ACQUISITION AGREEMENT
Between
GSF Energy, L.L.C.,
as Seller,
And
Olinda, L.L.C.,
as Buyer
Dated as of May 31, 1997
Acquisition of Common Stock
of Brea Power (I), Inc. and Limited Partnership Interests in
Brea Power Partners, L.P.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATIONS. . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . 1
1.2 Interpretations. . . . . . . . . . . . . . . . . . . 6
ARTICLE 2
SALE AND PURCHASE OF BREA STOCK AND LP INTEREST;
PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Sale of Brea Stock . . . . . . . . . . . . . . . . . 7
2.2 Sale of LP Interest. . . . . . . . . . . . . . . . . 7
2.3 Manner of Payment. . . . . . . . . . . . . . . . . . 7
ARTICLE 3
CLOSING DATE AND ACTIONS AT CLOSING. . . . . . . . . . . . . . 7
3.1 Closing Date . . . . . . . . . . . . . . . . . . . . 7
3.2 Actions at Closing . . . . . . . . . . . . . . . . . 7
3.2.1 Brea Stock Certificates . . . . . . . . . . . 7
3.2.2 Assignment of LP Interest . . . . . . . . . . 7
3.2.4 Payment of Brea Stock Purchase Price. . . . . 7
3.2.5 Payment of LP Interest Purchase Price . . . . 8
3.3 Additional Actions . . . . . . . . . . . . . . . . . 8
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
RELATING TO THE SELLER . . . . . . . . . . . . . . . . . . . . 8
4.1 Due Organization . . . . . . . . . . . . . . . . . . 8
4.2 Power and Authority. . . . . . . . . . . . . . . . . 8
4.3 Valid, Binding and Enforceable Obligations . . . . . 8
4.4 No Violations. . . . . . . . . . . . . . . . . . . . 8
4.5 Governmental Consents and Notices. . . . . . . . . . 9
4.6 Additional Consents and Notices. . . . . . . . . . . 9
4.7 Partner Interests. . . . . . . . . . . . . . . . . . 9
4.8 No Litigation. . . . . . . . . . . . . . . . . . . . 9
4.9 Bankruptcy . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 5
REPRESENTATIONS AND WARRANTIES RELATING TO
BREA, THE PARTNERSHIP AND THE FACILITY . . . . . . . . . . . . 10
5.1 Due Organization; Capitalization . . . . . . . . . . 10
5.2 Power and Authority. . . . . . . . . . . . . . . . . 10
5.3 Business of Brea and the Partnership . . . . . . . . 10
5.4 No Violations. . . . . . . . . . . . . . . . . . . . 11
5.5 No Litigation. . . . . . . . . . . . . . . . . . . . 11
5.6 Bankruptcy . . . . . . . . . . . . . . . . . . . . . 11
5.7 Qualifying Facility Matters. . . . . . . . . . . . . 11
5.8 Intentionally Omitted. . . . . . . . . . . . . . . . 12
5.9 Financial Statements; Books of Account . . . . . . . 12
5.10 Absence of Certain Changes. . . . . . . . . . . . . 12
5.11 No Undisclosed Liabilities. . . . . . . . . . . . . 12
5.12 Partnership Assets. . . . . . . . . . . . . . . . . 13
5.12.1 Real Property Rights; Title Insurance. . . . 13
5.12.2 Fixtures and Improvements. . . . . . . . . . 13
5.12.3 Equipment and Other Personal Property. . . . 13
5.12.4 Title to Partnership Assets. . . . . . . . . 13
5.13 Project Documents . . . . . . . . . . . . . . . . . 13
5.14 No Employees, Etc . . . . . . . . . . . . . . . . . 14
5.15 Permits . . . . . . . . . . . . . . . . . . . . . . 14
5.16 General Legal Compliance. . . . . . . . . . . . . . 15
5.17 Environmental Legal Compliance. . . . . . . . . . . 15
5.18 Insurance . . . . . . . . . . . . . . . . . . . . . 15
5.19 Utilities . . . . . . . . . . . . . . . . . . . . . 15
5.20 Facility Construction and Condition . . . . . . . . 15
5.21 Securities Laws . . . . . . . . . . . . . . . . . . 15
5.22 Brokers . . . . . . . . . . . . . . . . . . . . . . 16
5.23 Tax Returns . . . . . . . . . . . . . . . . . . . . 16
5.24 Bank Accounts . . . . . . . . . . . . . . . . . . . 16
5.25 Projections . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 6
BUYER'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 16
6.1 Due Organization . . . . . . . . . . . . . . . . . . 16
6.2 Power and Authority. . . . . . . . . . . . . . . . . 17
6.3 Valid, Binding and Enforceable Obligations . . . . . 17
6.4 No Violations. . . . . . . . . . . . . . . . . . . . 17
6.5 Bankruptcy . . . . . . . . . . . . . . . . . . . . . 17
6.6 No Litigation. . . . . . . . . . . . . . . . . . . . 18
6.7 Investment Intent. . . . . . . . . . . . . . . . . . 18
6.8 Accredited Investor. . . . . . . . . . . . . . . . . 18
6.9 Brokers' Fees. . . . . . . . . . . . . . . . . . . . 18
ARTICLE 7
CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS. . . . . . . . 19
7.1 No Termination . . . . . . . . . . . . . . . . . . . 19
7.2 Representations True and Correct; Certificate. . . . 19
7.3 Compliance with Covenants; Certificate . . . . . . . 19
7.4 No Adverse Proceedings . . . . . . . . . . . . . . . 19
7.5 Proceedings Satisfactory . . . . . . . . . . . . . . 19
7.6 No Adverse Changes . . . . . . . . . . . . . . . . . 19
7.7 Consents and Notices . . . . . . . . . . . . . . . . 19
7.8 Legal Opinion. . . . . . . . . . . . . . . . . . . . 20
7.9 Execution and Delivery of Closing Documents. . . . . 20
7.10 No Violations . . . . . . . . . . . . . . . . . . . 20
7.11 Closing Actions . . . . . . . . . . . . . . . . . . 20
7.12 Stock and Partnership Documents . . . . . . . . . . 20
ARTICLE 8
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS . . . . . . . . . 20
8.1 No Termination . . . . . . . . . . . . . . . . . . . 20
8.2 Representations True and Correct; Certificate. . . . 21
8.3 Compliance with Covenants; Certificate . . . . . . . 21
8.4 No Adverse Proceedings . . . . . . . . . . . . . . . 21
8.5 Proceedings Satisfactory . . . . . . . . . . . . . . 21
8.6 Consents and Notices . . . . . . . . . . . . . . . . 21
8.7 Legal Opinion. . . . . . . . . . . . . . . . . . . . 21
8.8 Execution and Delivery of Closing Documents. . . . . 21
8.9 No Violations. . . . . . . . . . . . . . . . . . . . 21
8.10 Closing Actions . . . . . . . . . . . . . . . . . . 22
ARTICLE 9
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 22
9.1 Indemnification by Seller. . . . . . . . . . . . . . 22
9.2 Indemnification by the Buyer.. . . . . . . . . . . . 22
ARTICLE 10
ADDITIONAL COVENANTS AND TERMINATION . . . . . . . . . . . . . 22
10.1 Seller's General Pre-Closing Covenants. . . . . . . 22
10.1.1 Full Access. . . . . . . . . . . . . . . . . 23
10.1.2 Furnishing Information . . . . . . . . . . . 23
10.1.3 Consultation with Accountants. . . . . . . . 23
10.1.4 Discussions with Facility Participants . . . 23
10.1.5 Representations and Warranties . . . . . . . 23
10.1.6 Conduct of Business. . . . . . . . . . . . . 23
10.1.7 Preservation of Assets, Relationships, Etc.. 23
10.1.8 New Obligations. . . . . . . . . . . . . . . 24
10.1.9 No Defaults or Events of Default . . . . . . 24
10.1.10 No Solicitations, Etc.. . . . . . . . . . . 24
10.1.11 Notification. . . . . . . . . . . . . . . . 24
10.1.12 Spare Parts . . . . . . . . . . . . . . . . 24
10.2 Filings and Consents. . . . . . . . . . . . . . . . 24
10.3 Provision of Information. . . . . . . . . . . . . . 24
10.4 Partnership Financial Matters Before\
and After the Closing Date . . . . . . . . . . . . 24
10.5 Intentionally left blank. . . . . . . . . . . . . . 25
10.6 Further Assurances. . . . . . . . . . . . . . . . . 25
10.7 Termination . . . . . . . . . . . . . . . . . . . . 25
10.7.1 By Mutual Agreement. . . . . . . . . . . . . 25
10.7.2 By the Buyer . . . . . . . . . . . . . . . . 25
10.7.3 By the Seller. . . . . . . . . . . . . . . . 25
10.7.4 By Any Party . . . . . . . . . . . . . . . . 25
10.8 Seller's/Operator's Employees . . . . . . . . . . . 25
ARTICLE 11
TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.1 Sales and Transfer Taxes. . . . . . . . . . . . . . 26
11.2 Income Tax Matters. . . . . . . . . . . . . . . . . 26
11.2.1 Certain Income Tax Effects of the Transactions 26
11.2.2 Closing of Books . . . . . . . . . . . . . . 27
11.2.3 Covenant of Consistent Reporting . . . . . . 27
11.2.4 Taxes and Tax Returns. . . . . . . . . . . . 27
11.2.4.1 Seller's Responsibility . . . . . . . 27
11.2.4.2 Buyer's Responsibility. . . . . . . . 27
11.2.5 Cooperation and Exchange of Information. . . 27
11.2.6 Tax Proceedings. . . . . . . . . . . . . . . 28
11.2.7 Survival . . . . . . . . . . . . . . . . . . 28
ARTICLE 12
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 28
12.1 Transaction Costs . . . . . . . . . . . . . . . . . 28
12.2 Entire Agreement. . . . . . . . . . . . . . . . . . 28
12.3 Amendments. . . . . . . . . . . . . . . . . . . . . 29
12.4 Assignments . . . . . . . . . . . . . . . . . . . . 29
12.5 Binding Effect. . . . . . . . . . . . . . . . . . . 29
12.6 Headings. . . . . . . . . . . . . . . . . . . . . . 29
12.7 Notices . . . . . . . . . . . . . . . . . . . . . . 29
12.8 Severability. . . . . . . . . . . . . . . . . . . . 30
12.9 Waivers . . . . . . . . . . . . . . . . . . . . . . 30
12.10 Enforcement Costs. . . . . . . . . . . . . . . . . 30
12.11 Remedies Cumulative. . . . . . . . . . . . . . . . 30
12.12 Counterparts . . . . . . . . . . . . . . . . . . . 30
12.13 Governing Law. . . . . . . . . . . . . . . . . . . 31
12.14 Preparation of Agreement . . . . . . . . . . . . . 31
12.15 Survival . . . . . . . . . . . . . . . . . . . . . 31
12.16 Inducement to Transaction. . . . . . . . . . . . . 31
12.17 Receipt of Monies, Etc.. . . . . . . . . . . . . . 31
ARTICLE 13
EXECUTION CLAUSE . . . . . . . . . . . . . . . . . . . . . . . 32
EXHIBITS:
Exhibit A - Form of Agreement of Waiver
Exhibit B - Form of Amendment to Transaction Documents
Exhibit C - Form of Assignment and Assumption Agreement
Exhibit D - Form of Assignment of LP Interest
SCHEDULES:
Schedule 4.5 - Governmental Consents and Notices
Schedule 4.6 - Additional Consents and Notices
Schedule 5.9 - Financial Statements
Schedule 5.12.1- Real Property, Easements, Title Insurance, Etc.
Schedule 5.12.2- Fixtures, Improvements, Etc.
Schedule 5.12.3- Equipment and Other Personal Property, Etc.
Schedule 5.13 - Project Documents
Schedule 5.14 - Employee Matters
Schedule 5.15 - Permits
Schedule 5.16 - Exceptions to General Legal Compliance
Schedule 5.17 - Exceptions to Environmental Legal Compliance
Schedule 5.18 - Insurance
Schedule 5.24 - Bank Accounts, Etc.
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (the "Agreement") is made and entered into
as of May 31, 1997, between GSF Energy, L.L.C., a Delaware limited
liability company and successor by merger to GSF Energy, Inc. (the
"Seller"), and Olinda, L.L.C., a Delaware limited liability company (the
"Buyer"), with reference to the following recitals:
RECITALS
A. Brea Power Partners, L.P. (the "Partnership") has been formed as a
limited partnership under the Delaware Revised Uniform Limited Partnership
Act (the "Act") pursuant to a Certificate of Limited Partnership of the
Partnership, as filed in the office of the Secretary of State of the State
of Delaware on October 12, 1994, and an Agreement of Limited Partnership
dated as of the 12th day of October, 1994 (the "Partnership Agreement").
B. Under the Partnership Agreement, Brea Power (I), Inc., a Delaware
corporation ("Brea"), is the sole general partner of the Partnership and
the Buyer and the Seller are each limited partners of the Partnership.
C. The Partnership owns and operates all of the assets comprising an
approximately 5 megawatt landfill gas fired electric generating facility
(the "Facility") located in the space above Olinda Canyon portion of the
municipal solid waste landfill owned by and located in Orange County,
California, which is generally referred to as the Olinda/Olinda Alpha
Sanitary Landfill. The Facility provides electrical energy and capacity to
Southern California Edison Company ("SCE") pursuant to the Power Purchase
Agreement (defined below).
D. At the closing described below, the Buyer will purchase from the
Seller the Brea Stock (as defined below) and the Seller will assign to the
Buyer the LP Interest (as defined below).
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants set forth below, the parties, intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
1.1 Defined Terms. Capitalized terms used in this Agreement without
other definition shall have the meanings specified in this Section 1.1,
unless the context requires otherwise.
"Additional Consents and Notices" has the meaning set forth in Section
4.6.
"Affiliate" of a specified Person means any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the Person specified. For
purposes of the foregoing, "control," "controlled by" and
"under common control with," with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities or by contract or otherwise.
"Aggregate Purchase Price" means an amount of Three Million Dollars
($3,000,000), consisting of the Brea Stock Purchase Price and the LP
Interest Purchase Price.
"Agreement" means this Acquisition Agreement, including all Exhibits
and Schedules.
"Agreement of Waiver" means the mutual waiver agreement in the form of
Exhibit A attached hereto.
"Amendment to Transaction Documents" means the amendment to certain
transaction documents relating to the Facility in the form of Exhibit B
attached hereto.
"Assignment and Assumption Agreement" means the assignment and
assumption agreement between Seller and Buyer in the form of Exhibit C
attached hereto.
"Assignment of LP Interest" means the Assignment of LP Interest
between the Seller and the Buyer in the form of Exhibit D attached hereto.
"Brea Stock" shall have the meaning given in Section 5.1.
"Brea Stock Purchase Price" means Three Hundred Thousand Dollars
($300,000).
"Buyer" has the meaning set forth in the Preamble.
"Closing" has the meaning given in Section 3.1.
"Closing Date" has the meaning given in Section 3.1.
"Closing Documents" means, collectively, this Agreement, the
Assignment of LP Interest, the Amendment to Transaction Documents, the
Assignment and Assumption Agreement, and the Agreement of Waiver.
"Code" means the Internal Revenue Code of 1986, as amended, and all
rules and regulations adopted thereunder.
"CPUC" means the California Public Utilities Commission and its
successors.
"Default" means, when used with reference to any agreement without
other reference, any event or circumstances that, with the giving of notice
or lapse of time, or both, would, unless cured or waived, become an Event
of Default under such agreement.
"Environmental Laws" means, collectively, all federal, state, local
and other applicable laws, statutes and regulations, which in any way
relates to health, safety or the environment, including the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. (
9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976, as amended by the Solid and
Hazardous Waste Amendments of 1984, 42 U.S.C. ( 6901 et seq.; the Federal
Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33
U.S.C. ( 1251 et seq.; the Toxic Substances Control Act of 1976, 15 U.S.C.
( 2601 et seq.; the Emergency Planning and Community Right-To-Know Act of
1986, 42 U.S.C. ( 11001 et seq.; the Clean Air Act of 1966, as amended, 42
U.S.C. ( 7401 et seq.; the National Environmental Policy Act of 1975, 42
U.S.C. ( 4231; the Rivers and Harbours Act of 1899, 33 U.S.C. ( 401 et
seq.; the Endangered Species Act of 1973, as amended, 16 U.S.C. ( 1531 et
seq.; the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C.
( 651 et seq.; the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. (
300(f) et seq.; the Hazardous Materials Transportation Act, 42 U.S.C. ((
1471, 1472, 1655, 1801 et seq.; the Federal Insecticide, Fungicide &
Rodenticide Act, 7 U.S.C. ( 136 et seq.; and the Atomic Energy Act, 42
U.S.C. ( 3011 et seq.
"Event of Default means, when used with reference to any agreement
without other reference, an event of default or other similar event as
defined, or pursuant to, the terms of such agreement.
"Facility" has the meaning set forth in the Recitals.
"FERC" means the Federal Energy Regulatory Commission and its
successors.
"Financial Statements" has the meaning set forth in Section 5.9.
"FPA" means the Federal Power Act, as amended, and all rules and
regulations adopted thereunder.
"GAAP" means generally accepted accounting principles in effect in the
United States from time to time.
"Gas Agreement" means that certain Partial Assignment and Assumption
Agreement dated November 29, 1994 between the Seller and the Partnership.
"Gas Lease" means that certain Amended and Restated Gas Lease
Agreement dated December 14, 1993 by and between the County of Orange,
California and Seller.
"Governmental Approval" means any applicable authorization, approval,
consent, license, lease, ruling, permit, tariff, certification, exemption,
filing or registration by or with any Governmental Person.
"Governmental Person" means any federal, state, local or other
government, any political subdivision or any governmental, judicial, public
or statutory instrumentality, tribunal, agency (including those pertaining
to health, safety or the environment), authority, body or entity, or other
regulatory bureau, authority, body or entity having legal jurisdiction over
the matter or Person in question.
"Governmental Rule" means any applicable federal, state, local or
other law, statute, treaty, rule, regulation, ordinance, order, code,
judgment, decree, directive, injunction, writ or similar action or decision
duly implementing any of the foregoing by any Governmental Person, but does
not include Governmental Approvals.
"Governmental Consents and Notices" has the meaning set forth in
Section 4.5.
"GP Interest" has the meaning set forth in Section 4.7.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and all of the rules and regulations thereunder.
"Knowledge," "known" and "knows," whether or not capitalized herein
and when used with respect to matters covered by representation, warranty,
covenant or other provision of this Agreement applicable to the Seller,
means the knowledge and beliefs of each of Jerrel D. Branson and John Hall,
but without any independent investigation.
"Lien" means any lien, mortgage, encumbrance, charge, pledge, lease,
security interest, claim, option or right of any kind (including any
conditional sale or other title retention agreement).
"LP Interest" shall have the meaning given in Section 4.7.
"LP Interest Purchase Price" means Two Million Seven Hundred Thousand
Dollars ($2,700,000).
"Operator" means Ecogas Corporation, a Delaware corporation.
"Partnership" has the meaning set forth in the Recitals.
"Partnership Agreement" has the meaning set forth in the Recitals.
"Partnership Assets" means all of the assets and rights of any kind or
character owned or leased or otherwise benefiting the Partnership,
including (i) the Site, and all easements, rights of way and other similar
rights in which the Partnership has any interest, (ii) the Facility and
related fixtures, improvements, equipment and other assets located on the
Site, (ii) the Power Purchase Agreement, Gas Agreement and all of the other
Project Documents, (iii) the Permits, (iv) all of the tangible and
intangible personal, real, mixed and
other property and assets of any kind owned or leased by the Partnership or
in which the Partnership has any right or interest and (v) all assets
included in the balance sheet contained in the Financial Statements (other
than assets which have been disposed of in the ordinary course since the
date of the Financial Statements), but excluding the Excluded Assets and
excluding any assets transferred to the Seller under any of the Closing
Documents.
"Permits" has the meaning set forth in Section 5.15.
"Person" means any individual, corporation, partnership, trust, joint
venture, unincorporated association, limited liability company,
Governmental Person or other entity.
"Power Purchase Agreement" means that certain Parallel Generation
Agreement dated December 28, 1982 between the Seller (as successor to Getty
Synthetic Fuels, Inc.) and SCE, as amended by Amendment No. 1 executed as
of September 30, 1985, and as assigned to the Partnership pursuant to an
Assignment and Assumption Agreement dated November 29, 1994 between the
Seller and the Partnership, as consented to by SCE pursuant to a Consent
Agreement dated as of November 29, 1994 by and among SCE, the Seller and
the Partnership.
"Project Documents" has the meaning set forth in Section 5.13.
"Projections" means the financial projections attached hereto as
Schedule 5.25.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended, and all rules and regulations adopted thereunder.
"PURPA" means the Public Utility Regulatory Policies Act of 1978, as
amended, and all rules and regulations adopted thereunder.
"Qualifying Facility" means a "qualifying facility" within the meaning
of PURPA.
"Ridgewood Trust" means Ridgewood Electric Power Trust I, a Delaware
business trust and limited partner of the Partnership.
"SCE" has the meaning set forth in the recitals of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and all
rules and regulations adopted thereunder.
"Seller" has the meaning set forth in the Preamble.
"Site" means the property on which the Facility is located.
"Tax Liabilities" means all income, excise, sales, unemployment,
employer and employee withholding, social security, occupation, franchise,
customs and other taxes, duties or charges levied, assessed or imposed upon
Brea or the Partnership, to the extent allocable to the Seller"s interest
in the Partnership, during any portion of the taxable year of Brea or the
Partnership ending on the Closing Date or that accrued or are attributable
to any portion of the taxable year of Brea or the Partnership ending on the
Closing Date.
"Tax Returns" has the meaning set forth in Section 5.23.
1.2 Interpretations. For purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise necessarily
requires:
1.2.1 the terms "herein," "herewith" and "hereof" are references
to this Agreement, taken as a whole;
1.2.2 the terms "include," "includes" and "including" shall mean
"including, without limitation";
1.2.3 references to a "Section," "Article," "Exhibit" or
"Schedule" shall mean a Section, Article, Exhibit or Schedule of this
Agreement, as the case may be;
1.2.4 references to a given agreement, instrument or other
document shall be a reference to that agreement, instrument or other
document as modified, amended, supplemented and restated through the date
as of which such reference is made;
1.2.5 references to a Person includes its permitted successors
and permitted assigns;
1.2.6 the singular shall include the plural and the masculine
shall include the feminine and neuter, and vice versa;
1.2.7 reference to a given Governmental Rule is a reference to
that Governmental Rule as amended, modified, supplemented or restated as of
the date on which the reference is made; and
1.2.8 accounting terms have the meaning given to them by GAAP
applied on a consistent basis by the Person to which they relate.
ARTICLE 2
SALE AND PURCHASE OF BREA STOCK AND LP INTEREST;
PURCHASE PRICE
2.1 Sale of Brea Stock. Upon the terms and subject to the conditions
of this Agreement, at the Closing, the Seller shall sell, and the Buyer
shall purchase, the Brea Stock for a price equal to the Brea Stock Purchase
Price.
2.2 Sale of LP Interest. Upon the terms and subject to the
conditions of this Agreement, at the Closing, the Seller shall sell and the
Buyer shall purchase, the LP Interest for a purchase price equal to the LP
Interest Purchase Price.
2.3 Manner of Payment. At the Closing, the Buyer shall pay the
purchase prices specified in Section 2.1 and Section 2.2 in the manner
specified in Article 3.
ARTICLE 3
CLOSING DATE AND ACTIONS AT CLOSING
3.1 Closing Date. Subject to the other provisions of this Agreement,
the closing of the transactions contemplated by this Agreement (the
"Closing") shall be held at the offices of Reid & Priest, LLC, 40 West 57th
Street, New York, NY 10019 at 12:00 p.m. Pacific Daylight Time, on
Saturday May 31, 1997, or on such other date and at such other place as may
be mutually agreed upon by the parties. The date of the Closing is
sometimes referred to herein as the "Closing Date."
3.2 Actions at Closing. In addition to and without limiting any
other provisions of this Agreement, the Seller and the Buyer shall take the
following actions or cause the following actions to be taken at the
Closing:
3.2.1 Brea Stock Certificates. The Seller shall deliver to the
Buyer certificates representing the Brea Stock, duly endorsed in blank or
accompanied by duly executed stock powers in blank in proper form for
transfer.
3.2.2 Assignment of LP Interest. The Seller and the Buyer shall
execute and deliver the Assignment of LP Interest.
3.2.3 Other Closing Documents. The Seller and the Buyer shall
execute and deliver the other Closing Documents.
3.2.4 Payment of Brea Stock Purchase Price. The Buyer shall pay
or cause to be paid to the Seller the Brea Stock Purchase Price by wire
transfer or other credit of immediately available funds to an account
designated by the Seller.
3.2.5 Payment of LP Interest Purchase Price. The Buyer shall
pay or cause to be paid to the Seller the LP Interest Purchase Price by
wire transfer or other credit of immediately available funds to an account
designated by the Seller.
3.3 Additional Actions. The Seller and the Buyer shall, on request,
on and after the Closing Date, take such further actions as may be
requested pursuant to Section 10.6.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
RELATING TO THE SELLER
The Seller hereby represents and warrants to the Buyer (regardless of
any examinations, inspections, audits or other investigations the Buyer has
heretofore made or may hereafter make with respect to such representations
and warranties) as of the Closing Date as follows:
4.1 Due Organization. The Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the
State of Delaware and is qualified to transact business in the State of
California.
4.2 Power and Authority. The Seller has full power and authority to
enter into and perform its obligations hereunder and under the Closing
Documents to which it is or will be a party and to consummate the
transactions herein and therein contemplated in accordance with the terms,
provisions and conditions hereof and thereof. All proceedings required to
be taken by the Seller to authorize it to execute, deliver and perform the
terms of this Agreement and the other Closing Documents to which it is or
will be a party have been duly and validly taken.
4.3 Valid, Binding and Enforceable Obligations. Each of this
Agreement and the other Closing Documents to which the Seller is or will be
a party has been, or will be on the Closing Date, as the case may be, duly
and validly executed by the Seller and constitutes, or will constitute when
executed, a valid, binding, and enforceable obligation, enforceable against
the Seller in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors" rights and the enforcement of debtors"
obligations generally and by general principles of equity, regardless of
whether enforcement is pursuant to a proceeding in equity or at law.
4.4 No Violations. The execution and delivery by the Seller of this
Agreement and the other Closing Documents to which it is or will be a
party, and the Seller's consummation of the transactions contemplated
hereby and thereby will not (a) violate the organizational documents of the
Seller, (b) violate or constitute a Default or Event of Default under, or
cause or permit the acceleration of the maturity of, or give rise to any
right of termination, cancellation, imposition of fees or penalties under,
any debt, obligation, contract, commitment
of fees or other agreement to which the Seller is a party or by which any
of the properties or assets of the Seller is or may be bound, (c) result in
the creation or imposition of any Lien upon any of the property or assets
of the Seller, or under any debt, obligation, contract, commitment or other
agreement to which the Seller is a party or by which any of its properties
or assets is or may be bound or (d) violate any Governmental Rule.
4.5 Governmental Consents and Notices. Except for the Governmental
Approvals set forth on Schedule 4.5 (collectively, the "Governmental
Consents and Notices"), no Governmental Approval is necessary or
appropriate in connection with the execution and delivery by the Seller of
this Agreement and the other Closing Documents, or the consummation by the
Seller of the transactions contemplated hereby and thereby, including the
transfer of the Brea Stock and the LP Interest. Except as expressly
described on Schedule 4.5, all of the Governmental Consents and Notices
have been duly obtained or made and none has been revoked or rescinded or
has expired. Without limiting the generality of the preceding provisions
of this Section 4.5, no consent, approval or filing is required under or in
connection with the HSR Act in connection with the transactions
contemplated by this Agreement.
4.6 Additional Consents and Notices. Except for the consents,
notices and other items set forth on Schedule 4.6 (collectively, the
"Additional Consents and Notices"), no filing, registration, qualification,
notice, consent, approval or authorization to, with or from any Person
(excluding Governmental Persons) is necessary or appropriate in connection
with the execution and delivery by the Seller of this Agreement and the
other Closing Documents, or the consummation by the Seller of the
transactions contemplated hereby and thereby, including the transfer by the
Seller of the Brea Stock and the LP Interest. Except as expressly
described on Schedule 4.6, all of the Additional Consents and Notices have
been duly obtained or made and none has been revoked or rescinded or has
expired.
4.7 Partner Interests. The Seller and Ridgewood Trust are the sole
limited partners of the Partnership, provided that no representation is
made as to whether Ridgewood has sold or otherwise transferred its interest
in the Partnership to any Person. Brea is the sole general partner of the
Partnership, holding a 1% interest therein (the "GP Interest"). The Seller
holds the interest described in the Partnership Agreement (the "LP
Interest"). Brea owns the GP Interest, and Seller owns the LP Interest, in
each case free and clear of all Liens. No other party has any rights to
acquire or otherwise holds any interest in or has any rights with respect
to (i) the Brea Stock, (ii) the GP Interest or (iii) the LP Interest,
except as may be otherwise provided in the Partnership Agreement. The
Seller will sell and transfer the Brea Stock and LP Interest to the Buyer
at the Closing free and clear of all Liens as herein provided.
4.8 No Litigation. There are no actions, suits or proceedings of any
type pending or, to the Seller's knowledge, threatened, against the Seller,
whether at law or in equity, including actions, suits or proceedings,
before or by any Governmental Person, which relate to the Facility or its
interest in Brea or the Partnership. Seller has no knowledge of any state
of
facts or contemplated event which may reasonably be expected to give rise
to any such action, suit or proceeding.
4.9 Bankruptcy. The Seller has not filed any voluntary petition in
bankruptcy or been adjudicated a bankrupt or insolvent, filed any petition
or answer seeking any reorganization, liquidation, dissolution or similar
relief under any federal bankruptcy, insolvency, or other debtor relief
law, or sought or consented to or acquiesced in the appointment of any
trustee, receiver, conservator or liquidator of all or any part of its
properties. No court of competent jurisdiction has entered an order,
judgment or decree approving a petition filed against the Seller seeking
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any federal bankruptcy act, or other
debtor relief law, and no other liquidator has been appointed of the Seller
or of all or any part of its properties.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES RELATING TO
BREA, THE PARTNERSHIP AND THE FACILITY
The Seller hereby represents and warrants to the Buyer (regardless of
any examinations, inspections, audits or other investigations the Buyer has
heretofore made or may hereafter make with respect to such representations
and warranties) as of the Closing Date as follows:
5.1 Due Organization; Capitalization. Brea is a corporation, and the
Partnership is a limited partnership, in each case duly organized, validly
existing and in good standing under the laws of the State of Delaware.
Each of Brea and the Partnership is qualified to transact business in the
State of California and in all other jurisdictions where the ownership of
its properties or its operations require such qualifications. There are no
dissolution, winding-up or similar proceedings pending, or to the Seller's
knowledge, threatened against, Brea or the Partnership. The authorized
capital of Brea consists of 500 shares of capital stock, par value $1.00
per share, of which 100 shares are issued and outstanding, fully paid and
non-assessable, and owned by the Seller, free and clear of all Liens (the
"Brea Stock").
5.2 Power and Authority. Each of Brea and the Partnership has full
power and authority as a corporation and as a limited partnership,
respectively, to carry on its respective business as now conducted, to own
or hold under lease its properties and to enter into and perform its
obligations under each Project Document to which it is a party.
5.3 Business of Brea and the Partnership. Brea is not engaged in any
business or activities other than serving as the sole general partner of
the Partnership and matters incidental thereto. The Partnership is not
engaged in any business or activities other than the development,
ownership, operation and maintenance of the Facility and matters incidental
thereto. Without limiting the generality of the foregoing, neither Brea
nor the Partnership (a) owns any capital stock, partnership interest or
other interest of any type, directly or indirectly, in any other
corporation, partnership (other than the Partnership) or other Person, (b)
conducts
any business other than the business contemplated by the Project Documents
to which it is a party, (c) is a party to or bound by any contract,
agreement, instrument or other document other than the Project Documents to
which it is a party (d) has outstanding debt or other liability of any type
other than pursuant to the Project Documents to which it is a party or as
otherwise disclosed on the Financial Statements.
5.4 No Violations. The execution and delivery by Brea and the
Partnership of this Agreement and the other Closing Documents, and the
consummation by such parties of the transactions contemplated hereby and
thereby will not (a) violate or constitute a Default or Event of Default
under, or cause or permit the acceleration of the maturity of, or give rise
to any right of termination, cancellation, imposition of fees or penalties
under, any Project Document, (b) result in the creation or imposition of
any Lien upon any of the property or assets of Brea or the Partnership, or
under the Project Documents or (c) violate any Governmental Rule.
5.5 No Litigation. There are no actions, suits or proceedings of any
type pending or, to the Seller's knowledge, threatened, against Brea, the
Partnership or any of their respective properties or business, whether at
law or in equity, including actions, suits, or proceedings before or by any
federal, state, municipal or other court or governmental department,
commission, board, bureau, agent, instrumentality or other Governmental
Person. The Seller has no knowledge of any state of facts or contemplated
event which may reasonably be expected to give rise to any such action,
suit or proceeding. Neither Brea nor the Partnership is operating under,
or subject to, or in default with respect to, any order, writ, injunction
or decree of any Governmental Person.
5.6 Bankruptcy. Neither Brea nor the Partnership has filed any
voluntary petition in bankruptcy or been adjudicated a bankrupt or
insolvent, filed any petition or answer seeking any reorganization,
liquidation, dissolution or similar relief under any federal bankruptcy,
insolvency, or other debtor relief law, or sought or consented to or
acquiesced in the appointment of any trustee, receiver, conservator or
liquidator of all or any part of their respective properties. No court of
competent jurisdiction has entered an order, judgment or decree approving a
petition filed against Brea or the Partnership seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any federal bankruptcy act, or other debtor relief law, and no
other liquidator has been appointed of Brea or the Partnership or of all or
any part of their respective properties.
5.7 Qualifying Facility Matters. The Facility is an electrical
generating facility that has been certified by the FERC as a Qualifying
Facility. The Facility is, and during all applicable periods has been, a
Qualifying Facility (except that (a) no representation or warranty is made
as to the effect, if any, on the status of the Facility as a Qualifying
Facility under PURPA, of Ridgewood Trust being a limited partner in the
Partnership) in compliance in all respects with all technical and ownership
requirements contained in all applicable FERC and CPUC rules and
regulations.
5.8 Intentionally Omitted.
5.9 Financial Statements; Books of Account. Attached as Schedule 5.9
are the audited financial statements of the Partnership for the period
ending as of December 31, 1996 (collectively, the "Financial Statements").
The Financial Statements have been prepared in accordance with GAAP applied
on a consistent basis, and present fairly the financial position and
results of operations of Brea and the Partnership at the dates and for the
periods indicated therein. Brea's only activities have been to serve as the
general partner of the Partnership and it has no assets (other than the
general partnership interest in the Partnership), revenues or liabilities
except for the contingent liabilities for the liabilities of the
Partnership shown in the Financial Statements.
5.10 Absence of Certain Changes. Since the date of the Financial
Statements:
5.10.1 neither Brea nor the Partnership has entered into any
transaction which was not in the ordinary course of its business;
5.10.2 there has been no material change in the business,
operations, finances, assets or liabilities of Brea or the Partnership;
5.10.3 there has been no material damage to, destruction of or
loss of or the Facility or any assets of Brea or the Partnership;
5.10.4 neither Brea nor the Partnership has declared, paid or
set aside for payment any amounts for distribution to the Seller or any
other Person; and
5.10.5 neither Brea nor the Partnership has made any change in
any method of accounting or accounting practice or any change in
depreciation or amortization policies or rates theretofore adopted.
5.11 No Undisclosed Liabilities. To the knowledge of the Seller (i)
as of the date of the most recent balance sheet included in the Financial
Statements, neither Brea nor the Partnership had any material liabilities
or obligations of any nature (whether accrued, absolute, fixed or unfixed,
known or unknown, asserted or unasserted, contingent, by guaranty, surety
or assumption or otherwise), which were not fully disclosed, reflected or
reserved against in such Financial Statements or the notes thereto, and
(ii) since the date of the most recent balance sheet included in the
Financial Statements, neither Brea nor the Partnership has incurred any
liability or obligation of any nature (whether accrued, absolute, fixed,
known, asserted, contingent, by guaranty, surety or assumption or
otherwise) except for current liabilities or obligations which have been
incurred in the ordinary course of business.
5.12 Partnership Assets.
5.12.1 Real Property Rights; Title Insurance. Schedule 5.12.1
is a complete and accurate list of (i) all real property owned or leased by
Brea or the Partnership and of all easements, rights of way, rights of
interconnection and other similar agreements in which Brea or the
Partnership has any rights and (ii) all title insurance policies and
similar insurance policies issued to Brea or the Partnership or any of
their respective Affiliates relating to any of the property described in
preceding clause (i) or relating to the fixtures and improvements listed on
Schedule 5.12.2.
5.12.2 Fixtures and Improvements. Schedule 5.12.2 is a complete
and accurate list of all buildings, material fixtures and other
improvements owned by the Partnership and located on the Site or elsewhere.
The term "material," as used in this Section 5.12.2 and Section 5.12.3
below, means any such property having a value exceeding $1,000.
5.12.3 Equipment and Other Personal Property. To the extent not
included on Schedule 5.12.2, Schedule 5.12.3 is a complete and accurate
list of all material equipment, plant, machinery, installations, tools,
spare parts, furniture, supplies, vehicles and other personal property
owned by the Partnership, and Schedule 5.12.3 specifically indicates any
material item of property which is not located on or at the Site and
identifies the location thereof.
5.12.4 Title to Partnership Assets. The Partnership has a valid
leasehold interest in the Site, free and clear of all Liens, and the
Partnership has good and indefeasible title to the remainder of the
Facility and all of the other Partnership Assets, free and clear of all
Liens, in each case subject to customary and routine exceptions normally
found in title insurance policies. The Partnership Assets constitute all
of the assets necessary for the lawful operation and use of the Facility in
the ordinary course (including all easements, rights of way, rights of
interconnection and other similar rights and agreements required for the
operation of the Facility) and such assets include all assets required by
the Project Documents.
5.13 Project Documents.
5.13.1 Set forth on Schedule 5.13 is a true, correct and
complete list and brief description of all material agreements, contracts,
instruments, licenses, permits and franchises, including all amendments
thereto relating to Brea, the Partnership or the Facility, or to which
Brea, the Partnership or the Facility is subject (collectively, the
"Project Documents"). A true, correct and complete copy of each of the
Project Documents including all amendments, supplements, exhibits and
schedules, if any, thereto has been delivered to the Buyer.
5.13.2 Neither the Power Purchase Agreement nor the Gas
Agreement has been modified, supplemented, amended, waived or terminated in
any respect whatsoever, and none of the other Project Documents has been
modified, supplemented, amended, waived or
terminated in any material respect, in any such case whether orally or in
writing, except by means of another Project Document.
5.13.3 Each of the Project Documents constituting an agreement,
contract, instrument or other similar document (including the Power
Purchase Agreement and the Gas Agreement) (a) has been duly authorized,
executed and delivered by the Seller, Brea and/or the Partnership, as the
case may be, and to the Seller's knowledge, by each of the other parties
thereto, (b) except to the extent fully performed in accordance with its
terms, is in full force and effect, and (c) to the Seller's knowledge, is a
valid obligation of such other parties enforceable in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application referring
to or affecting enforcement of creditor's rights and general principles of
equity.
5.13.4 No Default or Event of Default on the part of Brea or the
Partnership has occurred and is continuing under any Project Document
(including the Power Purchase Agreement or Gas Agreement), and neither
Seller, Brea nor the Partnership has received notice, oral or written, that
a Default or Event of Default on the part of any other Person has occurred
thereunder or that any Person has alleged or asserted any such Default or
Event of Default by an Person.
5.14 No Employees, Etc. Neither Brea nor the Partnership has any
employees, or any compensation, bonus, health, sick pay, disability,
vacation pay, group-term life insurance, dependant care assistance,
accidental death and dismemberment insurance, severance, employee welfare,
pension, profit sharing, retirement or other employee benefit plans, funds,
programs or arrangements. Schedule 5.14 sets forth a true and accurate
list of the employees of the Seller or the Operator who are employed in
connection with the Facility.
5.15 Permits. The Governmental Approvals listed on Schedule 5.15
(collectively, the "Permits") constitute, to the Seller's knowledge, all of
the material Governmental Approvals which are necessary or appropriate in
connection with the ownership, use, operation and maintenance of the
Facility and the conduct of Brea's and the Partnership's business and
activities. To the Seller's knowledge, except as set forth on Schedule
5.15, each Permit has been duly and validly issued, or transferred, to Brea
or the Partnership, as the case may be, and is in full force and effect,
and all rights and entitlements thereunder are vested exclusively in Brea
or the Partnership. Neither the Seller, Brea nor the Partnership has
received any notice that Brea or the Partnership has committed any act or
failed to act in any manner or under any circumstances which could result
in the revocation or suspension of any Permit or in any other disciplinary
action relating thereto. The consummation of the transactions provided for
in this Agreement and the other Closing Documents will not violate any of
the terms or provisions of the Permits or impose any material obligation on
the Partnership or Brea. Neither Seller, Brea nor the Partnership has
reason to believe that any of such Permits will not be renewed upon their
natural expiration in the ordinary course of business upon compliance with
normal and customary renewal procedures applicable to the respective
Permit.
5.16 General Legal Compliance. Except as disclosed on Schedule 5.16
or 5.17, Brea, the Partnership and the Facility are in compliance in all
material respects with all Governmental Rules applicable to Brea, the
Partnership and/or the Facility, as the case may be, and with all Permits,
including all Governmental Rules applicable to the conduct of Brea's and
the Partnership's business and activities and to the construction,
ownership, operation, maintenance and use of the Facility, except where
failure to comply would not have a material adverse effect on Brea, the
Partnership or the Facility.
5.17 Environmental Legal Compliance. Without limiting the generality
of Section 5.16, and except as disclosed on Schedule 5.17, (a) Brea, the
Partnership, the Facility and the Site are in compliance in all material
respects with all Environmental Laws, and (b) to the Seller's knowledge,
there has not been (in connection with, the construction, fuel supply,
power generation and transmission, waste disposal, and other operations and
processes relating to the Facility) any release, emission, seepage,
disposal, spill or discharge at or to the Site or its environment, whether
onto or into the ground, water, air or otherwise, of any petroleum products
or of any substance considered a hazardous or toxic substance that would
give rise to liability to the owner or operator of the Facility under any
Environmental Law, and to the best of knowledge of the Seller, none is
reasonably expected to occur imminently, other than those which (i) are not
material, (ii) are permitted under all applicable Environmental Laws and
Permits, (iii) occur in the normal course of the operation of the Facility
or (iv) have not had and are not reasonably expected to have any material
adverse impact on Brea, the Partnership or the Facility.
5.18 Insurance. Schedule 5.18 contains a list and description of all
insurance policies of any type which are held by Brea or the Partnership
(or their Affiliates which relate to Brea, the Partnership or the Facility)
specifying the insurer, amount of coverage, type of insurance, policy
number and any pending claims thereunder. Except as disclosed on Schedule
5.18, no claim of any type has been made under any of such policies.
5.19 Utilities. All utility services necessary for the operation of
the Facility are available at the boundaries of the Site, including water
supply, sanitary and storm sewer facilities, and gas, electric and
telephone facilities.
5.20 Facility Construction and Condition. To the knowledge of the
Seller, the Facility is operating substantially as designed, all of the
Partnership Assets are in good operating condition, maintenance and repair
(subject only to normal wear and tear) and there are no material design or
other material defects in the Facility or any other Partnership Asset.
5.21 Securities Laws. Based upon and provided that the
representations of the Buyer in Sections 6.7 and 6.8 are true and correct,
the sale of the Brea Stock and the LP Interest is not required to be
registered pursuant to the Securities Act, or applicable state securities
laws or regulations.
5.22 Brokers. Neither this Agreement nor the consummation of the
transactions contemplated hereby was induced by or procured through any
Person acting on behalf of, or representing, either Seller, Brea, the
Partnership or any of their Affiliates as a broker, finder, investment
banker, financial advisor or in any similar capacity.
5.23 Tax Returns. Each of Brea and the Partnership has properly,
accurately and timely completed and filed all federal, state and local tax
returns and reports, declarations and information returns ("Tax Returns")
required to be filed on or before the Closing Date by or on behalf of Brea
or the Partnership, and has withheld and paid over all amounts shown as due
on such returns, as well as other due and payable charges, assessments and
governmental charges of which the Seller has knowledge. To the knowledge
of the Seller, prior to the Closing Date, the Partnership is classifiable
as a partnership, and not as an association taxable as a corporation under
Section 7701 of the Code and the regulations promulgated thereunder, and
has been taxed as a partnership for federal income tax purposes under
subchapter "K" of the Code, provided, however, that no representation is
being made by Seller with respect to any adverse effect on such
classification which is attributable to the activities of Ridgewood Trust
as a limited partner of the Partnership. Except as provided on Schedule
5.23, no Tax Returns have been audited by any federal, state or local
taxing authorities and no representation as to tax matters are made for the
period commencing on and continuing after the Closing Date.
5.24 Bank Accounts. Schedule 5.24 sets forth an accurate and
complete list of (a) the names and locations of all banks, trust companies,
savings and loan associations and other financial institutions at which
Brea or the Partnership maintains accounts of any nature or safe deposit
boxes and the names of all Persons authorized to draw thereon, make
withdrawals therefrom or to have access thereto and (b) the names of all
Persons, if any, holding general or specific powers of attorney from Brea
or the Partnership and a summary of the terms thereof.
5.25 Projections. The Projections attached hereto as Schedule 5.25
were prepared by the Seller in good faith. The Seller has no knowledge of
any facts or circumstances or provisions of the Project Documents that are
inconsistent with the assumptions on which the Projections are based.
ARTICLE 6
BUYER'S REPRESENTATIONS AND WARRANTIES
The Buyer hereby represents and warrants to Seller (regardless of any
examinations, inspections, audits or other investigations the Seller has
heretofore made or may hereafter make with respect to such representations
and warranties) as of the Closing Date as follows:
6.1 Due Organization. The Buyer is a Delaware limited liability
company, duly organized, and validly existing under the laws of the State
of Delaware, and is qualified to
transact business in all jurisdictions where the ownership of its
properties or its operations require such qualification, except where the
failure to so qualify would not have a material adverse effect on its
financial condition, its ability to own its properties or transact its
business, or to carry out the transactions contemplated hereby.
6.2 Power and Authority. The Buyer has full limited liability
company power and authority to enter into and perform its obligations
hereunder and under the other Closing Documents to which it is or will be a
party and to consummate the transactions herein and therein contemplated in
accordance with the terms, provisions and conditions hereof and thereof.
All limited liability company proceedings required to be taken by the Buyer
to authorize it to execute, deliver and perform the terms of this Agreement
and the other Closing Documents to which it is or will be a party have been
duly and validly taken.
6.3 Valid, Binding and Enforceable Obligations. Each of this
Agreement and the other Closing Documents to which the Buyer is or will be
a party has been, or will be on the Closing Date, as the case may be, duly
and validly executed by the Buyer and constitutes, or will when executed
constitute, a valid, binding, and enforceable obligation, enforceable
against the Buyer in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights and
the enforcement of debtors' obligations generally and by general principles
of equity, regardless of whether enforcement is pursuant to a proceeding in
equity or at law.
6.4 No Violations. The execution and delivery by the Buyer of this
Agreement and the other Closing Documents to which it is or will be a
party, and the Buyer's consummation of the transactions contemplated hereby
and thereby will not (a) violate or be in conflict with the organizational
documents of the Buyer, (b) violate, be in conflict with, or constitute a
Default or Event of Default under, or cause or permit the acceleration of
the maturity of, or give rise to any right of termination, cancellation,
imposition of fees or penalties under, any debt, obligation, contract,
commitment of fees or other agreement to which the Buyer is a party or by
which any of the properties or assets of the Buyer is or may be bound, (c)
result in the creation or imposition of any Lien upon any of the property
or assets of the Buyer, or under any debt, obligation, contract, commitment
or other agreement to which the Buyer is a party or by which any of the
properties or assets is or may be bound, or (d) violate any Governmental
Rule.
6.5 Bankruptcy. The Buyer has not filed any voluntary petition in
bankruptcy or been adjudicated a bankrupt or insolvent, filed any petition
or answer seeking any reorganization, liquidation, dissolution or similar
relief under any federal bankruptcy, insolvency, or other debtor relief
law, or sought or consented to or acquiesced in the appointment of any
trustee, receiver, conservator or liquidator of all or any substantial part
of its properties. No court of competent jurisdiction has entered an
order, judgment or decree approving a petition filed against the Buyer
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any federal bankruptcy
act, or other debtor
relief law, and no other liquidator has been appointed of the Buyer or of
all or any substantial part of its properties.
6.6 No Litigation. There are no actions, suits or proceedings of any
type pending or, to the Buyer's knowledge, threatened, against the Buyer or
any of its properties or business, whether at law or in equity, before or
by Governmental Person. The Buyer has no knowledge of any state of facts
or contemplated event which may reasonably be expected to give rise to any
such action, suit or proceeding. The Buyer is not operating under, or
subject to, or in default with respect to, any order, writ, injunction or
decree of any Governmental Person.
6.7 Investment Intent. The Buyer is acquiring the Brea Stock and the
LP Interest solely for the purpose of investment and not with a view to, or
for sale in connection with, any distribution thereof. The Buyer
acknowledges that the Brea Stock and the LP Interest are not registered
under the Securities Act and that the Brea Stock and the LP Interest may
not be transferred or sold except in compliance with the registration
provisions of the Securities Act or pursuant to an applicable exemption
therefrom and in compliance with applicable state securities laws and
regulations.
6.8 Accredited Investor. The Buyer is an "accredited investor" as
defined in Rule 501 of the Securities Act and is a sophisticated investor
with the capability of evaluating the merits and risks of entering into
this Agreement.
6.9 Brokers' Fees. Neither this Agreement nor the consummation of
the transactions contemplated hereby was induced by or procured through any
Person acting on behalf of, or representing, the Buyer or any of its
Affiliates as a broker, finder, investment banker, financial advisor or in
any similar capacity, except Monhegan Partners, pursuant to a separate
agreement for which the Buyer is solely responsible.
6.10 HSR Act. No consent, approval or filing is required under or in
connection with the HSR Act in connection with the transactions
contemplated by this Agreement.
6.11 Ridgewood Partnership Interest. Ridgewood Trust has not sold,
assigned or otherwise transferred all or any portion of its interest in the
Partnership to any Person. To the knowledge of Buyer, prior to the Closing
Date, the Partnership is classifiable as a partnership, and not as an
association taxable as a corporation under Section 7701 of the Code and the
regulations promulgated thereunder, and has been taxed as a partnership for
federal income tax purposes under Subchapter "K" of the Code, provided,
however that no representation is being made by Buyer with respect to any
adverse effect on such classification which is attributable to the
activities of the Seller as a limited partner of the Partnership or of Brea
as the general partner of the Partnership.
ARTICLE 7
CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS
The obligation of the Buyer to consummate the transactions
contemplated hereby shall be subject to the fulfillment to the satisfaction
of, or waiver by, the Buyer, in its sole discretion, of each of the
following conditions on or prior to the Closing:
7.1 No Termination. This Agreement shall not have been terminated
pursuant to Section 10.7 hereof.
7.2 Representations True and Correct; Certificate. The
representations and warranties of the Seller contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date with the same force and effect as if made on and as of the Closing
Date, and the Seller shall have executed and delivered to the Buyer an
officer's certificate confirming the same.
7.3 Compliance with Covenants; Certificate. The Seller shall have
performed and complied with all covenants, agreements and conditions
required by this Agreement to be performed or complied with by it prior to
or on the Closing Date, and the Seller shall have executed and delivered to
the Buyer an officers' certificate confirming the same.
7.4 No Adverse Proceedings. On the Closing Date, no action or
proceeding shall be pending by any public authority or private individual
or entity before any court or administrative body to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the transactions
contemplated hereby or to recover any damages or obtain other relief as a
result of the transactions proposed hereby.
7.5 Proceedings Satisfactory. All proceedings to be taken in
connection with the consummation of the transactions contemplated by this
Agreement and all documents incident thereto, shall be reasonably
satisfactory in form and substance to the Buyer and its counsel, and, the
Buyer and its counsel shall have received copies of such documents and
customary certificates as the Buyer and its counsel may reasonably request
in connection therewith.
7.6 No Adverse Changes. There shall have been no material adverse
change in the position, financial or otherwise, or the assets, liabilities
or results of operations of Brea, the Partnership or the Facility other
than in the ordinary course of business or as permitted or contemplated by
this Agreement, nor shall the business, assets and properties of Brea, the
Partnership, or the Facility have been materially and adversely affected in
any way as a result of fire, explosion, earthquake, disaster, accident,
flood, riot, civil disturbance, uprising, activity of armed forces, or act
of God or public enemy, whether or not covered by applicable insurance.
7.7 Consents and Notices. All Governmental Consents and Notices,
Additional Consents and Notices and other consents or notices required to
be obtained from or made to
any Person shall have been duly obtained, made or provided, as the case may
be, and shall be in full force and effect.
7.8 Legal Opinion. The Buyer shall have received from Reid & Priest
LLP, legal counsel to the Seller, opinions as to the authorization,
delivery and performance of the Closing Documents and the other acts to be
performed by Seller at Closing in form reasonably acceptable to the Buyer
and its counsel.
7.9 Execution and Delivery of Closing Documents. This Agreement and
each of the other Closing Documents shall have been duly authorized,
executed and delivered by the parties thereto and shall be in full force
and effect on the Closing Date without any material Default or Event of
Default having occurred or existing thereunder or material breach thereof
or circumstance which would give any party thereto the right to terminate
any such Closing Document.
7.10 No Violations. The consummation of the transactions
contemplated hereby and by the other Closing Documents shall not violate
any Governmental Rule.
7.11 Closing Actions. Each of the actions required to be taken
pursuant to Section 3.2 or otherwise to effect the transactions
contemplated hereby shall have been duly performed and complied with, and
the Buyer shall have received satisfactory evidence of any and all such
actions.
7.12 Stock and Partnership Documents. The Buyer shall have received
(i) Certificates representing the Brea Stock endorsed in blank, (ii) a copy
of the certificate of limited partnership of the Partnership and the
Partnership Agreement, in each case certified by an officer of Brea, and
(iii) evidence as to the good standing of Brea and the Partnership in the
State of California.
7.13 Transfer of Bank Accounts. Seller will execute and deliver, or
cause to be executed and delivered, to Buyer such resignations and other
documentation of officers and representatives of Brea or the Partnership as
Buyer may reasonably request to effect the transfer of the bank accounts
referenced in Schedule 5.24 as of the Closing Date.
ARTICLE 8
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligation of the Seller to consummate the transactions
contemplated hereby shall be subject to the fulfillment to the satisfaction
of, or waiver by, the Seller, in its sole discretion, of each of the
following conditions on or prior to the Closing:
8.1 No Termination. This Agreement shall not have been terminated
pursuant to Section 10.7 hereof.
8.2 Representations True and Correct; Certificate. The
representations and warranties of the Buyer contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date with the same force and effect as if made on and as of the Closing
Date, and the Buyer shall have executed and delivered to the Seller an
officer's certificate confirming the same.
8.3 Compliance with Covenants; Certificate. The Buyer shall have
performed and complied with all covenants, agreements and conditions
required by this Agreement to be performed or complied with by it prior to
or on the Closing Date, and the Buyer shall have executed and delivered to
the Seller an officers' certificate confirming the same.
8.4 No Adverse Proceedings. On the Closing Date, no action or
proceeding shall be pending by any public authority or private individual
or entity before any court or administrative body to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the transactions
contemplated hereby or to recover any damages or obtain other relief as a
result of the transactions proposed hereby.
8.5 Proceedings Satisfactory. All proceedings to be taken in
connection with the consummation of the transactions contemplated by this
Agreement and all documents incident thereto, shall be reasonably
satisfactory in form and substance to the Seller and its counsel, and, the
Seller and its counsel shall have received copies of such documents and
customary certificates as the Seller and its counsel may reasonably request
in connection therewith.
8.6 Consents and Notices. All Governmental Consents and Notices,
Additional Consents and Notices and other consents or notices required to
be obtained from or made to any Person shall have been duly obtained, made
or provided, as the case may be, and shall be in full force and effect.
8.7 Legal Opinion. The Seller shall have received from Downs Rachlin
& Martin, PC, opinions as to the authorization, delivery and performance of
the Closing Documents and the other acts to be performed by the Buyer at
Closing in form reasonably acceptable to the Seller and its counsel.
8.8 Execution and Delivery of Closing Documents. This Agreement and
each of the other Closing Documents shall have been duly authorized,
executed and delivered by the parties thereto and shall be in full force
and effect on the Closing Date without any material Default or Event of
Default having occurred or existing thereunder or material breach thereof
or circumstance which would give any party thereto the right to terminate
any such Closing Document.
8.9 No Violations. The consummation of the transactions contemplated
hereby and by the other Closing Documents shall not violate any
Governmental Rule.
8.10 Closing Actions. Each of the actions required to be taken
pursuant to Section 3.2 or otherwise to effect the transactions
contemplated hereby, including the payment of Brea Stock Purchase Price and
the LP Interest Purchase Price, shall have been duly performed and complied
with, and the Seller shall have received satisfactory evidence of any and
all such actions.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification by Seller. As the Buyer's sole monetary remedy
for any breach of this Agreement by Seller, the Seller shall to the maximum
extent not prohibited by law, indemnify, defend and hold harmless the Buyer
and all of its Affiliates, shareholders, partners, members, investors,
directors, officers, employees, agents and assignees, from and against any
and all losses, liabilities, damages, claims or expenses (including
reasonable attorneys' fees and expenses) suffered or incurred to third
parties by any such party by reason of or resulting from the inaccuracy of
any representation or warranty or the breach, nonfulfillment or
nonperformance of any covenant or agreement of the Seller under this
Agreement or any other Closing Document. All of Seller's representations,
warranties and covenants shall survive the Closing of this Agreement and
shall continue until the expiration of the applicable statute of
limitations; provided, however, that Buyer agrees that Seller shall have no
liability for any breach of the representations, warranties and covenants
set forth in section 5.3, 5.4, 5.5, 5.9, 5,10, 5.11, 5.12.1, 5.12.2,
5.12.3, 5.14, 5.15, 5.16, 5.18, 5.19, 5.20, 5.21, 5.24 or 5.25 unless Buyer
asserts a claim with respect thereto on or before May 31, 1998, in which
case Seller shall be liable only to the extent Buyer's claim exceeds
$50,000 in the aggregate. In no event shall Seller's liability hereunder
exceed the Aggregate Purchase Price.
9.2 Indemnification by the Buyer. As the Seller's sole monetary
remedy for any breach of this Agreement by the Buyer, the Buyer shall to
the maximum extent not prohibited by law, indemnify, defend and hold
harmless the Seller and all of its Affiliates, shareholders, partners,
members, investors, directors, officers, employees, agents and assignees,
from and against any and all losses, liabilities, damages, claims or
expenses (including reasonable attorneys' fees and expenses) suffered or
incurred to third parties by any such party by reason of or resulting from
the inaccuracy of any representation or warranty or the breach,
nonfulfillment or nonperformance of any covenant or agreement of the Buyer
under this Agreement or any other Closing Document.
ARTICLE 10
ADDITIONAL COVENANTS AND TERMINATION
10.1 Seller's General Pre-Closing Covenants. Until the Closing Date,
the Seller shall, and shall cause Brea and the Partnership to, unless the
Buyer shall otherwise agree in writing, do the following:
10.1.1 Full Access. Permit the Buyer and its representatives,
agents, counsel and accountants to have full access to all properties,
books, accounts, records, contracts, files, correspondence, tax records and
documents of or relating to Brea or the Partnership, the Facility and the
Partnership Assets, and permit the Buyer to cause its agents to conduct
such reviews, inspections, surveys, tests and investigations of Brea and
the Partnership and the Facility and the Partnership Assets as the Buyer
deems necessary or advisable, provided that the Buyer shall take all
reasonable steps to minimize the disturbance to the operations of Brea and
the Partnership.
10.1.2 Furnishing Information. Promptly furnish to cause to be
furnished, at their sole cost and expense, to the Buyer and its
representatives, originals or copies of all Project Documents and other
documents, records, data and information concerning such businesses,
assets, finances and properties of or relating to Brea, the Partnership,
the Facility and the Partnership Assets that may be requested, including
copies of all environmental reports, and plans and specifications
pertaining to all or any portion of the Facility or the Site.
10.1.3 Consultation with Accountants. Permit the Buyer to
consult with the accountants for Brea and the Partnership, and said
accountants are hereby authorized to disclose all information in their
possession to the Buyer with respect to Brea and the Partnership.
10.1.4 Discussions with Facility Participants. Permit the Buyer
and its representatives and agents to discuss the proposed sale of the Brea
Stock and the LP Interest with any of the parties to the Project Documents
or any other Person who has any relationship to the Facility, except for
employees of the Operator, without the explicit consent of the Seller.
10.1.5 Representations and Warranties. Refrain from doing, or
causing to be done, anything which would cause the representations and
warranties set forth in Articles 4 or 5 hereof from being true, complete
and accurate on the Closing Date as if made on such date.
10.1.6 Conduct of Business. Except as expressly contemplated
hereby, carry on the business of Brea, the Partnership and the Facility in
the ordinary course, and not sell, transfer or otherwise dispose of any
Partnership Asset except in the ordinary course of business, and continue
to use, operate, maintain and repair the Facility and all Partnership
Assets in accordance with all Permits, all Project Documents and all
applicable Governmental Rules and otherwise in accordance with the
Partnership's prior practice.
10.1.7 Preservation of Assets, Relationships, Etc. Preserve the
business organization of Brea and the Partnership and the Facility and
Partnership Assets intact, and preserve Brea's and the Partnership's
present relationships with all other parties to the Project Documents and
others involved with or having any material relationship to the Facility.
10.1.8 New Obligations. Not enter into any material contract,
agreement or instrument of any type, whether written or oral, or otherwise
incur any new liabilities, whether contingent or otherwise, except in the
ordinary course of business.
10.1.9 No Defaults or Events of Default. Refrain from doing any
act or omitting to do any act, or permitting any act or omission to act,
which will cause a Default or Event of Default under any Project Document.
10.1.10 No Solicitations, Etc. Refrain from soliciting or
encouraging (by way of furnishing information, or otherwise) any inquiries
or proposals for the acquisition of Brea Stock or the GP Interest or the LP
Interest or the Facility or any Partnership Assets.
10.1.11 Notification. Promptly notify the Buyer in writing of
any event, circumstance or condition that results or, with the passage of
time or notice, or both, would reasonably be likely to result, in (a) any
representation or warranty of the Seller under this Agreement being false
in any material respect at any time, (b) any condition to Closing for the
benefit of the Buyer being unable to be satisfied, or (c) the inability of
the Seller to perform any of its obligations hereunder.
10.1.12 Spare Parts. Contribute or cause to be contributed to
the Partnership, free and clear of any Liens and at no obligation to the
Partnership, all spare parts and other assets relating to or used in the
operation of the Facility which are owned or controlled by the Seller or
its Affiliates.
10.2 Filings and Consents. The Seller, on its own behalf and on
behalf of Brea and the Partnership, and the Buyer, as promptly as
practicable after the Effective Date shall each use their reasonable, good
faith and diligent efforts to make, or cause to be made, all such filings
and submissions and obtain or cause to be obtained all such consents and
approvals applicable to it, in order to consummate the transactions
contemplated by this Agreement in accordance with the terms hereof.
10.3 Provision of Information. The originals of all books and
records, accounts, contracts, and other documents held by the Seller or its
Affiliates and relating to Brea, the Partnership or the Facility (other
than documents wholly internal to the Seller or its Affiliates and not
reasonably necessary to the proper operation and management of the
Facility) shall be delivered by such parties to the Buyer at the Closing or
promptly after the Closing Date, but in no event later than fifteen days
after the Closing Date.
10.4 Partnership Financial Matters Before and After the Closing Date.
The Buyer and the Seller agree that the results of operations of the
Partnership which are attributable to the GP Interest and the LP Interest
for the period from January 1, 1997 through the Closing Date shall be for
the account of the Seller, and that to the extent that the Partnership or
Brea receives the proceeds of any of the Excluded Assets after the Closing
Date, the Buyer shall promptly cause either Brea or the Partnership to pay
over such proceeds to Seller, subject,
however, to Buyer's right of offset to the extent that Seller has not
discharged any of the Retained Liabilities. Similarly, if after the
Closing Date, the Seller receives any amounts which are attributable to
Brea, the Partnership or the Facility for periods commencing after the
Closing Date, Seller shall promptly pay over all such amounts to the Buyer
subject to Seller's right to offset the amount of such payment by any
amount owed to the Seller by the Buyer pursuant to this Agreement.
10.5 Intentionally left blank.
10.6 Further Assurances. The Seller and the Buyer shall, on request,
on and after the Closing Date, cooperate with each other by furnishing any
additional information, executing and delivering any additional documents
and/or instruments and doing any and all such other things as may be
reasonably requested by any of the parties or its counsel to consummate or
otherwise further implement or effectuate the transactions contemplated by
this Agreement and the other Closing Documents.
10.7 Termination. This Agreement may be terminated at any time prior
to the Closing as follows, and in no other manner:
10.7.1 By Mutual Agreement. By the mutual agreement of the
Buyer and the Seller in writing.
10.7.2 By the Buyer. By written notice the Buyer to the Seller
if (a) any condition set forth herein for the benefit of the Buyer shall
not have been timely satisfied, (b) Seller fails to perform any obligation
hereunder in a timely manner and fails to cure the same promptly after
written notice thereof from the Buyer to the Seller or (c) any
representation or warranty of the Seller hereunder proves to be false in
any material respect and is not promptly cured after written notice thereof
from the Buyer to the Seller.
10.7.3 By the Seller. By written notice from the Seller to the
Buyer if (a) any condition set forth herein for the benefit of the Seller
shall not have been timely satisfied, (b) the Buyer fails to perform any
obligation hereunder in a timely manner and fails to cure the same promptly
after written notice thereof from the Seller to the Buyer or (c) any
representation or warranty of the Buyer hereunder proves to be false in any
material respect and is not promptly cured after written notice thereof
from the Seller to the Buyer.
10.7.4 By Any Party. By written notice from any party to the
other parties if the Closing contemplated hereunder has not taken place on
or before April 30, 1997.
10.8 Seller's/Operator's Employees. Buyer covenants that for a
period of ten years after the Closing Date, Buyer will not solicit for
employment or otherwise employ any of Seller's or the Operator's employees
listed on Schedule 5.14, provided, however, that Buyer may solicit or
employ any of such persons during such period if Seller's/Operator's
employment relationship with such person has been terminated prior to the
date of Buyer's first solicitation of such person.
ARTICLE 11
TAX MATTERS
11.1 Sales and Transfer Taxes. All transfer, sales, use, documentary
transfer, stamp or excise taxes, or other similar taxes of any type payable
in connection with the sale and transfer of the Brea Stock or the LP
Interest (or in connection with any deemed transfer of Partnership Assets
effected thereby or otherwise in connection with the consummation of the
transactions contemplated by this Agreement and the other Closing
Documents) shall be the exclusive responsibility of and shall be paid by
the Seller.
11.2 Income Tax Matters.
11.2.1 Certain Income Tax Effects of the Transactions. The
parties acknowledge and agree that the transactions contemplated by this
Agreement and the other Closing Documents relating to the Partnership will
have the following consequences, among other consequences, for income tax
purposes:
11.2.1.1 The Seller will take into account, and there will
be reported by the Seller to the Internal Revenue Service (and to the
appropriate state, local and foreign income tax authorities), the Seller's
allocable share (determined in accordance with Section 11.2.2) of the
Partnership's income, gains, deductions, losses, credits and other items
for the portion of the taxable year of the Partnership ending on the
Closing Date; and
11.2.1.2 Brea will take into account, and Brea will report
to the Internal Revenue Service (and to the appropriate state, local and
foreign income tax authorities) Brea's allocable share (determined in
accordance with Section 11.2.2) of the Partnership's income, gains,
deductions, losses, credits and other items for the portion of the taxable
year of the Partnership ending on the Closing Date. Seller will indemnify
and hold harmless Buyer, Brea and their respective Affiliates with respect
to all tax liabilities of Brea attributable to the portion of the taxable
year of the Partnership ending on the Closing Date.
11.2.1.3 The Buyer will take into account, and there will
be reported by the Buyer to the Internal Revenue Service (and to the
appropriate state, local and foreign income tax authorities), the Buyer's
allocable share (determined in accordance with Section 11.2.2) of the
Partnership's income, gains, deductions, losses, credits and other items
for the portion of the taxable year of the Partnership starting with the
day after the Closing Date.
11.2.2 Closing of Books. The determination of the Seller's,
Brea's and the Buyer's allocable share of income, gains, deductions,
losses, credits and other items for the taxable period before or after the
Closing, as applicable, shall be made on the basis of each party's
percentage interest in the Partnership under the terms of the Partnership
Agreement, and a closing of the books of the Partnership as of the Closing.
For this purpose, the Partnership books shall be deemed to have closed
immediately after the purchase of all of the Brea Stock and the LP Interest
at Closing.
11.2.3 Covenant of Consistent Reporting. The Seller and the
Buyer each covenant that it will not take any action inconsistent with any
of the actions to be taken pursuant to this Agreement and will file, or
cause to be filed, all tax returns, reports and forms affected by such
consequences in a manner consistent with the requirement of this Agreement.
11.2.4 Taxes and Tax Returns.
11.2.4.1 Seller's Responsibility. The Seller and its
Affiliates shall cause to be prepared and filed, and shall pay any taxes,
interest or penalties associated therewith, any and all tax returns,
reports and forms relating to taxes which are required to be filed for, by,
on behalf of, or with respect to Brea and the Partnership on or before the
Closing, or after the Closing and relating to any taxable period of Brea
and the Partnership or portion thereof ending on or before the Closing.
The Seller shall indemnify the Buyer and Brea and their respective
Affiliates and hold the Buyer, Brea and their respective Affiliates
harmless from any and all liabilities associated with the failure by the
Seller or its Affiliates to comply with the obligations set forth in the
preceding sentence. Upon request of the Buyer made within 60 days after
the Closing, Seller will cause the Partnership to make an election under
Section 754 of the Code with respect to the final tax return of the
Partnership for the period ending on the Closing Date to the extent that
such taxable year ends as a result of a constructive termination of the
Partnership for federal income tax purposes by reason of Buyer's purchase
of interests of the Partnership under this Agreement.
11.2.4.2 Buyer's Responsibility. The Buyer and its
Affiliates shall cause to be prepared and filed, and shall pay any taxes,
interest or penalties associated therewith, each tax return, report or form
(other than any tax return, report or form described in Section 11.2.4.1)
which is required to be filed for, by, on behalf of or with respect to Brea
and the Partnership for the periods after the Closing. The Buyer shall
indemnify the Seller and its Affiliates and hold the Seller and its
Affiliates harmless from any and all liabilities associated with the
failure by the Buyer or any Affiliate thereof to comply with the
obligations set forth in the preceding sentence.
11.2.5 Cooperation and Exchange of Information. The Buyer and
the Seller shall furnish or cause to be furnished to each other and their
Affiliates (at reasonable times) upon request and as promptly as
practicable, such information (including, without limitation,
access to personnel and books and records) pertinent to tax matters to
which this Agreement relates and assistance relating to such tax matters as
is reasonably necessary for the preparation, review, audit and filing of
any tax return, the preparation for any tax audit, or the defense or
prosecution of any assessment or other similar claim or any administrative
or court proceeding. The party requesting information shall reimburse the
other for the third party costs of providing such information. Any
information obtained by a party hereto or its Affiliates from another party
hereto or its Affiliates in connection with any tax matters to which this
Agreement relates shall be kept confidential, except as may be otherwise
necessary in connection with the filing of tax returns or claims for refund
or in conducting an audit or other proceeding.
11.2.6 Tax Proceedings. The Buyer shall give reasonably prompt
written notice to the Seller upon receipt by the Buyer or any of its
Affiliates of written notice of any audit of, assessment against, or
administrative, court or other proceeding against Brea or the Partnership
and with respect to which the Seller is required to indemnify, defend and
hold harmless under Section 11.2.4.1 or which may affect the determination
of taxes for which the Seller is obligated to indemnify, defend and hold
harmless under this Agreement. The Seller shall give reasonably prompt
written notice to the Buyer upon receipt by the Seller or any of its
Affiliates of written notice of any audit of, assessment against, or,
administrative, court or other proceeding against Brea or the Partnership
with respect to which the Seller or the Buyer is required to indemnify,
defend and hold harmless under Section 11.2.4.1 or Section 11.2.4.2,
respectively, or which may affect the determination of taxes for which the
Seller or the Buyer are obligated to indemnify, defend and hold harmless
under this Agreement.
11.2.7 Survival. Notwithstanding anything contained in this
Agreement to the contrary, each of the parties' representations and
warranties, covenants, agreements, rights, and obligations with respect to
any tax covered by this Agreement shall survive the Closing and shall not
terminate until the expiration of all statutes of limitation (including any
and all extensions thereof) applicable to such tax or the assessment
thereof.
ARTICLE 12
MISCELLANEOUS
12.1 Transaction Costs. Except as otherwise expressly provided
herein, the Buyer, on the one hand, and the Seller, on the other, shall pay
all of their own costs and expenses (including attorneys' fees and other
legal costs and expenses and accountants' fees and other accounting costs
and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby. Expenses of Brea incurred with respect
to periods ending on or before the Closing Date shall be deemed to be
expenses of the Seller.
12.2 Entire Agreement. This Agreement represents the entire
understanding and agreement among the parties with respect to the subject
matter hereof, and supersedes all other negotiations, understandings and
representations (if any) made by and among such parties.
12.3 Amendments. The provisions of this Agreement may not be
amended, supplemented, waived or changed orally, but only by a writing
signed by each of the parties hereto.
12.4 Assignments. No party shall assign its rights and/or
obligations hereunder without the prior written consent of each other party
to this Agreement.
12.5 Binding Effect. All of the terms and provisions of this
Agreement, whether so expressed or not, shall be binding upon, inure to the
benefit of, and be enforceable by the parties and their respective
administrators, executors, legal representatives, heirs, successors and
permitted assigns.
12.6 Headings. The headings contained in this Agreement are for
convenience of reference only, are not to be considered a part hereof and
shall not limit or otherwise affect in any way the meaning or
interpretation of this Agreement.
12.7 Notices. All notices, requests, consents and other
communications required or permitted under this Agreement shall be in
writing and shall be (as elected by the person giving such notice) hand
delivered by messenger or courier service telefaxed, or mailed by
registered or certified mail (postage prepaid), return receipt requested,
addressed to:
To the Buyer: With a copy to:
Olinda, L.L.C.
c/o Ridgewood Power Corporation Downs Rachlin & Martin, PC
947 Linwood Drive 199 Main Street, P.O. Box 190
Ridgewood, New Jersey 07450 Burlington, VT 05402-0190
Attn: President Attn: Thomas H. Moody, Esq.
Fax: (201) 447-0474 Fax: (802) 862-7512
To the Seller: With a copy to:
GSF Energy, L.L.C. Reid & Priest LLC
3321 Bee Caves Road 40 West 57th Street
Suite 300 New York, NY 10019-4097
Austin, TX 78746 Attn: J. Anthony Terrell, Esq.
Attn: President Fax: (212) 603-2001
Fax: (512) 347-1551
or to such other address as any party may designate by notice complying
with the terms of this Section 12.7. Each such notice shall be deemed
delivered (a) on the date actually delivered if by messenger or courier
service; (b) on the date of confirmed answer-back if by telefax; and (c) on
the date upon with the return receipt is signed or delivery is refused or
the notice is designated by the postal authorities as not deliverable, as
the case may be, if mailed.
12.8 Severability. If any provision of this Agreement or any other
Agreement entered into pursuant hereto is contrary to, prohibited by or
deemed invalid under applicable law or regulation, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and
shall be given full force and effect so far as possible. If any provision
of this Agreement may be construed in two or more ways, one of which would
render the provision invalid or otherwise voidable or unenforceable and
another of which would render the provision valid and enforceable, such
provision shall have the meaning which renders it valid and enforceable.
12.9 Waivers. The failure or delay or any party at any time to
require performance by another party of any provision of this Agreement,
even if known, shall not affect the right of such party to require
performance of that provision or to exercise any right, power or remedy
hereunder. Any waiver by any party of any breach of any provision of this
Agreement should not be construed as a wavier of any continuing or
succeeding breach of such provision, a waiver of the provision itself, or a
wavier of any right, power or remedy under this Agreement. No notice to or
demand on any party in any case shall, of itself, entitle such party to any
other or further notice or demand in similar or other circumstances.
12.10 Enforcement Costs. If any legal action or other proceeding is
brought for the enforcement of this Agreement or any other Closing
Document, or because of an alleged dispute, breach, default or
misrepresentation in connection with any provision of this Agreement or any
other Closing Document, the successful or prevailing party or parties shall
be entitled to recover reasonable attorneys' fees, sales and use taxes,
court costs and all out-of-pocket expenses even if not taxable as court
costs (including, without limitation, all such fees, taxes, costs and
expenses incident to arbitration, appellate, bankruptcy and post-judgment
proceedings), incurred in that action or proceeding, in addition to any
other relief to which such party or parties may be entitled. Attorneys'
fees shall include, without limitation, paralegal fees, investigative fees,
administrative costs, sales and use taxes and all other reasonable and
customary charges billed by the attorney to the prevailing party.
12.11 Remedies Cumulative. Except as otherwise expressly provided
herein, no remedy herein conferred upon any party is intended to be
exclusive of any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder
or now or hereafter existing at law or inequity or by statute or otherwise.
No single or partial exercise by any party of any right, power or remedy
hereunder shall preclude any other or further exercise thereof.
12.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Confirmation of
execution by telefax of a signature page shall be binding upon any party so
confirming.
12.13 Governing Law. This Agreement and all transactions
contemplated by this Agreement shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of New York,
without regard to principles of conflicts of laws.
12.14 Preparation of Agreement. This Agreement shall not be
construed more strongly against any party regardless of who is responsible
for its preparation. The parties acknowledge each contributed and is
equally responsible for its preparation.
12.15 Survival. All representations, warranties, covenants and
agreements made herein or otherwise referenced herein shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby for the time periods herein provided.
12.16 Inducement to Transaction. All representations and warranties
made by any party of this Agreement shall be deemed made for the purpose of
inducing the other party to enter into this Agreement.
12.17 Receipt of Monies, Etc. Any monies, checks, drafts, money
orders, postal notes and other instruments received after the Closing Date
by the Seller or its Affiliates in payment of any amounts due the
Partnership with respect to any period beginning after the Closing Date
shall be promptly delivered to the Buyer.
ARTICLE 13
EXECUTION CLAUSE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
SELLER:
GSF ENERGY, LLC.
By: Ecogas Corporation, Manager
By: /S/ Jerrel D. Branson
Jerrel D. Branson, President
BUYER:
OLINDA, L.L.C.
By: Ridgewood Management Corporation, Manger
By: /s/ Mary Louise Olin
Mary Louise Olin, Vice President