funds available to it as of
the Initial Closing Date or Subsequent Closing Date, as the case may be, or (b)
binding written commitments from responsible financial institutions to provide
sufficient immediately available funds as of the Initial Closing Date or
Subsequent Closing Date, as the case may be, to pay the Relevant Facility
Purchase Price, the Relevant Fuel Purchase Price, the Relevant Unit 2 Purchase
Price, the NAEC Real Property Purchase Price and any Estimated Adjustment, and
to enable the Buyer to perform all of its obligations under this Agreement.
5. Covenants. The Parties agree as follows:
5.1 General. Without limiting the rights of any Party to exercise its
rights hereunder, each of the Parties will use Commercially Reasonable Efforts
to take all actions and to do all things necessary, proper or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
and the Related Agreements pursuant to this Agreement, prior to the date which
is twelve (12) months from the Effective Date for the Required Sellers and
fifteen (15) months from the Effective Date for the Remaining Sellers (including
satisfaction of the closing conditions set forth in Section 6). Notwithstanding
anything to the contrary set forth in this Agreement, all obligations of any
Seller specified in Schedule 3.5(iv) to consummate the transactions contemplated
hereby are subject to any rights of a Participant under the Joint Ownership
Agreement, and any such Seller shall, without Liability to the Buyer or any
other Seller (but preserving all rights and obligations of the Parties to enter
into the Agreement to Amend the Transmission Support Agreement), promptly take
any and all actions reasonably necessary or appropriate to comply with such
rights in accordance with the terms of the Joint Ownership Agreement.
5.2 Notices, Consents and Approvals.
(a) Hart-Scott-Rodino. Each of the Sellers and the Buyer shall,
if required, file or cause to be filed with the Federal Trade Commission and the
United States Department of Justice any notifications required to be filed under
the Hart-Scott-Rodino Act and the rules and regulations promulgated thereunder
with respect to the transactions contemplated hereby and in the Related
Agreements. The Parties shall cooperate with each other and use Commercially
Reasonable Efforts to make such filings as promptly as possible after the
Effective Date, and to respond promptly to any requests for additional
information made by either of such agencies. The Buyer will pay all filing fees
under the Hart-Scott-Rodino Act, but each Party will bear its own costs for the
preparation of any filing. The Parties shall use Commercially Reasonable Efforts
to cause any waiting period under the Hart-Scott-Rodino Act with respect to the
transactions contemplated by this Agreement and the Related Agreements to expire
or terminate at the earliest possible time.
(b) Consents and Approvals.
(i) The Buyer and the Sellers shall cooperate and use all
Commercially Reasonable Efforts with respect to their respective
obligations to (A) promptly prepare and file all necessary documentation,
(B) effect all necessary applications, notices, petitions and filings and
execute all agreements and documents, (C) obtain the transfer, issuance or
reissuance to the Buyer of all necessary Permits, (D) facilitate the
substitution of the Buyer for the Sellers where appropriate on pending
Permits and (E) obtain all necessary consents, waivers, approvals and
authorizations of all other parties necessary or advisable to consummate
the transactions contemplated by this Agreement or any of the Related
Agreements (including, without limitation, Seller Regulatory Approvals and
Buyer Regulatory Approvals) or approvals required by the terms of any
note, bond, mortgage, indenture, deed of trust, license, franchise,
Permit, concession, contract, lease, warranty or other instrument to which
any Seller or Buyer is a party or by which any of them is bound. Without
limiting the generality of the foregoing, each of the Sellers and the
Buyer shall, as promptly as practicable after the Effective Date and in
any event by no later than forty-five (45) days after the Effective Date,
make the necessary filings and pursue receipt of those Buyer Regulatory
Approvals, Seller Regulatory Approvals and Requested Rulings for which
each such Seller or Buyer has responsibility.
(ii) The Buyer and the Sellers (promptly and on a coordinated
basis) each shall have the right to review and comment in advance on all
filings relating to the transactions contemplated by this Agreement or any
of the Related Agreements made by any Party in connection with the
transactions contemplated hereby or thereby. The Parties shall in good
faith consider such comments before making any such filings.
(iii) The Seller Representatives, for themselves and on
behalf of the other Sellers, shall use Commercially Reasonable Efforts to
obtain all necessary consents for assignment of Material Contracts,
Permits, Leases, and Emergency Preparedness Agreements. The Buyer shall
cooperate with the Seller Representatives and use Commercially Reasonable
Efforts to facilitate the obtaining of such consents. To the extent any
Material Contract relates to assets or services which are both related to
the operation of the Facility and used by any Seller in its other
operations, the Parties shall cooperate and use Commercially Reasonable
Efforts in the obtaining of such partial assignment, apportionment or
other arrangement as may be necessary and practicable to permit the Buyer
to obtain such portion of the assets or services necessary for continued
operation of the Facility on and after the Initial Closing Date or any
Subsequent Closing Date, as the case may be, and to permit such Seller to
retain such other rights or portion of the assets or services to continue
its other operations on and after such Closing Date, it being understood
that, except as provided in Section .2(b)(vi), such portion of the
Material Contracts as may relate to the Buyer's continued operation of the
Facilities after the Initial Closing Date must be assigned to or otherwise
obtained by the Buyer as of the Initial Closing Date pursuant to Section
2.1(g); provided, that (A) any cost of obtaining any such partial
assignment, apportionment or other arrangement shall be for Sellers'
account. In no instance shall any Seller commit to any arrangements
outside the ordinary course of business affecting the Buyer without the
Buyer's consent, which shall not be unreasonably withheld.
(iv) Seller Representatives, for themselves and on behalf of
the other Sellers, shall use Commercially Reasonable Efforts to obtain all
necessary consents for assignment of the Intellectual Property Licenses;
provided that any cost of obtaining such assignment, or any cost of
obtaining a new license for Buyer, shall be for Seller's account. The
Buyer shall cooperate with the Seller Representatives and use Commercially
Reasonable Efforts to facilitate the obtaining of such consents. To the
extent any Intellectual Property License relates to Licensed Intellectual
Property which is both related to the operation of the Facility and used
by any Seller in its other operations, the Parties shall cooperate and use
Commercially Reasonable Efforts in the obtaining of such partial
assignment, apportionment or other arrangement as may be necessary and
practicable to permit the Buyer to obtain rights to use such Licensed
Intellectual Property for continued operation of the Facility on and after
the Initial Closing Date and to permit such Seller to retain such other
rights related to such Licensed Intellectual Property to continue its
other operations on and after the Initial Closing Date; provided, that any
cost of obtaining any such partial assignment, apportionment or other
arrangement, or any cost of obtaining a new license for Buyer, shall be
for Seller's account. In no instance shall any Seller commit to any
arrangements outside the ordinary course of business affecting the Buyer
without the Buyer's consent, which shall not be unreasonably withheld.
(v) The Seller Representatives shall use Commercially
Reasonable Efforts to obtain the necessary consents to assignment,
including the forwarding of notices of assignment or termination to
vendors or invoking the right to terminate the Other Assigned Contracts in
cooperation with the Buyer. To the maximum extent permitted by Law and
each applicable Other Assigned Contract, the Sellers appoint the Buyer as
the Sellers' agent to obtain all required consents of any party to each of
the Other Assigned Contracts for the assignment thereof to the Buyer, but
in no instance shall the Buyer commit any Seller to any arrangement
affecting such Seller without such Seller's consent. Pursuant to an
agreed protocol and form letters to be sent by Seller Representatives to
all parties to Other Assigned Contracts, the Seller Representatives, for
themselves and on behalf of the other Sellers, shall take all steps
reasonably necessary to assist the Buyer in obtaining necessary consents
to assignment, including the forwarding of notices of assignment or
termination to vendors or invoking the right to terminate Other Assigned
Contracts for the Sellers' convenience in cooperation with the Buyer. The
Buyer shall use Commercially Reasonable Efforts to obtain all such
consents to assignment.
(vi)The Seller Representatives, for themselves and on behalf
of the other Sellers and NAESCO, agree that if any consent to an
assignment of a Material Contract shall not be obtained or if any
attempted assignment would in the reasonable judgment of the Seller
Representatives be ineffective or would impair any material rights and
obligations of the Buyer under such Material Contract, so that the Buyer
would not in effect acquire the benefit of all such rights and
obligations, the Seller Representatives, for themselves and on behalf of
the other Sellers, to the maximum extent permitted by law and such
Material Contract, shall enter into such other reasonable arrangements
with the Buyer as are necessary to provide the Buyer with the benefits and
obligations of such Material Contract, including enforcement for the
benefit of the Buyer of any and all rights of the Sellers or NAESCO
against the other contract party arising out of the default or
cancellation by such contract party or otherwise. The Seller
Representatives, for themselves and on behalf of the other Sellers, and
the Buyer shall cooperate and shall each use Commercially Reasonable
Efforts after the Initial Closing Date to obtain an assignment of each
such Material Contract to the Buyer.
(vii) The Sellers and the 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 Facility Purchase Price, the Fuel Purchase Price,
the Unit 2 Purchase Price or the NAEC Real Property Purchase Price may be
required to be withheld or in which Buyer would otherwise be liable for
any Tax Liabilities of the Sellers pursuant to state or local Tax Laws.
(c) Nuclear Regulatory Commission Approval.
(i) Application. As promptly after the Effective Date as
may be feasible, the Buyer and the Sellers shall jointly prepare and file
with the NRC an Application. Thereafter, the Buyer and the Sellers,
promptly and on a coordinated basis, shall cooperate with one another to
facilitate review of the Application by the NRC Staff, including but not
limited to promptly providing the NRC Staff with any and all documents or
information that the NRC Staff may reasonably request or require any of
the Parties to provide or generate.
(ii) Prosecution of Application. The Application shall
identify the Buyer, the Sellers and NAESCO collectively as separate
parties to the Application. In the event the processing of such
Application by the NRC becomes a Contested Proceeding, until such
Contested Proceeding becomes Final, the Buyer, the Sellers and NAESCO
shall separately appear therein by their own counsel, and shall continue
to cooperate with each other to facilitate a favorable result.
(iii) Costs of Application and Prosecution. The Buyer
and each Seller will each bear their own costs of the preparation,
submission and processing of the Application, including any Contested
Proceeding that may occur in respect thereof; provided, however, that the
Buyer shall bear the costs of all NRC Staff fees payable in connection
with the Application. In the event that the Parties agree upon the use of
common counsel, they shall share equally the fees and expenses of such
counsel.
(iv) Other Proceedings. Except as specified above in this
Section 5.2(c), none of the Sellers, NAESCO or any of their respective
Affiliates shall initiate or participate as an adverse party to the Buyer
in any proceeding before the NRC or any other Governmental Authority
relating to the transfer of the Facility, the transfer of any of the
Acquired Assets or the Decommissioning Trusts. Should any other Person
initiate such a proceeding, Sellers shall assist Buyer in becoming a party
to such proceeding and, in any event, shall obtain Buyer's written
concurrence before entering into any agreement or stipulation in
connection with such proceeding; provided, that the foregoing shall not
prevent any Seller or NAESCO or any of their respective Affiliates from
entering into any such agreement or stipulation without the Buyer's
written concurrence which does not adversely affect the interest of Buyer.
5.3 Operation of Business During Interim Period.
(a) During the Interim Period, the Facility shall be operated and
maintained consistent with Good Utility Practices in accordance with the
Managing Agent Operating Agreement, unless otherwise contemplated by this
Agreement or with the prior written consent of the Buyer. Without limiting the
generality of the foregoing, the Sellers shall not, without the prior written
consent of the Buyer, during the Interim Period, with respect to the Acquired
Assets:
(i) sell, lease (as lessor), transfer or otherwise dispose
of, any of the Acquired Assets, other than as used, consumed or replaced
in the ordinary course of business consistent with Good Utility Practices,
or encumber, pledge, mortgage or suffer to be imposed on any of the
Acquired Assets any encumbrance other than Permitted Encumbrances, and
other than such additional financing under the Mortgage Indenture as shall
not prevent the Sellers from obtaining a Mortgage Indenture release with
respect to the Acquired Assets;
(ii) make any material change in the levels of Inventories
customarily maintained by the Sellers with respect to the Acquired Assets,
except for such changes as are consistent with Good Utility Practices;
(iii) enter into, amend, make any waivers under, or
otherwise modify any real or personal Property Tax Agreement, treaty or
settlement or make any new, or change any current, election with respect
to Taxes affecting the Acquired Assets;
(iv) except as described in Schedule 5.3(a)(iv), enter into
any commitment for the purchase or sale of Nuclear Fuel (A) where the
aggregate payments under all such commitments would be expected to exceed
$1,000,000, or (B) which is not terminable either (x) automatically on the
Initial Closing Date or (y) by option of the Buyer in its sole discretion
at any time after the Initial Closing Date without penalty or cancellation
charge;
(v) terminate, make any waiver under, extend or materially
amend any of the Material Contracts, Emergency Preparedness Agreements,
Leases, Other Assigned Contracts or the Transferable Permits, except for
such terminations, extensions or amendments as are in the normal course of
business and consistent with Good Utility Practices and except as may be
necessary in order to transfer the Sellers' rights thereunder to the Buyer
at the relevant Closing;
(vi) enter into any contract or commitment which individually
exceeds $1,000,000 or any series of related contracts or commitments which
in the aggregate exceeds $5,000,000, unless such contract or commitment is
(A) to be fully performed prior to the Initial Closing Date or (B) can be
assigned to the Buyer and terminated by the Buyer at its option at any
time on or after the Initial Closing Date without penalty or cancellation
charge;
(vii) knowingly engage in any practice, take any action,
fail to take any action, or enter into any transaction that will result in
any misrepresentation or breach of warranty under Section 3 as of the
Initial Closing Date;
(viii)fail to take reasonably appropriate steps to pursue
currently pending regulatory approvals relating to the Facility;
(ix) amend in any material respect or cancel any property,
liability or casualty insurance policies related thereto, or fail to
maintain by self insurance, or with financially responsible insurance
companies, insurance in such amounts and against such risks and losses as
are customary for such assets and businesses;
(x) change, in any material respect, its accounting methods
or practices, credit practices or collection policies;
(xi) fail to take any actions required to be taken in order
to insure that (x) the Acquired Assets are being owned, operated and
maintained in all material respects in a manner that is in compliance with
Good Utility Practice and all applicable Laws or Permits or (y) the
reputation of the business of the Facility is preserved;
(xii) hire any Acquired Assets Employees (other than to
replace any Acquired Assets Employees who have resigned or been
terminated) or increase the compensation or benefits payable to any
Acquired Assets Employees, except as required under the Collective
Bargaining Agreements or other agreements as in existence on the Effective
Date or consistent with Sellers' or NAESCO's past practices; or
(xiii)initiate any regulatory proceeding potentially
affecting the amount or rate of Facility decommissioning funding,
including but not limited to NRC and NDFC proceedings.
Notwithstanding anything in this Section 5.3(a) to the contrary, the Sellers
may, in their sole discretion and consistent with the Joint Ownership Agreement
and the Managing Agent Operating Agreement, make or incur an obligation to the
extent relating to (i) Required Nuclear Expenditures or any repairs or
modifications to the Facility reasonably required in the normal course of
business and in accordance with Good Utility Practices (a "Required
Expenditure") or (ii) the Pre-Approved Capital Expenditures set forth on
Schedule 5.3. Without limiting the generality of the foregoing, the Parties
agree that NAESCO shall retain exclusive control over all aspects of the
operation, maintenance, refueling, shutdown or other matters relating to the
Facility during the Interim Period, all in accordance with the Managing Agent
Operating Agreement and Good Utility Practices.
(b) During the Interim Period, in the interest of facilitating an
orderly transition of the management of the Acquired Assets and the Transfer of
Licenses and permitting informed action by the Buyer regarding its rights under
Section 5.3(a), the Parties shall, as promptly as is practicable after the
Effective Date, establish a committee comprised of at least five persons,
including the Divestiture Site Manager, two persons to be designated by the
Sellers and two persons to be designated by the Buyer, and such additional
persons as may be appointed by the persons originally appointed to such
committee (the "Transition Executive Committee"). From time to time, the
Transition Executive Committee shall report to the senior management of NAESCO,
on behalf of the Sellers, and the Buyer. The Transition Executive Committee
shall meet periodically and shall oversee and manage the transition process
during the Interim Period. The Sellers and NAESCO shall consult with Buyer's
representatives on the Transition Executive Committee, on a regular and timely
basis, with respect to the refueling outage currently planned for May 2002, to
any repairs to the Facility contemplated by Section 5.11 and to the Pre-Approved
Capital Expenditures, Required Nuclear Expenditures and Required Expenditures.
The Transition Executive Committee shall have no authority to bind or make
agreements on behalf of the Sellers or the Buyer or to issue instructions to or
direct or exercise authority over the Sellers or the Buyer or any of their
respective officers, employees, advisors or agents or to waive or modify any
provision thereof. The Buyer in its sole discretion may send its management
personnel to the Facility at the Buyer's expense to continue the Buyer's
transition efforts with respect to the Acquired Assets. The Sellers shall
provide the Buyer, at no cost to the Buyer, interim furnished office space,
utilities and HVAC at the Facility reasonably necessary to allow the Buyer and
its representatives to conduct their transition efforts during the Interim
Period; provided that the Buyer shall be responsible for all other costs
relating thereto, including telecommunications expenses and the cost of workers'
compensation and employer's liability coverage, which will be maintained by the
Buyer for its employees. The Buyer will have no greater than six (6) of its
employees or representatives present at such interim office space or on the Site
on a full-time basis, unless otherwise authorized in writing by the Seller
Representatives.
(c) The Buyer may from time to time request that certain actions
be taken to improve or enhance the operation and maintenance of the Acquired
Assets during the period between the Effective Date and the Initial Closing Date
(the "Proposed Improvements"). To the extent such Proposed Improvements (i)
will not interfere with safety or reliability in the operation and maintenance
of the Facility or the Acquired Assets, (ii) are not inconsistent with the
Business Plan, (iii) do not violate Good Utility Practices, applicable Laws or
other obligations of the Sellers under NEPOOL or ISO-NE, and (iv) are consistent
with the Managing Agent Operating Agreement and the Joint Ownership Agreement,
the Sellers shall consult with NAESCO and they shall reasonably consider such
Proposed Improvements and take such action to implement such Proposed
Improvements as they deem appropriate in their sole discretion. In the event
NAESCO and the Sellers shall determine that such Proposed Improvements do not
meet the criteria set forth in the previous sentence or are otherwise excessive
under Good Utility Practices, then the Seller Representatives shall so inform
the Buyer in writing that such Proposed Improvements shall not be implemented.
(d) During the Interim Period, the Seller Representatives shall
use Commercially Reasonable Efforts to assist the Buyer with its efforts to plan
for and implement the transition of ownership and operation of the Acquired
Assets from the Sellers to the Buyer.
(e) In the event the Buyer, on the one hand, or any Seller, on the
other hand, believes the other Party has breached any of its obligations under
this Section 5.3, the Buyer or the Seller Representatives shall submit such
dispute to dispute resolution pursuant to Section 12.
5.4 Access and Investigations During Interim Period. In addition to the
access permitted in Section 5.3(b), during the Interim Period, the Sellers will
require NAESCO to permit a maximum of twelve (12) designated officers, employees
or agents of the Buyer to have access, pursuant to the procedures set forth in
Section 5.4(b), (i) to observe and inspect all premises, properties, management,
personnel, books, records, (including tax records), and other information,
including, without limitation, all information necessary to enable the Buyer to
verify the Sellers' representations and warranties as set forth in Section 3 and
to confirm that the Sellers have complied with the covenants set forth herein,
and any other information or documents associated with or pertaining to the
Acquired Assets and (ii) to plan for and facilitate an orderly transition of
ownership of the Acquired Assets and operation of the Facility from the Sellers
to the Buyer. All access and inspections by the Buyer are subject to the
following provisions:
(a) Costs. All costs of such investigations and observations,
including but not limited to the compensation paid to the Persons involved and
their expenses, and other discrete incremental costs incurred by the Sellers in
connection with such investigation and observation, shall be borne by the Buyer.
(b) Physical Access (Escorted and Unescorted).
(i) The Buyer shall, with respect to each Person designated
by the Buyer to have escorted access to the Facility, provide the
following information for each such Person to the Divestiture Site Manager
for the Facility (or his designee) no later than twenty-four (24) hours
prior to the proposed time of access by such Person: name, date of birth,
social security number, and the name of each nuclear power plant at which
such Person has a current badge for unescorted access. The Sellers shall
be permitted where necessary in their sole discretion to limit the number
of Persons to whom escorted access is provided at any one time on account
of reasonable logistical considerations.
(ii) Subject to the immediately succeeding sentence, the
Buyer shall, with respect to each Person designated by the Buyer to have
unescorted access to the Facility, provide reasonable notice to the
Divestiture Site Manager for the Facility (or his designee), so as not to
interfere with the normal business operations of the Facility, and such
Person shall comply with all existing requirements of the Facility and NRC
for unescorted access, including, but not limited to, background
investigation, training requirements, fitness-for-duty requirements, a
psychological assessment and behavioral observation.
(iii) In the event that the Buyer shall have a fitness-
for-duty program meeting the requirements of 10 C.F.R. Part 26, the Buyer
may request that any Person subject to such program be excused from
compliance with the fitness-for-duty program of NAESCO for up to ninety
days, in which event the provisions of 10 C.F.R. Section 26.23 shall be
applicable to such Person designated by the Buyer to have unescorted
access to the Facility. The Buyer shall reimburse the Sellers for the
cost of reviewing and auditing the Buyer's fitness-for-duty program, as
required by 10 C.F.R. Section 26.23.
(iv) Irrespective of whether a Person has qualified for
escorted or unescorted access pursuant to this Section 5.4(b), the Sellers
shall have the right to withhold access to any area of the Facility that
would reveal "Safeguards Information," "Classified National Security
Information" or "Restricted Data," as defined in 10 C.F.R. Part 73, to any
Person to whom such information is not to be made available under Section
5.4(c).
(c) Access to Records and Information.
(i) Under no circumstances shall any Seller be required to
provide access to any documents or information constituting or containing
"Classified National Security Information" or "Restricted Data," as
defined in 10 C.F.R. Part 73. The Sellers shall not be required to
provide access to any documents or information constituting or containing
"Safeguards Information," as defined in 10 C.F.R. Part 73, except to any
Person designated by the Buyer to have access to such information and the
Buyer shall have first obtained authorization or concurrence from the NRC
for the disclosure of such information to such Person.
(ii) Except as provided in clause (i) above, the Buyer shall
have the right to receive copies of all documentary information and
records associated with the Acquired Assets subject to the provisions of
Section 7.
(d) Limitations. Notwithstanding anything to the contrary in this
Section 5.4, each Seller shall: (i) only furnish or provide such access to
confidential personnel records and medical records as is allowed by applicable
Laws, (ii) not provide any information that such Seller or such Seller's counsel
reasonably believes constitutes or could reasonably be deemed to constitute a
waiver of the attorney-client privilege, and (iii) not be required to supply the
Buyer with any information that such Seller is under a legal obligation not to
supply; provided that the Sellers shall use Commercially Reasonable Efforts to
obtain the consent to disclose all material information otherwise described in
this Section 5.4.
(e) Contact with Seller-Related Persons. Prior to the Initial
Closing Date, the Buyer shall not contact any vendors, suppliers, contractors,
customers or employees of the Sellers or NAESCO regarding the Facility, the
Acquired Assets or the transactions contemplated in this Agreement and the
Related Agreements without prior written consent of the relevant Seller, which
shall not be unreasonably withheld or delayed, and any such permitted contacts
shall be conducted in a manner which will not materially adversely interfere
with the operations or business relationships of the relevant Seller or NAESCO
with such Persons.
5.5 Certain Notices.
(a) Each Seller shall notify the Buyer in writing of the existence
of any matter that becomes known to such Seller, which, if in existence on the
Effective Date or the Initial Closing Date would cause or would have a
reasonable likelihood of causing any of the representations or warranties in
Section 3 to be materially untrue or incorrect, and each Remaining Seller shall
notify the Buyer of the existence of any matter that becomes known to such
Remaining Seller, which, if in existence on the relevant Subsequent Closing Date
would cause or would have a reasonable likelihood of causing any of the
representations or warranties in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7(b),
3.7(c), 3.8, 3.9, 3.12 or 3.13(e) to be materially untrue or incorrect. Unless
the Buyer terminates this Agreement pursuant to Section 10.1(c)(vi), the written
notice pursuant to this Section 5.5(a) shall be set forth on an amended Schedule
or Schedules acceptable to the Parties which shall be deemed to replace the
original Schedule or Schedules as of the Effective Date and the relevant Closing
Date, to have qualified the relevant representations and warranties contained in
Section 3 as of the Effective Date and such Closing Date, and to have cured any
misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the existence of such matter.
(b) The Buyer shall notify the Seller Representatives of the
existence of any matter that becomes known to the Buyer, which if in existence
on the Effective Date, the Initial Closing Date or any Subsequent Closing Date
would cause or would have a reasonable likelihood of causing any of the
representations or warranties in Section 4 to be untrue or incorrect. Unless
the Seller Representatives terminate this Agreement pursuant to Section
10.1(d)(vii) by reason of such notice, the written notice pursuant to this
Section 5.5(b) shall be deemed to replace the original Schedule or Schedules as
of the Effective Date and such Closing Date, to have qualified the
representations and warranties contained in Section 4 as of the Effective Date
and such Closing Date, and to have cured any misrepresentation or breach of
warranty that otherwise might have existed hereunder by reason of the existence
of such matter.
(c) The Buyer shall notify the Seller Representatives if any
information comes to its attention which would cause or would have a reasonable
likelihood of causing any of the representations or warranties of the Sellers in
Section 3 above to be materially untrue or incorrect.
(d) Each Seller shall notify the Buyer if any information comes to
its attention which would cause or would have a reasonable likelihood of causing
any of the representations and warranties of the Buyer in Section 4 above to be
materially untrue or incorrect.
5.6 Further Assurances.
(a) On and after the Initial Closing Date or any Subsequent
Closing Date, as the case may be, without further payment, at the request of a
Closing Party, the other Closing Party will execute and deliver such additional
instruments of sale, transfer, conveyance, assignment and confirmation and take
such additional action as is necessary to transfer, convey and assign to the
Buyer and for the Buyer to assume and accept, in each case in accordance with
the terms hereof, the Sellers' Proportionate Ownership of the Acquired Assets
and Assumed Liabilities or to put the Buyer in actual possession and operating
control of the Acquired Assets and/or to cause the Sellers to be released from
their Proportionate Ownership of the Assumed Liabilities.
(b) To the extent that, after the Initial Closing Date or any
Subsequent Closing Date, as the case may be, it is determined that any asset
that is an Acquired Asset shall not have been conveyed to the Buyer on such
Closing Date, the Sellers shall, subject to Section 5.6(c), use their best
efforts to convey the Ownership Shares of the Sellers' right, title and interest
in such asset to the Buyer as promptly as is practicable after the Initial
Closing Date or such Subsequent Closing Date, as the case may be. In the event
that any other access, transmission, distribution or communication easements
reasonably necessary to PSNH in connection with the operation or maintenance of
the 345 kV Substation, including, without limitation, the transmission and
distribution of power, shall not have been retained by the Sellers on the
Initial Closing Date, the Buyer shall grant to PSNH if it is within Buyer's
control to do so, and shall use its Commercially Reasonable Efforts to obtain
for PSNH if the agreement of a Third Party is required to do so, such easements
as promptly as practicable after such Closing Date; provided that such easements
shall not interfere with the Buyer's operation of the Facility or any plans to
expand the Facility or modify generation capacity at the Site.
(c) To the extent the rights of any Seller under any contract or
Permit included as an Acquired Asset other than a Material Contract,
Transferable Permit, Emergency Preparedness Agreement or Lease, may not be
assigned without the consent of another Person which consent has not been
obtained on or prior to the Initial Closing Date, this Agreement shall not
constitute an agreement to assign the same if an attempted assignment would
constitute a breach thereof or be unlawful. The Sellers and the Buyer agree
that if any consent to an assignment shall not be obtained, or if any attempted
assignment would be ineffective or would impair the Buyer's rights and
obligations under the applicable contract, so that the Buyer would not in effect
acquire the benefit of all such rights and obligations, (i) the Seller
Representatives, to the maximum extent permitted by Law and such contract, shall
appoint the Buyer to be Sellers' agent with respect to such contract or Permit
for the purpose of obtaining an assignment thereof to the Buyer, following which
the Buyer shall use its Commercially Reasonable Efforts to obtain such
assignment, and (ii) the Seller Representatives shall, to the maximum extent
permitted by Law and such contract, enter into such reasonable agreements with
the Buyer as are necessary to permit the Buyer to obtain the benefits and
obligations of such contract or Permit; provided, that the exercise by the Buyer
and the Seller Representatives of the terms of this Section 5.6(c) shall in no
event constitute a waiver of the condition to Closing set forth in Section
6.1(g) and 6.2(f) with respect to the delivery of the consents, waivers and
approvals described in Section 2.11(a)(xii). The Seller Representatives and the
Buyer shall cooperate and shall each use their Commercially Reasonable Efforts
after the Initial Closing Date to obtain an assignment of such contracts to the
Buyer including the Buyer's express written agreement to assume and perform such
Seller's obligations thereunder from and after such Closing.
(d) To the extent that during the Interim Period or after the
Initial Closing Date the Parties shall identify any additional assets of the
Sellers or portions thereof (including, without limitation, software or other
Intellectual Property) which are (i) related to the operation of the Facility,
(ii) reasonably necessary for the Buyer's operation of the Facility, and (iii)
omitted from Schedule 2.1(v) (other than by agreement of the Parties), the
Parties shall amend Schedule 2.1(v) to include such assets. The Seller
Representatives shall use their best efforts to convey such additional assets to
the Buyer or facilitate the acquisition thereof from a Third Party; provided,
that any cost or increased cost of obtaining such assets or rights from a Third
Party arising at any time shall be for the Seller's account.
(e) To the extent that the rights of any Seller under any warranty
or guaranty described in Section 2.1(c) (except for warranties in Material
Contracts and Leases) may not be assigned without the consent of another Person,
which consent has not been obtained by the Initial Closing Date, this Agreement
shall not constitute an agreement to assign the same, if an attempted assignment
would constitute a breach thereof or be unlawful. The Parties agree that if any
consent to an assignment of any such warranty or guaranty would be ineffective
or would impair the Buyer's rights and obligations under the warranty or
guaranty in question, so that the Buyer would not substantially receive such
rights and obligations, the Seller Representatives, to the extent permitted by
Law and such warranty and guaranty, shall appoint the Buyer to be the Sellers'
agent for the purpose of enforcing such warranty or guaranty, so as to the
maximum extent possible, provide the Buyer with the rights and obligations of
such warranty or guaranty. Notwithstanding the foregoing, the Seller
Representatives shall not be obligated to bring or file suit against any Third
Party; provided that if the Seller Representatives shall determine not to bring
or file suit after being requested by the Buyer to do so, the Seller
Representatives shall, to the maximum extent permitted by Law and any applicable
agreement or contract, enter into such reasonable agreements with the Buyer so
that the Buyer may bring or file such suit with respect to the rights of such
Seller.
5.7 Employee Matters.
(a) The Buyer agrees to offer, in writing, employment, commencing
as of 12:01 a.m. on the Initial Closing Date, for a period of at least twelve
(12) months (the "Minimum Employment Period") from such date, to all employees
of NAESCO who are represented by the Local and who were employed in represented
positions in the operation of the Acquired Assets at any time during the three-
month period prior to the Initial Closing, as set forth in Schedule 5.7(a) (the
"Represented Plant Employees"). Those employees who accept, in writing, such
offer of employment are hereinafter referred to as the "Represented Employees."
All such offers of employment shall be made in accordance with all applicable
Laws and regulations and the Collective Bargaining Agreement. Effective as of
the Initial Closing Date, the Buyer shall agree to be bound by the terms of the
Collective Bargaining Agreement with respect to the Represented Employees as if
the Buyer were the Seller for purposes of such Collective Bargaining Agreement,
and to thereafter comply with all applicable obligations thereunder, subject to
the changes negotiated with and acceptable to the Local. The Buyer shall take,
or cause to be taken, all actions, or do, or cause to be done, all things
necessary, proper or advisable with respect to the Collective Bargaining
Agreement as the Sellers shall reasonably request, including becoming a party to
the Collective Bargaining Agreement for the duration of its term as it relates
to the Represented Employees, and the Buyer shall comply with all applicable
obligations under the Collective Bargaining Agreement.
(b) The Buyer agrees to offer, in writing, employment, commencing
as of 12:01 a.m. on the Initial Closing Date, for at least the Minimum
Employment Period, to all employees of NAESCO who were employed in the operation
of the Acquired Assets at any time during the three-month period prior to the
Initial Closing Date, other than Represented Plant Employees, as set forth in
Schedule 5.7(b)(i) (the "Non-Represented Plant Employees," together with the
Represented Plant Employees, the "Plant Employees"), at levels of wages and
benefits in the aggregate not less than the level of wages and benefits in the
aggregate of each such Non-Represented Plant Employee in effect immediately
prior to the Initial Closing Date. The Non-Represented Plant Employees who
accept, in writing, such offer of employment are hereinafter referred to as the
"Non-Represented Employees," and the Non-Represented Employees and the
Represented Employees are hereinafter collectively referred to as the "Acquired
Assets Employees." Plant Employees who decline to accept such offer of
employment shall not be entitled to any severance or other benefits on account
of such declination. The Buyer shall provide to any Non-Represented Employee
who is terminated for reasons other than cause during the Minimum Employment
Period those severance benefits described in Schedule 5.7(b)(ii). The Buyer
shall provide to any Non-Represented Employee whose employment is terminated
involuntarily during the six (6) month period immediately following the Minimum
Employment Period out-placement assistance and tuition reimbursement consistent
with that described in Schedule 5.7(b)(iii).
(c) As soon as practical after the Effective Date, the Buyer shall
take all action necessary or appropriate to establish and maintain a tax
qualified pension plan for the Acquired Assets Employees (the "Buyer's Plan"),
which Buyer's Plan shall provide, with respect to relevant Acquired Assets
Employees who leave employment with the Buyer or subsequent buyers, for the
following:
(i) The Buyer shall provide a level of pension benefits not
lower than such level of pension benefits calculated using the pension
benefit formula applicable to each relevant Acquired Assets Employee under
the NUSCO Retirement Plan (the "Plan") as of the Initial Closing Date.
The Buyer's obligation under the Buyer's Plan will be calculated as the
difference between (A) the total pension benefit of such Acquired Assets
Employee as calculated as of such Acquired Assets Employee's retirement
date with Buyer using (1) the pension benefit formula and actuarial
factors that would have been applicable to the Acquired Assets Employee if
he or she had continued to participate in the Plan as the Plan was in
effect on the Initial Closing Date, (2) the "final average earnings" (as
defined in the Plan) as of such Acquired Assets Employee's retirement date
with the Buyer, taking into account compensation credited under the Plan
through the Initial Closing Date and earned from NAESCO or any of its
Affiliates and the Buyer, (3) such Acquired Assets Employee's total years
of service under the Plan as of the Initial Closing Date plus years of
service with the Buyer as of such Acquired Asset Employee's retirement
date with the Buyer, and (4) "covered compensation" (as defined in the
Plan) as of such Acquired Assets Employee's retirement date with the
Buyer, and (B) the pension benefit payable to such Acquired Assets
Employee by NAESCO or any of its Affiliates at retirement determined as
follows: the pension benefit payable to each Acquired Assets Employee by
NAESCO or any of its Affiliates shall be calculated by the Sellers as of
the Initial Closing Date, based upon (1) the pension benefit formula under
the Plan applicable to such Acquired Assets Employee as of the Initial
Closing Date, (2) years of credited service of such Acquired Assets
Employee under the Plan as of the Initial Closing Date, (3) the "final
average earnings" (as defined in the Plan) of such Acquired Asset Employee
as of the Initial Closing Date, and (4) the "covered compensation" (as
defined in the Plan) as of the Initial Closing Date.
(ii) NAESCO or its Affiliates shall provide each Acquired
Assets Employee with a vested and non-forfeitable right to a benefit equal
to his/her accrued benefit under the Plan determined as of the Initial
Closing Date as described in Section 5.7(c)(i) above.
(iii) The Buyer shall permit any Acquired Asset Employee
whose age is 55 or older to retire with full pension benefits if the sum
of such Acquired Assets Employee's age and years of credited service
(credited under the Plan as of the Initial Closing Date plus years of
service with the Buyer) equals 85 at such Acquired Assets Employee's
termination date (the "Rule of 85"). The Buyer shall apply the Rule of 85
to all Acquired Assets Employees.
(iv) If any Acquired Assets Employee who is age 50 to 54
years on the Announcement Date and whose age plus years of credited
service equals or exceeds 65 years (an "Eligible Acquired Assets
Employee") is involuntarily separated from employment with the Buyer, the
Buyer shall provide the benefits described in Schedule 5.7(c)(iv) to such
Eligible Acquired Assets Employee.
(d) The Buyer shall establish and maintain for the Non-Represented
Employees for the Minimum Employment Period plans and programs which, in the
aggregate, shall be generally comparable to the plans and programs provided to
such Acquired Assets Employees by NAESCO or any of its Affiliates as of the
Effective Date as listed on Schedule 5.7(d).
(e) The Buyer shall apply the period of each Acquired Assets
Employee's prior service with NAESCO or any of its Affiliates or any other
service credited under NAESCO's or its Affiliates' applicable employee benefit
plan toward any eligibility, vesting or other waiting period requirements
(including but not limited to eligibility for actuarially unreduced early
retirement benefits, pension benefits, life insurance, health care benefits and
vacation and sick time) under the Buyer's Employee Benefit Plans (including the
Buyer's Plan) to the extent such conditions were satisfied under the Employee
Benefit Plans prior to the Initial Closing Date. The Acquired Assets Employees
shall be treated as having continuous years of service under the Buyer's
Employee Benefit Plans (including the Buyer's Plan) which includes their years
of service with NAESCO or its predecessor or Affiliate. The Buyer shall waive,
with respect to the Acquired Assets Employees and their spouses and dependents,
if applicable, all limitations with respect to preexisting medical conditions,
exclusions and waiting periods with respect to participation and coverage
requirements under the Buyer's Employee Benefit Plans and will give the Acquired
Assets Employees credit for any moneys paid toward the annual deductible under
such plans as of the Initial Closing Date. The Buyer shall vest each Acquired
Assets Employee to the extent such Acquired Assets Employee is vested under the
NAESCO or NUSCO Employee Benefits Plans (including the Plan) as of the Initial
Closing Date.
(f) Within a reasonable time prior to the Initial Closing Date,
the Seller Representatives shall provide the Buyer with such pertinent data or
information as the Buyer shall reasonably require to determine each Acquired
Assets Employee's service, compensation and accrued benefits under the Plan
before the Initial Closing Date. To the extent the consent of an Acquired Asset
Employee is required in order for the Seller Representatives to deliver any such
pertinent data or information or such other Acquired Asset Employee Records to
the Buyer, the Seller Representatives, for themselves and on behalf of the other
Sellers, agree to use Commercially Reasonable Efforts to secure such consent.
(g) The Sellers shall provide and remain liable for any and all
continuation of coverage under the Employee Benefit Plans of such Sellers as
required under sections 601 through 608 of ERISA and section 4980B of the Code
with respect to any person as to whom a "qualifying event" as defined in section
4980B of the Code occurred prior to the Initial Closing Date.
(h) Effective as of 12:01 a.m. on the Initial Closing Date, the
Acquired Assets Employees shall cease to be employees of NAESCO, and the Sellers
shall be solely responsible for the payment of all wages and compensation
legally owing to or with respect to the Acquired Assets Employees prior to 12:01
a.m. on the Initial Closing Date. The Sellers shall retain any and all
Liability under the Employee Benefit Plans of the Sellers for retirees as of the
Initial Closing Date.
The Sellers shall timely perform and discharge all requirements under the WARN
Act and under applicable state and local Laws for the notification of employees
arising from the sale of the Acquired Assets to the Buyer prior to the Initial
Closing Date, including those Plant Employees who will become Acquired Assets
Employees effective as of the Initial Closing Date. On and after the Initial
Closing Date, the Buyer shall be responsible for performing and discharging all
requirements under the WARN Act and under all applicable Laws and regulations
for the notification of its employees, whether Acquired Assets Employees or
otherwise. All severance and other costs associated with workforce
restructuring activities associated with the Acquired Assets and/or the Acquired
Assets Employees on and after the Initial Closing Date shall be borne solely by
the Buyer, and the Buyer shall not charge or otherwise seek reimbursement or
proration from any of the Sellers for any such costs.
5.8 Cooperation after Initial Closing Date.
(a) Records and Support. After the Initial Closing Date, each
Seller shall have reasonable access to and rights to copy all of the records,
books, data (in whatever form) and documents related to the Acquired Assets to
the extent that such access may reasonably be required by such Seller in
connection with matters relating to or affected by the ownership or operation of
the Facility by such Seller prior to the Initial Closing Date. Such access
shall be afforded by the Buyer upon receipt of reasonable advance notice and
during normal business hours. Each Seller shall be solely responsible for any
costs or expenses incurred by it pursuant to this Section 5.8(a). If the Buyer
desires to dispose of any records, books, data (in whatever form) or documents
that may relate to operation of the Facility prior to the Initial Closing Date,
the Buyer shall, prior to such disposition, give the Seller Representatives a
period of ninety (90) days, at the Sellers' expense, to segregate and remove
such records, books, data (in whatever form) or documents as the Seller
Representatives or any Seller may select; provided, that the Buyer shall not
have any obligation to the Sellers to maintain any such records, books, data (in
whatever form) or documents relating to the operation of the Facility prior to
the Initial Closing Date beyond six (6) years following the Initial Closing
Date.
(b) Employees. After the Initial Closing Date, the Parties shall
have reasonable access to the employees of the other Parties, for purposes of
consultation or otherwise, to the extent that such access may reasonably be
required, in the case of the Buyer, in connection with matters relating to or
affected by the operations of the Sellers prior to the Initial Closing Date or
in the case of the Sellers, operations of the Buyer during the period on and
following the Initial Closing Date and prior to the date of the last Closing.
The Buyer shall cooperate with the Sellers on and after the Initial Closing Date
to provide employee-related information as may be reasonably required by the
Sellers for rate making and other regulatory purposes.
(c) Investigations and Litigation. The Parties agree to cooperate
in connection with any audit, investigation, hearing or inquiry by any
Governmental Authority, litigation or regulatory or other proceeding which may
arise following the Initial Closing Date and which relates to the ownership and
operation of the Facility by the Sellers prior to the Initial Closing Date or
ownership and operation of the Facility by the Buyer on or after the Initial
Closing Date, including litigation or regulatory or other proceedings relating
or pertaining to the DOE's defaults under the DOE Standard Contracts.
Notwithstanding any other provision of this Agreement to the contrary, each
Party shall bear its own expenses, including fees of attorneys or other
representatives, in connection with any such matter described in this Section
5.8(c) in which the Sellers and the Buyer or their respective Affiliates are
subjects or parties or in which they have a material interest.
(d) Pollution Control Revenue Bonds.
(i) The Buyer acknowledges that:
(A) The facilities listed in Schedule 5.8(d) hereto
(the "Pollution Control Facilities") have been financed, and refinanced, in
whole or in part, with proceeds of the issuance and sale of the Pollution
Control Bonds;
(B) PSNH, UI, Canal and NEP are each the economic
obligor and conduit borrower in respect of certain of the Pollution Control
Bonds, as specified in Schedule 2.4(m);
(C) The interest paid or accrued on the Pollution
Control Bonds is not included in the gross income of the holders of the
Pollution Control Bonds (the "PC Bondholders") for purposes of federal income
taxation;
(D) Pursuant to the Internal Revenue Code of 1954, as
amended, and the Code, the basis for the federal income tax exclusion for
interest payable to the PC Bondholders is the use of the Pollution Control
Facilities for certain qualified purposes which include (I) the abatement or
control of air or atmospheric pollution or contamination, (II) the
abatement or control of water pollution or contamination, (III) sewage disposal,
and/or (IV) the disposal of solid waste;
(E) The use of all or part of the Pollution Control
Facilities for a purpose other than the qualifying purpose or purposes described
in subclause (D) above for which the Pollution Control Bonds that financed or
refinanced them were issued may cause (I) the interest payable on all or part of
the Pollution Control Bonds to be includable in the federal gross income of the
PC Bondholders possibly with retroactive effect, unless remedial action is
promptly taken to redeem or defease the Pollution Control Bonds or a portion
thereof, and/or (II) the deductibility of the interest payable by PSNH, UI,
Canal or NEP on all or part of the Pollution Control Bonds to be disallowed by
Section 150(b) of the Code; and
(F) Any breach by the Buyer or any subsequent
transferee of all or any part of the Pollution Control Facilities of its
obligations under this Section 5.8(d) could result in the incurrence by PSNH,
UI, Canal or NEP of additional costs and expenses, including, but not limited
to, an increase in the rate of interest required to be paid to the PC
Bondholders, liability to some or all of the PC Bondholders for their failure to
include interest payable on the Pollution Control Bonds in their respective
federal gross income in the event of a Final determination of taxability by the
IRS, loss of the interest deduction to PSNH, UI, Canal or NEP under Section
150(b) of the Code and transaction costs relating to any refinancing, redemption
and/or defeasance of all or part of the Pollution Control Bonds.
(ii) In order to avoid any or all of the consequences
described in clauses (E) and (F) above, the Buyer agrees that it will not
use, or permit the use of, all or part of the Pollution Control Facilities
for any purpose except (x) the current use of such Pollution Control
Facilities or (y) as "sewage or solid waste disposal facilities" or "air
or water pollution control facilities" within the meaning of Section
103(b)(4)(E) or (F) of the Internal Revenue Code of 1954, as amended, as
contemplated by the tax compliance documents or non-arbitrage certificates
for the Pollution Control Bonds that financed or refinanced such Pollution
Control Facilities (copies of which with respect to all of the Pollution
Control Facilities have been provided to the Buyer by NAEC or PSNH, UI,
Canal or NEP), unless the Buyer shall have obtained at its own expense an
opinion of nationally recognized bond counsel reasonably acceptable to
NAEC or PSNH, UI, Canal and NEP ("Bond Counsel") addressed to and
reasonably satisfactory to NAEC or PSNH, UI, Canal and NEP that such
proposed change in use of the Pollution Control Facilities or part thereof
will not impair (x) the exclusion from gross income of the interest on any
Pollution Control Bonds for federal income tax purposes or (y) the
deductibility of the interest payable on any Pollution Control Bonds by
PSNH, UI, Canal or NEP under Section 150(b) of the Code.
(iii) The provisions of Section 5.8(d)(ii) shall not
prohibit the Buyer from 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 terminating the
operation of the Pollution Control Facilities on a permanent basis and
shutting down the Pollution Control Facilities; provided, however, that
the Pollution Control Facilities, in whole or in part, shall not be
maintained in such a manner as to prevent their being reactivated and used
for a purpose permitted by Section 5.8(d)(ii) nor be retired and/or
decommissioned, dismantled or sold as scrap, unless the Buyer has obtained
at its own expense an opinion of Bond Counsel addressed to and reasonably
satisfactory to NAEC and PSNH, UI, Canal and NEP that this action will not
impair either (x) the exclusion from gross income of the interest on any
Pollution Control Bonds for federal income tax purposes or (y) the
deductibility of the interest payable with respect to any Pollution
Control Bonds by PSNH, UI, Canal or NEP under Section 150(b) of the Code.
The Buyer shall provide to NAEC and PSNH, UI, Canal and NEP written notice
at least thirty (30) days in advance of any permanent shut-down,
retirement, abandonment or decommissioning of Seabrook Unit 1 or the
Pollution Control Facilities in whole or in part and shall in good faith
by written notice to NAEC and PSNH, UI, Canal and NEP describe the
affected property so that NAEC and PSNH, UI, Canal and NEP can determine
which issue or issues of Pollution Control Bonds financed or refinanced
such affected property.
(iv) It is expressly understood and agreed that this Section
5.8(d) shall not prohibit the use by the Buyer of tax-exempt bonds to
finance or refinance any improvements to the Pollution Control Facilities
made on or after the Initial Closing Date or any assets other than the
Pollution Control Facilities, provided that no breach by the Buyer of its
covenants in this Section 5.8(d) shall result from such improvements.
(v) The Buyer shall indemnify NAEC and PSNH, UI, Canal and
NEP for any additional costs and expenses incurred by NAEC or PSNH, UI,
Canal or NEP, respectively, solely as a result of any breach by the Buyer
of its covenants in this Section 5.8(d).
(vi)(A) NAEC shall, or shall cause PSNH to notify the Buyer
in writing of the maturity or redemption of any issue of the Pollution
Control Bonds, and (B) UI, Canal or NEP shall notify the Buyer in writing
of the maturity or redemption of any issue of the Pollution Control Bonds.
(vii) If NAEC or PSNH, UI, Canal or NEP shall have
notified the Buyer that it has refinanced any of the Pollution Control
Bonds with new bonds, the provisions of this Section 5.8(d), if
applicable, shall apply with respect to such new bonds as though they were
the Pollution Control Bonds; provided that the provisions of this Section
5.8(d)(vii) shall not operate to require that the use of any Pollution
Control Facilities be subject to any requirements of the Internal Revenue
Code of 1954, as amended, or the Code that are more restrictive than those
in effect and applicable to the related issue of Pollution Control Bonds
as of the issue date of such issue.
(viii) The Buyer and any transferee or subsequent
transferee will not sell or otherwise transfer all or part of the
Pollution Control Facilities unless its transferee covenants in writing
for the benefit of NAEC and PSNH, UI, Canal and NEP to comply with and to
satisfy the covenants of this Section 5.8(d) (including without limitation
the covenants of this clause (viii)) with respect to its ownership and use
of such Pollution Control Facilities.
(ix) The covenants of this Section 5.8(d) shall survive
Closing and shall continue in effect and bind the Buyer and any transferee
or subsequent transferee of all or part of the Pollution Control
Facilities so long as any of the Pollution Control Bonds remain
outstanding.
5.9 NEPOOL. At the Initial Closing Date and through the last Subsequent
Closing, the Buyer shall be a member in good standing in NEPOOL. Except as
required to preserve system reliability or to comply with the requirements of
ISO-NE or NEPOOL, and except as otherwise provided in any Related Agreement, the
Sellers shall not interfere with the Buyer's efforts to expand or modify
generation capacity at the Site.
5.10 Funding of the Decommissioning Trusts.
(a) Decommissioning Trust Closing Amount. For the purpose hereof
"Decommissioning Trust Closing Amount" shall mean the greater of the following:
(i) the aggregate amount of Qualified Decommissioning Funds and Nonqualified
Decommissioning Funds required to be on deposit in the Sellers' Qualified
Decommissioning Funds and Nonqualified Decommissioning Funds at the time of the
Initial Closing and each Subsequent Closing on account of the Ownership Shares
of the Sellers participating in each said Closing based on the calculation
methodology and assumptions contained in the NDFC Final Report and Order for
Docket 2001-1 (hereinafter referred to as the "Existing NDFC Order"); (1) or
(ii) the aggregate amount of Qualified Decommissioning Funds and Nonqualified
Decommissioning Funds required to be on deposit in the Sellers' Qualified
Decommissioning Funds and Nonqualified Decommissioning Funds at the time of the
Initial Closing and each Subsequent Closing on account of the Ownership Shares
of the Sellers participating in each said Closing based on any order(s) of the
NDFC subsequent to the Existing NDFC Order other than an order of the type
specified in Section 5.10(e). To the extent computation or reference is
required as to the portion or share of the Decommissioning Trust Closing Amount
due from a particular Seller participating in any Closing, the same shall be
based on that Seller's pro rata share of the total Ownership Shares of the
Sellers participating in that specific Closing. Notwithstanding anything else
contained in this Section 5.10(a), however, if the amount determined pursuant to
Section 5.10(a)(ii) is less than the amount determined pursuant to Section
5.10(a)(i), the amount determined pursuant to Section 5.10(a)(ii) shall be
deemed the Decommissioning Trust Closing Amount.
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(1)For example, if a single Closing in which all Sellers participated
occurred on December 31, 2002, the calculation methodology and assumptions
contained in the Existing NDFC Order would result in a Decommissioning Trust
Closing Amount of $232.72 million. The foregoing example is provided for
illustrative purposes only, and should one or more Closings occur on dates other
than December 31, 2002, said calculation methodology and assumptions contained
in the Existing NDFC Order would be applied accordingly to compute the
Decommissioning Trust Closing Amount for the participating Seller(s) as of said
date(s).
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(b) Buyer's Decommissioning Fund. The Buyer shall have
established as of the Initial Closing Date a qualified decommissioning fund (the
"Buyer's Qualified Decommissioning Fund") and a nonqualified decommissioning
fund (the "Buyer's Nonqualified Decommissioning Fund," Buyer's Nonqualified
Decommissioning Fund, together with Buyer's Qualified Decommissioning Fund, are
collectively referred to as the "Buyer's Decommissioning Fund") for the Facility
into which, as set forth below, the assets of each Seller's Qualified
Decommissioning Fund and Nonqualified Decommissioning Fund, as applicable, shall
be transferred.
(c) Required Seller Deposits. Prior to the Initial Closing Date
or each Subsequent Closing Date, as the case may be, each Seller participating
in such Closing that has a Qualified Decommissioning Fund shall make, from time
to time, additional cash contributions to its Qualified Decommissioning Fund
equal to as much of such Seller's share of the Decommissioning Trust Closing
Amount as is eligible or required to be contributed to the Qualified
Decommissioning Fund under Code Section 468A and applicable Treasury Regulations
as in effect as of the relevant Closing Date (the "Qualified Deposits"). On or
prior to the Initial Closing Date or each Subsequent Closing Date, as the case
may be, each Seller participating in such Closing shall make additional cash
contributions from time to time to its Nonqualified Decommissioning Fund such
that at the Initial Closing Date or the Subsequent Closing Date, as the case may
be, the aggregate assets in such Seller's Nonqualified Decommissioning Fund and
Qualified Decommissioning Fund equals such Seller's share of the Decommissioning
Trust Closing Amount. The amount of all additional cash contributions required
from each Seller pursuant to this Section 5.10(c) shall hereinafter be referred
to as the "Required Seller Deposit."
(d) Transfer to Buyer. After making the Required Seller Deposit
in accordance with Section 5.10(c) hereof, on the Initial Closing Date or a
Subsequent Closing Date, as the case may be, each Seller participating in such
Closing shall transfer to the Buyer's Qualified Decommissioning Fund and Buyer's
Nonqualified Decommissioning Fund the assets of such Seller's Qualified
Decommissioning Fund and Nonqualified Decommissioning Fund, as applicable.
(e) Required Buyer Deposit. If, based on any order(s) of the NDFC
subsequent to the Existing NDFC Order that results from actions of the Buyer,
the aggregate amount of Qualified Decommissioning Funds and Nonqualified
Decommissioning Funds required to be on deposit at the time of the Initial
Closing and each Subsequent Closing on account of the Ownership Shares of the
Sellers participating in each said Closing exceeds the Decommissioning Trust
Closing Amount, the Buyer shall be responsible (at or before the time of each
Closing at which any such excess is due) to make an additional cash deposit to
the Buyer's Decommissioning Fund in an amount equivalent to the applicable share
of the excess due at any Closing. The aggregate amount of such additional cash
deposits, if any, required from the Buyer pursuant to this Section 5.10(e) shall
hereinafter be referred to at the "Required Buyer Deposit."
(f) Agreements Among Sellers. Nothing contained in this Section
5.10 shall be deemed to prohibit the Sellers from entering into agreements among
themselves with respect to such Parties' obligations under this Section 5.10, so
long as such agreements do not change any obligations of any of such Sellers to
the Buyer pursuant to this Section 5.10 or otherwise.
(g) Amendment. Between the Effective Date and the last Closing
Date, each Seller agrees not to amend in any material respect its
Decommissioning Trust Agreement without the Buyer's prior written consent, which
shall not be unreasonably withheld. Without limiting the generality of the
foregoing, the Decommissioning Trust Agreements shall not be amended by any
Seller to provide for the consolidation of such Seller's Qualified
Decommissioning Funds and Nonqualified Decommissioning Funds and shall not be
amended in any other manner if and to the extent such amendment would constitute
a Disqualification Event. Except as otherwise required by the IRS, the NRC or
any other Governmental Authority having jurisdiction, following the last Closing
Date and prior to twelve months following the transfer of all amounts held in
any Seller's Decommissioning Funds to the Buyer's respective Decommissioning
Funds, the Decommissioning Trust Agreements shall not be amended by the Buyer to
provide for the consolidation of its Qualified Decommissioning Funds and
Nonqualified Decommissioning Funds; provided, however, that in no event shall
any such amendment be made to the Decommissioning Trust Agreements that would be
inconsistent with the Requested Rulings or that would result in a
Disqualification Event for any Seller; and the Decommissioning Trust Agreements
shall not be amended in any other manner if and to the extent such amendment
would constitute a Disqualification Event, as defined herein. The execution and
delivery of the Supplemental Indenture by the Buyer and the Sellers shall not be
deemed an amendment prohibited by this Section 5.10(g).
(h) Customer Contribution. When the Buyer or its successors have
completed Decommissioning of the Facility as required by Section 5.23 and by
applicable Law, (i) any remaining Decommissioning Funds determined by the NDFC
to be New Hampshire customer contributions pursuant to RSA 162-F:21-b II(c), and
(ii) any remaining Decommissioning Funds determined by the Governmental
Authority having jurisdiction in Connecticut, Massachusetts and Rhode Island, as
the case may be, to be customer contributions from the customers of such state
under the applicable Law of such state, to the extent required by the applicable
Law of such state, shall be paid by the Buyer in coordination with applicable
Governmental Authority having jurisdiction in such state for the benefit of the
customers of the relevant Seller or Sellers in such state.
(i) Ownership Shares of GBP and LBP. For all purposes of this
Section 5.10, consistent with the Existing NDFC Order, the Ownership Share of
GBP and the Ownership Share of LBP shall be deemed to be the Ownership Share of
a single Seller. The transfer of the Qualified Decommissioning Fund and the
Nonqualified Decommissioning Fund of each of GBP and LBP shall occur
simultaneously on the same closing date.
5.11 Risk of Loss. Except as otherwise provided in this Section 5.11,
during the Interim Period all risk of loss or damage to the property included in
the Acquired Assets shall be borne by the Sellers. If during the Interim Period
the Acquired Assets are damaged by fire or other casualty (each such event, an
"Event of Loss"), or are taken by a Governmental Authority by exercise of the
power of eminent domain (each, a "Taking"), the following provisions shall
apply:
(a) the occurrence of (i) any one or more Events of Loss, as a
result of which the aggregate costs to restore, repair or replace, less any
insurance proceeds received or payable to the Sellers in connection with such
Event or Events of Loss (provided that any insurance proceeds received or
payable in connection with the Event or Events of Loss are either used to
restore, repair or replace such Event or Events of Loss or are made available to
the Buyer) are reasonably estimated to be equal to or less than $10,000,000,
and/or (ii) any one or more Takings, as a result of which the aggregate
condemnation proceeds equal an amount reasonably estimated to be equal to or
less than $10,000,000, shall have no effect on the transactions contemplated
hereby; provided, that any condemnation proceeds received or payable in
connection with the Taking or Takings are made available to the Buyer;
(b)upon the occurrence of (i) any one or more Events of Loss, as a
result of which the aggregate costs to restore, repair or replace, less any
insurance proceeds received or payable to the Sellers in connection with such
Event or Events of Loss (provided that any insurance proceeds received or
payable in connection with the Event or Events of Loss are either used to
restore, repair or replace such Event or Events of Loss or are made available to
the Buyer) are reasonably estimated to be greater than $10,000,000, and/or (ii)
any one or more Takings, as a result of which the aggregate condemnation
proceeds are reasonably estimated to be greater than $10,000,000 (a "Major
Loss"), the Seller Representatives, for themselves and on behalf of the other
Sellers, consistent with the Joint Ownership Agreement and the Managing Agent
Operating Agreement, shall have, in the case of a Major Loss relating to one or
more Events of Loss, the option, exercised by notice to the Buyer, to restore,
repair or replace the affected Acquired Assets. If the Seller Representatives
elect to restore, repair or replace the Acquired Assets relating to a Major
Loss, which election shall be made by notice to the Buyer prior to the Initial
Closing Date and as soon as practicable following the occurrence of the Major
Loss, the Buyer will have the option of (x) making the completion of the repair,
replacement or restoration of the affected Acquired Assets a condition to the
Closing and the Initial Closing Date shall be postponed at its election for the
amount of time reasonably necessary to complete the restoration, repair or
replacement of such affected Acquired Assets, such time period to be agreed upon
by the Buyer and the Seller Representatives or (y) allowing the Initial Closing
to occur prior to the completion of the repair, replacement or restoration of
such affected Acquired Assets; provided that the Seller Representatives shall
have agreed to complete such repair, replacement or restoration which covenant
shall survive the Closings. If the Seller Representatives elect not to restore,
repair or replace the Acquired Assets affected by a Major Loss, or such Major
Loss is the result of one or more Takings, the provisions of Section 5.11(c)
will apply;
(c)in the event that the Seller Representatives elect not to
restore, repair or replace a Major Loss, or in the event that the Seller
Representatives, having elected to repair, replace or restore the Major Loss,
fail to complete such repair, replacement or restoration within the period of
time as agreed upon by the Parties pursuant to the penultimate sentence of
Section 5.11(b), or in the event that a Major Loss is the result of one or more
Takings, then the Parties shall, within thirty (30) days following the Seller
Representatives' election not to restore, repair or replace, failure to
complete, or the occurrence of such Takings, as the case may be, negotiate in
good faith an equitable adjustment in the Facility Purchase Price, pursuant to
Section 2.6(a)(iv) to reflect the impact of the Major Loss and taking into
account the Ownership Shares to be transferred to the Buyer pursuant to this
Agreement, as mitigated by any repair, replacement or restoration work actually
completed by the Seller Representatives, on the Acquired Assets being sold to
Buyer, and proceed to the Initial Closing Date. To assist the Buyer in its
evaluation of any and all Events of Loss, the Seller Representatives shall
provide the Buyer such access to the Acquired Assets and such information as the
Buyer may reasonably request in connection therewith; and
(d) in the event that the Parties fail to reach agreement on an
equitable adjustment of the Facility Purchase Price, within the thirty (30) days
provided in Section 5.11(c), then the Buyer shall have the right to elect,
exercisable by notice to the Seller Representatives within fifteen (15) days
immediately following the expiration of the thirty (30) day period, to (i)
proceed with the consummation of the transaction at the Initial Closing, with a
reduction in the Facility Purchase Price, consistent with the Seller
Representatives' last offer of equitable adjustment thereto as contemplated by
the penultimate sentence of Section 5.11(c) communicated to the Buyer, in which
event the Sellers shall assign over or deliver to the Buyer at the Initial
Closing all condemnation proceeds or insurance proceeds that the Sellers
receive, or to which the Sellers become entitled by virtue of the Events of Loss
or Taking with respect to the Acquired Assets, less any costs and expenses
reasonably incurred by the Sellers in connection with such Events of Loss or
Taking or in obtaining such condemnation proceeds or insurance proceeds, and
less the reduction in the Facility Purchase Price made pursuant to this clause
(i), or (ii) submit the matter to dispute resolution pursuant to Section 12 to
determine the adjustment, if any, in the Facility Purchase Price, which
determination shall be binding on all Parties. If the Buyer fails to make the
election within the fifteen (15) day period described in the preceding sentence,
the Buyer will, subject to Section 5.11(d), be deemed to have made the election
to proceed with the Initial Closing.
5.12 Discharge of Environmental Liabilities. After the Initial Closing
Date, with respect to Environmental Liabilities which constitute Excluded
Liabilities (the "Seller Environmental Liabilities"), the Buyer will use
Commercially Reasonable Efforts not to prejudice or impair the rights of any
Seller under Environmental Laws or interfere with the ability of any Seller to
contest in appropriate administrative, judicial or other proceedings its
liability, if any, for Environmental Claims or Remediation. To the extent
relevant to the Seller Environmental Liabilities, (i) the Buyer further agrees
to provide to the Sellers draft copies of all plans and studies prepared in
connection with any Site investigation or Remediation prior to their submission
to the Governmental Authority with jurisdiction under Environmental Laws, (ii)
the Seller Representatives shall have the right, without the obligation, to
attend all meetings between the Buyer, its agents or representatives, and such
Governmental Authorities and (iii) the Buyer shall promptly provide to the
Seller Representatives copies of all written information, plans, documents and
material correspondence submitted to or received from such Governmental
Authorities relating to the Buyer's discharge of any Environmental Liabilities
assumed pursuant to this Agreement.
5.13 Nuclear Insurance. (i) The Buyer shall obtain and maintain policies
of liability and property insurance with respect to the ownership, operation,
and maintenance of the Facility which shall afford protection against the
insurable hazards and risks with respect to which units of similar size and type
customarily maintain insurance, and which meets the requirements of 10 C.F.R.
50.54(w) and 10 C.F.R. Part 140. Such coverage shall include nuclear liability
insurance, in such form and in such amount as will meet the financial protection
requirements of the Atomic Energy Act, and an agreement of indemnification as
contemplated by Section 170 of the Atomic Energy Act. In the event that the
nuclear liability protection system contemplated by Section 170 of the Atomic
Energy Act is repealed or changed, the Buyer shall obtain and maintain, to the
extent commercially available on reasonable terms, alternate protection against
Nuclear Liability. In addition, the Buyer shall be able to provide the
financial assurance consistent with the requirements of 10 CFR Section 140.21
that it will be able to pay the retrospective premiums for the Facility as
prescribed by Section 170 of the Atomic Energy Act.
(ii) Promptly after the receipt thereof, the Buyer shall disburse
to each Seller in accordance with its respective Proportionate Ownership any
refunds or other distributions received by the Buyer with respect to NEIL or ANI
premiums actually paid by the Sellers.
5.14 Nonwaiver of Third Party Environmental Liabilities. In the event
that the Buyer, either before or after the Initial Closing Date, shall
reasonably determine that the cause that gives rise to the Environmental
Liabilities assumed pursuant to Section 2.3(a) occurred, in whole or in part,
prior to the Initial Closing Date, the Sellers shall cooperate and provide the
Buyer with any information in their possession that will assist the Buyer in
locating any Third Party who may be a "potentially responsible party" as defined
by any Environmental Laws with respect thereto, and, prior to the second
anniversary of the Initial Closing, the Sellers shall not waive or excuse the
liability of any Third Party who may share responsibility for any of such
Environmental Liabilities that would be likely to have a Plant Material Adverse
Effect.
5.15 Control of Litigation. The Parties agree and acknowledge that the
Seller Representatives shall, subject to the Joint Ownership Agreement and the
Managing Agent Operating Agreement, be entitled exclusively to control, defend
and settle any litigation, administrative or regulatory proceeding, and any
investigative or Remediation activities (including without limitation any
environmental mitigation) arising out of or related to any Excluded Assets or
Excluded Liabilities, so long as such defense, settlement or other activities do
not unreasonably interfere with the Buyer's operation of the Facility or
materially impair the value of the Facility, and the Buyer agrees to use
Commercially Reasonably Efforts to cooperate with the Seller Representatives in
connection therewith. The Parties agree and acknowledge that the Buyer shall be
entitled exclusively to control, defend and settle any litigation,
administrative or regulatory proceeding, and any investigative or remediation
activities arising out of or related to any Acquired Assets or Assumed
Liabilities, so long as such defense, settlement or other activities do not
unreasonably interfere with the Sellers' respective businesses, and the Seller
Representatives agree to use Commercially Reasonably Efforts to cooperate with
the Buyer in connection therewith.
5.16 Availability of Funds. On or before the Effective Date, the Buyer
shall have delivered to the Sellers (a) evidence of sufficient funds available
to it as of the Initial Closing Date through the last Subsequent Closing Date or
binding written commitments from responsible financial institutions to provide
sufficient immediately available funds as of the Initial Closing Date through
the last Subsequent Closing Date to pay the Facility Purchase Price, the Fuel
Purchase Price, the Unit 2 Purchase Price, the NAEC Real Property Purchase Price
and any Estimated Adjustment and (b) evidence of the availability of the
Acceptable Guaranty in accordance with Section 2.5.
5.17 Department of Energy Decontamination and Decommissioning Fees. Each
Seller shall continue to pay its Ownership Share of all uranium-enrichment
decontamination and decommissioning fund fees levied by the DOE pursuant to 42
U.S.C. Section 2297g-1 that are payable prior to the Initial Closing Date or any
Subsequent Closing Date, as the case may be. On and after the Initial Closing
and each Subsequent Closing Date, the Buyer shall pay such decontamination and
decommissioning fund fees for the appropriate Ownership Shares acquired by the
Buyer at each Closing, including but not limited to all annual special
assessment invoices issued on and after the Initial Closing Date by the DOE, as
contemplated by its regulations at 10 C.F.R. Part 766 implementing Sections
1801, 1802, and 1803 of the Atomic Energy Act.
5.18 Cooperation Relating to Insurance and Price-Anderson Act. Until the
Initial Closing, the Sellers shall maintain in effect not less than the amounts
of property damage and liability insurance for the Facility as set forth in
Schedule 5.18. The Seller Representatives shall cooperate with the Buyer's
efforts to obtain insurance, including insurance required under the Price
Anderson Act or other Nuclear Laws with respect to the Acquired Assets. Subject
to Section 9.4, the Sellers agree to use reasonable efforts to assist the Buyer
in making any claims against pre-Closing insurance policies of the Sellers that
may provide coverage related to Assumed Liabilities. The Buyer agrees to
indemnify the Sellers for their reasonable out of pocket expenses incurred in
providing such assistance and cooperation and not to take any action which shall
adversely affect any residual rights of the Sellers in such insurance policies.
After the Initial Closing and through the last Subsequent Closing, the Buyer
shall maintain, with financially responsible insurance companies, insurance in
such amounts and against such risks and losses as is customary in the commercial
nuclear power industry. After the Initial Closing through the relevant
Subsequent Closing, the Buyer shall include each Remaining Seller as a named
insured and loss payee, as its interests may appear, on the property damage and
liability insurance policies maintained for the Facility.
5.19 Acceptable Guaranty. If the Buyer elects to deliver an Acceptable
Guaranty pursuant to Section 2.5, then (i) on the Effective Date the Buyer shall
deliver to the Sellers an Acceptable Guaranty and (ii) at all times thereafter
until payment in full of all amounts due hereunder the Buyer shall maintain such
Acceptable Guaranty in full force and effect. If at any time the guarantor
under such Acceptable Guaranty shall cease to be an Acceptable Guarantor, then
the Buyer shall, within ten (10) days after the earlier of the date on which (i)
the Buyer shall have been given notice of such cessation by the Seller
Representatives and (ii) the Buyer shall have Knowledge of such cessation,
deliver to the Seller Representatives a replacement Acceptable Guaranty to be
issued by an Acceptable Guarantor.
5.20 Private Letter Ruling Requests. The Parties agree to cooperate in
good faith in the preparation and filing of any private letter ruling requests
to be made by the Buyer and the Sellers (which shall be made as a single, joint
filing by all Parties) in order to obtain the tax treatment desired by the
Parties with respect to the transfer of the Decommissioning Funds pursuant to
the terms of this Agreement (the "Private Letter Ruling Requests"). Without
limiting the generality of the foregoing, the Buyer and the Sellers shall use
Commercially Reasonable Efforts to obtain one or more private letter ruling(s)
from the IRS determining that (i) the transfer of assets from the Sellers'
Qualified Decommissioning Funds to the Buyer's Qualified Decommissioning Fund is
a disposition that, pursuant to the IRS' authority under Treas. Reg. 1.468A-
6(g)(1), satisfies the requirements of Treas. Reg. 1.468A-6(b), (ii) the Buyer
will not recognize gain or otherwise take into account any income for U.S.
federal income tax purposes by reason of the receipt of the assets of the
Sellers' Nonqualified Decommissioning Funds, including any top-off amounts
contributed thereto pursuant to Section 5.10(c), and (iii) each Seller shall be
entitled to a current deduction equal to the total of any amounts realized by
such Seller as a result of the Buyer's assumption of the decommissioning
obligations with regard to the Acquired Assets (the "Requested Rulings"), and
further the Buyer and the Sellers shall use Commercially Reasonable Efforts to
obtain private letter ruling(s) from the IRS determining that each Seller's net
operating loss attributable to the decommissioning obligations assumed by the
Buyer will qualify for specified liability loss treatment under section 172 of
the Code. Neither the Buyer nor the Sellers shall take any action that would
cause the transfer of assets from the Sellers' Qualified Decommissioning Funds
to the Buyer's Qualified Decommissioning Fund to fail to satisfy the
requirements of Treas. Reg. 1.468A-6(b) (assuming solely for purposes of this
sentence that the interest acquired by the Buyer constitutes a "qualified
interest" in a "nuclear power plant" as defined in Treas. Reg. 1.468A-5(b)), or
cause the Buyer and the Sellers to fail to obtain such a private letter ruling.
5.21 Credit Rating of Acceptable Guarantor. The Buyer shall, until the
expiration of the term of the Acceptable Guaranty, promptly notify the Seller
Representatives of any downgrade in the credit rating of such Acceptable
Guarantor.
5.22 NRC Commitments. The Buyer shall maintain, and operate the Facility
in accordance with the NRC Commitments to the extent required by the NRC
Licenses and with applicable Law.
5.23 Decommissioning and Funding Assurance. Buyer hereby agrees that it
will complete, at its expense, the Decommissioning of the Facility once the Site
is no longer utilized for power generation, and that it will complete all
Decommissioning activities in accordance with all applicable Laws and
requirements, including those of the NRC, the Environmental Protection Agency
and the State of New Hampshire as may be in effect as of the date that the Site
is proposed to be declared to be fully decommissioned. The Buyer acknowledges
that, as of the Effective Date, entombment is not considered to be an acceptable
form of Decommissioning in New Hampshire. Buyer hereby further agrees that
prior to the Initial Closing Date, it will provide Funding Assurance sufficient
to demonstrate to the satisfaction of the NDFC Buyer's ability to fully fund the
projected cost of Decommissioning in a manner consistent with the requirements
of RSA 162-F:21-c as set forth in the Existing NDFC Order.
5.24 Joint Ownership Agreement. Except as otherwise provided expressly
herein, after the Initial Closing and prior to the last Subsequent Closing
neither the Buyer nor any Remaining Seller shall enter into any amendment to or
termination of the Joint Ownership Agreement (including billing practices
thereunder) without the prior written consent of each of the Remaining Sellers
and the Buyer.
5.25 Memorandum of Understanding with the Town of Seabrook. On the
Initial Closing Date and each Subsequent Closing Date, as the case may be, each
Seller participating in such Closing shall contribute an amount equal to its
Ownership Share of $2,000,000 to the escrow account created in accordance with
the Memorandum of Understanding with the Town of Seabrook.
5.26 Certain Agreements. The Seller Representatives shall, on the
Initial Closing Date, cause PSNH to enter into the Interconnection Agreement
described in Section 6.1(k), pursuant to which PSNH shall control the
transmission of electric power through the 345 kV Substation, and an Agreement
to Amend Transmission Support Agreement described in Section 6.1(l) with the
Buyer.
6. Conditions Precedent to Obligation to Close
6.1. Conditions Precedent to Obligation of the Buyer to Close. The
obligation of the Buyer to consummate the transactions to be performed by it in
connection with the Initial Closing and each Subsequent Closing is subject to
satisfaction of the following conditions with respect to such Initial Closing or
Subsequent Closing, as the case may be:
(a) Representations and Warranties. At the Initial Closing, the
representations and warranties set forth in Section 3 (other than the
representation set forth in Section 3.10 hereof) of NAESCO and of each Seller
participating in the Initial Closing shall be true and correct in all material
respects as though made at and as of the Initial Closing Date (except with
respect to any representation or warranty expressly made as of the Effective
Date, which shall be deemed made as of the Effective Date). At each Subsequent
Closing, the representations and warranties set forth in Section 3 of each
Remaining Seller participating in such Subsequent Closing, except for the
representations and warranties set forth in Sections 3.1, 3.2, 3.3, 3.4, 3.5,
3.6, 3.7(b), 3.7(c), 3.8, 3.9, 3.10, 3.12 and 3.13(e) shall be true and correct
in all material respects as though made at and as of the Initial Closing Date,
and the representations and warranties of each such Remaining Seller set forth
in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7(b), 3.7(c), 3.8, 3.9, 3.12 and
3.13(e) shall be true and correct in all material respects as though made at and
as of such Subsequent Closing date on which such Remaining Seller transfers its
Ownership Share (except with respect to any representation or warranty expressly
made as of the Effective Date, which shall be deemed made as of the Effective
Date and except with respect to any breach of any such representation or
warranty to the extent that such breach arises from the acts or omissions of the
Buyer or its Affiliates after the Initial Closing Date);
(b) Performance by the Sellers. The Required Sellers or the
Remaining Sellers, as the case may be, shall have performed and complied in all
material respects with all of their covenants, agreements and obligations
hereunder through the relevant Closing Date;
(c) Buyer Regulatory Approval. Buyer shall have received the
consents, approvals and authorizations referenced in Section 5.2(b) and the
Buyer Regulatory Approvals specified in Schedule 6.1(c) in each case without
terms and conditions that, either singly or in the aggregate, would be likely to
have a Plant Material Adverse Effect (including any conditions applicable to
Buyer on marketing or brokering in connection with the Transfer of Licenses) or
a Material Adverse Effect on the Buyer and such approvals shall be Final;
(d) Seller Regulatory Approvals. The Required Sellers or the
Remaining Sellers shall have received the applicable Seller Regulatory Approvals
specified in Schedule 6.2(c), in each case without terms and conditions that,
either singly or in the aggregate, would be likely to have a Plant Material
Adverse Effect (including any conditions on marketing or brokering in connection
with the Transfer of Licenses) on the Buyer and such approvals shall be Final;
(e) Absence of Litigation. (i) Except for any NRC proceeding
which may be pending after the NRC has approved the Application, no suit, action
or other proceeding against the Buyer, any Seller participating in such Closing,
or any of their respective Affiliates or the Ownership Shares being transferred
at such Closing shall be pending before any Governmental Authority which seeks
to restrain or prohibit any of the transactions contemplated by this Agreement
or to obtain damages or other relief in connection with this Agreement or the
actions contemplated hereby, except for matters that, in the aggregate, would
not be likely to have a Material Adverse Effect on the Buyer or the Facility.
There shall not be any injunction, judgment, order, decree, ruling, charge or
Laws in effect as of the relevant Closing Date with respect to the Buyer, any
Seller participating in such Closing, or any of their respective Affiliates
preventing consummation of any of the transactions contemplated by this
Agreement or the Related Agreements, except as would not be likely to have a
Plant Material Adverse Effect; and (ii) in addition to the matters specified in
Section 6.1(e)(i), no suit, action or other proceeding against the Buyer, any
Seller participating in such Closing, or any of their respective Affiliates or
the Ownership Shares being transferred at such Closing shall be pending before
any court, tribunal, panel, or Governmental Authority which seeks to restrain or
prohibit any of the transactions contemplated by this Agreement based on a bona
fide claim which, if resolved in favor of the Person initiating such suit,
action or proceeding, would constitute a breach by such Seller of the
representation of such Seller set forth in Section 3.13(e), except for claims
that, in the aggregate, would not be likely to have a Material Adverse Effect on
the Buyer or the Facility;
(f) Anti-trust Matters. All applicable waiting periods (and any
extensions thereof) under the Hart-Scott-Rodino Act shall have expired or
otherwise been terminated or it shall have been determined to the Parties'
mutual satisfaction that all transactions between the Parties are exempt from
the Hart-Scott-Rodino Act;
(g) Deliveries. The Required Sellers or the Remaining Sellers, as
the case may be, shall have complied in all material respects with the delivery
requirements of Section 2.11;
(h) Title Commitments. The issuer of the Title Commitments shall
have made available to the Buyer title insurance policies in an amount
satisfactory to the Buyer insuring title to the Ownership Shares being
transferred at each Closing consisting of real estate and Improvements as of the
relevant Closing Date substantially in the form of the Title Commitments (but in
the case of any Subsequent Closing without regard to any changes therefrom which
result from any act or omission of the Buyer and/or any owner of the Facility
other than the Seller(s) participating in said Subsequent Closing), with such
changes therefrom as would not in the aggregate be likely to have a Plant
Material Adverse Effect and with the exceptions for parties in possession (other
than those disclosed in Schedule 2.1(a)(iii)(A) and Schedule 2.1(a)(iii)(B), if
any) and unfiled mechanics' and materialmen's liens (other than those that arise
from any act or omission of the Buyer or arise under Good Utility Practices and
are not material to the operation or use of the Acquired Assets in the business
of the Sellers as conducted through the relevant Closing Date) removed;
provided, that the Buyer shall be under no obligation to pay any amounts to the
issuer of such title insurance policies in order to cause an exception not
contained in the Title Commitments to be removed from such title insurance
policies if the amount of such payment would constitute a Plant Material Adverse
Effect;
(i) Plant Material Adverse Effect. Since the Effective Date and
prior to the Initial Closing Date, there shall not have occurred and be
continuing a Plant Material Adverse Effect, which could reasonably be expected
to cause a loss and/or the expenditure by the Buyer within one year following
the Initial Closing Date in excess of $50,000,000 individually or in the
aggregate, other than arising from facts or circumstances (i) that were within
the Buyer's Knowledge on the Effective Date and were not required to be
corrected or remediated before the Initial Closing Date by this Agreement, (ii)
that were disclosed on any of the Schedules and were not required to be
corrected or remediated before the Initial Closing Date by this Agreement, or
(iii) such Plant Material Adverse Effect which is the direct and sole result of
acts or omissions on the part of the Buyer;
(j) Related Agreements. The Related Agreements, to the extent
applicable to each Seller participating in such Closing, shall be in full force
and effect on each Closing Date other than failures to be in full force and
effect resulting from Buyer's acts or omissions;
(k) Interconnection Agreement. The Interconnection Agreement
shall have become effective;
(l) Agreement to Amend Transmission Support Agreement. The
Agreement to Amend Transmission Support Agreement shall have become effective;
(m) Other Matters Affecting Acquired Assets. The Buyer shall have
received such other documents, agreements or instruments, and the Required
Sellers or the Remaining Sellers, as the case may be, shall have performed such
acts, as the Buyer or its counsel may reasonably request in order to accomplish
the acquisition of the Ownership Shares of the Required Sellers or the Remaining
Sellers, as the case may be, and the operation of the Facility in a safe and
reliable fashion;
(n) Requested Rulings. The Buyer shall have received the
Requested Rulings; and
(o) No Shutdown. The Facility shall not have been shut down and
its licensed thermal output shall not have been significantly reduced as a
result of actions taken by the NRC or other Governmental Authority.
The Buyer may waive any condition specified in this Section 6.1 if it
executes a writing so stating on or prior to the relevant Closing Date and,
except as provided in the following sentence, such waiver shall not be
considered a waiver of any other provision in this Agreement unless the writing
so states. If the Buyer waives any such condition with respect to the Initial
Closing Date, then such waiver shall be effective with respect to each
Subsequent Closing Date.
6.2 Conditions Precedent to Obligation of the Sellers to Close. The
obligation of each Required Seller or Remaining Seller, as the case may be, to
consummate the transactions to be performed by it in connection with the Initial
Closing or Subsequent Closing, as the case may be, is subject to satisfaction of
the following conditions:
(a) Representations and Warranties of Buyer. The representations
and warranties of the Buyer set forth in Section 4 shall be true and correct in
all material respects (except if such representation or warranty is subject to a
Material Adverse Effect, Plant Material Adverse Effect or other materiality
threshold, in which case such representation or warranty shall be true and
correct in all respects) at and as of the Initial Closing Date or Subsequent
Closing Date, as the case may be (except with respect to any representation or
warranty expressly made as of the Effective Date, which shall be deemed made as
of the Effective Date);
(b) Performance by the Buyer. The Buyer shall have performed and
complied in all material respects with all of its covenants, agreements and
obligations hereunder through the relevant Closing Date;
(c) Seller Regulatory Approvals. Each Required Seller or
Remaining Seller, as the case may be, shall have received the Seller Regulatory
Approvals specified in Schedule 6.2(c), in each case without terms and
conditions that either singly or in the aggregate would be likely to have a
Material Adverse Effect on such Seller and such approvals shall be Final;
(d) Buyer Regulatory Approval. The Buyer shall have received the
consents, approvals and authorizations referenced in Section 5.2(b) and the
Buyer Regulatory Approvals specified in Schedule 6.1(c) in each case without
terms and conditions that, either singly or in the aggregate, would be likely to
have a Material Adverse Effect on any Seller and such approvals shall be Final;
(e) Absence of Litigation. Except for any NRC proceeding which
may be pending after the NRC has approved the Application, no suit, action or
other proceeding against any Party or its Affiliates or any of the Acquired
Assets shall be pending before any Governmental Authority which seeks to
restrain or prohibit any of the transactions contemplated by this Agreement or
to obtain damages or other relief in connection with this Agreement or the
actions contemplated hereby, except for matters that, in the aggregate, would
not be likely to have a Plant Material Adverse Effect. There shall not be any
injunction, judgment, order, decree, ruling, charge or Laws in effect on the
relevant Closing Date preventing consummation of any of the transactions
contemplated by this Agreement or the Related Agreements, except as would not be
likely to have a Plant Material Adverse Effect;
(f) Deliveries. The Buyer shall have complied in all material
respects with the delivery requirements of Section 2.12;
(g) Anti-trust Matters. All applicable waiting periods (and any
extensions thereof) under the Hart-Scott-Rodino Act shall have expired or
otherwise been terminated or it shall have been determined to the Parties'
mutual satisfaction that all transactions between the Parties are exempt from
the Hart-Scott-Rodino Act;
(h) NEPOOL. The Buyer shall be a member in good standing of
NEPOOL;
(i) Related Agreements. The Related Agreements shall be in full
force and effect on each Closing Date other than failures to be in full force
and effect resulting from any of Sellers' or NAESCO's acts or omissions;
(j) Requested Rulings. The Sellers shall have received the
Requested Rulings;
(k) Agreement to Amend Transmission Support Agreement. An
Agreement to Amend Transmission Support Agreement substantially in the form of
Exhibit N shall have become effective;
(l) Redemption of the UI Bonds. In the case of UI, the
termination of the Facility Lease pursuant to the Termination Agreement shall
have become effective and all notice requirements which would permit the
redemption of the Seabrook Unit 1 Secured Lease Obligation Bonds (the "UI
Bonds") in accordance with the Indenture shall have been satisfied; and
(m) Seller Shareholder Approval. With respect to any Seller
identified on Schedule 6.2(n) that must obtain shareholder approval, such
shareholder approval shall have been received.
Each of the Sellers may waive any condition specified in this Section 6.2
if it executes a writing so stating on or prior to the relevant Closing Date and
such waiver shall not be considered a waiver of any other provision in this
Agreement unless the writing specifically so states, nor shall any such waiver
be effective as against any other Seller.
6.3 Initial and Subsequent Closings.
(a) Coordination and Initial Closing. The Buyer and the Sellers
desire to effect a coordinated closing with respect to all of the Sellers'
interests in the Acquired Assets. To that end, in order to provide sufficient
time for the Sellers to obtain necessary Seller Regulatory Approvals, no Closing
including, without limitation, the Initial Closing, shall occur until the date
(the "Coordination Date") which is the earlier of (1) the date which is six (6)
months after the Effective Date or (2) the date on which all Seller Regulatory
Approvals have been obtained. Anything provided in this Agreement to the
contrary notwithstanding, if the Coordination Date has occurred and the
conditions precedent set forth in Section 6 are satisfied with respect to NAEC
and any other Seller or Sellers (each a "Required Seller") holding individually,
or in the aggregate with other Required Sellers, Ownership Shares (which shall
include NAEC's Ownership Share), representing not less than fifty-one percent
(51%) of the aggregate ownership interests of all of the Participants in the
Facility (the "Required Assets"), then the Buyer and the Required Sellers shall
proceed to Closing in accordance with Section 2.10 (the "Initial Closing") as
follows:
(i) In no event shall Ownership Shares (which shall include
NAEC's Ownership Share) representing less than fifty-one percent (51
percent) of the aggregate ownership interests of all of the Participants
in the Facility, be transferred at the Initial Closing. If UI has
satisfied (and continues to satisfy) all conditions precedent set forth in
Section 6 other than the condition precedent set forth in Section 6.2(m)
(the "UI Bond Redemption Condition Precedent") at a time when the Initial
Closing may otherwise occur, the Required Sellers may elect (such election
to be made by consent of the Required Sellers holding fifty-one percent
(51 percent) or more of the Ownership Shares to defer Closing until the
"Deferral Date" which shall mean the earlier of: (1) the date of the
satisfaction of the UI Bond Redemption Condition Precedent and (2) an
outside date certain specified by such Required Sellers at the time said
election is made (which shall not be later than sixty (60) days after the
date of such election) (in which case the Required Sellers shall be
referred to as the "Electing Required Sellers") (UI and the Electing
Required Sellers collectively with any Seller for which all conditions
precedent set forth in Section 6 have not then been satisfied shall be
referred to as the "Remaining Sellers").
(ii) At any time when UI has satisfied (and continues to
satisfy) all conditions precedent set forth in Section 6 other than the UI
Bond Redemption Condition Precedent, the Buyer and the applicable
Remaining Sellers shall proceed to Closing in accordance with Section
2.10: (1) on the Deferral Date, if applicable, in the case of each
Remaining Seller with respect to whom all conditions precedent set forth
in Section 6 are then satisfied, (2) on the date of satisfaction of the UI
Bond Redemption Condition Precedent in the case of each Remaining Seller
with respect to whom all conditions precedent set forth in Section 6 are
then satisfied and (3) in the case of each other Remaining Seller, on a
date no later than ten (10) days (or, if the tenth day is not a Business
Day, then the next Business Day following such tenth day) after the
satisfaction of the last condition precedent applicable to such Seller
(each a "Subsequent Closing").
(iii) In the event that the Required Sellers and/or any
Remaining Seller satisfy all applicable conditions precedent set forth in
Section 6 at a time when UI has failed to satisfy one or more conditions
precedent set forth in Section 6 in addition to the UI Bond Redemption
Condition Precedent, said Required Sellers and/or Remaining Seller(s)
shall proceed to Closing on a date no later than ten (10) days (or, if the
tenth day is not a Business Day, then the next Business Day following such
tenth day) after the satisfaction of the last condition precedent
applicable to such Seller(s) for the Initial Closing or a Subsequent
Closing, as applicable, provided, however, the Initial Closing shall not
occur prior to the Coordination Date.
(iv) In the event that all of the Sellers shall participate
in a single Closing, such Closing shall be deemed to be the Initial
Closing and all Sellers shall be deemed to be the Required Sellers (and
there shall be deemed to be no Remaining Sellers).
(b) Initial Closing. At the Initial Closing (i) the Required
Sellers shall sell and transfer to the Buyer and the Buyer shall purchase and
acquire from the Required Sellers such Sellers' Proportionate Ownership of the
Acquired Assets, (ii) the Buyer shall assume such Sellers' Proportionate
Ownership of the Assumed Liabilities, (iii) the Required Sellers shall make the
transfer to the Buyer's Decommissioning Fund pursuant to Section 5.10, and (iv)
the Buyer shall become a party to, and shall succeed to the rights and
obligations of the Required Sellers under the Joint Ownership Agreement and the
rights and obligations of NAESCO as currently provided in the Managing Agent
Operating Agreement and the Disbursing Agent Agreement as currently in effect.
(c) Subsequent Closings. At each Subsequent Closing (i) the
relevant Remaining Sellers shall sell and transfer to the Buyer and the Buyer
shall purchase and acquire from such Remaining Sellers such Sellers'
Proportionate Ownership of the Acquired Assets, (ii) the Buyer shall assume such
Sellers' Proportionate Ownership of the Assumed Liabilities, (iii) such
Remaining Sellers shall make the transfer to the Buyer's Decommissioning Trust
Fund pursuant to Section 5.10, and (iv) the Buyer shall succeed to the rights
and obligations of such Remaining Sellers under the Joint Ownership Agreement.
7. Confidentiality.
(a) Each Receiving Party and each Representative thereof will
treat and hold as confidential all Proprietary Information, refrain from using
any such Proprietary Information except in connection with this Agreement, the
Related Agreements and transactions contemplated hereby and thereby, and, if
this Agreement is terminated prior to Closing, deliver promptly to the
Disclosing Party or destroy, at the request and option of the Disclosing Party,
all tangible embodiments and all copies, summaries or abstracts of any
Proprietary Information received from such Disclosing Party which are in his or
its possession. All Proprietary Information relating to the Acquired Assets as
may be delivered to the Buyer prior to the Initial Closing shall become Buyer's
Proprietary Information and the Buyer shall be deemed to be the Disclosing Party
with respect thereto upon consummation of the Initial Closing, and the Sellers
shall not thereafter disclose any such Proprietary Information except to the
extent allowed herein; provided, however, that, subject to Section 7(b), any
such information which was not treated as confidential or proprietary by any of
the Sellers prior to Closing shall not become confidential or Proprietary
Information of the Buyer after the Initial Closing. In the event that the
Receiving Party or any Representative thereof is requested or required
(including, without limitation, (i) pursuant to any rule or regulation of any
stock exchange or other self-regulatory organization upon which any of the
Receiving Party's securities are listed, or (ii) under compulsion of law
(whether by oral question, interrogatory, subpoena, civil investigative demand
or otherwise) or by order of any court or governmental or regulatory body to
whose supervisory authority the Receiving Party is subject, including, without
limitation, Buyer Regulatory Approval and Seller Regulatory Approval processes,
interrogatory, subpoena, civil investigative demand, or similar process or
pursuant to any freedom of information or open meeting Law applicable to any
Seller) to disclose any Proprietary Information, the Receiving Party will notify
the Disclosing Party promptly of the request or requirement so that the
Disclosing Party may seek an appropriate protective order or waive compliance
with the provisions of this Section 7. If, in the absence of a protective order
or the receipt of a waiver hereunder, the Receiving Party is, on the advice of
counsel, compelled to disclose any Proprietary Information to any tribunal or
else stand liable for contempt or to disclose any Proprietary Information to any
Person in compliance with any freedom of information or open meeting Law, the
Receiving Party may disclose the Proprietary Information to the tribunal or such
Person; provided, however, that the Receiving Party shall use its Commercially
Reasonable Efforts to obtain, at the request of the Disclosing Party and at the
Disclosing Party's cost, a voluntary agreement or other assurance that
confidential treatment will be accorded to such portion of the Proprietary
Information required to be disclosed as the Disclosing Party shall designate.
Notwithstanding the foregoing, if a Receiving Party shall be compelled by order,
subpoena, interrogatory or other administrative or judicial directive to provide
Proprietary Information, it may furnish such information in accordance with said
directive provided that it shall (i) promptly notify the Disclosing Party in
writing of such directive and shall provide the Disclosing Party with an
opportunity to seek a protective order or other similar measure prior to the
time it furnishes such information, and (ii) exercise its Commercially
Reasonable Efforts to obtain assurances that confidential treatment will be
accorded such information.
(b) On or after the Initial Closing Date, the Buyer will notify
the Sellers of any non-public information related to the Acquired Assets that
was not confidential prior to the Initial Closing Date that the Buyer wishes to
treat as Proprietary Information after the Initial Closing and the Sellers will
treat such information as Proprietary Information after receiving such notice.
(c) The obligations of the Parties contained in this Section shall
remain in full force and effect for three (3) years from the date hereof and
will survive the termination of this Agreement, the discharge of all other
obligations owed by the Parties to each other and any transfer of title to the
Acquired Assets.
(d) Upon the Disclosing Party's prior written approval, which will
not be unreasonably withheld, the Receiving Party may provide Proprietary
Information to the NDFC, NHPUC, DPUC, the FERC, the NRC, the SEC, the IRS, the
United States Department of Justice, the United States Federal Trade Commission
or any other Governmental Authority with jurisdiction, as necessary, to obtain
any consents, waivers or approvals as may be required for the Parties to
undertake the transactions contemplated hereby. The Receiving Party will seek
confidential treatment for such Proprietary Information provided to any such
Governmental Authority and the Receiving Party will notify the Disclosing Party
as far in advance as is practicable of its intention to release to any such
Governmental Authority any such Proprietary Information, so as to permit such
Disclosing Party a reasonable opportunity to obtain a protective order.
(e) Notwithstanding anything set forth herein, nothing in this
Agreement shall be interpreted as precluding any Party from reporting or
disclosing any information (i) to the NRC concerning any perceived safety issue
within the NRC's regulatory jurisdiction, (ii) with the prior written consent of
the Disclosing Party, or (iii) to its Affiliates, attorneys, financial advisors
and accountants who are assisting such Party in connection with the transactions
contemplated by this Agreement, provided that such Affiliates, attorneys,
financial advisors and accountants acknowledge the provisions of this Section 7
and agree to be bound hereby.
8. Taxes
(a) All transfer and sales Taxes incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne equally by the
Buyer and the Sellers, including, without limitation, New Hampshire state sales
tax and New Hampshire and local real estate, transfer, personal property and
conveyance taxes, and the Buyer, at its own expense, will file, to the extent
required by applicable Laws, all necessary Tax Returns and other documentation
with respect to all such Taxes, and, if required by applicable Laws, the Sellers
will join in the execution of any such Tax Returns or other documentation.
Prior to the Initial Closing Date or any Subsequent Closing Date, as the case
may be, the Buyer will provide to the Required Sellers or the Remaining Sellers,
as the case may be, to the extent possible, an appropriate certificate of no tax
due from each applicable taxing authority.
(b) With respect to Taxes to be prorated in accordance with
Section 2.9, the Buyer shall prepare and timely file all Tax Returns required to
be filed on and after the Closing Dates with respect to the Acquired Assets and
shall duly and timely pay all such Taxes shown to be due on such Tax Returns.
The Buyer's preparation of any such Tax Returns shall be subject to the Sellers'
approval to the extent that such Tax Returns relate to any period, allocation or
other amount for which the Sellers are responsible, which approval shall not be
unreasonably withheld. No later than twenty-five (25) Business Days prior to
the due date of any such Tax Return, the Buyer shall make such Tax Return
available for the Sellers' review and approval. The Sellers shall respond no
later than ten (10) Business Days prior to the due date for filing such Tax
Return. The failure of any Seller to timely respond shall constitute approval
by such Seller of such Tax Return. With respect to such Tax Return, the Sellers
shall pay to the Buyer their appropriate share of the amount shown as due on the
Tax Returns determined in accordance with Section 2.9 of this Agreement.
(c) Each of the Parties shall provide the other with such
assistance as may reasonably be requested 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 Tax Return, audit or examination, proceedings or
determination. Any information obtained pursuant to this Section 8 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 deemed to be and
shall be Proprietary Information.
9. Survival; Effect of Closing and Indemnification.
9.1 Survival of Representations and Warranties; Survival of Covenants
and Agreements. The representations and warranties of each Seller set forth in
Sections 3.1, 3.2, 3.3, 3.6 and 3.21 shall expire at the Closing in which such
Seller participates. The representations and warranties of each Seller set forth
in Sections 3.4, 3.5, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16,
3.17, 3.18, 3.19, 3.20, 3.22, 3.23, 3.24 and 3.25 shall survive for a period of
12 months following the Closing in which such Seller participates. The
representations and warranties of NAESCO set forth in Section 3 shall survive
for a period of 12 months following the Initial Closing, except for the
representations and warranties set forth in Section 3.21, which shall expire at
the Initial Closing. The representations and warranties of the Buyer set forth
in Sections 4.1, 4.2, 4.3, 4.5, 4.7, 4.8 and 4.12 shall expire, with respect to
a given Seller, upon the Closing in which such Seller participates. The
representations and warranties of the Buyer set forth in Sections 4.4, 4.6, 4.9
and 4.11 shall survive, with respect to a given Seller, for a period of 12
months following the Closing in which such Seller participates. All
representations and warranties of the Parties and NAESCO contained in this
Agreement shall terminate upon a termination of this Agreement pursuant to
Section 10. The covenants of the Parties contained in this Agreement, other
than those which by their terms survive the Initial Closing and/or termination
of this Agreement (including, without limitation, the covenants set forth in
Sections 5.7, 5.8, 5.9, 5.10, 5.12, 5.13, 5.14, 5.15, 5.17, 5.18, 5.19, 5.21,
5.22, 5.23, 7, 8, 9, 11 and 12 and related definitions), shall terminate with
respect to a Seller, at the Closing in which such Seller participates, and with
respect to the Buyer, at the last Subsequent Closing, or the termination of this
Agreement pursuant to Section 10.
9.2 Effect of Closing. Except as otherwise provided elsewhere in this
Agreement, or as otherwise agreed by the Parties, upon the Initial Closing or
any Subsequent Closing, as the case may be, any condition in favor of either the
Buyer, the Required Sellers or the Remaining Sellers, as the case may be (each a
"Closing Party" and collectively the "Closing Parties") that has not been
satisfied, or any representation, warranty or covenant that has been breached or
left unsatisfied by any Closing Party, or, to the extent applicable, by NAESCO
will be deemed waived by the Closing Parties as of such Closing Date (but only
with respect to those Closing Parties and such Closing Date and not to any other
Closing Parties or any Subsequent Closing, except conditions that are deemed
waived by the Closing Parties as of the Initial Closing Date in which case such
waiver shall be effective at each Subsequent Closing), and each Closing Party
will be deemed to fully release and forever discharge the other Closing Parties
on account of any and all claims, Liabilities, obligations, judgments, Liens,
injunctions, charges, orders, decrees, rulings, damages, dues, assessments,
Taxes, losses, fines, penalties, damages, expenses, fees, costs, amounts paid in
settlement (including reasonable attorneys' and expert witness fees and
disbursements in connection with investigating, defending or settling any action
or threatened action), arising out of any claim, complaint, demand, cause of
action, action, suit or other proceeding asserted or initiated or otherwise
existing in respect of any matter, known or unknown (collectively, the
"Losses"), with respect to the same. Except as provided in Sections 9.3 and
9.4, nothing in this Section 9.2 shall affect or cause to be waived those
matters specifically stated to survive or to occur after such Closing Date
pursuant to this Agreement.
9.3 Indemnity by Sellers. Subject to the last paragraph of this Section
9.3, each Seller, on and after such Seller's respective Closing Date, hereby
severally agrees to indemnify, defend and hold harmless the Buyer, its
Affiliates and any of their officers, directors and employees, agents and
representatives ("Buyer Indemnified Parties") against and in respect of their
respective Losses; provided that such Losses result or arise from:
(a) except as provided below in clauses (f) and (g), the untruth,
inaccuracy or incompleteness of any representation or warranty of such Seller
and/or of NAESCO contained in this Agreement or the Schedules hereto or in any
document, writing, certificate or data delivered by such Seller under this
Agreement; provided, and only to the extent, that Buyer's Loss therefrom exceeds
$1,000,000;
(b) Liabilities of such Seller (whether known or unknown) other
than Assumed Liabilities, including, but not limited to, Excluded Liabilities;
(c) any Third Party Claim against the Buyer Indemnified Parties
based on or relating to such Seller's ownership, operation or use of the
Acquired Assets prior to the Initial Closing Date or any Subsequent Closing
Date, as the case may be, that is not an Assumed Liability;
(d) the Excluded Assets;
(e) any breach by such Seller of any covenant, agreement or
obligation of the Sellers contained in this Agreement or any certificate
required to be delivered by such Seller pursuant to this Agreement;
(f) any intentional misrepresentation or fraudulent breach of any
representation or warranty of such Seller or NAESCO contained in this Agreement
or the Schedules hereto; provided that the indemnity obligations resulting or
arising from this clause (f) shall not be subject to the following limitations:
(i) the $1,000,000 threshold in clause (a), (ii) the cap on Liability set forth
in Section 9.5 or (iii) the survival period set forth in Section 9.1; or
(g) the untruth, inaccuracy or incompleteness of any
representation or warranty contained in Sections 3.7(a) and (b) and 3.13(e);
provided that the indemnity obligations in this clause (g) shall not be subject
to the following limitations: (i) the $1,000,000 threshold in clause (a) to the
extent such threshold would otherwise applied to the representations in Sections
3.7(a), 3.7(b) or 3.13(e), (ii) the cap on Liability set forth in Section 9.5 or
(iii) the survival period set forth in Section 9.1.
The indemnification obligations of the Sellers arising out of this Section
9.3 shall be several and not joint or joint and several and shall be limited to
each Seller's Proportionate Ownership of any Loss, and no Seller shall have any
obligation under this Section 9.3 until such Seller has transferred its
Ownership Share to the Buyer; provided, however, that subject to the proviso set
forth in Sections 9.3(a) and to Section 9.5, each Seller alone shall be liable
to the Buyer Indemnified Party for the full amount of any Loss arising from any
matter involving such Seller only and no Seller shall under any circumstances be
liable to the Buyer for any matter involving one or more, but less than all,
Sellers other than such Seller.
9.4 Indemnity by Buyer. The Buyer hereby agrees to indemnify, defend
and hold harmless each of the Sellers and their respective Affiliates and any of
their respective officers, directors and employees, agents and representatives
("Seller Indemnified Parties") against and in respect of all Losses; provided
that such Losses result or arise from:
(a) the untruth, inaccuracy or incompleteness of any
representation or warranty of the Buyer contained in this Agreement or the
Schedules hereto or in any document, writing, certificate or data delivered by
the Buyer under this Agreement; provided, and only to the extent, that Sellers'
Loss therefrom exceeds $1,000,000;
(b) any Third Party Claim against the Seller Indemnified Parties
based on or relating to the Buyer's ownership, operation or use of the Acquired
Assets on and after the Initial Closing Date and any Subsequent Closing Date, as
the case may be, that is not an Excluded Liability;
(c) any Third Party Claim arising out of, or related to the
contracts, warranties or guaranties, or any other agreements that have been
properly transferred or assigned to the Buyer by any Seller, except to the
extent the Third Party Claim arises from a breach of the contract or agreement
by such Seller prior to the Initial Closing Date or the Subsequent Closing Date
on which such Seller transferred its Ownership Share, as the case may be;
(d) the Assumed Liabilities, including without limitation Third
Party Claims arising out of the Assumed Liabilities;
(e) any breach by the Buyer of any covenant, agreement or
obligation of the Buyer contained in this Agreement or any certificate required
to be delivered by the Buyer pursuant to this Agreement; or
(f) any intentional misrepresentation or fraudulent breach of
representation or warranty inducing the Seller to proceed to a Closing Date and
causing any Seller Indemnified Party to suffer Losses.
9.5 Exclusive and Limited Remedies. From and after the Initial Closing
Date, the remedies set forth in this Section 9 and in Section 11.19 shall
constitute the sole and exclusive remedy for any and all claims, damages,
complaints, demands, causes of action, investigations, hearings, actions, suits
or other proceedings relating to this Agreement and are in lieu of any and all
other rights and remedies which the Sellers or the Buyer may have under this
Agreement or otherwise for monetary relief with respect to any breach or failure
to perform or with respect to the Assumed Liabilities or Excluded Liabilities.
Each Party waives any provision of Law to the extent that it would limit or
restrict the agreements contained in this Section 9. Nothing herein shall
prevent the Buyer or the Sellers from terminating this Agreement in accordance
with Section 10. The maximum aggregate exposure for indemnity by the Buyer for
any and all claims of breach of express warranties or representations hereunder
and indemnification of claims relating thereto shall be $20,000,000; provided,
however, that in the event such breach of representation or warranty arises
under Section 9.4(f), such limitation shall not apply. The maximum aggregate
exposure for indemnity by all Sellers together for any and all claims of breach
of express warranties or representations hereunder and indemnification of claims
relating thereto shall be $20,000,000; provided, however, that in the event such
breach of representation or warranty arises under Sections 9.3(f) or 9.3(g),
such limitation shall not apply. This maximum exposure amount shall apply to
claims against Buyer or the Sellers, as the case may be, in the aggregate, with
each Seller being responsible only for that portion of such total that is equal
to its Proportionate Ownership. No Seller shall in any event be liable
hereunder for an amount in excess of the net proceeds of the sale of the
Acquired Assets received by such Seller. No Party shall be entitled to recover
lost profits, consequential, indirect, punitive or exemplary damages in regard
to any claim against the other Party.
9.6 Notice; Defense of Claims
(a) The Party which is entitled to indemnification hereunder (for
purposes of this Section 9.6, the "Indemnified Party") may make claims for
indemnification hereunder by giving written notice thereof to the Party required
to indemnify (for purposes of this Section 9.6, the "Indemnifying Party") prior
to the time of expiration set forth in Section 9.1 forclaims based on the
untruth, inaccuracy or incompleteness of any representation or warranty
specified therein or within six (6) months after the relevant Closing Date for
any other claims (other than claims relating to the Assumed Liabilities, the
Excluded Liabilities, the Excluded Assets, Third Party Claims referred to in
Sections 9.3(c), 9.4(b), 9.4(c) or 9.4(d), or claims under Sections 9.3(f),
9.3(g) or 9.4(f), which claims may be asserted until the applicable statute of
limitations for such claims expires) or such claim will be forever barred. If
indemnification is sought for a claim or liability asserted by a Third Party,
the Indemnified Party shall also give written notice thereof to the Indemnifying
Party promptly after it receives notice of the claim or liability being
asserted, but the failure to do so, or any delay in doing so, shall not relieve
the Indemnifying Party from any liability, unless, and then only to the extent
that, the rights and remedies of the Indemnifying Party are prejudiced as a
result of the failure to give, or delay in giving, such notice; provided,
however, that in any event such notice must be given within the relevant period
specified or referred to in the preceding sentence. Such notice shall summarize
the bases for the claim for indemnification and any claim or liability being
asserted by a Third Party. Within thirty (30) days after receiving such notice,
the Indemnifying Party shall give written notice to the Indemnified Party
stating whether it disputes the claim for indemnification and whether it will
defend against any Third Party Claim or liability at its own cost and expense.
If the Indemnifying Party fails to give notice to the Indemnified Party that it
disputes an indemnification claim within thirty (30) days after receipt of
notice thereof it shall be deemed to have accepted and agreed to the claim,
which shall become immediately due and payable.
(b) The Indemnifying Party shall be entitled to direct the defense
against a Third Party claim or litigation with counsel selected by it (subject
to the consent of the Indemnified Party, which consent shall not be unreasonably
withheld), as long as the Indemnifying Party is conducting a good faith and
diligent defense. Notwithstanding the foregoing, the obligations of the
Indemnifying Party hereunder as to such Third Party claim or litigation shall
include taking all steps reasonably necessary in the defense, settlement, or
compromise of such claim or litigation and holding the Indemnified Party
harmless from and against any and all Losses caused by or arising out of any
settlement or compromise approved by the Indemnifying Party or any judgment in
connection with such claim or litigation. The Indemnifying Party shall not, in
the defense of such Third Party claim or any litigation resulting therefrom,
consent to entry of any judgment (other than a judgment of dismissal on the
merits without costs) except with the written consent of the Indemnified Party
(which consent shall not be unreasonably withheld), or enter into any settlement
or compromise (except with the written consent of the Indemnified Party, which
consent shall not be unreasonably withheld) which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party a full release from all liability in respect of such claim or
litigation and which does not contain any other term or provision materially
adverse to the Indemnified Party. The Indemnified Party shall at all times have
the right to fully participate in the defense of a Third Party claim or
liability at its own expense directly or through counsel; provided, however,
that if the named parties to the action or proceeding include both the
Indemnifying Party and the Indemnified Party and the Indemnified Party is
advised by counsel that representation of both parties by the same counsel would
be inappropriate under applicable standards of professional conduct, the
Indemnified Party may engage one separate counsel at the expense of the
Indemnifying Party.
(c) If the Indemnifying Party does not give notice of its intent
to dispute and defend a Third Party claim or liability or litigation resulting
therefrom within thirty (30) days after receipt of notice from the Indemnified
Party, or if such good faith and diligent defense is not being or ceases to be
conducted by the Indemnifying Party, the Indemnified Party shall have the right,
at the expense of the Indemnifying Party, to undertake the defense of such claim
or liability in such manner as it deems appropriate (with counsel selected by
the Indemnified Party and reasonably acceptable to the Indemnifying Party), and
to compromise or settle such claim or litigation on such terms as it may deem
appropriate, exercising reasonable business judgment.
(d) The Indemnifying Party shall promptly reimburse the
Indemnified Party for all Losses incurred by the Indemnified Party in connection
with the defense against such claim or litigation, whether or not resulting
from, arising out of, or incurred with respect to, the act of a Third Party.
(e) The Indemnified Party shall make available such information
and assistance in connection with the defense by the Indemnifying Party, as the
Indemnifying Party may reasonably request and shall cooperate with the
Indemnifying Party in such defense at the expense of the Indemnifying Party.
(f) The expiration or termination of any representation or
warranty shall not affect the Parties' obligations under this Section 9 if the
Indemnified Party provided the Indemnifying Party with proper notice of the
claim or event for which indemnification is sought prior to such expiration,
termination or extinguishment.
9.7 Net of Taxes and Insurance. Any calculation of a Loss under this
Section 9 shall, in each case, give full effect to (a) any and all income Tax
benefits and costs to the Indemnified Party in respect of the Loss to the extent
realized by the Indemnified Party, but such amounts shall be increased to give
effect to income Taxes attributable to the receipt of any indemnification
payments hereunder, to the extent applicable, and (b) any and all insurance or
other proceeds received by the Indemnified Party in respect of the Loss. Any
Party seeking indemnity hereunder shall use Commercially Reasonable Efforts to
seek coverage for both costs of defense and indemnity under applicable insurance
policies.
9.8 Release. Except as provided in Section 9.3, the Buyer hereby
releases, holds harmless and forever discharges the Sellers from any and all
claims, damages, complaints, demands, causes of action, investigations,
hearings, actions, suits or other proceedings of any kind or character whether
known or unknown, hidden or concealed resulting from or arising from any
Environmental Liability, except for the Environmental Liabilities retained by
the Sellers pursuant to Section 2.4. The Buyer hereby waives any and all rights
and benefits that it now has, or in the future may have conferred upon it with
respect to any Environmental Claim it may have as contemplated by the preceding
sentence by virtue of any statute or common law principle which provides that a
general release does not extend to claims which a Party does not know or suspect
to exist in its favor at the time of such release, which if known, would have
materially affected such Party's settlement with the other Party. In this
connection, the Buyer hereby acknowledges that factual matters now unknown to it
may have given or may hereafter give rise to claims, damages, complaints,
demands, causes of action, investigations, hearings, actions, suits or other
proceedings that are presently unknown, unanticipated and unsuspected, and it
further agrees that this Section 9.8 has been negotiated and agreed upon in
light of that awareness and it nevertheless hereby intends to release the
Sellers as set forth in the first sentence of this Section 9.8.
9.9 No Recourse. To the extent the transfer, conveyance, assignment and
delivery of the Acquired Assets to the Buyer as provided in this Agreement is
accomplished by deeds, assignments, easements, leases, licenses, bills of sale,
or other instruments of transfer and conveyance, whether executed on the Initial
Closing Date or any Subsequent Closing Date, as the case may be, or thereafter,
such instruments are made without representation or warranty by, or recourse
against, the Sellers, except as expressly provided in this Agreement or in any
such instrument.
10. Termination
10.1 Termination of Agreement. The Buyer and the Sellers may terminate
this Agreement as provided below:
(a) The Buyer and the Sellers holding Ownership Shares
representing at least fifty-one percent (51%) of the aggregate ownership
interests of all the Participants in the Facility, for themselves and on behalf
of the other Sellers, may terminate this Agreement by mutual written consent at
any time prior to the Initial Closing Date.
(b) The Buyer and any Remaining Seller may terminate this
Agreement only with respect to such Remaining Seller by mutual written consent
at any time during the period following the Initial Closing and prior to a
Subsequent Closing with respect to such Remaining Seller.
(c) The Buyer may terminate this Agreement by giving written
notice to the Seller Representatives at any time prior to the Initial Closing
Date or any Subsequent Closing Date, as the case may be, if any of the following
has occurred:
(i)(A) prior to the Initial Closing, any Seller or NAESCO
has breached any representation or warranty in Section 3 (other than
Section 3.10) or any Seller has breached any covenant in Section 5 in any
material respect or (B) after the Initial Closing and prior to the
relevant Subsequent Closing any Remaining Seller has breached any
representation or warranty in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6,
3.7(b), 3.7(c), 3.8, 3.9, 3.12 or 3.13(e), and the Buyer has notified such
Seller of the breach, and the breach has continued without cure for a
period of sixty (60) days after the notice of breach; provided, however,
that the Buyer shall not have the right to terminate this Agreement
pursuant to this clause (i) if such breach can be cured within an
additional reasonable time period, in which case such Seller shall have,
within such sixty (60) day period, commenced and diligently continued in
good faith actions to cure such breach within a reasonable time period,
which period shall in no event (A) in the case of the Required Sellers,
exceed twelve (12) months from the Effective Date, or (B) in the case of
the Remaining Sellers, exceed fifteen (15) months from the Effective Date;
and provided further that any such termination on account of a breach by a
Remaining Seller shall be effective as against such Remaining Seller only;
(ii)(A) in the case of the Initial Closing, the Initial
Closing shall not have occurred on or before a date which is eight (8)
months from the Effective Date, which date shall be extended to a date
which is twelve (12) months from the Effective Date, only if the Initial
Closing shall not have occurred due to failure of any condition precedent
under Section 6.1, unless such condition precedent cannot reasonably be
expected to be satisfied within such additional period, or (B) in the case
of any Subsequent Closing, such Subsequent Closing shall not have occurred
on or before a date which is nine (9) months from the Effective Date,
which date shall be extended to a date which is no more than fifteen (15)
months from the Effective Date, only if such Subsequent Closing shall not
have occurred due to failure of any condition precedent under Section 6.1,
unless such condition precedent cannot reasonably be expected to be
satisfied within such additional period; provided, however, that the Buyer
shall not have the right to terminate this Agreement pursuant to this
clause (ii) if such failure results primarily from the breach by the Buyer
of any representation, warranty or covenant contained in this Agreement;
(iii) any Buyer Regulatory Approvals shall have been
Finally denied, or appear reasonably likely to be denied, or shall have
been granted, or appear reasonably likely to be granted, subject to terms
or conditions that would be likely to have a Plant Material Adverse
Effect, and all appeals of such action shall have been taken and have been
unsuccessful;
(iv) one or more courts of competent jurisdiction shall have
issued an order, judgment or decree permanently restraining, enjoining or
otherwise prohibiting the consummation of any of the transactions
contemplated hereby, which order, judgment or decree shall have become
Final;
(v) any statute, rule or regulation shall have been enacted
or promulgated by any Governmental Authority having jurisdiction which,
directly or indirectly, prohibits the consummation of any of the
transactions contemplated hereby; or
(vi)(A) any Seller has within the then-previous fifteen
(15) days given the Buyer any notice pursuant to Section 5.5(a); (B) the
Buyer has notified the Seller Representatives of its intent to terminate
pursuant to this Section 10.1(c)(vi); and (C) the matter that is the
subject of such notice continues to exist for a period of 30 days after
such notice by the Buyer without such Seller having commenced and
diligently continued in good faith actions to cure such matter within a
reasonable time; provided, however, that any such termination with respect
to a Remaining Seller shall be effective as against such Remaining Seller
only.
(d) Sellers holding at least 80% of the Ownership Shares for
themselves and on behalf of the other Sellers, may terminate this Agreement by
giving written notice to the Buyer at any time prior to the Initial Closing if
any of the following has occurred:
(i) the Buyer has breached any representation, warranty, or
covenant contained in this Agreement (except for a breach of Section 5.19
as specifically provided in clause (ii) of this Section 10.1(d)) in any
material respect, and any Seller has notified the Buyer of the breach, and
the breach has continued without cure for a period of sixty (60) days
after the notice of breach; provided, however, that the Sellers shall not
have the right to terminate this Agreement pursuant to this clause (i) if
the Buyer shall have, within such sixty (60)-day period, commenced and
diligently continued in good faith actions to cure such breach within a
reasonable time which period shall in no event exceed twelve (12) months
from the Effective Date;
(ii) the Buyer has breached Section 5.19 and the breach has
continued without cure for a period of five (5) days, except that any
Seller shall have the right to immediately terminate this Agreement
pursuant to this clause (ii) if the credit rating of the long-term
unsecured debt obligations of the Acceptable Guarantor has been downgraded
two or more levels since the Effective Date;
(iii) the Initial Closing shall not have occurred on or
before a date which is eight (8) months from the Effective Date, which
date shall be extended to a date which is twelve (12) months from the
Effective Date if such Closing shall not have occurred due to failure of
any condition precedent under Section 6.2, unless such condition precedent
cannot reasonably be expected to be satisfied within such additional
period; provided, however, that the Sellers shall not have the right to
terminate this Agreement pursuant to this clause (ii) if such failure
results primarily from the breach by any Seller of any representation,
warranty or covenant contained in this Agreement;
(iv) any Seller Regulatory Approvals shall have been Finally
denied, or appear reasonably likely to be denied, or shall have been
granted, or appear reasonably likely to be granted, subject to terms or
conditions that in the reasonable determination of Sellers holding at
least 80 percent of the Ownership Shares would be likely to have a
Material Adverse Effect on the Sellers;
(v) one or more courts of competent jurisdiction shall have
issued an order, judgment or decree permanently restraining, enjoining or
otherwise prohibiting the consummation of any of the transactions
contemplated hereby, which order, judgment or decree shall have become
Final;
(vi) any statute, rule or regulation shall have been enacted
or promulgated by any Governmental Authority having jurisdiction which,
directly or indirectly, prohibits the consummation of any of the
transactions contemplated hereby; or
(vii)(A) the Buyer has within the then-previous fifteen
(15) days given the Seller Representatives any notice pursuant to Section
5.5(b); (B) the Seller Representatives, for themselves and on behalf of
the other Sellers, have notified the Buyer of their intent to terminate
pursuant to this Section 10.1(d)(vii); and (C) the matter that is the
subject of such notice continues to exist for a period of thirty (30) days
after such notice by the Seller Representatives without the Buyer having
commenced and diligently continued in good faith actions to cure such
matter within a reasonable time.
(e) after the Initial Closing, any Remaining Seller may terminate
this Agreement only as to such Remaining Seller by giving written notice to the
Buyer at any time following the Initial Closing and prior to any Subsequent
Closing if any of the following has occurred:
(i) the Buyer has breached any representation, warranty, or
covenant contained in this Agreement in any material respect, and any
Remaining Seller has notified the Buyer of the breach, and the breach has
continued without cure for a period of sixty (60) days after the notice of
breach; provided, however, that the Remaining Sellers shall not have the
right to terminate this Agreement pursuant to this clause (i) if the Buyer
shall have, within such sixty (60)-day period, commenced and diligently
continued in good faith actions to cure such breach within a reasonable
time which period shall in no event exceed twelve (12) months from the
Effective Date;
(ii) such Subsequent Closing shall not have occurred on or
before a date which is nine (9) months from the Effective Date, which date
shall be extended to a date which is fifteen (15) months from the
Effective Date if such Subsequent Closing shall not have occurred due to
failure of any condition precedent under Section 6.2, unless such
condition precedent cannot reasonably be expected to be satisfied within
such additional period; provided, however, that the Remaining Sellers
shall not have the right to terminate this Agreement pursuant to this
clause (ii) if such failure results primarily from the breach by any
Remaining Seller of any representation, warranty or covenant contained in
this Agreement;
(iii) any Seller Regulatory Approvals shall have been
Finally denied, or appear reasonably likely to be denied, or shall have
been granted, or appear reasonably likely to be granted, subject to terms
or conditions that in the reasonable determination of the Remaining
Sellers would be likely to have a Material Adverse Effect on the Remaining
Sellers;
(iv) one or more courts of competent jurisdiction shall have
issued an order, judgment or decree permanently restraining, enjoining or
otherwise prohibiting the consummation of any of the transactions
contemplated hereby, which order, judgment or decree shall have become
Final;
(v) any statute, rule or regulation shall have been enacted
or promulgated by any Governmental Authority which, directly or
indirectly, prohibits the consummation of any of the transactions
contemplated hereby; or
(vi)(A) the Buyer has within the then-previous fifteen
(15) days given the Remaining Sellers any notice pursuant to Section
5.5(b); (B) such Remaining Seller has notified the Buyer of its intent to
terminate pursuant to this Section 10.1(e)(vi), and (C) the matter that is
the subject of such notice continues to exist for a period of thirty (30)
days after such notice by such Remaining Seller without the Buyer having
commenced and diligently continued in good faith actions to cure such
matter within a reasonable time.
(f) Any Seller may terminate this Agreement only as to such Seller
by giving written notice to the Buyer and the Seller Representatives if the
Initial Closing shall not have occurred on or before a date which is eight (8)
months from the Effective Date, which date shall be extended to a date which is
twelve (12) months from the Effective Date if the Initial Closing shall not have
occurred due to failure of any condition precedent under Section 6.2, unless
such condition precedent cannot reasonably be expected to be satisfied within
such additional period; provided, however, that no Seller shall have the right
to terminate this Agreement pursuant to this Section 10.1(f) if such failure
results primarily from the breach by such Seller of any representation, warranty
or covenant contained in this Agreement; and provided further that if Sellers
owning Ownership Shares representing more than fifty-one percent (51 percent) of
the aggregate ownership interests of all of the Participants in the Facility
terminate this Agreement pursuant to this Section 10.1(f), the Buyer may
terminate this Agreement as to all other Sellers and the Buyer by delivering
written notice of such termination to the Seller Representatives within 30 days
after the termination by a Seller pursuant to this Section 10.1(f) that causes
the Ownership Shares to be held by all Sellers who have terminated pursuant to
this Section 10.1(f) to exceed 51 percent.
(g) It is expressly understood and agreed that in the event the
Initial Closing has not occurred by the dates set forth in Sections 10.1(c)(ii)
and 10.1(d)(iii), without regard to any extensions relating to Buyer Regulatory
Approvals or Seller Regulatory Approvals as set forth therein, the Parties
reserve the right to renegotiate any provisions of this Agreement which may be
materially affected by such passage of time.
This Agreement will terminate as to any Seller specified on Schedule
3.5(iv) upon the consummation of a transfer by such Seller of its Ownership
Share to one of the Participants (other than a Seller) pursuant to Section 23.1
of the Joint Ownership Agreement.
10.2 Effect of Termination. If either Party terminates this Agreement
pursuant to Section 10.1, all rights and obligations of the Sellers whose
Closing has not occurred and the Buyer (with respect to such Sellers) shall
terminate without any Liability of any Party to any other Party (except for any
Liability of any Party then in breach and except as provided in Section 9.1 and
Section 7). In view of the expenses incurred and opportunities foregone by the
Buyer in connection with the negotiation and execution of this Agreement, if
this Agreement is terminated as permitted under Section 10.1(c)(i) due to the
existence of circumstances that cause the closing condition in Section
6.1(e)(ii) to not be satisfied as specified therein, each Seller shall
immediately pay to the Buyer a termination fee equal to such Seller's
Proportionate Ownership of $20,000,000 in cash. No obligations of any Seller
under this Agreement shall be terminated until such payment is received by the
Buyer. The termination fee specified in this Section 10.2 represents liquidated
damages for the consequences of the specified circumstances and is not a
penalty. The Parties acknowledge that the actual damages that would be suffered
by the Buyer as a result of such a breach would be extremely difficult to
calculate with precision.
11. Miscellaneous
11.1 Press Releases and Public Announcements. No Party shall issue or
make, or allow to be issued or made, any press release or make any public
announcement relating to the subject matter of this Agreement without the prior
approval of the other Parties; provided, however, that any Party may make any
public disclosure it believes in good faith is required by applicable Law, or
any listing or trading agreement concerning its publicly traded securities (in
which case the disclosing Party, to the extent possible, shall provide the other
Parties with the opportunity to review in advance the disclosure).
11.2 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Third Party.
11.3 Appointment of Seller Representatives as Agent for Sellers. The
Sellers hereby appoint the Seller Representatives to act as the agent of the
Sellers for purposes of performing those certain actions and complying with
those covenants and agreements expressly specified herein and in the Related
Agreements to be performed by the Seller Representatives (collectively, "Seller
Representative Actions"). It is expressly agreed and acknowledged that the
Seller Representatives act as agent of the Sellers for such purposes, and that
in performing the Seller Representative Actions the Seller Representatives shall
not, and shall have no authority to, take any action that would (i) create or
increase any commitment, obligation or liability of any Seller, (ii) decrease or
adversely affect the rights of, or benefits to be received by, any Seller
hereunder (including amounts to be received hereunder), (iii) constitute an
amendment or waiver of any provision of this Agreement or any Related Agreement,
or (iv) not be permitted under the Managing Agent Operating Agreement or Joint
Ownership Agreement. Any and all actions taken by the Seller Representatives,
or any agreement or covenant entered into by the Seller Representatives in
accordance with this Agreement shall be binding upon all the Sellers, and the
Buyer may rely upon any such action, agreement or covenant of the Seller
Representatives as the act, agreement or covenant of the Sellers.
Each of the Sellers hereby severally agrees to indemnify, defend and hold
harmless the Seller Representatives (acting in such capacity), their Affiliates
and any of their officers, directors and employees, agents and representatives
against and in respect of all Losses resulting from the Seller Representative
Actions, and none of the Seller Representatives shall have any liability to any
of the other Sellers for any Losses, whether in contract, tort, negligence,
strict liability or otherwise, for the performance or non-performance in good
faith of any Seller Representatives Actions; provided that:
(a) the Seller Representatives shall be liable, and shall not be
indemnified by the Sellers, for any Losses caused by the willful misconduct or
gross negligence of the Seller Representatives;
(b) the Sellers shall cooperate in all matters covered by this
indemnity and shall provide such support and assistance in matters pertaining to
the Seller Representatives' performance of and compliance with those actions,
covenants and agreements specified herein and in the Related Agreements, as the
Seller Representatives shall reasonably request from time to time; and
(c) the indemnification obligations of the Sellers under this
Section 11.3 shall be several and not joint or joint and several and shall be
limited to each Seller's Proportionate Ownership of any Loss.
11.4 No Joint Venture. Nothing in this Agreement creates or is intended
to create an association, trust, partnership, joint venture or other entity or
similar legal relationship among the Parties, or impose a trust, partnership or
fiduciary duty, obligation, or liability on or with respect to the Parties.
Except as expressly provided herein, none of the Parties is or shall act as or
be the agent or representative of any of the other Parties.
11.5 Time of the Essence. Time is of the essence of this Agreement.
11.6 Entire Agreement. This Agreement, including the Related Agreements
and any other documents incorporated by reference herein, constitutes the entire
agreement among the Parties and supersedes any prior understandings, agreements,
or representations by or among the Parties, written or oral, to the extent they
related in any way to the subject matter hereof. All conflicts or
inconsistencies between the terms hereof and the terms of any of the Related
Agreements, if any, shall be resolved in favor of this Agreement.
11.7 Succession and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any
Party, including by operation of law, without the prior written consent of the
other Parties, such consent not to be unreasonably withheld or delayed, nor is
this Agreement intended to confer upon any other Person except the Parties any
rights, interests, benefits, obligations or remedies hereunder. Any assignment
in contravention of the foregoing sentence shall be null and void and without
legal effect on the rights and obligations of the Parties hereunder. No
provision of this Agreement shall create any third party beneficiary rights in
any employee or former employee of any Seller or NAESCO (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. Notwithstanding the
foregoing, but subject to all applicable Laws, (i) the 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 institutions
or other party for the purposes of leasing, financing or refinancing the
Acquired Assets, and (ii) the Buyer or its permitted assignee may assign,
transfer, pledge or otherwise dispose of (absolutely or as security) its rights
and interests hereunder to an Affiliate of the Buyer so long as such Affiliate
makes the representations and warranties set forth in Section 4 to the same
extent as the Buyer and provides Acceptable Guaranty to the Sellers; provided,
however, in each case that no such assignment shall relieve or discharge the
assigning Party from any of its obligations hereunder or shall be made if it
would reasonably be expected to prevent or materially impede, interfere with or
delay the transactions contemplated by this Agreement or materially increase the
cost of the transactions contemplated by this Agreement. Each Party agrees, at
the assigning Party'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 the nonassigning
Party's rights under this Agreement are not thereby materially altered, amended,
diminished or otherwise impaired. Notwithstanding the foregoing, in no event
shall the rights or obligations acquired hereunder by the Buyer or the Sellers
be conveyed to any Third Party, directly or indirectly, pursuant to the exercise
of a right of first refusal under the Joint Ownership Agreement.
11.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
11.9 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.10 Notices.
(a) All notices, requests, demands, consents, authorizations,
claims, and other communications hereunder must be in writing. Any notice,
request, demand, claim, or other communication (a "Communication") hereunder
shall be deemed duly given (i) one (1) Business Day following the date sent when
sent by overnight delivery and (ii) five (5) Business Days following the date
mailed when mailed by registered or certified mail return receipt requested and
postage prepaid at the following address:
If to Seller:
For NEP:
Terry L. Schwennesen
Vice President, Generation Investments
25 Research Drive
Westborough, MA 01582
Copy to:
Hemmie Chang
Ropes and Gray
One International Place
Boston, MA 02110
For NHEC:
Stephen E. Kaminski
V.P. Power Resources, Access and Pricing
New Hampshire Electric Cooperative, Inc.
579 Tenney Mountain Highway
Plymouth, NH 03264
Copy to:
Mark W. Dean, General Counsel
Devine, Millimet and Branch
49 North Main Street
Concord, NH 03301
For GBP/LBP:
Frank W. Getman Jr., President
BayCorp Holdings, Ltd.
51 Dow Highway, Suite 7
Eliot, ME 03903
Copy to:
Richard A. Samuels
McLane, Graf, Raulerson & Middleton, Professional Association
900 Elm Street, Box 326
Manchester, NH 03105-0326
For Canal:
Douglas S. Horan
Senior Vice President and General Counsel
NSTAR Electric and Gas Corporation
800 Boylston Street/P1700
Boston, MA 02199
Copy to:
Timothy Cronin, Esq.
NSTAR Electric and Gas Corporation
800 Boylston Street/P1700
Boston, MA 02199
For NAEC, CL&P and NAESCO:
Jack B. Keane
Vice President - Administration
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
Copy to:
William J. Quinlan
Deputy General Counsel
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
For The United Illuminating Company:
Nathaniel D. Woodson
Chairman and Chief Executive Officer
The United Illuminating Company
157 Church Street
New Haven, CT 06506
Copy to:
Cynthia Brodhead
Wiggin and Dana
One Century Tower
P.O. Box 1832
New Haven, CT 06508-1832
If to the Buyer:
Edward F. Tancer
FPL Energy Seabrook, LLC
c/o FPL Energy, LLC
700 Universe Boulevard
Juno Beach, FL 33408
Attention: Vice President and General Counsel
Any Party may send any Communication hereunder to the intended recipient at the
address set forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such Communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which Communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.
(b) The Seller Representatives shall (a) promptly furnish to the
other Sellers a copy of any Communication received by the Seller Representatives
from the Buyer or any Seller under this Agreement or any of the Related
Agreements, shall notify each of the other Sellers, and provide each of the
other Sellers with a summary, of any material oral communication from the Buyer
or any Seller under this Agreement or any of the Related Agreements, and shall
provide each Seller with such other information relating to this Agreement, the
Related Agreements or the transactions contemplated hereby reasonably requested
by any Seller; and (b) provide each of the other Sellers with reasonable
periodic updates regarding the progress toward the satisfaction of the covenants
and conditions set forth herein and in the Related Agreements and the
consummation of the transactions contemplated hereby and by the Related
Agreements.
11.11 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic Laws of the State of New Hampshire without giving
effect to any choice or conflict of law provision or rule (whether of New
Hampshire or any other jurisdiction) that would cause the application of the
Laws of any jurisdiction other than New Hampshire.
11.12 Change in Law. If and to the extent that any Laws or regulations
that govern any aspect of this Agreement shall change, so as to make any aspect
of this transaction unlawful, then the Parties agree to make such modifications
to this Agreement as may be reasonably necessary for this Agreement to
accommodate any such legal or regulatory changes, without materially changing
the overall benefits or consideration expected hereunder by either party.
11.13 Consent to Jurisdiction and Venue. Subject to and without limiting
the dispute resolution procedure set forth in Section 12, each of the Sellers
and the Buyer consent to the exclusive jurisdiction and venue of the federal
court in Boston, Massachusetts for adjudication of any suit, claim, action or
other proceeding at law or in equity relating to this Agreement, or to any
transaction contemplated hereby. Each of the Sellers and the Buyer accepts,
generally and unconditionally, the exclusive jurisdiction and venue of the
aforesaid court and waive any objection as to venue, and any defense of forum
non conveniens.
11.14 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
11.15 Severability. Any term or provision of this Agreement that is held
invalid or unenforceable in any situation shall not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation;
provided, however, that the remaining terms and provisions of this Agreement may
be enforced only to the extent that such enforcement in the absence of any
invalid terms and provisions would not result in (a) deprivation of a Party of a
material aspect of its original bargain upon execution of this Agreement or any
Related Agreement, (b) unjust enrichment of a Party, or (c) any other manifestly
unfair or inequitable result.
11.16 Expenses. Except as otherwise expressly provided herein, each of
the Sellers and the Buyer will each bear its own costs and expenses (including
legal and accounting fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
11.17 Construction. Ambiguities or uncertainties in the wording of this
Agreement will not be construed for or against any Party, but will be construed
in the manner that most accurately reflects the Parties' intent as of the
Effective Date they executed this Agreement. The Parties acknowledge that they
have been represented by counsel in connection with the review and execution of
this Agreement, and, accordingly, there shall be no presumption that this
Agreement or any provision hereof be construed against the Party that drafted
this Agreement or any portion hereof.
11.18 Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
11.19 Specific Performance. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter in addition to any other remedy to which it may be
entitled, at law or in equity.
11.20 Dispute Negotiation. Prior to instituting any litigation or other
dispute resolution as provided herein, the Parties will attempt in good faith to
resolve any dispute or claim by referring any such matter, within ten (10) days
of written notice of any such dispute or claim, to one of their respective
executive officers for resolution. The executive officers of the relevant
Parties shall attempt to resolve the dispute or claim within thirty (30) days.
11.21 Good Faith Covenant. The Parties agree that their actions and
dealings with each other shall be subject to an express covenant of good faith
and fair dealing.
11.22 Set-Off. Notwithstanding any provisions hereof to the contrary, in
the event a Party shall be delinquent in the payment of any sum due any other
Parties under any note, this Agreement or any Related Agreement, in addition to
and without waiving any other remedies hereunder, the Party to whom the
obligation is owed shall be entitled to set off any sums due from the delinquent
Party under this Agreement or any Related Agreement, or any other obligations of
the delinquent Party, in full or partial satisfaction of such sum due from the
delinquent Party.
11.23 Bulk Transfer Act. The Parties hereby waive compliance with the
bulk sales act or comparable statutory provisions of each applicable
jurisdiction.
11.24 No Recourse to NAESCO. The Buyer's sole recourse for any claim that
NAESCO has breached the representations and warranties made by NAESCO pursuant
to Section 3, has incorrectly certified to any matter or has breached any other
provision hereof shall be as against the Sellers, on a several basis, pursuant
to and in accordance with the indemnification provided to the Buyer by the
Sellers pursuant to Section 9.3 hereof, and no recourse shall be sought by the
Buyer as against NAESCO for such breach. Moreover, each of the Sellers hereby
acknowledge and agree that they shall seek no recourse against NAESCO for the
making of said representations and warranties pursuant to Section 3 hereof,
making any certifications or undertaking any other obligations under this
Agreement and hereby waive any right of subrogation which they may otherwise
have in connection therewith.
11.25 Buyer Obligations. Subject to Section 11.7, any obligations of the
Buyer under this Agreement or the Related Agreements may be satisfied or
performed by an Affiliate of the Buyer.
12. Dispute Resolution. Any dispute arising out of this Agreement or any of
the Related Agreements, or the consummation of the transactions contemplated
hereby or thereby involving a monetary claim of less than $3,000,000 or at the
election of the parties, except as otherwise provided herein or therein, shall
be submitted to binding dispute resolution in the following manner. Within ten
(10) days following receipt of a written request by one Party to the other, the
Parties will each select one representative with the particular knowledge and
expertise relevant to the technical, financial or other matter in dispute (the
"Dispute Representative") to serve on a dispute resolution panel (the "Panel").
Each Party will notify the other in writing of its Dispute Representative within
such ten (10) day period. Within ten (10) days following the selection of the
Dispute Representatives, the Dispute Representatives shall mutually agree upon
the selection of a third member of the Panel who shall also possess the
particular knowledge and expertise relevant to the subject matter of the
dispute. If the Dispute Representatives cannot agree on the selection of a
third member of the Panel within ten (10) days after their selection, they will
obtain a list of qualified individuals from mutually agreeable professional
association or society and each in turn shall have the option of removing one
name at a time from such list until an acceptable individual is selected as the
third member of the Panel or until only one name remains (in which case the
individual whose name remains shall be the third member of the Panel). Within
fifteen (15) days after the selection of the third member of the Panel, the
Parties will agree upon a process which is appropriate for the resolution of the
dispute, including the presentation of live testimony or documentary evidence,
as they deem appropriate, and shall further agree upon such other procedures,
such as the presentation of summation papers or closing argument, as they deem
appropriate. The Panel will render a binding decision no later than thirty (30)
days following the selection of the third member of such Panel, unless the
Parties agree upon an extension of such thirty (30)-day period. The decision of
the Panel shall be final and binding on all Parties. All dispute resolution
proceedings shall be held in Boston, Massachusetts. All documents, information
and other evidence produced for or in connection with such proceeding shall be
held in confidence by the Parties. Each Party shall bear the compensation and
expenses of its chosen Dispute Representative, and the expenses of the third
member of the Panel shall be borne equally by the Buyer, on the one hand, and
the Sellers, on the other hand. Each Party shall bear the compensation and
expenses of its legal counsel, witnesses and employees.
13. Definitions
"345 kV Substation" means those assets described on Schedule 2.1(y) and
shown on the drawing referenced therein.
"Acceptable Guarantor" means a Person with a rating of its long-term
unsecured debt obligations of not less than Investment Grade.
"Acceptable Guaranty" means a guaranty issued by an Acceptable Guarantor,
substantially in the form of Exhibit H attached hereto.
"Acquired Assets" has the meaning set forth in Section 2.1.
"Acquired Assets Employee Records" means all personnel records maintained
by or on behalf of the Sellers relating to the Acquired Assets Employees to the
extent such files contain (a) names, addresses, dates of birth, job titles and
descriptions; (b) starting dates of employment; (c) salary and benefits
information; (d) resumes and job applications; (e) Occupational Safety and
Health Administration reports (or the equivalent); (f) active medical
restriction forms; (g) fitness for duty and disciplinary action information; and
(h) any other documents relating to Acquired Assets Employees.
"Acquired Assets Employees" has the meaning set forth in Section 5.7(b).
"Act of Bankruptcy" means the filing of a petition in bankruptcy (or
other commencement of a bankruptcy or similar proceeding) by or against the
Buyer under the Bankruptcy Code or other applicable bankruptcy, insolvency or
similar Law, whether federal or state, as now or hereafter in effect.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended.
"Agreement" has the meaning set forth in the preamble to this Agreement,
together with Schedules and Exhibits hereto, as the same may be amended from
time to time.
"Agreement to Amend Transmission Support Agreement" means the Agreement
to Amend Transmission Support Agreement in substantially the form attached
hereto as Exhibit N.
"ANI" means American Nuclear Insurers, or any successor thereto.
"Announcement Date" means following the close of business on April 15,
2002.
"Application" means all necessary or appropriate actions to request NRC
approval in respect of a Transfer of License for a Facility, including a change
in the operator of such Facility.
"Asset Demarcation Agreement" means the Asset Demarcation Agreement
between the Buyer and the Sellers, in substantially the form attached hereto as
Exhibit C.
"Assignment and Assumption Agreement" means the Assignment and Assumption
Agreement between the Buyer and the relevant party thereto, in substantially the
form attached hereto as Exhibit D.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Atomic Energy Act" means the Atomic Energy Act of 1954, as amended, 42
U.S.C. Section 2011 et seq., or any successor statute.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor statute.
"Bill of Sale" means the Bill of Sale, in substantially the form of
Exhibit B attached hereto.
"Bond Counsel" has the meaning set forth in Section 5.8(d)(ii).
"Business Day" means any day other than a Saturday, Sunday or day on
which banks are legally closed for business in New York, New York.
"Business Plan" means "Seabrook Station Business Strategy, 2002-2005."
"Buyer" has the meaning set forth in the preamble above.
"Buyer Indemnified Parties" has the meaning set forth in Section 9.3.
"Buyer Regulatory Approvals" means those approvals identified on Schedule
6.1(c) attached hereto to be obtained by the Buyer as a condition to the Buyer's
obligations under this Agreement.
"Buyer's Decommissioning Fund" has the meaning set forth in Section
5.10(a)
"Buyer's Plan" has the meaning set forth in Section 5.7(c).
"Buyer's Nonqualified Decommissioning Fund" has the meaning set forth in
Section 5.10(a).
"Buyer's Qualified Decommissioning Fund" has the meaning set forth in
Section 5.10(a).
"Canal" has the meaning set forth in the preamble of this Agreement.
"Cash" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP.
"CL&P" has the meaning set forth in the preamble of this Agreement.
"Closing" has the meaning set forth in Section 2.10.
"Closing Date" has the meaning set forth in Section 2.10.
"Closing Party" and "Closing Parties" have the meanings as set forth in
Section 9.2
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended and the applicable regulations promulgated thereunder.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collective Bargaining Agreements" has the meaning set forth in Section
3.16.
"Commercially Reasonable Efforts" means efforts which are reasonably
within the contemplation of the Parties at the Effective Date and which do not
require the performing Party to expend any funds other than expenditures which
are customary and reasonable in nature and amount in transactions of the kind
and nature contemplated by this Agreement in order for the performing Party to
satisfy its obligations hereunder or otherwise assist in the consummation of the
transactions contemplated by this Agreement.
"Communication" has the meaning set forth in Section 11.10.
"Contested Proceeding" when used in connection with a Transfer of
License, means a proceeding commenced by the issuance of a "notice of hearing"
under 10 C.F.R. Section 2.104 or Section 2.105 Subsection (e)(2), as the case
may be, or 10 C.F.R. Section 2.1308 or Section 2.1309.
"Coordination Date" has the meaning set forth in Section 6.3(a).
"Decommissioning" means to remove of the Facility from service and
restore the Site, in accordance with applicable Laws, including (a) the
dismantlement, decontamination, and/or safe storage of the Facility, in whole or
in part, and any reduction or removal, whether before or after termination of
the applicable NRC License, of radioactivity at the Site, and (b) all
activities, necessary for the retirement, dismantlement, and decontamination of
the Facility to comply with all applicable Nuclear Laws and Environmental Laws,
including the applicable requirements of the Atomic Energy Act, the NRC's rules,
regulations, orders and pronouncements thereunder, the NRC Licenses, any related
decommissioning plan, all applicable requirements of New Hampshire Laws and
regulations (including but not limited to RSA 162-F:15) and other applicable
Laws. The parties understand and acknowledge that, as of the Effective Date,
entombment is not considered to be an acceptable form of Decommissioning in New
Hampshire.
"Decommissioning Funds" means the Qualified Decommissioning Funds and the
Nonqualified Decommissioning Funds.
"Decommissioning Trust Agreement" means the Trust Agreement dated October
11, 1988 among New Hampshire Yankee Division of Public Service Company of New
Hampshire, as agent, First NH Investment Services, Corp., as Trustee, and the
Treasurer of the State of New Hampshire as modified, supplemented and amended
through the Effective Date.
"Decommissioning Trust Closing Amount" means the amount determined
pursuant to Section 5.10(a).
"Decommissioning Trusts" means the irrevocable trusts created pursuant to
the Decommissioning Trust Agreement, consisting of assets held in Qualified
Decommissioning Funds and Nonqualified Decommissioning Funds.
"Deeds" means the Deed for the NAEC Real Property substantially in the
form of Exhibit A(i) attached hereto, and the Deed for the Jointly Owned Real
Property substantially in the form of Exhibit A(ii) attached hereto.
"Deferral Date" has the meaning set forth in Section 6.3(a).
"Disbursing Agent Agreement" means the Agreement for Seabrook Project
Disbursing Agent, dated as of May 23, 1984, by and among the Participants and
NAESCO, as amended and restated.
"Disclosing Party" has the meaning set forth in the definition of
"Proprietary Information."
"Dispute Representative" has the meaning set forth in Section 12.
"Disqualification Event" means any amendment to the Decommissioning Trust
Agreements which, assuming that the Qualified Decommissioning Funds were not
disqualified at the Closing Date, would disqualify such Qualified
Decommissioning Funds under (a) Section 468A of the Code and the Regulations
promulgated thereunder as in effect on the Closing Date; (b) any Final,
temporary or proposed regulations published by the Department of Treasury; or
(c) any other written guidance published by the IRS.
"Divestiture Site Manager" means that NAESCO employee who is the project
manager for the Seabrook divestiture.
"DOE" means the U.S. Department of Energy or any successor thereto.
"DOE Standard Contract" means the Contract for Disposal of Spent Nuclear
Fuel and/or High Level Radioactive Waste, No.DE-CR01-86RW00111, dated as of June
27, 1986, between the United States of America, represented by the United States
Department of Energy, and the Sellers or their Affiliates.
"Dollars" or "$" means lawful currency of the United States of America.
"DPUC" means the State of Connecticut Department of Public Utility
Control, or any successor commission, agency or officer.
"Easement Agreement" means the agreement with respect to certain
easements in the form of Exhibit M.
"Effective Date" means the date on which this Agreement has been duly
executed and validly delivered by the Parties.
"Electing Required Seller" has the meaning set forth in Section 6.3(a).
"Eligible Acquired Assets Employees" means an Acquired Assets Employee
whose age is between 50 and 54 as of the Announcement Date, and whose age plus
years of credited service as determined under the Plan as of such Announcement
Date equals or exceeds 65.
"Emergency Preparedness Agreements" has the meaning set forth in Section
2.1(n).
"Emergency Preparedness Assets" has the meaning set forth in Section
2.1(n).
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan, (d) Employee Welfare
Benefit Plan or material fringe benefit plan, program or arrangement or (e)
profit sharing, bonus, stock option, stock purchase, equity, stock appreciation,
deferred compensation, incentive, severance plan or other benefit plan.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Section 3 Subsection (2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Section 3 Subsection (1).
"Environment" means soil, land surface or subsurface strata, real
property, surface waters (including navigable waters, ocean waters, streams,
ponds, drainage basins and wetlands), groundwater, water body sediments,
drinking water supply, stream sediments, ambient air (including indoor air),
plant and animal life (including fish and all other aquatic life) and any other
environmental medium or natural resource.
"Environmental Claim" means a claim by any Person based upon a breach of
Environmental Law or an Environmental Liability alleging loss of life, injury to
persons, property or business, damage to natural resources or trespass to
property.
"Environmental Clean-Up Site" means any location which is listed or
formally 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, or which is the
subject of any action, suit, proceeding, or investigation which has been
disclosed in writing to any Seller for any alleged violation of any
Environmental Laws.
"Environmental Laws" means all applicable Laws and any binding
administrative or judicial interpretations thereof relating to: (a) the
regulation, protection and use of the Environment; (b) the conservation,
management, development, control and/or use of land (including zoning Laws and
ordinances), natural resources and wildlife; (c) the management, manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal, Release, abatement, removal, remediation, or handling of, or exposure
to, any Hazardous Substances; or (d) noise; and includes, without limitation,
the following federal statutes (and their implementing regulations): the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended; the Solid Waste Disposal Act, as amended, 42 U.S.C. section 6901 et
seq.; the Federal Water Pollution Control Act of 1972, as amended, 33 U.S.C.
section 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15
U.S.C. section 2601 et. seq.; the Clean Air Act of 1966, as amended, 42 U.S.C.
section 7401 et. seq.; the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended, 7 U.S.C. section 136 et. seq.; the Coastal Zone Management Act of
1972, as amended, 16 U.S.C. section 1451 et seq.; the Oil Pollution Act of 1990,
as amended, 33 U.S.C. section 2701 et seq.; the Rivers and Harbors Act of 1899,
as amended, 33 U.S.C. section 401 et seq.; the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. section 1801 et seq.; the Endangered
Species Act of 1973, as amended, 16 U.S.C. section 1531 et seq.; and the Safe
Drinking Water Act of 1974, as amended, 42 U.S.C. section 300(f) et seq.; and
all analogous or comparable state statutes and regulations; provided, however,
that in no event shall "Environmental Laws" include any Nuclear Law.
"Environmental Liabilities" means any Liability under or related to
former or current Environmental Laws or the common law, whether such liability
or obligation or responsibility is known or unknown, contingent or accrued,
arising as a result of or in connection with (a) any violation or alleged
violation of Environmental Laws, prior to, on or after the any Closing Date,
with respect to the ownership, operation or use of the Acquired Assets; (b) loss
of life, injury to persons, property or business or damage to natural resources
(whether or not such loss, injury or damage arose or was made manifest before
any Closing Date or arises or becomes manifest after any Closing Date), caused
(or allegedly caused) by the presence or Release of Hazardous Substances at, on,
in, under, above, adjacent to or migrating from the Acquired Assets prior to, on
or after any Closing Date, including, but not limited to, Hazardous Substances
contained in building materials at the Acquired Assets or in the atmosphere,
soil, surface water, sediments, groundwater, landfill cells, or in other
environmental media at or adjacent to the Acquired Assets; (c) the investigation
and/or Remediation (whether or not such investigation or Remediation commenced
before any Closing Date or commences after any Closing Date) of Hazardous
Substances that are present or have been Released prior to, on or after any
Closing Date at, on, in, under, above, adjacent to or migrating from the
Acquired Assets, including, but not limited to, Hazardous Substances contained
in building materials at the Acquired Assets or in the atmosphere, soil, surface
water, sediments, groundwater, landfill cells, or in other environmental media
at or adjacent to the Acquired Assets; (d) subject to the provisions of Section
5.14, compliance with applicable Environmental Laws prior to, on or after any
Closing Date with respect to the ownership or operation or use of the Acquired
Assets; (e) loss of life, injury to persons, property or business or damage to
natural resources caused (or allegedly caused) by the offsite disposal, storage,
transportation, discharge, Release or recycling, or the arrangement for such
activities, of Hazardous Substances, prior to, on or after any Closing Date, in
connection with the ownership or operation of the Acquired Assets; and (f) the
investigation and/or remediation of Hazardous Substances that are disposed,
stored, transported, discharged, Released, recycled, or the arrangement of such
activities, prior to, on or after any Closing Date, in connection with the
ownership or operation of the Acquired Assets; provided, however, that in no
event shall "Environmental Liabilities" include any Nuclear Liability.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Estimated Adjustment" has the meaning set forth in Section 2.6(d)(i).
"Estimated Closing Statement" has the meaning set forth in Section
2.6(d)(i).
"Estimated Facility Purchase Price Adjustment" has the meaning set forth
in Section 2.6(d)(i).
"Estimated Fuel Purchase Price Adjustment" has the meaning as set forth
in Section 2.6(d)(i).
"Estimated Unit 2 Purchase Price Adjustment" has the meaning set forth in
Section 2.6(d)(i).
"Event of Loss" has the meaning set forth in Section 5.11.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section 2.4.
"Exhibits" means the exhibits to this Agreement.
"Existing NDFC Order" has the meaning set forth in Section 5.10(a).
"Facility" means all of the real and personal property (including the
Acquired Assets) constituting the nuclear power plant known as Seabrook Station.
"Facility Lease" means the Facility Lease, dated as of August 1, 1990, as
supplemented between UI and the Owner Trustee, pursuant to which UI leases the
Undivided Interest.
"Facility Purchase Price" has the meaning set forth in Section 2.5(a).
"Facility Purchase Price Adjustment" has the meaning set forth in Section
2.6(d)(ii).
"FERC" means the Federal Energy Regulatory Commission, or its regulatory
successor, as applicable.
"Final" or "Finally," when applied to a decision, approval or act of any
Governmental Authority, means that the decision, approval or act has occurred,
purports to be the final resolution and has not been stayed by any Governmental
Authority, and all periods, up to ninety (90) days, for appeal, rehearing or
reconsideration within the Governmental Authority making such decision have
expired.
"Final Safety Analysis Report" or "FSAR" means the report, as updated,
that is required for the Facility in accordance with the requirements of 10
C.F.R. section 50.71(e).
"FIRPTA Affidavit" means the affidavit to be delivered by each Seller at
the Closing at which it is transferring its Ownership Share in substantially the
form of Exhibit G attached hereto.
"Fuel Purchase Price" has the meaning set forth in Section 2.5(a).
"Fuel Purchase Price Adjustment" has the meaning set forth in Section
2.6(d)(ii).
"Funding Assurance" has the meaning set forth in RSA 162-F.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"GBP" has the meaning set forth in the preamble of this Agreement.
"Good Utility Practices" means any of the practices, methods and acts
engaged in or approved by a significant portion of the nuclear electric utility
industry during the relevant time period, or any of the practices, methods or
acts which, in the exercise of reasonable judgment in light of the facts known
at the time the decision was made, could have been expected to accomplish the
desired result at a reasonable cost consistent with good business practices,
reliability, safety and expedition. Good Utility Practices are not intended to
be limited to the optimum practice, method or act to the exclusion of all
others, but rather to be acceptable practices, methods or acts generally
accepted in the United States.
"Governmental Authority" means any federal, state, local or other
governmental, regulatory or administrative agency, commission, department,
board, or other governmental subdivision, court, tribunal, arbitral body or
other governmental authority.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Hazardous Material" or "Hazardous Materials" means oil and hazardous
materials or wastes, air emissions, hazardous or toxic substances, wastewater
discharges and any chemical, material or substance or other emissions that may
give rise to Liability under, or is listed or regulated under, applicable
Environmental Laws as a "hazardous" or "toxic" substance or waste, or as a
"contaminant," or is otherwise listed or regulated under applicable
Environmental Laws because it poses a hazard to human health or the environment;
provided, however that in any case "Hazardous Materials" shall not include any
Nuclear Material, High Level Waste or Low Level Waste.
"Hazardous Substance" means any Hazardous Material.
"High Level Waste" means (a) Spent Nuclear Fuel, (b) the highly
radioactive material resulting from the reprocessing of Spent Nuclear Fuel,
including liquid wastes produced directly in reprocessing and any solid material
derived from such liquid waste that contains fission products in sufficient
concentrations or quantities that exceed NRC requirements for classifications as
Low Level Waste, and (c) other highly radioactive material that the NRC,
consistent with existing law, determines by rule requires permanent isolation.
"Improvements" means all buildings, structures (including all fuel
handling and storage facilities), machinery and equipment, fixtures,
construction in progress, including all piping, cables and similar equipment
forming part of the mechanical, electrical, plumbing or HVAC infrastructure of
any building, structure or equipment, located on and affixed to the Site, or
used in or for the operation of the Facility.
"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.
"Indemnified Party" has the meaning set forth in Section 9.6(a).
"Indemnifying Party" has the meaning set forth in Section 9.6(a).
"Indenture" means the Indenture of Mortgage and Deed of Trust, dated as
of August 1, 1990 among the Owner Trustee, and UI and The Bank of New York.
"Independent Accounting Firm" means an independent accounting firm of national
standing as is mutually appointed by the Buyer and the Sellers.
"Independent Appraiser" has the meaning set forth in Section 2.8.
"Initial Closing" has the meaning set forth in Section 6.3.
"Initial Closing Date" has the meaning set forth in Section 2.10.
"INPO" means Institute of Nuclear Power Operations.
"Intellectual Property" means all trade secrets, copyrights, copyright
applications, patents, patent applications, patent rights, trademarks, trademark
applications, trade names, service marks, service mark applications, computer
programs and other computer software, inventions, designs, samples,
specifications, schematics, know-how, proprietary processes, domain names,
websites, source and object code and other intellectual property rights.
"Intellectual Property Licenses" means those agreements related to
Licensed Intellectual Property.
"Interconnection Agreement" means the Interconnection Agreement between
the Buyer and PSNH relating to certain interconnection services to be performed
by PSNH, substantially in the form of Exhibit E attached hereto.
"Interim Period" means that period of time commencing on the Effective
Date and ending on the Initial Closing Date.
"Interim Services Agreement" means the Interim Services Agreement between
Buyer and NUSCO, substantially in the form of Exhibit J attached hereto.
"Inventory" or "Inventories" means all materials and supplies (designated
as "Materials and Supplies" in books and records of NAESCO) including fuel
inventories (excluding Nuclear Fuel or Spent Nuclear Fuel), materials, spare
parts, consumable supplies and chemical and gas inventories located at the Site,
in transit to the Site or identified in any Schedule to the extent owned or paid
for, for use at the Site prior to the applicable Closing.
"Inventory Deficit Amount" has the meaning set forth in Section 2.6(a).
"Inventory Excess Amount" has the meaning set forth in Section 2.6(a).
"Investment Grade" means one of the four highest generic rating
categories assigned by S and P, Moody's or any other nationally recognized
statistical rating organization.
"IRS" means the Internal Revenue Service or any successor agency.
"IRS Ruling Amount" has the meaning set forth in Section 3.8.
"ISO-NE" means ISO New England Inc., or its successor.
"Jointly Owned Real Property" has the meaning set forth in Section
2.1(a)(ii).
"Joint Ownership Agreement" means the Agreement for Joint Ownership,
Construction and Operation of the New Hampshire Nuclear Units, dated as of May
1, 1973, as supplemented and amended through the date hereof, among the
Participants.
"Knowledge" means the actual, current knowledge of a Party's board of
directors, board of trustees, any of its statutory or non-statutory officers or
managers charged with responsibility for the function, or any person who reports
directly to such board or trustees, at the relevant time or, with respect to any
certificate delivered pursuant to this Agreement, on the date of delivery of the
certificate.
"Law" or "Laws" means all laws, rules, regulations, codes, injunctions,
judgments, orders, decrees, rulings, interpretations, constitution, ordinance,
common law, or treaty, of any Governmental Authority.
"LBP" has the meaning set forth in the preamble of this Agreement.
"Leased Properties" means leasehold interests in certain real property
identified as lessee interests on Schedule 2.1(e).
"Leases" has the meaning set forth in Section 2.1(e).
"Liability" or "Liabilities" means any liability or obligation (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
whether incurred or consequential and whether due or to become due), including
any liability for Taxes. Without limiting the generality of the foregoing, in
the case of the NRC Licenses "Liabilities" shall include NRC Commitments.
"Licensed Intellectual Property" means the Intellectual Property set
forth on Schedule 2.1(x).
"Lien" means any mortgage, pledge, lien, security interest, charge,
claim, equitable interest, infringement of a third party patent, copyright,
trade secret or other intellectual property right, encumbrance, restriction on
transfer, conditional sale or other title retention device or arrangement
(including, without limitation, a capital lease), transfer for the purpose of
subjection to the payment of any indebtedness, or restriction on the creation of
any of the foregoing, whether relating to any property or right or the income or
profits therefrom; provided, however, that the term "Lien" shall not include any
Permitted Encumbrances.
"Local" means Local Union Number 55 of the Utility Workers of America.
"Losses" has the meaning set forth in Section 9.2.
"Low Level Waste" means radioactive material that (a) is not High Level
Waste, Spent Nuclear Fuel, or byproduct material (as defined in the Atomic
Energy Act) and (b) the NRC, consistent with existing law, classifies as low-
level radioactive waste.
"Major Loss" has the meaning set forth in Section 5.11(b).
"Managing Agent Operating Agreement" means the Seabrook Project Managing
Agent Operating Agreement, dated as of June 29, 1992, between NAESCO and the
Participants, as supplemented and amended.
"Material Contracts" has the meaning set forth in Section 2.1(g).
"Material Adverse Effect" means, when used in connection with any person,
any change, effect, event, occurrence or state of facts (i) that is, or would
likely be, materially adverse to the business, assets, properties, financial
condition, results of operations of such person and its subsidiaries taken as a
whole or (ii) that prevents, or can reasonably be expected to prevent, such
person from performing any of its material obligations under this Agreement or
consummation of the transactions contemplated hereby; provided, however, that
Material Adverse Effect shall not include any change (or changes taken together)
generally affecting the international, national, regional or local wholesale or
retail electric industry as a whole or nuclear generating facilities of their
operations or operators as a whole which does not affect the Acquired Assets or
the Parties in any manner or degree significantly different than the industry as
a whole, including but not limited to (a) changes in markets for electric power
or fuel used in connection with the Acquired Assets, (b) changes resulting from
or associated with acts of war or terrorism or changes imposed by a Governmental
Authority associated with additional security to address the events of September
11, 2001, or (c) changes (individually or taken together) in the North American,
national, regional or local electric transmission systems or operations thereof;
and provided, further, that any loss, claim, occurrence, change or effect that
is cured prior to the Initial Closing Date or a Subsequent Closing Date, as the
case may be, at the Sellers' expense shall not be considered a Material Adverse
Effect.
"MDTE" means the Massachusetts Department of Telecommunications and
Energy, and its successors.
"Memorandum of Understanding with the Town of Seabrook" means the
Memorandum of Understanding, dated April 10, 2001, between the Participants, the
Town of Seabrook, New Hampshire and the State of New Hampshire regarding the
mitigation of the off-site visual impact of the Unit 2 containment building.
"Minimum Employment Period" has the meaning set forth in Section 5.7(a).
"Moody's" means Moody's Investors Service, Inc. or any successor thereto.
"Mortgage Indenture" means the First Mortgage Indenture and Deed of Trust
dated May 1, 1921 between CL and P and the trustee named therein, as amended and
supplemented to the date hereof and any other similar instrument or agreement
entered into by any Seller.
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"NAEC" has the meaning set forth in the preamble to this Agreement.
"NAEC Real Property" has the meaning set forth in Section 2.1(a)(i).
"NAEC Real Property Purchase Price" has the meaning set forth in Section
2.5(a).
"NAESCO" means North Atlantic Energy Service Corporation, a New Hampshire
corporation.
"NDFC" means the New Hampshire Nuclear Decommissioning Financing
Committee or any successor committee, agency or officer.
"NEI" means Nuclear Energy Institute, or any successor thereto.
"NEIL" means Nuclear Electric Insurance Limited, or any successor
thereto.
"NEP" has the meaning set forth in the preamble to this Agreement.
"NEPOOL" means the New England Power Pool, established by the NEPOOL
Agreement, or its successor.
"NEPOOL Agreement" means the New England Power Pool Agreement, dated
September 1, 1971, as amended by the Restated New England Power Pool Agreement
filed with FERC on June 22, 1998, as Finally approved by FERC and as further
amended from time to time.
"NHEC" has the meaning set forth in the preamble of this Agreement.
"NHPUC" means the New Hampshire Public Utilities Commission or any
successor commission, agency or officer.
"Non-Assigned Contract" has the meaning set forth in Section 2.2(g).
"Nonqualified Decommissioning Funds" means the external trust funds that
do not meet the requirements of Code Section 468A or Treas. Reg. Section 1.46A-
5, maintained by the Sellers with respect to the Facility prior to a Closing
pursuant to such Seller's Decommissioning Trust Agreement.
"Non-Represented Plant Employees" has the meaning set forth in Section
5.7(b).
"NPCC" has the meaning set forth in Section 3.30.
"NRC" means the United States Nuclear Regulatory Commission, as
established by Section 201 of the Energy Reorganization Act of 1974, as amended,
42 U.S.C. Section 5841, or any successor commission, agency or officer.
"NRC Commitments" means all written commitments made by the Sellers, as
documented in their NRC commitment tracking system, to the NRC and as identified
on Schedule 3.11(iv).
"NRC Licenses" means Facility Operating License No. NPF-86 and Materials
License No. 28-28098-01 on the basis of which the Sellers are authorized to own,
possess and operate the Facility and Nuclear Materials prior to the Initial
Closing Date, and on the basis of which the Buyer is authorized to own, possess
and operate the Facility and Nuclear Materials after the Initial Closing Date.
"NRC Staff' means the regulatory staff of the NRC.
"Nuclear Fuel" means all nuclear fuel assemblies in the Facility reactor
on a Closing Date and any irradiated nuclear fuel assemblies that have been
temporarily removed from the Facility reactor as of a Closing Date and all
nuclear unirradiated fuel assemblies awaiting insertion into the Facility
reactor, as well as all nuclear fuel constituents in any stage of the fuel cycle
which are in the process of production, conversion, enrichment or fabrication
for use in the Facility or which have been or will be purchased for the
Facility.
"Nuclear Fuel Contracts" means contracts between the Sellers or their
Affiliates and a Third Party providing for the purchase and sale of Nuclear Fuel
for the Facility.
"Nuclear Insurance Policies" means all nuclear insurance policies
described in Schedule 2.1(r) carried by or for the benefit of the Sellers with
respect to the ownership, operation or maintenance of the Facility, including
all Nuclear Liability, property damage and business interruption policies in
respect thereof.
"Nuclear Laws" means all applicable 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 material and special nuclear materials (as defined in the Atomic
Energy Act); the regulation of Low Level Waste and High Level Waste; the
transportation and storage of Nuclear Materials; 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
any 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 licenses of commercial nuclear reactors, but shall not
include Environmental Laws. "Nuclear Laws" include the Atomic Energy Act of
1954, as amended (42 U.S.C. section 2011 et seq.); the Price-Anderson Act
(section 170 of the Atomic Energy Act of 1954, as amended); the Energy
Reorganization Act of 1974 (42 U.S.C. section 5801 et seq.); 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, (42 U.S.C. section 10101 et seq., as
amended); 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 RSA 162-F; and any applicable state or local Laws analogous
to the foregoing.
"Nuclear Liability" means any Liability arising out of or resulting from
the hazardous or radioactive properties of (i) Nuclear Material or any other
fissionable isotope and (ii) any fission product resulting from the fission
process.
"Nuclear Material" means any source, special nuclear or byproduct
material, as defined in the Atomic Energy Act of 1954, as amended.
"NUSCO" means Northeast Utilities Service Company, a wholly owned
subsidiary of Northeast Utilities and an Affiliate of NAEC, PSNH and CL&P.
"Offsite Hazardous Substance Facility" means a location, or transport
vehicle or vessel, which accepts or accepted Hazardous Substances.
"Other Assigned Contracts" has the meaning set forth in Section 2.1(p).
"Other Related Assets" has the meaning set forth in Section 21.(v).
"Owned Intellectual Property" means the Intellectual Property set forth
on Schedule 2.1(q).
"Ownership Share" means, with respect to each Seller and expressed as a
percentage, the undivided ownership interest and obligation, as tenant in
common, of such Seller in the Facility as set forth in Schedule 1(a) provided,
however, that, in the case of UI, Ownership Share shall include the Undivided
Interest.
"Owner Trustee" means First Union Trust Company, National Association,
not in its individual capacity but solely as successor Owner Trustee under the
Trust Agreement, dated as of August 1, 1990, as supplemented, with Financial
Leasing Corporation.
"Owner Trustee Deed and Bill of Sale" means the Deed and Bill of Sale, in
substantially the form of Exhibit K hereto.
"Panel" has the meaning set forth in Section 12.
"Participants" means those Persons that are parties to the Joint
Ownership Agreement.
"Party" or "Parties" has the meaning set forth in the preamble to this
Agreement.
"PC Bondholders" has the meaning set forth in Section 5.8(d).
"Permits" means all certificates, licenses, permits, approvals, consents,
orders, exemptions, decisions and other actions of a Governmental Authority to
the extent pertaining to a particular Acquired Asset, the Facility and the Site
or the ownership, operation or use thereof.
"Permitted Encumbrances" means and includes: (a) Liens for Taxes or other
charges or assessments by any Governmental Authority to the extent that the
payment thereof is not in arrears or otherwise due or is being contested in good
faith; (b) encumbrances in the nature of zoning restrictions, building and land
use Laws, ordinances, orders, decrees, restrictions or any other conditions
imposed by or pursuant to any agreement with any Governmental Authority provided
the same do not materially detract from operation or use of such property or in
the business conducted at the Facility; (c) easements (including without
limitation, the Seller Easements) granted or reserved by an instrument executed
in connection with this Agreement or the Related Agreements or the transactions
contemplated hereby or thereby, but excluding such encumbrances that secure
indebtedness; (d) deposits or pledges made in connection with, or to secure
payment of, workers' compensation, unemployment insurance, pension programs
mandated under applicable Laws or other social security regulations; (e)
statutory or common law liens in favor of carriers, warehousemen, mechanics and
materialmen, statutory or common law liens to secure claims for labor, materials
or supplies and other like liens, which secure obligations to the extent that
payment thereof is not in arrears or otherwise due; (f) any Lien or title
imperfection with respect to the Acquired Assets created by or resulting from
any act or omission of the Buyer and in any case of any representation or
warranty required from a Seller pursuant to Section 3.7 in connection with a
Subsequent Closing, any Lien which first arises after the Initial Closing
created or resulting from any act or omission of any owner of the Facility other
than said Seller, and (g) any exception set forth in the Title Commitments.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, a limited
liability company, an unincorporated organization, or a Governmental Authority.
"Plan" has the meaning set forth in Section 5.7(c)(i).
"Plant Employee" has the meaning set forth in Section 5.7(b).
"Plant Material Adverse Effect" means any event, circumstance, claim,
occurrence, change or effect related to the Acquired Assets which could
reasonably be expected to cause a loss and/or the expenditure by the Buyer
within one year following the Initial Closing Date in excess of $2,000,000
individually, or in excess of $10,000,000 in the aggregate; provided, however,
that Plant Material Adverse Effect shall not include any change (or changes
taken together) generally affecting the international, national, regional or
local wholesale or retail electric industry as a whole or nuclear generating
facilities or their operations or operators as a whole which does not affect the
Acquired Assets or the Parties in any manner or degree significantly different
than the industry as a whole, including but not limited to (a) changes in
markets for electric power or fuel used in connection with the Acquired Assets,
(b) changes resulting from or associated with acts of war or terrorism or
changes imposed by a Governmental Authority associated with additional security
to address the events of September 11, 2001, or (c) changes (individually or
taken together) in the North American, national, regional or local electric
transmission systems or operations thereof; and provided, further, that any
event, circumstance, claim, occurrence, change or effect that is cured prior to
the Initial Closing Date or any Subsequent Closing Date, as the case may be, at
the Sellers' expense shall not be considered a Plant Material Adverse Effect.
"Pollution Control Facilities" has the meaning set forth in Section
5.8(d).
"Pollution Control Bonds" has the meaning set forth in Section 2.4(m).
"Post-Closing Statement" has the meaning set forth in Section 2.6(d)(ii).
"Pre-Approved Capital Expenditures" means those capital expenditures set
forth on Schedule 5.3 as the same may be amended from time to time by mutual
agreement of the Sellers acting in accordance with the Managing Agent Operating
Agreement and the Buyer.
"Private Letter Ruling Requests" has the meaning set forth in Section
5.20.
"Property Tax Agreements" means agreements between the Buyer and each
taxing authority having jurisdiction and powers to impose real property Tax or
personal property Tax or other Taxes on the Acquired Assets.
"Proportionate Ownership" means a Seller's percentage ownership of that
portion of the Facility being transferred to the Buyer, as set forth in Schedule
3.1(i), which in the case of UI shall include the Undivided Interest. The sum
of the Proportionate Ownership of all Sellers in each of the Acquired Assets
(other than the NAEC Real Property) shall equal 100%.
"Proposed Improvements" has the meaning set forth in Section 5.3(b).
"Proprietary Information" means this Agreement, the Related Agreements,
all information concerning the Facility, this Agreement and the Related
Agreements and the discussions and negotiations leading up to the execution of
this Agreement, and all information about a Party or its properties or
operations furnished by such Party (the "Disclosing Party") or its
Representatives to the other Party (the "Receiving Party") or its
Representatives, which information either is not available in the public domain
or is marked or designated in writing by the Disclosing Party as "confidential,"
regardless of the manner or medium in which it is furnished. Proprietary
Information does not include information that (a) is or becomes generally
available to the public, other than as a result of a disclosure by the Receiving
Party or its Representatives in violation of this Agreement; (b) was available
to the Receiving Party on a nonconfidential basis prior to its disclosure by the
Disclosing Party or its Representatives; (c) becomes available to the Receiving
Party on a nonconfidential basis from a Person, other than the Disclosing Party
or its Representatives, each of whom, to the Receiving Party's Knowledge, is not
otherwise bound by a confidentiality agreement with 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
Receiving Party or its Representatives, or (d) the Disclosing Party discloses to
others on a non-confidential basis.
"PSNH" means Public Service Company of New Hampshire, a New Hampshire
corporation.
"Qualified Decommissioning Funds" means the external trust funds that
meet the requirements of Code Section 468A and Treas. Reg. section 1.468A-5,
maintained by the Sellers with respect to the Facility prior to a Closing
pursuant to such Seller's Decommissioning Trust Agreement.
"Qualified Deposits" has the meaning set forth in Section 5.10(c).
"Radioactive Material" means any material that is radioactive or
contaminated with radioactivity.
"Real Property" has the meaning set forth in Section 2.1(a)(ii).
"Receiving Party" has the meaning set forth in the definition of
Proprietary Information.
"Refueling Outage" means the refueling outage number ORO9 for the
Facility currently scheduled to commence in October, 2003, including the
refueling of the Facility and the performance of certain maintenance, inspection
and other work in connection therewith.
"Related Agreements" means the Deeds, Assignment and Assumption
Agreement, Bill of Sale, Owner Trustee Deed and Bill of Sale, Asset Demarcation
Agreement, Interconnection Agreement, Releases of Mortgage Indenture, Easement
Agreement, Interim Services Agreement and Agreement to Amend Transmission
Support Agreement.
"Release" means any actual, threatened or alleged spilling, leaking,
pumping, pouring, emitting, dispersing, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing of any Hazardous Substance into the
Environment that may cause an Environmental Liability (including the disposal or
abandonment of barrels, containers, tanks or other receptacles containing or
previously containing any Hazardous Substance).
"Release of Mortgage Indenture" means a release of mortgage indenture, in
the case of CL and P, substantially in the form of Exhibit F attached hereto.
"Relevant Facility Purchase Price" has the meaning set forth in Section
2.5(b).
"Relevant Fuel Purchase Price" has the meaning set forth in Section
2.5(b).
"Relevant Unit 2 Purchase Price" has the meaning set forth in Section
2.5(b).
"Remaining Sellers" has the meaning set forth in Section 6.3.
"Remediate" or "Remediation" means any or all of the following activities
to the extent required to address the presence or Release of Hazardous
Substances: (a) monitoring, investigation, assessment, treatment, cleanup
containment, removal, mitigation, response or restoration work as well as
obtaining any permits, consents, approvals or authorizations of any Governmental
Authority necessary to conduct any such activity; (b) preparing and implementing
any plans or studies for any such activity; (c) obtaining a written notice from
a Governmental Authority with competent jurisdiction under Environmental Laws,
that no material additional work is required; and (d) any other activities
reasonably determined by a party to be necessary or appropriate or required
under Environmental Laws.
"Represented Employees" has the meaning set forth in Section 5.7(a).
"Represented Plant Employees" has the meaning set forth in Section
5.7(a).
"Representative" means, as to any Person, such Person's Affiliates and
its and their directors, trustees, officers, employees, agents, consultants,
advisors (including, without limitation, financial advisors, counsel and
accountants).
"Requested Rulings" has the meaning set forth in Section 5.20.
"Required Assets" has the meaning set forth in Section 6.3.
"Required Expenditure" has the meaning set forth in Section 5.3(a).
"Required Nuclear Expenditure" means a capital expenditure that is (a)
required in order to satisfy an order from the NRC or other applicable legal
requirement, (b) required in order to preclude, forestall or satisfy any form of
NRC enforcement action (including, without limiting the generality of the
foregoing, a so-called "confirmatory action letter"), or (c) necessary in order
to cause the Facility to meet NRC regulations; provided however, that Required
Nuclear Expenditures shall not include expenses associated with a Refueling
Outage.
"Required Sellers" has the meaning set forth in Section 6.3.
"RIPUC" means the Rhode Island Public Utility Commission.
"RSA" means New Hampshire Revised Statutes Annotated.
"Rule of 85" has the meaning set forth in Section 5.7(c)(iii).
"Seabrook" has the meaning set forth in the preamble to this Agreement.
"Seabrook Unit 1 Secured Lease Obligation Bonds" means those bonds issued
by the Owner Trustee under and secured by the Indenture.
"Schedule" means a schedule to this Agreement.
"S and P" means Standard & Poor's Rating Group, a division of McGraw-Hill
Corporation, or any successor thereto.
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Seller Easement" means an easement for use of any Real Property granted
to PSNH pursuant to an Easement Agreement.
"Seller Environmental Liabilities" has the meaning set forth in Section
5.12.
"Seller Indemnified Parties" has the meaning specified in Section 9.4.
"Seller Regulatory Approvals" means those approvals identified on
Schedule 6.2(c) hereto to be obtained by each Seller as a condition to such
Seller's obligations under this Agreement.
"Seller Representatives" means NAEC and CL&P.
"Seller Representative Actions" has the meaning set forth in Section
11.3.
"Seller" or " Sellers" has the meaning set forth in the preamble to this
Agreement.
"Site" means the Real Property on which the Facility is located or which
forms part of, or is used or usable in connection with, the operation of the
Facility, and includes all NAEC Real Property described in Schedule 2.1(a)(i),
all Jointly Owned Real Property described in Schedule 2.1(a)(ii) and all Leased
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.
"Solvent" means, as to any Person, that such Person has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage and is able to pay its debts as they
mature and owns property having a value, both at fair valuation and at present
fair saleable value, greater than the amount required to pay its debts.
"Spent Nuclear Fuel" means uranium fuel and other radioactive materials
associated with nuclear fuel assemblies that has been permanently withdrawn from
a nuclear reactor following irradiation, and has not been chemically separated
into its constituent elements by reprocessing.
"Subsequent Closing" has the meaning set forth in Section 6.3.
"Subsequent Closing Date" has the meaning set forth in Section 2.10.
"Supplemental Indenture" means a supplemental indenture between each
Seller, the Buyer, the Trustee and the Treasurer of the State of New Hampshire
amending and supplementing the Decommissioning Trust Agreement in a manner
acceptable to the Buyer and the Sellers, pursuant to which (a) the Buyer shall
agree to assume the due and punctual performance of all Liabilities of each
Seller arising after the relevant Closing Date under the relevant trust
agreement, (b) the Buyer shall succeed to and be substituted for such Seller
thereunder, and (c) the relevant trust agreement shall be amended as necessary
to ensure that the Buyer has the right to appoint and remove the trustee and the
investment manager and the ability to direct the investment of funds in the
Decommissioning Trust in any investment permitted by applicable Law, rule or
regulation.
"Taking" has the meaning set forth in Section 5.11.
"Tax" or "Taxes" means any federal, state, local, or foreign income,
gross receipts, business enterprise, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Section 59A of the Code), customs duties, capital stock,
franchise, profits, withholding, social security (or similar, including FICA),
unemployment, disability, real property (including the Utility Property Tax),
recordation, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
"Tax Basis" means the adjusted tax basis determined for federal income
tax purposes under Section 1011(a) of the Code.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Termination Agreement" means the Termination Agreement, dated as of
November 1, 2001, among Financial Leasing Corporation, the Owner Trustee, The
Bank of New York, as Indenture Trustee, and UI.
"Third Party" means a Person who is not a Party, an Affiliate of a Party,
a Representative of a Party, a Representative of an Affiliate of a Party or a
shareholder of any Party, a Party's Affiliate or a Party's Representative.
"Third Party Claim" means any claim asserted by a Third Party.
"Title Commitments" has the meaning set forth in Section 3.7.
"Title Company" means, Fidelity National Title Insurance Company of New
York, or another title company as selected by the Buyer.
"Trademarks" means any trademarks, service marks, trade dress, and logos,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith.
"Transfer of License" means the transfer of any of the NRC Licenses from
the Sellers to the Buyer and includes any act for which the approval of the NRC
is required by Atomic Energy Act Section 184 and 10 C.F.R. Section 50.80 or
otherwise.
"Transferable Permits" has the meaning set forth in Section 2.1(f).
"Transition Executive Committee" has the meaning set forth in Section
5.3(b).
"Transmission Credit" has the meaning set forth in Schedule 2.6(a)(x).
"Transmission Support Agreement" means the Transmission Support
Agreement, dated as of May 1, 1973, as supplemented and amended, among the
Participants.
"Trustee" means the trustee of the Qualified Decommissioning Funds and
the Nonqualified Decommissioning Funds.
"UI" has the meaning set forth in the preamble of this Agreement.
"UI Bond Redemption Condition Precedent" has the meaning set forth in
Section 6.3(a).
"UI Bonds" have the meaning set forth in Section 6.2(m).
"Undivided Interest" means the Owner Trustee's 11.61577% undivided
ownership interest in Unit 1 (as defined in the Facility Lease).
"Unit 1" means Seabrook Unit 1.
"Unit 2" has the meaning set forth in Section 2.1(d).
"Unit 2 Purchase Price" has the meaning set forth in Section 2.5(a).
"Unit 2 Purchase Price Adjustment" has the meaning set forth in Section
2.6(d)(ii).
"Utility Property Tax" means the tax imposed by the State of New
Hampshire under RSA 83-F.
"Vehicles" has the meaning set forth in Section 2.1(o).
"VTPSB" means the Vermont Public Service Board.
"WARN Act" means the Workers Adjustment and Retraining Notification Act
of 1988, as amended.
[signature pages follow]
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
FPL ENERGY SEABROOK, LLC
By: ___________________________
Name: J.A. Stall
Title: Vice President
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
NORTH ATLANTIC ENERGY CORPORATION
By: _____________________________
Name:
Title:
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
THE UNITED ILLUMINATING COMPANY
By: ____________________________
Name:
Title:
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
GREAT BAY POWER CORPORATION
By: __________________________________
Name:
Title:
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
NEW ENGLAND POWER COMPANY
By: _________________________________
Name:
Title:
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
THE CONNECTICUT LIGHT AND POWER COMPANY
By: _________________________________
Name:
Title:
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
CANAL ELECTRIC COMPANY
By: _________________________________
Name:
Title:
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
LITTLE BAY POWER CORPORATION
By: _________________________________
Name:
Title:
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
NEW HAMPSHIRE ELECTRIC COOPERATIVE, INC.
By: _________________________________
Name:
Title:
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
NORTH ATLANTIC ENERGY SERVICE CORPORATION
By: _________________________________
Name:
Title:
</table>