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EXHIBIT 10.73
PURCHASE AND SALE AGREEMENT
BETWEEN
NRG ENERGY, INC.
AND
THE CONNECTICUT LIGHT AND POWER COMPANY
JULY 1, 1999
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "Agreement") is entered into on
July 1, 1999, by and between NRG Energy, Inc., a Delaware corporation (the
"Buyer"), and The Connecticut Light and Power Company, a Connecticut
corporation (the "Seller"). The Buyer and the Seller are each referred to
herein as a "Party" or, collectively as the "Parties."
This Agreement contemplates a transaction in which the Buyer will
purchase certain assets of the Seller (as defined in Section 2.1 below) in
consideration of the Purchase Price (as defined in Section 2.5 below).
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
1. Definitions
"Acquired Assets" has the meaning set forth in Section 2.1.
"Acquired Assets Employees" has the meaning set forth in Section 5.7(b).
"Acquired Assets Employees' Records" mean all personnel records
maintained by Seller relating to the Acquired Assets Employees to the extent
such files contain (i) names, addresses, dates of birth, job titles and
descriptions; (ii) starting dates of employment; (iii) salary and benefits
information; (iv) resumes and job applications; and (v) any other documents
that the Seller is not prohibited by Law to deliver to the Buyer. To the extent
the consent of an Acquired Assets Employee is required in order for the Seller
to deliver a document which is part of the Acquired Assets Employees' Records
to the Buyer, the Seller agrees to use reasonable efforts to secure such
consent.
"Act" means "An Act Concerning Electric Restructuring," Public Act No.
98-28.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Agreement" has the meaning set forth in the preamble above.
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"Air Emission Credit", otherwise known as an Emission Reduction Credit
or ERC, means (i) a reduction of emissions of carbon dioxide, nitrogen oxides
or volatile organic compounds from a stationary, mobile or area source that is
certified by a Governmental Authority as real, quantifiable, surplus, permanent
and enforceable, and is recorded as such; or (ii) a reduction of emissions of
nitrogen oxides below the most stringent applicable emissions rate achieved
during the 1997 or 1998 control periods and approved by a Governmental
Authority.
"Allowance" means (i) an "allowance" to emit up to one ton of sulfur
dioxide as defined in Section 7651 a(3) of the Clean Air Act; or (ii) the
limited authorization to emit up to one ton of nitrogen oxides during a
specified control period as defined in R.C.S.A. Section 226-174-22a.
"Asset Demarcation Agreement" means the agreement between the Parties
evidencing their agreement as to the demarcation of ownership with respect to
certain assets not situated wholly on real property owned, or to be owned, by
either the Seller or the Buyer, in substantially the form attached hereto as
Exhibit G.
"Assignment and Assumption Agreement" means the agreement between the
Parties by which the Seller shall assign certain rights, liabilities and
obligations and the Buyer shall assume the Assumed Liabilities, in
substantially the form attached hereto as Exhibit C.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Bill of Sale" means the form of bill of sale by which the title to
personal property shall be conveyed to the Buyer, substantially in the form
attached hereto as Exhibit B.
"Business Day" means any day other than a Saturday, Sunday or day on
which banks are legally closed for business in Hartford, Connecticut or New
York, New York.
"Buyer" has the meaning set forth in the preamble above.
"Buyer Material Adverse Effect" means any material adverse change in, or
effect on, the business, financial condition, operations, results of operations
or future prospects of the Buyer, including any change or effect that is
materially adverse to the Buyer's ability to own, operate or use the Acquired
Assets as so owned, operated
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and used by the Seller prior to the Effective Date, taken as a whole; provided
that any change or effect that is cured prior to Closing shall not be
considered a Buyer Material Adverse Effect; and provided, further, that any
change or effect having a value of five percent of the Purchase Price or less
shall not be deemed to be a Buyer Material Adverse Effect.
"Buyer's Regulatory Approvals" means those approvals identified on
Schedule 6.1(c) attached hereto to be obtained by the Buyer as a condition to
the Buyer's obligations under this Agreement.
"Capital Commitments" means all binding contractual commitments to make
capital expenditures relating to the Acquired Assets, Facilities or Sites
incurred by the Seller during the Interim Period that extend beyond the Closing
Date, whether or not relating to the Pre-Approved Capital Expenditures.
"Cash" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP.
"C.G.S." means Connecticut General Statutes.
"Closing" has the meaning set forth in Section 2.9.
"Closing Adjustment" has the meaning set forth in Section 2.6(c).
"Closing Date" has the meaning set forth in Section 2.9.
"Closing Purchase Price" has the meaning set forth in Section 2.5.
"Closing Statement" has the meaning set forth in Section 2.6(d).
"Code" means the Internal Revenue Code of 1986, as amended.
"Collective Bargaining Agreement" has the meaning set forth in Section
5.7(a).
"Commercially Reasonable Efforts" means efforts which are reasonably
within the contemplation of the Parties at the Effective Date and which do not
require the performing Party to expend any funds other than expenditures which
are
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customary and reasonable in transactions of the kind and nature contemplated by
this Agreement in order for the performing Party to satisfy its obligations
hereunder.
"Contracts" has the meaning set forth in Section 2.1(f).
"Deed" means the form of deed by which the Real Property shall be
conveyed to the Buyer, substantially in the form attached hereto as Exhibit
A-1.
"Disclosing Party" has the meaning set forth in the definition of
Proprietary Information.
"DPUC" means the Connecticut Department of Public Utility Control.
"DPUC Approval" means the order or orders of the DPUC approving this
Agreement and. the Related Agreements and the consummation of the transactions
contemplated hereby and thereby and all related matters, including without
limitation approval of the amount of the proceeds of the sale of the Acquired
Assets, such order or orders to be in a form which is final, unconditional and
unappealable by any Person, including exhaustion of all administrative and
judicial appeals or remedies and the running of time periods and statutes of
limitation for rehearing and judicial review.
"Effective Date" means the date on which this Agreement has been duly
executed and validly delivered by the Parties.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan,
(b) qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program or (e) profit sharing, bonus, stock option, stock
purchase, equity, stock appreciation, deferred compensation, incentive,
severance plan or other benefit plan.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Section 3(1).
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"Environment" means soil, land surface or subsurface strata, real
property, surface waters, groundwater, wetlands, sediments, drinking water
supply, ambient air (including indoor air) and any other environmental medium
or natural resource.
"Environmental Claim" means a claim by any Person based upon a breach of
Environmental Laws or an Environmental Liability alleging loss of life, injury
to persons, property or business, damage to natural resources or trespass to
property, whether or not such loss, injury, damage or trespass arose or was
made manifest before the Closing Date or arises or becomes manifest after the
Closing Date.
"Environmental Laws" means all applicable Laws and any binding
administrative or judicial interpretations thereof relating to: (a) the
regulation, protection and use of the Environment; (b) the conservation,
management, development, control and/or use of land, natural resources and
wildlife; (c) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release, threatened
release, abatement, removal, remediation, or handling of, or exposure to, any
Hazardous Substances; or (d) noise; and includes, without limitation, the
following federal statutes (and their implementing regulations): the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended; the Solid Waste Disposal Act, as amended, 42 U.S.C. Section 6901 et
seq.; the Federal Water Pollution Control Act of 1972, as amended, 33 U.S.C.
Section 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15
U.S.C. Section 2601 et. seq.; the Clean Air Act of 1966, as amended, 42 U.S.C.
Section 7401 et seq.; the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended, 7 U.S.C. Section 136 et seq.; the Coastal Zone Management Act of
1972, as amended, 16 U.S.C. Section 1451 et seq.; the Oil Pollution Act of
1990, as amended, 33 U.S.C. Section 2701 et. seq.; the Rivers and Harbors Act
of 1899, as amended, 33 U.S.C. Section 401 et seq.; the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Section 1801 et seq.; the Endangered
Species Act of 1973, as amended, 16 U.S.C. Section 1531 et. seq.; the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Section 651
et seq.; and the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. Section
300(f) et seq.; and all analogous or comparable state statutes and regulations,
including, without limitation, the Connecticut Transfer Act, as amended, CGS
Section 22a-134 et seq.; and the Connecticut Remediation Standard Regulations,
RCSA Section 22a-133k-1 et seq.
"Environmental Liabilities" means any Liability under or related to
Environmental Laws arising as a result of or in connection with (i) any
violation or alleged violation of Environmental Law, prior to, on or after the
Closing Date, with respect to the ownership, operation or use of the Acquired
Assets; (ii) any Environmental
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Claims caused (or allegedly caused) by the presence or Release of Hazardous
Substances at, on, in, under, adjacent to or migrating from the Acquired Assets
prior to, on or after the Closing Date,; (iii) the investigation and/or
Remediation (whether or not such investigation or Remediation commenced before
the Closing Date or commences after the Closing Date) of Hazardous Substances
that are present or have been Released prior to, on or after the Closing Date
at, on, in, under, adjacent to or migrating from the Acquired Assets; (iv)
compliance with Environmental Laws on or after the Closing Date with. respect
to the ownership or operation or use of the Acquired Assets; (v) any
Environmental Claim arising from or relating to the off-site disposal,
treatment, storage, transportation, discharge, Release or recycling, or the
arrangement for such activities, of Hazardous Substances, on or after the
Closing Date, in connection with the ownership or operation of the Acquired
Assets; and (vi) the investigation and/or remediation of Hazardous Substances
that are generated, disposed, treated, stored, transported, discharged,
Released, recycled, or the arrangement of such activities, on or after the
Closing Date, in connection with the ownership or operation of the Acquired
Assets, at any Offsite Disposal Facility.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Estimated Adjustment" has the meaning set forth in Section 2.6(c).
"Estimated Closing Statement" has the meaning set forth in Section
2.6(c).
"Event of Loss" has the meaning set forth in Section 5.10.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section 2.4.
"Exhibits" means the exhibits to this Agreement.
"Facilities" means the generating facilities identified by name on
Schedule 2.1(h) attached hereto.
"FERC" means the Federal Energy Regulatory Commission, or its regulatory
successor, as applicable.
"FERC Applications" has the meaning set forth in Section 5.11.
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"FIRPTA Affidavit" means the affidavit to be delivered by the Parties at
Closing pursuant to Section 1445(b)(2) of the Code, to establish that each
Party is not a "foreign person" within the meaning of that Section.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Generation Support Services Agreement" means an agreement between the
Buyer and. Northeast Generation Services, Inc. under which the Buyer can
contract, at the Buyer's option, for the provision of certain services to the
Buyer after the Closing.
"Good Utility Practices" means any of the practices, methods and acts
engaged in or approved by a significant portion of the electric utility
industry during the relevant time period, or any of the practices, methods or
acts which, in the exercise of reasonable judgment in light of the facts known
at the time the decision was made, could have been expected to accomplish the
desired result at a reasonable cost consistent with good business practices,
reliability, safety and expedition. Good Utility Practices are not intended to
be limited to the optimum practice, method or act to the exclusion of all
others, but rather to be acceptable practices, methods or acts generally
accepted in the region.
"Governmental Authority" means any federal, state, local or other
governmental, regulatory or administrative agency, commission, department,
board, or other governmental subdivision, court, tribunal, arbitral body or
other governmental authority, but excluding the Buyer and any subsequent owner
of the Sites (if otherwise a Governmental Authority under this definition).
"Granted Easements" means the easements to be granted to the Buyer
pursuant to instruments in the form attached hereto as Exhibit A-3 for the
location of the Remote ICUs on T&D Assets of the Seller.
"Group Health Plan" has the meaning set forth in Section 5000(b)(1) of
the Code.
"Guaranty" means the form of guaranty in substantially the form attached
hereto as Exhibit F.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
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"Hazardous Substance" means (a) any petrochemical or petroleum products,
oil, waste oil, asbestos in any form that is or could become friable, urea
formaldehyde foam insulations, lead-based paint and polychiorinated biphenyls;
(b) any products, mixtures, compounds, materials or wastes, air emissions,
toxic substances, wastewater discharges and any chemical, material or substance
that may give rise to liability pursuant to, or is listed or regulated under,
or the human exposure to which or the Release of which is controlled or limited
by applicable Environmental Laws; and (c) any materials or substances defined
in Environmental Laws as "hazardous", "toxic", "pollutant", or "contaminant",
or words of similar meaning or regulatory effect.
"Improvements" means all buildings, structures (including all fuel
handling and storage facilities), machinery and equipment, fixtures,
construction in progress, including all piping, cables and similar equipment
forming part of the mechanical, electrical, plumbing or HVAC infrastructure of
any building, structure or equipment, and including all generating units,
located on and affixed to the Sites.
"Indemnified Party" has the meaning set forth in Section 9.6(a).
"Indemnifying Party" has the meaning set forth in Section 9.6(a).
"Independent Appraiser" has the meaning set forth in Section 2.7.
"Initial Purchase Price" has the meaning set forth in Section 2.5.
"Inspections" means all tests, reviews, examinations, inspections,
investigations, verifications, samplings and similar activities conducted by
any Party or such Party's agents or representatives with respect to the
Acquired Assets prior to the Closing.
"Interconnection Agreement" means the agreement between the Parties in
substantially the form attached hereto as Exhibit E.
"Interim Period" means that period of time commencing on the Effective
Date and ending on the Closing Date.
"Inventory" or "Inventories" means fuel inventories, materials, spare
parts, consumable supplies and chemical and gas inventories located at the
Sites, in transit to the Sites or identified in any Schedule.
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"ISO New England" means ISO New England, Inc., the independent system
operator as established or designated by NEPOOL.
"Knowledge" means the actual, current knowledge, after due inquiry, of
the corporate officers charged with responsibility for the particular function
at the date of this Agreement, or, with respect to any certificate delivered
pursuant to this Agreement, the date of delivery of the certificate.
"Laws" means all laws, rules, regulations, codes, injunctions,
judgments, orders, decrees, rulings, interpretations, constitution, ordinance,
common law, or treaty, of any federal, state, local municipal and foreign,
international, or multinational government or administration and related
agencies.
"Leases" has the meaning set forth in Section 2. 1(c).
"Liability" or "Liabilities" means any liability or obligation (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
whether incurred or consequential and whether due or to become due), including
any liability for Taxes.
"Lien" means the Mortgage Indenture and any other mortgage, pledge,
lien, security interest, charge, claim, equitable interest, encumbrance,
restriction on transfer, conditional sale or other title retention device or
arrangement (including, without limitation, a capital lease), transfer for
security for the payment of any indebtedness, or restriction on the creation of
any of the foregoing, whether relating to any property or right or the income
or profits therefrom; provided, however, that the term "Lien" shall not include
any of the following "Permitted Encumbrances": (i) Liens for Taxes or other
charges or assessments by any Governmental Authority to the extent that the
payment thereof is not in arrears or otherwise due or is being contested in
good faith; (ii) encumbrances in the nature of zoning restrictions, building
and land use laws, ordinances, orders, decrees, restrictions or any other
conditions imposed by any Governmental Authority; (iii) easements (including
without limitation, the Reserved Easements and any other easement or like right
granted by an instrument executed in connection with this Agreement or the
Related Agreements or the transactions contemplated hereby or thereby, but
excluding such encumbrances that secure indebtedness), rights, restrictions,
title imperfections and similar matters including such matters as are set forth
in any applicable FERC license or exemption on the uses of property if the same
do not materially detract from the operation or use of such property in the
business of the Seller as conducted
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on the Effective Date; (iv) deposits or pledges made in connection with, or to
secure payment of, worker's compensation, unemployment insurance, old age
pension programs mandated under applicable laws or other social security
regulations; (v) statutory or common law liens in favor of carriers,
warehousemen, mechanics and materialmen, statutory or common law liens to
secure claims for labor, materials or supplies to the Acquired Assets and other
like liens, which, in the case of clauses (i) through (v), inclusive, secure
obligations to the extent that payment thereof is not in arrears or otherwise
due and which have been incurred under Good Utility Practices; (vi) any Lien
with respect to the Acquired Assets that arises under Good Utility Practices
and is not material to the operation or use of the Acquired Assets in the
business of the Seller as conducted on the Effective Date; (vii) any Lien or
title imperfection with respect to the Acquired Assets created by or resulting
from any act or omission of the Buyer; (viii) all exceptions set forth in the
"Title Commitments" or discoverable based on a review of an accurate survey of
the Sites or the land records of the respective towns in which the Sites are
located; (ix) matters set forth on Schedule 2. 1(a)(ii); and (x) the Norwalk
Harbor Conservation Easement.
"Locals" means the International Brotherhood of Electrical Workers,
Local Union Nos. 420 and 457.
"Losses" has the meaning set forth in Section 9.3.
"Major Loss" has the meaning set forth in Section 5.10(b).
"Material Adverse Effect" means any change in, or effect on, the
Acquired Assets that is materially adverse to the operations or condition of
the Acquired Assets as operated by the Seller on the Effective Date, taken as a
whole, other than any such change or effect resulting from (a) changes in the
international, national, regional or local wholesale or retail markets for
electric power or fuel used in connection with the Acquired Assets; (b) changes
in the North American, national, regional or local electric transmission
systems or the operation thereof or the costs imposed on generators of
electricity in connection with the use of such electric transmission systems;
or (c) any order of any Governmental Authority, or legislation applicable to
providers of generation, transmission or distribution of electricity generally
that imposes restrictions, regulations or other requirements thereon; provided
that any change or effect that is cured prior to Closing shall not be
considered a Material Adverse Effect.
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"Mortgage Indenture" means that certain Indenture of Mortgage and Deed
of Trust between the Seller and Bankers Trust Company, as Trustee, dated as of
May 1, 1921, as supplemented and amended.
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"NEPOOL" means the New England Power Pool, established by the NEPOOL
Agreement, or its successor.
"NEPOOL Agreement" means the New England Power Pool Agreement, dated
September 1, 1971, as amended by the Restated New England Power Pool Agreement
filed with FERC on July 22, 1998, as finally approved by FERC and as further
amended from time to time.
"Non-Represented Employees" has the meaning set forth in Section 5.7(b).
"Norwalk Harbor Conservation Easement" means the conservation easement
granted by the Seller to the State of Connecticut Department of Environmental
Protection with respect to the Norwalk Harbor Station set forth in Schedule D
to the Purchase and Sale Agreement dated March 31, 1999 between the Seller and
the State of Connecticut Department of Environmental Protection.
"Offsite Disposal Facility" means a location, other than a Facility or a
Site, which receives or received Hazardous Substances for disposal by the
Seller prior to the Closing Date or by the Buyer on or after the Closing Date.
"Party" and "Parties" have the meanings set forth in the preamble above.
"Permits" means all certificates, licenses, permits, approvals,
consents, orders, decisions and other actions of a Governmental Authority
pertaining to a particular Acquired Asset, or the ownership, operation or use
thereof.
"Permitted Encumbrances" has the meaning set forth in the definition of
Lien.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, a limited
liability company, an unincorporated organization, or a governmental entity (or
any department, agency, or political subdivision thereof).
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"Pre-Approved Capital Expenditures" means those capital expenditures set
forth on Schedule 5.3.
"Proprietary Information" means all information about either Party (the
"Disclosing Party") or its properties or operations furnished to the other
Party (the "Receiving Party") or its Representatives by the Disclosing Party or
its Representatives, after the date hereof, regardless of the manner or medium
in which it is furnished. Proprietary Information does not include information
that (a) is or becomes generally available to the public, other than as a
result of a disclosure by the Receiving Party or its Representatives in
violation of this Agreement; (b) was available to the Receiving Party on a
nonconfidential basis prior to its disclosure by the Disclosing Party or its
Representatives; (c) becomes available to the Receiving Party on a
nonconfidential basis from a Person, other than the Disclosing Party or its
Representatives, who, to the Receiving Party's actual knowledge, is not
otherwise bound by a confidentiality agreement with the Disclosing Party or its
Representatives, or is not otherwise under any obligation to the Disclosing
Party or any of its Representatives not to transmit the information to the
Receiving Party or its Representatives, or (d) the Disclosing Party discloses
to others on a non-confidential basis.
"Purchase Price" has the meaning set forth in Section 2.5.
"Purchase Price Adjustment" has the meaning set forth in Section 2.6.
"Real Property" has the meaning set forth in Section 2.1(a).
"Receiving Party" has the meaning set forth in the definition of
Proprietary Information.
"Related Agreements" means the Assignment and Assumption Agreement, the
Bill of Sale, the Deed, the Property Tax Agreement, the Interconnection
Agreement, the Guaranty, the Generation Support Services Agreement, the Release
of Mortgage Indenture, the Asset Demarcation Agreement, the Reserved Easement
and the Granted Easement.
"Release" means any actual, threatened or alleged spilling, leaking,
pumping, pouring, emitting, dispersing, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing of any Hazardous Substance into the
Environment that may cause an Environmental Liability (including the disposal
or abandonment of barrels,
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containers, tanks or other receptacles containing or previously containing any
Hazardous Substance).
"Release of Mortgage Indenture" means the form of release substantially
in the form attached hereto as Exhibit H.
"Remediation" means any or all of the following activities to the extent
required to address the presence or Release of Hazardous Substances: (a)
monitoring, investigation, assessment, treatment, cleanup containment, removal,
mitigation, response or restoration work as well as obtaining any permits,
consents, approvals or authorizations of any Governmental Authority necessary
to conduct any such activity; (b) preparing and implementing any plans or
studies for any such activity; (c) obtaining a written notice from a
Governmental Authority with competent jurisdiction under Environmental Laws or
a written opinion of a Licensed Environmental Professional (as defined in
C.G.S. Section 22a-133v.) as contemplated by the relevant Environmental Laws
and in lieu of a written notice from a Governmental Authority, that no material
additional work is required; and (d) any other activities reasonably determined
by a Party to be necessary or appropriate or required under Environmental Laws.
"Remote ICUs" means the internal combustion generating units located at
certain substations owned by the Seller and included as part of the Facilities,
as identified by name on Schedule 2.1(h).
"Representative" means, as to any Person, such Person's Affiliates and
its and their directors, officers, employees, agents, advisors (including,
without limitation, financial advisors, counsel and. accountants).
"Represented Employees" has the meaning set forth in Section 5.7(a).
"Reserved Easements" means easements to be reserved by the Seller with
respect to certain T&D Assets and associated telecommunications facilities
located on the site of the Acquired Assets, as set forth in Schedule 2.1(a)
hereto, to be reserved in the Deeds by language substantially in the form
attached hereto as Exhibit A-2.
"R.C.S.A." means Regulations of Connecticut State Agencies.
"Schedule" means a schedule to this Agreement.
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"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Seller" has the meaning set forth in the preamble.
"Seller's Regulatory Approvals" means those approvals identified on
Schedule 6.2(c) hereto to be obtained by the Seller as a condition to the
Seller's obligation to close under this Agreement.
"Site" means the Real Property and Improvements forming a part of, or
used or usable in connection with, a Facility. Any reference to a Site shall
include, by definition, the surface and subsurface elements, including the
soils and groundwater present at such Site, and any reference to items "at the
Site" shall include all items "at, on, in, upon, over, across, under and
within" the Site.
"T&D" means the transmission and distribution of electricity.
"T&D Assets" means the transmission, distribution, communication,
substation and other assets necessary to current or future T&D Operations of
the Seller.
"T&D Operations" means the process of conducting and supporting T&D.
"Taking" has the meaning set forth in Section 5.10.
"Tax" or "Taxes" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Code Section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar, including FICA), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.
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"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party" means a Person who is not a Party, an Affiliate of a
Party, a Representative of a Party, a Representative of an Affiliate of a Party
or a shareholder of any of a Party, a Party's Affiliate or a Party's
Representative.
"Third Party Claim" has the meaning set forth in Section 9.6(a).
"Title Commitments" has the meaning set forth in Section 3.5.
"Trademarks" means any trademarks, service marks, trade dress, and
logos, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith.
"Transferable Permits" has the meaning set forth in Section 3.6(b).
"WARN Act" means the Federal Worker Adjustment Retraining and
Notification Act of 1988, as amended.
"Year 2000 Computer Problem" means the failure or inability of any
hardware, software, or firmware product (including embedded microcontrollers in
non-computer equipment) to correctly differentiate between years, in different
centuries, which years end in the same two digits, or accurately process
date/time data (including, but not limited to, calculating, comparing, and
sequencing) from, into and between the twentieth and twenty-first centuries,
including leap year calculations.
2. Acquisition of Assets by Buyer
2.1. Purchase and Sale of Assets. The Seller agrees to sell and
transfer to the Buyer, and the Buyer agrees to purchase from the Seller at the
Closing, subject to and upon the terms and conditions contained herein, free
and clear of any Lien, all of the right, title and interest of the Seller in
and to the following properties and assets owned by the Seller constituting, or
used in and necessary for the operation of, the Facilities (collectively, the
"Acquired Assets"):
(a) the real property, Improvements thereon, easements and
other rights in real property described in Schedule 2.1(a)(i), but
subject to the
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exceptions and encumbrances set forth in the Title Commitments and
subject to the Permitted Encumbrances, including the matters set forth
in Schedule 2.1(a)(ii) (the "Real Property");
(b) the machinery, equipment, furniture, boats, vehicles,
intellectual property and other personal property owned by the Seller
and located at the Facilities and Inventories (including without
limitation the items of personal property described on Schedule 2.1.(b),
all applicable warranties against manufacturers or vendors, to the
extent that such warranties are transferable without further action by
the Seller, and all items of personal property due under applicable
warranties), in each case as in existence on the Effective Date, but
excluding such items disposed of by the Seller in the ordinary course of
business during the Interim Period, and including such additional items
as may be acquired by the Seller for use in connection with the Acquired
Assets in the ordinary course of business during the Interim Period;
(c) all rights with respect to leasehold interests and
subleases and rights thereunder relating to real property set forth on
Schedule 2.1. (c) (the "Leases");
(d) the Granted Easements for the Remote ICUs;
(e) all Permits relating to ownership or operation of the
Facilities;
(f) those contracts, agreements and personal property leases
which are material to the operation of the Facilities and which are set
forth in Schedule 2.1.(f) (the "Contracts"), and all other contracts
which relate exclusively to the operation of the Facilities; provided
that the Seller shall retain the rights and interests under any Contract
to the extent such rights and interests provide for indemnity and
exculpation rights for pre-Closing occurrences for which the Seller
remains liable under this Agreement;
(g) all books, operating records, engineering designs,
blueprints, as-built plans, specifications, procedures, studies, reports
and equipment repair, safety, maintenance or service records of the
Seller relating specifically to the operation of the Facilities,
including the Acquired Assets Employees' Records but expressly excluding
financial records, employees
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records (other than the Acquired Assets Employees' Records) and books of
account;
(h) the rights of the Seller to the use of the names of the
Facilities set forth in Schedule 2.1(h);
(i) subject to the provisions of Section 2.8(c), the
Allowances set forth on Schedule 2.1(i) (including those Allowances set
forth on such Schedule held by the United States Environmental
Protection Agency in its Special Allowance Reserve for the benefit of
the Seller pursuant to the Clean Air Act);
(j) subject to the provisions of Section 2.8(c), the Air
Emission Credits set forth on Schedule 2.1(j); and
(k) all rights of the Seller in and to any causes of action
against a Third Party relating to any Assumed Liability, whether
received as a payment or credit against future liabilities, including,
without limitation, insurance proceeds, condemnation awards and cash
payments under warranties covering the Acquired Assets to the extent
such payments relate to Assumed Liabilities.
2.2. Excluded Assets. Notwithstanding anything to the contrary in this
Agreement, there shall be excluded from the Acquired Assets to be sold,
assigned, transferred, conveyed or delivered to the Buyer hereunder, and to the
extent in existence on the Effective Date or on the Closing Date, there shall
be retained by the Seller, any and all right, title or interest to the
following assets, properties and rights (collectively, the "Excluded Assets"):
(a) as identified on Schedule 2.2.(a) or in the Asset
Demarcation Agreement, or any document or exhibit referred to or
incorporated in the Asset Demarcation Agreement, the property comprising
or constituting any or all of the T&D Assets located at the Sites
(whether or not regarded as a "transmission", "distribution" or
"generation" asset for regulatory or accounting purposes), including all
switchyard facilities, substation facilities and support equipment, as
well as all Permits and contracts, to the extent they relate to the T&D
Assets, and those certain assets and facilities identified for use or
used by the Seller or others pursuant to an agreement or agreements with
the Seller for telecommunications purposes;
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(b) the interests in real property covered by the Norwalk
Harbor Conservation Easement and the rights of the Seller under the
agreement related thereto including, without limitation, the rights of
the Seller to receive the proceeds due to it under such agreement;
(c) all Cash, accounts and notes receivable, checkbooks and
canceled checks, bank deposits and property or income tax receivables or
any other Tax refunds to the extent allocable to a period ending on or
before the Closing Date;
(d) all contracts, instruments or other agreements relating to
the sale by the Seller of electric capacity or energy under wholesale
rates, or otherwise subject to regulation by the FERC;
(e) all rights of the Seller in and to any causes of action
against a Third Party relating to any period through the Closing Date,
whether received as a payment or credit against future liabilities,
including, without limitation, any rights or interests in respect of any
refunds relating to property Taxes paid by the Seller for any period
prior to the Closing Date, insurance proceeds, condemnation awards and
cash payments under warranties covering the Acquired Assets to the
extent such payments relate to warranty claims made by the Seller prior
to the Closing Date, but excluding any such rights of the Seller to the
extent the associated Third Party claims relate to an Assumed Liability;
(f) all rights of the Seller to the words "CL&P" and "The
Connecticut Light and Power Company" and any Trademark which is composed
of or comprises any derivative thereof; and
(g) those Allowances which the Seller has committed to retire
or swap with a third party subject to the receipt of certain regulatory
approvals, as set forth on Schedule 2.2(g) hereto.
2.3. Assumption of Liabilities. On the terms and subject to the
conditions set forth herein, from and after the Closing, the Buyer will assume
and satisfy or perform all of the Liabilities of the Seller in respect of, or
otherwise arising from the operation or use of the Acquired Assets, other than
the Excluded Liabilities (as set
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forth in Section 2.4 below), including, without limitation, the following
Liabilities (the "Assumed Liabilities"):
(a) all Environmental Liabilities, other than the Excluded
Liabilities (as set forth in Section 2.4 below);
(b) all Liabilities under (i) the Contracts, Leases, and the
Transferable Permits in accordance with the terms thereof, (ii) the
contracts, leases and other agreements entered into by the Seller with
respect to the Acquired Assets which would be required to be disclosed
on Schedule 2.1(c) or 2.1(f) but for the exception provided in clause
(iii) of Section 3.8(a), in accordance with the terms thereof, and (iii)
the contracts, leases, commitments and other agreements entered into by
the Seller with respect to the Acquired Assets during the Interim Period
consistent with the terms of this Agreement (including, without
limitation, Capital Commitments, agreements with respect to Liabilities
for real or personal property Taxes on any of the Acquired Assets or, to
the extent such agreements do not allocate such Tax liability between
the Acquired Assets and the Excluded Assets, all Tax liability under
such agreements entered into by the Seller and any local government);
except (x) in each case, to the extent such Liabilities, but for a
breach or default by the Seller, would have been. paid, performed or
otherwise discharged on or prior to the Closing Date, or to the extent
the same arise out of any such breach or default, or to the extent the
same relate to performance rendered to the Seller prior to the Closing
Date and (y) as otherwise provided in Section 2.4(f);
(c) all Liabilities under the Permitted Encumbrances other
than under or with respect to the exercise of the Reserved Easements;
(d) all Liabilities relating to Employees for which the Buyer
is responsible under Section 5.7; and
(e) all other Liabilities expressly allocated to the Buyer in
this Agreement or in any -of the Related Agreements. -
2.4. Excluded Liabilities. The Buyer shall not assume or be responsible
for the performance of any of the following Liabilities (collectively, the
"Excluded Liabilities"):
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(a) any liability of the Seller in respect of or otherwise
arising from the operation or use of the Excluded Assets or any other
assets of the Seller that are not Acquired Assets;
(b) any Liability of the Seller including, without limitation,
any Environmental Liability, in respect of or otherwise arising from the
exercise of the Reserved Easements or the condition of the- property on
which the Substations (as defined in the Reserved Easements) are
located, including Hazardous Substances disposed of or Released at, on
or under property on which the Substations are located;
(c) any Liability relating to the treatment, disposal,
storage, discharge, Release, recycling or the arrangement for such
activities at, or the transportation to, any Offsite Disposal Facility,
by the Seller, prior to the Closing Date, of Hazardous Substances that
were generated at the Sites, provided that for purposes of this Section,
"Offsite Disposal Facility" does not include any location to which
Hazardous Substances disposed of or Released at the Acquired Assets have
migrated;
(d) any Liability of the Seller arising from the making or
performance of this Agreement or a Related Agreement or the transactions
contemplated hereby or thereby;
(e) any Liability of the Seller in respect of payment
obligations for goods delivered or services rendered prior to the
Closing Date or other Liabilities under contracts or leases which the
Buyer has not assumed pursuant to Section 2.3(b);
(f) any Liability which is or would be required to be accrued
by the Seller on a balance sheet of the Seller as of the Closing Date
prepared in accordance with GAAP, other than those Liabilities-which
are-expressly set forth as Assumed Liabilities in Sections 2.3(a), (b)
and (c) hereof,
(g) any Liability of the Seller arising out of any Employee
Benefit Plan established or maintained by the Seller or to which the
Seller contributes or any Liability for the termination of any such
Employee Benefit Plan;
(h) any Liability of the Seller for any compensation or any
benefits, including, without limitation, vacation pay, severance pay,
post-
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retirement benefits and COBRA coverage, accruing on or prior to the
Closing Date under the terms or provisions of any Seller Employee
Benefit Plan, the Collective Bargaining Agreement or any other
agreement, plan, practice, policy, instrument or document relating to
any of the Acquired Assets Employees, other than the Liabilities
expressly assumed by the Buyer under Section 5.7;
(i) any Liability of the Seller relating to any cause of
action against the Seller filed -with or pending before any court or
administrative agency on the Closing Date;
(j) any Liability of the Seller for any fines or penalties
imposed by a Governmental Authority resulting from (x) any investigation
or proceeding pending on or prior to the Closing Date or (y) illegal
acts or willful misconduct of the Seller on or prior to the Closing
Date;
(k) any Environmental Liability to the extent such
Environmental Liability arises out of or relates to any Governmental
Authority's allegation and investigation of any criminal violations of
Environmental Laws by the Seller of which the Seller has received formal
written notification from such Governmental Authority on or prior to the
Closing Date;
(l) any Environmental Liability to the extent such
Environmental Liability derives from the same facts which form the basis
of a conviction of, or plea of nondisclosure by, the Seller for a
violation of Environmental Laws which conviction or plea arises out of a
Governmental Authority's investigation of criminal violations of
Environmental Laws by the Seller of which the Seller receives formal
written notification from such Governmental Authority on or before the
sixth anniversary of the Effective Date; and
(m) any Liability in respect of Taxes attributable to the
Acquired Assets and any Liability in respect of Taxes attributable to
the Acquired Assets for periods prior to and including the Closing Date,
except those Taxes for which the Buyer is liable pursuant to Sections
2.8 and 8.
2.5. Purchase Price. The Buyer agrees to assume the Assumed
Liabilities and pay to the Seller at the Closing an aggregate amount equal to
$___________ (the "Initial Purchase Price") plus or minus amounts to account
for (i) the Estimated Adjustment to the Initial Purchase Price to be made as of
the Closing under Section
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2.6(c), and (ii) the pro rations to be made as of the Closing under Section
2.8(a), (the Initial Purchase Price, as so adjusted, shall be referred to
herein as the "Closing Purchase Price"). The Closing Purchase Price shall be
payable in cash by wire transfer to the Seller in accordance with written
instructions of the Seller given to the Buyer at least three (3) Business Days
prior to the Closing. Following the Closing, the Closing Purchase Price shall
be subject to adjustment pursuant to Sections 2.6(d) and 2.8(b), and the
Closing Purchase Price, as so adjusted pursuant to such Sections, shall be
herein referred to as the "Purchase Price."
2.6. Adjustments to Initial Purchase Price. The Initial Purchase Price
shall be increased or reduced as set forth in Sections 2.6(a), (b) and (c), and
the Closing Purchase Price shall be subject to adjustment as set forth in
Section 2.6(d). Such increases or reductions, as the case may be, shall be
referred to herein as the "Purchase Price Adjustment" and shall be determined
and paid as set forth below:
(a) the Initial Purchase Price shall be increased to account
for the following items: -(i) the net book value of all Inventories held
by the Seller as of the Closing Date; (ii) the cost incurred by the
Seller in purchasing the vehicles identified as leased vehicles on
Schedule 2.1(b); (iii) any Pre-Approved Capital Expenditures incurred by
the Seller during the Interim Period; (iv) any other capital
expenditures incurred by the Seller during the Interim Period
necessitated by Good Utility Practice and to which the Buyer shall have
consented pursuant to Section 5.3(f); (v) any operations and maintenance
expenses paid for by the Seller during the Interim Period that the
Seller would not have actually paid but for the Buyer's written request;
and (vi) the costs (not in excess of $75,000) incurred by the Seller in
having surveys of the Facilities performed in connection with the
transactions contemplated hereby;
(b) the Initial Purchase Price shall be reduced to account for
any Capital Commitments assumed by the Buyer that were not (i)
Pre-Approved Capital Expenditures or (ii) capital expenditures
necessitated by Good Utility Practice to which Buyer consented pursuant
to Section 5.3(f);
(c) at least twenty (20) Business Days prior to the Closing
Date, the Seller shall prepare and deliver to the Buyer an Estimated
Closing Statement (the "Estimated Closing Statement") that shall set
forth the Seller's best estimate of all adjustments to the Initial
Purchase Price required by Sections 2.6(a) and 2.6(b) (the "Estimated
Adjustment"). Within ten (10) Business
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Days following the delivery of the Estimated Closing Statement by the
Seller to the Buyer, the Buyer may object in good faith to the Estimated
Adjustment in writing. If the Buyer objects to the Estimated Adjustment,
the Parties shall attempt to resolve such dispute by negotiation. If the
Parties are unable to resolve such dispute before five (5) Business Days
prior to the Closing Date (or if the Buyer fails to object to the
Estimated Adjustment), the Initial Purchase Price shall be adjusted (the
"Closing Adjustment") for the Closing by the amount of the Estimated
Adjustment not in dispute; and
(d) within thirty (30) days following the Closing Date, the
Seller shall prepare and deliver to the Buyer a closing statement that
shall set forth the Seller's computation of the final Purchase Price
Adjustment based on Sections 2.6(a) and (b) and the components thereof
taking into account actual data (the "Closing Statement"). Within twenty
(20) days following the delivery of the Closing Statement by the Seller
to the Buyer, the Buyer may object to the Closing Statement in writing.
The Seller agrees to cooperate with the Buyer to provide to the Buyer or
the Buyer's Representatives information used to prepare the Closing
Statement and information relating thereto. If the Buyer objects to the
Closing Statement, the Parties shall attempt to resolve such dispute by
negotiation. If the Parties are unable to resolve such dispute within
twenty (20) days of any objection by the Buyer, the Parties shall
appoint Ernst & Young who shall, at the Seller's and the Buyer's joint
expense, review the Closing Statement and determine the appropriate
Purchase Price Adjustment under this Section 2.6. The agreed upon
Closing Statement or the finding of such accounting firm, as the case
may be, shall be the Purchase Price Adjustment and shall be binding on
the Parties. Upon the determination of the Purchase Price Adjustment,
the Party owing a balance on account of the Purchase Price Adjustment
shall deliver the balance due to the other Party no later than two (2)
Business Days after such determination in immediately available funds or
in any other manner as reasonably requested by the payee. The balance
due shall be determined by offsetting against each Party's credits and
debits arising from the Purchase Price Adjustment the credits and debits
accorded to each Party in the Closing Statement on account of the
Estimated Adjustment. The acceptance by the Buyer and the Seller of the
Purchase Price Adjustment shall not constitute or be deemed to
constitute a waiver of the rights of such Party in respect of any other
provision of this Agreement.
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2.7. Allocation of Purchase Price. The Buyer and the Seller shall use
their good faith best efforts to agree upon an allocation among the Acquired
Assets of the sum of the Purchase Price and the Assumed Liabilities consistent
with Section 1060 of the Code and the Treasury Regulations thereunder within
one hundred and twenty (120) days of the Effective Date (or such later date as
the Parties may mutually agree) but in no event fewer than thirty (30) days
prior to the Closing; provided, however, that twenty-six million
($26,000,000.00) dollars shall be treated as the prepayment by Buyer of the
Interconnection Facilities Charge attributable to Middletown Unit 4 under the
Interconnection Agreement for a period of thirty (30) years after the Closing
Date (it being understood and acknowledged by the Parties that such prepayment
shall not entitle Buyer to interconnect more than 402 MW of capacity during
such thirty (30) year period, and that the Buyer shall not seek to have such
prepayment reduced or refunded by appeal to FERC or otherwise). In the event
that FERC disapproves such prepayment, or raises objections that may result in
a delay of the Closing, then the purchase price shall be reduced by twenty-six
million ($26,000,000.00) dollars and Buyer shall be required to pay FERC Tariff
No. 9 charges with respect to Middletown Unit 4, notwithstanding this Section
2.7. The Buyer and the Seller may jointly agree to obtain the services of an
independent engineer or appraiser (the "Independent Appraiser") to assist the
Parties in determining the fair value of the Acquired Assets solely for
purposes of such allocation under this Section 2.7. If such an appraisal is
made, both the Buyer and the Seller agree to accept the Independent Appraiser's
determination of the fair value of the Acquired Assets. The cost of the
appraisal shall be borne equally by the Buyer and the Seller. Each of the Buyer
and the Seller agrees to file Internal Revenue Service Form 8594 and all
federal, state, local and foreign Tax Returns in accordance with such agreed
allocation. Each of the Buyer and the Seller shall report the transactions
contemplated by this Agreement and the Related Agreements for federal Income
Tax and all other Tax purposes in a manner consistent with the allocation
determined pursuant to this Section 2.7. Each of the Buyer and the Seller
agrees to provide the other promptly with any other information required to
complete Form 8594. Each of the Buyer and the Seller shall notify and provide
the other with reasonable assistance in the event of an examination, audit or
other proceeding regarding the agreed upon allocation of the Purchase Price.
2.8. Proration.
(a) The Buyer and the Seller agree that all of the items
normally prorated in a sale of assets of the type contemplated by this
Agreement, including those listed below, relating to the business and
operations of the
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Acquired Assets, will be prorated as of the Closing Date, with the
Seller liable to the extent such items relate to any period through the
Closing Date, and the Buyer liable to the extent such items relate to
periods after the Closing Date: (i) personal property, Real Property,
occupancy and water Taxes, assessments and other charges, if any, on or
associated with the Acquired Assets; (ii) rent, Taxes and other items
payable by or to the Seller under any of the Contracts or Leases
assigned to and assumed by the Buyer hereunder; (iii) any Permit,
license, registration or fees with respect to any Transferable Permit
associated with the Acquired Assets; and (iv) sewer rents and charges
for water, telephone, electricity and other utilities. Subject to
Section 2.8(b), below, not less than five (5) Business Days prior to the
Closing Date, the Parties shall agree upon the sum of the net amount of
the prorated amounts to which either the Seller or the Buyer shall be
entitled pursuant to this Section 2.8(a) and the Initial Purchase Price
shall be adjusted to reflect such net amount.
(b) If the amount of one or more Taxes, fees or other
liabilities to be prorated in accordance with Section 2.8(a) is not
known or determinable on or prior to the Closing Date, the amounts to be
prorated upon the Closing in accordance with Section 2.8(a) shall be
based upon the actual Taxes, fees or other liabilities for the preceding
year (or appropriate period) for which such actual Taxes, fees or
liabilities are available. The amount of Taxes, fees or other
liabilities prorated upon the Closing pursuant to Section 2.8(a) shall
be adjusted upon the request of either the Seller, on the one hand, or
the Buyer, on the other hand, made within sixty (60) days of the date
the actual amounts become available. The Seller and the Buyer agree to
furnish each other with such documents and other records that may be
reasonably re quested in order to confirm all adjustment and proration
calculations made pursuant to this Section 2.8.
(c) Seller and Buyer shall pro rate the use of all Allowances
and Air Emission Credits as of the Closing Date as follows: (i) Seller
shall be entitled to an allocation of all Air Emission credits available
for the year in which the Closing occurs which is equal to the number of
days in the calendar year preceding and including the Closing Date
divided by the number of days in such calendar year; (ii) if the Closing
occurs prior to January 1, 2000, then the Seller shall not be entitled
to an allocation of any Phase II SO(2) Allowances; (iii) if the Closing
occurs on or after January 1, 2000, then the Seller shall be entitled to
an allocation of Phase II SO(2) Allowances available
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for the year in which the Closing occurs equal to (a) the sum of the
percent age allocations for all months prior to the month in which the
Closing Date occurs, as set forth on Schedule 2.8(c), plus (b)-a
percentage of the percent age allocation for the month in which the
Closing Date occurs, as set forth on Schedule 2.8(c), as is equal to a
fraction, the numerator of which is the number of days in such month
preceding and including the Closing Date, and the denominator of which
is the number of days in such month; and (iv) the Seller shall be
entitled to an allocation of the NOx Allowances available for the year
in which the Closing occurs equal to the number of days after May 1 and
before October 31 in such year before which the Closing occurs (if any),
divided by 153. To the extent that as of the Closing Date the Seller has
used less than or more than the amount of Allowances and Air Emission
Credits provided for hereinabove, the Seller shall pay to the Buyer or
the Buyer shall pay to the Seller, as the case may be, at the Closing,
an amount per Allowance or Air Emission Credit equal to the most recent
current market price of that specific Allowance or Air Emission Credit
as determined by the average of three regional air credit brokers'
prices for the most recent transactions in the same Allowance or Air
Emission Credit, as the case may be.
2.9. The Closing. Unless otherwise agreed to by the Parties, the
closing of the transactions contemplated by this Agreement (the "Closing")
shall take place at the offices of LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125
West 55th Street, New York, New York, commencing at 9:00a.m. eastern time on
the date that is five (5) days (or, if the fifth day is not a Business Day,
then the next Business Day following such fifth day) following the date on
which all of the conditions set forth in Sections 6.1 and 6.2 have either been
satisfied or waived by the Party for whose benefit such condition exists, such
satisfaction or waiver to conform to Section 11.12. The date of Closing is
hereinafter called the "Closing Date" and shall be effective for all purposes
herein as of 11:59 p.m. Eastern clock time on the Closing Date.
2.10. Deliveries by the Seller at the Closing. At the Closing, the
Seller shall deliver the following to the Buyer, duly executed and properly
acknowledged, if appropriate:
(a) deeds for the Real Property and Improvements,
substantially in the form attached hereto as Exhibit A-i and otherwise
in a form suitable for recording;
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(b) instruments conveying the Granted Easements, substantially
in the form attached hereto as Exhibit A-3 and otherwise in a form
suitable for recording;
(c) the Bill of Sale, substantially in the form attached
hereto as Exhibit B, for the tangible personal property included in the
Acquired Assets;
(d) the Assignment and Assumption Agreement, in the form
attached hereto as Exhibit C, in recordable form if necessary;
(e) the Property Tax Agreement, substantially in the form
attached hereto as Exhibit
(f) the Interconnection Agreement, in the form attached hereto
as Exhibit E;
(g) the Asset Demarcation Agreement, in the form attached
hereto as Exhibit G;
(h) if requested by the Buyer, the Generation Support Services
Agreement, executed by Northeast Generation Services, Inc.;
(i) the Release of Mortgage Indenture, substantially in the
form attached hereto as Exhibit H;
(j) a FIRPTA Affidavit executed by the Seller;
(k) certificates evidencing ownership of the Allowances in
proper form for recordation with the Environmental Protection Agency;
(l) certificates of title for the vehicles and boats which are
part of the Acquired Assets;
(m) all attornment agreements, notices and other documents and
instruments required for the assignment or other transfer of the Leases
from the Seller to the Buyer, which agreements, notices, documents and
instruments shall, upon the reasonable request of the Buyer, be in
recordable form;
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(n) copies of all consents, waivers or approvals obtained by
the Seller with respect to the Acquired Assets, the transfer of the
Transferable Permits or the consummation of the transactions
contemplated by this Agreement and the Related Agreements, to the extent
specifically required under this Agreement or the Related Agreements;
(o) the Environmental Consultant Reliance Letter in the form
of Exhibit I hereto, duly executed and addressed to the Buyer and any
lending institution identified by the Buyer;
(p) a certificate from an authorized officer of the Seller,
dated the Closing Date, to the effect that, to such officer's Knowledge,
the conditions set forth in Sections 6.1(a), (b), (e) and (g) and
Sections 6.2(c) and (d) have been satisfied;
(q) a copy, certified by the Secretary or an Assistant
Secretary of the Seller, of corporate resolutions authorizing the
execution and delivery of this Agreement and the Related Agreements and
instruments attached as exhibits hereto and thereto, and the
consummation of the transactions contemplated hereby and thereby;
(r) a certificate of the Secretary or an Assistant Secretary
of the Seller which shall identify by name and title and bear the
signature of the officers of the Seller authorized to execute and
deliver this Agreement and the Related Agreements and instruments
attached as exhibits hereto and thereto;
(s) an opinion or opinions from one or more counsel to the
Seller (any of whom may be an employee of the Seller), dated the Closing
Date and reasonably satisfactory in form to the Buyer and its counsel,
covering substantially the matters set forth in Schedule 2.10(s); and
(t) all such other instruments of sale, transfer, conveyance,
assignment or assumption as the Buyer and its counsel may reasonably
request in connection with the sale of the Acquired Assets, provided
however, that this Section 2.10(t) shall not require the Seller to
prepare or obtain any surveys relating to the Real Property other than
those previously provided to the Buyer.
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2.11. Deliveries by the Buyer at the Closing. At the Closing, the Buyer
shall deliver to the Seller, properly executed and acknowledged, if
appropriate:
(a) the Closing Purchase Price;
(b) the Assignment and Assumption Agreement, in the form
attached hereto as Exhibit C to this Agreement, duly executed by the
Buyer, and if necessary or desirable to the Seller, in recordable form;
(c) the Property Tax Agreement, substantially in the form
attached hereto as Exhibit B, for the tangible personal property
included in the Acquired Assets;
(d) the Interconnection Agreement, in the form attached hereto
as Exhibit E;
(e) the Asset Demarcation Agreement, in the form attached
hereto as Exhibit G;
(f) if requested by the Buyer, the Generation Support Services
Agreement;
(g) a certificate from an authorized officer of the Buyer,
dated the Closing Date, to the effect that, to such officer's Knowledge,
the conditions set forth in Sections 6.1(c) and (d) and Sections 6.2(a),
(b), (e) and (g) have been satisfied;
(h) a copy, certified by the Secretary or Assistant Secretary
of the Buyer, of resolutions authorizing the execution and delivery of
this Agreement and the Related Agreements and instruments attached as
exhibits hereto and thereto, and the consummation of the transactions
contemplated hereby and thereby;
(i) a certificate of the Secretary or Assistant Secretary of
the Buyer which shall identify by name and title and bear the signature
of the officers of the Buyer authorized to execute and deliver this
Agreement and the Related Agreements and instruments attached as
exhibits hereto and thereto;
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(j) one or more opinions from Gray, Plant, Mooty, Mooty &
Bennett, P.A., counsel to the Buyer, dated the Closing Date and
reasonably satisfactory in form to the Seller and its counsel, covering
substantially the matters set forth in Schedule 2.11. (j);
(k) evidence of the Buyer's membership in NEPOOL; and
(l) all such other instruments of purchase, sale, transfer,
conveyance, delivery, receipt, assignment or assumption as the Seller
and its counsel may reasonably request in connection with the sale or
purchase of the Acquired Assets or assumption of the Assumed
Liabilities.
3. Representations, Warranties and Disclaimers of the Seller. The Seller
represents and -warrants to the Buyer that the statements contained in this
Section 3 are correct and complete as of the Effective Date.
3.1. Organization of the Seller. The Seller is duly organized, validly
existing and in good standing under the laws of the State of Connecticut.
Copies of the charter and by~laws of the Seller, each as amended to date, have
been heretofore delivered to the Buyer and are accurate and complete.
3.2. Authorization of Transaction. The Seller has the power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and the Related Agreements and, subject to receipt of all the
Seller's Regulatory Approvals, to perform its obligations hereunder and
thereunder. All corporate actions or proceedings to be taken by or on the part
of the Seller to authorize and permit the due execution and valid delivery by
the Seller of this Agreement and the Related Agreements and the instruments
required to be duly executed and validly delivered by the Seller pursuant
hereto and thereto, the performance by the Seller of its obligations hereunder
and thereunder, and the consummation by the Seller of the transactions
contemplated herein and therein, have been duly and properly taken. This
Agreement and the Related Agreements have been duly executed and validly
delivered by the Seller and constitute the legal, valid and binding obligation
of Seller, enforceable in accordance with their terms and conditions.
3.3. Noncontravention. Subject to the Seller obtaining the Seller's
Regulatory Approvals, neither the execution and the delivery of this Agreement
or any of the Related Agreements, nor the consummation of the transactions
contemplated hereby and thereby (including the assignments and assumptions
referred to in
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Sections 2.10(t) and 2.11(1) above), will (a) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
license or other restriction of any Governmental Authority to which the Seller
or any of its property is subject or any provision of the charter or by-laws of
the Seller, or (b) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Seller is bound or to which any of the Acquired Assets is subject (or
result in the imposition of any Lien upon any of the Acquired Assets), except
for matters that will not have a Material Adverse Effect or as disclosed in
Schedule 3.3 or any other Schedule.
3.4. Brokers' Fees. The Seller has no Liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
3.5. Title to Acquired Assets. Except for Permitted Encumbrances, the
Seller has title to the Real Property to the extent, and only to the extent,
specified in the title policy commitments attached hereto on Schedule 3.5 (the
"Title Commitments"). Except as set forth in Schedule 3.5 and except for
Permitted Encumbrances, the Seller has good and valid title to the other
Acquired Assets.
3.6. Legal and Other Compliance; Permits.
(a) The Seller is in compliance with all current Laws
applicable to the Acquired -Assets or the Seller's operation of the
Acquired Assets the violation of which could have a Material Adverse
Effect, other than as disclosed in Schedule 3.6 and other than with
respect to matters covered by Section 3.12, below.
(b) Schedule 2.1(e) sets forth all Permits which are material
to the ownership or operation of the Facilities, and also identifies
those material Permits which are transferable or assignable by the
Seller to the Buyer or which will pass to the Buyer as successor in
-title to the Facilities by operation of applicable Laws (the
"Transferable Permits").
3.7. Taxes. The Seller has filed all Tax Returns that it was required
to file, and has paid all Taxes that have become due as indicated thereon,
where the failure
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so to file or pay could have a Material Adverse Effect, except where the Seller
is contesting the same in good faith by appropriate proceedings. There is no
unpaid Tax due and payable that could have a Material Adverse Effect on the
Buyer's ownership, operation or use of the Acquired Assets for which the Buyer
could become liable.
3.8. Contracts and Leases.
(a) Except (i) as listed in Schedule 2.1. (1) or 2.1. (c) or
any other Schedule, (ii) for contracts, agreements, personal property
leases, commitments, understandings or instruments which will expire
prior to the Closing Date, and (iii) for agreements with suppliers
entered into in the ordinary course of business for amounts not in
excess of $100,000 individually or $250,000 in the aggregate and which
have a term ending on or prior to December 31, 2000, the Seller is not a
party to any written contract, agreement, personal property lease,
commitment, understanding or instrument which (x) is material to the
business or operations of the Acquired Assets or (y) which provides for
the sale of any amount of capacity or energy from any of the Acquired
Assets (whether or not entered into in the ordinary course of business).
(b) Except as disclosed in Schedule 3. 6(b) (i) each of the
Con tracts constitutes a valid and binding obligation of the Seller,
(ii) the Seller is not in default in any material respect under any of
the Contracts and, to the Seller's Knowledge, the other parties to the
Contracts are not in default in any material respect under any thereof,
and (iii) the Contracts may be transferred to the Buyer pursuant to this
Agreement and will continue in full force and effect thereafter, in each
case without breaching the terms thereof or resulting in the forfeiture
or impairment of any material rights thereunder.
3.9. Insurance. Except as set forth in Schedule 3.9, all material
policies of fire, liability, worker's compensation and other forms of insurance
owned or held by the Seller insuring the Acquired Assets are in full force and
effect, all premiums with respect thereto covering all periods up to and
including the date as of which this representation is being made have been paid
(other than retroactive premiums which may be payable with respect to
comprehensive general liability and worker's compensation insurance policies),
and no written notice of cancellation or termination has been received with
respect to any such policy which was not replaced on substantially similar
terms prior to the date of such cancellation. Except as described in Schedule
3.9, as of the date of-this Agreement, the Seller has not been refused any
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insurance with respect to the Acquired Assets nor has its coverage been limited
by any insurance carrier to which it has applied for any such insurance or with
which it has carried insurance during the last five years.
3.10. Litigation. Except as disclosed in Schedule 3.10, no action,
suit, claim, demand or other proceeding is pending or, to Seller's Knowledge,
threatened that would be reasonably likely to result in a Material Adverse
Effect or that questions the validity of this Agreement or the Related
Agreements or of any action taken or to be taken pursuant to or in connection
with the provisions of this Agreement or the Related Agreements.
3.11. Employees. The Collective Bargaining Agreement referenced in
Schedule 3.11 is the only collective bargaining agreement to which the Seller
is a party and which governs terms and conditions of employment of employees of
the Seller whose employment relates primarily to the Acquired Assets. A true
and correct copy of the Collective Bargaining Agreement has heretofore been
delivered to the Buyer. Except as described in Schedule 3.11, and except as to
such matters as will not have a Material Adverse Effect: (i) the Seller has not
experienced any labor disputes, strikes or work stoppages by such employees due
to labor disagreements since 1971 and to the Seller's Knowledge none is
currently pending; (ii) to the Seller's Knowledge the Seller is in compliance
with all applicable Laws respecting employment and employment practices, equal
employment opportunity, occupational health and safety and affirmative action,
terms and conditions of employment and wages and hours; (iii) the Seller has
not received written notice from any Govern mental Authority of any unfair
labor practice charge, complaint or proceeding against the Seller pending or
threatened before the National Labor Relations Board or any other Governmental
Authority with respect to such employees; (iv) no arbitration proceeding
arising out of or under any collective bargaining agreement with respect to the
Acquired Assets is pending against the Seller; and (v) the Seller is in
compliance in all material respects with the Collective Bargaining Agreement.
3.12. Environmental Matters. During the two-year period preceding the
Effective Date, except as disclosed in Schedule 3.12, and except where such
matters, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect, (i) the Seller did not receive any written
notice from any Govern mental Authority that it is not in compliance with
Environmental Laws or failed to obtain material Permits required for the
ownership or operation of any Acquired Asset under Environmental Laws; (ii) the
Seller did not receive any written notice from any Governmental Authority that
any Acquired Asset is listed under the
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Comprehensive Environmental Response, Compensation Liability Information
Systems or any similar state list; (iii) the Seller did not receive any written
notice from any Person alleging Liability for any Environmental Claims; and
(iv) the Seller was not required by any applicable Environmental Laws to place
any use or activities restrictions or any institutional controls on any
Acquired Assets. The Seller is not aware of any matters which could give rise
to Environmental Liabilities which would reasonably be expected to have a
Material Adverse Effect which are not disclosed or identified in the Phase I
and Phase II Reports referred to in Schedule 3.12.
3.13. Condemnation. Except as set forth in Schedule 3.13, the Seller
has received no written notice from any Governmental Authority of any pending
or threatened proceeding to condemn or take by power of eminent domain or
otherwise, by any Governmental Authority, all or any part of the Acquired
Assets, which would constitute a Major Loss. -
3.14. Regulation as a Utility. The Seller is a public service company
and an electric company under C.G. S. section 16-1(4) and 16-1(8), and is
subject to regulation as such by the DPUC, and is a "subsidiary company" of a
"holding company" which is registered under (and as those terms are defined in)
the Public Utility Holding Company Act of 1935, as amended.
3.15. Benefit Plans. Schedule 3.15 lists as of the Effective Date, all
Employee Benefit Plans established, sponsored, - - maintained or -contributed
to by (or to which there is an obligation to contribute of) the Seller in
respect of the Acquired Assets Employees. Accurate and complete copies of all
such Employee Benefit Plans (excluding Multiemployer Plans) have been made
available to the Buyer. Except as disclosed on Schedule 3.15, the Seller does
not contribute to, and has no obligation to contribute to, any Multiemployer
Plan. No liability under Title IV or Section 302 of ERISA or Section 412 of the
Code has been incurred by the Seller with respect to the Acquired Assets
Employees that has not been satisfied in full, and to the Seller's Knowledge no
condition exists that presents a material risk to the Seller of incurring any
such liability, other than liability for premiums due the Pension Benefit
Guaranty Corporation, which premiums have been paid.
3.16. Assets Used in Operation of the Facilities. The Acquired Assets
include all material assets and properties that are used by the Seller in the
operation of the Facilities on the Effective Date.
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3.17. Year 2000 Computer Problem. The Seller has performed all of the
work regarding addressing the Year 2000 Computer Problem which the Seller has
advised ISO New England and NEPOOL has been performed, as more particularly
identified in Schedule 3.17.
3.18. Disclaimers Regarding Acquired Assets. EXCEPT FOR ANY
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 3, THE ACQUIRED ASSETS
ARE SOLD "AS IS, WHERE IS," AND THE SELLER EXPRESSLY - DISCLAIMS ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO
LIABILITIES, OPERATIONS OF THE FACILITIES, TITLE, CONDITION, VALUE OR QUALITY
OF THE ACQUIRED ASSETS OR THE PROSPECTS (FINANCIAL AND OTHERWISE), RISKS AND
OTHER INCIDENTS OF THE ACQUIRED ASSETS INCLUDING, WITHOUT LIMITATION, WITH
RESPECT TO THE ACTUAL OR RATED GENERATING CAPABILITY OF ANY OF THE FACILITIES
OR THE ABILITY OF THE BUYER TO SELL FROM ANY OF THE FACILITIES ELECTRIC ENERGY,
CAPACITY OR OTHER PRODUCTS RECOGNIZED BY ISO NEW ENGLAND FROM TIME TO TIME, AND
THE SELLER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANT
ABILITY, USAGE, OR SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH
RESPECT TO THE ACQUIRED ASSETS, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP
THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, OR
COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS, OR AS-TO THE CONDITION OF THE
ACQUIRED ASSETS, OR ANY PART THEREOF, INCLUDING, WITHOUT LIMITATION, THE
CONDITION OF THE ACQUIRED ASSETS WITH RESPECT TO TILE YEAR 2000 COMPUTER
PROBLEM, OR WHETHER THE SELLER POSSESSES SUFFICIENT REAL PROPERTY OR PERSONAL
PROPERTY TO OPERATE TILE ACQUIRED ASSETS. EXCEPT AS OTHER WISE EXPRESSLY
PROVIDED HEREIN, THE SELLER FURTHER SPECIFICALLY DISCLAIMS ANY REPRESENTATION
OR WARRANTY REGARDING THE ABSENCE OF HAZARDOUS SUBSTANCES OR LIABILITY OR
POTENTIAL LIABILITY ARISING UNDER ENVIRONMENTAL LAWS. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE SELLER
EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF ANY KIND REGARDING THE
CONDITION OF THE ACQUIRED ASSETS OR THE SUITABILITY
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THEREOF AS SITES FOR THE DEVELOPMENT OF ADDITIONAL OR RE PLACEMENT GENERATION
CAPACITY, AND NO MATERIAL OR INFORMATION PROVIDED BY OR COMMUNICATIONS MADE BY
THE SELLER, OR BY ANY BROKER OR INVESTMENT BANKER, INCLUDING WITHOUT LIMITATION
ANY INFORMATION OR MATERIAL CONTAINED IN THE DESCRIPTIVE MEMORANDUM DATED AS OF
FEBRUARY 10, 1999 AND ANY ORAL, WRITTEN OR ELECTRONIC RESPONSE TO ANY
INFORMATION REQUEST PROVIDED TO THE BUYER, WILL CAUSE OR CREATE ANY WARRANTY,
EXPRESS OR IMPLIED, AS TO THE TITLE, CONDITION, VALUE OR QUALITY OF THE
ACQUIRED ASSETS.
4. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller that the statements contained in this Section 4 are
correct and complete as of the Effective Date.
4.1. Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Delaware.
Copies of the organizational documents and bylaws of the Buyer, each as amended
to date, have been heretofore delivered to the Seller and are accurate and
complete.
4.2. Authorization of Transaction. The Buyer has the power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and the Related Agreements and, subject to receipt of all
Buyer's Regulatory Approvals, to perform its obligations hereunder and
thereunder. All corporate actions or proceedings to be taken by or on the part
of the Buyer to authorize and permit the due execution and valid delivery by
the Buyer of this Agreement, the Related Agreements and the instruments
required to be duly executed and validly delivered by the Buyer pursuant hereto
and thereto, the performance by the Buyer of its obligations hereunder and
thereunder, and the consummation by the Buyer of the transactions contemplated
herein and therein, have been duly and properly taken. This Agreement and the
Related Agreements have been duly executed and validly delivered by the Buyer
and constitute the valid and legally binding obligations of the Buyer,
enforceable in accordance with their terms and conditions.
4.3. Noncontravention. Subject to the Buyer obtaining the Buyer's
Regulatory Approvals, -neither the execution and the delivery of this Agreement
or any of the Related Agreements, nor the consummation of the transactions
contemplated hereby and thereby (including the assignments and assumptions
referred to in Sections 2.10(t) and 2.11(1) above), will (i) violate any
constitution, statute, regula-
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tion, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any Governmental Authority to which the Buyer is subject or any
provision of the [organizational documents] or bylaws of the Buyer or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Buyer is a party or by
which it is bound or to which any of its assets is subject, except for matters
that will not have a Buyer Material Adverse Effect.
4.4. Brokers' Fees. The Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
4.5. Litigation. No action, suit, claim, demand or other proceeding is
pending or, to the Buyer's Knowledge, threatened that would be reasonably
likely to result in a Buyer Material Adverse Effect or that questions the
validity of this Agreement or the Related Agreements or of any action taken or
to be taken pursuant to or in connection with the provisions of this Agreement
or the Related Agreements. There are no judgments, orders, decrees, citations,
fines or penalties heretofore assessed against the Buyer that have a Buyer
Material Adverse Effect or impair, estop, impede, restrain, ban or otherwise
adversely affect the Buyer's ability to satisfy or perform any of the Assumed
Liabilities under any federal, state or local Law.
4.6. No Knowledge of the Seller 's Breach. The Buyer has no Knowledge
of any breach by the Seller of any representation or warranty contained in
Section 3 hereof, or of any condition or circumstance that would excuse the
Buyer from performance of its obligations under this Agreement or the Related
Agreements.
4.7. Availability of Funds. The Buyer has sufficient funds available
to it to pay the Closing Purchase Price on the Closing Date.
4.8. "As Is" Sale. The representations and warranties set forth in
Section 3 hereof constitute the sole and exclusive representations and
warranties of the Seller in connection with the transactions contemplated
hereby. There are no representations, warranties, covenants, understandings or
agreements among the Parties regarding the Acquired Assets or their transfer
other than those incorporated in this Agreement. Except for the representations
and warranties expressly set forth in Section 3, the Buyer disclaims reliance
on any representations, warranties or guaran-
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tees, either express or implied, by the Seller including but not limited to any
representation or warranty expressed or implied in the Descriptive Memorandum
dated as of February 10, 1999 and any oral, written or electronic response to
any information request provided to the Buyer. EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED HEREIN, THE BUYER ACKNOWLEDGES AND AGREES THAT THE ACQUIRED ASSETS ARE
BEING ACQUIRED "AS IS, WHERE IS" - ON THE CLOSING DATE, AND IN THEIR CONDITION
ON THE CLOSING DATE, AND THAT PRIOR TO TILE EXECUTION OF THIS AGREEMENT, THE
BUYER HAS CONDUCTED TO ITS SATISFACTION ALL NECESSARY AND SUFFICIENT
EXAMINATION OF THE ACQUIRED ASSETS, AND THAT THE BUYER IS RELYING ON ITS OWN
EXAMINATION OF THE ACQUIRED ASSETS, AND IS NOT RELYING ON ANY REPRESENTATION OR
WARRANTY MADE BY THE SELLER, OR ANY BROKER OR INVESTMENT BANKER. TILE BUYER
FURTHER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS SET FORTH IN SECTION 9.1, THE
REPRESENTATIONS AND WARRANTIES OF THE SELLER SET FORTH IN THIS AGREEMENT
TERMINATE AS OF THE CLOSING DATE OR TERMINATION OF THIS AGREEMENT PURSUANT TO
SECTION 10.1, AND THAT FOLLOWING THE CLOSING DATE OR SUCH TERMINATION, AS THE
CASE MAY BE, THE BUYER SHALL HAVE NO RECOURSE AGAINST THE SELLER WITH RESPECT
TO ANY BREACH OF SUCH REPRESENTATIONS AND WARRANTIES.
4.9. Affiliate Guaranty. If the Buyer assigns its rights and interests
to an Affiliate or Affiliates pursuant to Section 11.5 hereof, the Buyer shall
be deemed to have made the representations and warranties in this Section 4 on
behalf of itself and any such Affiliate as if such Affiliate were a signatory
to this Agreement.
4.10. Qualified Buyer. To the Knowledge of the Buyer, the Buyer is
qualified to obtain any Permits necessary for the Buyer to own and operate the
Acquired Assets as of the Closing, to the extent such operation is either
required by any Related Agreement or this Agreement, or is contemplated by the
Buyer.
5. Covenants. The Parties agree as follows:
5.1. General. Prior to the Closing, each of the Parties will use its
best efforts to take all actions and to do all things necessary, proper or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement
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and the Related Agreements prior to January 1, 2000 (including satisfaction,
but not waiver, of the closing conditions set forth in Section 6 below).
5.2. Notices, Consents and Approvals.
(a) The Seller and the Buyer shall each file or cause to be
filed with the Federal Trade Commission and the United States Department
of Justice any notifications required to be filed under the
Hart-Scott-Rodino Act and the rules and regulations promulgated
thereunder with respect to the transactions contemplated hereby. The
Parties shall cooperate with each other and use Commercially Reasonable
Efforts to make such filings, as promptly as possible after the
Effective Date, to respond promptly to any requests for additional
information made by either of such agencies, and to cause the waiting
periods under the Hart-Scott-Rodino Act to terminate or expire at the
earliest possible date after the date of filing. The Buyer will pay all
filing fees under the Hart-Scott-Rodino Act, but each Party will bear
its own costs for the preparation of any filing. Both Parties shall use
Commercially Reasonable Efforts to cause any waiting period under the
Hart-Scott- Rodino Act with respect to the transactions contemplated by
this Agreement and the Related Agreements to expire or terminate at the
earliest possible time.
(b) Prior to the Closing, the Seller and the Buyer shall
cooperate with each other and use all Commercially Reasonable Efforts to
(i) promptly prepare and file all necessary documentation, (ii) effect
all necessary applications, notices, petitions and filings and execute
all agreements and documents, (iii) obtain the transfer or reissuance to
the Buyer of all necessary Permits and (iv) obtain all necessary
consents, approvals and authorizations of all other parties necessary or
advisable to consummate the transactions contemplated by this Agreement
or in any of the Related Agreements (including, without limitation, the
Seller's Regulatory Approvals and the Buyer's Regulatory Approvals) or
required by the terms of any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, concession, contract, lease or other
instrument to which the Seller or the Buyer is a party or by which any
of them is bound. The Seller and the Buyer shall have the right to
review in advance all characterizations of the information relating to
the transactions contemplated by this Agreement or in any of the Related
Agreements which appear in any filing made in connection with the
transactions contemplated hereby or thereby. Notwithstanding the
foregoing, the Seller is not obligated
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to assign or transfer any interest in any Transferable Permits,
including, without limitation, those obtained pursuant to the applicable
requirements of Environmental Laws, if the consent or approval of the
third Person for such assignment or transfer cannot be obtained.
(c) The Buyer shall have primary responsibility for securing
the transfer or reissuance of the Permits (including the Transferable
Permits) effective as of the Closing Date. The Seller shall cooperate
with the Buyer's efforts in this regard and the Seller shall use all
Commercially Reasonable Efforts to assist in the transfer or reissuance
when so requested by the Buyer. If Buyer is unable to secure the
transfer or reissuance of one or more Permits effective on the Closing
Date, the Seller shall continue to cooperate with the Buyer's efforts to
secure such transfer or reissuance following the Closing Date.
5.3. Operation of Business. During the Interim Period, the Seller will
operate and maintain the Acquired Assets in the ordinary course consistent with
Good Utility Practices, unless otherwise contemplated by this Agreement or with
the prior written consent of the Buyer. Without limiting the generality of the
foregoing, the Seller shall not, without the prior written consent of the
Buyer, which Buyer shall not unreasonably withhold or delay, during the Interim
Period, with respect to the Acquired Assets:
(a) sell, lease (as lessor), transfer or otherwise dispose of,
any of the Acquired Assets, other than as used, consumed or replaced in
the ordinary course of business consistent with Good Utility Practices,
or encumber, pledge, mortgage or suffer to be imposed on any of the
Acquired Assets any encumbrance other than Permitted Encumbrances of the
type described in clauses (i) through (vi) of the definition thereof,
and other than such additional financing under the Mortgage Indenture as
shall not prevent the Seller from obtaining a Mortgage-Indenture Release
substantially in the form attached hereto as Exhibit H;
(b) make any material change in the levels of Inventories
customarily maintained by the Seller with respect to the Acquired
Assets, except for such changes that are consistent with Good Utility
Practices;
(c) amend, terminate or otherwise modify any Contract, Lease
or Permit other than in the ordinary course of business, or as may be
required in
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connection with transferring the Seller's rights or obligations
thereunder to the Buyer pursuant to this Agreement;
(d) enter into, amend, or otherwise modify any real or
personal property Tax agreement, treaty or settlement;
(e) except as set forth in Schedule 5.3(e), enter into any
commitment for the purchase or sale of fuel (whether commodity or
transportation) having a term greater than three (3) months and not
terminable either (i) automatically on the Closing Date; or (ii) by
option of the Buyer in its sole discretion at any time after the Closing
Date without penalty;
(f) make any capital expenditures that are not Pre-Approved
Capital Expenditures or enter into a Capital Commitment with respect
thereto, except for those capital expenditures or Capital Commitments
necessitated by Good Utility Practice, with respect to which the Seller
shall advise the Buyer of the proposed incurrence thereof not less than
thirty (30) days prior to the time the capital expenditures are to be
made or a Capital Commitment with respect thereto undertaken (or such
shorter period as may be necessitated by an emergency situation), and
with respect to which the Buyer shall promptly deliver the written
consent contemplated by this Section 5.3 unless the Buyer reasonably
objects thereto;
(g) except as set forth in Schedule 5.4(g), make or cause to
be made any material modifications to the Employee Benefit Plans;
(h) make any material changes to any Collective Bargaining
Agreement or enter into any new Collective Bargaining Agreement; or
(i) hire (whether by transfer from within Seller's or its
Affiliates' organizations or otherwise) any employees who would be
Acquired Assets Employees other than to replace or fill vacancies for
safety or operational purposes, without first consulting with Buyer.
Notwithstanding anything in Section 5.3 to the contrary, the Seller may, in its
sole discretion, (i) make Pre-Approved Capital Expenditures or incur a Capital
Commitment with respect thereto and (ii) make Capital Commitments for which an
adjustment to the Initial Purchase Price will be made pursuant to Section
2.6(b).
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5.4. Full Access; Year 2000 Computer Problem
(a) During the Interim Period, the Seller will permit the
Buyer and Representatives of the Buyer during normal business hours (i)
to have access upon reasonable notice, in a manner so as not to
interfere with the normal business operations of the Seller, to all
premises, properties, management, personnel, books., records (including
Tax records) and documents associated with the Acquired Assets; (ii)
permit the Buyer to make such reasonable inspections thereof as the
Buyer may reasonably request; and (iii) furnish the Buyer with a copy of
each material report, schedule or other document filed or received by it
with respect to the Acquired Assets with a Governmental Authority.
Notwithstanding the foregoing, and without limiting the generality of
the confidentiality provisions set forth in Section 7 hereof, the Seller
shall: (i) not provide any information that the Seller or the Seller's
counsel believes constitutes or could be deemed to constitute a waiver
of the attorney-client privilege, and (ii) not be required to supply the
Buyer with any information or records that the Seller is under a legal
obligation not to supply, including, without limitation, any Acquired
Assets Employees' Records.
(b) During the Interim Period, the Seller shall consult with
the Buyer and cooperate with the Buyer's reasonable requests regarding
modifications to any hardware, software or firmware (including embedded
microcontrollers in non-computer equipment) included in the Acquired
Assets so as to ensure to the extent practicable that on and following
the Closing Date the operation of the Acquired Assets by the Buyer will
not be interrupted or adversely affected due to the Year 2000 Computer
Problem. Any amounts expended by the Seller at the request of the Buyer
under this Section 5.4(b) shall constitute an adjustment to the Initial
Purchase Price pursuant to Section 2.6(a) hereof.
(c) During the Interim Period, at the sole cost and expense of
the Buyer, the Seller will permit designated employees or
Representatives of the Buyer (the "Buyer's Observers") to observe all
operations of the Seller related to the Acquired Assets and such
observation shall be permitted on a cooperative basis in the presence of
personnel of the Seller during normal business hours of the Seller;
provided, however, that the Buyer's Observers shall not unreasonably
interfere with the operation of the Acquired Assets by the Seller.
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(d) During the Interim Period, the Seller will permit the
environ mental consulting firm which prepared the Phase I and Phase II
Reports referred to in Schedule 3.12 to conduct additional
investigations of the Sites solely for the purpose of determining the
projected cost of Remediation which may be required solely with respect
to Releases specifically identified in such Phase I and Phase II
Reports. Any such additional investigation shall be at the sole cost and
expense of Buyer, shall be completed no later than sixty (60) days after
the date of this Agreement, and shall be pursuant to a work plan
reasonably acceptable to Buyer and Seller. The Buyer expressly
acknowledges and agrees that any facts or other matters discovered as a
result of the conduct of such additional investigations (including,
without limitation, the projected cost of anticipated Remediation
activities at the Sites) shall not be deemed to be or cause a Material
Adverse Effect, shall not affect the Buyer's obligation to consummate
the transactions contemplated hereby or the amount of the Purchase Price
payable by it hereunder, and shall not impose any obligation on Seller
to undertake any Remediation of any kind at or with respect to the
Sites.
5.5. Interim Period Notice.
(a) The Buyer shall notify the Seller promptly if any
information comes to its attention prior to the Closing that is likely
(i) to excuse the Buyer from the performance of its obligations under
this Agreement or the Related Agreements or (ii) cause any condition to
close set forth in Sections 6.1 or 6.2 not to be satisfied.
(b) The Seller shall notify the Buyer of the existence of any
matter which would cause any of the representations or warranties in
Section 3 above to be untrue or incorrect. Unless the Buyer has the
right to terminate this Agreement pursuant to Section 10. 1(b)(vi) below
by reason of such notice and exercises that right within the period of
15 days referred to in Section 10. 1(b)(vi) below, the written notice
pursuant to this Section 5.5(b) shall be deemed to have amended the
appropriate Schedule or Schedules as of the Effective Date, to have
qualified the representations and warranties contained in Section 3
above as of the Effective Date, and to have cured any misrepresentation
or breach of warranty that otherwise might have existed hereunder by
reason of the existence of such matter.
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(c) The Buyer may elect at any time to notify the Seller of
the existence of any matter, which if in existence on the Effective Date
or the Closing Date would or might cause any of the representations or
warranties in Section 4 above to be untrue or incorrect. Unless the
Seller has the right to terminate this Agreement pursuant to Section
10.1 (c)(vi) below by reason of such notice and exercises that right
within the period of 15 days referred to in Section 10. 1(c)(vi) below,
the written notice pursuant to this Section 5.5(b) shall be deemed to
have amended the appropriate Schedule or Schedules as of the Effective
Date, to have qualified the representations and warranties contained in
Section 4 above as of the Effective Date, and to have cured any
misrepresentation or breach of warranty that otherwise might have
existed hereunder by reason of the existence of such matter.
5.6. Further Assurances.
(a) any time and from time to time after the Closing, at the
request of a Party, the other Party will execute and deliver such
instruments of sale, transfer, conveyance, assignment and confirmation
and take such action as the Seller and the Buyer may both reasonably
agree is necessary to transfer, convey and assign to the Buyer, and to
confirm the Buyer's title to or interest in the Acquired Assets and
Assumed Liabilities or to put the Buyer in actual possession and
operating control of the Acquired Assets.
(b) In the event that any asset that is an Acquired Asset
shall not have been conveyed to the Buyer at the Closing, the Seller
shall, subject to Sections 5.6(c), (d) and (e), use its best efforts to
convey such asset to the Buyer as promptly as is practicable after the
Closing.
(c) To the extent that the Seller's rights under any Contract
or Lease may not be assigned without the consent of another Person which
consent has not been obtained by the Closing Date, this Agreement shall
not constitute an agreement to assign the same if an attempted
assignment would constitute a breach thereof or be unlawful, and the
Seller, at its expense, shall use its Commercially Reasonable Efforts to
obtain any such required consent(s) as promptly as possible. The Seller
and the Buyer agree that if any consent to an assignment shall not be
obtained, or if any attempted assignment would be ineffective or would
impair the Buyer's rights and obligations under the Contract or Lease in
question, so that the Buyer would not in effect acquire the benefit of
all such rights and obligations, the Seller, to the maxi-
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mum extent permitted by law and such Contract or Lease, shall, after the
Closing, appoint the Buyer to be the Seller's agent with respect to such
Contract or Lease, and the Seller shall, to the maximum extent permitted
by law and such Contract or Lease, enter into such reasonable
arrangements with the Buyer as are necessary to provide the Buyer with
the benefits and obligations of such Contract or Lease. The Seller and
the Buyer shall cooperate and shall each use their Commercially
Reasonable Efforts after the Closing to obtain an assignment of such
Contract or Lease to the Buyer; provided that neither the Seller nor the
Buyer shall have any obligation to offer or pay any consideration in
order to obtain any such consents.
(d) To the extent that the Seller's rights under any warranty
or guaranty described in Section 2.1 (b) may not be assigned without the
consent of another Person, which consent has not been obtained by the
Closing Date, this Agreement shall not constitute an agreement to assign
the same, if an attempted assignment would constitute a breach thereof,
or be unlawful. The Seller and the Buyer agree that if any consent to an
assignment of any such warranty or guaranty would be ineffective or
would impair the Buyer's rights and obligations under the warranty or
guaranty in question, so that the Buyer would not in effect acquire the
benefit of all such rights and obligations, the Seller shall use
Commercially Reasonable Efforts, at the Buyer's sole cost and expense,
to the extent permitted by law and such warranty or guaranty, to enforce
such warranty or guaranty for the benefit of the Buyer so as to the
maximum extent possible to provide the Buyer with the benefits and
obligations of such warranty or guaranty. Notwithstanding the foregoing,
the Seller shall not be obligated to bring or if suit against any Third
Party, provided that if the Seller shall determine not to bring or file
suit after being requested by the Buyer to do so, the Seller shall
assign, to the extent permitted by law or any applicable agreement or
contract, its rights in respect of the claims so that the Buyer may
bring or file such suit.
(e) To the extent that any personal property lease cannot be
assigned to the Buyer or is not subject to arrangements described in
Section 5.6(c), upon the Buyer's request and at the Buyer's sole
expense, the Seller will use Commercially Reasonable Efforts to acquire
the assets relating to such lease and to include them in the Acquired
Assets before the Closing Date.
5.7. Employee Matters.
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(a) The Buyer shall offer employment, commencing as of mid
night on the Closing Date, to all employees of the Seller who are
represented by the Locals and who were employed in the operation of the
Acquired Assets at any time during the three-month period prior to the
Closing Date, at levels of wages and overall compensation not lower
than. each such employee's level of wages and overall compensation as of
the Effective Date; provided that the Buyer shall recognize all
increases in wages made in the ordinary course of business and in
accordance with the Collective Bargaining Agreement (as defined
hereinbelow) between the Effective Date and the Closing Date. Those
employees who accept such offer of employment are hereinafter referred
to as the "Represented Employees". All such offers of employment shall
be made in accordance with all applicable laws and regulations and the
Collective Bargaining Agreement between the Seller and the Locals dated
June 1, 1998, as amended by the Memorandum of Understand ing dated
December 17, 1998 between the Locals and the Seller (the "MOU", and,
together with the above-referenced Collective Bargaining Agreement,
referred to herein as the "Collective Bargaining Agreement"). Effective
as of the Closing Date, the Buyer shall agree to be bound by the terms
of the Collective Bargaining Agreement and to thereafter comply with all
applicable obligations thereunder, subject to changes negotiated with
and acceptable to the Locals.
(b) The Buyer agrees to offer employment, commencing as of
midnight on the Closing Date, for a period of at least twelve months
(the "Minimum Employment Period") to all employees of the Seller who
were employed in the operation of the Acquired Assets at any time during
the three-month period prior to the Closing Date, other than Represented
Employees, at levels of wages and overall compensation not lower than
each such employee's level of wages and overall compensation as of the
Effective Date; provided that the Buyer shall recognize all increases in
wages made in the ordinary course of business between the Effective Date
and the Closing Date; and provided, further, that nothing herein shall
prevent the Buyer from terminating any Non-Represented Employee's
employment for cause during the Minimum Employment Period. Those
employees who accept such offer of employment are hereinafter referred
to as the "Non-Represented Employees, and the Non-Represented Employees
and the Represented Employees are hereafter referred to as the "Acquired
Assets Employees". All such offers of employment shall be made in
accordance with all applicable laws. Notwith-
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standing anything herein to the contrary, all Non-Represented Employees
will be employed as at-will employees whose employment may be terminated
at any time with or without cause or reason by either the employee or
the Buyer. In addition, the Buyer shall provide to any Non-Represented
Employee who is furloughed during the six months following the Minimum
Employment Period out-placement assistance and tuition reimbursement
consistent with that provided to the Represented Employees in the Locals
420 and 457 MOU. For purposes of this Section 5.7, the term "furloughed"
shall refer to the termination of employment with or without possibility
of recall, made by the Buyer without cause.
(c) As soon as practical after the Effective Date, Buyer shall
take all action necessary and appropriate to establish and maintain a
tax qualified pension plan for the Acquired Assets Employees (the
"Buyer's Plan").
(i) The Buyer shall provide a minimum level of pension
benefits calculated using the pension benefit formula
applicable to each Acquired Asset Employee under the NUSCO
Retirement Plan (the "Seller's Plan") as of the Effective
Date. The Buyer's minimum obligation with regard to this
pension benefit will be calculated as the difference
between (a) the Acquired Assets Employee's total pension
benefit as calculated as of the employee's retirement date
using (1) the pension benefit formula under the Seller's
Plan applicable to the employee as of the Effective Date,
(ii) such employee's final average earnings (as defined in
the Seller's Plan) as of the employee's retirement date,
taking into account compensation earned from the Seller
and the Buyer, (iii) such employee's total years of
service with the Seller and the Buyer as of the employee's
retirement date, and (iv) covered compensation as of the
employee's retirement date and (b) the pension benefit
payable to the employee by the Seller at retirement as
follows: the pension benefit payable to each Acquired
Assets Employee at age 65 by the Seller shall be
calculated by the Seller as of the Closing Date, based
upon (i) the pension benefit formula under the Seller's
Plan applicable to the employee as of the Closing Date,
(ii) years of credited service with the Seller as of the
Closing Date, (iii) final average earnings (as defined in
the Seller's Plan) as of the Closing Date, and (iv)
covered compensation as of the Closing Date. This benefit
shall be a vested terminated benefit subject
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to the vested terminated actuarial factors applied under
the Seller's Plan.
(ii) The Seller shall provide each Acquired Assets Employee
with a vested and non-forfeitable right to a benefit equal
to his accrued benefit under the Seller's Plan determined
as of the Closing Date as described in Section 5.7(c)(i)
above.
(iii) (iii) Employee (as defined below), the Buyer will provide
the benefits described in Schedule 5.7(c)(iii). An
Eligible Non-Represented Employee is an employee whose
age on the date of announcement of the successful
bidder(s) is between 50 and 54 years, inclusive, and whose
age plus years of credited service under the Seller's Plan
on the same date equals or exceeds 65 years.
(iv) Effective September 30, 1999, the Seller's Plan will
permit employees age 55 and older to retire on or after
January 1, 2000 with full pension benefits if the sum of
the employee's age and years of credited service equals 85
at such employee's termination date (the "Rule of 85").
The Buyer shall apply the Rule of 85 to all Acquired
Assets Employees.
(d) The Buyer shall establish and maintain for the
Non-Represented Employees for a period of at least twelve months
following the Closing Date plans and programs which, in the aggregate,
shall be generally comparable to the plans and programs provided to such
employees by Seller as of the Effective Date as listed on Schedule 3.15.
(e) The Buyer shall apply each Acquired Assets Employee's
prior service with the Seller toward any eligibility, vesting or other
waiting period requirements under the Buyer's Employee Benefit Plans
(including the Buyer's Plan) to the extent such conditions were
satisfied under the Seller's Employee Benefit Plans prior to the Closing
Date. In addition, the Buyer shall waive all limitations with respect to
preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements under the Buyer's Employee
Benefit Plans and credit each Acquired Assets Employee for any
co-payments and deductibles paid prior to the Closing Date under any
such plans in which each Acquired Assets Employee participates.
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The Buyer shall vest each Acquired Assets Employee to the extent such
employee is vested under the Seller's Employee Benefit Plans as of the
Closing Date.
(f) Within a reasonable time prior to the Closing Date, the
Seller shall provide the Buyer with such pertinent data or information
as the Buyer shall reasonably require to determine each Acquired Assets
Employee's service, compensation and accrued benefits under the Seller's
Plan before the Closing Date.
(g) The authorized complement of employees (by position) for
the Acquired Assets, as of the Effective Date, is set forth on Schedule
5.7(g).
(h) The Seller shall provide and remain liable for any and all
continuation of coverage under the Seller's Employee Benefit Plans as
required under Section 601 through 608 of ERISA and Section 4980B of the
Code with respect to any person as to whom a "qualifying event" as
defined in Section 4980 of the Code occurred on or prior to the Closing
Date.
(i) On or before the Closing Date, the Seller shall terminate
the employment of the Acquired Assets Employees and shall be solely
responsible for the payment of all wages and compensation thereupon
legally owing to or with respect to the Acquired Assets Employees
including, without limitation, accrued and payable vacation pay,
bonuses, severance pay, overtime, and all benefits under any Employee
Benefit Plan that became payable on account of such termination of
employment or any other amounts to which the Acquired Assets Employees
may be entitled for services rendered prior to their termination or by
virtue of their termination. The Seller shall retain any and all
liability under the Seller's Employee Benefit Plans for retirees of the
Seller as of the Closing Date.
(j) The Seller agrees to timely perform and discharge all
requirements under the WARN Act and under applicable state and local
Laws for the notification of its employees arising from the sale of the
Acquired Assets to the Buyer up to and including the Closing Date,
including those employees who will become Acquired Assets Employees
effective as of the Closing Date. After the Closing Date, the Buyer
shall be responsible for performing and discharging all requirements
under the WARN Act and under applicable state and local laws and
regulations for the notification of its employees,
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whether Acquired Assets Employees or otherwise. All severance and other
costs associated with workforce restructuring activities associated with
the Assets and/or the Acquired Assets Employees subsequent to the
Closing Date shall be borne solely by the Buyer.
5.8. Access after Closing.
(a) Records. For a period of five (5) years after the Closing
Date, the Seller shall have reasonable access to all of the records,
books and documents related to the Acquired Assets to the extent that
such access may reasonably be required by the Seller in connection with
matters relating to or affected by the operations of the Seller prior to
the Closing Date. Such access shall be afforded by the Buyer upon
receipt of reasonable advance notice and during normal business hours.
The Seller shall be solely responsible for any costs or expenses
incurred by it pursuant to this Section 5.8(a). If the Buyer shall
desire to dispose of any records, books or documents that may relate to
operation of the Acquired Assets before the Closing prior to the
expiration of such five-year period, the Buyer shall, prior to such
disposition, give to the Seller a reasonable opportunity, at the
Seller's expense, to segregate and remove such records, books or
documents as the Seller may select.
(b) Employees. For a period of five (5) years after the
Closing Date, the Seller shall have reasonable access to the Acquired
Assets Employees, for purposes of consultation or otherwise, to the
extent that such access may reasonably be required by the Seller in
connection with matters relating to or affected by the operations of the
Seller prior to the Closing.
5.9. NEPOOL. At the Closing, the Buyer shall be a member in good
standing in NEPOOL. Except as required to preserve system reliability and in
compliance with the requirements of the ISO or NEPOOL, and as may be otherwise
provided in any Related Agreement, the Seller shall not interfere with the
Buyer's efforts to expand or modify generation capacity at any of the Sites.
5.10. Risk of Loss. Except as otherwise provided in this Section 5.10,
during the Interim Period all risk of loss or damage to the Acquired Assets
shall be borne by the Seller. If during the Interim Period the Acquired Assets
are damaged by fire or other casualty (each such event, an "Event of Loss"), or
are taken by a Governmental Authority by exercise of the power of eminent
domain (each, a "Taking"), then the following provisions shall apply:
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(a) the occurrence of (i) any one or more Events of Loss, as a
result of which the aggregate costs to restore, repair or replace, less
any insurance proceeds received or payable to the Seller in connection
with such Event or Events of Loss (provided that any insurance proceeds
received or payable in connection with an Event or Events of Loss are
either used to restore, repair or replace such Event or Events of Loss
or made available to the Buyer), are reasonably estimated to be an
amount less than or equal to $1,000,000, and/or (ii) any one or more
Takings, as a result of which the aggregate condemnation proceeds equal
an amount less than or equal to $1,000,000, shall have no effect on the
transactions contemplated hereby;
(b) upon the occurrence of (i) any one or more Events of Loss,
as a result of which the aggregate costs to restore, repair or replace,
less any insurance proceeds received or payable to the Seller in
connection with such Event or Events of Loss (provided that any
insurance proceeds received or payable in connection with an Event or
Events of Loss are either used to restore, repair or replace such Event
or Events of Loss or made available to the Buyer'), are reasonably
estimated to be an amount in excess of $1,000,000, or (ii) any one or
more Takings, as a result of which the aggregate condemnation proceeds
equal an amount in excess of$ 1,000,000 (a "Major Loss"), the Seller
shall have, in the case of a Major Loss relating to one or more Events
of Loss, the option, exercised by notice to the Buyer, to restore,
repair or replace the damaged Acquired Assets prior to Closing. If the
Seller elects to restore, repair or replace the Acquired Assets relating
to a Major Loss, which election shall be made by notice to the Buyer
within fifteen (15) days following the occurrence of the Major Loss, the
completion of the repair, replacement or restoration will be a condition
to the Closing and the Closing Date shall be postponed at the election
of the Seller for the amount of time reasonably necessary to complete
the restoration, repair or replacement, not to exceed one hundred and
eighty (180) days without the Buyer's consent. If the Seller elects not
to restore, repair or replace the Acquired Assets affected by a Major
Loss, or such Major Loss is the result of one or more Takings, the
provisions of Section 5. 10(c) will apply;
(c) in the event that the Seller elects not to restore, repair
or replace a Major Loss, or in the event that the Seller, having elected
to repair, replace or restore the Major Loss, fails to complete the
repair, replacement or restoration within the one hundred eighty (180)
days (or such longer period as
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the Buyer shall have consented to), or in the event that a Major Loss is
the result of one or more Takings, then the Parties shall, within thirty
(30) days following the Seller's election, failure to complete, or the
occurrence of such Takings, as the case may be, negotiate in good faith
an equitable adjustment in the Purchase Price to reflect the impact of
the Major Loss, as mitigated by any repair, replacement or restoration
work actually completed by the Seller, on the Acquired Assets being sold
to the Buyer, and proceed to Closing. To assist the Buyer in its
evaluation of any and all Events of Loss, the Seller shall provide the
Buyer such access to the Acquired Assets and such information as the
Buyer may reasonably request in connection therewith; and
(d) in the event that the parties fail to reach agreement on
an equitable adjustment of the Purchase Price within the thirty (30)
days provided in Section 5. 10(c), then the Buyer shall have the
election, exercisable by notice to the Seller within fifteen (15) days
immediately following the expiration of the thirty (30) day period, to
either (a) proceed with the consummation of the transaction at Closing,
with a reduction in the Purchase Price consistent with the Seller's last
offer communicated to the Buyer, in which event the Seller shall assign
over or deliver to the Buyer at Closing all condemnation proceeds or
insurance proceeds which the Seller receives, or to which the Seller
becomes entitled by virtue of the Events of Loss, less any costs and
expenses reasonably incurred by the Seller in obtaining such
condemnation proceeds or insurance proceeds, or (b) terminate this
Agreement, in which event this Agreement shall terminate and neither
Party shall thereafter have any obligation or liability to the other by
reason of this Agreement. If the Buyer fails to make the election within
the fifteen (15) day period, the Buyer will be deemed to have made the
election to proceed with the Closing.
5.11. Regulatory Approval Process. The Parties acknowledge and agree
that it is essential that the Closing occur prior to December 31, 1999, and
that the Seller may suffer certain adverse consequences if the Closing does not
take place by that time. Accordingly, the Buyer hereby covenants that it shall
(x) submit its portion of the draft applications, including all required
exhibits and attachments, under Sections 203 and 205 of the Federal Power Act
substantially in a form ready for filing with the FERC (the "FERC
Applications") to the Seller on or before July 31, 1999 for the Seller's review
and (y) cooperate with the Seller with a view to filing the FERC Applications
with the FERC in accordance with the rules and regulations of the
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FERC on or before September 1, 1999 and shall thereafter not seek to amend or
withdraw such FERC Applications.
5.12. Connecticut Transfer Act. The Buyer agrees that certain Sites on
which some or all of the Facilities are located are "establishments" within the
meaning of the Connecticut Transfer Act (CGS section 22a-134 et seq.), and that
it is the Buyer's sole and exclusive responsibility (i) to determine the
"establishment" status for each Site and Facility; (ii) to comply, at its sole
cost and expense, with any requirement for executing appropriate forms and
making necessary submissions in connection with the Connecticut Transfer Act;
(iii) to comply, at its sole cost and expense, with any requirement under the
Connecticut Transfer Act for investigations or Remediations of Hazardous
Substances Released at or emanating from the Sites; and (iv) to pay any
transfer fees due the Connecticut Department of Environmental Protection and
other related fees or costs; provided, however, that the Seller shall pay to
and indemnify the Buyer for any such costs or expenses (including the costs of
investigations or Remediations of Hazardous Substances Released at or emanating
from the Sites) to the extent they relate to (i) any Substation Area (as
defined in the Reserved Easements) or (ii) to the portion of the properties on
which the Granted Easements are located which are not part of the Generating
Easement Area, as defined in the Granted Easements.
5.13. Discharge of Environmental Liabilities. In discharging its
Environ mental Liabilities, if any, on or after the Closing Date, pursuant to
Section 2.3(a) hereof, the Buyer agrees and covenants that the Buyer will not
prejudice or impair the Seller's rights under the Environmental Laws or
interfere with the Seller's ability to contest in appropriate administrative,
judicial or other proceedings its liability, if any, for Environmental Claims
or Remediation. The Buyer further agrees to provide to the Seller draft copies
of all plans and studies prepared in connection with any Site investigation or
Remediation prior to their submission to the Governmental Authority with
jurisdiction under Environmental Laws. The Seller shall have the right, without
the obligation, to attend all meetings between the Buyer, its agents or
representatives, and such Governmental Authorities. The Buyer shall promptly
provide to the Seller copies of all written information, plans, documents and
material correspondence submitted to or received from such Governmental
Authorities relating to the Buyer'
6. Conditions to Obligation to Close.
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6.1. Conditions to Obligation of the Buyer to Close. The obligation of
the Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(a) Representations and Warranties. The representations and
warranties set forth in Section 3 above shall be true and correct in all
material respects at and as of the Closing Date;
(b) Performance by the Seller. The Seller shall have performed
and complied in all material respects with all of its covenants,
agreements and obligations hereunder through the Closing;
(c) Buyer's Regulatory Approvals. The Buyer shall have
received the Buyer's Regulatory Approvals specified in Schedule 6.1.
(c), with such terms and conditions as may be included therein except
for such terms and conditions that, either singly or in the aggregate,
are reasonably likely to have a Material Adverse Effect;
(d) Seller's Regulatory Approvals. The Seller shall have
received the Seller's Regulatory Approvals specified in Schedule 6.2(c),
with such terms and conditions as may be included therein except for
such terms and conditions that, either singly or in the aggregate, are
reasonably likely to have a Material Adverse Effect;
(e) Absence of Litigation. There shall not be any injunction,
judgment, order, decree or ruling in effect or pending which would
prevent or inhibit consummation of the transactions contemplated by this
Agreement or the Related Agreements;
(f) Antitrust Matters. All applicable waiting periods (and any
extensions thereof) under the Hart-Scott-Rodino Act shall have expired
or otherwise been terminated;
(g) No Material Adverse Effect. There shall not be any
Material Adverse Effect; and
(h) Deliveries. The Seller shall have complied in all material
respects with the delivery requirements of Section 2.10.
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(i) Title Insurance. The issuer of the Title Commitment shall
have made available to Buyer title insurance policies in an amount equal
to the Purchase Price insuring title to the Acquired Assets as of the
Closing Date substantially in the form of the Title Commitments, with
such changes therefrom as shall not in the aggregate have a Material
Adverse Effect and with the exceptions for parties in possession (other
than those disclosed in Schedule 2. 1(a)(ii), if any) and unfiled
mechanics' and materialmen's liens (other than those that arise from any
act of Buyer or arise under Good Utility Practice and are not material
to the operation or use of the Acquired Assets in the business of Seller
as conducted on the Effective Date) removed; provided, that Buyer shall
be under no obligation to pay any amounts to the issuer of such title
insurance policies in order to cause an exception not contained in the
Title Commitments to be removed from such title insurance policies if
the amount of such payment would constitute a Material Adverse Effect.
The Buyer may waive any condition specified in this Section 6.1 if it executes
a writing so stating at or prior to the Closing and such waiver shall not be
considered a waiver of any other provision in this Agreement unless the writing
specifically so states.
6.2. Conditions to Obligation of the Seller to Close. The obligation
of the Seller to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(a) Representations and Warranties. The representations and
warranties set forth in Section 4 above shall be true and correct in all
material respects at and as of the Closing Date;
(b) Performance by Buyer. The Buyer shall have performed and
complied in all material respects with all of its covenants, agreements
and obligations hereunder through the Closing;
(c) Seller's Regulatory Approvals. The Seller shall have
received the Seller's Regulatory Approvals specified in Schedule 6.2.
(c), in each case without terms and conditions that are reasonably
likely to have a material adverse effect on the Seller and in the case
of the DPUC Approval, with such terms and conditions as are acceptable
to the Seller in its sole and absolute discretion;
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(d) Buyer's Regulatory Approvals. The Buyer shall have
received the Buyer's Regulatory Approvals specified in Schedule 6.1(c),
in each case without terms and conditions that are reasonably likely to
have a material adverse effect on the Seller;
(e) Absence of Litigation. There shall not be any injunction,
judgment, order, decree or ruling in effect or pending which would
prevent or inhibit consummation of the transactions contemplated by this
Agreement or the Related Agreements;
(f) Antitrust Matters. All applicable waiting periods (and any
extensions thereof) under the Hart-Scott-Rodino Act shall have expired
or otherwise been terminated;
(g) Deliveries. The Buyer shall have complied in all material
respects with the delivery requirements of Section 2.11; and
(h) NEPOOL. The Buyer shall be a member in good standing of
NEPOOL. The Seller may waive any condition specified in this Section 6.2
if it executes a writing so stating at or prior to the Closing and such
waiver shall not be considered a waiver of any other provision in this
Agreement unless the writing specifically so states.
7. Confidentiality.
(a) Each Receiving Party and each Representative thereof will
treat and hold as confidential all of the Proprietary Information, and
refrain from using any of the Proprietary Information except in
connection with this Agreement and the Related Agreements and
transactions contemplated hereby and thereby. In the event that the
Receiving Party or any Representative thereof is requested or required
(including, without limitation, (i) pursuant to any rule or regulation
of any stock exchange or other self-regulatory organization upon which
any of the Receiving Party's securities are listed or (ii) by oral
question or request for information or documents in any legal
proceeding, including without limitation the Buyer's Regulatory Approval
and the Seller's Regulatory Approval processes, interrogatory, subpoena,
civil investigative demand, or similar process) to disclose any
Proprietary Information, the Receiving Party will notify the Disclosing
Party promptly of the request or requirement so that the Disclosing
Party may seek an appropriate
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protective order or waive compliance with the provisions of this Section
7. If, in the absence of a protective order or the receipt of a waiver
hereunder, the Receiving Party or any Representative thereof is, on the
advice of counsel, compelled to disclose any Proprietary Information
pursuant to any such request or requirement, then the Receiving Party or
such Representative may disclose the Proprietary Information so
requested or required to be disclosed; provided, however, that the
Receiving Party shall use its reasonable best efforts to obtain, at the
request of the Disclosing Party, an order or other assurance that
confidential treatment will be accorded to such portion of the
Proprietary Information required to be disclosed as the Disclosing Party
shall designate. If this Agreement is terminated pursuant to Section
10.1 hereof, then each Receiving Party shall deliver promptly to the
Disclosing Party or destroy, at the request and option of the Disclosing
Party, all tangible embodiments (and all copies) of the Proprietary
Information which are in his or its possession.
(b) The obligations of the Parties contained in this Section 7
shall be in full force and effect for three years from the date hereof
and will survive the termination of this Agreement, the discharge of all
other obligations owed by the Parties to each other and any transfer of
title to the Acquired Assets. Nothing in this Section 7 shall in any way
alter the Buyer's obligations under the Confidentiality Agreement dated
February 12, 1999 by and between the Buyer and J.P. Morgan Securities
Inc.
(c) Upon the Disclosing Party's prior written approval (which
will not be unreasonably withheld), the Receiving Party may provide
Proprietary Information to the DPUC, the FERC, the SEC, the United
States Department of Justice, the United States Federal Trade Commission
or any other Govern mental Authority with jurisdiction, as necessary, to
obtain any consents, waivers or approvals as may be required for the
Receiving Party to undertake the transactions contemplated herein. The
Receiving Party will seek confidential treatment for such Proprietary
Information provided to any such Governmental Authority (if such
confidential treatment is available from the appropriate Governmental
Authority) and the Receiving Party will notify the Disclosing Party as
far in advance as is practicable of its intention to release to any such
Governmental Authority any such Proprietary Information.
8. Taxes.
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(a) All transfer and sales Taxes incurred in connection with
this Agreement and the transactions contemplated hereby shall be borne
by the Buyer, including, without limitation, Connecticut state sales
tax, and the Buyer, at its own expense, will file, to the extent
required by applicable Laws, all necessary Tax Returns and other
documentation with respect to all such transfer or sales Taxes, and, if
required by applicable Laws, the Seller will join in the execution of
any such Tax Returns or other documentation. Prior to the Closing Date,
the Buyer will provide to the Seller, to the extent possible, an
appropriate certificate of no tax due from each applicable taxing
authority.
(b) With respect to Taxes to be prorated in accordance with
Section 2.8 of this Agreement only, the Buyer shall prepare and timely
file all Tax Returns required to be filed after the Closing with respect
to the Acquired Assets, if any, and shall duly and timely pay all such
Taxes shown to be due on such Tax Returns. The Buyer's preparation of
any such Tax Re turns shall be subject to the Seller's approval, which
approval shall not be unreasonably withheld. No later than twenty-five
(25) Business Days prior to the due date of any such Tax Return, the
Buyer shall make such Tax Return available for the Seller's review and
approval. The Seller shall respond no later than ten (10) Business Days
prior to the due date for filing such Tax Return. With respect to such
Tax Return, the Seller shall pay to the Buyer its appropriate share of
the amount shown as due on the Tax Returns determined in accordance with
Section 2.8 of this Agreement.
(c) Each of the Buyer and the Seller shall provide the other
with such assistance as may reasonably be requested by the other Party
in connection with the preparation of any Tax Return, any audit or other
examination by any taxing authority, or any judicial or administrative
proceedings relating to liability for Taxes, and each will retain and
provide the requesting Party with any records or information which may
be relevant to such Tax Return, audit or examination, proceedings or
determination. Any information obtained pursuant to this Section 8 or
pursuant to any other Section hereof providing for the sharing of
information or review of any Tax Return or other schedule relating to
Taxes shall be deemed to be and shall be Proprietary Information.
9. Survival of Representations and Warranties; Effect of Closing and
Indemnification.
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9.1. Survival of Representations and Warranties; Survival of Covenants
and Agreements. The representations and warranties of the Seller set forth in
Sections 3.1, 3.2, 3.3, 3.4 and 3.16, and the representations and warranties of
the Buyer set forth in Sections 4.1, 4.2, 4.3 and 4.4, shall survive the
Closing for a period of twelve months; all other representations and warranties
of the Parties contained in this Agreement shall terminate at the Closing and
all representations and warranties of the Parties contained in this Agreement
shall terminate upon a termination of this Agreement pursuant to Section 10.1.
The covenants of the Parties contained in this Agreement, other than those
which by their terms survive the Closing and/or termination of this Agreement,
shall terminate at the Closing or the termination of this Agreement pursuant to
Section 10.1.
9.2. Effect of Closing. Upon the Closing, any condition to the
obligations of either Party hereunder that has not been satisfied, or any
representation, warranty or covenant that has been breached or left unsatisfied
by either Party will be deemed waived by the Parties, and each Party will be
deemed to fully release and forever discharge the other Party on account of any
and all claims, demands or charges, known or unknown, with respect to the same.
Nothing in this Section 9.2 shall be deemed to affect any provision herein
which expressly survives the Closing or pertains to matters which will occur
after the Closing.
9.3. Indemnity by the Seller. The Seller shall indemnify, defend and
hold harmless the Buyer against and in respect of all Liabilities, obligations,
judgments, Liens, injunctions, charges, orders, decrees, rulings, damages,
assessments, Taxes, losses, fines, penalties, damages, expenses, fees, costs,
and amounts paid in settlement (including reasonable consultants', attorneys'
and expert witness fees and disbursements in connection with investigating,
defending or settling any action or threatened action), arising out of any
claim, complaint, demand, cause of action, audit, investigation, hearing,
action, suit or other proceeding asserted or initiated or otherwise existing in
respect of any matter (collectively, the "Losses"), that results from:
(a) any Liability of the Seller that becomes a Liability of
the Buyer under any bulk transfer law of any jurisdiction;
(b) any Excluded Liability;
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(c) any breach by the Seller of any representation or warranty
which by its terms survives the Closing or the termination of this
Agreement under Section 10.1 hereof, provided that the Losses associated
therewith have a Buyer Material Adverse Effect; and
(d) any breach by the Seller of any of its covenants contained
in Article V hereof
9.4. Indemnity by Buyer. The Buyer hereby agrees to indemnify, defend
and hold harmless the Seller and its Affiliates against and in respect of all
Losses that result from:
(a) any Third Party Claim against the Seller based on or
relating to the Buyer's ownership, operation or use of the Acquired
Assets on or after the Closing Date;
(b) the Assumed Liabilities;
(c) any breach by the Buyer of any of its covenants contained
in Article V hereof or
(d) the failure of the Buyer to close the transactions
contemplated hereby within the time provided in Section 2.9 hereof,
other than because of a failure of the Seller to perform its obligations
under this Agreement.
9.5. Exclusive Remedy. From and after the Closing, the remedies set
forth in this Section 9 shall constitute the sole and exclusive remedies for
any and all claims, damages, complaints, demands, causes of action,
investigations, hearings, actions, suits or other proceedings relating to this
Agreement and are in lieu of any and all other rights and remedies which the
Seller or the Buyer may have under this Agreement or otherwise for monetary
relief with respect to any breach or failure to perform or with respect to the
Assumed or Excluded Liabilities. Each Party waives any provision of law to the
extent that it would limit or restrict the agreements contained in this Section
9. Nothing herein shall prevent either Party from terminating this Agreement in
accordance with Section 10.
9.6. Matters Involving Third Parties.
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(a) If any Third Party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against any other
Party (the "Indemnfying Party") under this Section 9, then the
Indemnified Party shall promptly notify the Indemnifying Party thereof
in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then solely
to the extent) the Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (i)
the Indemnify ing Party notifies the Indemnified Party in writing within
fifteen days after the Indemnified Party has given notice of the Third
Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any Losses the Indemnified Party
may suffer resulting from, arising out of, relating to, in the nature
of, or caused by the Third Party Claim, (ii) the Indemnifying Party
provides the Indemnified Party with evidence acceptable to the
Indemnified Party that the Indemnifying Party will have the financial
resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (iii) the Third Party Claim
involves only money damages and does not seek an injunction or other
equitable relief, settlement of, or an adverse judgment with respect to,
the Third Party Claim is not, in the good faith judgment of the
Indemnified Party, likely to establish a precedential custom or practice
adverse to the continuing business interests of the Indemnified Party,
and (iv) the Indemnifying Party conducts the defense of the Third Party
Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 9.5(b)
above, (i) the Indemnified Party may retain separate co-counsel at its
sole cost and expense and participate in the defense of the Third Party
Claim, (ii) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party (which
consent shall not unreasonably be with held), and (iii) the Indemnifying
Party will not consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim unless written
agreement is obtained releasing the Indemnified Party from all liability
thereunder.
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(d) In the event any of the conditions in Section 9.5(b) above
is or becomes unsatisfied, however, (1) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it may
deem appropriate (and the Indemnified Party need not consult with, or
obtain any consent from, any Indemnifying Party in connection
therewith), (ii) the Indemnifying Party will reimburse the Indemnified
Party promptly and periodically for the costs of defending against the
Third Party Claim (including attorneys' fees and expenses,
notwithstanding Section 9.3), and (iii) the Indemnifying Party will
remain responsible for any Losses the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused
by the Third Party Claim to the fullest extent provided in this Section
9.
9.7. Net of Taxes and Insurance. Any calculation of a Loss under this
Section 9 shall, in each case, give full effect to (i) any and all income Tax
benefits to the Indemnified Party in respect of the Loss, and (ii) any and all
insurance proceeds received or payable to the Indemnified Party in respect of
the Loss.
9.8. No Recourse. To the extent the transfer, conveyance, assignment
and delivery of the Acquired Assets to the Buyer as provided in this Agreement
is accomplished by deeds, assignments, easements, leases, licenses, bills of
sale, or other instruments of transfer and conveyance, whether executed at the
Closing or thereafter, these instruments are made without representation or
warranty by, or recourse against, the Seller, except as expressly provided in
this Agreement or in any such instrument.
10. Termination.
10.1. Termination of Agreement. The Parties may terminate this
Agreement as provided below:
(a) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;
(b) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing if any of the
following has occurred: (i) the Seller has breached any representation,
warranty or covenant contained in this Agreement in any material
respect, the Buyer has notified
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the Seller of the breach, and the breach has continued without cure for
a period of sixty (60) days after the notice of breach; (ii) the Closing
shall not have occurred on or before June 30, 2000 by reason of the
failure of any condition precedent under Section 6.1 hereof (unless the
failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement);
(iii) one or more courts of competent jurisdiction shall have issued an
order, judgment or decree permanently restraining, enjoining or
otherwise prohibiting the Closing, which order, judgment or decree shall
not have been terminated, lifted, vacated or other wise rendered
irrelevant within ninety (90) days of the issuance thereof, (iv) any
statute, rule or regulation shall have been enacted by any Governmental
Authority which, directly or indirectly, prohibits the consummation of
the transactions contemplated hereby; (v) in accordance with Section
5.10 hereof, or (vi) (W) the Seller has within the then previous fifteen
(15) days given the Buyer any notice pursuant. to Section 5.5(a) above
and the matter that is the subject of such notice, if in existence on
the Effective Date or the Closing Date, would cause the representations
and warranties of the Seller set forth in Section 3 hereof not to be
true and correct, (X) such matter would have a Material Adverse Effect,
(Y) the Buyer has notified the Seller of its intent to terminate
pursuant to this Section 10.1 (b)(vi), and (Z) the matter that is the
subject of such notice continues to exist for a period of sixty (60)
consecutive days after such notice by the Buyer; and
(c) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing if any of the
following has occurred: (i) the Buyer has breached any representation,
warranty, or covenant contained in this Agreement in any material
respect, the Seller has notified the Buyer of the breach, and the breach
has continued without cure for a period of sixty (60) days after the
notice of breach; (ii) the Closing shall not have occurred on or before
June 30, 2000 by reason of the failure of any condition precedent under
Section 6.2 hereof (unless the failure results primarily from the Seller
itself breaching any representation, warranty, or covenant contained in
this Agreement); (iii) one or more courts of competent jurisdiction
shall have issued an order, judgment or decree permanently restraining,
enjoining or otherwise prohibiting the Closing, which order, judgment or
decree shall not have been terminated, lifted, vacated or other wise
rendered irrelevant within ninety (90) days of the issuance thereof;
(iv) any statute, rule or regulation shall have been enacted by any
Governmental Authority which, directly or indirectly, prohibits the
consummation of the
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transactions contemplated hereby; (v) in accordance with Section 5.10
hereof, or (vi) (W) the Buyer has within the then previous fifteen (15)
days given the Seller any notice pursuant to Section 5.5(a) above and
the matter that is the subject of such notice, if in existence on the
Effective Date or the Closing Date, would cause the representations and
warranties of the Buyer set forth in Section 4 hereof not to be true and
correct, (X) such matter would have a Material Adverse Effect, (Y) the
Seller has notified the Buyer of its intent to terminate pursuant to
this Section 10.1(c)(vi), and (Z) the matter that is the subject of such
notice continues to exist for a period of sixty (60) consecutive days
after such notice by the Seller.
10.2. Effect of Termination. If either Party terminates this Agreement
pursuant to Section 10.1 above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of either Party to the other
Party (except for any Liability of any Party then in breach and except as
otherwise expressly provided herein).
11. Miscellaneous.
11.1. Press Releases and Public Announcements. No Party shall issue any
press release or -make any public announcement relating to the subject matter
of this Agreement prior to the Closing without the prior approval of the other
Party; provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concern ing its publicly-traded securities (in which case the
disclosing Party will provide the other Party with the opportunity to review in
advance the disclosure).
11.2. No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Third Party.
11.3. No Joint Venture. Nothing in this Agreement creates or is
intended to create an association, trust, partnership, joint venture or other
entity or similar legal relationship between the Parties, or impose a trust,
partnership or fiduciary duty, obligation, or liability on or with respect to
either Party. Except as provided in Section 5.6 hereof, neither Party is or
shall act as or be the agent or representative of the other Party.
11.4. Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto), together with the Related Agreements and any other documents
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referred to herein, constitute the entire agreement between the Parties and
supersede any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they relate in any way to
the subject matter hereof, provided however, that the Confidentiality Agreement
referred to in Section 7(b) hereof shall remain in full force and effect
without regard to any provision of this Agreement. All conflicts or
inconsistencies between the terms hereof and the terms of any of the Related
Agreements, if any, shall be resolved in favor of this Agreement.
11.5. Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
the Related Agreements or any of its rights, interests, or obligations
hereunder or thereunder without the prior written approval of the other Party;
provided, however, that the Seller's written approval shall not be unreasonably
withheld if the Buyer elects to assign any or all of its rights and interests
hereunder to one or more of its Affiliates, provided that the Buyer shall
deliver the following documents before such assignment: (i) a Guaranty
substantially in the form of Exhibit F that guarantees the full and timely
performance of all obligations of such Affiliate under this Agreement, all
Related Agreements and all other agreements and commitments contemplated hereby
or thereby or in connection with the Closing entered into for the benefit of
the Seller, as so assigned; (ii) a copy, certified by the Secretary of the
Buyer, of resolutions authorizing the execution and delivery of such Guaranty;
(iii) a certificate of the Secretary of the Buyer identifying by name and title
and bearing the signatures of the officers of the Buyer authorized to execute
and deliver the Guaranty; (iv) an opinion from Gray, Plant, Mooty, Mooty &
Bennett, P.A., counsel to the Buyer, dated as of the date of such assignment
and reasonably satisfactory in form to the Seller and its counsel,
substantially to the effect that the Guaranty is a valid and binding obligation
of the Buyer; (v) evidence that such Affiliate is a member of NEPOOL.
11.6. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
11.7. Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
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11.8. Notices. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given (i) upon
confirmation of facsimile, (ii) one Business Day following the date sent when
sent by overnight delivery and (iii) five Business Days following the date
mailed when mailed by registered or certified mail return receipt requested and
postage prepaid at the following address:
If to the Seller:
The Connecticut Light and Power Company
107 Selden Street
Berlin, CT 06037
Attn: Vice President - Administration
Copy to:
Vice President, Secretary and General Counsel
Northeast Utilities
107 Selden Street
Berlin, CT 06037
If to the Buyer:
NRG Energy, Inc.
1221 Nicollet Mall, Suite 700
Minneapolis, MN 5 5403-2445
Fax: 612-373-5392
Attn: Vice President and General Counsel
Copy to:
Joseph T. Kinning, Esq.
Gray, Plant, Mooty, Mooty & Bennett, P.A.
3400 City Center
33 South Sixth Street
Minneapolis, MN 55402-3796
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Either Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim or other communication shall be deemed to
have been duly given unless and until it actually is received by the intended
recipient. Either Party may change the address to which notices, requests,
demands, claims and other communications hereunder are to be delivered by
giving the other Party notice in the manner herein set forth. -
11.9. Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Connecticut without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Connecticut or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Connecticut.
11.10. Change in Law. If and to the extent that, during the Interim
Period, any laws or regulations that govern any aspect of this Agreement shall
change, so as to make any aspect of this transaction unlawful, then the Parties
agree to make such modifications to this Agreement as may be reasonably
necessary for this Agreement to accommodate any such legal or regulatory
changes.
11.11. Consent to Jurisdiction. Each of the Seller and the Buyer
consents to the nonexclusive jurisdiction of any local, state or federal court
located within the City of Hartford, Connecticut, for adjudication of any suit,
claim, action or other proceeding at law or in equity relating to this
Agreement, or to any transaction contemplated hereby. The Seller and the Buyer
each accept, generally and unconditionally, the nonexclusive jurisdiction of
the aforesaid courts and waive any objection as to venue, and any defense
offorum nonconveniens.
11.12. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
11.13. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or
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enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction.
11.14. Expenses. Each of the Buyer and the Seller will bear its own
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including legal and accounting fees and
expenses, except as otherwise provided in Section 9 above), except that the
Buyer shall bear the entire cost of(i) all filings by both the Seller and the
Buyer under the Hart-Scott Rodino Act and (ii) the Joint Application for
authorization pursuant to Sections 203 and 205 of the Federal Power Act.
11.15. Construction. Ambiguities or uncertainties in the wording of this
Agreement will not be construed for or against any Party, but will be construed
in the manner that most accurately -reflects the Parties' intent as of the
Effective Date. The Parties acknowledge that they have been represented by
counsel in connection with the review and execution of this Agreement, and,
accordingly, there shall be no presumption that this Agreement or any provision
hereof be construed against the Party that drafted this Agreement.
11.16. Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof
11.17. Specific Performance. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Party shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter in addition to any other remedy to
which it may be entitled, at law or in equity.
11.18. Dispute Resolution. Prior to instituting any litigation or
dispute resolution mechanism, the Parties will attempt in good faith to resolve
any dispute or claim promptly by referring any such matter to their respective
chief executive officers for resolution. Either Party may give the other Party
written notice of any dispute or claim. Within ten (10) days after delivery of
said notice, the executives
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will meet at a mutually acceptable time and place, and thereafter as often as
they reasonably deem necessary to exchange information and to attempt to
resolve the dispute or claim within thirty (30) days.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement on the date first above written.
NRG ENERGY, INC.
/s/ Craig A. Mataczynski
----------------------------------------
By: Craig A. Mataczynski
Title: Senior Vice President
THE CONNECTICUT LIGHT AND POWER COMPANY
/s/ John B. Keane
----------------------------------------
By: John B. Keane
Title: Vice President - Administration
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