1
EXECUTION COPY
PURCHASE AGREEMENT
dated as of February 19, 2000
Among
RELIANT ENERGY POWER GENERATION, INC.
as Buyer,
RELIANT ENERGY, INCORPORATED,
as Guarantor,
and
SITHE ENERGIES, INC.
and
SITHE NORTHEAST GENERATING COMPANY, INC.,
as Sellers.
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TABLE OF CONTENTS
PAGE
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ARTICLE 1. CERTAIN DEFINITIONS........................................ 2
Section 1.1 Definitions................................................ 2
Section 1.2 Certain Interpretive Matters............................... 25
ARTICLE 2. PURCHASE AND SALE OF INTERCOMPANY NOTES,
MID-ATLANTIC STOCK AND LLC INTERESTS....................... 26
Section 2.1 Purchase and Sale of Intercompany Notes, Mid-Atlantic
Stock and LLC Interests.................................... 26
Section 2.2 Determination of Adjustment Amount and Preclosing Seller
Breach Amount.............................................. 27
Section 2.3 Terminated Obligations..................................... 32
Section 2.4 Senior Credit Facility and BECO Facility................... 33
Section 2.5 Allocation of Aggregate Purchase Price..................... 34
ARTICLE 3. REPRESENTATIONS AND WARRANTIES REGARDING
THE COMPANIES.............................................. 35
Section 3.1 Organization, Qualification and Power...................... 35
Section 3.2 Condemnation............................................... 36
Section 3.3 No Conflict................................................ 36
Section 3.4 Equity Interests........................................... 37
Section 3.5 Financial Statements....................................... 39
Section 3.6 Litigation; Compliance with Law; Permits................... 41
Section 3.7 Tax Matters................................................ 42
Section 3.8 Material Contracts......................................... 47
Section 3.9 Capital Expenditures....................................... 48
Section 3.10 Brokers.................................................... 48
Section 3.11 Labor Matters.............................................. 48
Section 3.12 ERISA...................................................... 49
Section 3.13 Events Subsequent to November 24, 1999..................... 53
Section 3.14 Title to Properties........................................ 55
Section 3.15 Insurance.................................................. 56
Section 3.16 Transactions with Certain Persons.......................... 56
Section 3.17 Compliance With Environmental Laws......................... 57
Section 3.18 Certain Matters Relating to GPU Assets and Development
Assets..................................................... 58
Section 3.19 Consents and Approvals..................................... 59
Section 3.20 Utility Regulation......................................... 60
Section 3.21 Intellectual Property...................................... 60
ARTICLE 4. REPRESENTATIONS AND WARRANTIES REGARDING
THE SELLERS................................................ 61
Section 4.1 Organization and Corporate Power........................... 61
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PAGE
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Section 4.2 Authorization; Validity.................................... 62
Section 4.3 No Conflict................................................ 62
Section 4.4 Ownership of Genco, Mid-Atlantic Stock and LLC Interests... 62
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER.................... 63
Section 5.1 Organization and Corporate Power........................... 63
Section 5.2 Authorization; Validity.................................... 63
Section 5.3 No Conflict................................................ 64
Section 5.4 Consents and Approvals..................................... 64
Section 5.5 Brokers.................................................... 64
Section 5.6 Availability of Funds...................................... 64
Section 5.7 No Knowledge of the Sellers' Breach........................ 65
Section 5.8 Investment................................................. 65
ARTICLE 6. ACCESS; ADDITIONAL AGREEMENTS.............................. 65
Section 6.1 Access to Information; Continuing Disclosure............... 65
Section 6.2 Regulatory Approvals....................................... 67
Section 6.3 Further Assurances......................................... 68
Section 6.4 Certain Tax Matters........................................ 69
Section 6.5 Ordinary Course of Business................................ 78
Section 6.6 Notice of Changes.......................................... 86
Section 6.7 Collective Bargaining Agreements........................... 86
Section 6.8 Pollution Control Bonds.................................... 87
Section 6.9 Certain Benefits Matters................................... 88
Section 6.10 WARN Act................................................... 90
Section 6.11 Sithe Release from GPU Liabilities......................... 91
Section 6.12 Change of Entity Names..................................... 91
Section 6.13 Interim Services Agreement................................. 91
Section 6.14 Environmental Matters/ISRA................................. 92
Section 6.15 Certain Rights Under Amended and Restated Transition
Power Purchase Agreements.................................. 93
Section 6.16 Release of Certain Agreements.............................. 94
Section 6.17 GPU Post Closing Amounts................................... 94
Section 6.18 Trading Contracts.......................................... 94
Section 6.19 Matters Relating to Keystone and Conemaugh................. 95
ARTICLE 7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS................ 95
Section 7.1 No Injunction.............................................. 96
Section 7.2 Representations and Warranties............................. 96
Section 7.3 Performance................................................ 97
Section 7.4 Approvals and Filings...................................... 97
Section 7.5 Opinion of Counsel......................................... 97
Section 7.6 No Material Adverse Effect................................. 97
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Section 7.7 Buyer Permits................................... 98
Section 7.8 Resignations.................................... 98
ARTICLE 8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH SELLER.. 98
Section 8.1 No Injunction................................... 98
Section 8.2 Representations and Warranties.................. 98
Section 8.3 Performance..................................... 99
Section 8.4 Approvals and Filings........................... 99
Section 8.5 Opinion of Counsel.............................. 100
ARTICLE 9. CLOSING................................................. 100
Section 9.1 Time and Place.................................. 100
Section 9.2 Payments and Terminated Obligations............. 100
Section 9.3 Deliveries...................................... 101
ARTICLE 10. TERMINATION AND ABANDONMENT............................ 102
Section 10.1 Methods of Termination.......................... 102
Section 10.2 Procedure Upon Termination and Consequences..... 104
ARTICLE 11. SURVIVAL............................................... 104
Section 11.1 Survival........................................ 104
ARTICLE 12. ASSUMPTION OF GPU LIABILITIES; INDEMNIFICATION......... 105
Section 12.1 Assumption of GPU Liabilities; Indemnification.. 105
Section 12.2 Defense of Claims............................... 106
ARTICLE 13. OBLIGATIONS OF GUARANTOR............................... 111
Section 13.1 Guarantee....................................... 111
Section 13.2 Representations and Warranties Regarding
Guarantor..................................... 112
Section 13.3 Covenants Relating to Buyer..................... 113
ARTICLE 14. MISCELLANEOUS.......................................... 115
Section 14.1 Amendment and Modification...................... 115
Section 14.2 Waiver of Compliance............................ 115
Section 14.3 Notices......................................... 115
Section 14.4 Binding Nature; Assignment...................... 117
Section 14.5 Entire Agreement................................ 118
Section 14.6 Expenses........................................ 119
Section 14.7 Press Releases and Announcement; Disclosure..... 119
Section 14.8 Acknowledgement................................. 119
Section 14.9 Disclaimer Regarding Assets..................... 121
Section 14.10 Governing Law................................... 122
Section 14.11 Nonforeign Affidavit............................ 122
Section 14.12 Counterparts.................................... 123
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Section 14.13 Interpretation.................................. 123
Section 14.14 Confidentiality................................. 123
Section 14.15 Limitation on Due Inquiry....................... 124
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SCHEDULES
Schedule 1A - Development Assets
Schedule 1B - GPU Project Documents
Schedule 1C - General Description of Interim Services Agreement
Schedule 1D - Executive Officers
Schedule 1E - Budgeted Development Costs
Schedule 2.3 - Terminated Obligations
Schedule 3.2 - Condemnation
Schedule 3.3 - Conflicts
Schedule 3.4 - Capital Stock
Schedule 3.5 - Financial Statements
Schedule 3.6 - Litigation; Compliance with Law; Permits
Schedule 3.7 - Tax Matters
Schedule 3.8 - Material Contracts
Schedule 3.9 - Capital Expenditures
Schedule 3.11 - Labor Matters
Schedule 3.12 - ERISA
Schedule 3.13 - Events Subsequent to November 24, 1999
Schedule 3.14 - Title to Properties
Schedule 3.16 - Transactions with Certain Persons
Schedule 3.17 - Environmental Matters
Schedule 3.18 - Certain GPU Matters
Schedule 3.19 - Seller Consents and Approvals
Schedule 3.21 - Intellectual Property
Schedule 4.3 - Sellers' Conflicts
Schedule 5.4 - Buyer Consents and Approvals
Schedule 6.5 - Exceptions to Ordinary Course of Business
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Schedule 6.5.2 - Contracts Not to Be Amended
Schedule 6.5.2(f)(A) - Trading Contracts at Signing
Schedule 6.5.2(f)(B) - Trading Contracts Executed Between Signing
and Closing
Schedule 6.5.2(j) - Outages
Schedule 6.16 - Released Agreements
Schedule 7.4 - Approvals and Filings to be Obtained or Made by
Buyer Prior to Closing
Schedule 7.5 - Opinion of Sellers' Counsel
Schedule 8.4 - Approvals and Filings to be Obtained or Made by
Sellers Prior to Closing
Schedule 8.5 - Opinion of Buyer's Counsel
Schedule 9.3A - Form of Transfer Instrument for LLC Interests
Schedule 9.3B - General Transfer and Conveyancing Instrument
Schedule 12.1 - Form of Assumption Instrument
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PURCHASE AGREEMENT
This Purchase Agreement, dated as of February 19, 2000 (this "Agreement")
is among Reliant Energy Power Generation, Inc., a Delaware corporation
("Buyer"), Reliant Energy, Incorporated, a Texas corporation ("Guarantor"),
Sithe Energies, Inc., a Delaware corporation ("Sithe"), and Sithe Northeast
Generating Company, Inc., a Delaware corporation and an indirect wholly-owned
Subsidiary (as defined herein) of Sithe ("Genco" and, together with Sithe, the
"Sellers").
RECITALS
A. Sithe owns, through Genco, all of the issued and outstanding capital
stock of Sithe Mid-Atlantic Power Services, Inc., a Delaware corporation
("Sithe Mid-Atlantic"), and all of the limited liability company interests in
each of Sithe Pennsylvania Holdings LLC, a Delaware limited liability company,
Sithe Maryland Holdings LLC, a Delaware limited liability company, and Sithe
New Jersey Holdings LLC, a Delaware limited liability company (Sithe
Mid-Atlantic and each of the limited liability companies referred to above,
individually, a "Company" and, collectively, the "Companies").
B. Sithe holds, through Genco, certain Intercompany Notes (as defined
herein) issued by the Companies.
C. The Companies collectively own, or will own at or prior to the
Closing (as defined herein) directly or indirectly through their wholly-owned
Subsidiaries, all of the GPU Assets (as defined herein), together with any
assets acquired after November 24, 1999 by Sithe or any of its Subsidiaries
relating primarily to the GPU Assets.
Purchase Agreement
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D. The Companies collectively own, or will own at or prior to the
Closing, directly or indirectly through their wholly-owned Subsidiaries,
certain rights and assets relating to generation projects under development in
the geographic area covered by PJM (as defined herein) that were not part of
the assets acquired from GPU.
E. Buyer desires to purchase from Genco, and Genco desires to sell to
Buyer, subject to the terms and conditions of this Agreement, (a) all of the
issued and outstanding capital stock of Sithe Mid-Atlantic, (b) all of the
limited liability company interests in each of the other Companies and (c) all
of the Intercompany Notes held by Genco.
F. In order to induce the Sellers to enter into this Agreement,
Guarantor is willing to enter into this Agreement in order to guarantee Buyer's
obligation to pay, upon the terms and subject to the conditions set forth
herein, the Guaranteed Obligations and for the other purposes set forth in
Article 13.
G. The Board of Directors of each of the Sellers, Guarantor and Buyer
have determined that the consummation of the transactions contemplated by this
Agreement, upon the terms and conditions set forth in this Agreement, is in the
best interests of each of the Sellers, Guarantor and Buyer, respectively, and
their respective stockholders.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE 1. CERTAIN DEFINITIONS
Section 1.1 Definitions. For the purposes of this Agreement, the
following words and phrases shall have the following meanings:
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"Acquired Assets" means collectively the GPU Assets and the Development
Assets.
"Adjusted Net Working Capital" means the result obtained by subtracting
the Base Net Working Capital from the Closing Net Working Capital.
"Adjustment Amount" means the difference between (i) the sum, without
duplication, of (a) Adjusted Net Working Capital, (b) Budgeted Capital
Expenditures and such additional amounts of Capital Expenditures as are allowed
under Section 6.5.2(i)(1) or (3), (c) Budgeted Development Costs (whether
expensed or capitalized) and such additional amounts of Development Costs as
are allowed under Section 6.5.2(i)(2), and (d) expenditures to which Buyer has
consented in writing, and (ii) the sum, without duplication, of (a)(1) any cash
proceeds from any dispositions of Acquired Assets (other than current assets)
that are obsolete, or (2) any salvage cash proceeds from the removal or
replacement of Acquired Assets that are capital assets that have not been
repaired or replaced or that have been repaired or replaced in accordance with
Section 6.5.2(b), (b) the Preclosing Seller Breach Amount, (c) insurance
proceeds received in connection with a casualty or property loss to the extent
Sellers have not previously repaired or replaced the covered property and (d)
the Mark to Market Adjustment Amount.
"Advisors" has the meaning as set forth in Section 14.8.2.
"Affiliate" means any Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with, another Person. For purposes of the foregoing, "control", with respect to
any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and
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policies of such Person, whether through ownership of voting securities or by
contract or otherwise.
"Aggregate Purchase Price" has the meaning as set forth in Section 2.1.2.
"Agreement" has the meaning as set forth in the first paragraph of this
Agreement.
"Amended and Restated Transition Power Purchase Agreements" means (i) the
Amended and Restated Transition Power Purchase Agreement among Sithe,
Metropolitan Edison Company, Sithe Pennsylvania Holdings, LLC and Sithe Power
Marketing, dated as of November 24, 1999, (ii) the Amended and Restated
Transition Power Purchase Agreement among Sithe, Pennsylvania Electric Company,
Sithe Pennsylvania Holdings, LLC, Sithe Maryland Holdings, LLC and Sithe Power
Marketing, dated as of November 24, 1999, and (iii) the Amended and Restated
Transition Power Purchase Agreement among Sithe, Jersey Central Power and Light
Company, Sithe New Jersey Holdings, LLC and Sithe Power Marketing, dated as of
November 24, 1999.
"Assignment" means that certain Assignment and Transfer Agreement and Bill
of Sale, to be dated as of the Closing Date, substantially in the form of
Schedule 9.3B.
"Balance Sheets" means the Opening Balance Sheet, the December Balance
Sheet and the Closing Balance Sheet, all of which shall be prepared in
accordance with GAAP.
"Base Net Working Capital" means the Net Working Capital of the Companies
and their Subsidiaries on a combined basis as of November 24, 1999 as
determined from the Opening Balance Sheet.
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"BECO Facility" means that certain Credit Agreement, dated as of May 15,
1998, among Sithe New England Holdings, LLC, Bank of Montreal, as agent, and
the financial institutions party thereto, as amended, modified and
supplemented.
"Benefit Arrangement" means any executive incentive arrangement,
consisting of: (i) any employment or individual personal services agreement
involving an annual base salary of at least $250,000 (with respect to any such
agreement that is an employment agreement) or annual compensation of at least
$250,000 (with respect to any other such agreement), but excluding any
agreement of at-will employment, (ii) any equity compensation plan and (iii)
any deferred compensation plan.
"Benefit Plans" has the meaning as set forth in Section 3.12.1.
"Budgeted Capital Expenditures" means those expenditures incurred between
January 1, 2000 and the Closing Date in accordance with Schedule 3.9.
"Budgeted Development Costs" means those costs incurred between January 1,
2000 and the Closing Date in the development of the Development Projects that
are set forth on Schedule 1E.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which commercial banking institutions in New York, New York are authorized or
obligated by law or executive order to be closed.
"Buyer" has the meaning as set forth in the first paragraph of this
Agreement.
"Buyer Group" has the meaning as set forth in Section 6.1.1.
"Buyer's Representatives" has the meaning as set forth in Section 6.5.5(a).
"Buyer's Trading Representatives" has the meaning as set forth in Section
6.5.5(b).
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"Capital Expenditures" means expenditures that may be capitalized in
accordance with GAAP using the same accounting policies (which are in
accordance with GAAP) as were used by the Sellers in the preparation of the
Opening Balance Sheet or that Buyer agrees in writing should be treated as
capitalized expenses under this Agreement.
"Cash Equivalents" means (i) cash, (ii) debt securities issued, guaranteed
or insured by the United States government or any agency or instrumentality
thereof, (iii) certificates of deposit, eurodollar time deposits, bankers'
acceptances and bank deposits, (iv) repurchase obligations for underlying
securities of the types described in clauses (ii) and (iii) above, and (v)
commercial paper.
"CERCLA" means the federal Comprehensive Environmental Response,
Compensation and Liability Act, as amended (42 U.S.C. Sections 9601-9675).
"CFO Certificate" has the meaning as set forth in Section 13.3.1.
"Chief Financial Officer of Guarantor" has the meaning as set forth in
Section 13.3.1.
"Charter Documents" means, with respect to any Person, the certificate of
incorporation, by-laws, articles of organization, limited liability company
agreement, partnership agreement, formation agreement or other similar
organizational documents of such Person.
"Closing" has the meaning as set forth in Section 9.1.
"Closing Date" has the meaning as set forth in Section 9.1.
"Closing Balance Sheet" means an audited combining balance sheet at the
Closing Date of the Companies and their Subsidiaries, which balance sheet shall
not reflect any intercompany payables or receivables, to be prepared in
accordance with GAAP, using the same accounting
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policies (which are in accordance with GAAP) as were used by the Sellers in the
preparation of the Opening Balance Sheet.
"Closing Net Working Capital" means the Net Working Capital of the
Companies and their Subsidiaries on a combined basis as of the Closing Date as
determined from the Closing Balance Sheet.
"Code" means the Internal Revenue Code of 1986, as amended. All citations
to the Code or to the regulations promulgated thereunder shall include any
amendments or any substitute or successor provisions thereto.
"Collective Bargaining Agreements" has the meaning as set forth in
Section 3.11.
"Company" has the meaning as set forth in Recital A.
"Confidential Acquired Asset Information" has the meaning as set forth in
Section 14.14(b).
"Confidential Information" has the meaning as set forth in
Section 14.14(a).
"Confidentiality Agreement" has the meaning as set forth in Section 6.1.1.
"Contract" means a contract, agreement, note, bond, mortgage, indenture,
easement, lease, license, instrument or other obligation.
"December Balance Sheet" has the meaning as set forth in Section 3.5.
"Development Assets" means all rights of the Sellers and their Affiliates
relating primarily to the Development Projects, including but not limited to
those arising pursuant to the Contracts, Permits and Environmental Permits and
other rights listed on Schedule 1A, and all books and records (including but not
limited to proposals, studies and applications) relating to the Development
Projects; provided, that the term "Development Assets" shall not include any
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GPU Assets and shall not include any assets of any Seller or any Affiliate of
any Seller that are not primarily related to the Development Projects.
"Development Costs" means costs incurred (whether capitalized or expensed)
in the development of the Development Projects including costs, fees and
expenses to be paid to third parties and costs chargeable by Sellers or their
Affiliates controlled by them to the Development Projects, in accordance with
Sithe's standard practices existing at the date hereof.
"Development Projects" means the Hunterstown, Erie West, Portland,
Atlantic, Seward and Gilbert generation projects under development by Sellers
or any of their Affiliates in the geographic area covered by PJM.
"Direct Claim" has the meaning as set forth in Section 12.2.3.
"DOJ" has the meaning as set forth in Section 6.2.1.
"Due Date" has the meaning as set forth in Section 6.4.12.
"Easement Agreements" means, collectively, those certain Easement
Agreements entered into pursuant to the Sithe/GPU Agreements with respect to
certain of the Real Property.
"Election" has the meaning as set forth in Section 6.4.1.1.
"Emission Allowance" means all present and future authorizations to emit
specified units of pollutants or Hazardous Substances, which units are
established by a Governmental Authority with jurisdiction over the generating
facilities included in the Acquired Assets and relating to such Acquired Assets
under (i) an air pollution control and emission reduction program designed to
mitigate global warming or interstate or intra-state transport of air
pollutants or Hazardous Substances; (ii) a program designed to mitigate
impairment of surface waters, watersheds or groundwater; or (iii) any pollution
reduction program with a similar purpose. Emission
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Allowances include allowances, as described above, regardless as to whether
the Governmental Authority establishing such Emission Allowances designates
such allowances by a name other than "allowances."
"Emission Reduction Credits" means credits in units that are established
by a Governmental Authority with jurisdiction over the generating facilities
included in the Acquired Assets that have obtained the credits, resulting from
reductions in the emissions of air pollutants from an emitting source or
facility (including, without limitation, and to the extent allowable under
applicable law, reductions from shut-downs or control of emissions beyond that
required by applicable law) that: (i) have been identified by the applicable
state regulatory authorities as complying with applicable state laws and
regulations governing the establishment of such credits (including, without
limitation, that such emissions reductions are enforceable, permanent,
quantifiable and surplus); or (ii) have been certified by any other applicable
Governmental Authority as complying with the laws and regulations governing the
establishment of such credits (including, without limitation, that such
emissions reductions are enforceable, permanent, quantifiable and surplus). The
term includes Emission Reduction Credits that have been approved by any
applicable state regulatory agency and are awaiting United States Environmental
Protection Agency approval. The term also includes certified air emissions
reductions, as described above, regardless as to whether the Governmental
Authority certifying such reductions designates such certified air emissions
reductions by a name other than "emission reduction credits."
"Employee Benefit Plan" means any employee benefit plan, as defined in
Section 3(3) of ERISA.
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"Environmental Claim" means administrative or judicial actions, suits,
orders, claims, liens, notices, notices of violations, investigations,
complaints, requests for information, proceedings, or other written
communication, whether criminal or civil, pursuant to or arising under any
applicable Environmental Law by any Person to the extent based upon, alleging,
asserting, or claiming any actual or potential (a) violation of, or liability
under any Environmental Law, (b) violation of any Environmental Permit, or (c)
liability for investigatory costs, cleanup costs, removal costs, remedial
costs, response costs, natural resource damages, property damage, personal
injury, fines, or penalties arising out of, based on, resulting from, or
related to the presence, Release, or threatened Release into the environment of
any Hazardous Substances at any location related to the Acquired Assets,
including, but not limited to, any off-Site location to which Hazardous
Substances, or materials containing Hazardous Substances, were sent for
handling, storage, treatment, or disposal.
"Environmental Laws" means all applicable federal, state and local laws
and regulations, relating to pollution or protection of the environment,
natural resources or human health and safety, including laws and regulations
relating to Releases or threatened Releases of Hazardous Substances (including,
without limitation, Releases to ambient air, surface water, groundwater, land
and surface and subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, release, transport, disposal
or handling of Hazardous Substances.
"Environmental Permits" means permits, certificates, certifications,
licenses, franchises and other governmental filings, notices, authorizations,
consents and approvals under Environmental Laws.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" of any Company and any Subsidiary of any Company means
any other Person that, together with the relevant Company or Subsidiary, is or
was required to be treated as a single employer under Section 414 of the Code.
"Estimated Closing Statement" has the meaning as set forth in Section
2.2.1.
"Estimated Adjustment Amount" has the meaning as set forth in Section
2.2.1.
"Excluded Liabilities" means the sum of (a) affiliate notes payable, (b)
GPU Post Closing Amounts, (c) maintenance reserves and (d) deferred taxes, all
as determined from the Balance Sheets.
"FERC" has the meaning as set forth in Section 6.2.2.
"Financial Statements" has the meaning as set forth in Section 3.5.
"Financing Parties" has the meaning as set forth in Section 6.3.
"Fixed Purchase Price" has the meaning as set forth in Section 2.1.2.
"FTC" has the meaning as set forth in Section 6.2.1.
"Funded Debt" means indebtedness for borrowed money (other than under the
Intercompany Notes, and other than accounts payable and trade payables incurred
in the ordinary course of business).
"GAAP" means generally accepted accounting principles in the United
States, consistently applied.
"Genco" has the meaning set forth in the first paragraph of this
Agreement.
"Good Operating Practices" mean any of the practices, methods and acts
engaged in or approved by a significant portion of the electric generation
industry or any of the practices,
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methods or acts which, in the exercise of reasonable judgment in light of the
facts known at the time the decision was made, would have been expected to
accomplish the desired result at a reasonable cost consistent with good
electric generation industry business practices, reliability, safety and
expedition during the relevant time period. Good Operating Practices are not
intended to be limited to the optimum practices, methods or acts to the
exclusion of all others, but rather to be acceptable practices, methods or acts
generally accepted in the industry.
"Governmental Authority" means any federal, state, local or other
governmental, regulatory or administrative agency, commission, department,
board, or other governmental subdivision, court, tribunal, arbitrating body or
other governmental authority.
"GPU" means GPU, Inc., a Pennsylvania corporation and a party to one or
more of the Sithe/GPU Agreements.
"GPU Assets" means all of the following:
(a) the "Purchased Assets" as defined in the Sithe/GPU Agreements
excluding assets identified in any Sithe/GPU Agreements as not being included
in the transactions contemplated in the Sithe/GPU Agreements, but including
any right that the Sellers and their Affiliates have to acquire the stock or
assets of York Haven Power Company and of Forked River station (but excluding
such stock or assets themselves);
(b) all rights of the Sellers and their Affiliates under the GPU
Project Documents and all rights, claims and causes of actions accrued or
accruing thereunder;
(c) all rights of the Sellers and their Affiliates under the
Sithe/GPU Agreements and all rights, claims and causes of action accrued or
accruing thereunder; and
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(d) all of the assets and rights of the Sellers and their
Affiliates, acquired or created since November 24, 1999 and used in connection
with, and relating primarily to, the assets referred to in clause (a) of this
definition, including without limitation such assets consisting of Real
Property, Inventories, tangible personal property, Contract rights (including
any rights to sell power), Real Property leases, Permits, Environmental
Permits, books and records, Emission Reduction Credits and Emission Allowances,
unexpired and transferable warranties and guaranties from third parties with
respect to Real Property or personal property, year 2000 compliance
information, names of plants (excluding the right to use the name "Sithe") and
intellectual property; provided, that the GPU Assets shall not include (i) any
Cash Equivalents, (ii) the name "Sithe" or any right of use thereof, or (iii)
any corporate-wide information, technology, financial reporting or accounting
systems, including software relating thereto and hardware not located on the
premises of any facility included in the GPU Assets; provided, however, that
Buyer shall be furnished with data related to the GPU Assets in a form
agreeable to Buyer and the Sellers.
"GPU Liabilities" means all of the obligations and liabilities (whether
accrued, absolute, contingent or otherwise) of Sithe or any of its Subsidiaries
(or any of their respective successors or assigns) under (i) the GPU Project
Documents, including, without limitation, obligations arising out of GPU
Project Documents that consist of assumed Contracts and Easement Agreements,
and Permitted Liens, (ii) the "Assumed Liabilities" as defined in the Sithe/GPU
Agreements, (iii) the Sithe/GPU Agreements (other than transaction expenses,
including transfer taxes, incurred pursuant to the Sithe/GPU Agreements) and
(iv) the Intercompany Notes.
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"GPU Post Closing Amounts" means "Post-Closing Adjustments" as defined in
Section 3.3(c) of the Sithe/GPU Agreements.
"GPU Project Documents" means the agreements and documents listed on
Schedule 1B.
"GPU Sellers" has the meaning set forth in Section 6.8.
"Guaranteed Obligations" has the meaning as set forth in Section 13.1.
"Guarantor" has the meaning as set forth in the first paragraph of this
Agreement.
"Hazardous Substances" or "hazardous substances" means (a) any
petrochemical or petroleum products, coal ash, oil, radioactive materials,
radon gas, asbestos in any form that is friable, urea formaldehyde foam
insulation and transformers or other equipment that contain dielectric fluid
which contains levels of polychlorinated biphenyls in excess of 50 parts per
million, (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "hazardous constituents," "restricted hazardous materials,"
"extremely hazardous substances," "toxic substances," "contaminants,"
"pollutants," "toxic pollutants" or words of similar meaning and regulatory
effect under any applicable Environmental Law; and (c) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any applicable Environmental Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"Indemnifiable Loss" has the meaning as set forth in Section 12.1.
"Indemnifying Party" has the meaning as set forth in Section 12.2.1.
"Indemnitee" has the meaning as set forth in Section 12.1.
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"Independent Accounting Firm" means an independent accounting firm of
national reputation that is mutually appointed by Sithe and Buyer (other than
the regular outside accounting firm of any of Buyer, Guarantor or any Seller).
"Interim Services Agreement" shall mean that certain Interim Services
Agreement, to be entered into between Sithe and Buyer, a general description of
which is attached hereto as Schedule 1C.
"Inventories" means coal, fuel oil or alternative fuel inventories,
limestone, materials, spare parts, consumable supplies and chemical and gas
inventories relating to the operation of a generating facility included in the
Acquired Assets.
"Intercompany Notes" means (a) the promissory note, dated November 24,
1999, issued by Sithe Pennsylvania Holders LLC to Genco in the principal amount
of $1,278,272,817.78, (b) the promissory note, dated November 24, 1999, issued
by Sithe New Jersey Holdings LLC to Genco in the principal amount of
$145,033,723.56, (c) the promissory note, dated November 24, 1999, issued by
Sithe Maryland Holdings LLC to Genco in the principal amount of $11,840,000.00,
(d) the promissory note, dated November 24, 1999, issued by Sithe Pennsylvania
Holdings LLC to Genco in the initial principal amount of $124,784,102.22, (e)
the promissory note, dated December 31, 1999, issued by Sithe Pennsylvania
Holdings LLC to Genco in the initial principal amount of $15,262,506.00, (f) the
promissory note, dated December 31, 1999, issued by Sithe New Jersey Holdings
LLC to Genco in the initial principal amount of $0.00, and (g) the promissory
note, dated December 31, 1999, issued by Sithe Maryland Holdings LLC to Genco in
the initial principal amount of $118,446.00 (as the principal balance
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owing under the promissory notes referred to in clauses (e), (f) and (g) may
change from time to time prior to the Closing in accordance with this
Agreement).
"ISRA" has the meaning as set forth in Section 6.14.
"Keystone and Conemaugh Operating Agreements" means (i) the Conemaugh
Operating Agreement between Pennsylvania Electric Company and Conemaugh Station
Owners, dated as of December 1, 1967, as amended through the date hereof (the
last such amendment being dated November 24, 1999) and (ii) the Keystone
Operating Agreement between Pennsylvania Electric Company and Keystone Station
Owners, dated as of December 1, 1967 as amended through the date hereof (the
last such amendment being dated March 25, 1998).
"Keystone and Conemaugh Owners' Agreements" means (i) the Memorandum of
Owners' Agreement Conemaugh Steam Electric Station among Conemaugh Station
Owners, dated as of August 1, 1966; and (ii) the Memorandum of Owners' Agreement
Keystone Steam Electric Station among Keystone Station Owners, dated December 7,
1964.
"knowledge" or words to such effect means (a) with respect to any Person
that is an individual, the actual knowledge without independent investigation of
such Person and (b) (i) in the case of Sithe, the actual knowledge of the
executive officers listed on Schedule 1D after due inquiry by one or more of
such executive officers of (A) the plant managers of the generating facilities
included in the GPU Assets and (B) Martin Rosenberg, pursuant to Section 6.5.4
and (ii) in the case of Buyer, the actual knowledge of the executive officers
listed on Schedule 1D.
"Liens" means liens, charges, restrictions, claims or encumbrances of any
nature.
"LLC Interests" has the meaning as set forth in Section 4.4.
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"Mark to Market Adjustment Amount" means the amount (which may be positive
or negative) by which the market value (as defined by the mid-point of the bid
and ask price, as agreed by Buyer and Seller) of any outstanding Trading
Contracts, as of the Closing Date, listed in Schedule 6.5.2(f)(A) varies from
the recorded value of such Trading Contracts at the Closing Date.
"material" or "materially," when used with respect to any Company or any
Subsidiary of any Company or any of the Acquired Assets (except when used to
modify the term "Lien" or "Liens" in Section 3.14), means material to (i) the
Companies and their Subsidiaries, taken as a whole or (ii) any Specified Plant
(as defined below in the definition of "Material Adverse Effect").
"Material Adverse Effect" means an effect that is or reasonably could be
expected to be materially adverse to the business, assets, condition (financial
or otherwise), prospects, properties or results of operations of (a) the
Companies and their Subsidiaries, taken as a whole, or (b) a Specified Plant (as
defined below), excluding in any case, (i) any changes, circumstances or effects
resulting from or relating to changes or developments in the economy, financial
markets, commodity markets (including power markets), laws, regulations or rules
in the applicable electric power markets (including, without limitation, changes
in laws or regulations affecting owners or providers of electric generation,
transmission or distribution as a group and not the Companies exclusively) or in
the political climate generally or in any specific region and (ii) any changes
in conditions or developments generally applicable to the industries in which
any of the Companies or any of their Subsidiaries is involved. As used herein,
each of the following shall be a "Specified Plant": (1) the Shawville Station
and associated GPU Assets taken as a whole;
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(2) the Portland Station and associated GPU Assets taken as a whole; and (3)
collectively, all GPU Assets taken as a whole that were conveyed to the Sellers
or their Affiliates under the Sithe/GPU Agreement identified in clause (d) of
the definition of Sithe/GPU Agreements.
"Material Contract" means each Contract to which any Company or any
Subsidiary of any Company is a party or by which any of them or any of their
respective property may be bound and which, in each case, is material to (a) the
Companies and their Subsidiaries taken as a whole or (b) any Specified Plant
(as defined above in the definition of "Material Adverse Effect"); provided,
however, that the term "Material Contract" shall not include the Project Office
Contracts.
"Mid-Atlantic Stock" has the meaning as set forth in Section 4.4.
"Multiemployer Plan" means a multiemployer plan, as defined in Sections
3(37) and 4001(a)(3) of ERISA.
"Net Working Capital" means the difference between (i) the sum of (a) fuel
inventory, including with respect to the Opening Balance Sheet, the balance in
any intercompany account with respect to fuel, (b) material and supplies
inventories, (c) other current assets, (d) other assets (excluding land,
property, plant & equipment, construction work in progress, project development
costs, goodwill, and long-term receivables from joint owners), and (e)
receivables from unaffiliated third parties (other than (1) insurance
receivables to the extent covered property is not being repaired or replaced and
(2) salvage receivables from the removal or replacement of Acquired Assets that
are capital assets that have not been repaired or replaced or that have been
repaired or replaced in accordance with Section 6.5.2(b)), and (ii) the sum of
(x) third party trade payables and (y) any other liabilities to unaffiliated
third parties other than (A) Excluded
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Liabilities, (B) any liabilities related to the capacity payments payable under
the transportation contract between Pennsylvania Power & Light Company,
Interstate Energy Company and Jersey Central Power & Light Company, for the
Gilbert Station, dated as of August 12, 1977, and (C) Taxes for which either
Seller is liable pursuant to Section 6.4, all as determined from the Balance
Sheets.
"Net Worth" means, with respect to any Person, (a) the total assets of such
Person and its Subsidiaries on a consolidated basis, less (b) the total
liabilities of such Person and its Subsidiaries, on a consolidated basis, in
each case, determined in accordance with GAAP.
"NJDEP" has the meaning as set forth in Section 6.14.
"N.J.S.A." has the meaning as set forth in Section 3.20.
"Northeast Management" means Sithe Northeast Management Company, a
Pennsylvania corporation.
"Opening Balance Sheet" has the meaning as set forth in Section 3.5.
"Other Transfer Taxes" has the meaning as set forth in Section 6.4.3.2.
"Payor" has the meaning as set forth in Section 6.4.2.
"Permits" means permits, certificates, certifications, licenses, franchises
and other filings, notices, authorizations, consents and approvals of any
Governmental Authority (other than Environmental Permits).
"Permitted Liens" has the meaning as set forth in Section 3.14.
"Person" means and includes an individual, a partnership, a joint venture,
a corporation, a limited liability company, a trust, an unincorporated
organization or a Governmental Authority.
"PJM" means the Pennsylvania - New Jersey - Maryland power pool.
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"Post-Closing Statement" has the meaning as set forth in Section 2.2.4.
"Preclosing Seller Breach Amount" shall mean the sum of the amount of
damages to Buyer, determined without regard to materiality or Material Adverse
Effect, resulting from a breach by the Sellers or any Company or any Subsidiary
of any Company of (i) the representations set forth in
(a) Sections 3.4.1 and 4.4 to the effect that the Sellers own 100% of the
equity interests in the Companies and each Subsidiary of the Companies free and
clear of any Liens, or
(b) Section 3.4.4 regarding the lack of business activities conducted in
the Companies and the Subsidiaries of the Companies other than in connection
with the acquisition, ownership, development and operation of the GPU Assets and
the absence of any Funded Debt (or any Liens related to any Funded Debt), or
(ii) the covenants set forth in paragraphs (b), (d), (f), (h) and (i) of
Section 6.5.2. For purposes of this definition, the damages to Buyer with
respect to a breach shall be deemed to be the monetary difference between (i)
the facts as represented as compared to the actual facts to which a specified
representation relates or (ii) the performance required by a specified covenant
as compared to actual performance. Such damages shall not include punitive,
incidental, special, exemplary or consequential damages, but only such actual
monetary differences as provided in the preceding sentence.
"Preclosing Seller Breach Amount Statement" has the meaning as set forth
in Section 2.2.1.
"Preparer" has the meaning as set forth in Section 6.4.2.
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"Project Office Contracts" shall mean the Contracts which are entered into
or administered by the Keystone-Conemaugh Project Office on behalf of the
owners of the Keystone and Conemaugh generating stations.
"PUHCA" means the Public Utility Holding Company Act of 1935, as amended.
"Real Property" means those certain parcels of land (including all
buildings, facilities and other improvements thereon and all appurtenances
thereto and any and all easements and rights of ingress and egress) included in
the Acquired Assets, excluding the real property that are assets owned by the
York Haven Power Company and those related to the Forked River station (to
which the Company or any Subsidiary of the Company have rights pursuant to the
Sithe/GPU Agreements).
"reasonable efforts" means commercially reasonable efforts.
"Recipient" has the meaning as set forth in Section 6.4.6.1.
"Release" means release, spill, leak, discharge, dispose of, pump, pour,
emit, empty, inject, leach, dump or allow to escape into or through the
environment.
"Remediation" means action of any kind to address a Release or the
presence of Hazardous Substances at a Site or an off-Site location including,
without limitation, any or all of the following activities to the extent they
relate to or arise from the presence of a Hazardous Substance at a Site or an
off-Site location: (a) monitoring, investigation, assessment, treatment,
cleanup, containment, removal, mitigation, response or restoration work; (b)
obtaining any permits, consents, approvals or authorizations of any
Governmental Authority necessary to conduct any such activity; (c) preparing
and implementing any plans or studies for any such activity; (d) obtaining a
written notice from a Governmental Authority with jurisdiction over a
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Site or an off-Site location under Environmental Laws that no material
additional work is required by such Governmental Authority; and (c) the use,
implementation, application, installation, operation or maintenance of removal
actions on a Site or an off-Site location, remedial technologies applied to the
surface or subsurface soils, excavation and off-Site treatment or disposal of
soils, systems for long term treatment of surface water or groundwater,
engineering controls or institutional controls, provided, that for purposes of
the foregoing, references to "off-Site" locations refer to such locations only
with respect to the period from November 24, 1999 to the Closing Date.
"Remediation Agreements" has the meaning as set forth in Section 6.14.
"RES" has the meaning as set forth in Section 6.18.
"Sellers" has the meaning as set forth in the first paragraph of this
Agreement.
"Sellers' Representatives" has the meaning as set forth in Section
6.5.5(a).
"Sellers' Trading Representatives" has the meaning as set forth in Section
6.5.5(b).
"Senior Facility" means that certain Amended and Restated Senior Secured
Revolving Credit Agreement, dated as of December 19, 1997 and amended and
restated, among Sithe, certain Subsidiaries of Sithe, Bank of Montreal, as
agent, and the financial institutions party thereto, as amended, modified and
supplemented.
"Site" means, with respect to any generating facility included in the
Acquired Assets, the Real Property (including improvements) forming a part of,
or used or usable in connection with the operation of, such facility, including
any disposal sites included in the Real Property. Any reference to the Sites
shall include, by definition, the surface and subsurface elements, including
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the soils and groundwater present at the Sites, and any reference to items "at
the Sites" shall include all items "at, on, in, upon, over, across, under and
within" the Site.
"Sithe" has the meaning set forth in the first paragraph of this Agreement.
"Sithe/GPU Agreements" means, collectively (a) the Purchase and Sale
Agreement dated as of October 29, 1998, as amended by Amendments 1 through 9,
between Sithe and Jersey Central Power & Light Company, a New Jersey
corporation; (b) the Purchase and Sale Agreement dated as of October 29, 1998,
as amended by Amendments 1 through 9, between Sithe and Metropolitan Edison
Company, a Pennsylvania corporation; (c) the Purchase and Sale Agreement dated
as of October 29, 1998, as amended by Amendments 1 through 9, between Sithe and
Pennsylvania Electric Company, a Pennsylvania corporation; and (d) the Purchase
and Sale Agreement dated as of October 29, 1998, as amended by Amendments 1
through 9, among Jersey Central Power & Light Company, Metropolitan Edison
Company, GPU and Sithe; in each case together with related documents,
instruments, agreements, including all closing statements, assignments, deeds,
Easement Agreements, assumptions, bills of sale and other transfer documents
executed or delivered in connection therewith.
"Sithe Mid-Atlantic" has the meaning as set forth in the Recitals.
"Sithe Power Marketing" shall mean Sithe Power Marketing, L.P.
"Subsidiary" of a Person means (i) any corporation, association or other
business entity of which 50% or more of the total voting power of shares or
other voting securities outstanding thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person (or a combination thereof) and (ii) any partnership or limited
liability company (a) the sole general partner or the managing general partner
or managing
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member of which is such Person or one or more of the other Subsidiaries of such
Person (or any combination thereof) or (b) the only general partners or members
of which are such Person or one or more of the other Subsidiaries of such
Person (or any combination thereof). For purposes of clarification, neither
the Keystone generation facility nor the Conemaugh generation facility shall be
deemed to be Subsidiaries of any Company.
"Target Date" means the 90th day after the date of this Agreement.
"Tax Audit" has the meaning as set forth in Section 6.4.6.1.
"Tax Item" has the meaning as set forth in Section 6.4.12.
"Taxes" mean all federal, state, local, foreign and other net income,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, lease, service, service use, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property, windfall
profits, fuel, gas import, customs, duties or other taxes, fees, assessments or
charges of any kind whatsoever imposed by any governmental entity, together
with any interest and any penalties, additions to tax or additional amounts
with respect thereto, and shall include all liability for the payment of any
consolidated or combined income taxes (including, without limitation, any
United States federal consolidated income tax liability) that is payable as a
result of being a member of, and which may be imposed upon, any affiliated
group(as defined in Section 1504 (a) of the Code or other applicable law) of
which any Taxpayer or Northeast Management is a member, and the term "Tax"
means any one of the foregoing Taxes.
"Taxpayer" means each Company and each Subsidiary of each Company other
than Northeast Management.
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"Tax Returns" means all returns, declarations, reports, statements and
other documents required to be filed in respect of Taxes, and the term "Tax
Return" means any one of the foregoing Tax Returns.
"Terminated Obligations" means (i) all (a) existing letters of credit set
forth on Schedule 2.3 and any replacements thereof entered into in the ordinary
course of business or (b) letters of credit issued after the date of this
Agreement for the account of (1) any Company or any Subsidiary of any Company
and as to which Sithe or any of its Subsidiaries has any reimbursement or other
similar obligations or (2) Sithe or any of its Subsidiaries in connection with
the GPU Assets, Development Assets or Development Projects, in case of clause
(1) or (2), incurred in the ordinary course of business and consistent with Good
Operating Practices or with the consent of Buyer and (ii) the bonds listed on
Schedule 2.3 required by the State of Pennsylvania in connection with permits or
licenses issued for the generating facilities of any Company and any Subsidiary
of any Company in Pennsylvania.
"Third Party Claim" has the meaning as set forth in Section 12.2.1.
"Trading Contracts" has the meaning as set forth in Section 6.5.2(f).
"Unions" shall mean Local 459 of the International Brotherhood of
Electrical Workers, AFL-CIO ("IBEW"), Local 777 of the IBEW, and System Council
U-3 (consisting of Local Unions 327 and 1314) of the IBEW.
"WARN Act" has the meaning as set forth in Section 6.10.
Section 1.2 Certain Interpretive Matters. In this Agreement, unless the
context otherwise requires, the singular shall include the plural, the masculine
shall include the feminine and neuter, and vice versa. The term "includes" or
"including" shall mean "including without
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limitation." References to a Section, Article, Exhibit or Schedule shall mean a
Section, Article, Exhibit or Schedule of this Agreement, and reference to a
given agreement or instrument shall be a reference to that agreement or
instrument as modified, amended, supplemented and restated through the date as
of which such reference is made.
ARTICLE 2. PURCHASE AND SALE OF INTERCOMPANY NOTES, MID-ATLANTIC STOCK AND
LLC INTERESTS
Section 2.1 Purchase and Sale of Intercompany Notes, Mid-Atlantic Stock
and LLC Interests.
2.1.1 Transfer of Intercompany Notes, Mid-Atlantic Stock and LLC
Interests. Upon the terms and subject to the conditions set forth in Articles 7
and 8, on the Closing Date Genco shall sell, convey, transfer, assign and
deliver to Buyer, and Buyer shall purchase from Genco, the Intercompany Notes,
the Mid-Atlantic Stock and the LLC Interests.
2.1.2 Aggregate Purchase Price. The aggregate consideration
payable by Buyer to Genco for the transfer of the Intercompany Notes, the
Mid-Atlantic Stock and the LLC Interests pursuant to Section 2.1.1 shall be
US$2,100,000,000 (the "Fixed Purchase Price") plus the Adjustment Amount, which
may be a positive or negative number (the Adjustment Amount plus the Fixed
Purchase Price, the "Aggregate Purchase Price").
2.1.3 Allocation of Aggregate Purchase Price. Of the Aggregate
Purchase Price, an amount equal to the aggregate principal amount of, and
accrued and unpaid interest on, the Intercompany Notes shall be allocated to
the purchase of the Intercompany Notes; provided, that such amount shall in no
event exceed the Aggregate Purchase Price. The balance of the
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Aggregate Purchase Price, if any, shall be allocated to the purchase of the
Mid-Atlantic Stock and the LLC Interests.
Section 2.2 Determination of Adjustment Amount and Preclosing Seller
Breach Amount.
2.2.1 At least 12 Business Days prior to the Closing Date, Buyer
shall prepare and deliver to the Sellers a statement (the "Preclosing Seller
Breach Amount Statement") which shall include an estimate of the Preclosing
Seller Breach Amount, if any, and a description in reasonable detail of (i)
each event or fact giving rise to the estimated damages included in such
estimated Preclosing Seller Breach Amount and (ii) Buyer's good faith
calculation as to the monetary value of the damages attributable to such event
or fact, in accordance with the definition of Preclosing Seller Breach Amount
set forth in this Agreement. At least ten (10) Business Days prior to the
Closing Date, the Sellers shall prepare and deliver to Buyer an estimated
closing statement (the "Estimated Closing Statement") that shall set forth the
Sellers' best estimate of the Adjustment Amount (the "Estimated Adjustment
Amount"), if any, including a calculation of such Estimated Adjustment Amount
in reasonable detail, provided that, solely for the purpose of establishing the
Estimated Adjustment Amount, the Preclosing Seller Breach Amount shall be
deemed to be Buyer's estimate of the Preclosing Seller Breach Amount included
in the Preclosing Seller Breach Amount Statement and any supplement thereto
submitted by Buyer in accordance with this Section 2.2 no later than three (3)
Business Days prior to the Closing Date. Solely for the purpose of establishing
the amount of the Adjustment Amount payable by Buyer to Genco at the Closing as
part of the Aggregate Purchase Price, the Estimated Adjustment Amount shall be
deemed to be the Adjustment Amount and Buyer shall
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pay the Fixed Purchase Price plus the Estimated Adjustment Amount to Genco at
the Closing, subject to this Section 2.2.
2.2.2 At any time from the date on which Buyer shall have delivered
the Preclosing Seller Breach Amount Statement to the Sellers until the 30th day
after the Closing Date, the Sellers may object in writing to the estimated
Preclosing Seller Breach Amount or any other information included in the
Preclosing Seller Breach Amount Statement, which objection should include a
description, in reasonable detail, of the basis for such objection. If Sellers
so object, the parties shall attempt to resolve such dispute by negotiation. If
the parties are unable to resolve such dispute within ten (10) Business Days of
receipt by Buyer of any objection by the Sellers, such dispute shall be
submitted to final and binding arbitration before J*A*M*S/ENDISPUTE, or its
successor, pursuant to the United States Arbitration Act, 9 U.S.C. Sec. 1 et
seq. Any party may commence the arbitration process called for in this
Agreement by filing a written demand for arbitration with J*A*M*S/ENDISPUTE,
with a copy to the other parties. The arbitration will be conducted in
accordance with the provisions of J*A*M*S/ENDISPUTE's Comprehensive Arbitration
Rules and Procedures in effect at the time of filing of the demand for
arbitration. The parties will cooperate with J*A*M*S/ENDISPUTE and with one
another in selecting an arbitrator from J*A*M*S/ENDISPUTE's panel of neutrals,
and in scheduling the arbitration proceedings. The arbitrator shall be
instructed to make a final determination with respect to the submitted dispute
within sixty (60) days of the date of the appointment. The arbitrator shall
consider only the alleged breaches described in the Preclosing Seller Breach
Amount Statement and in any supplement thereto submitted in writing by Buyer to
the Sellers on or prior to the Closing Date (which supplement, if any, shall
contain the same type
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of information required to be included in the Preclosing Seller Breach Amount
Statement with respect to any alleged breaches described in such supplement),
which breaches may only be with respect to the matters specified in the
definition of Preclosing Seller Breach Amount set forth in this Agreement. The
Sellers may object to any supplement provided by Buyer in writing prior to the
30th day after the Closing Date, which objection should include a description,
in reasonable detail, of the basis for any such objection. The arbitrator shall
determine the amount of damages, if any, that constitute the Preclosing Seller
Breach Amount in accordance with the definition of Preclosing Seller Breach
Amount set forth in this Agreement. In no event may the amount of the Preclosing
Seller Breach Amount exceed the estimate of the Preclosing Seller Breach Amount
included in the Preclosing Seller Breach Amount Statement and any supplement
thereto submitted by Buyer to the Sellers in accordance with this Section 2.2.2.
The final determination of the Preclosing Seller Breach Amount resulting from
such arbitration shall be final and binding on the parties hereto. The parties
covenant that they will participate in the arbitration in good faith. The
provisions of this Section 2.2.2 may be enforced by any court of competent
jurisdiction.
2.2.3 In the event that the Preclosing Seller Breach Amount as determined
pursuant to Section 2.2.2 (whether by arbitration or by settlement of the
parties after the Closing), if any, is less than the estimate of the Preclosing
Seller Breach Amount, if any, included in the Preclosing Seller Breach Amount
Statement and any supplement thereto submitted by Buyer to the Sellers in
accordance with Section 2.2.2, then Buyer shall pay to Genco, no later than
five (5) Business Days after such determination pursuant to Section 2.2.2, by
wire transfer of immediately available funds to an account designated by Genco,
the amount
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of such difference, plus interest on such amount from and including the Closing
Date to the date of payment at an annual rate of 18%. In addition, in the event
that the estimate of the Preclosing Seller Breach Amount, if any, included in
the Preclosing Seller Breach Amount Statement (and any supplement thereto
submitted by Buyer to the Sellers in accordance with Section 2.2.2) is more than
118% of the Preclosing Seller Breach Amount determined pursuant to Section
2.2.2) (whether by arbitration or by settlement of the parties after the
Closing), then Buyer shall also include in such payment to Genco the fees and
expenses (including reasonable legal and accounting fees and expenses) incurred
by the Sellers in connection with the determination of the Preclosing Seller
Breach Amount pursuant to Section 2.2.2 (whether by arbitration or by settlement
of the parties after the Closing).
2.2.4 Within ninety (90) days following the Closing Date, the Sellers
shall prepare and deliver to Buyer a final closing statement (the "Post-Closing
Statement") that shall set forth the amount of the Adjustment Amount (other than
the Preclosing Seller Breach Amount). The Post-Closing Statement shall include
(i) the Opening Balance Sheet, expanded to include financial statement
footnotes, and (ii) the Closing Balance Sheet. The Sellers shall provide Buyer
and Buyer's independent auditors with copies of, or access to, records and other
information that Buyer may reasonably request with respect to the information
set forth on the Post-Closing Statement (other than the Preclosing Seller Breach
Amount). For purposes of the Post-Closing Statement, the values of fuel
inventories and materials and supplies inventories on the Closing Balance Sheet
will be determined after physical inventory observations, performed in
accordance with normal and customary industry practices, performed on or about
the Closing
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Date, at Buyer's cost, utilizing inventory valuation methods consistent with
those used on the Opening Balance Sheet.
2.2.5 Within thirty (30) days following the delivery of the Post-Closing
Statement by the Sellers to Buyer, Buyer may object to the Adjustment Amount
(other than the Preclosing Seller Breach Amount) in writing. If Buyer so objects
to the Adjustment Amount, the parties shall attempt to resolve such dispute by
negotiation. If the parties are unable to resolve such dispute within thirty
(30) days of any objection by Buyer, the parties shall appoint the Independent
Accounting Firm, and shall instruct such firm, at Sithe's and Buyer's joint
expense, to review the calculation of the Adjustment Amount (other than the
Preclosing Seller Breach Amount) and determine the appropriate amount of the
Adjustment Amount (other than the Preclosing Seller Breach Amount), in
accordance with this Agreement, within thirty (30) days of such appointment. The
parties agree to cooperate with the Independent Accounting Firm and provide it
with such information as it reasonably requests to enable it to make such
determination. The finding of such Independent Accounting Firm shall be binding
on the parties hereto.
2.2.6 Upon final determination of the Adjustment Amount (other than the
Preclosing Seller Breach Amount) pursuant to Section 2.2.5, whether by agreement
of the parties or as otherwise provided above, and regardless of whether the
Preclosing Seller Breach Amount has been finally determined, (a) if the
Adjustment Amount (assuming for this purpose that Preclosing Seller Breach
Amount is zero) is more than the Estimated Adjustment Amount (assuming for this
purpose that Preclosing Seller Breach Amount is zero), Buyer shall pay such
difference to Genco and (b) if the Adjustment Amount (assuming for this purpose
that Preclosing
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Seller Breach Amount is zero) is less than the Estimated Adjustment Amount
(assuming for this purpose that Preclosing Seller Breach Amount is zero), Genco
shall pay such difference to Buyer, in either case, no later than five (5)
Business Days after such determination, by wire transfer of immediately
available funds to an account designated by the payee.
2.2.7 Notwithstanding anything else in this Agreement to the contrary, (a)
in no event shall the Closing Balance Sheet or the calculation of Net Working
Capital include any accrual, reserve or liability with respect to any matter
included in the Preclosing Seller Breach Amount in excess of the accrual,
reserve or liability with respect thereto included in the Opening Balance Sheet,
(b) in no event shall any accrual, reserve or liability be included on the
Closing Balance Sheet or in the calculation of Net Working Capital with respect
to any matter disclosed in Section 3.2, 3.3, 3.6, 3.7, 3.8, 3.11, 3.12, 3.13,
3.14, 3.15, 3.17, 3.18, 3.19, 3.20 or 3.21, including any disclosure schedule
relating to any of the foregoing Sections (except (i) to the extent that an
accrual, reserve or liability with respect to such matter was included on the
Opening Balance Sheet, in which case no adjustment shall be made to such
accrual, reserve or liability for purposes of the Closing Balance Sheet and (ii)
for accruals for third party trade payables and accrued expenses incurred in the
ordinary course of business through the Closing Date) and (c) there shall be no
accrual, reserve or liability on the Closing Balance Sheet or in the calculation
of Net Working Capital with respect to any event or matter which gave rise to or
was part of a Material Adverse Effect.
Section 2.3 Terminated Obligations.
On the Closing Date, in addition to paying the Fixed Purchase Price and the
Estimated Adjustment Amount to the Sellers, Buyer shall provide evidence of the
delivery of
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substitute letters of credit or other security for each of the Terminated
Obligations in form and substance satisfactory to the beneficiary of each such
Terminated Obligation and use reasonable efforts to deliver to the Sellers
releases with respect to all Terminated Obligations as soon as reasonably
practicable. If Buyer is unable to effect any such substitution on or prior to
the Closing Date, Buyer will also indemnify and hold harmless each Seller from
and against any liabilities, claims, demands, judgments, losses, costs, damages
or expenses from and after the Closing Date that such Seller may sustain,
suffer or incur and that result from or arise out of or relate to that
Terminated Obligation until such time as substitutions of all such Terminated
Obligations are effected and releases thereto have been obtained; provided that
Buyer shall continue to use reasonable efforts to effect such substitution at
all times after the Closing Date with respect to the Terminated Obligations
until such time when the substitution of all Terminated Obligations has been
effected. The Sellers shall cooperate with and use reasonable efforts to assist
Buyer in obtaining any such releases; provided that none of the Companies, any
Subsidiary of any Company, any Seller or any Affiliate of any Seller shall be
obligated to seek any waiver or consent from any issuer of any Terminated
Obligation; and provided further, that the failure of either Seller to perform
its obligations in this Section shall not constitute an event that would, by
itself, give rise to any claim by Buyer or right of Buyer to terminate this
Agreement.
Section 2.4 Senior Credit Facility and BECO Facility. On or prior to the
Closing Date, the Sellers shall, with respect to each of the Senior Credit
Facility and the BECO Facility, either (i) obtain consent of the lenders under
such facility to the consummation of the transactions contemplated by this
Agreement or (ii) discharge all outstanding obligations of the
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Sellers and their Affiliates under such facility. If the Sellers elect to
follow clause (ii), the Sellers and Buyer shall cooperate with one another to
arrange mutually satisfactory arrangements for the payment of the Aggregate
Purchase Price to assure that the outstanding obligations referred to in such
clause (ii) are discharged.
Section 2.5 Allocation of Aggregate Purchase Price. For United States
federal and applicable state income tax purposes, the Aggregate Purchase Price
and all other capitalized costs shall be allocated among the Mid-Atlantic Stock
and the assets of the other Companies and their Subsidiaries. In connection
therewith, Buyer shall prepare and submit to the Sellers a proposed allocation
of the Aggregate Purchase Price and all other capitalized costs among the
Mid-Atlantic Stock and the assets of the other Companies and their Subsidiaries
as soon as reasonably practicable after the Closing. Sellers shall approve and
agree to the proposed allocation unless Sellers reasonably determine that the
proposed allocation is improper. Each of Buyer and each of the Sellers agrees
to file Internal Revenue Service Form 8594, and all federal, state, local and
foreign tax returns, in a manner consistent with any such agreed upon
allocation. Each of Buyer and each of the Sellers agrees to provide the others
promptly with any information required to complete Form 8594. Buyer and the
Sellers shall notify and provide the others with reasonable assistance in the
event of an examination, audit or other proceeding regarding any allocation of
the Aggregate Purchase Price agreed to pursuant to this Section 2.5.
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ARTICLE 3. REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES
Except as otherwise disclosed in this Agreement, or in any Schedule, Sithe
hereby represents and warrants to Buyer, as of the date hereof (except where
such representation or warranty is expressly made as of another specific date),
as follows:
Section 3.1 Organization, Qualification and Power.
3.1.1 Sithe Mid-Atlantic is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware,
and is duly licensed or qualified to transact business as a foreign corporation
in each jurisdiction in which the nature of the business transacted by it or
the character of the properties owned or leased by it requires such licensing
or qualification, except where the failure to be so licensed or qualified would
not have, individually or in the aggregate, a Material Adverse Effect. Each
Company other than Sithe Mid-Atlantic is a limited liability company duly
organized, validly existing and in good standing under the laws of the State
of Delaware, and is duly licensed or qualified to transact business as a
foreign business entity in each jurisdiction in which the nature of the
business transacted by it or the character of the properties owned or leased by
it requires such licensing or qualification, except where the failure to be so
licensed or qualified would not have, individually or in the aggregate, a
Material Adverse Effect. Each Company has full power and authority to own,
lease or otherwise hold its properties and assets and to carry on its business
as now conducted.
3.1.2 Each Subsidiary of any Company that is a corporation is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and each Subsidiary of any Company that is a
partnership or limited liability company is duly
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formed, validly existing and in good standing under the laws of the
jurisdiction of its organization. Each Subsidiary of any Company is duly
licensed or qualified to transact business as a foreign corporation, limited
liability company or partnership, as applicable, in each jurisdiction in which
the nature of the business transacted by it or the character of the properties
owned or leased by it requires such licensing or qualification, except where
the failure to be so licensed or qualified would not, individually or in the
aggregate, have a Material Adverse Effect. Each Subsidiary of any Company has
the requisite corporate or organizational power and authority to own, lease or
otherwise hold its properties and assets and to carry on its business as now
conducted.
Section 3.2 Condemnation. Except as set forth in Schedule 3.2 and
except as would not, individually or in the aggregate, have a Material Adverse
Effect, none of the Companies and none of their Subsidiaries has received any
written notices of, and Sithe has no knowledge of, any pending or threatened
proceedings or governmental actions to condemn or take by power of eminent
domain all or any part of the Real Property and there have been no casualties
or condemnation proceedings relating to the Acquired Assets since November 24,
1999.
Section 3.3 No Conflict. Except as set forth in Schedule 3.3, the
execution, delivery and performance by the Sellers of this Agreement and the
consummation by the Sellers of the transactions contemplated hereby will not
(i) violate, conflict with or result in a breach of any provisions of the
Charter Documents of any Company or any Subsidiary of any Company, (ii) violate
any law, regulation, order, judgment or decree applicable to any Company or any
Subsidiary of any Company, or any order of any Governmental Authority having
jurisdiction over any Company or any Subsidiary of any Company, (iii) violate
or conflict with, or constitute
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(with due notice or lapse of time or both) a default (or give rise to any right
of termination, consent, cancellation or acceleration) under (a) any Contract
(other than the Project Office Contracts) to which any Company or any Subsidiary
of any Company is a party or (b) any Contract (other than the Project Office
Contracts) to which Sithe or any Affiliate of Sithe is a party that constitutes
a part of the Acquired Assets or (iv) result in the creation or imposition of
any Lien on the Acquired Assets or, to Sithe's knowledge, violate or conflict
with, or constitute (with due notice or lapse of time or both) a default or give
rise to any right of termination, consent, cancellation or acceleration under
any Project Office Contract), except, in the case of clauses (ii), (iii) and
(iv), as would not, individually or in the aggregate, have a Material Adverse
Effect.
Section 3.4 Equity Interests.
3.4.1 Subsidiaries. The authorized, issued and outstanding capital
stock of Sithe Mid-Atlantic and each Subsidiary of each Company that is a
corporation are as set forth in Schedule 3.4. The limited liability company
interests, partnership interests or equity securities of each Company and each
Subsidiary of each Company that is not a corporation are as set forth in
Schedule 3.4. The stockholders of record of each Subsidiary of each Company
that is a corporation, and the owner or owners of each Subsidiary of each
Company that is not a corporation, are as set forth in Schedule 3.4. There is
no authorized or outstanding subscription, warrant, option, convertible
security or other right (contingent or otherwise) to purchase or otherwise
acquire from any Company or from any Subsidiary of any Company equity interests
or partnership interests of any Company or any Subsidiary of any Company. There
is no commitment on the part of any Company or any Subsidiary of any Company to
issue shares,
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subscriptions, warrants, options, convertible securities, partnership interests
or other similar rights. No equity securities of any Company or any Subsidiary
of any Company are reserved for issuance for any such purpose. Neither any
Company nor any Subsidiary of any Company has any obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its equity
securities. Except for this Agreement and except for the limited liability
company operating agreements of the Companies and their Subsidiaries (other
than Sithe Mid-Atlantic and Northeast Management), there is no voting trust or
agreement, stockholders agreement, pledge agreement, buy-sell agreement, right
of first refusal, preemptive right or proxy relating to any equity securities
of any Company or any equity securities or partnership interests of any
Subsidiary of any Company.
3.4.2 Duly Authorized Shares. All of the shares of Mid-Atlantic
Stock and all of the issued and outstanding shares of capital stock of Northeast
Management have been or at the Closing will be duly authorized, validly issued,
fully paid and non-assessable.
3.4.3 Other Equity Interests. Set forth on Schedule 3.4 is (i) a
list of each Person (other than any Company or any Subsidiary of any Company)
in which either any Company or any Subsidiary of any Company (A) has any direct
or indirect equity or other participation in, or (B) has any right (contingent
or otherwise) to acquire the same, and (ii) a description of the nature and
amount of each interest required to be set forth pursuant to clause (i). With
respect to such interests, either a Company or a Subsidiary of a Company owns,
of record and beneficially, the interests set forth opposite the name of the
Company or the Subsidiary, as the case may be, free and clear of any Liens. On
the Closing Date, upon consummation of the transactions contemplated hereby,
either a Company or a Subsidiary of a
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Company will own such interests free and clear of any Liens, except for any
Liens created by or at the behest of Buyer.
3.4.4 Activities of the Companies. Each of the Companies was formed for
the purpose of acquiring, owning, developing and operating the Acquired Assets,
and no such Company is currently engaged or in the past has engaged in any
activity since the date of its formation other than in connection with the
ownership, operation and development of the Acquired Assets. No Subsidiary of
any Company which Subsidiary is a limited liability company has conducted any
material business activities since the date of its formation, other than the
ownership, operation and development of the Acquired Assets, and Northeast
Management has not conducted any material business activities since November 24,
1999, other than the ownership, operation and development of the Acquired
Assets. None of the Companies and none of the Subsidiaries of the Companies has
any Funded Debt.
Section 3.5 Financial Statements. Attached as Schedule 3.5 are (i) an
unaudited combining balance sheet of the Companies and their Subsidiaries at
November 24, 1999 (the "Opening Balance Sheet") and (ii) an unaudited combining
balance sheet of the Companies and their Subsidiaries at December 31, 1999 (the
"December Balance Sheet") and the related combining unaudited statements of
income and cash flows of the Companies and their Subsidiaries for the period
from November 24, 1999 to December 31, 1999 (such statements specified in
clause (i) and (ii) collectively, the "Financial Statements"). Within 45 days
after the date hereof (or, if such 45th day is not a Business Day, the next
Business Day thereafter), the Sellers shall deliver to Buyer a supplement to
Schedule 3.5 which shall (i) include a balance sheet analysis with respect to
each of the Financial Statements and (ii) set forth the components
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of each balance sheet line item (including the GPU Post Closing Amounts, the
liabilities related to the capacity payments payable under the transportation
contract between Pennsylvania Power & Light Company, Interstate Energy Company
and Jersey Central Power and Light Company for the Gilbert Station, long-term
receivables from joint owners, reserves for environmental obligations accrued,
the balance in any intercompany account with respect to fuel on the Opening
Balance Sheet only, and other reconciling items). Within 45 days after the date
hereof (or, if such 45th day is not a Business Day, the next Business Day
thereafter), the Sellers shall also provide Buyer with an analysis of the fuel
inventory at December 31, 1999, owned by Sithe Power Marketing with respect to
the Acquired Assets. The Financial Statements have been prepared in accordance
with GAAP and fairly present the financial condition, on a combined and
individual basis, of the Companies and their Subsidiaries as of the dates
thereof and the results of their operations, on a combined and individual basis,
for the period covered thereby, except as set forth on Schedule 3.5 and except
for the absence of financial statement footnotes and subject to normal recurring
period-end adjustments. Neither any Company nor any Subsidiary of any Company
has any liability or obligation (whether accrued, absolute, contingent or
otherwise), other than (i) liabilities reflected (but only to the extent so
reflected) or reserved against on the Opening Balance Sheet or the December
Balance Sheet, (ii) the GPU Liabilities, (iii) liabilities or obligations (other
than Funded Debt) that have arisen since November 24, 1999 (with respect to the
Opening Balance Sheet) or December 31, 1999 (with respect to the December
Balance Sheet) in the ordinary course of business, none of which, individually
or in the aggregate, would have a Material Adverse Effect, (iv) liabilities or
obligations explicitly disclosed herein or in any
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Schedule, or (v) liabilities or obligations (other than Funded Debt) incurred in
accordance with the terms of this Agreement or any Contract listed on Schedule
3.8.
Section 3.6 Litigation; Compliance with Law; Permits.
3.6.1 Schedule 3.6 lists each action, suit, claim or proceeding
(including, but not limited to, any arbitration proceeding) pending or, to
Sithe's knowledge, threatened, and each investigation which, to Sithe's
knowledge, is pending or threatened, against any Company or any Subsidiary of
any Company or Sithe or any Affiliate of Sithe, at law or in equity, or before
or by any Governmental Authority that relates to (a) any Company or any
Subsidiary of any Company or (b) any Acquired Assets, which (in the case of (a)
or (b) above), if determined adversely to any Company or any Subsidiary of any
Company or Sithe or any Affiliate of Sithe, would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. For purposes
of the preceding sentence, no representation is made with respect to (i) any
proceeding before any Governmental Authority initiated by any Company or any
Subsidiary of any Company in which any Company or any such Subsidiary of any
Company is an applicant for any Permit or Environmental Permit, to the extent
the matters considered in such proceeding are limited to the approval or
authority requested in such application, or (ii) proceedings initiated by a
third party in which any Company or any Subsidiary of any Company is an
intervener, and the subject matter of such intervention is of general
applicability to similarly-situated parties. Neither any Company nor any
Subsidiary of any Company is in default with respect to any order, writ,
injunction or decree known to or served upon such entity of any Governmental
Authority except for defaults which would not have, individually or in the
aggregate, a Material Adverse Effect.
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3.6.2 Except as set forth on Schedule 3.6, the Sellers and their
Affiliates controlled by them, including each Company and each Subsidiary of
each Company, are in compliance with all laws, rules, regulations and orders
applicable to the business and operations of the Acquired Assets and the
business of the Companies and their Subsidiaries (other than labor laws, which
are addressed in Section 3.11, and other than Environmental Laws, which are
addressed in Section 3.17), except where the failure to so comply would not
have, individually or in the aggregate, a Material Adverse Effect.
3.6.3 Except as set forth on Schedule 3.6, each Company and each
Subsidiary of each Company has all Permits and Environmental Permits necessary
to own, lease or otherwise hold its properties and assets and to conduct its
business as currently conducted, except where the failure to obtain the same
would not have, individually or in the aggregate, a Material Adverse Effect.
Except as disclosed on Schedule 3.6, neither any Company nor any Subsidiary of
any Company has received any notification that it is in violation of any such
Permits and Environmental Permits except notifications of violations which would
not have, individually or in the aggregate, a Material Adverse Effect. Each
Company and each Subsidiary of each Company is in compliance with all such
Permits and Environmental Permits except where non-compliance would not have,
individually or in the aggregate, a Material Adverse Effect.
Section 3.7 Tax Matters.
3.7.1 There have been properly completed and filed on a timely
basis and in correct form all Tax Returns required to be filed (i) on or prior
to the date hereof by any Taxpayer and (ii) after November 24, 1999 and on or
prior to the date hereof (and, to Sithe's knowledge on or prior to November 24,
1999), by Northeast Management. As of the time of
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filing, the foregoing Tax Returns of any Taxpayer and, to Sithe's knowledge, of
Northeast Management, were true and complete in all material respects.
3.7.2 Except as would not, individually or in the aggregate, have a
Material Adverse Effect, with respect to all amounts in respect of Taxes
(i) imposed on any Taxpayer with respect to all taxable periods or portions of
periods ending on or before the Closing Date and (ii) imposed on Northeast
Management with respect to all taxable periods or portions of periods beginning
after November 24, 1999 and ending on or before the Closing Date (and, to
Sithe's knowledge, with respect to all taxable periods or portions of periods
beginning on or before November 24, 1999 and ending on or before November 24,
1999), (a) all applicable Tax laws and regulations have been complied with in
all respects and (b) all such amounts required to be paid to taxing authorities
or others on or before the date hereof have been paid, except such Taxes, if
any, as are set forth in Schedule 3.7 that are being contested in good faith.
3.7.3 Except as set forth in Schedule 3.7, no adjustments to the Tax
liability of any Taxpayer have been proposed in writing (and are currently
pending) by any taxing authority in connection with any Tax Return of any
Taxpayer, except for adjustments that would not have a Material Adverse Effect.
All deficiencies asserted or assessments made as a result of any examinations
have been fully paid, or are fully reflected as a liability in the financial
statements of the applicable Taxpayer, or are being contested in good faith and
are described in Schedule 3.7 except for deficiencies or assessments that would
not, individually or in the aggregate, have a Material Adverse Effect. Except
as set forth on Schedule 3.7, with respect to all taxable periods or portions
of periods beginning after November 24, 1999 (and, to Sithe's knowledge, with
respect to all taxable periods or portions of periods beginning before
November 24, 1999 and
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ending on or before November 24, 1999) no adjustments to the Tax liability of
Northeast Management have been proposed in writing (and are currently pending)
by any taxing authority in connection with any Tax Return of Northeast
Management, except for adjustments that would not have a Material Adverse
Effect. To Sithe's knowledge, all material deficiencies asserted or assessments
made as a result of any examination have been fully paid or are fully reflected
as a liability in the financial statements of Northeast Management, or are
being contested in good faith and are described in Schedule 3.7.
3.7.4 Except as set forth on Schedule 3.7, there are no liens for
Taxes (other than for current Taxes not yet due and payable) on any of the
assets of any Company or any Subsidiary of any Company.
3.7.5 Each of the Companies (other than Sithe Mid-Atlantic) and each
Subsidiary of each Company (other than Northeast Management) is properly
treated as a disregarded entity for federal income tax purposes.
3.7.6 No property owned by any Company or any Subsidiary of any
Company (i) is property required to be treated as being owned by another
Person pursuant to the provisions of Section 168(f)(8) of the Internal Revenue
Code of 1954, as amended and in effect immediately prior to the enactment of
the Tax Reform Act of 1986, (ii) constitutes "tax-exempt use property" within
the meaning of Section 168(h)(1) of the Code or (iii) except for pollution
control facilities financed with the proceeds of Pollution Control Revenue
Bonds (as described in Section 6.8 of this Agreement), is "tax-exempt bond
financed property" within the meaning of Section 168(g) of the Code.
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3.7.7 Genco is not a foreign person within the meaning of Section
1445 of the Code.
3.7.8 Genco and each of Sithe Mid-Atlantic and Northeast Management
are members of a "selling consolidated group" as such term is defined in
Treasury Regulation Section 1.338(h)(10)-1(c).
3.7.9 Except as set forth on Schedule 3.7 and other than the
Sithe/GPU Agreements and except as would not, individually or in the aggregate,
have a Material Adverse Effect, (i) no Company and no Subsidiary of any Company
other than Northeast Management is a party to, is bound by or has any
obligations under any Tax sharing agreement, any Tax indemnification agreement
or similar contract or arrangement and (ii) to Sithe's knowledge, Northeast
Management is not a party to, is not bound by and has no obligation under any
Tax sharing agreement, any Tax indemnification agreement or similar contract or
arrangement.
3.7.10 Except as set forth on Schedule 3.7, no tax audits or other
administrative proceedings or court proceedings are presently pending with
regard to any Taxes for which any Company or any Subsidiary of any Company
would be liable except for audits or proceedings which would not have a
Material Adverse Effect.
3.7.11 Except as would not have, individually or in the aggregate, a
Material Adverse Effect, no Company and no Subsidiary of any Company has
executed or entered into (or prior to the close of business on the Closing Date
will execute or enter into) with any taxing authority (i) any agreement, waiver
or other document extending or having the effect of extending or waiving the
period for assessments or collection of any Taxes for which any Company or any
Subsidiary of any Company would or could be liable or (ii) any closing
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agreement pursuant to Section 7121 of the Code, or any predecessor provision
thereof or any similar provision of state, local or foreign tax law that
relates to the assets or operations of any Company or any Subsidiary of any
Company.
3.7.12 Except as would not have, individually or in the aggregate, a
Material Adverse Effect, no Company and no Subsidiary of any Company has made
any payments, is obligated to make any payments, or is a party to any agreement
or other arrangement that could obligate it to make any payments that would not
be deductible under Section 280G of the Code.
3.7.13 Except as would not have, individually or in the aggregate, a
Material Adverse Effect, each Company and each Subsidiary of each Company has
collected and withheld all Taxes that it has been required to collect or
withhold and has timely submitted all such collected and withheld Taxes to the
appropriate authorities. Each Company and each Subsidiary of each Company has
complied and is in compliance with all applicable laws, rules and regulations
relating to the payment, withholding and information reporting requirements
relating to any Taxes required to be collected or withheld.
3.7.14 Neither Sithe Mid-Atlantic nor Northeast Management has made
an election or filed a consent under Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply to any disposition of a subsection (f)
asset (as such term is defined in Section 341(f)(4) of the Code) owned by such
entity.
3.7.15 No claim has ever been made by an authority in a jurisdiction
where any Company or any Subsidiary of any Company does not or has not filed
tax returns that such Company or such Subsidiary of any Company is or may be
subject to taxation by that jurisdiction.
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Section 3.8 Material Contracts. The Contracts listed in Schedule 3.8
include all of the Material Contracts and certain other Contracts that are
listed for the information of Buyer; provided, however, that no Contract shall
be deemed a Material Contract solely by reason of the fact that it is listed on
Schedule 3.8. Except as otherwise set forth in Schedule 3.8: (i) each Contract
listed on Schedule 3.8 and, to Sithe's knowledge, each Project Office Contract,
is valid, binding and in full force and effect, and is enforceable by a Company
or a Subsidiary of a Company, as applicable, in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in effect
relating to creditors' rights generally, and general equitable principles
(whether considered in a proceeding in equity or at law), except those
Contracts which have expired or been terminated in the ordinary course of
business or in accordance with Good Operating Practices, and except as would
not, individually or in the aggregate, have a Material Adverse Effect, (ii)
each Company and each Subsidiary of a Company that is a party to a Contract
listed in Schedule 3.8 has performed in all material respects the obligations
required to be performed by it to date under such Contract, except for such
failure or failures to perform which would not, individually or in the
aggregate, have a Material Adverse Effect and, to Sithe's knowledge, each
Company and each Subsidiary of a Company that is a party to a Project Office
Contract has performed in all respects the obligations required to be performed
by it to date under such Project Office Contract, except for such failure or
failures to perform which would not individually or in the aggregate, have a
Material Adverse Effect, (iii) there is not, under any Contract listed on
Schedule 3.8, or, to Sithe's knowledge, under any Project Office Contract any
default or event which, with notice or lapse of time or both, would constitute
a default on the part of any
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Company or any Subsidiary of any Company and neither any Company nor any
Subsidiary of any Company has received any notice of default, notice of force
majeure or notice of other suspension of performance or notice exercising a
right of renegotiation under any such Contract to which it is a party, except as
would not have, individually or in the aggregate, a Material Adverse Effect; and
(iv) none of the Companies or their Subsidiaries is seeking the renegotiation or
substitute performance of any Contract listed Schedule 3.8, or to Sithe's
knowledge, any Project Office Contract, except as would not have, individually
or in the aggregate, a Material Adverse Effect. For purposes of this Section
3.8, the term "Contract listed on Schedule 3.8" shall not include any Project
Office Contract.
Section 3.9 Capital Expenditures. Except as set forth in Schedule 3.9, as
of the date of this Agreement, there are no capital expenditures that are
planned by any Company or any Subsidiaries of any Company through December 31,
2000.
Section 3.10 Brokers. None of the Sellers, any Company or any Subsidiary
or Affiliate of any Company has any contract, arrangement or understanding with
any investment banking firm, broker or finder with respect to the transactions
contemplated by this Agreement, except for Goldman, Sachs & Co., whose fees
shall be borne by the Sellers.
Section 3.11 Labor Matters. The Sellers have delivered to Buyer true and
correct copies of the agreements listed on Schedule 3.11 (the "Collective
Bargaining Agreements"). The Collective Bargaining Agreements constitute all
collective bargaining agreements to which any Seller, any Company or any
Subsidiary of any Company is a party or is subject and that relate to the
business and operations of any Company or any Subsidiary of any Company. Other
than as set forth in Schedule 3.11, the applicable Company or the applicable
Subsidiary of any Company
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(a) is in compliance with all applicable laws and regulations regarding
employment and employment practices, terms and conditions of employment, and
wages and hours; (b) has not received written notice of any unfair labor
practice complaint against it pending before the National Labor Relations
Board; (c) has no arbitration proceeding pending against it that arises out of
or under any collective bargaining agreement that relates to the business or
operations of any Company or any Subsidiary of any Company, and (d) is not
currently experiencing, and has received no current threat of, any work
stoppage, in each case, except as would not, individually or in the aggregate,
have a Material Adverse Effect.
Section 3.12 ERISA.
3.12.1 Schedule 3.12 lists all Employee Benefit Plans and Benefit
Arrangements that are sponsored or contributed to by Sithe, any Company or any
Subsidiary of any Company covering the employees or former employees of any
Company or any Subsidiary of any Company ("Benefit Plans"). With respect to
each Benefit Plan, each Company and each Subsidiary of each Company has made
available to Buyer a true and correct copy of each of the following, as
applicable:
3.12.1.1 the current plan document (including all
amendments adopted since the most recent restatement) and its most recently
prepared summary plan description and all summaries of material modifications
prepared since the most recent summary plan description, and all material
employee communications relating to such plan;
3.12.1.2 a written description of any Benefit Plan for
which no plan document exists;
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3.12.1.3 annual reports or Code Section 6039D information
returns (IRS Form 5500 Series), including financial statements, if applicable,
for the last three years;
3.12.1.4 all contracts relating to any Benefit Plan with
respect to which any Company or any Subsidiary of any Company has any
liability, without limitation, each related trust agreement, insurance
contract, service provider contract, subscription or participation agreement,
or investment management agreement (including all amendments to each such
document);
3.12.1.5 the most recent IRS determination letter or other
opinion letter with respect to the qualified status under Code Section 401(a)
of any Benefit Plan intended to satisfy the qualification requirements of Code
Section 401(a); and
3.12.1.6 actuarial reports or valuations for the last
three years.
3.12.2 To Sithe's knowledge, except as set forth in Schedule 3.12
and except as would not have, individually or in the aggregate, a Material
Adverse Effect, all Benefit Plans subject to ERISA and the Code covering
employees or former employees of any Company or any Subsidiary of any Company
comply with ERISA and the Code.
3.12.3 Except as set forth in Schedule 3.12, all Employee Benefit
Plans intended to be qualified under Code Section 401 maintained by any Company
or any Subsidiary of any Company have received favorable determinations with
respect to such qualified status from the Internal Revenue Service or will be
amended as requested by the Internal Revenue Service within the remedial
amendment period prescribed under Section 401(b) of the Code so as to
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obtain such favorable determination. Except as set forth in Schedule 3.12, to
Sithe's knowledge, nothing has occurred in the operation of any such plan that
would adversely affect its qualification under Section 401(a) of the Code.
3.12.4 None of the Companies, any Subsidiaries of any Company or their
respective ERISA Affiliates currently sponsors, contributes to or has any
obligation to contribute to any voluntary employees' beneficiary association,
as defined in Section 501(c)(9) of the Code.
3.12.5 No Employee Benefit Plan that is subject to Title IV of ERISA and
is sponsored by any Company or any Subsidiary of any Company or their
respective ERISA Affiliates has (i) incurred an accumulated funding deficiency,
whether or not waived, within the meaning of Section 412 of the Code or Section
302 of ERISA, or (ii) been a plan with respect to which a reportable event, as
defined in Section 4043 of ERISA, to the extent that the reporting of such
event to the Pension Benefit Guaranty Corporation has not been waived, has
occurred and is continuing, or will occur as a result of the consummation of
the transactions contemplated by this Agreement. Except as set forth in
Schedule 3.12, neither any Company nor any Subsidiary of any Company, nor any
of their respective ERISA Affiliates, has incurred any liability under Section
4062(b) of ERISA or to the Pension Benefit Guaranty Corporation in connection
with any Benefit Plan which is subject to Title IV of ERISA or any withdrawal
liability with respect to any Benefit Plan, within the meaning of Section 4201
of ERISA.
3.12.6 Neither any Company nor any Subsidiary of any Company or their
respective ERISA Affiliates sponsors or has previously sponsored, maintained,
contributed to or incurred an obligation to contribute to any Multiemployer
Plan.
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3.12.7 Except as set forth in Schedule 3.12, to Sithe's knowledge, no
Person has engaged in or been a party to a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA, respectively, in relation to any of
the Employee Benefit Plans covering employees or former employees of any
Company or any Subsidiary of any Company.
3.12.8 Except as set forth in Schedule 3.12 or as specifically provided
in Sithe/GPU Agreements or the Collective Bargaining Agreements, as of the date
hereof, no employee or former employee of any Company or any Subsidiary of any
Company shall accrue or receive additional benefits, service or accelerated
rights to payment of benefits under any Benefit Plan or become entitled to
severance, termination allowance or similar payments as a result of the
transactions contemplated by this Agreement.
3.12.9 Except as set forth in Schedule 3.12 and other than claims for
benefits in the ordinary course, there is no material claim pending, or, to
Sithe's knowledge, threatened, involving any Benefit Plan by any Person against
such Benefit Plan. No Benefit Plan is subject to ongoing audit or other
administrative proceeding of the IRS, the Department of Labor or any other
governmental agency, and no Benefit Plan is the subject of any pending
application for administrative relief under any voluntary compliance program of
the IRS, the Department of Labor or any other governmental entity.
3.12.10 Except as set forth in Schedule 3.12, each Company and each
Subsidiary of each Company has made full and timely payment of all amounts
required to be contributed under the terms of each Benefit Plan.
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3.12.11 Except as set forth in Schedule 3.12, no Benefit Plan provides
for the continuation of medical or health benefits or death benefits after an
employee's termination of employment (including retirement) except for
continuation coverage required pursuant to Section 4980B of the Code and Part 6
of Title I of ERISA and the regulations thereunder.
3.12.12 Except as set forth in Schedule 3.12, or as specifically
provided in the Sithe/GPU Agreements or a Collective Bargaining Agreement,
neither any Company nor any Subsidiary of any Company is subject to any legal
obligation to enter into any new form of compensation or employment agreement
or to establish any new Employee Benefit Plan or benefit program of any nature,
including (without limitation) any stock option, stock or cash award,
non-qualified deferred compensation or executive compensation plan or policy or
to modify or change any existing Benefit Plan. Except as set forth in Schedule
3.12, or as specifically provided in the Sithe/GPU Agreements or a Collective
Bargaining Agreement, each Company and/or each Subsidiary of each Company has
the right to, in any manner, and without the consent of any employee,
beneficiary or dependent, employees' organization or other person, terminate,
modify or amend any Employee Benefit Plan (or their participation in any such
new Employee Benefit Plan) at any time sponsored, maintained or contributed to
by any Company or any Subsidiary of any Company, effective as of any date
before, on or after the Closing Date except to the extent that any retroactive
amendment would be prohibited by Section 204(g) of ERISA or would adversely
affect a vested accrued benefit or a previously granted award under any such
plan not subject to Section 204(g) of ERISA.
Section 3.13 Events Subsequent to November 24, 1999. Except (a) as set
forth in Schedule 3.13, (b) as specifically provided for by this Agreement or
consented to or approved in
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writing by Buyer or (c) for transactions between or among any Company and any
other Company and/or one or more of the Subsidiaries of any Company or between
or among Subsidiaries of any Company, since November 24, 1999 neither any
Company nor any Subsidiary of any Company, has:
3.13.1 incurred or guaranteed any Funded Debt;
3.13.2 acquired or disposed of, in either case in any manner, any
Acquired Assets or properties, other than (i) acquisitions and dispositions in
the ordinary course of business consistent with Good Operating Practices, (ii)
dispositions of obsolete assets, (iii) acquisitions and dispositions in
connection with property losses fully covered by insurance, (iv) acquisitions
and dispositions in the ordinary course of business in accordance with any
Contract listed on Schedule 3.8 or (v) distributions or other payments of Cash
Equivalents to any Seller or any Affiliate of any Seller;
3.13.3 amended its Charter Documents other than amendments to remove
the name "Sithe" from the name of any Company or Subsidiary of any Company;
3.13.4 failed to pay and discharge on a timely basis any liabilities
which constitute current liabilities under GAAP, except for (i) liabilities not
yet due, (ii) liabilities which are subject to good faith contest for which
appropriate reserves have been established or (iii) liabilities for which the
failure to pay would not, individually or in the aggregate, have a Material
Adverse Effect;
3.13.5 cancelled any indebtedness owed to any Company or any Subsidiary
of any Company or waived any rights of substantial value to any Company or any
Subsidiary of any
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Company, except for any such cancellations or waivers of intercompany
indebtedness or which, individually or in the aggregate, do not have a Material
Adverse Effect; or
3.13.6 entered into any agreement or commitment to take any of the
actions described in Sections 3.13.1 to 3.13.5.
Section 3.14 Title to Properties. Except as set forth on Schedule 3.4,
the Companies and their Subsidiaries (a) have, or on the Closing Date will have,
good and valid title to, or a valid leasehold interest in, the Acquired Assets
that consist of Real Property or tangible personal property and (b) own, lease
or have rights to use, or have rights with respect to, or on the Closing Date
will own, lease or have rights to use or have rights with respect, as
applicable, to all other material Acquired Assets (other than, in the case of
(a) or (b) above, material GPU Assets and the material Development Assets
disposed of in the ordinary course of business and consistent with Good
Operating Practices and dispositions that would not result in a breach of the
representations set forth in Section 3.13), free and clear of any material
Liens, except for: (i) Liens set forth in Schedule 3.14 or Liens incurred in the
ordinary course of business in connection with the performance of the terms of
any Contract listed on Schedule 3.8; (ii) Liens for current taxes not yet due
and payable or being contested in good faith through appropriate proceedings,
Liens to lenders incurred on deposits made in the ordinary course of business in
connection with maintaining bank accounts, Liens in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, governmental permits, licenses and approvals, performance and
return-of-money bonds and other similar obligations incurred in the ordinary
course of business (iii)
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materialmen's, warehousemen's and mechanics' Liens and other Liens arising by
operation of law in the ordinary course of business for sums not yet due, and
(iv) zoning, entitlement, conservation restriction and other land use and
environmental regulations by Governmental Authorities, provided, in the case of
clauses (ii) and (iii) above, that none of the foregoing would have,
individually or in the aggregate, a Material Adverse Effect. The Liens
described in the foregoing clauses (i), (ii), (iii) and (iv) are collectively
referred to as "Permitted Liens."
Section 3.15 Insurance. Each Company and the Subsidiaries of each Company
hold or are covered by valid policies of insurance of the types and in such
amounts as is customary for companies similarly situated. Prior to the Closing
Date, the Sellers shall provide a copy of each such policy, or if such policy
is not available, a broker's confirmation of coverage or binder, to Buyer. Each
Company and each Subsidiary of each Company is a named insured under these
policies or covered pursuant to a broad form named insured wording. The Sellers
shall use their reasonable efforts to have such policies endorsed to provide
that effective at and from the Closing Date, Buyer and its Affiliates will be
additional insureds, but only in respect of occurrences prior to the Closing
Date. The Sellers shall use reasonable efforts to assist Buyer in filing any
claims under such policies. In the event any such policies are "claims-made",
prior to the Closing Date the Sellers shall, in consultation with Buyer, obtain
terms to extend coverage thereunder for claims reported after the Closing Date.
Buyer may, at its option, accept or decline such terms and if accepted, shall
pay any premiums and related fees for the coverage extension.
Section 3.16 Transactions with Certain Persons. Except for liabilities and
obligations arising out of their employment relationship with any Company or
any Affiliate of any
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Company, and except as set forth in Schedule 3.8, 3.12 or 3.16, neither any
Company nor any Subsidiary of any Company has any outstanding liabilities or
obligations owing to or from any officer, director or employee of any Seller or
any of Sellers' Affiliates (other than the Companies and their Subsidiaries)
nor any member of any such person's immediate family.
Section 3.17 Compliance With Environmental Laws. (a) Except as set forth
in Schedule 3.17, the Companies and their Subsidiaries are in compliance with
the applicable Environmental Laws, except where any such instance of
non-compliance would not have, individually or in the aggregate, a Material
Adverse Effect. Except as set forth in Schedule 3.17, (i) no written notice of
any violation of the applicable Environmental Laws relating to the operations
or properties of any Company or any Subsidiary of any Company has been received
by, and is pending against, any Company or any Subsidiary of any Company,
except where any such instance of non-compliance would not have, individually
or in the aggregate, a Material Adverse Effect and (ii) there are no writs,
injunctions, consents, decrees, orders or judgments outstanding, or any pending
actions, suits, claims, or proceedings relating to compliance by any Company or
any Subsidiary of any Company with or liability of any of them under the
applicable Environmental Laws, including any Remediation of Hazardous
Substances, except where any such instance of non-compliance or liability would
not have, individually or in the aggregate, a Material Adverse Effect. Except
as set forth on Schedule 3.17, there are no pending or, to Sithe's knowledge,
threatened investigations, actions, suits, claims, or proceedings relating to
compliance by any Company or any Subsidiary of any Company with or liability of
any of them under the applicable Environmental Laws except where any such
instance of non-compliance or liability would not have, individually or in the
aggregate, a Material Adverse
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Effect. Schedule 3.17 lists all Emission Allowances and Emission Reduction
Credits included in the Acquired Assets.
(b) Except as disclosed on Schedule 3.17, (i) none of the Sellers, the
Companies or their Subsidiaries has received any written request for
information, or been notified in writing that it is a potentially responsible
party, under CERCLA or any similar state law with respect to the Real Property
or any other Acquired Asset and (ii) to Sithe's knowledge, since November 24,
1999, no Releases of Hazardous Substances have initiated at, from, in, on, or
under any Site, and no Hazardous Substances are present in, on, about or
migrating from any such Site that could reasonably be expected to give rise to
an Environmental Claim related to the Acquired Assets for which Remediation
reasonably could be required, except in any such case to the extent that any
such Releases would not, individually or in the aggregate, create a Material
Adverse Effect.
Section 3.18. Certain Matters Relating to GPU Assets and Development
Assets.
Except as set forth in Schedule 3.18:
3.18.1 All conditions precedent to closing set forth in the
Sithe/GPU Agreements or in any of the agreements that GPU or any of its
Affiliates entered into in connection with the closing of the transactions
contemplated by the Sithe/GPU Agreements (including, but not limited to,
continuing services agreements, interconnection agreements, transition power
purchase agreements and various easement, license, sublease and other
agreements) were satisfied or waived and all post-closing obligations
thereunder to be performed prior to the date hereof have been satisfied or
waived.
3.18.2 All interconnection agreements contemplated by the Sithe/GPU
Agreements, including the interconnection agreements with respect to the
Keystone and
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Conemaugh facilities, have (a) been fully executed and delivered by the
intended parties thereto, and (b) been filed with FERC. The filing party has
requested that all such interconnection agreements become fully effective as of
November 24, 1999.
3.18.3 No assets provided by the Sithe/GPU Agreements to have been
purchased by any Company or any of its Subsidiaries were excluded from purchase
under Section 7.3 of such agreements for failure to meet the conditions therein.
3.18.4 Each of the Keystone and Conemaugh Operating Agreements and the
Keystone and Conemaugh Owners' Agreements are in full force and effect and
neither Sithe nor any of its Affiliates (including the Companies) has received
any notice of or has knowledge of any termination thereunder.
3.18.5 None of the Sellers or any Affiliates controlled by them has any
generation projects under development in the geographic area covered by the PJM
other than the Development Projects.
3.18.6 Except as set forth in the disclosure schedules hereto, or
otherwise provided in the Sithe/GPU Agreements, the Acquired Assets include all
of the assets and rights material to the operation of the generation facilities
included in the GPU Assets in accordance with Good Operating Practices.
Section 3.19 Consents and Approvals. Except as set forth in Schedule
3.19, no registration or filing with, or consent or approval of or other action
by, and Governmental Authority or any other Person is or will be necessary for
the valid execution, delivery and performance by the Sellers of this Agreement
and the consummation of the transactions contemplated hereby, other than
filings required pursuant to the HSR Act.
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Section 3.20 Utility Regulation. Neither any Company nor any Subsidiary
of any Company is a "public utility company", a "holding company" or a
"subsidiary company" of a "holding company", each term as defined in PUHCA. Each
of the Generator Equity Interests constitutes an "exempt wholesale generator" as
such term is defined in PUHCA. As used in this Agreement, "Generator Equity
Interest" means any corporation, association, partnership or other business
entity owning any electric generating facilities and included in the Acquired
Assets. None of the Companies is (i) a "public utility" as that term is defined
in Section 102 of the Public Utility Code, 66 Pa. C.S. 102, an "electric
distribution company", or "electric generation supplier" as those terms are
defined in Section 2803 of the Public Utility Code, 66 Pa.C.S. 2803, (ii) an
"electric company" or a "public service company" as defined in Section 1-101 of
the Public Utility Companies Article of the Annotated Code of Maryland, (iii) an
"electric public utility" as defined in New Jersey Statutes Annotated
("N.J.S.A.") 48:3-51 or a "public utility" as defined in N.J.S.A 48:2-13, (iv)
"engaged in the business of an electricity supplier" in the state of Maryland
within the meaning of Section 7-507 of the Public Utility Companies Article of
the Annotated Code of Maryland or (v) otherwise subject to regulation as to
rates or the provision of service by the Pennsylvania Public Utility Commission,
the Maryland Public Service Commission or the New Jersey Board of Public
Utilities. Sithe New Jersey Holdings LLC is an "electric power generator" as
that term is defined in N.J.S.A. 48:3-51.
Section 3.21 Intellectual Property. Except as disclosed in Schedule
3.21 (i) none of the Companies or their Subsidiaries is, nor has it received
any notice that it is, in default (or with the giving of notice or lapse of
time or both, would be in default), under any contract to use Intellectual
Property, and (ii) to Sithe's knowledge, such Intellectual Property is not being
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infringed by any other Person. The Sellers have not received notice that they or
any of the Companies or the Subsidiaries of the Companies are infringing any
Intellectual Property of any other Person in connection with the operation or
business of the Acquired Assets, and, to the knowledge of Sellers, none of the
Sellers, the Companies or the Subsidiaries of the Companies are infringing any
Intellectual Property of any other Person the effect of which, individually or
in the aggregate, would have a Material Adverse Effect. "Intellectual Property"
means all patents and patent rights, trademarks and trademark rights, copyrights
and copyright rights owned by the Companies and their Subsidiaries and necessary
for the operation and maintenance of the Acquired Assets, and all pending
applications for registrations of patents, trademarks, and copyrights, as set
forth as part of Schedule 3.21.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES REGARDING THE SELLERS
Except as otherwise disclosed in this Agreement or in any Schedule, Sithe
represents and warrants to Buyer, as of the date hereof (except where such
representation or warranty is expressly made as of another specific date), as
follows:
Section 4.1 Organization and Corporate Power. Each Seller is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware. Genco has full corporate power and authority to own the
Intercompany Notes, the Mid-Atlantic Stock and the LLC Interests and to transfer
the Intercompany Notes, the Mid-Atlantic Stock and the LLC Interests as provided
in this Agreement, and such transfer has been authorized by all requisite action
on the part of the Sellers. Sellers have full corporate power and authority to
execute, deliver and perform this Agreement.
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Section 4.2 Authorization; Validity. The execution, delivery and
performance of this Agreement by each Seller have been duly authorized by all
requisite action on the part of such Seller. This Agreement has been duly
executed and delivered by each Seller and constitutes the valid and binding
obligation of such Seller, enforceable against such Seller in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in effect
relating to creditors' rights generally, and general equitable principles
(whether considered in a proceeding in equity or at law).
Section 4.3 No Conflict. Except as set forth in Schedule 4.3, the
execution, delivery and performance by each Seller of this Agreement and the
consummation by each Seller of the transactions contemplated hereby will not
(i) violate the Certificate of Incorporation and By-laws of such Seller, (ii)
violate any law or regulation applicable to such Seller, or (iii) violate or
conflict with, or constitute (with due notice or lapse of time or both) a
default under, any Contract by which such Seller or any of its assets is bound
except, in the case of clauses (ii) and (iii) above, as would not materially
adversely affect the Sellers' ability to consummate the transactions
contemplated hereby.
Section 4.4 Ownership of Genco, Mid-Atlantic Stock and LLC Interests.
Sithe owns, indirectly, all of the issued and outstanding capital stock of
Genco. Genco owns all of the issued and outstanding capital stock of Sithe
Mid-Atlantic (the "Mid-Atlantic Stock"), free and clear of any Liens. Genco
owns all of the limited liability company interests, as defined in Section
18-101 of the Delaware Limited Liability Company Act, of each of the Companies
other than Sithe Mid-Atlantic, and all voting and other rights appurtenant to
the ownership of such interests (such
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interests and rights, collectively, the "LLC Interests"), free and clear of any
Liens. Except for this Agreement and except for the limited liability company
agreements of the Companies and their Subsidiaries (other than Sithe
Mid-Atlantic and Sithe Northeast Management), there is no voting trust or
agreement, stockholders agreement, pledge agreement, buy-sell agreement, right
of first refusal, preemptive right, proxy or agreement or commitment to sell
relating to the Mid-Atlantic Stock and the LLC Interests or the capital stock
or other equity interests of any Subsidiary of any Company. On the Closing
Date, upon the consummation of the transactions contemplated by this Agreement,
Buyer will own the Mid-Atlantic Stock and the LLC Interests free and clear of
any Liens, except for any Liens created by or at the behest of Buyer.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Sellers that, as of the date hereof
(except where such representation or warranty is expressly made only as of a
specific date) as follows:
Section 5.1 Organization and Corporate Power. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware. Buyer has full corporate power and authority to execute, deliver and
perform this Agreement.
Section 5.2 Authorization Validity. The execution, delivery and
performance by Buyer of this Agreement have been duly authorized by all
requisite corporate action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium
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or other similar laws now or hereafter in effect relating to creditors' rights
generally, and general equitable principles (whether considered in a proceeding
in equity or at law).
Section 5.3 No Conflict. The execution, delivery and performance by
Buyer of this Agreement and the consummation of the transactions contemplated
hereby will not (i) violate the Certificate of Incorporation or By-Laws of
Buyer; (ii) violate any law or regulation applicable to Buyer, or any order of
any court or governmental agency or authority having jurisdiction over Buyer,
or (iii) violate or conflict with, or constitute (with due notice or lapse of
time or both) a default under, any Contract by which Buyer or any of its assets
is bound.
Section 5.4 Consents and Approvals. Except as set forth in Schedule 5.4,
no registration or filing with, or consent or approval of or other action by,
any Governmental Authority or any other Person is or will be necessary for the
valid execution, delivery and performance by Buyer of this Agreement and the
consummation of the transactions contemplated hereby, other than filings
required pursuant to the HSR Act.
Section 5.5 Brokers. Neither Buyer nor any Subsidiary or Affiliate of
Buyer has any contract, arrangement or understanding with any investment
banking firm, broker, finder or similar agent with respect to the transactions
contemplated by this Agreement, except for Chase Securities Inc. whose fees
shall be borne by Buyer.
Section 5.6 Availability of Funds. At the Closing, Buyer will have
sufficient funds to pay the Aggregate Purchase Price and the Estimated
Adjustment Amount and to consummate the transactions contemplated hereby.
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Section 5.7 No Knowledge of the Sellers' Breach. Buyer has no knowledge
of any breach by any Seller of any representation or warranty of such Seller
or of any condition or circumstance that would excuse Buyer from its timely
performance of its obligations hereunder.
Section 5.8 Investment. Buyer is not acquiring the Mid-Atlantic Stock or
the LLC Interests with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act of 1933, as amended.
ARTICLE 6. ACCESS; ADDITIONAL AGREEMENTS
Section 6.1 Access to Information; Continuing Disclosure
6.1.1 Access. The Sellers agree that from the date hereof until
the Closing Date, subject to the terms of the Confidentiality Agreement (as
defined below) and for purposes of transition, upon reasonable notice from
Buyer, (i) the Sellers shall, and shall cause each Affiliate controlled by Sithe
to, provide to Buyer and its representatives (collectively, the "Buyer Group")
reasonable access, at reasonable times during normal business hours, to the
employees, auditors, counsel and consultants of the Sellers and the Affiliates
controlled by Sithe relating to, and to the properties, books and records of the
Sellers and the Affiliates controlled by Sithe relating to, the Acquired Assets
and the GPU Liabilities and shall promptly furnish to the Buyer Group
information as the Buyer Group may reasonably request; provided, that such
access shall be afforded to the Buyer Group as soon as practicable but in no
event more than two Business Days after receipt of notice, and only in such
manner so as not to unreasonably disturb or interfere with the normal operations
of the Companies or their Subsidiaries; and provided further, that neither
Seller nor any of their respective Affiliates shall be required to take any
action that would
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constitute a waiver of the attorney-client privilege or to supply to the Buyer
Group any information that any Company or any such Subsidiary of any Company
is under a legal obligation not to supply, and (ii) as soon as practicable
after request by Buyer or its representatives but in no event more than two
Business Days after receipt of notice, each Seller shall have, or cause the
appropriate Affiliate of Sithe to have, meetings or discussions with the Buyer
Group regarding the conduct of the business of each Company and its
Subsidiaries, the Acquired Assets, the GPU Liabilities and the effect thereon
of the transactions contemplated by this Agreement. All information furnished
by or on behalf of any Company or any Subsidiary of any Company hereunder to a
member of the Buyer Group shall be subject to the terms of the Confidentiality
Agreement dated as of November 16, 1999 between Sithe and Buyer (the
"Confidentiality Agreement"). Buyer shall not have the right to perform or
conduct any environmental sampling or testing at, in, on or underneath the
Acquired Assets.
6.1.2 Transition. In furtherance of the foregoing Section 6.1.1 and to
further transition planning activities, from the date hereof, the Sellers shall
permit designated representatives of Buyer and its Affiliates to use office
space at the offices of the Companies in Johnstown, Pennsylvania in order to
participate in transition planning. The Sellers will also designate certain
representatives located in Johnstown to work on a daily basis with Buyer's
designated representatives as a "transition team." The Companies shall keep
Buyer's designated representatives reasonably informed on a timely basis about
significant issues relating to the business of the Companies and their
Subsidiaries and the ownership, operation and development of the Acquired
Assets. Within 15 days of the date hereof, Buyer and the Sellers shall also
establish a transition planning committee, which shall meet (whether in person
or telephonically)
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not less than weekly and more frequently as appropriate to discuss matters
relating to Closing and the transition to ownership of the Companies and the
ownership, operation and development of the Acquired Assets by Buyer.
Section 6.2 REGULATORY APPROVALS.
6.2.1 ANTITRUST NOTIFICATION. Buyer and Sithe will as promptly as
practicable, but in no event later than fifteen (15) days following the
execution and delivery of this Agreement, each file with the United States
Federal Trade Commission (the "FTC") and the United States Department of
Justice (The "DOJ") the Notification and Report Form under the HSR Act, if any,
required in connection with the transactions contemplated hereby and as promptly
as practicable supply additional information, if any, requested in connection
herewith pursuant to the HSR Act. Such Notification and Report Form and
additional information, if any, submitted to the FTC or the DOJ shall be in
substantial compliance with the requirements of the HSR Act. Each of Buyer and
Sithe shall furnish to the other such information and assistance as the other
may reasonably request in connection with its preparation of any filing or
submission which is necessary under the HSR Act. Each of Buyer and Sithe shall
keep the other apprised in a prompt manner of the status and substance of any
communications with, and inquiries or requests for additional information from,
the FTC and the DOJ and shall comply promptly with any such inquiry or request.
Each of Buyer and Sithe will use its reasonable efforts to obtain the
termination or expiration of any applicable waiting period required under the
HSR Act for the consummation of the transaction contemplated hereby.
6.2.2 REGULATORY APPROVAL PROCESS. Buyer and the Sellers shall, as
promptly as practical, but in no event later than thirty days following the
execution and delivery of this
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Agreement, submit or cause the submission, to the appropriate agency/ies or
third party/ies all declarations, filings and registration listed on
Schedules 7.4 and 8.4 required to be submitted by such Person or its
Subsidiaries. The parties agree to make a joint filing for any approval
required under Section 203 of the Federal Power Act. With respect to any
filings that will be submitted to the Federal Energy Regulatory Commission
("FERC"), Buyer and the Sellers shall cooperate to share and develop
information necessary for such filing(s) and prepare drafts of such filing(s)
within fifteen days following execution and delivery of this Agreement and
shall give each other reasonable opportunity to comment on and to revise such
draft filing(s) before such filing(s) are submitted to FERC.
Section 6.3 FURTHER ASSURANCES. From time to time from the date hereof
until the Closing Date, as and when requested by any party hereto, the
requested party shall use reasonable efforts to execute and deliver, or cause
to be executed and delivered, all such documents and instruments and shall
take, or cause to be taken, all such further or other actions as such other
party may reasonably deem necessary to consummate the transactions contemplated
by this Agreement, including, without limitation, such actions as are necessary
in connection with obtaining any third party consent or any regulatory filings
(including filings with FERC) identified on Schedule 7.4 or 8.4. Without
limiting the generality of the foregoing, the Sellers shall: (i) use reasonable
efforts to facilitate communication between Buyer and any Person having the
right to consent to the termination or substitution of any Terminated
Obligation, or to consent to the release of any obligation set forth on
Schedule 6.16; and (ii) cooperate, and cause the Companies and their
Subsidiaries to cooperate, with Buyer in connection with any financing
transactions, which cooperation shall consist of making
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management of the Sellers, the Companies and the Subsidiaries of the Companies
available to potential financing sources and other Persons who may be involved
in potential financings (the "Financing Parties") (including any rating
agencies, attorneys, consultants, potential investors, lenders, placement agents
and underwriters) at management's offices on not less than two Business Days'
notice and only in such a manner so as not to unreasonably disturb or interfere
with the normal operations of Sithe and it Affiliates, and allowing the
Financing Parties and their representatives to conduct customary due diligence,
in each case, during normal business hours upon reasonable notice and subject to
the execution by such Financing Parties and each such representative of a
confidentiality agreement with the Sellers in form and substance consistent with
the Confidentiality Agreement; provided, however, the failure of either Seller
to perform its obligations in this sentence shall not constitute a breach of
this Agreement by either Seller or otherwise constitute an event that would, by
itself, give rise to any claim by Buyer or right of Buyer to terminate this
Agreement. In the event that any Acquired Asset shall not have been effectively
assigned, transferred or conveyed to the Companies or the Subsidiaries of the
Companies at the Closing, the Sellers shall convey such asset to Buyer as
promptly as is practicable after the Closing in the manner set forth in, and
subject to the limitations set forth in, the Assignment.
Section 6.4 Certain Tax Matters.
6.4.1 Election Under Section 338(h)(10).
6.4.1.1 The Sellers and Buyer shall make a joint election
for each of Sithe Mid-Atlantic and Northeast Management under Section
338(h)(10) of the Code and under any comparable provisions of state or local
law (an "Election") with
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respect to the purchase of the Mid-Atlantic Stock and the deemed purchase of all
outstanding capital stock of Northeast Management. The Sellers and Buyer shall
mutually execute and complete copies of IRS Form 8023 and any similar state or
local forms no later than 60 days prior to the due date (including extensions)
for filing such forms or the Tax Returns to which such forms must be attached.
If any changes are required in these forms as a result of information that is
first available after such forms are prepared, the parties will promptly agree
on such changes.
6.4.1.2 Buyer shall prepare and submit to the Sellers a
proposed allocation of the Modified Adjusted Deemed Sales Price (as defined in
Treasury Regulation Section 1.338(h)(10)-1(f)) for each of Sithe Mid-Atlantic
and Northeast Management among the assets of each such corporation as soon as
practicable after the Closing Date. Sellers shall approve and agree to the
proposed allocation unless Sellers reasonably determine that the proposed
allocation is improper. Neither Buyer nor the Sellers shall take any action
inconsistent with, or fail to take any action necessary for, the validity of the
Election, and, if an allocation schedule is agreed to among Buyer and the
Sellers, Buyer and the Sellers shall adopt and utilize the asset values as
determined on the allocation schedule for the purpose of all Tax Returns filed
by them unless otherwise required by applicable law.
6.4.2 Tax Returns. The Sellers shall cause the Companies and their
Subsidiaries to prepare and file at the Sellers' expense (i) all Tax Returns of
the Companies and their Subsidiaries which are required to be filed (taking into
account extensions of time to file) on or before the Closing Date and (ii) all
federal and state income and franchise Tax Returns of the
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Companies and their Subsidiaries for all periods ending on or prior to the
Closing Date. Buyer shall prepare and file (or cause to be prepared and filed)
at its own expense all other Tax Returns of the Companies and their
Subsidiaries. If either Buyer, on the one hand, or either Seller, on the other
hand, may be liable for any material portion of the Tax payable in connection
with any Tax Return to be filed by the other, the party responsible under this
Section 6.4.2 for filing such return (the "Preparer") shall prepare and deliver
to the other party (the "Payor") a copy of such return and any schedules, work
papers and other documentation then available that are relevant to the
preparation of the portion of such return for which the Payor is or may be
liable hereunder not later than 30 days before the Due Date (as defined in
Section 6.4.12 of this Agreement). The Preparer shall not file such return until
the earlier of either the receipt of written notice from the Payor indicating
the Payor's consent thereto, or the Due Date. The Payor shall have the option of
providing to the Preparer, at any time at least 15 days prior to the Due Date,
written instructions as to how the Payor wants any, or all, of the items for
which it may be liable reflected on such Tax Return. The Preparer shall, in
preparing such return, cause the items for which the Payor is liable hereunder
to be reflected in accordance with the Payor's instructions (unless, in the
opinion of nationally recognized tax counsel to the Preparer, complying with the
Payor's instructions would likely subject the Preparer to any criminal penalty
or to civil penalties) and, in the absence of having received such instructions,
in accordance with past practice.
If the Preparer fails to satisfy its obligations pursuant to this Section
6.4.2, the Payor shall have no obligation to indemnify the Preparer for any
Taxes which are reflected on any such Tax
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Return if and to the extent the Payor was actually prejudiced by such failure,
and shall retain any and all remedies it may otherwise have which arise out of
such failure.
6.4.3 Transfer Taxes.
6.4.3.1 Sales and Real Property Taxes. All sales and use and
real property transfer taxes incurred in connection with this Agreement and
the transactions contemplated hereby shall be borne by Buyer, and Buyer at its
own expense shall file, to the extent required by applicable laws and
regulations, all necessary Tax Returns and other documentation with respect to
all such transfer or sales and use taxes, and, if required by applicable law,
Buyer shall cause the Companies and their Subsidiaries to join the execution of
any such Tax Returns or other documentation.
6.4.3.2 Other Transfer Taxes. All excise, transfer (excluding
real property transfer or gains taxes and excluding sales and use taxes),
stamp, documentary, filing, recordation and other similar taxes (excluding real
property transfer or gains taxes and excluding sales and use taxes), together
with any interest, additions or penalties with respect thereto and any interest
in respect of such additions or penalties, resulting directly from the sale and
transfer by the Sellers to Buyer of the Mid-Atlantic Stock and the LLC
Interests (the "Other Transfer Taxes"), shall be borne by Buyer.
Notwithstanding Section 6.4.2 of this Agreement, which shall not apply to Tax
Returns relating to Transfer Taxes, any Tax Returns that must be filed in
connection with Transfer Taxes shall be prepared and filed when due by Buyer,
and Buyer will use its reasonable efforts to provide such Tax Returns to the
Sellers at least 10 days prior to the Due Date for such Tax Returns.
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6.4.4 Indemnification.
6.4.4.1 Sellers' Indemnification of Buyer. The Sellers shall
indemnify Buyer from, against and in respect of any Taxes imposed on any
Company or any Subsidiary of a Company with respect to any taxable period, or
portion thereof, ending on or before the Closing Date; provided, however, that
with respect to Northeast Management, the Sellers shall have no obligation to
indemnify Buyer for taxes with respect to any taxable period or portion thereof
ending on or before November 24, 1999.
6.4.4.2 Buyer's Indemnification of the Sellers. The Buyer
shall indemnify the Sellers from, against and in respect of any liability of
the Sellers or their Subsidiaries for (A) any Taxes imposed on any Company or
any Subsidiary of a Company with respect to any taxable period, or portion
thereof, beginning on or after the Closing Date; and (B) any Transfer Taxes for
which Buyer is liable pursuant to Section 6.4.3 hereof.
6.4.5 Computation of Tax Liabilities.
6.4.5.1 Proration of Taxes and Earnings and Profits. To the
extent permitted by law or administrative practice, the taxable years of each
Company and each Subsidiary of each Company shall end on and include the
Closing Date. Whenever it is necessary to determine the liability for Taxes, or
the earnings and profits, of any Company or any Subsidiary of a Company for a
portion of a taxable year or period that begins before and ends after the
Closing Date, the determination of the Taxes or the earnings and profits for
the portion of the year or period ending on, and the portion of the year or
period beginning after, the Closing Date shall be determined by assuming that
the
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taxable year or period ended on and included the Closing Date, except that
exemptions, allowances or deductions that are calculated on an annual basis and
annual property taxes shall be prorated on the basis of the number of days in
the annual period elapsed through the Closing Date as compared to the number of
days in the annual period elapsing after the Closing Date.
6.4.5.2 Standalone Basis. Whenever it is necessary to
determine the liability of any Company or any Subsidiary of a Company for
Taxes, such liability shall be computed as if such Company or such Subsidiary
of a Company was not a member of Sithe's or Genco's consolidated, affiliated,
combined or unitary group for Tax purposes.
6.4.6 Contest Provisions.
6.4.6.1 Notification of Contests. Each of Buyer, on the one
hand, and the Sellers, on the other hand (the "Recipient"), shall notify the
Vice President - Taxes or chief tax officer of the other party in writing
within 45 days of receipt by the Recipient of written notice of any pending or
threatened audits, adjustments or assessments (a "Tax Audit") which are likely
to affect the liability for Taxes of such other party. If the Recipient fails
to give such prompt notice to the other party, it shall not be entitled to
indemnification for any Taxes arising in connection with such Tax Audit if and
to the extent that such other party is actually prejudiced by such failure to
give notice.
6.4.6.2 Which Party Controls.
6.4.6.2.1 Sellers' Items. If such Tax Audit relates to any
taxable period, or portion thereof, ending on or before the Closing Date or for
any Taxes for
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which the Sellers are liable in full hereunder, the Sellers shall at their
expense control the defense and settlement of such Tax Audit.
6.4.6.2.2. Buyer's Item. If such Tax Audit relates to any taxable period,
or portion thereof, beginning on or after the Closing Date or for any Taxes for
which Buyer is liable in full hereunder, Buyer shall at its expense control the
defense and settlement of such Tax Audit.
6.4.6.2.3. Combined and Mixed Items. If such Tax Audit relates to Taxes
for which both the Sellers and Buyers are liable hereunder, to the extent
practicable such Tax Items (as defined in Section 6.4.12 of this Agreement) will
be distinguished and each party will control the defense and settlement of those
Taxes for which it is so liable. If such Tax Audit relates to a taxable period,
or portion thereof, beginning before and ending after the Closing Date and any
Tax Item cannot be identified as being a liability of only one party or cannot
be separated from a Tax Item for which the other party is liable, the party
which has greater potential liability for those Tax Items that cannot be so
attributed or separated (or both) shall control the defense of the Tax Audit,
provided that such party defends the items as reported on the relevant Tax
Return and provided further that no such matter shall be settled without the
written consent of both parties, not to be unreasonably withheld.
6.4.6.2.4. Participation Rights. Any party whose liability for Taxes may
be affected by a Tax Audit shall be entitled to participate at its expense in
such defense and to employ counsel of its choice at its expense.
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6.4.7 Buyer's Claiming, Receiving or Using of Refunds and Overpayments. If
after the Closing, Buyer, any Company, or any Subsidiary of a Company (A)
receives any refund or (B) utilizes the benefit of any overpayment of Taxes
which, in each case (A) and (B), (x) relates to Taxes paid by the Sellers or any
Company, or any Subsidiary of a Company with respect to a taxable period, or
portion thereof, ending on or before the Closing Date, or (y) is the subject of
indemnification by the Sellers pursuant to this Agreement, Buyer shall promptly
transfer, or cause to be transferred, to the Sellers the entire amount of the
refund or overpayment (including interest) resolved or utilized by Buyer, any
Company, or any Subsidiary of a Company. The Buyer agrees to notify the Sellers
within 15 days following the discovery of a right to claim any such refund or
overpayment and the receipt of any such refund or utilization of any such
overpayment. The Buyer agrees to claim any such refund or to utilize any such
overpayment as soon as possible and to furnish to the Sellers all information,
records and assistance necessary to verify the amount of the refund or
overpayment.
6.4.8 Resolution of All Tax-Related Disputes. In the event that the Sellers
and Buyer cannot agree on the calculation of any amount relating to Taxes or the
interpretation or application of any provision of this Agreement relating to
Taxes, such dispute shall be resolved by a nationally recognized accounting firm
mutually acceptable to each of the Sellers and Buyer, whose decision shall be
final and binding upon all Persons involved and whose expenses shall be shared
equally by the Sellers, on the one hand, and Buyer on the other hand.
6.4.9 Termination of Existing Tax Sharing Agreements. Any and all existing
Tax sharing agreements or arrangements, written or unwritten, binding any
Company or any Subsidiary of a Company, shall be terminated as of the Closing.
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6.4.10 Assistance and Cooperation. The parties agree that, after the
Closing Date:
6.4.10.1 Buyer, on the one hand, and the Sellers, on the other
hand, shall each assist the other (and cause its respective Affiliates to
assist) the other party in preparing any Tax Returns which such other party is
responsible for preparing and filing;
6.4.10.2 Buyer, on the one hand, and the Sellers, on the other
hand, shall cooperate fully in preparing for any Tax audits, or disputes with
taxing authorities, relating to any Tax Returns or Taxes of any Company or any
Subsidiary of a Company;
6.4.10.3 Buyer, on the one hand, and the Sellers, on the other
hand, shall make available to each other upon written request and to any
taxing authority as reasonably requested in writing all relevant books and
records relating to Taxes but only to the minimum extent necessary to enable
the other party to prepare Tax Returns or resolve disputes with taxing
authorities relating to Tax Returns or Taxes of a Company or a Subsidiary of a
Company. Any such information shall be kept strictly confidential;
6.4.10.4 Buyer, on the one hand, and the Sellers, on the other
hand, shall promptly furnish the other party with copies of all relevant
correspondence received from any taxing authority in connection with any Tax
Audit or information request relating to Taxes for which such other party may
have an indemnification obligation under this Agreement; and
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6.4.10.5 Except as otherwise provided herein, the party
requesting assistance or cooperation shall bear the other party's out-of-pocket
expenses in complying with such request to the extent that those expenses are
attributable to fees and other costs of unaffiliated third-party service
providers.
6.4.11 This Section 6.4 alone shall govern the procedure for all
Tax indemnification claims, notwithstanding any provision of Article 12.
6.4.12 For purposes of this Agreement, "Due Date" shall mean, with
respect to any Tax Return, the date such return is due to be filed (taking into
account any valid extensions); and "Tax Item" shall mean, with respect to
Taxes, any item of income, gain, deduction, loss or credit or other tax
attribute.
Section 6.5 Ordinary Course of Business.
6.5.1 Prior to the Closing, except (i) as set forth on Schedule
3.13 or 6.5 or actions taken in the ordinary course of business pursuant to or
in connection with Contracts listed on Schedule 3.8, (ii) as specifically
provided for by this Agreement or consented to or approved in writing by Buyer
or (iii) for transactions between or among any Company and any other Company
and/or one or more of the Subsidiaries of any Company or between or among
Subsidiaries of any Company, the Sellers shall cause each Company and each
Subsidiary of each Company to:
(a) conduct its business in the ordinary course of business,
consistent with Good Operating Practices;
(b) maintain the insurance coverage described in Section 3.15,
including the filing and prosecution of any claims related to the Acquired
Assets; and
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(c) comply with all applicable laws and regulations relating to the
Acquired Assets, including without limitation, all Environmental Laws, except
where the failure to so comply would not result, individually or in the
aggregate, in a Material Adverse Effect.
6.5.2 Without limiting the generality of the foregoing, and, except as
(i) contemplated in this Agreement, (ii) described in Schedule 6.5 or (iii)
required under applicable laws and regulations or by any Governmental Authority,
prior to the Closing, without the prior written consent of Buyer, the Sellers
shall not, directly or indirectly through their Subsidiaries, with respect to
the Acquired Assets:
(a) make any material change in the levels of Inventories customarily
maintained with respect to the GPU Assets and Development Assets, other than
changes in the ordinary course of business consistent with Good Operating
Practice or that would not have, individually or in the aggregate, a Material
Adverse Effect;
(b) sell, lease (as lessor), encumber, pledge, transfer or otherwise
dispose of any of the Acquired Assets (except for (i) Acquired Assets, used,
consumed or replaced in the ordinary course of business consistent with Good
Operating Practices, (ii) dispositions of obsolete assets in the ordinary course
of business consistent with Good Operating Practices, (iii) property losses,
(iv) dispositions in the ordinary course of business in accordance with any
Contract listed on Schedule 3.8 and (v) dispositions of Acquired Assets not to
exceed $10.0 million in the aggregate, except that no such disposition shall
be of any Acquired Assets necessary for the operation of a generating facility
included in the Acquired Assets), other than to encumber Acquired Assets with
Permitted Liens;
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(c) modify, amend, voluntarily terminate, waive or permit to expire prior
to the scheduled expiration date any Contracts listed on Schedule 3.8, Real
Property leases or any of the Permits or Environmental Permits associated with
such Acquired Assets other than (i) in the ordinary course of business, to the
extent consistent with Good Operating Practices, (ii) as may be required in
connection with the transactions contemplated by this Agreement or the Sithe/GPU
Agreements or (iii) as may be required by applicable law, rule or regulation;
(d) (i) enter into any commitment for the purchase, sale, or
transportation of fuel unless (A) such commitment is terminable on or before the
Closing Date either (1) automatically or (2) by option of any Company or any
Subsidiary of any Company (or after the Closing, by Buyer) without penalty or
premium in its sole discretion, (B) such commitment will by its terms be fully
performed on or before the Closing Date, (C) such commitment is for an amount of
fuel necessary to produce electricity sufficient to satisfy the obligations of
the Sellers or their Subsidiaries pursuant to any Contract entered into pursuant
to Section 6.5.2 9(d)(ii)(C) or (D) the aggregate payment under such commitment
for fuel and all other outstanding commitments for fuel not previously approved
by Buyer would not exceed $5.0 million, or (ii) enter into any commitment for
the purchase or sale of electricity, capacity or related products unless (A)
such commitment is terminable on or before the Closing Date either (1)
automatically or (2) by option of any Company or any Subsidiary of any Company
(or after the Closing, by Buyer) without penalty or premium in its sole
discretion, (B) such commitment will by its terms be fully performed on or
before the Closing Date, (C) such commitment is for the sale of electricity into
the PJM Energy Interchange Market, or a similar daily spot market, (1) for an
amount of electricity not to exceed, with respect to any generating facility
included in the GPU
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Assets, the maximum capacity for such generating facility at the time such
commitment is made and (2) for a term not to extend beyond the next Business
Day following such commitment or (D) the aggregate payment under such
commitment for electricity, capacity or related products and all other
outstanding commitments for electricity, capacity or related products not
previously approved by Buyer would not exceed $5.0 million;
(e) sell, lease or otherwise dispose of Emission Allowances, or Emission
Reduction Credits identified in Schedule 3.17, except to the extent necessary
to operate any of the Acquired Assets in accordance with this Section 6.5 or in
accordance with Good Operating Practices;
(f) enter into any Contract relating to the Acquired Assets (other than
any such Contract described in Section 6.5.2(d)) unless (i) such Contract is
terminable on or before the Closing Date either (A) automatically or (B) by
option of any Company or any Subsidiary of any Company (or, after the Closing,
by Buyer) without penalty or premium in its sole discretion, (ii) such Contract
will by its terms be fully performed on or before the Closing Date, (iii) the
aggregate payments under any such Contract entered into after the date hereof
and not previously approved by Buyer would not exceed $500,000 individually or
together with all other such Contracts, $5,000,000 in the aggregate, (iv) such
Contract relates to any outage and is entered into in accordance with Good
Operating Practices or (v) such Contract is (A) listed on Schedule 6.5.2(f)(A)
or (B) entered into by Sithe Power Marketing with the consent of Buyer and set
forth on Schedule 6.5.2(f)(B), as such schedule may be amended from time to time
in accordance with Section 6.5.5(b) (any Contract referred to in this clause
(v), a "Trading Contract", and all such Contracts collectively, the "Trading
Contracts"); provided that notwithstanding anything else
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herein to the contrary, any Seller or any Subsidiary of any Seller may at any
time prior to the Closing Date amend, modify, supplement or terminate any
Contract set forth on Schedule 6.5.2(f)(A), or remove any such Contract from
Schedule 6.5.2(f)(A), with or without the consent of Buyer.
(g) except as otherwise required by the terms of the Collective
Bargaining Agreements or the Sithe/GPU Agreements or, with the prior written
consent of Buyer not to be unreasonably withheld, as Sithe believes is
necessary for the operation of the business of the Companies and their
Subsidiaries in accordance with Good Operating Practices: (i) hire any new
employees prior to the Closing on terms that provide for an annual salary of
more than $100,000; (ii) increase salaries or wages of employees prior to the
Closing other than in the ordinary course of business and in accordance with
the past practices of Sithe or any Affiliate of Sithe; (iii) take any action
prior to the Closing to effect a change in a Collective Bargaining Agreement;
(iv) take any action prior to the Closing to increase the aggregate benefits
payable to its employees other than increases for non-union employees in the
ordinary course of business and in accordance with past practices of Sithe or
any Affiliate of Sithe; or (v) enter into any employment contracts or any
collective bargaining agreements with labor organizations representing such
employees;
(h) modify, amend, voluntarily terminate, waive or permit to expire prior
to the scheduled expiration date any rights under or agree to any termination
of any of the Contracts listed on Schedule 6.5.2, to the extent that any such
amendment, modification, waiver or termination could reasonably be expected to
affect the rights of the Companies and their Subsidiaries after the Closing
Date without the prior consent of Buyer not to be unreasonably withheld, other
than such amendments, modifications or alterations as (i) have already been
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agreed upon, in substance (as disclosed on Schedule 6.5) or (ii) reasonably
incidental to the operation of the Acquired Assets in the ordinary course of
business;
(i) make any Capital Expenditures or incur any Development Costs except
for (1) Budgeted Capital Expenditures plus additional Capital Expenditures in an
amount of up to 10% of the amount of Budgeted Capital Expenditures, (2) Budgeted
Development Costs plus additional Development Costs in an amount of up to 10% of
the amount of Budgeted Development Costs, (3) Capital Expenditures necessary in
order to comply with (A) applicable law or the rules and regulations of any
Governmental Authority or other entity having the legal authority to regulate
the activities of the Companies, the Subsidiaries of the Companies or the
Acquired Assets (including, without limitation, rules and regulations relating
to PJM) and (B) to comply with the decisions of the owners of the Keystone
and/or Conemaugh generating facilities with respect to the operation of such
facilities, and (4) Capital Expenditures for the account of Sithe and its
Subsidiaries, other than the Companies and their Subsidiaries; and
(j) make any changes in scheduled outages for the generating facilities
included in the Acquired Assets, which scheduled outages are set forth on
Schedule 6.5.2(j), except in accordance with Good Operating Practices; and
(k) except as otherwise provided herein, enter into any written or oral
contract, agreement, commitment or arrangement with respect to any of the
proscribed transactions set forth in the foregoing paragraphs (a) through (j).
6.5.3 Notwithstanding Section 6.5.1 or 6.5.2, (a) any Company and any
Subsidiary of any Company shall be permitted to distribute or otherwise pay
Cash Equivalents to any other Company or Subsidiary of any Company or any
Seller or any Affiliate of any Seller
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(other than Cash Equivalents constituting proceeds from a disposition of assets
made by a Company or a Subsidiary of a Company in breach of this Agreement
without regard to materiality), (b) Sithe Northeast Management may enter into
Contracts on behalf of the station owners under the Keystone and Conemaugh
Operating Agreements, (c) Sithe Pennsylvania Holdings, LLC may enter into
Contracts and otherwise perform its obligations as an owner in the Keystone and
Conemaugh stations that are contemplated under the Keystone or Conemaugh annual
station plan, under the Keystone coal supply plan or under the Conemaugh coal,
natural gas and limestone supply plan and (d) Sithe and its Subsidiaries (other
than the Companies and their Subsidiaries) may enter into letters of credit
that satisfy the requirements of clause (b) of the definition of "Terminated
Obligations".
6.5.4 The Sellers shall cause one or more of their executive officers
set forth on Schedule 1D to make due inquiry of (a) each plant manager of the
generating facilities included in the Acquired Assets and (b) Martin Rosenberg,
as to the accuracy of the representations and warranties contained in Sections
3.2, 3.3, 3.6.1, 3.8 and the third sentence of Section 3.17 as of the date
hereof and the Closing Date (except that, with respect to the plant managers,
due inquiry regarding the representations and warranties contained in Section
3.3 and Section 3.8 shall be as of the Closing Date only), to the extent that
any such representation or warranty is qualified as to Sithe's knowledge.
6.5.5 (a) Buyer hereby designated the two representatives of Buyer or
its Affiliates listed on Schedule 6.5 under the heading "Buyer's
Representatives" or such other representatives as Buyer may designate upon
written notice to the Sellers (the "Buyer's Representatives"), to be
responsible for determining whether consent to any action prohibited by
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this Section 6.5 (other than any action described in clause (b) below) shall be
given by Buyer. The Sellers hereby designate the two representatives of the
Sellers listed on Schedule 6.5 under the heading "Sellers' Representatives" or
such other representatives as the Sellers may designate upon written notice to
Buyer (the "Sellers' Representatives"), to contact Buyer's Representatives with
requests for consent to any action prohibited by this Section 6.5 (other than
any action described in clause (b) below). Buyer's Representatives shall
respond promptly (in writing) to any request for consent (which must be
written, except as set forth below) to the taking of any action under this
Section 6.5 and Buyer shall not unreasonably withhold (taking into account
Buyer's interests) the requested consent. If Buyer's Representatives do not
respond to any request within three (3) Business Days of its receipt, such
consent will be deemed to have been given. The Sellers' Representatives may
rely on any consent given by either of Buyer's Representatives. The time
periods within which Buyer's Representatives must respond shall commence on the
date on which either of Buyer's Representatives receives a written request
for consent.
(b) Buyer hereby designates the two representatives of Buyer listed on
Schedule 6.5 under the heading "Buyer's Trading Representatives" or such other
representatives as Buyer may designate upon written notice to the Sellers (the
"Buyer's Trading Representatives"), to be responsible for determining whether
any consent to any action that relates to a commitment referenced in Section
6.5.2(d) and that is to be entered into on the Business Day of the request
shall be given by Buyer. The Sellers hereby designate the two representatives
of the Sellers listed on Schedule 6.5 under the heading "Sellers' Trading
Representatives" or such other representatives as the Sellers may designate
upon written notice (the "Sellers' Trading
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Representatives") to contact Buyer's Trading Representatives with respect to
any such commitment. Such request may be made orally and such consent (x) shall
not be unreasonably withheld (taking into account Buyer's interests), (y) shall
be given as soon as practicable and (z) shall be deemed to have been given if
Buyers Trading Representatives do not respond within 2 hours of receipt of such
request. The Sellers' Trading Representatives may rely on any consent given by
either of Buyer's Trading Representatives. The time periods within which
Buyer's Trading Representatives must respond shall commence on the date and
time on which either of Buyer's Trading Representatives receives a request for
consent.
Section 6.6 Notice of Changes. Prior to the Closing, each party will
promptly advise the other in writing with respect to any matter arising after
execution of this Agreement of which that party obtains knowledge (including,
without limitation, knowledge that if in existence on the date of this
Agreement and not disclosed by Buyer would have resulted in the breach of
Section 5.7) and which, if existing or occurring at the date of this Agreement,
would have been required to be set forth in this Agreement, including any of
the Schedules.
Section 6.7 Collective Bargaining Agreements. Effective as of the
Closing, Buyer shall cause each Company and each Subsidiary of each Company to
perform its respective obligations under any Collective Bargaining Agreement
that covers the employees of any such entity for the duration of the term of
any such Collective Bargaining Agreement. Effective as of the Closing, Buyer
shall assume the Collective Bargaining Agreements in place of Sithe and shall
thereafter recognize the Unions in place of Sithe and comply with all
applicable obligations in place of Sithe under the Collective Bargaining
Agreements. If, after the Closing, Buyer sells, transfers, or otherwise conveys
any of the Acquired Assets covered by one or more of the
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Collective Bargaining Agreements, whether by transfer, lease, assignment,
corporate reorganization or otherwise, Buyer shall require, as an absolute
precondition of such sale, transfer, or conveyance, that the purchaser,
transferee, lessee or assignee of such assets assume the applicable Collective
Bargaining Agreement(s) and agree to be bound by the terms, conditions and
obligations thereof.
Section 6.8 Pollution Control Bonds. Notwithstanding any other provision
hereof, Buyer covenants and agrees that, after the Closing Date, Buyer will not
make any modifications to the "Purchased Assets" as defined under the Sithe/GPU
Agreements or take any action which, in and of itself, results in a loss of the
exclusion of interest on the "Pollution Control Revenue Bonds" as defined under
the Sithe/GPU Agreements issued on behalf of Jersey Central Power & Light
Company, Metropolitan Edison Company and Pennsylvania Electric Company (the
"GPU Sellers") in connection with such Purchased Assets from gross income for
federal income tax purposes under Section 103 of the Code. Actions with respect
to Purchased Assets shall not constitute a breach by Buyer of this Section 6.8
in the following circumstances: (i) Buyer ceases to use or decommissions any of
the Purchased Assets or subsequently repowers such Purchased Assets that are no
longer used or decommissioned (but does not hold such Purchased Assets for
sale); (ii) Buyer acts with respect to Purchased Assets in order to comply with
requirements under applicable federal, state or local environmental or other
laws or regulations; or (iii) Buyer acts in a manner the GPU Seller (i.e., a
reasonable private provider of electricity of similar stature as the GPU
Seller) would have acted during the term of the Pollution Control Revenue Bonds
(including, but not limited to, applying new technology). In the event Buyer
acts or anticipates acting in a manner that will cause a loss of the exclusion
of interest on the Pollution
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Control Revenue Bonds from gross income for federal income tax purposes, Buyer
shall give prompt written notice to such effect. Buyer further covenants and
agrees that, in the event that Buyer transfers any of the "Purchased Assets" (as
described above), Buyer shall obtain from its transferee a covenant and
agreement that is analogous to Buyer's covenant and agreement pursuant to this
Section 6.8, including this sentence. In addition, Buyer shall not, without at
least 60 days' advance written notice to the GPU Seller, take any action which
would result in (x) a change in the use of the assets financed with the
Pollution Revenue Control Bonds from the use in which such assets were
originally intended, or (y) a sale of such assets separate from the generating
assets to which they relate; provided that no notice is required of the events
set forth in clause (i), (ii), or (iii) above. This covenant shall survive the
Closing and shall continue in effect so long as the Pollution Control Revenue
Bonds remain outstanding.
Section 6.9 Certain Benefits Matters.
6.9.1 Following the Closing, Buyer agrees to cause each Company and
each Subsidiary of each Company to honor and perform the obligations of such
Company and such Subsidiary under each Benefit Plan in accordance with the terms
of any such Benefit Plan and in accordance with the obligations imposed under
the Sithe/GPU Agreements and the Collective Bargaining Agreements; provided,
however, that Buyer, any Company and any Subsidiary of any Company may make any
lawful changes to any such Benefit Plan, or terminate any Benefit Plan, to the
extent permitted under the terms of such Benefit Plan, the Sithe/GPU Agreements,
the Collective Bargaining Agreements and applicable law. Effective as of the
Closing, Buyer shall assume in place of Sithe all the obligations of Sithe under
the Sithe/GPU Agreements that pertain to the Benefit Plans and shall cause
Sithe to be released from all such obligations. In the event
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that any employees of a Company or Subsidiary of a Company are covered under a
Benefit Plan sponsored by Sithe that is required to be maintained on behalf of
such employees pursuant to the Sithe/GPU Agreements or a Collective Bargaining
Agreement, Buyer shall, or shall cause the Company or the Subsidiary of any
Company that employs such employees either to assume the sponsorship of such
Benefit Plan, accept a spin-off of the portion of such Benefit Plan covering
such employees, adopt a new Employee Benefit Plan or amend an existing Employee
Benefit Plan to provide the required benefits, as Buyer may determine, provided
that Buyer shall notify Sithe of the manner in which it will meet the obligation
described in this sentence at least thirty (30) days before the Closing and
cause Sithe to be released from its obligations under the Sithe/GPU Agreements
effective upon the Closing. Nothing in this Agreement shall preclude a
subsequent agreement by Buyer to assume the obligation to provide benefits under
any Employee Benefit Plan to any group of employees under one or more of the
Collective Bargaining Agreements with respect to service earned with a Company
or a Subsidiary of any Company for the period commencing November 24, 1999 and
ending on the Closing Date, subject to reimbursement of Buyer by Sithe for the
cost of any such benefits, calculated as Buyer and Sithe may agree, and subject
to the agreement of the Union that represents the affected employees.
6.9.2 Following the Closing, Buyer shall cause each Company and each
Subsidiary of each Company to (A) waive all pre-existing conditions,
exclusions, and waiting periods with respect to participation and coverage
requirements applicable to the employees of such Company and each such
Subsidiary and their covered dependents under any group health plan, within the
meaning of Section 5000(b)(1) of the Code, in which such employees may be
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eligible to participate after the Closing Date except to the extent that such
pre-existing conditions, exclusions and waiting periods were in effect in the
Benefit Plans that covered such employees prior to the Closing; (B) provide
each employee of such Company and each such Subsidiary with credit for payments
made by such employee or his covered dependents prior to the Closing Date for
purposes of satisfying any applicable deductible or out-of-pocket requirements
under any such group health plan, and (C) give credit, to employees of such
Company and each such Subsidiary, for purposes of satisfying any eligibility or
vesting requirements of (but not for purposes of benefit accrual under) any
Employee Benefit Plan, or other benefit program or arrangement in which
employees of such Company and each such Subsidiary may be eligible to
participate after the Closing Date, for services rendered by such employees
prior to the Closing Date to such Company and each such Subsidiary or, to the
extent recognized by the Benefit Plans, for services rendered to any other
Person; provided, that the foregoing shall not apply to the extent it would
result in duplication of benefits.
Section 6.10 WARN Act. Sellers and the Companies will provide Buyer on or
prior to the Closing Date with a written list of all employees of the Companies
or their Subsidiaries whose employment has been terminated and whose work hours
have been reduced within 90 calendar days preceding the Closing Date. Such list
will indicate the employee's site of employment, position or job title, name,
starting and ending dates of employment and date of employment loss,
termination, layoff and, if applicable, the amount of hour reduction. If a
plant closing or a mass layoff occurs or is deemed to occur with respect to any
Company or any Subsidiary of any Company or any of their respective facilities
in connection with the transactions contemplated in this Agreement or at any
time after the Closing, Buyer shall be
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solely responsible for providing all notices required under the Work Adjustment
and Retraining Notification Act, 29 U.S.C. Section 2109 et seq. or the
regulations promulgated thereunder (the "WARN Act") and for taking all remedial
measures, including, without limitation, the payment of all amounts, penalties,
liabilities, costs and expenses if such notices are not provided.
Section 6.11 Sithe Release from GPU Liabilities. If requested by Sithe,
Buyer shall use reasonable efforts to cause all third parties to release Sithe
and its Affiliates and their successors and assigns (other than the Companies
and their Subsidiaries) from all GPU Liabilities and to obtain the
acknowledgment or consent of any third party of or to the assumption by Buyer of
the GPU liabilities as provided in Article 12; provided that the failure to
cause such release or obtain such acknowledgment or consent shall not affect
Buyer's obligations under Article 12.
Section 6.12 Change of Entity Names. Buyer acknowledges and agrees that the
trade name "Sithe" shall not be deemed an Acquired Asset and that the Sellers
shall be permitted (but shall not be required), on or prior to the Closing, to
cause each Company and each Subsidiary of each Company to change its name such
that the name "Sithe" is not used in any such entity's name. Following the
Closing Date, Buyer shall, upon the request of any Seller, cause any Company or
any Subsidiary of any Company the name of which includes the name "Sithe" to
change its name within 90 days of such request to exclude the name "Sithe."
Section 6.13 Interim Services Agreement. As promptly as practicable but in
any event within 30 days of the date of this Agreement, Buyer and Sithe shall
negotiate in good faith and use reasonable efforts to enter into an Interim
Services Agreement with respect to the services and on the terms and conditions
described in Schedule 1C; provided that the execution and
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delivery of the Interim Services Agreement shall not be a condition to the
performance by any party of any of such party's obligations under this
Agreement.
Section 6.14 Environmental Matters/ISRA. Buyer acknowledges that Sithe New
Jersey Holdings, LLC has entered into agreements with the New Jersey Department
of Environmental Protection ("NJDEP") pursuant to the New Jersey Industrial Site
Recovery Act ("ISRA"), N.J.S.A. Sections 13:1K-6 et seq., ("Remediation
Agreements") which obligate Sithe New Jersey Holdings, LLC to conduct a
Remediation of the Glen Gardner, Sayreville, Werner and Gilbert generating
facilities in conformance with applicable State standards. The Sellers shall
cause Sithe New Jersey Holdings, LLC to take such actions as are necessary to
obtain such authorizations as are required to consummate the transactions
contemplated by this Agreement in compliance with ISRA, including the filings of
any General Information Notices and any other required ISRA documents and
applications. Buyer agrees to cooperate with the Sellers and Sithe New Jersey
Holdings, LLC in these efforts, which cooperation shall include, but shall not
be limited to, execution of, or consenting to, ISRA related applications,
submissions or remediation agreements with NJDEP and the establishment of
remediation funding sources satisfactory to NJDEP. Buyer agrees that the Sellers
and their Affiliates shall have no responsibility for compliance with ISRA after
Closing. Pursuant to Section 12.1 of this Agreement, at Closing, Buyer shall
assume all of the Sellers' ISRA obligations and liabilities related to the GPU
Assets and shall indemnify and hold harmless the Sellers, their Affiliates
(other than the Companies and their Subsidiaries) and their shareholders for any
costs or liabilities associated with the remediation of the GPU Assets,
including those obligations and liabilities addressed in the existing
Remediation Agreements between Sithe New Jersey Holdings, LLC and NJDEP and any
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further ISRA obligations or liabilities arising as a result of this Agreement,
provided, that Buyer's obligation to indemnify and hold harmless the Sellers,
their Affiliates (other than the Companies and their Subsidiaries) and their
shareholders shall not apply to any fines or penalties imposed by NJDEP arising
out of Sellers' decision to close the transactions provided for in this
Agreement without obtaining NJDEP's authorizations pursuant to ISRA.
Section 6.15 CERTAIN RIGHTS UNDER AMENDED AND RESTATED TRANSITION
POWER PURCHASE AGREEMENTS.
Buyer shall promptly (but in no event later than 5:00 p.m., Eastern time,
on February 23, 2000 provide the Sellers with written instructions setting
forth the amount, if any, of capacity with respect to which the applicable
Affiliates of the Sellers should exercise the put options. The Sellers shall
cause the applicable Affiliates to exercise the put options or refrain from
such exercise, in accordance with such instructions; provided, that Buyer shall
have consulted with the Sellers regarding the benefits to the Companies and
their Subsidiaries of complying with such instructions, and such instructions
shall not be inconsistent with the operation of the Companies and their
Subsidiaries in accordance with Good Operating Practices; and provided further,
that in the absence of any such written instructions from Buyer at or prior to
5:00 p.m., Eastern time, on February 23, 2000, Buyer shall be deemed to have
consented to either the exercise of such options (in whole or in part) or to a
determination not to exercise such options, in either case, as determined by
either Seller (or the applicable Affiliates) in the sole discretion of any such
Person; and provided, further, that neither the Sellers nor Buyer (nor their
respective Affiliates) shall be liable for any losses or damages alleged to
have occurred as a result of or arising out of any action or inaction
consistent with any instructions from Buyer given pursuant to this Section
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6.15 or, failing delivery of such instruction from Buyer at or prior to
5:00 p.m., Eastern time, on February 23, 2000, any discretionary action or
inaction by either Seller (or any of their Affiliates) with respect to
Section 3.06 of any of the Amended and Restated Transition Power Purchase
Agreements. The Sellers shall provide to Buyer copies of any and all
correspondence from GPU or any of its Affiliates regarding the "put option" or
the "call option" under any of the Amended and Restated Transition Power
Purchase Agreements immediately after receipt thereof.
Section 6.16 RELEASE OF CERTAIN AGREEMENTS. Buyer and Sellers shall use
reasonable efforts to obtain for the benefit of each Seller and its Affiliates
(other than the Companies and their Subsidiaries) a release from any and all
obligations and liabilities of such Seller and such Affiliates arising under, or
in connection with, each of the Contracts listed on Schedule 6.16.
Section 6.17 GPU POST CLOSING AMOUNTS. The Sellers shall indemnify and
hold harmless Buyer from and against any liabilities, claims, demands,
judgments, losses, costs, damages or expenses from and after the Closing Date
that Buyer may sustain, suffer or incur and that result from or arise out of or
relate to the GPU Post Closing Amounts.
Section 6.18 TRADING CONTRACTS. On or prior to the Closing Date, the
Sellers shall cause Sithe Power Marketing, and Guarantor shall cause Reliant
Energy Services, Inc. ("RES") to enter into "back-to-back" Contracts pursuant
to which Sithe Power Marketing shall purchase from (or sell to) RES any fuel,
electricity, capacity or related products required to be sold by (or purchased
by) Sithe Power Marketing, as the case may be, pursuant to each Trading
Contract on substantially the same terms and conditions as are applicable to
Sithe Power Marketing under such Trading Contract. The Sellers shall use
reasonable efforts to cause Sithe Power Marketing to enter into the Trading
Contracts described in Section 6.5.2(f)(v)(B) using the form of enabling
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agreement provided to the Sellers by Buyer with such changes thereto as shall
be mutually acceptable to RES and Sithe Power Marketing.
Section 6.19 Matters Relating to Keystone and Conemaugh. From the date
hereof until the Closing Date, the Sellers shall, and shall cause Sithe
Pennsylvania Holdings LLC to, promptly notify Buyer of, and consult with Buyer
with respect to, any proposed vote of the owners under the Keystone and
Conemaugh Owners' Agreements. Buyer shall direct the vote of Sithe Pennsylvania
Holdings LLC or any other Subsidiary of Sellers entitled to vote under such
agreements with respect to any such matter, provided that Buyer agrees to
execute such vote in a manner consistent with Good Operating Practices.
Notwithstanding the foregoing, in the event that Buyer does not provide written
direction to Sithe reasonably in advance of such proposed vote, but in any event
no later than one Business Day preceding the date of such proposed vote, Buyer
shall be deemed to have granted to Sithe Pennsylvania Holdings LLC the right to
exercise discretion with respect to the matter subject to such vote. Neither the
Sellers nor their Affiliates shall be liable for any losses or damages alleged
to have occurred as a result of or arising out of any vote by Sithe Pennsylvania
Holdings LLC under the Keystone and Conemaugh Owners' Agreements made in
accordance with this Section 6.19.
ARTICLE 7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligations of Buyer under this Agreement shall be subject to the
satisfaction (or waiver by Buyer in its sole discretion), at or before the
Closing, of each of the following conditions, and the Sellers shall use
reasonable efforts to cause each of such conditions to be satisfied on or
before the Target Date and, in any event, as promptly as practicable:
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Section 7.1 No Injunction. No Governmental Authority shall have issued
any injunction or other order (whether temporary, preliminary or permanent) or
enacted any statute, rule or regulation that prohibits the consummation of the
transactions contemplated hereby; provided, that the parties shall use their
reasonable efforts to litigate against, and obtain the lifting of, any such
injunction or order.
Section 7.2 Representations and Warranties. The representations and
warranties of each Seller contained in Articles 3 and 4 shall be true and
correct in all material respects as of the Closing Date (in each case except
(a) where such representation or warranty is expressly made only as of a date
other than the date hereof, in which case such representation or warranty shall
be true and correct in all material respects as of such date, and (b) where
such representation or warranty is qualified by reference to materiality or a
Material Adverse Effect, in which case such representation or warranty shall be
true in all respects) as though such representations and warranties were made
at and as of the Closing Date, except as otherwise contemplated by this
Agreement or as may be specified in amendments to any of the Schedules provided
at the Closing (none of which amendments may disclose the occurrence of any
event or development which, individually or in the aggregate, would have a
Material Adverse Effect); and Buyer shall have received at the Closing (i) a
certificate of each Seller dated the Closing Date and signed on behalf of such
Seller by an executive officer of such Seller to such effect, but only insofar
as it is applicable to the representations and warranties set forth in Article
3, which certificate shall include a representation that one or more of the
executive officers listed on Schedule 1D have made due inquiry of (A) the plant
managers and (B) Martin Rosenberg not earlier than three (3) Business Days
prior to the Closing Date for purposes of affirming those representations and
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warranties referred to in Section 6.5.4 that are qualified as to Sithe's
knowledge, and (ii) a certificate of each Seller dated the Closing Date and
signed by an executive officer of such Seller, to such effect, but only insofar
as it is applicable to the representations and warranties set forth in Article
4.
Section 7.3 Performance. Each Seller shall have performed and complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by such Seller at or prior to the
Closing (except where a covenant or agreement is qualified by reference to
materiality or Material Adverse Effect, in which case such covenant or
agreement shall be performed in all respects); and Buyer shall have received at
the Closing a certificate of each Seller dated the Closing Date and signed on
behalf of such Seller by an executive officer of such Seller to such effect.
Section 7.4 Approvals and Filings. All Permits, Environmental Permits,
consents, authorizations and approvals form, and all declarations, filings and
registrations with, Governmental Authorities or third parties that are listed on
Schedule 7.4 shall have been obtained or made without any conditions or terms
that, individually or in the aggregate, have or would have a Material Adverse
Effect. All waiting periods under the HSR Act shall have expired or been
properly terminated.
Section 7.5 Opinion of Counsel. Buyer shall have received an opinion or
opinions dated the Closing Date of counsel to the Sellers, covering the matters
set forth on Schedule 7.5.
Section 7.6 No Material Adverse Effect. Since the date of this
Agreement, no events that have or would have, individually or in the aggregate,
a Material Adverse Effect shall have occurred and be continuing.
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Section 7.7 Buyer Permits. Buyer shall have obtained all Permits and
Environmental Permits listed on Schedule 7.4, to the extent necessary, to own
and operate the generating facilities included in the Acquired Assets in
accordance with past emissions and operating practices, except for those
Permits and Environmental Permits the absence of which would not individually
or in the aggregate have a Material Adverse Effect.
Section 7.8 Resignations. Buyer shall have received the written
resignations of the directors, limited liability company managers and officers
of each of the Companies and their Subsidiaries, effective as of the Closing
Date.
ARTICLE 8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH SELLER
The obligations of Sellers under this Agreement shall be subject to the
satisfaction (or waiver by the Sellers in their sole discretion) at or before
the Closing, of each of the following conditions, and Buyer shall use
reasonable efforts to cause each of such conditions to be satisfied on or
before the Target Date and, in any event, as promptly as practicable:
Section 8.1 No Injunction. No Governmental Authority shall have issued
any injunction or other order (whether temporary, preliminary or permanent) or
enacted any statute, rule or regulation that prohibits the consummation of the
transactions contemplated hereby; provided, that the parties shall use their
reasonable efforts to litigate against, and obtain the lifting of, any such
injunction or order.
Section 8.2 Representations and Warranties. The representations and
warranties of Buyer and Guarantor contained in Articles 5 and 13,
respectively, shall be true and correct in all material respects as of the
Closing Date (in each case except (a) where such representation or
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warranty is expressly made only as of a date other than the date hereof, in
which case such representation or warranty shall be true and correct in all
material respects as of such date) as though such representations and warranties
were made at and as of the Closing Date, except as otherwise contemplated by
this Agreement; and the Sellers shall have received at the Closing (i) a
certificate, dated the Closing Date, signed on behalf of Buyer by an executive
officer of Buyer to such effect, but only insofar as it is applicable to the
representations and warranties set forth in Article 5, and (ii) a certificate,
dated the Closing Date, signed on behalf of Guarantor by an executive officer
of Guarantor to such effect, but only insofar as it is applicable to the
representations and warranties set forth in Article 13.
Section 8.3 Performance. Buyer shall have performed and complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by it at or prior to the Closing (except where
a covenant or agreement is qualified by reference to materiality or Material
Adverse Effect, in which case such covenant or agreement shall be performed in
all respects); and the Sellers shall have received at the Closing a
certificate, dated the Closing Date, signed on behalf of Buyer by an executive
officer of Buyer to such effect.
Section 8.4 Approvals and Filings. All Permits, Environmental Permits,
consents, authorizations and approvals from, and all declarations, filings and
registrations with, Governmental Authorities or third parties that are listed
on Schedule 8.4 shall have been obtained or made. All waiting periods under the
HSR Act shall have expired or been properly terminated.
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Section 8.5 Opinion of Counsel. The Sellers shall have received an
opinion or opinions dated the Closing Date of counsel to Buyer and Guarantor,
covering the matters set forth in Schedule 8.5.
ARTICLE 9. CLOSING
Section 9.1 Time and Place. Subject to the provisions of Articles 7 and
8, the closing of the sale by the Sellers and the purchase by Buyer of the
Intercompany Notes, the Mid-Atlantic Stock and the LLC Interests and the
consummation of the transactions contemplated by Article 2 (the "Closing")
shall take place at the offices of Latham & Watkins, 885 Third Avenue, New
York, New York 10022 on the Target Date; provided, however, that, if all of the
conditions in Articles 7 and 8 are not satisfied by the Target Date, then,
subject to Article 10, the Closing shall take place on the fifth Business Day
after the date on which such conditions are satisfied (other than those
conditions that by their nature are to be satisfied at the Closing, but subject
to the fulfillment or waiver of those conditions); and provided, further that,
notwithstanding the foregoing, the Closing may take place at such other place,
at such other time, or on such other date as the parties hereto may mutually
agree (the date on which the Closing occurs being herein referred to as the
"Closing Date").
Section 9.2 Payments and Terminated Obligations.
9.2.1 Payment for Intercompany Notes, Mid-Atlantic Stock and LLC
Interests. At the Closing, upon the terms and subject to the conditions set
forth herein, Buyer shall pay to Genco, by wire transfer of immediately
available funds to an account designated by the Sellers,
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the Fixed Purchase Price, as adjusted by the Estimated Adjustment Amount, in
United States dollars.
9.2.2 Terminated Obligations; Releases. At the Closing, upon the
terms and subject to the conditions set forth herein, (a) Buyer shall deliver
to the applicable Company or Subsidiary of a Company (i) any letters of credit
in substitution for the Terminated Obligations that are required to be delivered
pursuant to Section 2.3 or (ii) evidence of other arrangements made in
satisfaction of Section 2.3 and (b) each Seller shall receive the releases
obtained pursuant to Sections 6.11 and 6.16.
Section 9.3 Deliveries.
9.3.1 Transfer Instruments. Genco shall deliver to Buyer (a) the
Intercompany Notes, duly endorsed in blank for transfer, (b) certificate(s)
evidencing the Mid-Atlantic Stock, duly endorsed in blank for transfer or
accompanied by a stock power duly executed in blank, (c) instruments of
transfer in substantially the form attached hereto as Schedule 9.3A, in order
to effectuate the transfer of the LLC Interests and (d) a general transfer and
conveyancing instrument with respect to the Acquired Assets in substantially
the form attached hereto as Schedule 9.3B duly executed by the Sellers.
9.3.2 Certificates; Opinions. Buyer and the Sellers shall
deliver to each other the certificates, opinions of counsel and other items
described in Article 7 and 8.
9.3.3 Other Closing Transactions. Each of the parties shall take
such other actions required hereby to be performed by it prior to or on the
Closing Date, including, without limitation, satisfying the conditions set
forth in Articles 7 and 8, and providing evidence of such satisfaction
consisting of (i) the certificates required by Sections 7.2, 7.3, 8.2 and 8.3;
(ii) copies
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of the consents, authorizations, approvals, declarations, filings and
registrations listed on Schedules 7.4 and 8.4, and (iii) copies of the opinions
of counsel required by Sections 7.5 and 8.5.
9.3.4 Senior Credit Facility and Beco Facility. The Sellers shall
deliver to Buyer, with respect to each of the Senior Credit Facility and the
BECO Facility, either (i) evidence of consent of the lenders under such
facility to the consummation of the transactions contemplated by this Agreement
or (ii) a payoff letter evidencing the discharge of all outstanding obligations
of the Sellers and their Affiliates under such facility.
9.3.5 Additional Documents. Each party shall execute and deliver to
the other parties all documents which the other reasonably determines are
necessary to consummate the transactions contemplated hereby or to demonstrate
or evidence compliance with the terms or the accuracy of any representation and
warranty set forth herein. At the Closing, the Sellers shall deliver to Buyer
the stock certificates, certificates of organization, limited liability company
agreements and/or other instruments evidencing the Companies' ownership of
their respective Subsidiaries.
ARTICLE 10. TERMINATION AND ABANDONMENT
Section 10.1 Methods of Termination. This Agreement may be terminated and
the transactions herein contemplated may be abandoned at any time prior to the
Closing Date:
10.1.1 by mutual consent of Sithe and Buyer; or
10.1.2 by Buyer at any time after September 30, 2000 if any of the
conditions provided for in Article 7 of this Agreement shall not have been
satisfied or waived in writing by
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Buyer in its sole discretion prior to such date; provided, that if any
condition in Article 7 has not been so satisfied or waived and diligent efforts
are being undertaken to satisfy such condition, including, but not limited to,
efforts to cure any breach of any representation or warranty, then the
references to September 30, 2000 in this Section 10.1.2 shall be extended for
up to 90 days so long as such diligent efforts continue; or
10.1.3 by Sithe at any time after September 30, 2000 if any of the
conditions provided for in Article 8 of this Agreement shall not have been
satisfied or waived in writing by Sithe in its sole discretion prior to such
date; provided, that if any condition in Article 8 has not been so satisfied or
waived and diligent efforts are being undertaken to satisfy such condition,
including, but not limited to, efforts to cure any breach of any representation
or warranty, then the references to September 30, 2000 in this Section 10.1.3
shall be extended for up to 90 days so long as such diligent efforts continue;
or
10.1.4 (a) by Buyer, upon not less than 30 days' prior written
notice, there has been a violation or breach by any Seller of any agreement,
representation or warranty contained in this Agreement which, individually or
in the aggregate, has or would have a Material Adverse Effect and which is not
susceptible to cure (or if so susceptible is not the subject of diligent
efforts on the part of the breaching party to cure; provided that no such
efforts shall affect the time periods set forth in Section 10.1.2); provided,
that Buyer is not in material violation or breach of its agreements,
representations or warranties contained in this Agreement, or (b) by Sithe
upon not less than 30 days, prior written notice, if there has been a material
violation or breach by Buyer of any agreement, representation or warranty
contained in this Agreement;
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provided, that the Sellers are not in material violation or breach of their
agreements, representations or warranties contained in this Agreement.
Section 10.2 Procedure Upon Termination and Consequences. Buyer or Sithe,
as the case may be, may terminate this Agreement when permitted pursuant to
Section 10.1 by delivering written notice of such termination, and such
termination shall be effective upon delivery of such notice in accordance with
Section 14.3. If this Agreement is terminated as provided herein:
10.2.1 Buyer will deliver all documents, work papers and other
materials relating to the transactions contemplated hereby, whether obtained
before or after the execution hereof, to the Sellers; and
10.2.2 no party hereto shall have any liability or further obligation
to any other party to this Agreement (i) except with respect to the
Confidentiality Agreement, which shall survive the termination of this
Agreement, including with respect to information that is subject to the
Confidentiality Agreement pursuant to Section 6.1, and the confidentiality
agreement dated February 8, 2000 between Buyer and Sithe which shall survive
the termination of this Agreement, (ii) except for such legal and equitable
rights and remedies which any party may have by reason of any breach or
violation of this Agreement by any other party prior to such termination and
(iii) except pursuant to Section 14.6.
ARTICLE 11. SURVIVAL
Section 11.1 Survival. The several representations and warranties of
each Seller contained in Article 4 (and in the certificate delivered pursuant
to Section 7.2(ii)), the
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representations and warranties of Buyer contained in Sections 5.1, 5.2 and 5.3
(and the certificate delivered pursuant to Section 8.2(i) (only insofar as
applicable to Sections 5.1, 5.2 and 5.3), the representations and warranties of
Guarantor contained in Sections 13.2.1, 13.2.2 and 13.2.3 (and the certificate
delivered pursuant to Section 8.2(ii) (only insofar as applicable to Sections
13.1, 13.2 and 13.3), the covenants and agreements of the Sellers contained in
Sections 2.2, 2.3, 2.4, 2.5, the last sentence of Section 6.3, 6.4, 6.16, 6.17,
10.2.1, Articles 11, 12 and 14, the covenants and agreements of Buyer contained
in Sections 2.2, 2.3, 2.4, 2.5, 6.4, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12, 6.14,
6.16, Articles 11, 12 and 14, and the covenants and agreements of Guarantor
contained in Articles 11 and 13, shall survive the Closing. Except as provided
in the preceding sentence, the representations, warranties, covenants and
agreements contained in this Agreement and in any certificate delivered
pursuant to this Agreement shall not survive the Closing and shall terminate
simultaneously therewith, and from and after the Closing no party shall have
any liability with respect to any such terminated representation, warranty,
covenant or agreement.
ARTICLE 12. ASSUMPTION OF GPU LIABILITIES; INDEMNIFICATION
Section 12.1 Assumption of GPU Liabilities; Indemnification. At the
Closing, Buyer shall assume, pursuant to an instrument substantially in the
form attached hereto as Schedule 12.1, all obligations and liabilities of any
kind, whether fixed, contingent, accrued or otherwise, that any Seller or any
Affiliate of any Seller (other than any Company or any Subsidiary of any
Company) or any of their respective successors or assigns may have under, with
respect to or in connection with the GPU Liabilities. Buyer shall indemnify,
defend and hold harmless each Seller, their Affiliates (other than the
Companies and their Subsidiaries) and their respective
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officers, directors, employees, shareholders, Affiliates and agents (each, an
"Indemnitee") from and against any and all claims, demands, suits, losses,
liabilities, damages, obligations, payments, costs and expenses (including,
without limitation, the costs and expenses of any and all actions, suits,
proceedings, assessments, judgments, settlements and compromises relating
thereto and reasonable attorneys' fees and reasonable disbursements in
connection therewith) (each, an "Indemnifiable Loss"), asserted against or
suffered by any Indemnitee relating to, resulting from or arising out of (i) the
GPU Liabilities or (ii) any Third Party Claims against any Indemnitee arising
out of or in connection with the Acquired Assets, including the acquisition,
ownership or operation thereof.
Section 12.2 Defense of Claims.
12.2.1 If any Indemnitee receives notice of the assertion of any
claim or of the commencement of any claims, action, or proceeding made or
brought by any Person (including Guarantor, Buyer, their respective Affiliates,
officers, directors and shareholders, and the successors and assigns of any
such Person) (a "Third Party Claim") with respect to which indemnification is
to be sought from a Person that is required to indemnify such Indemnitee (an
"Indemnifying Party"), the Indemnitee shall give such Indemnifying Party
reasonably prompt written notice thereof but in any event such notice shall not
be given later than ten (10) calendar days after the Indemnitee's receipt of
notice of such Third Party Claim. Such notice shall describe the nature of the
Third Party Claim in reasonable detail and shall indicate the estimated amount,
if practicable, of the Indemnifiable Loss that has been or may be sustained by
the Indemnitee. In addition, the Indemnitee shall transmit to the Indemnifying
Party a copy of all papers served with respect to such claim (if any). The
Indemnitee shall cooperate in good faith
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in such defense at the Indemnifying Party's expense. If the Indemnifying
Party shall acknowledge in writing to the Indemnitee that the Indemnifying Party
shall be obligated to indemnify the Indemnitee under the terms of its indemnity
hereunder in connection with such Third Party Claim, then the Indemnifying Party
will have the right to participate in or, by giving written notice to the
Indemnitee, to elect to assume the defense of any Third Party Claim at such
Indemnifying Party's expense and by employing such Indemnifying Party's own
counsel; provided that the counsel for the Indemnifying Party who shall conduct
the defense of such Third Party Claim shall be reasonably satisfactory to the
Indemnitee. If an Indemnifying Party elects not to assume the defense of any
Third Party Claim, the Indemnitee may compromise or settle such Third Party
Claim over the objection of the Indemnifying Party, which settlement or
compromise shall conclusively establish the Indemnifying Party's liability
pursuant to this Agreement.
12.2.2 (i) if, within ten (10) calendar days after an Indemnitee provides
written notice to the Indemnifying Party of any Third Party Claims, the
Indemnitee receives written notice from the Indemnifying Party that such
Indemnifying Party has elected to assume the defense of such Third Party Claim
as provided in Section 12.2.1, the Indemnifying Party will not be liable for any
legal expenses subsequently incurred by the indemnitee in connection with the
defense thereof; provided, however, that if the Indemnifying Party shall fail to
take reasonable steps necessary to defend diligently such Third Party Claim
within twenty (20) calendar days after receiving notice from the Indemnitee, the
Indemnitee may assume its own defense and the Indemnifying Party shall be liable
for all reasonable expenses thereof. (ii) Without the prior written consent of
the Indemnitee, the Indemnifying Party shall not enter into any settlement of
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any Third Party Claim which would lead to liability or create any financial or
other obligation or restriction on the part of the Indemnitee for which the
Indemnitee is not entitled to indemnification hereunder. If a firm offer is made
to settle a Third Party Claim without leading to liability or the creation of a
financial or other obligation on the part of the Indemnitee for which the
Indemnitee is not entitled to indemnification hereunder the Indemnifying Party
desires to accept and agree to such offer, the Indemnifying Party shall give
written notice to the Indemnitee to that effect. If the Indemnitee fails to
consent to such firm offer within ten (10) calendar days after its receipt of
such notice, the Indemnifying Party shall be relieved of its obligations to
defend such Third Party Claim and the Indemnitee may contest or defend such
Third Party Claim. In such event, the maximum liability of the Indemnifying
Party as to such Third Party Claim will be the amount of such settlement offer
plus reasonable costs and expenses paid or incurred by Indemnitee up to the date
of said notice.
12.2.3 Any claim by an Indemnitee on account of an Indemnifiable Loss which
does not result from a Third Party Claim (a "Direct Claim") shall be asserted by
giving the Indemnifying Party reasonably prompt written notice thereof, stating
the nature of such claim in reasonable detail and indicating the estimated
amount, if practicable, and the Indemnifying Party shall have a period of thirty
(30) calendar days after the Indemnifying Party's receipt of such notice within
which to respond to such Direct Claim. If the Indemnifying Party does not
respond within such thirty (30) calendar days period, the Indemnifying Party
shall be deemed to have accepted such claim. If the Indemnifying Party rejects
such claim, the Indemnitee will be free to seek enforcement of its rights to
indemnification under this Agreement.
12.2.4 Notwithstanding anything to the contrary contained herein:
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12.2.4.1 Any Indemnitee shall use reasonable efforts to
mitigate all losses, damages and the like relating to a claim under these
indemnification provisions, including availing itself of any defenses,
limitations, rights of contribution, claims against third Persons and other
rights at law or equity. The Indemnitee's reasonable efforts shall include the
reasonable expenditure of money to mitigate or otherwise reduce or eliminate
any loss or expenses for which indemnification would otherwise be due, provided
that the Indemnitee shall only be required to make expenditures if and to the
extent that the Indemnifying Party shall have advanced funds to the Indemnitee
for such expenditures after notice from the Indemnitee to the Indemnifying
Party that such an expenditure would be required.
12.2.4.2 Any Indemnifiable Loss shall be net of the dollar
amount of any insurance or other proceeds actually received by the Indemnitee
with respect to the Indemnifiable Loss, but shall not take into account any
income tax benefits to the Indemnitee, or any income taxes attributable to the
receipt of any indemnification payments hereunder. Any party seeking indemnity
hereunder shall use reasonable efforts to seek coverage (including both costs
of defense and indemnity) under applicable insurance policies with respect to
any such Indemnifiable Loss; provided, that the failure to seek or obtain such
coverage shall affect such party's rights pursuant to this Article 12, and
provided, further, that no such party seeking indemnification shall be
required to enter into or maintain any insurance policy or incur additional
insurance premiums pursuant to this Section 12.2.4.2.
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The expiration or termination of any covenant or agreement shall not affect
the parties' obligations under this Section of the Indemnitee provides the
Indemnifying Party with proper notice of the claim or event for which
indemnification is sought prior to such expiration, termination or
extinguishment.
Notwithstanding anything to the contrary herein, no party (including an
Indemnitee) shall be entitled to recover from any other party (including an
Indemnifying Party) for any liabilities, damages, obligations, payments,
losses, costs, or expenses under this Agreement any amount in excess of the
actual compensatory damages, court costs and reasonable attorney's fees and
other advisor fees suffered by such party. Buyer and the Sellers waive any
right to recover punitive, incidental, special, exemplary and consequential
damages arising in connection with or with respect to this Agreement. The
provisions of this last paragraph of Section 12.2.4.2 shall not preclude
recovery of an Indemnifiable Loss by an Indemnitee to the extent such
Indemnifiable Loss is payable to a third party in connection with a Third
Party Claim.
12.2.5 A failure to give timely notice as provided in this Section 12.2
shall not affect the rights or obligations of any party hereunder expect if,
and only to the extent that, as a result of such failure, the party which was
entitled to receive such notice was actually prejudiced as a result of such
failures.
12.2.6 If the amount of any Indemnifiable Loss, at any time subsequent to
the making of an indemnity payment in respect thereof, is reduced by recovery,
settlement or otherwise under or pursuant to any insurance coverage, or
pursuant to any claim, recovery, settlement or payment by, from or against any
other entity, the amount of such reduction, less
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any costs or expenses incurred in connection therewith shall promptly be repaid
by the Indemnitee to the Indemnifying Party.
ARTICLE 13. OBLIGATIONS OF GUARANTOR
Section 13.1 Guarantee. In order to induce the Sellers to enter into
this Agreement and to consummate the transactions contemplated hereby, and for
other good and valuable consideration received, Guarantor irrevocably and
unconditionally guarantees Buyer's obligation to pay promptly when due the
Aggregate Purchase Price in accordance with the terms of this Agreement (the
"Guaranteed Obligations"). No invalidity, irregularity or unenforceability of
all or any part of the Guaranteed Obligations, or of any security therefor,
shall affect, impair or be a defense to the foregoing guarantee nor shall any
other circumstances which may otherwise constitute a defense available to, or
legal or equitable discharge of, Guarantor in respect of the Guaranteed
Obligations, or of any security therefor, or in respect of the foregoing
guarantee affect, impair or be a defense to the foregoing guarantee. The
liability of Guarantor hereunder is absolute, primary and unconditional and
shall not be subject to any offset, defense or counterclaim of Guarantor.
Guarantor also agrees that no Seller need attempt to collect any part of the
Guaranteed Obligations from Guarantor or others, but may require Guarantor to
make immediate payment of the Guaranteed Obligations when due or at any time
thereafter. To the fullest extent permitted by law, Guarantor hereby waives all
defenses, counterclaims and all suretyship defenses.
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Section 13.2 Representations and Warranties Regarding Guarantor.
Guarantor represents and warrants to the Sellers that, as of the date hereof
(except where such representation or warranty is expressly made only as of a
specific date) as follows:
13.2.1 Organization and Corporate Power. Guarantor is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas. Guarantor has full corporate power and authority to execute,
deliver and perform this Agreement.
13.2.2 Authorization; Validity. The execution, delivery and
performance by Guarantor of this Agreement have been duly authorized by all
requisite corporate action on the part of Guarantor. This Agreement has been
duly executed and delivered by Guarantor and constitutes the valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and general equitable principles
(whether considered in a proceeding in equity or at law).
13.2.3 No Conflict. The execution, delivery and performance by
Guarantor of this Agreement and the consummation of the transactions
contemplated hereby will not (i) violate the articles of incorporation or
by-laws of Guarantor; (ii) violate any law or regulation applicable to
Guarantor, or any order of any Governmental Authority having jurisdiction over
Guarantor, or (iii) violate or conflict with, or constitute (with due notice or
lapse of time or both) a default under, any Contract by which Guarantor or any
of its assets is bound.
13.2.4 Consents and Approvals. No registration or filing with, or
consent or approval of or other action by, any Governmental Authority or any
other Person is or will be
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necessary for the valid execution, delivery and performance by Guarantor of its
obligations under this Agreement.
Section 13.3 Covenants Relating to Buyer.
13.3.1 Guarantor hereby covenants and agrees that, for a period
commencing on the Closing Date and terminating on the second anniversary of the
Closing Date, Guarantor shall cause Buyer at all times to maintain (i) a Net
Worth equal to the greater of (a) $611 million or (b) an amount that is not
significantly less than the Net Worth of Buyer immediately after the Closing,
and (ii) sufficient net assets to discharge and perform its obligations
pursuant to this Agreement. Not later than forty five (45) days after the
Closing Date, Guarantor shall deliver to the Sellers a certificate of the Chief
Financial Officer of Guarantor (or an officer of Guarantor serving in a similar
capacity)(the "Chief Financial Officer of Guarantor") setting forth the Net
Worth of Buyer and its Subsidiaries as of the end of the calendar month
immediately preceding the month in which the Closing occurs, on a pro forma
basis to give effect to the purchase of the Intercompany Notes, the LLC
Interests and the Sithe Mid Atlantic Stock (the "CFO Certificate") and
certifying that the amount set forth in the CFO Certificate has been derived
from a historical balance sheet prepared in accordance with GAAP and that the
adjustments thereto are based upon reasonable assumptions. Not later than (y)
the 45th day after the last day of each of the first, second and third fiscal
quarters of Buyer and (z) the 100th day after the last day of each fiscal year
of Buyer, Guarantor shall provide Sithe with a certificate of the Chief
Financial Officer of Guarantor to the preceding fiscal quarter (or fiscal year,
in the case of any such certificate delivered with respect to a fiscal year-end
balance sheet).
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13.3.2 Upon the reasonable request of Sithe in connection with a
possible acquisition, merger, consolidation, financing or other similar
transaction, Buyer shall provide to Sithe, upon not less than 10 Business Days'
prior notice, the most recent year-end audited consolidated balance sheet of
Buyer and its Subsidiaries (and, if such request is made later than the 135th
day following the last day of Buyer's fiscal year, the most recent
unaudited consolidated balance sheet of Buyer and its Subsidiaries) together
with a certificate of the Chief Financial Officer of Buyer that such balance
sheet or balance sheets have been prepared in accordance with GAAP; provided
that in no event shall Buyer be required to deliver the foregoing balance
sheets pursuant to this Section 13.3.2: (a) more frequently than twice in any
365-day period; and (b) unless Buyer and Sithe (and any third party to which
Sithe proposes to provide copies of such balance sheets) shall have executed a
confidentiality agreement reasonably satisfactory to Buyer and Sithe. In
addition, if there is a claim or threatened claim against Sithe or any of its
Affiliates with respect to any matter as to which Buyer is obligated to provide
indemnification pursuant to Article 12 and, based on the advice of Sithe's
independent auditors, in the absence of evidence of Buyers ability to satisfy
such obligation, such claim or threatened claim will be required to be
disclosed, in footnotes or otherwise, in Sithe's consolidated financial
statements, then upon the reasonable request of Sithe, Buyer shall provide to
Sithe, upon not less than 10 Business Days' prior notice, the financial
statements referred to the preceding sentence, but without regard to the number
of other requests that Sithe may have delivered during the preceding 365-day
period.
13.3.3 Notwithstanding Section 13.3.1, Guarantor may elect, at any
time on or prior to the second anniversary of the Closing Date, to terminate
Section 13.3.1 by delivering to the Sellers a guarantee of all of Buyer's
obligations hereunder in form and substance satisfactory
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to the Sellers in their sole discretion by either (a) Guarantor or (b) another
Person, provided that such other Person has (i) a Net Worth greater than or
equal to the Net Worth of Guarantor immediately prior to the date of such
assumption and (ii) either (A) securities listed on a national securities
exchange in the United States, Britain, Japan, France, Germany, the Netherlands
or Belgium, (B) an investment grade credit rating for long term unsecured
indebtedness from either Standard and Poors Rating Group, a division of the
McGraw-Hill Industries, Inc., or Moody's Investors Services, Inc. or (C) a
financial condition reasonably acceptable to Sithe, as determined based upon
financial statements that are mutually acceptable to Guarantor and Sithe. Any
such guarantee shall terminate on the second anniversary of the Closing Date.
ARTICLE 14. MISCELLANEOUS
Section 14.1 Amendment and Modification. This Agreement may be amended,
modified and supplemented only by written agreement of Buyer and Sithe.
Section 14.2 Waiver of Compliance. Any failure of Buyer, on the one hand,
or any Seller, on the other hand, to comply with any obligation, covenant,
agreement or condition contained herein may be expressly waived in writing by
Sithe, in the event of any such failure by Buyer, or by Buyer, in the event of
any such failure by any Seller, but such waiver or failure to insist upon strict
compliance shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
Section 14.3 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and may be given by any of the following methods: (a) personal
delivery, (b) facsimile transmission,
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(c) registered or certified mail, postage prepaid, return receipt requested, or
(d) overnight courier service. Notices shall be sent to the appropriate party
at its address or facsimile number given below (or at such other address or
facsimile number for such party as shall be specified by notice given
hereunder).
If to either Seller, to:
Sithe Energies, Inc.
335 Madison Avenue, 28th Floor
New York, New York 10017
Attn: Chief Executive Officer
Telecopy: (212) 351-0015
General Counsel
Telecopy: (212) 351-0019
with copies to:
Latham & Watkins
885 Third Avenue, Suite 1000
New York, New York 10022-4802
Attn: Roger H. Kimmel, Esq.
Samuel A. Fishman, Esq.
Telecopy: (212) 751-4864
or to such other Person or address as Sithe shall designate by notice to
Buyer.
If to Buyer to:
Reliant Energy Power Generation, Inc.
1111 Louisiana
Houston, Texas 77002
Telecopy No.: 713-207-9605
Attn: J. Douglas Divine
Senior Vice President
Generation Development, Wholesale Group
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with a copy to:
Reliant Energy, Incorporated
1111 Louisiana
Houston, Texas 77002
Telecopy: 713-207-0116
Attn: Michael L. Jines
Vice President and General Counsel, Wholesale Group
or to such other Person or address as Buyer shall designate by notice to
Sithe.
All such notices, requests, demands, waivers and communications shall be
deemed received upon (i) actual receipt thereof by the addressee, (ii) actual
delivery thereof to the appropriate address or (iii) in the case of a facsimile
transmission, transmission thereof by the sender and issuance by the
transmitting machine of a confirmation slip that the number of pages
constituting the notice have been transmitted without error. In the case of
notices sent by facsimile transmission, the sender shall contemporaneously mail
a copy of the notice to the addressee at the address provided for above by
first class mail or by an overnight courier service, postage prepaid. However,
such mailing shall in no way alter the time at which the facsimile notice is
deemed received.
Section 14.4 Binding Nature; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without prior written consent of (i) in the case of an assignment
by Buyer or Guarantor, Sithe or (ii) in the case of an assignment by any Seller,
Buyer; provided, that Buyer may assign and delegate its rights, interests and
obligations hereunder to one or more wholly-owned direct or indirect
Subsidiaries of Buyer or of Guarantor, upon written notice to
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Sithe (which shall contain a representation that the assignee is a wholly-owned
Subsidiary of Buyer or Guarantor) at or before the Closing Date, in which event
Buyer shall remain liable for all of its obligations under this Agreement and
such Subsidiary or Subsidiaries shall, together with Buyer, be jointly and
severally liable for such obligations. Nothing contained herein, express or
implied, is intended to confer on any Person other than the parties hereto or
their successors and assigns, any rights, remedies, obligations or liabilities
under or by reason of this Agreement. Notwithstanding the proviso contained in
the immediately preceding sentence, Buyer may not assign its rights, interests
and obligations hereunder if such assignment could reasonably be expected to
result in a delay or impediment to consummating those transactions hereunder
which by their terms are to be performed on the Closing Date, including, without
limitation, due to the need to obtain the consent of any third party, including
any Governmental Authority, not required for Buyer to consummate the
transactions contemplated hereby.
Section 14.5 Entire Agreement. This Agreement, including the Schedules
and the Confidentiality Agreement, embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. This Agreement, including the Schedules, the Confidentiality Agreement
and the confidentiality agreement, dated February 8, 2000 between Buyer and
Sithe, supersede all prior drafts, agreements and understandings between or
among any or all of the parties with respect to such subject matter and
supersede any letters, memoranda or other documents or communications, whether
oral, written or electronic, submitted or made by (i) Buyer or its agents or
representatives to either Seller, Goldman, Sachs & Co. or any of their
respective Affiliates, agents or representatives, or (ii) either Seller,
Goldman, Sachs & Co. or their respective agents or representatives to Buyer or
any of its agents
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or representatives, in connection with the bidding process which occurred prior
to the execution of this Agreement or otherwise in connection with the
negotiation and execution of this Agreement. No communications by or on behalf
of any Seller, including responses to any questions or inquiries, whether
orally, in writing or electronically, and no information provided in any data
room or any copies of any information from any data room provided to Buyer or
any other information shall be deemed to (i) constitute a representation,
warranty or an agreement of such Seller, or (ii) be part of this Agreement.
Section 14.6 Expenses. Except as otherwise expressly provided in Section
2.2.3, each party to this Agreement will pay its own expenses in connection
with the negotiation of this Agreement, the performance of its obligations
hereunder, and the consummation of the transactions contemplated herein.
Section 14.7 Press Releases and Announcements; Disclosure. Prior to the
Closing Date, no press release or other public announcement or disclosure
related to this Agreement or the transactions contemplated herein (including
but not limited to the terms and conditions of this Agreement) shall be issued
or made without the prior approval of Buyer and Sithe. The foregoing shall not
prohibit any disclosure required by law, provided such disclosure is made
pursuant to the Confidentiality Agreement and that the disclosing party shall
consult with the other parties in advance of such disclosure.
Section 14.8 Acknowledgment.
14.8.1 Buyer acknowledges that neither any Seller, any Company, any
Subsidiary of any Company nor any other Person has made any representation or
warranty, expressed or implied, as to the accuracy or completeness of any
information regarding any Seller, any
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Company or any Subsidiary of any Company not included in this Agreement and the
Schedules. Without limiting the generality of the foregoing, no representation
or warranty is made with respect to any information in the Confidential Offering
Memorandum dated November 1999 or any supplement or amendment thereto provided
in connection with the solicitation of proposals to enter into the transactions
contemplated by this Agreement, such information having been provided for the
convenience of Buyer in order to assist Buyer in framing its due diligence
efforts.
14.8.2 Buyer further acknowledges that (i) Buyer, either alone or
together with any Persons Buyer has retained to advise it with respect to the
transactions contemplated hereby ("Advisors"), has knowledge and experience in
transactions of this type and in the business of the Companies and their
Subsidiaries and is therefore capable of evaluating the risks and merits of
acquiring the Intercompany Notes, the Mid-Atlantic Stock and the LLC Interests
and the consummation of the transactions contemplated hereby, (ii) it has
relied on its own independent investigation, and has not relied on any
information or representations furnished by any Seller, any Company, any
Subsidiary of any Company or any representative or agent of any thereof or any
other Person (except as specifically set forth herein), in determining to enter
into this Agreement, (iii) neither any Seller, any Company, any Subsidiary of
any Company nor any representative or agent of any thereof or any other Person
has given any investment, legal or other advice or rendered any opinion as to
whether the purchase of the Intercompany Notes, the Mid-Atlantic Stock and the
LLC Interests or the consummation of the transactions contemplated hereby is
prudent, and Buyer is not relying on any representation or warranty by any
Seller, any Company, any Subsidiary of any Company or any representative or
agent of any thereof or any
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other Person except as set forth in this Agreement, (iv) Buyer has conducted
extensive due diligence, including a review of the documents contained in a
data room prepared by or on behalf of the Sellers, the Companies and the
Subsidiaries of the Companies; and (v) the Sellers made available to Buyer all
documents, records and books pertaining to the Companies and the Subsidiaries
of the Companies that Buyer's attorneys, accountants, Advisors, if any, and
Buyer have requested, and Buyer and its Advisors, if any, have had the
opportunity to visit the Companies and the Subsidiaries of the Companies, their
facilities, plants, development sites, offices and other properties, and ask
questions and receive answers concerning the Companies, the Subsidiaries of the
Companies and the terms and conditions of this Agreement.
Section 14.9 Disclaimer Regarding Assets. Except as otherwise expressly
provided herein, each Seller expressly disclaims any representations or
warranties of any kind or nature, express or implied, as to the condition, value
or quality of the assets or operations of the Companies or the Subsidiaries of
the Companies or the prospects (financial and otherwise), risks and other
incidents of the Companies or the Subsidiaries of the Companies and each Seller
specifically disclaims any representation or warranty of merchantability, usage,
suitability or fitness for any particular purpose with respect to such 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, or the rights of any Company or any
Subsidiary of any Company, or their title to, any of their assets, or any part
thereof, or whether any Company or any Subsidiary of any Company possesses
sufficient Real Property or personal property interests to own or operate such
assets. Except as expressly provided herein, no Schedule or exhibit to this
Agreement, nor any other material or information
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provided by or communications made by any Seller, any Company, any Subsidiary
of any Company, or any of their respective representatives will cause or create
any warranty, express or implied, as to the condition, value or quality of such
assets. Without limiting the generality of the foregoing, no representation or
warranty is made with respect to the accuracy of any information provided in
any site tours or on any web site, or in any meetings with management or other
personnel of any Seller, any Company, any Subsidiary of any Company or their
respective representatives, except as expressly set forth herein.
Section 14.10 Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of New York without giving
effect to the choice of law principles thereof which would require the
application of the laws of a jurisdiction other than New York. Each party
consents to personal jurisdiction in any action arising out of or relating to
this Agreement brought in the U.S. District Court for the Southern District of
New York, or any New York court within the County and State of New York having
subject matter jurisdiction as to a matter arising out of or relating to this
Agreement (and the appropriate appellate courts), and each of the parties hereto
agrees that (except as provided in Sections 2.2.2 and 2.2.3) any action
instituted by either of them against the other arising out of or relating to
this Agreement will be instituted exclusively in one of the above specified
courts.
Section 14.11 Nonforeign Affidavit. At or prior to the Closing, Genco
shall furnish Buyer an affidavit, stating, under penalty of perjury, that the
indicated number is the transferor's United States taxpayer identification
number and that the transferor is not a foreign person, pursuant to Section
1445(b)(2) of the Code. In the event that Genco fails to furnish such affidavit
to Buyer, Buyer shall be entitled to deduct and withhold from the Aggregate
Purchase
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Price federal income taxes to the extent required to be withheld pursuant to
Section 1445(a) of the Code.
Section 14.12 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page of this Agreement by facsimile transmission
shall be effective as delivery of a manually executed counterpart of this
Agreement.
Section 14.13 Interpretation. The article and section headings contained
in this Agreement are inserted for convenience only and shall not constitute a
part hereof.
Section 14.14 Confidentiality. (a)(i) The terms and conditions of the
Confidentiality Agreement are hereby incorporated by reference into this
Agreement as of the Closing Date, as though fully set forth herein, except for
the following amendments: (A) the provisions thereof shall terminate five years
from the Closing Date; (B) the term "Confidential Information" as used therein
shall mean all information, whether written, oral or otherwise and on whatever
medium that is furnished to the Recipient (as defined in the Confidentiality
Agreement) and its Representatives (each as defined in the Confidentiality
Agreement) by Sithe which concerns Sithe, its affiliates, properties or assets
or the properties or assets of GPU, and all analyses, compilations, forecasts,
studies or other documents prepared by Recipient (as defined in the
Confidentiality Agreement) or its Representatives which contain such
information; and (C) the provisions of the Confidentiality Agreement shall not
apply to any Confidential Information relating to the Acquired Assets (the
"Confidential Acquired Asset Information"). From and after
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the Closing Date, the term "Confidentiality Agreement" shall mean the
Confidentiality Agreement as so incorporated by reference herein and as so
modified.
(b) From and after the Closing Date, Sithe agrees to maintain in
confidence any Confidential Acquired Asset Information Sithe or any of its
Subsidiaries have (with the exception of any publicly available information)
for a period of five (5) years from the Closing Date to the same extent and
subject to the same terms, conditions and exceptions as apply to the Recipient
pursuant to Section 14.14(a) with respect to Confidential Information
(including, without limitation, those terms, conditions and exceptions that
were incorporated by reference therein), mutatis mutandis as though such terms,
conditions and exceptions were set forth in this Section 14.14(b).
Section 14.15 Limitation on Due Inquiry. To the extent due inquiry is
required to be made of Martin Rosenberg with respect to any representation or
warranty made under this Agreement as of any date after Martin Rosenberg ceases
to be an employee of Sithe or of an Affiliate of Sithe, such requirement shall
be deemed to have been satisfied if such due inquiry is made within fourteen
(14) days prior to or 14 days after the date on which Mr. Rosenberg ceases to
be an employee of Sithe or an Affiliate of Sithe.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
SITHE ENERGIES, INC.
By:
______________________________________________
Name:
Title:
SITHE NORTHEAST GENERATING COMPANY, INC.
By:
______________________________________________
Name:
Title:
RELIANT ENERGY POWER GENERATION, INC.
By:
______________________________________________
Name:
Title:
Reliant Energy, Incorporated, is executing this
Agreement solely for the purposes specified in
Article 13.
RELIANT ENERGY, INCORPORATED, as Guarantor
By:
______________________________________________
Name:
Title:
133
SCHEDULES
TO THE PURCHASE AGREEMENT DATED AS OF FEBRUARY 19TH, 2000 (THE "AGREEMENT")
AMONG RELIANT ENERGY POWER GENERATION, INC., A DELAWARE CORPORATION ("BUYER"),
RELIANT ENERGY, INCORPORATED, A TEXAS CORPORATION ("GUARANTOR"), SITHE ENERGIES,
INC., A DELAWARE CORPORATION ("SITHE"), AND SITHE NORTHEAST GENERATING COMPANY,
INC., A DELAWARE CORPORATION AND AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF SITHE
("GENCO" AND, TOGETHER WITH SITHE, THE "SELLERS").
Capitalized terms used but not defined in the Schedules have the meaning
assigned to them in the Agreement. All references to Contracts herein shall be
to such Contracts as they may have been amended, modified, supplemented or
replaced.
Schedule 1A - Development Assets
Schedule 1B - GPU Project Documents
Schedule 1C - General Description of Interim Services
Agreement
Schedule 1D - Executive Officers
Schedule 1E - Budgeted Development Costs
Schedule 2.3 - Terminated Obligations
Schedule 3.2 - Condemnation
Schedule 3.3 - Conflicts
Schedule 3.4 - Capital Stock
Schedule 3.5 - Financial Statements
Schedule 3.6 - Litigation; Compliance with Law; Permits
Schedule 3.7 - Tax Matters
Schedule 3.8 - Material Contracts
Schedule 3.9 - Capital Expenditures
Schedule 3.11 - Labor Matters
Schedule 3.12 - ERISA
Schedule 3.13 - Events Subsequent to November 24, 1999
Schedule 3.14 - Title to Properties
Schedule 3.16 - Transactions with Certain Persons
Schedule 3.17 - Environmental Matters
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Schedule 3.18 - Certain GPU Matters
Schedule 3.19 - Sellers' Consents and Approvals
Schedule 3.21 - Intellectual Property
Schedule 4.3 - Sellers' Conflicts
Schedule 5.4 - Buyer Consents and Approvals
Schedule 6.5 - Exceptions to Ordinary Course of Business
Schedule 6.5.2 - Contracts Not to be Amended
Schedule 6.5.2(f)(A) - Trading Contracts at Signing
Schedule 6.5.2(f)(B) - Trading Contracts Executed Between Signing and
Closing
Schedule 6.5.2(j) - Outages
Schedule 6.16 - Agreements to be Released
Schedule 7.4 - Approvals and Filings to be Obtained or Made
Prior to Closing
Schedule 7.5 - Opinion of Sellers' Counsel
Schedule 8.4 - Approvals and Filings to be Obtained or Made
Prior to Closing
Schedule 8.5 - Opinion of Buyer's Counsel
Schedule 9.3A - Form of Transfer Instrument for LLC Interests
Schedule 9.3B - General Transfer and Conveyancing Instruments
Schedule 12.1 - Form of Assumption Instrument
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SCHEDULE 1A
DEVELOPMENT ASSETS
1. HUNTERSTOWN
Letter from PJM Interconnection, LLC to Sithe, dated April 15, 1999, regarding
PJM Generator Interconnection Queue Position; Hunterstown Project.
2. ERIE WEST
Letter from PJM Interconnection, LLC to Sithe, dated April 15, 1999, regarding
PJM Generator Interconnection Queue Position; Erie West Project.
Sithe has made a $10.0 million initial payment pursuant to a Memorandum of
Understanding between General Electric Company and Sithe for Equipment Sale
entered into on March 26, 1999, for the purchase of 9 7FB-combustion turbine
generators, three of which will be used for the Erie West project. $6.689
million of such deposit shall be credited to Buyer and included as a Development
Asset. Sithe will take delivery of the first three turbines scheduled for
delivery under the Memorandum of Understanding. The remaining six turbines will
be allocated to the Buyer.
3. PORTLAND
Letter from PJM Interconnection, LLC to Sithe, dated April 15, 1999, regarding
PJM Generator Interconnection Queue Position; Portland Project.
Sithe has made a $10.0 million initial payment pursuant to a Memorandum of
Understanding between General Electric Company and Sithe for Equipment Sale
entered into on March 26, 1999, for the purchase of 9 7FB-combustion turbine
generators, three of which will be used for the Portland project. $6.689
million of such deposit shall be credited to Buyer and included as a Development
Asset. Sithe will take delivery of the first three turbines scheduled for
delivery under the Memorandum of Understanding. The remaining six turbines will
be allocated to the Buyer.
4. ATLANTIC
Letter from PJM Interconnection, LLC to Sithe, dated April 15, 1999, regarding
PJM Generator Interconnection Queue Position; Atlantic Project.
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5. GILBERT
Letter from PJM Interconnection, LLC to Sithe, dated April 15, 1999, regarding
PJM Generator Interconnection Queue Position; Gilbert Project.
6. SEWARD
Letter from Sithe to PJM Interconnection, LLC, dated November 16, 1999,
regarding Sithe's request for Generation Interconnection Expansion. While Sithe
has not received written notice of the Seward project's queue position, at
February 17, 2000, the Seward project was posted on PJM's website at position
B34 in Queue B.
For the avoidance of doubt the $6.689 million relating to the six turbines to be
allocated to Buyer and referred to in sections 2 and 3 above is a single amount
applicable to all six turbines.
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SCHEDULE 1B
GPU PROJECT DOCUMENTS
1. Purchase and Sale Agreement between Metropolitan Edison Company ("Met-Ed")
and Sithe, dated as of October 29, 1998, as amended by Amendment Nos. 1-9.
2. Purchase and Sale Agreement between Pennsylvania Electric Company
("Penelec") and Sithe, dated as of October 29, 1998, as amended by
Amendment Nos. 1-9.
3. Purchase and Sale Agreement between Jersey Central Power & Light Company
("JCP&L") and Sithe, dated October 29, 1998, as amended by Amendment Nos.
1-9.
4. Purchase and Sale Agreement between Met-Ed, JCP&L, GPU, Inc. ("GPU"), and
Sithe, dated as of October 29, 1998, as amended by Amendment Nos. 1-9.
5. Bill of Sale between Met-Ed and Sithe Pennsylvania Holdings LLC, dated as
of November 24, 1999.
6. Bill of Sale between Penelec, Sithe Pennsylvania Holdings LLC and Sithe
Maryland Holdings LLC, dated as of November 24, 1999.
7. Bill of Sale between JCP&L and Sithe New Jersey Holdings LLC, dated as of
November 24, 1999.
8. Bill of Sale between Met-Ed, JCP&L, and Sithe Pennsylvania Holdings LLC,
dated as of November 24, 1999.
9. Assignment and Assumption Agreement between Met-Ed, Sithe Pennsylvania
Holdings LLC, Sithe Maryland Holdings LLC, Sithe New Jersey Holdings LLC,
Sithe Mid-Atlantic Power Services, Inc. (collectively, the "Companies")
and Sithe Northeast Management Company ("Northeast Management"), dated as
of November 24, 1999, and the agreements transferred thereunder.
10. Assignment and Assumption Agreement between the Companies, Penelec and
Northeast Management, dated as of November 24, 1999, and the agreements
transferred thereunder.
11. Assignment and Assumption Agreement between the Companies, JCP&L and
Northeast Management, dated as of November 24, 1999, and the agreements
transferred thereunder.
12. Assignment and Assumption Agreement between Met-Ed, JCP&L, Sithe
Pennsylvania Holdings LLC, Sithe Maryland Holdings LLC, Sithe New Jersey
Holdings LLC and Northeast Management, dated as of November 24, 1999, and
the agreements transferred thereunder.
13. Assignment and Assumption Agreement between Conemaugh Station Owners and
Sithe Power Marketing, L.P., dated as of November 24, 1999.
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14. Assignment and Assumption Agreement between Keystone Station Owners and
Sithe Power Marketing, L.P., dated as of November 24, 1999.
15. Put-Call Notice under Transition Power Purchase Agreement between GPU and
Sithe, dated as of March 29, 1999.
16. Amended and Restated Transition Power Purchase Agreement between Met-Ed,
Sithe, Sithe Pennsylvania Holdings LLC and Sithe Power Marketing, L.P.,
dated as of November 24, 1999.
17. Amended and Restated Transition Power Purchase Agreement between Penelec,
Sithe, Sithe Pennsylvania Holdings LLC, Sithe Maryland Holdings LLC and
Sithe Power Marketing, L.P., dated as of November 24, 1999.
18. Amended and Restated Transition Power Purchase Agreement between JCP&L,
Sithe, Sithe New Jersey Holdings LLC and Sithe Power Marketing, L.P., dated
as of November 24, 1999.
19. Interconnection Agreement between Conemaugh Station Owners and Conemaugh
Switching Station Owners, dated as of November 19, 1999.
20. Interconnection Agreement between Keystone Station Owners and Penelec dba
GPU Energy, dated as of November 19, 1999.
21. Amended and Restated Interconnection Agreement between Met-Ed and Sithe
Pennsylvania Holdings LLC, dated as of November 24, 1999.
22. Amended and Restated Interconnection Agreement between Penelec, Sithe
Pennsylvania Holdings LLC and Sithe Maryland Holdings LLC, dated as of
November 24, 1999.
23. Amended and Restated Interconnection Agreement between JCP&L and Sithe
New Jersey Holdings LLC, dated as of November 24, 1999.
24. Conemaugh Switchyard Operating Agreement between Conemaugh Station Owners
and Penelec dba GPU Energy, dated as of November 24, 1999.
25. Energy Service Agreement between Conemaugh Station Owners and Sithe Power
Marketing, L.P., dated as of November 24, 1999.
26. Energy Service Agreement between Keystone Station Owners and Sithe Power
Marketing, L.P., dated as of November 24, 1999.
27. Interim Revenue Metering Agreement between Met-Ed, JCP&L, Penelec dba GPU
Energy, Sithe Pennsylvania Holdings LLC, Sithe New Jersey Holdings LLC and
Sithe Maryland Holdings LLC, dated as of November 24, 1999.
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28. Reactive Power Compensation Agreement between Met-Ed, JCP&L, Penelec dba
GPU Energy, Sithe Pennsylvania Holdings LLC, Sithe New Jersey Holdings LLC
and Sithe Maryland Holdings LLC, dated as of November 24, 1999.
29. Revenue Meter Work Agreement between Met-Ed, JCP&L, Penelec dba GPU Energy,
Sithe Pennsylvania Holdings LLC, Sithe New Jersey Holdings LLC and Sithe
Maryland Holdings LLC, dated as of November 24, 1999.
30. Continuing Services Agreement between GPU Service, Inc. and Sithe, dated as
of November 24, 1999.
31. Pre-Closing Services Letter Agreement between GPU Service, Inc. and Sithe,
dated as of October 22, 1999.
32. Pre-Closing Installation of Improvements at GPU Generation, Inc. Facilities
Letter Agreement between GPU Service, Inc. and Sithe, dated as of July 9,
1999.
33. Amendment to Pre-Closing Installation of Improvements Letter Agreement
between GPU Service, Inc. and Sithe, dated as of August 6, 1999.
34. Proprietary Application License Agreement between Met-Ed, JCP&L, Penelec
dba GPU Service, Inc. and Northeast Management, dated as of November 24,
1999.
35. Intellectual Property Assignment Agreement between Met-Ed and Northeast
Management, dated as of November 24, 1999.
36. Intellectual Property Assignment Agreement between Penelec and Northeast
Management, dated as of November 24, 1999.
37. Intellectual Property Assignment Agreement between JCP&L and Northeast
Management, dated as of November 24, 1999.
38. Interim License Agreement between Electric Power Research Institute, Inc.
and Sithe, dated as of July 1, 1999.
39. Agreement between New Energy Installation and Sales and Sithe, dated as of
July 16, 1999.
40. Unit Commitment/PJM Data Interface between Integ Enterprise Consulting,
Inc. and Sithe, dated as of August 3, 1999.
41. Master Services Agreement between Pavilion Technologies, Inc. and Sithe
Northeast Holdings, Inc., dated as of September 30, 1999.
42. Master License Agreement between Pavilion Technologies, Inc. and Sithe
Northeast Holdings, Inc., dated as of September 30, 1999.
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43. ATW Software License Agreement between Electric Software Products, Inc.
and Sithe, dated as of November 12, 1999.
44. CEM Reporting Workstation Software and DCM Software License Agreement
between Electric Software Products, Inc. and Sithe, dated as of November
12, 199.
45. Agreements of Representation between GPU and Sithe Pennsylvania Holdings
LLC, dated as of November 5, 1999, for the following Met-Ed stations (in
connection with the Transfer of Allowances): Hamilton, Hunterstown,
Mountain, Orrtanna, Portland, Shawnee, Titus and Tolna.
46. Agreements of Representation between GPU and Sithe Pennsylvania Holdings
LLC, dated as of November 5, 1999, for the following Penelec stations (in
connection with the Transfer of Allowances): Blossburg, Seward, Shawville,
Warren, Wayne and Williamsburg.
47. Agreements of Representation between GPU and Sithe New Jersey Holdings LLC,
dated as of November 5, 1999, for the following JCP&L stations (in
connection with the Transfer of Allowances); Gilbert, Glen Gardner,
Sayreville and Werner.
48. Third Amendment to Agreement of Representation for the Conemaugh Station
(in connection with the Transfer of Allowances) between the Conemaugh
Station Owners and GPU Generation, Inc., dated as of November 24, 1999.
49. Third Amendment to Agreement of Representation for the Keystone Station
(in connection with the Transfer of Allowances) between the Keystone
Station Owners and GPU Generation, Inc., dated as of November 24, 1999.
50. ERC Administration Letter Agreement between Penelec and Sithe Pennsylvania
Holdings LLC, dated as of November 24, 1999.
51. NOx Allowances Letter Agreement between JCP&L and Sithe New Jersey Holdings
LLC, dated as of November 24, 1999.
52. ISRA Remediation Agreements between New Jersey Department of Environmental
Protection and Sithe New Jersey Holdings LLC, dated as of November 24,
1999, for the following JCP&L stations: Gilbert, Glen Gardner, Sayreville
and Werner.
53. Application for Self-Guarantees (regarding ISRA) signed by Sithe and dated
as of November 24, 1999 for the following JCP&L stations: Gilbert, Glen
Gardner, Sayreville and Werner.
54. Deeds from Met-Ed to Sithe Pennsylvania Holdings LLC, dated as of November
19, 1999, for the following Met-Ed properties: Hamilton, Hunterstown,
Mountain, Orrtanna, Portland, Bangor Quarry (aka Portland Ash Site),
Shawnee, Titus, Tolna, Jackson, North Bangor, North Hershey and Portland
Adjacent.
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55. Deeds from Penelec to Sithe Pennsylvania Holdings LLC and from Penelec to
Sithe Maryland Holdings LLC (for Deep Creek), dated as of November 19,
1999, for the following Penelec properties: Blossburg, Brookville, Genco
Headquarters, Piney, Seward (for Indiana and Westmoreland Counties),
Shawville, Warren, Wayne, Deep Creek, Coho, East Sayre, Erie West,
Philipsburg, Scottsville and Williamsburg.
56. Deeds from JCP&L to Sithe New Jersey Holdings LLC, dated as of November 19,
1999, for the following JCP&L properties: Gilbert Station, Gilbert Tank
Farm, Glen Gardner, Sayreville, Werner, Atlantic, East Flemington, H.C.
Thuerk, Pequest River and Pohatcong.
57. Deed from Met-Ed to Sithe Pennsylvania Holdings LLC, dated as of November
19, 1999, for the Conemaugh Station.
58. Deeds from JCP&L to Sithe Pennsylvania Holdings LLC, dated as of November
19, 1999, for the Keystone Station (for Armstrong and Indiana Counties).
59. Easement and License Agreements between Met-Ed and Sithe Pennsylvania
Holdings LLC, dated as of November 19, 1999, for the following Met-Ed
properties: Hamilton, Hunterstown, Mountain, Orrtanna, Portland, Bangor
Quarry (aka Portland Ash Site), Shawnee, Titus, Tolna, Jackson, North
Bangor, North Hershey and Portland Adjacent.
60. Easement and License Agreements between Penelec and Sithe Pennsylvania
Holdings LLC and between Penelec and Sithe Maryland Holdings LLC (for Deep
Creek), dated as of November 19, 1999, for the following Penelec
properties: Blossburg, Genco Headquarters, Piney, Seward (for Indiana and
Westmoreland Counties), Shawville, Warren, Wayne, Deep Creek, Coho, East
Sayre, Erie West, Philipsburg and Williamsburg.
61. Easement and License Agreements between JCP&L and Sithe New Jersey Holdings
LLC, dated as of November 19, 1999, for the following JCP&L properties:
Gilbert Station, Glen Gardner, Sayreville, Werner, Atlantic, East
Flemington, H.C. Thuerk, Pequest River and Pohatcong.
62. Easement and License Agreement between Met-Ed and Sithe Pennsylvania
Holdings LLC, dated as of November 19, 1999, for the Conemaugh Station.
63. Easement Agreement (short form) from Sithe Pennsylvania Holdings LLC to
Met-Ed, dated as of November 19, 1999, for the following Met-Ed Properties:
Bangor Quarry (aka Portland Ash Site), Shawnee, North Hershey and Portland
Adjacent.
64. Easement from Med-Ed to Sithe Pennsylvania Holdings LLC, dated as of
November 19, 1999, for access to Met-Ed Property adjacent to Tolna.
65. Easement Agreement (short form) from Sithe Pennsylvania Holdings LLC to
Penelec, dated as of November 19, 1999, for the following Penelec
Properties: Brookville, Seward, Warren, Coho and Scottsville.
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66. Easement Agreement (short form) from Sithe New Jersey Holdings LLC to
JCP&L, dated as of November 19, 1999, for the following JCP&L properties:
Gilbert Station and Glen Gardner.
67. Indenture from Sithe Pennsylvania Holdings LLC to Owners of Conemaugh
Station, dated as of November 22, 1999.
68. Access Easement for Erie West from Penelec to Sithe Pennsylvania Holdings
LLC, dated as of November 19, 1999.
69. Agreement Respecting Erie West Primary Access between Sithe Pennsylvania
Holdings LLC and Penelec, dated as of November 19, 1999.
70. Agreement Respecting Erie West between Sithe Pennsylvania Holdings LLC and
Penelec, dated as of November 19, 1999.
71. Agreement of Assignment and Assumption of Easements for Gilbert Tank Farm
(Northampton County, PA) from JCP&L to Sithe New Jersey Holdings LLC, dated
as of November 19, 1999.
72. Agreement of Assignment and Assumption of Easements for Gilbert Tank Farm
(Bucks County, PA) from JCP&L to Sithe New Jersey Holdings LLC, dated as of
November 19, 1999.
73. Lease Agreement for Titus between Met-Ed and Sithe Pennsylvania Holdings
LLC, dated as of November 24, 1999.
74. Lease Agreement for Brookville between Penelec and Sithe Pennsylvania
Holdings LLC, dated as of November 24, 1999.
75. Lease Agreement for office space for Genco Headquarters between Penelec and
Sithe Pennsylvania Holdings LLC, dated as of November 24, 1999.
76. Lease Agreement for Sayreville between JCP&L and Sithe New Jersey Holdings
LLC, dated as of November 24, 1999.
77. Merrill Creek Sublease Agreement between Met-Ed and Sithe Pennsylvania
Holdings LLC, dated as of November 24, 1999.
78. Merrill Creek Administration Agreement between Met-Ed and Sithe
Pennsylvania Holdings LLC, dated as of November 24, 1999.
79. Merrill Creek Sublease Agreement between JCP&L and Sithe New Jersey
Holdings LLC, dated as of November 24, 1999.
80. Merrill Creek Administration Agreement between JCP&L and Sithe New Jersey
Holdings LLC, dated as of November 24, 1999.
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81. Letter Agreement regarding crafts trades under the National Maintenance
Agreement from the National Maintenance Agreement Policy Committee, Inc. to
GPU Generation, Inc., dated as of May 4, 1999.
82. Maintenance Services Agreement for Pennsylvania and Maryland facilities
between GPU Service, Inc., Sithe Pennsylvania Holdings LLC and Sithe
Maryland Holdings LLC, dated as of November 24, 1999.
83. Maintenance Services Agreement for New Jersey facilities between GPU
Service, Inc. and Sithe New Jersey Holdings LLC, dated as of November 24,
1999.
84. Shared Use Agreement between Met-Ed, Penelec, JCP&L dba GPU Energy, Sithe
Pennsylvania Holdings LLC, Sithe New Jersey Holdings LLC and Sithe Maryland
Holdings LLC, dated as of November 24, 1999.
85. Johnstown Area Heritage Association ("JAHA") Side Letter Agreement from
Sithe, dated as of April 1, 1999.
86. Seward License Agreement between Penelec and Sithe Pennsylvania Holdings
LLC, dated as of November 24, 1999.
87. Memorandum of Owners' Agreement Conemaugh Steam Electric Station among
Conemaugh Station Owners dated as of August 1, 1966.
88. Conemaugh Operating Agreement between Penelec and Conemaugh Station Owners
dated as of December 1, 1967, as amended by Amendments dated June 4, 1969,
May 8, 1973, February 27, 1978, December 1, 1978, June 30, 1983, March 25,
1998 and November 24, 1999.
89. Memorandum of Owners' Agreement Keystone Steam Electric Station among
Keystone Station Owners, dated as of December 7, 1964.
90. Keystone Operating Agreement between Penelec and Keystone Station Owners,
dated as of December 1, 1967, as amended by Amendments dated May 8, 1973,
February 27, 1978, December 1, 1978, June 30, 1983 and March 25, 1998.
91. SPH Operating Agreement between Sithe Pennsylvania Holdings LLC and
Northeast Management, dated as of November 24, 1999.
92. Coal Supply Agreement between Met-Ed and Eighty-Four Mining Company, dated
September 8, 1997, as amended December 10, 1998 and February 7, 2000 by
Sithe Power Marketing, L.P. and Consol Inc., authorized agent for and on
behalf of Eighty-Four Mining Company, Consol Pennsylvania Coal Company,
Nineveh Coal Company and Greenon Coal Company.
93. All agreements listed on Schedules 3.8A and 3.14.
94. All agreements listed on Schedule 3.11.
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95. Agreement and Release between JCP&L, Conemaugh Station Owners, and GPU,
dated as of December 3, 1999.
96. Agreement and Release between Met-Ed, Keystone Station Owners, and GPU,
dated as of December 3, 1999.
97. Master Automobile Lease Agreement Between NationsBanc Leasing Corporation
and GPU Service Corporation, Met-Ed, Penelec, JCP&L and GPU Nuclear
Corporation, dated as of October 5, 1993, as amended by that certain
Transfer and Assumption Agreement, by and among GPU, Northeast
Management, Sithe Pennsylvania Holdings LLC, Sithe New Jersey Holdings
LLC, Sithe Maryland Holdings LLC and Banc of America Leasing & Capital,
LLC, successor by merger to NationsBanc Leasing Corporation, dated as of
December 7, 1999.
98. Agreements listed on Schedule 6.5.2(f)(A).
99. Release No. 0759182 to Master Agreement 0567911 between Sithe
Pennsylvania Holdings LLC, Sithe New Jersey Holdings LLC, Sithe Maryland
Holdings LLC, Northeast Management and ABB Alstom Power, effective
February 15, 2000.
100. Contract No. 0758667 by Genco, on behalf of the owner(s) and NPS Energy
Services, Inc., dated as of February 1, 2000.
101. Contract No. 0758946 by Genco, on behalf of the owner(s) and URS Greiner
Woodward Clyde, effective February 7, 2000.
102. Contract No. 0757857 by Genco, on behalf of the owner(s) and Burnham
Insulation Services, Inc., dated as of January 12, 2000.
103. Contract No. 0758019 by Fidelity Leasing, Inc. and Genco, executed on
December 8, 1999.
104. Contract No. 0756525 by Genco, on behalf of the owner(s) and Siemens
Westinghouse Power Corp., dated as of December 2, 1999.
105. Contract No. 0757253 by Genco, on behalf of Northeast Management and
Beckwith Machinery Company, dated as of December 23, 1999.
106. Service Agreement for Gas Transportation and/or Standby Service by and
between Columbia Gas of Pennsylvania, Inc. and Sithe Power Marketing,
L.P., dated as of December 2, 1999.
107. Addendum to Services Agreement and Lease by and between New Jersey
Natural Gas Company and JCP&L, dated as of September 1, 1980.
108. Large Volume Daily Service Agreement between Penn Fuel Gas, Inc. and
Sithe Power Marketing, L.P., dated as of November 29, 1999.
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109. Third Party Supplier Service Agreement by and between Elizabethtown Gas
Company and Sithe Power Marketing, L.P., dated as of October 14, 1999.
110. Agreement to Provide Gas Transportation Service to Sithe Energies Gilbert
and/or Glen Gardner Generating Stations in New Jersey for the Period
November 24, 1999 through March 31, 2000, dated January 12, 2000.
111. Memorandum of Assignment between GPU/Penelec Warren and Sithe Power
Marketing, L.P., dated as of December 2, 1999.
112. Rate IL Service Agreement by and between Sithe Power Marketing, L.P. and
UGI Utilities, Inc., dated as of November 24, 1999.
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SCHEDULE 1C
GENERAL DESCRIPTION OF INTERIM SERVICES AGREEMENT
1. Services to be Performed by Sithe
The services to be performed by Sithe pursuant to this agreement, if any,
are separate and apart from Sithe's obligations pursuant to Section 6.1 of the
Agreement. Upon the written request of Buyer to Sithe, Sithe will provide the
following services:
1.1 Pre-close and cut over
1.1.1. Assist in preparing HR, benefits and payroll to cut over to
Buyer (includes testing)
1.1.2. Continue development of SAP plant maintenance system (includes
purchasing)
1.1.3. Continue development of ABB GMS system
1.1.4. Continue development of ABB GIMS system
1.1.5. Assist in applying for and administering the transfer of
licenses and permits (including the bifurcation or partial
transfer of software licenses)
1.1.6. Assist in cut over of phones, e-mail and desktop systems
1.1.7. Assist in re-routing WAN to separate it from the Sithe network
1.1.8. Assist in cut over of finance and accounting systems to
Buyer's formats
1.1.9. Support split of SAP data relating to Acquired Assets from
Sithe corporate SAP system
1.1.10. If permitted by applicable license agreements, temporary
sharing of HP servers to host SAP until split into separate
instance to support Buyer
provided, however that Buyer shall notify Sithe of Buyer's intention to request
the services set forth in Sections 1.1.2, 1.1.3 and 1.1.4 above no later than
5:00 p.m., New York City time, February 25, 2000.
1.2 Post-close
1.2.1. Upon the written request of Buyer to Sithe, Sithe will provide
the following services (These services will be performed from
Johnstown, Pennsylvania; New York, New York or such other
location as may be appropriate):
1.2.1.1. Financial accounting and related services
S-14
147
1.2.1.2. Purchasing and logistics support
1.2.1.3. Payroll and benefits services
1.2.1.4. Information technology support
1.2.1.5. Permitting and licensing assistance
1.2.1.6. Scheduling/Dispatching
1.2.1.7. Fuel
1.2.1.8. Power in and out (interconnection)
1.2.1.9. Trading support
1.2.1.10. Settlement of bilateral trades
1.3 Any additional tasks are subject to mutual agreement and additional
compensation.
2. Terms and Conditions
2.1. Compensation
2.1.1. Fixed hourly rate for Sithe personnel: $100
2.1.2. Third-party costs will be billed at actual cost. Buyer
shall only be required to reimburse Sithe for such costs if
Buyer has consented in advance to Sithe's incurrence of such
costs. Third-party costs shall include, without limitation,
ABB GMS development/implementation until close, 50% of ABB
GIMS development/implementation until close and SAP plant
maintenance development/implementation until close, if and
only if Buyer has requested such services as provided in
Section 1.1.
2.1.3. Buyer to reimburse reasonable travel costs incurred in
performing services
2.1.4. Buyer will reimburse any new or increased out-of-pocket
costs that Sithe may incur in order to perform the services
(e.g., new equipment or software, third party service
providers) if Buyer has consented in advance in writing to
Sithe's incurrence of such costs.
2.1.5. Payment: Monthly invoices, payment due 15 days after
receipt, interest on late payments of prime plus 5
percentage points
2.2. Limitations on resources that Sithe commits to services
2.2.1. Commitment of personnel subject to reasonable availability
S-15
148
2.2.2. No investment in infrastructure (other than as agreed in
advance) unless Buyer requests that Sithe make such
investment and bears cost
2.3. Standard of Care
2.3.1. Devote reasonable commercial efforts to delivering the
services and resolving any system interruptions or defects
2.3.2. Disclaimer of warranty that services will be uninterrupted
or defect-free
2.3.3. Force majeure clause
2.4. Indemnities
2.4.1. Buyer and Sithe to agree on mutually satisfactory indemnity
provisions to indemnify Sithe against usual and customary
liabilities
2.5. Confidentiality (unless already covered by another agreement)
2.6. Project Management
2.6.1. Each party designates a manager for day-to-day management
of the relationship
2.7. Term and Termination
2.7.1. Maximum term of 180 days.
2.7.2. Terminates in the event of termination of the Purchase
Agreement
2.8. Survival: Indemnities, confidentiality, and payment (for accrued
charges and costs) obligations survive
2.9. Jurisdiction, governing law: New York
2.10. Liability Limitations
2.10.1. Exclusion of consequential damages
2.10.2. Overall liability cap equal to fees paid (does not include
pass-throughs to third parties), with carve-out for
indemnities
S-16
149
SCHEDULE 1D
EXECUTIVE OFFICERS
1. Sithe
William V. Kriegel - Chief Executive Officer, President and Chairman
Barry F. Sullivan - Vice Chairman
W. Harrison Wellford - Vice Chairman
Richard J. Cronin III - Chief Financial Officer and Senior Vice President
Ralph J. Grutsch - Senior Vice President, Operations
William C. Hughes, Jr. - Vice President, Operations
Sandra J. Manilla - Treasurer and Vice President
Hyun Park - Secretary and General Counsel
2. Genco
William V. Kriegel - Chief Executive Officer
Barry F. Sullivan - Vice Chairman
W. Harrison Wellford - Vice Chairman
Jeffrey D. Tranen - President and Chief Operating Officer
David Tohir - Senior Vice President
Richard J. Cronin III - Senior Vice President and Chief Financial Officer
Ralph J. Grutsch - Senior Vice President, Operations
Hyun Park - Senior Vice President, General Counsel and Secretary
Sandra J. Manilla - Vice President and Treasurer
S-17
150
3. Buyer
Joe Bob Perkins - President and Chief Operating Officer
J. Douglas Divine - Senior Vice President, Generation Development
David G. Tees - Senior Vice President, Power Operations
John H. Stout - Vice President, California Asset Commercialization
Michael L. Jines - Corporate Secretary
James E. Hammelman - Treasurer
Rufus S. Scott - Assistant Corporate Secretary
Lloyd A. Whittington - Assistant Treasurer
S-18
151
SCHEDULE 1E
BUDGETED DEVELOPMENT COSTS
(DOLLARS IN THOUSANDS)
-------------------------------------------------------------
2000 BUDGETED SPENDING
-------------------------------------------------------------
PROJECT QTR 1 QTR 2 QTR 3 QTR 4 TOTAL
------- ----- ----- ----- ----- -----
Atlantic $ 562.8 $ 518.8 $ 321.8 $ 301.8 $ 1,705.0
Gilbert 565.5 490.5 396.5 386.5 1,839.0
-------------------------------------------------------------
Total Sithe New Jersey Holdings LLC 1,128.3 1,009.3 718.3 688.3 3,544.0
-------------------------------------------------------------
Erie West 561.8 458.8 374.8 236.8 1,632.0
Hunterstown 887.5 481.5 490.5 433.5 2,293.0
Portland 483.8 519.8 408.8 308.8 1,721.0
Seward 525.8 489.8 492.8 5,412.8 6,921.0
-------------------------------------------------------------
Total Pennsylvania Holdings LLC 2,458.8 1,949.8 1,766.8 6,391.8 12,567.0
-------------------------------------------------------------
Engine Deposits -- -- -- 17,884.0 17,884.0
Grand Total $3,587.0 $2,959.0 $2,485.0 $24,964.0 $33,995.0
==============================================================
S-19
152
SCHEDULE 2.3
TERMINATED OBLIGATIONS
___________________________________________________________________________________________________
LETTER OF CREDIT LETTER OF CREDIT
FACILITY NUMBER AMOUNT FINAL BOND AMOUNT
___________________________________________________________________________________________________
Conemaugh 90001320 $5,189,925 $15,969,000
Keystone East Valley 90001321 $2,592,000 $10,368,000
Portland Bangor Ash Site 90001322 $2,143,086 $2,143,086
Seward Closed Ash Site 90001323 $308,000 $308,000
Shawville Closed Ash Site 90001324 $400,000 $400,000
Shawville New Ash Site 90001325 $5,073,916 $5,073,916
Titus Beagle Club Ash Site 90001326 $1,830,940 $1,830,940
Warren North Ash Site 90001225 $130,000 $130,000
Warren South Ash Site 90001226 $6,051,000 $6,051,000
Williamsburg New Ash Site 90001223 $50,000 $50,000
Williamsburg Old Ash Site 90001227 $68,000 $68,000
S-20
153
SCHEDULE 3.2
CONDEMNATION
The references to the following matters are for the information of Buyer.
The inclusion of each such matter does not constitute a representation with
respect to its materiality, is not intended to establish a standard of
materiality or significance and shall not be deemed to have such effect.
See title exception for condemnation proceeding for the Warren Station on
Schedule 3.14.
In order to comply with Article 5 of the license for the Piney Project
(FERC No. 309), GPU is currently pursuing two condemnation actions against the
owners of certain lands around the reservoir in order to eliminate certain title
issues. Article 5 requires that the licensee obtain and retain throughout the
term of the license the right to use projects lands in perpetuity. Section 21 of
the Federal Power Act authorizes licensees to bring eminent domain actions to
secure lands necessary for a project.
S-21
154
SCHEDULE 3.3
CONFLICTS
No Contract shall be deemed a Material Contract solely by reason of the
fact that it is referred to in this Schedule 3.3. The inclusion of the
following Contracts does not constitute a representation with respect to their
materiality, is not intended to establish a standard of materiality or
significance and shall not be deemed to have such effect.
The following GPU Project Document contains a change of control
restriction that may be violated if consent is not obtained from lessor by the
Closing.
Master Automobile Lease Agreement Between NationsBanc Leasing Corporation
and GPU Service Corporation, Met-Ed, Penelec, JCP&L and GPU Nuclear
Corporation, dated as of October 5, 1993, as amended by that certain Transfer
and Assumption Agreement, by and among GPU, Northeast Management, Sithe
Pennsylvania Holdings LLC, Sithe New Jersey Holdings LLC, Sithe Maryland
Holdings LLC and Banc of America Leasing & Capital, LLC, successor by merger
to NationsBanc Leasing Corporation, dated as of December 7, 1999.
See also agreements listed on Schedule 3.19.
S-22
155
SCHEDULE 3.4
CAPITAL STOCK
Authorized, Issued and Outstanding Capital Stock.
Authorized Issued and
Entity Shares Outstanding Shares
- -------------------------------------- ---------- ------------------
Sithe Mid-Atlantic Power Services, Inc. 1,500 100
Sithe Northeast Management Company 2,500 2,500
Sithe Pennsylvania Holdings LLC N/A N/A
Sithe Maryland Holdings LLC N/A N/A
Sithe New Jersey Holdings LLC N/A N/A
Sithe Hunterstown LLC N/A N/A
Sithe Erie West LLC N/A N/A
Sithe Portland LLC N/A N/A
Sithe Titus LLC N/A N/A
Sithe Seward LLC N/A N/A
Sithe Gilbert LLC N/A N/A
Sithe Atlantic LLC N/A N/A
Ownership
The Companies are wholly-owned by Genco.
Each of the Subsidiaries is directly wholly-owned by one of the Companies.
Other Equity Interests
Owner Percentage Interest Nature of Interest Person
- ----- ------------------- ------------------ -----------------
Sithe Pennsylvania
Holdings LLC 16.45% Tenancy in Common Conemaugh Station
Sithe Pennsylvania
Holdings LLC 16.67% Tenancy in Common Keystone Station
S-23
156
GPU ASSET ACQUISITION
COMBINING CASH FLOW STATEMENT (UNAUDITED)
FOR THE PERIOD FROM NOVEMBER 24, 1999 THROUGH DECEMBER 31, 1999
SITHE SITHE SITHE SITHE SITHE
PENNSYLVANIA NEW JERSEY MARYLAND NORTHEAST MID-ATLANTIC SITHE
HOLDINGS LLC HOLDINGS LLC HOLDINGS LLC MGMT CO. INC. PWR SVCS, INC. PORTLAND LLC
------------ ------------ ------------ ------------- -------------- ------------
Cash flows from operating
activities:
Net income (loss) $ (6,318,652) $ 1,075,196 $ (69,748) $(1,730,807) $ (60) $ --
Adjustments to reconcile
net income (loss) to net
cash provided (used) by
operating activities
Depreciation and
amortization 3,694,923 483,900 55,206
Changes in operating
assets and liabilities
Fuel inventory 1,591,021 -- --
M&S inventory (189,197) 7,875 --
Other current assets (5,424,627) -- -- (1,307,802)
Accounts payable (1,676,790) -- -- 1,641,422
Other current
liabilities 3,819,633 357,062 13,534 2,547,039 100,413
---------------------------------------------------------------------------------------------------
Net cash provided (used) by
operating activities (4,503,689) 1,924,033 (1,008) 1,149,852 100,353
---------------------------------------------------------------------------------------------------
Cash flows from investing
activities:
Acquisition of generating
assets from GPU (1,456,280,544) (165,828,342) (13,530,466) (50,000)
Capital expenditures (4,419,307) -- -- (2,861,086)
---------------------------------------------------------------------------------------------------
Net cash used in investing
activities (1,460,699,851) (165,828,342) (13,530,466) (50,000) -- (2,861,086)
---------------------------------------------------------------------------------------------------
Cash flows from investing
activities:
Capital contribution 35,000,000 18,129,215 1,480,000 50,000
Proceeds from intercompany
notes 1,441,352,286 148,838,672 12,143,495
Net change in intercompany
accounts (10,553,059) (3,063,578) (92,021) (1,149,852) (100,353) (2,861,086)
---------------------------------------------------------------------------------------------------
Net cash provided (used) by
investing activities 1,465,799,227 163,904,309 13,531,474 (1,099,852) (100,353) (2,861,086)
---------------------------------------------------------------------------------------------------
Net Increase (decrease) in cash
and cash equivalents 595,687 -- -- -- -- --
Cash and cash equivalents at
beginning of period -- -- -- -- -- --
---------------------------------------------------------------------------------------------------
Cash and cash equivalents at
end of period $ 595,687 $ -- $ -- $ -- $ -- $ --
===================================================================================================
SITHE SITHE SITHE SITHE SITHE SITHE
HUNTERSTOWN LLC SEWARD LLC ERIE WEST LLC ATLANTIC LLC GILBERT LLC SUBTOTAL
--------------- ---------- ------------- ------------- ------------ ---------
Cash flows from operating
activities:
Net income (loss) $ -- $ -- $ -- $ -- $ -- $ (7,044,071)
Adjustments to reconcile
net income (loss) to net
cash provided (used) by
operating activities
Depreciation and
amortization 4,234,029
Changes in operating
assets and liabilities
Fuel inventory 1,591,021
M&S inventory (181,322)
Other current assets (6,732,429)
Accounts payable (35,368)
Other current
liabilities 6,837,681
---------------------------------------------------------------------------------------------------
Net cash provided (used) by
operating activities -- -- -- -- -- (1,330,459)
---------------------------------------------------------------------------------------------------
Cash flows from investing
activities:
Acquisition of generating
assets from GPU (1,635,689,352)
Capital expenditures (552,553) (120,382) (2,807,359) (338,966) (214,637) (11,314,290)
---------------------------------------------------------------------------------------------------
Net cash used in investing
activities (552,553) (120,382) (2,807,359) (338,966) (214,637) (1,647,003,642)
---------------------------------------------------------------------------------------------------
Cash flows from investing
activities:
Capital contribution 54,659,215
Proceeds from intercompany
notes 1,602,334,453
Net change in intercompany
accounts 552,553 120,382 2,807,359 338,966 214,637 (8,063,880)
---------------------------------------------------------------------------------------------------
Net cash provided (used) by
investing activities 552,553 120,382 2,807,359 338,966 214,637 1,648,929,788
---------------------------------------------------------------------------------------------------
Net Increase (decrease) in cash
and cash equivalents -- -- -- -- -- 595,687
Cash and cash equivalents at
beginning of period -- -- -- -- -- --
---------------------------------------------------------------------------------------------------
Cash and cash equivalents at
end of period $ -- $ -- $ -- $ -- $ -- $ 595,687
===================================================================================================
ELIMINATION COMBINED
ADJUSTMENTS TOTAL
----------- --------
Cash flows from operating
activities:
Net income (loss) $ -- $ (7,044,071)
Adjustments to reconcile
net income (loss) to net
cash provided (used) by
operating activities
Depreciation and
amortization 4,234,029
Changes in operating
assets and liabilities
Fuel inventory 1,591,021
M&S inventory (181,322)
Other current assets (6,732,429)
Accounts payable (35,368)
Other current
liabilities 6,837,681
----------------------------------
Net cash provided (used) by
operating activities -- (1,330,459)
----------------------------------
Cash flows from investing
activities:
Acquisition of generating
assets from GPU -- (1,635,639,352)
Capital expenditures 50,000 (11,314,290)
----------------------------------
Net cash used in investing
activities 50,000 (1,646,953,642)
----------------------------------
Cash flows from investing
activities:
Capital contribution (50,000) 54,609,215
Proceeds from intercompany
notes 1,602,334,453
Net change in intercompany
accounts (8,063,880)
----------------------------------
Net cash provided (used) by
investing activities (50,000) 1,648,879,788
----------------------------------
Net Increase (decrease) in cash
and cash equivalents -- 595,687
Cash and cash equivalents at
beginning of period -- --
----------------------------------
Cash and cash equivalents at
end of period $ -- $ 595,687
==================================
157
SITHE GPU ASSET ACQUISITION
COMBINING BALANCE SHEET (UNAUDITED)
DECEMBER 31, 1999
SITHE SITHE SITHE SITHE SITHE
PENNSYLVANIA NEW JERSEY MARYLAND NORTHEAST MID-ATLANTIC SITHE SITHE
HOLDINGS LLC HOLDINGS LLC HOLDINGS LLC MGMT CO, INC. PWR SVCS, INC. PORTLAND LLC HUNTERSTOWN LLC
------------ ------------ ------------ ------------- -------------- ------------ ---------------
ASSETS
Cash 595,687
Fuel Inventory 5,296,789
M&S Inventories 36,527,172 16,890,111
Other Current Assets 5,424,627 215,520 1,307,802
Land 22,695,335 5,279,769 179,000
Property, Plant &
Equipment 1,109,190,667 139,232,314 13,141,000
Construction Work
in Progress 752,780
Accumulated
Depreciation (2,838,259) (459,472) (54,754)
Project Development
Cost 2,861,086 552,553
Investment in Sithe
Northeast Management
Co, Inc. 50,000
Long-term Receivables
from Joint Owners 11,237,181
Goodwill 329,766,500 10,011,213 215,849 50,000
Accumulated
Amortization of
Goodwill (856,664) (24,428) (452)
-----------------------------------------------------------------------------------------------------------
TOTAL ASSETS 1,517,841,815 171,145,027 13,480,643 1,357,802 -- 2,861,086 552,553
===========================================================================================================
LIABILITIES AND
STOCKHOLDER'S EQUITY
Accounts Payable (1,676,790) 1,641,422
Other Current
Liabilities 51,798,475 4,279,410 18,917 2,547,039 100,413
Other Liabilities 17,000,000 7,759,445
Intercompany Accounts (19,313,504) (8,936,911) (92,021) (1,149,852) (100,353) 2,861,086 552,553
Portion of Loan from
Vivendi used for
GPU Acquisition 1,441,352,286 148,838,672 12,143,495
-----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,489,160,467 151,940,616 12,070,391 3,038,609 60 2,861,086 552,553
Capital 35,000,000 18,129,215 1,480,000 50,000
Retained Earnings
(Deficit) (6,318,652) 1,075,196 (69,748) (1,730,807) (60) -- --
-----------------------------------------------------------------------------------------------------------
STOCKHOLDER'S EQUITY 28,681,348 19,204,411 1,410,252 (1,680,807) (60) -- --
-----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY 1,517,841,815 171,145,027 13,480,643 1,357,802 -- 2,861,086 552,553
===========================================================================================================
SITHE SITHE SITHE SITHE
SEWARD LLC ERIE WEST LLC ATLANTIC LLC GILBERT LLC SUBTOTAL
------------ ------------ ------------ ------------ --------------
ASSETS
Cash 595,687
Fuel Inventory 5,296,789
M&S Inventories 53,417,283
Other Current Assets 6,947,949
Land 28,154,104
Property, Plant &
Equipment 1,261,563,981
Construction Work
in Progress 752,780
Accumulated
Depreciation (3,352,485)
Project Development
Cost 120,382 2,807,359 338,966 214,637 6,894,983
Investment in Sithe
Northeast Management
Co, Inc. 50,000
Long-term Receivables
from Joint Owners 11,237,181
Goodwill 340,043,562
Accumulated
Amortization of
Goodwill (881,544)
---------------------------------------------------------------------------
TOTAL ASSETS 120,382 2,807,359 338,966 214,637 1,710,720,270
===========================================================================
LIABILITIES AND
STOCKHOLDER'S EQUITY
Accounts Payable (35,368)
Other Current
Liabilities 58,744,254
Other Liabilities 24,759,445
Intercompany Accounts 120,382 2,807,359 338,966 214,637 (22,697,658)
Portion of Loan from
Vivendi used for
GPU Acquisition 1,602,334,453
---------------------------------------------------------------------------
TOTAL LIABILITIES 120,382 2,807,359 338,966 214,637 1,663,105,126
Capital
Retained Earnings 54,659,215
(Deficit) -- -- -- -- (7,044,071)
---------------------------------------------------------------------------
STOCKHOLDER'S EQUITY -- -- -- -- 47,615,144
---------------------------------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY 120,382 2,807,359 338,966 214,637 1,710,720,270
===========================================================================
ADJUSTING ENTITIES
--------------------------- COMBINED
DEBT CREDIT TOTAL
------------ ------------ ------------
ASSETS
Cash 595,687
Fuel Inventory 5,296,789
M&S Inventories 53,417,283
Other Current Assets 6,947,949
Land 28,154,104
Property, Plant &
Equipment 1,261,563,981
Construction Work
in Progress 752,780
Accumulated
Depreciation (3,352,485)
Project Development
Cost 6,894,983
Investment in Sithe
Northeast Management
Co, Inc. 50,000 --
Long-term Receivables
from Joint Owners 11,237,181
Goodwill 340,043,562
Accumulated
Amortization of
Goodwill (881,544)
--------------------------------------------
TOTAL ASSETS -- 50,000 1,710,670,270
============================================
LIABILITIES AND
STOCKHOLDER'S EQUITY
Accounts Payable (35,368)
Other Current
Liabilities 58,744,254
Other Liabilities 24,759,445
Intercompany Accounts (22,697,658)
Portion of Loan from
Vivendi used for
GPU Acquisition 1,602,334,453
--------------------------------------------
TOTAL LIABILITIES -- -- 1,663,105,126
Capital 50,000
Retained Earnings 54,609,215
(Deficit) -- (7,044,071)
--------------------------------------------
STOCKHOLDER'S EQUITY 50,000 -- 47,565,144
--------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY 50,000 -- 1,710,670,270
============================================
158
Sithe GPU Asset Acquisition
Combining Income Statement (Unaudited)
For the period from November 24, 1999 through December 31, 1999
SITHE SITHE SITHE SITHE SITHE
PENNSYLVANIA NEW JERSEY MARYLAND NORTHEAST MID-ATLANTIC SITHE SITHE
HOLDINGS LLC HOLDINGS LLC HOLDINGS LLC MGMT CO. INC. PWR SVCS, INC. PORTLAND LLC HUNTERSTOWN LLC
------------ ------------ ------------ ------------- -------------- ------------ ---------------
Revenue $ 25,391,255 $ 4,017,054 $ 118,055 $ -- $ -- $-- $--
Cost of sales:
Fuel 10,687,542 66,274 -- --
Operations and
maintenance 6,279,860 1,249,549 39,569 483,425
Depreciation 2,838,259 459,472 54,754 --
--------------------------------------------------------------------------------------------------------
19,805,661 1,775,295 94,323 483,425 -- -- --
--------------------------------------------------------------------------------------------------------
Gross profit 5,585,594 2,241,759 23,732 (483,425) -- -- --
Other operating income
(expenses)
General and
administrative
expenses (25,701) (2,590) -- (1,247,382)
Amortization of
goodwill (856,664) (24,428) (452) --
--------------------------------------------------------------------------------------------------------
Operating income 4,703,229 2,214,741 23,280 (1,730,807) -- -- --
Non-operating income
(expenses):
Interest expense (11,023,964) (1,139,545) (93,028) -- --
Other income, net 2,083 -- -- -- (60)
--------------------------------------------------------------------------------------------------------
Net income (loss) $ (6,318,652) $ 1,075,196 $ (69,748) $(1,730,807) $(60) $-- $--
========================================================================================================
ADJUSTING ENTRIES
SITHE SITHE SITHE SITHE ----------------- COMBINED
SEWARD LLC ERIE WEST LLC ATLANTIC LLC GILBERT LLC SUBTOTAL DEBIT CREDIT TOTAL
---------- ------------- ------------ ----------- -------- ----- ------ --------
Revenue $-- $-- $-- $-- $29,526,364 $-- $-- $29,526,364
Cost of sales:
Fuel 10,753,816 10,753,816
Operations and
maintenance 8,052,403 8,052,403
Depreciation 3,352,485 3,352,485
-------------------------------------------------------------------------------------------------------
-- -- -- -- 22,158,704 -- -- 22,158,704
-------------------------------------------------------------------------------------------------------
Gross profit -- -- -- -- 7,367,660 -- -- 7,367,660
Other operating income
(expenses)
General and
administrative
expenses (1,275,673) (1,275,673)
Amortizaton of
goodwill (881,544) (881,544)
--------------------------------------------------------------------------------------------------------
Operating income -- -- -- -- 5,210,443 -- -- 5,210,443
Non-operating income
(expenses):
Interest expense (12,256,537) (12,256,537)
Other income, net 2,023 2,023
--------------------------------------------------------------------------------------------------------
Net income (loss) $-- $-- $-- $-- $(7,044,071) $-- $-- $(7,044,071)
========================================================================================================
159
SCHEDULE 3.5
FINANCIAL STATEMENTS
1. Unaudited combining balance sheet of the Companies and their Subsidiaries at
November 24, 1999.
2. Unaudited combining balance sheet of the Companies and their Subsidiaries at
December 31, 1999. The balance on the Project Development Costs line item on
the December 31, 1999 unaudited combining balance sheet shall be increased by
$1,489,000 to reflect the agreed upon increase in the allocated costs (from
$5,200,000 to $6,689,000) associated with engine deposits and the related
conforming changes.
3. Combining unaudited statements of income and cash flows of the Companies and
their Subsidiaries for the period from November 24, 1999 to December 31,
1999.
S-24
160
SITHE GPU ASSET ACQUISITION
COMBINING BALANCE SHEET (UNAUDITED)
NOVEMBER 24, 1999
Sithe Sithe Sithe Sithe Sithe
Pennsylvania New Jersey Maryland Northeast Mid-Atlantic Sithe Sithe
Holdings LLC Holdings LLC Holdings LLC Mgmt Co. Inc. Pwr Svcs. Inc. Portland LLC Hunterstown LLC
------------- ------------ ------------ ------------- -------------- ------------ ---------------
ASSETS
Cash
Fuel Inventory 6,887,810
M&S Inventories 36,337,975 16,897,986
Other Current Assets 215,520
Land 22,695,335 5,279,769 179,000
Property, Plant &
Equipment 1,105,524,140 139,232,314 13,141,000
Construction Work
in Progress
Accumulated
Depreciation
Project Development
Costs 2,792,603 415,663
Investment in Sithe
Northeast Management
Co. Inc. 50,000
Long-term Receivables
from Joint Owners 8,363,521
Goodwill 314,416,536 7,345,810 5,383 50,000
Accumulated Amortization
of Goodwill
-----------------------------------------------------------------------------------------------------
TOTAL ASSETS 1,494,275,317 168,971,399 13,325,383 50,000 -- 2,792,603 415,663
=====================================================================================================
LIABILITIES AND
STOCKHOLDER'S EQUITY
Accounts Payable
Other Current Liabilities 47,978,842 3,922,348 5,383
Other Liabilities 17,000,000 7,759,445
Intercompany Accounts (8,760,445) (5,873,333) 2,792,603 415,663
Portion of Loan from
Vivendi used for GPU
Acquisition 1,403,056,920 145,033,724 11,840,000
-----------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,459,275,317 150,842,184 11,845,383 -- -- 2,792,603 415,663
Capital 35,000,000 18,129,215 1,480,000 50,000 --
Retained Earnings
(Deficit)
-----------------------------------------------------------------------------------------------------
Stockholder's Equity 35,000,000 18,129,215 1,480,000 50,000 -- -- --
-----------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY 1,494,275,317 168,971,399 13,325,383 50,000 -- 2,792,603 415,663
=====================================================================================================
Adjusting Entries
Sithe Sithe Sithe Sithe ----------------- Combined
Seward LLC Erie West LLC Atlantic LLC Gilbert LLC Subtotal Debit Credit Total
---------- ------------- ------------ ----------- -------------- ------- ------- -------------
ASSETS
Cash -- --
Fuel Inventory 6,887,810 6,887,810
M&S Inventories 53,235,961 53,235,961
Other Current Assets 215,520 215,520
Land 28,154,104 28,154,104
Property, Plant &
Equipment 1,257,897,454 1,257,897,454
Construction Work
in Progress -- --
Accumulated
Depreciation -- --
Project Development
Costs 90,869 2,748,156 254,828 158,033 6,460,152 6,460,152
Investment in Sithe
Northeast Management
Co. Inc. 50,000 50,000 --
Long-term Receivables
from Joint Owners 8,363,521 8,363,521
Goodwill 321,817,729 321,817,729
Accumulated Amortization
of Goodwill -- --
------------------------------------------------------------------------------------------------------
TOTAL ASSETS 90,869 2,748,156 254,828 158,033 1,683,082,251 -- 50,000 1,683,032,251
======================================================================================================
LIABILITIES AND
STOCKHOLDER'S EQUITY
Accounts Payable -- --
Other Current Liabilities 51,906,573 51,906,573
Other Liabilities 24,759,445 24,759,445
Intercompany Accounts 90,869 2,748,156 254,828 158,033 (8,173,626) (8,173,626)
Portion of Loan from
Vivendi used for GPU
Acquisition 1,559,930,644 1,559,930,644
------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 90,869 2,748,156 254,828 158,033 1,628,423,036 -- -- 1,628,423,036
Capital 54,659,215 50,000 54,609,215
Retained Earnings
(Deficit) -- --
------------------------------------------------------------------------------------------------------
Stockholder's Equity -- -- -- -- 54,659,215 50,000 -- 54,609,215
------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY 90,869 2,748,156 254,828 158,033 1,683,082,251 50,000 -- 1,683,032,251
======================================================================================================
161
SCHEDULE 3.6
LITIGATION;
COMPLIANCE WITH LAW; PERMITS
The references to the following matters are for the information of Buyer.
The inclusion of each such matter does not constitute a representation with
respect to its materiality, is not intended to establish a standard of
materiality or significance and shall not be deemed to have such effect.
1. See Schedule 3.17 for environmental matters.
2. In order to comply with Article 5 of the license for the Piney
Project (FERC No. 309), GPU is currently pursuing two condemnation actions
against the owners of certain lands around the reservoir in order to eliminate
certain title issues. Article 5 requires that the licensee obtain and retain
throughout the term of the license the right to use projects lands in
perpetuity. Section 21 of the Federal Power Act authorizes licensees to bring
eminent domain actions to secure lands necessary for a project.
3. Application for renewal of Anchorage Lease at Sayreville sent to
Sithe New Jersey Holdings LLC directly from New Jersey Tidelands Council.
4. There are bankruptcy proceedings of Material Recovery Group, to
which Sithe and its affiliates are not parties, relating to the Erie West
Primary Access (see #69 of Schedule 1B).
5. In connection with its ownership of the GPU Assets and the conduct
of its business as currently conducted, Seller, by or through its subsidiaries,
has applied for or filed for amendments, renewals, or reissuance of certain
Environmental Permits. Applications for such amended, renewed, or reissued
permits or activities initiated by Governmental Authorities that are still
pending before the relevant Governmental Authorities include:
i. Reissuance of the Residual Solid Waste Disposal Permits by
PADEP for the Keystone, Conemaugh and Shawville stations,
which will reflect the change in the name of the permittee
from GPU Genco to Northeast Management, as appropriate;
ii. Minor modification of the Residual Solid Waste Disposal
Permits by PADEP for the Portland and Titus stations, which
will reflect the change in the name of the permittee from
GPU Genco to Northeast Management;
iii. Approval of replacement financial security by PADEP as
required by the Residual Solid Waste Disposal Regulations
for the Conemaugh, Shawville and Seward stations;
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iv. Renewal of expired wastewater disposal ("NPDES") permits by PADEP for
the Conemaugh, Seward and Williamsburg stations;
v. Modification of the NPDES permits by PADEP for Keystone and Conemaugh
stations to reflect the change in name of the permittee from GPU Genco
to Northeast Management;
vi. Modification of the Water Quality Management Permits issued by PADEP
for the Keystone and Conemaugh stations to reflect the change in name
of the permittee from GPU Genco to Northeast Management;
vii. Renewal by NJDEP of the Riparian License for the Sayreville station;
viii. Modification of the Submerged Lands License issued by the Commonwealth
of Pennsylvania for the Shawville station to reflect the change in
ownership from Penelec to Sithe Pennsylvania Holdings LLC. Additional
Submerged Lands Licenses may need to be obtained from the Commonwealth
of Pennsylvania in connection with certain Dams and Enroachment Permits
issued by PADEP to the extent that such Licenses are required by
Pennsylvania law and have not yet been obtained. Based upon verbal
communications with PADEP and the Governor's office, Sellers'
understanding is that, although Submerged Lands Licenses are required
by State law, such Licenses have not been uniformly required or issued
and that enforcement of the requirement for a particular license will
be addressed in the context of applications to PADEP for renewal or
modification of Dams and Enroachment Permits;
ix. Renewal of expired air pollution control operating permits or
certificates for several facilities in both Pennsylvania and New
Jersey. Both PADEP and NJDEP are not reissuing the expired permits or
certificates to operate and have authorized continued operation of the
stations in compliance with the terms and conditions of the expired
permits or certificates to operate until such time as they take final
action on the stations' applications for Title V operating permits or
"synthetic minor" operating permits. Title V operating permit
applications have been filed and are still pending for the Gilbert,
Glen Gardner, Sayreville, Warren, Titus, Conemaugh, Seward, Shawville
and Keystone stations. Synthetic minor operating permit applications
are still pending for Blossburg, Hamilton, Hunterstown, Mountain,
Orrtanna, Shawnee and Tolna stations. A Title V permit was recently
issued by PADEP for the Portland station but may be appealed by Sithe
Pennsylvania Holdings LLC. Sithe Pennsylvania Holdings LLC intends to
operate the Portland station in accordance with its state (non-Title V)
operating permits until such appeal is resolved;
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x. Application to NJDEP to transfer the Title V operating permit for the
Werner station;
xi. Application for an air pollution control operating permit from PADEP
for the Portland Station CT5;
xii. Issuance of revised Acid Rain Phase II permits reflecting Phase II NOx
limits for Conemaugh, Keystone and Seward.
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SCHEDULE 3.7
TAX MATTERS
There is one state tax lien on record in Cambria County, PA against Penelec
in favor of the Pennsylvania Secretary of Revenue. The amount of the lien is
$45,100.83 and was assessed on March 7, 1997.
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SCHEDULE 3.8
MATERIAL CONTRACTS
GENERAL ACQUISITION AGREEMENTS
1. Purchase and Sale Agreement between Met-Ed and Sithe, dated as of October
29, 1998, as amended by Amendment Nos. 1-9.
2. Purchase and Sale Agreement between Penelec and Sithe, dated as of October
29, 1998, as amended by Amendment Nos. 1-9.
3. Purchase and Sale Agreement between JCP&L and Sithe, dated as of October
29, 1998, as amended by Amendment Nos. 1-9.
4. Purchase and Sale Agreement between Met-Ed, JCP&L, GPU and Sithe, dated as
of October 29, 1998, as amended by Amendment Nos. 1-9.
5. Conemaugh Operating Agreement between Penelec and Conemaugh Station Owners
dated as of December 1, 1967, as amended by Amendments dated June 4, 1969,
May 8, 1973, February 27, 1978, December 1, 1978, June 30, 1983, March 25,
1998 and November 24, 1999.
6. Keystone Operating Agreement between Penelec and Keystone Station Owners,
dated as of December 1, 1967, as amended by Amendments dated May 8, 1973,
February 27, 1978, December 1, 1978, June 30, 1983 and March 25, 1998.
TRANSFER DOCUMENTS
7. Bill of Sale between Met-Ed and Sithe Pennsylvania Holdings LLC, dated
November 24, 1999.
8. Bill of Sale between Penelec, Sithe Pennsylvania Holdings LLC and Sithe
Maryland Holdings LLC, dated November 24, 1999.
9. Bill of Sale between JCP&L and Sithe New Jersey Holdings LLC, dated
November 24, 1999.
10. Bill of Sale between JCP&L and Met-Ed as Sellers of Keystone and Conemaugh
Stations and Sithe Pennsylvania Holdings LLC, dated November 24, 1999.
11. Assignment and Assumption Agreement between the Companies, Met-Ed and
Northeast Management, dated November 24, 1999, and all agreements
transferred thereunder.
12. Assignment and Assumption Agreement between the Companies, Penelec, and
Northeast Management, dated November 24, 1999, and all agreements
transferred thereunder.
13. Assignment and Assumption Agreement between the Companies, JCP&L and
Northeast Management, dated November 24, 1999, and all agreements
transferred thereunder.
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14. Assignment and Assumption Agreement between Met-Ed and JCP&L as Sellers,
Sithe Pennsylvania Holdings LLC, Sithe Maryland Holdings LLC, Sithe New
Jersey Holdings LLC and Northeast Management, dated November 24, 1999, and
all agreements transferred thereunder.
15. Assignment and Assumption Agreement between Sithe, the Companies and
Northeast Management, dated November 24, 1999 (Met-Ed Internal Assignment
and Assumption).
16. Assignment and Assumption Agreement between Sithe, the Companies and
Northeast Management, dated November 24, 1999 (Penelec Internal Assignment
and Assumption).
17. Assignment and Assumption Agreement between Sithe, the Companies and
Northeast Management, dated November 24, 1999 (JCP&L Internal Assignment
and Assumption).
18. Assignment and Assumption Agreement between Sithe, the Companies and
Northeast Management, dated November 24, 1999 (Keystone/Conemaugh Internal
Assignment and Assumption).
19. Assignment and Assumption Agreement between Sithe and Genco, dated November
24, 1999.
20. Assignment and Assumption Agreement between Sithe Pennsylvania Holdings
LLC, Sithe Maryland Holdings LLC, Sithe New Jersey Holdings LLC and Sithe
Power Marketing, L.P., dated November 24, 1999.
21. Assignment and Assumption Agreement between Conemaugh Station Owners and
Sithe Power Marketing, L.P., dated November 24, 1999.
22. Assignment and Assumption Agreement between Keystone Station Owners and
Sithe Power Marketing, L.P., dated November 24, 1999.
ENERGY AGREEMENTS
23. Amended and Restated Transition Power Purchase Agreement between Met-Ed,
Sithe, Sithe Pennsylvania Holdings LLC and Sithe Power Marketing, L.P.,
dated as of November 24, 1999.
24. Amended and Restated Transition Power Purchase Agreement between Penelec,
Sithe, Sithe Maryland Holdings LLC, Sithe Power Marketing L.P. and Sithe
Pennsylvania Holdings LLC, dated as of November 24, 1999.
25. Amended and Restated Transition Power Purchase Agreement between JCP&L,
Sithe, Sithe Power Marketing, L.P. and Sithe New Jersey Holdings LLC, dated
as of November 24, 1999.
26. Amended and Restated Interconnection Agreement between Met-Ed and Sithe
Pennsylvania Holdings LLC, dated as of November 24, 1999.
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27. Amended and Restated Interconnection Agreement between Penelec, Sithe
Pennsylvania Holdings LLC and Sithe Maryland Holdings LLC, dated as of
November 24, 1999.
28. Amended and Restated Interconnection Agreement between JCP&L and Sithe New
Jersey Holdings LLC, dated as of November 24, 1999.
29. Interconnection Agreement between The Conemaugh Station Owners and
Conemaugh Switching Station Owners, dated as of November 19, 1999.
30. Interconnection Agreement between The Keystone Station Owners and Penelec
d/b/a GPU Energy, dated as of November 19, 1999.
31. Reactive Power Compensation Agreement between JCP&L, Met-Ed, and Penelec
dba GPU Energy, Sithe Pennsylvania Holdings LLC, Sithe New Jersey Holdings
LLC and Sithe Maryland Holdings LLC, dated November 24, 1999.
32. Interim Revenue Metering Agreement between JCP&L, Met-Ed and Penelec dba
GPU Energy, Sithe Pennsylvania Holdings LLC, Sithe New Jersey Holdings LLC
and Sithe Maryland Holdings LLC, dated November 24, 1999.
33. Energy Services Agreement between Conemaugh Station Owners and Sithe Power
Marketing, L.P., dated November 24, 1999.
34. Energy Services Agreement between Keystone Station Owners and Sithe Power
Marketing, L.P., dated November 24, 1999.
35. Contracts listed on Schedule 6.5.2(f)(A).
INFORMATION TECHNOLOGY/INTELLECTUAL PROPERTY AGREEMENTS
36. Continuing Services Agreement between Sithe and GPU Service, Inc., dated
November 24, 1999.
37. Pre-Closing Services Agreement between Sithe and GPU Service, Inc., dated
October 22, 1999.
38. Proprietary Application License Agreement between Met-Ed, JCP&L and Penelec
dba GPU Service, Inc. and Northeast Management, dated November 24, 1999.
39. Intellectual Property Assignment and Assumption Agreement between Met-Ed
and Northeast Management, dated November 24, 1999.
40. Intellectual Property Assignment and Assumption Agreement between Penelec
and Northeast Management, dated November 24, 1999.
41. Intellectual Property Assignment and Assumption Agreement between JCP&L
and Northeast Management, dated November 24, 1999.
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42. Interim License Agreement between Sithe and Electric Power Research
Institute, Inc., dated July 1, 1999.
43. Agreement between Sithe and New Energy Installation and Sales, dated July
16, 1999.
44. Unit Commitment/PJM Data Interface between Sithe and Integ Enterprise
Consulting, Inc., dated August 3, 1999.
45. Master Services Agreement between Sithe Northeast Holdings, Inc. and
Pavilion Technologies, Inc, dated September 30, 1999.
46. Master License Agreement between Pavilion Technologies, Inc. and Sithe
Northeast Holdings, Inc., dated September 30, 1999.
47. ATW Software License Agreement between Sithe and Electric Software
Products, Inc., dated November 12, 1999.
48. CEM Reporting Workstation Software and DCM Software License Agreement
between Sithe and Electric Software Products, Inc., dated November 12, 1999.
ENVIRONMENTAL AGREEMENTS
49. ERC Administration Letter Agreement between Penelec and Sithe Pennsylvania
Holdings LLC, dated November 24, 1999.
50. NOx Allowances Letter Agreement between JCP&L and Sithe New Jersey Holdings
LLC, dated November 24, 1999.
51. SPH Operating Agreement between Sithe Pennsylvania Holdings LLC and
Northeast Management.
52. ISRA Remediation Agreements between New Jersey Department of Environmental
Protection and Sithe New Jersey Holdings LLC, dated as of November 24, 1999,
for the following JCP&L stations: Gilbert, Glen Gardner, Sayreville and
Werner.
53. Application for Self-Guarantees (regarding ISRA) signed by Sithe and dated
as of November 24, 1999, for the following JCP&L stations: Gilbert, Glen
Gardner, Sayreville and Werner.
54. Agreements of Representation between GPU and Sithe Pennsylvania Holdings
LLC, dated as of November 5, 1999, for the following Met-Ed stations (in
connection with the Transfer of Allowances): Hamilton, Hunterstown,
Mountain, Orrtanna, Portland, Shawnee, Titus and Tolna.
55. Agreements of Representation between GPU and Sithe Pennsylvania Holdings
LLC, dated as of November 5, 1999, for the following Penelec stations (in
connection with the Transfer of Allowances): Blossburg, Seward, Shawville,
Warren, Wayne and Williamsburg.
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56. Agreements of Representation between GPU and Sithe New Jersey Holdings LLC,
dated as of November 5, 1999, for the following JCP&L stations (in
connection with the Transfer of Allowances): Gilbert, Glen Gardner,
Sayreville and Werner.
57. Third Amendment to Agreement of Representation for the Conemaugh Station
(in connection with the Transfer of Allowances) between the Conemaugh
Station Owners and GPU Generation, Inc., dated as of November 24, 1999.
58. Third Amendment to Agreement of Representation for the Keystone Station (in
connection with the Transfer of Allowances) between the Keystone Station
Owners and GPU Generation, Inc., dated as of November 24, 1999.
LABOR AGREEMENTS
59. All agreements listed on Schedule 3.11.
60. Letter Agreement regarding crafts trades under the National Maintenance
Agreement from the National Maintenance Policy Committee, Inc. to GPU
Generation, Inc., dated as of May 4, 1999.
OTHER AGREEMENTS
61. Shared Use Agreement between JCP&L, Met-Ed and Penelec dba GPU Energy,
Sithe Pennsylvania Holdings LLC, Sithe New Jersey Holdings LLC, and Sithe
Maryland Holdings LLC, dated November 24, 1999.
62. Coal Supply Agreement between Met-Ed and Eighty-Four Mining Company, dated
September 8, 1997, as amended December 10, 1998 and February 7, 2000 by
Sithe Power Marketing, L.P. and Consol Inc., authorized agent for and on
behalf of Eighty-Four Mining Company, Consol Pennsylvania Coal Company,
Nineveh Coal Company and Greenon Coal Company.
63. Service Agreement for Gas Transportation and/or Standby Service by and
between Columbia Gas of Pennsylvania, Inc. and Sithe Power Marketing, L.P.,
dated as of December 2, 1999.
64. Addendum to Services Agreement and Lease by and between New Jersey Natural
Gas Company and JCP&L, dated as of September 1, 1980.
65. Large Volume Daily Service Agreement between Penn Fuel Gas, Inc. and Sithe
Power Marketing, L.P., dated as of November 29, 1999.
66. Third Party Supplier Service Agreement by and between Elizabethtown Gas
Company and Sithe Power Marketing, L.P., dated as of October 14, 1999.
67. Agreement to Provide Gas Transportation Service to Sithe Energies Gilbert
and/or Glen Gardner Generating Stations in New Jersey for the Period
November 24, 1999 through March 31, 2000, dated January 12, 2000.
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68. Memorandum of Assignment between GPU/Penelec Warren and Sithe Power
Marketing, L.P., dated as of December 2, 1999.
69. Rate IL Service Agreement by and between Sithe Power Marketing, L.P. and
UGI Utilities, Inc., dated as of November 24, 1999.
70. Agreement and Release between JCP&L, Conemaugh Station Owners and GPU,
dated as of December 3, 1999.
71. Agreement and Release between Met-Ed, Keystone Station Owners and GPU,
dated as of December 3, 1999.
72. Intercompany Notes.
73. Spill response contract between GPU and National Response Corporation (in
connection with the Oil Pollution Act of 1990).
74. Spill response contract between GPU and S&D Environmental (in connection
with the Oil Pollution Act of 1990).
75. Spill response contract between GPU and Lewis Environmental Group (in
connection with the Oil Pollution Act of 1990).
76. Release No. 0759182 to Master Agreement 0567911 between Sithe Pennsylvania
Holdings LLC, Sithe New Jersey Holdings LLC, Sithe Maryland Holdings LLC,
Northeast Management and ABB Alstom Power, effective February 15, 2000.
77. Contract No. 0758667 by Genco, on behalf of the owner(s) and NPS Energy
Services, Inc., dated as of February 1, 2000.
78. Contract No. 0758946 by Genco, on behalf of the owner(s) and URS Greiner
Woodward Clyde, effective February 7, 2000.
79. Contract No. 0757857 by Genco, on behalf of the owner(s) and Burnham
Insulation Services, Inc., dated as of January 12, 2000.
80. Contract No. 0758019 by Fidelity Leasing, Inc. and Genco, executed on
December 8, 1999.
81. Contract No. 0756525 by Genco, on behalf of the owner(s) and Siemens
Westinghouse Power Corp., dated as of December 2, 1999.
82. Contract No. 0757253 by Genco, on behalf of Northeast Management and
Contract No. 0757253 by Genco, on behalf of Northeast Management and
Beckwith Machinery Company, dated as of December 23, 1999.
REAL ESTATE AGREEMENTS
83. Merrill Creek Sublease Agreement between Met-Ed and Sithe Pennsylvania
Holdings LLC, dated November 24, 1999.
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84. Merrill Creek Administration Agreement between Met-Ed and Sithe
Pennsylvania Holdings LLC, dated November 24, 1999.
85. Merrill Creek Sublease Agreement between JCP&L and Sithe New Jersey
Holdings LLC, dated November 24, 1999.
86. Merrill Creek Administration Agreement between JCP&L and Sithe New Jersey
Holdings LLC, dated November 24, 1999.
87. Seward License Agreement between Sithe Pennsylvania Holdings LLC and
Penelec, dated November 24, 1999.
88. All agreements listed on Schedule 3.8A attached.
EXCEPTIONS: CONTRACTS THAT ARE IN DEFAULT
89. Agreement No. 0568836 between GPU Service Corporation as authorized agent
for and on behalf of Penelec and Power Operating Company, Inc., as assigned
to Sithe Power Marketing L.P. (Power Operating Company Inc., as Supplier,
is in default).
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SCHEDULE 3.8a
REAL ESTATE RELATED DOCUMENTS
- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
Blossburg agreement Ames, Stuart 25' wide access right-of-way
6/19/70
- -------------------------------------------------------------------------------------------------------
Brookville lease agreement Pennsylvania Electric Building lease
11/24/99 Company, d/b/a GPU
Energy
- -------------------------------------------------------------------------------------------------------
Coho vacation Springfield Twp. Vacate unopened roads on
ordinance 12/8/69 Ordinance #691 Penelec property
- -------------------------------------------------------------------------------------------------------
Coho lease 10/8/86 Girard Twp. Hiking trails
- -------------------------------------------------------------------------------------------------------
Coho lease 3/4/81 Girard Twp. Recreational purposes
- -------------------------------------------------------------------------------------------------------
Coho lease 5/19/93 Kmecik, Daniel Farming
- -------------------------------------------------------------------------------------------------------
Coho lease 5/19/93 Kmecik, Stephen G., Farming
Alice H. and
Thomas J.
- -------------------------------------------------------------------------------------------------------
Conemaugh license 12/15/88 Atlantic City Electric, Penelec to provide 23kV
et. al. electric service to station truck
unloading facility
- -------------------------------------------------------------------------------------------------------
Conemaugh license 12/12/86 Atlantic City Electric, Penelec to provide 23kV
et. al. electric service to station ash
treatment facilities
- -------------------------------------------------------------------------------------------------------
Conemaugh Highway State of Pennsylvania Seward Ash Haul Road access
Occupancy to LR 23008 on Conemaugh
Permit 8/13/82 PennDOT property
- -------------------------------------------------------------------------------------------------------
Conemaugh declaration of State of Pennsylvania Improvements to LR 32009
taking 8/8/78
PennDOT
- -------------------------------------------------------------------------------------------------------
Erie West agreement Bessemer & Lake Connect Erie West Sub
11/10/72 Erie RR sidetrack to B&LE mainline
(removed 1973)
- -------------------------------------------------------------------------------------------------------
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- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
Erie West agreement Bessemer & Lake Reinstall turnout
11/25/88 Erie RR removed above
- -------------------------------------------------------------------------------------------------------
Erie West agreement Bessemer & Lake Removal of turnout
7/18/91 Erie RR mentioned above
- -------------------------------------------------------------------------------------------------------
Erie West agreement Bessemer & Lake Construction of
9/11/68 Erie RR turnout and track
extension
- -------------------------------------------------------------------------------------------------------
Erie West agreement Pennsylvania Electric Primary access
11/19/99 Company
- -------------------------------------------------------------------------------------------------------
Erie West agreement Pennsylvania Electric Sidetrack agreement
11/19/99 Company
- -------------------------------------------------------------------------------------------------------
GENCO Hdq. agreement Pennsylvania RR Standard sidetrack
9/21/62 connected to mainline
- -------------------------------------------------------------------------------------------------------
GENCO Hdq. lease 7/1/97 Tri-County Ambulatory 5,000 sq.ft. building
Care Center and 24 parking spots
- -------------------------------------------------------------------------------------------------------
GENCO Hdq. lease 4/1/99 Johnstown Area Entranceway, loading dock
Heritage Association and parking
- -------------------------------------------------------------------------------------------------------
GENCO Hdq. lease agreement Pennsylvania Electric Office space
11/24/99 Company, d/b/a GPU
Energy
- -------------------------------------------------------------------------------------------------------
Gilbert Tank easement from Interstate Energy Co. Oil supply pipeline to
Farm condemnation transfers 48 Gilbert Station
8/12/77 easements
- -------------------------------------------------------------------------------------------------------
Gilbert Tank easement from Interstate Energy Co. Oil supply pipeline to
Farm condemnation transfers 8 easements Station
8/12/77
- -------------------------------------------------------------------------------------------------------
Gilbert Tank undivided 1/2 Interstate Energy Co. Oil supply pipeline to
Farm interest in transfers 1/2 interest Gilbert Station
easement as as tenant in common in
tenant in common 17 easements
- -------------------------------------------------------------------------------------------------------
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- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
Gilbert Tank undivided 1/2 Interstate Energy Co. 6" water effluent pipeline
Farm interest in transfers 1/2 interest as
easements for tenant in common in
pipeline 8/12/77 4 easements
- -------------------------------------------------------------------------------------------------------
Hamilton license 8/30/82 Adams Electric Corp. Primary metering area
- -------------------------------------------------------------------------------------------------------
Hamilton lease 2/25/76 Pearson, Randall Dwelling and garden area
et ux.
- -------------------------------------------------------------------------------------------------------
Hunterstown license 4/22/82 Columbia Gas of PA, Area for natural gas
Inc. measurement and regulation
station, access road, use of
existing 20' road
- -------------------------------------------------------------------------------------------------------
Hunterstown agreement Columbia Gas 24" subterranean gas pipeline
1/24/83 Transmission Corp.
- -------------------------------------------------------------------------------------------------------
Hunterstown license 2/24/87 Columbia Gas of PA, Inc. 8" pipeline for transport of
gas, oil and petroleum
products
- -------------------------------------------------------------------------------------------------------
Hunterstown license 10/12/90 Columbia Gas of PA, Inc. Skid-mounted bldg., and use
and Columbia Gas Transmission of existing 20" gas line
Corp. right-of-way for installation
of telephone cable to compressor
station
- -------------------------------------------------------------------------------------------------------
Hunterstown license 3/30/71 United Telephone Underground cable
Co. of Pennsylvania
- -------------------------------------------------------------------------------------------------------
Hunterstown lease 6/1/83 Flickinger, Richard Farming
- -------------------------------------------------------------------------------------------------------
Jackson lease 10/21/91 Shearer, John et ux. Farming
- -------------------------------------------------------------------------------------------------------
Jackson easement 5/29/92 Jackson Township Easement and right-of-way for
public road use
- -------------------------------------------------------------------------------------------------------
Keystone Limited Power State of Pennsylvania Permit to construct dam on
Permit (amended) Plum Creek creating Keystone
3/12/71 DER Reservoir
- -------------------------------------------------------------------------------------------------------
Keystone easement 1/16/70 State of Pennsylvania Improvements to LR 3055
PennDOT
- -------------------------------------------------------------------------------------------------------
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- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
Keystone consent 1/9/84 Keystone Owners Permit to install generator
Group disconnect facilities at
Keystone
- -------------------------------------------------------------------------------------------------------
Mountain lease 3/13/75 Sauder, D. Clinton Farming
- -------------------------------------------------------------------------------------------------------
North Hershey lease 7/6/89 Haldeman, Gern L. Cut grass for hay purposes
- -------------------------------------------------------------------------------------------------------
Orrtanna License 6/10/71 United Telephone Underground cable
Co. of Pennsylvania
- -------------------------------------------------------------------------------------------------------
Orrtanna agreement Allegheny Electric Establish 115kV delivery point
8/23/79 Coop./Adams (substation bus)
Electric Coop.
- -------------------------------------------------------------------------------------------------------
Phillipsburg license 6/24/99 PFG Gas, Inc. 6" gas main tapped off existing
4" gas main to serve
Phillipsburg H.S.
- -------------------------------------------------------------------------------------------------------
Phillipsburg lease 12/1/92 Phillipsburg Borough Land
Council
- -------------------------------------------------------------------------------------------------------
Piney permit 10/12/22 State of Pennsylvania Construct a dam across Clarion
River
Water Supply
Commission
- -------------------------------------------------------------------------------------------------------
Piney permit 8/21/23 State of Pennsylvania Change in highway bridge
on Route 65 across Clarion River
Water & Power
Resources Board
- -------------------------------------------------------------------------------------------------------
Piney permit 11/21/23 State of Pennsylvania Change in highway bridge on
Township highway
Water & Power
Resources Board
- -------------------------------------------------------------------------------------------------------
Piney permit 8/17/27 State of Pennsylvania Construct a bridge across Toby
Creek
Water & Power
Resources Board
- -------------------------------------------------------------------------------------------------------
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- -----------------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -----------------------------------------------------------------------------------------------------------------
Piney permit 9/26/28 State of Pennsylvania Permit an addition to dam on
Clarion River raising the tainter
DER and trash gate 3' from original
height
- -----------------------------------------------------------------------------------------------------------------
Piney agreement Clarion Water Co. Clean water intake structure
9/18/72
- -----------------------------------------------------------------------------------------------------------------
Piney license agreement Simpkins, Frank R. Cottage structure
10/2/89
- -----------------------------------------------------------------------------------------------------------------
Piney easement PA American Water Intake pipe and intake structure
Co. on Clarion River
- -----------------------------------------------------------------------------------------------------------------
Piney license agreement Gift, Robert N. et.ux. Maintain structure
7/6/78 (Formerly Floyd
Himes, et ux.)
- -----------------------------------------------------------------------------------------------------------------
Piney license agreement Williams, Bill L. Maintain structure
7/6/78 et ux.
- -----------------------------------------------------------------------------------------------------------------
Piney license agreement James Garbarino and Maintain structure
Connie Sue Lines
- -----------------------------------------------------------------------------------------------------------------
Piney agreement 9/9/62 State of Pennsylvania Boat launch, ramps and
parking, recreation, etc.
Fish Commission
- -----------------------------------------------------------------------------------------------------------------
Piney letter agreement Lawyers Title Agreement for inclusion of the
11/19/99 Insurance Piney condemnation parcels in
Corporation owner's title insurance policy
- -----------------------------------------------------------------------------------------------------------------
Piney letter agreement Lawyer's Title Agreement regarding
11/19/99 Insurance endorsements for adding
Corporation condemned parcels at Piney
- -----------------------------------------------------------------------------------------------------------------
Portland agreement 3/2/56, Delaware, Land and right-of-way for
Station amended 9/1/85 Lackawanna and sidetracks, amended to include
Western RR Co. an additional track
(now ConRail)
- -----------------------------------------------------------------------------------------------------------------
Portland license 6/11/86 Consolidated RR Existing private 30' vehicle
Station Corp. crossing at grade
- -----------------------------------------------------------------------------------------------------------------
S-40
177
- ---------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- ---------------------------------------------------------------------------------------------------
Portland Station agreement Delaware, Private grade crossing
9/17/56 Lackawanna and
Western RR Co.
(now ConRail)
- ---------------------------------------------------------------------------------------------------
Portland Station agreement Erie Lackawanna Use and maintain existing
12/23/70 Railway Co. (now private grade crossing
ConRail)
- ---------------------------------------------------------------------------------------------------
Portland Station lease 11/17/97 Predmore, Bruce C. Farming
- ---------------------------------------------------------------------------------------------------
Portland Station lease 10/1/71 Reinhardt, Richard P. Farming and dwelling
- ---------------------------------------------------------------------------------------------------
Portland lease 2/2/98 Predmore, Bruce C. Farming
Adjacent
- ---------------------------------------------------------------------------------------------------
Portland lease 7/1/83 Longyhore, Charles Dwelling
Adjacent
- ---------------------------------------------------------------------------------------------------
Portland lease 7/1/97 Predmore, Bruce C. Farming
Adjacent
- ---------------------------------------------------------------------------------------------------
Portland lease 8/28/97 Ollar, Isadore Farming
Adjacent
- ---------------------------------------------------------------------------------------------------
Portland lease 9/27/76 Rutt, Jacob et. al. Dwelling
Adjacent
- ---------------------------------------------------------------------------------------------------
Portland lease 5/15/97 Predmore, Bruce C. Farming
Adjacent
- ---------------------------------------------------------------------------------------------------
Portland license 4/16/69 Bangor Gas Co. 6" subterranean gas pipeline
Adjacent
- ---------------------------------------------------------------------------------------------------
Portland license 8/10/92 Upper Mt. Bethel Softball field
Adjacent Township
- ---------------------------------------------------------------------------------------------------
Portland license 2/5/99 Upper Mt. Bethel Occasional extraction of shale
Adjacent Township by Township Road Department
- ---------------------------------------------------------------------------------------------------
Portland declaration of Upper Mt. Bethel Relocation of River Lane Road
Adjacent taking 7/30/97 Township
- ---------------------------------------------------------------------------------------------------
S-41
178
- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
Scottsville reservation of Estate of Margaret Grantors retain right of access
rights Fassett to cemetery. Penelec may
move cemetery at its expense if
it interferes with use and
development of Scottsville site
- -------------------------------------------------------------------------------------------------------
Scottsville reservation of Brown, William H. Grantors retain right of access
rights to cemetery. Penelec may
move cemetery at its expense if
it interferes with use and
development of Scottsville site
- -------------------------------------------------------------------------------------------------------
Scottsville reservation of Menger, John Fassett Grantors retain right of access
rights to cemetery. Penelec may
move cemetery at its expense if
it interferes with use and
development of Scottsville site
- -------------------------------------------------------------------------------------------------------
Scottsville lease 4/8/82 Kintner, Fred J. Farming
- -------------------------------------------------------------------------------------------------------
Scottsville agreement Pennsylvania Game Provides for public hunting and
11/7/75 Commission Auxiliary State Game Refuge
Projects
- -------------------------------------------------------------------------------------------------------
Seward agreement 6/8/34 Pennsylvania RR Covers mine headings (cannot
(now split between locate agreement since 2/25/85)
ConRail and Penn
Central)
- -------------------------------------------------------------------------------------------------------
Seward agreement Consolidated RR For a sidetrack
8/14/90 Corp.
- -------------------------------------------------------------------------------------------------------
Seward lease 10/18/90 Consolidated RR Site for an industry sidetrack,
Corp. pursuant to above
- -------------------------------------------------------------------------------------------------------
Seward agreement Pennsylvania RR Standard RR sidetrack
3/26/57 Corp. connected with extension
branch
- -------------------------------------------------------------------------------------------------------
Seward easement 7/31/69 General Telephone Underground telephone
Co. facilities
- -------------------------------------------------------------------------------------------------------
S-42
179
- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
Seward agreement Laurel Pipe Line Co. Additional pipeline
7/19/57
- -------------------------------------------------------------------------------------------------------
Seward easement Sinclair Refining Co. Pipeline for transpor-
2/2/43 tation of petroleum
products
- -------------------------------------------------------------------------------------------------------
Seward agreement Conemaugh Owners Permit Penelec to use
8/31/82 existing stations and
future Phase II ash
disposal site
- -------------------------------------------------------------------------------------------------------
Seward right-of-way Texas Eastern Construct, lay, maintain
10/10/60 Transmission operate, alter, repair
Corporation remove, change size of
and replace pipelines
for transport of oil, gas
petroleum products
- -------------------------------------------------------------------------------------------------------
Seward right-of-way Texas Eastern Construct, lay, maintain
2/24/54 Penn-Jersey operate, alter, repair
Transmission remove, change size of
Corporation and replace pipelines
for transport of oil, gas
petroleum products
- -------------------------------------------------------------------------------------------------------
Shawville easement United Electric Provide service to
7/1/81 Cooperative Thomas Smith Trucking Co.
- -------------------------------------------------------------------------------------------------------
Shawville agreement Consolidated RR Provides for switched
12/21/51 Corp. private sidetrack service
from mainline to plant
- -------------------------------------------------------------------------------------------------------
Shawville Limited Power State of Pennsylvania Permit to construct dam
Permit and appurtenant
9/7/50 structures on Susquehanna
River to supply water for
DER a steam power plant
- -------------------------------------------------------------------------------------------------------
Shawville lease Penn Central 3 parcels of land
12/17/73 Transportation Co.
(now R.J. Corman)
- -------------------------------------------------------------------------------------------------------
Shawville agreement New York Central Private grade crossing
9/11/59 RR Co. (now over main track
ConRail)
- -------------------------------------------------------------------------------------------------------
S-43
180
- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
Shawville lease 8/5/75 Pennsylvania Fish Building and maintain launching ramp
Commission for public access into Trout Run and
west branch of Susquehanna River
- -------------------------------------------------------------------------------------------------------
Titus lease 12/1/77 Consolidated RR 3 sidetracks
Corp.
- -------------------------------------------------------------------------------------------------------
Titus agreement Consolidated RR 3 gates across Conrail's abandoned
4/11/85 Corp. Reading Secondary to control dumping
- -------------------------------------------------------------------------------------------------------
Titus easement 5/20/63 Pennsylvania RR Use of existing crossing at grade as
private crossing
- -------------------------------------------------------------------------------------------------------
Titus agreement Reading Company Sidetrack facilities at Klapperthal
11/9/50 (now ConRail) Junction
- -------------------------------------------------------------------------------------------------------
Titus right-of-way UGI Corporation 12" subterranean gas main
8/26/68
- -------------------------------------------------------------------------------------------------------
Titus lease 6/1/95 Brok, Glen E. Grazing purposes
- -------------------------------------------------------------------------------------------------------
Titus license 8/21/80 UGI Corporation 12" subterranean gas main
- -------------------------------------------------------------------------------------------------------
Titus lease 12/4/84 Penn Advertising Lighted rotary outdoor
(now Lamar billboard sign
Advertising
- -------------------------------------------------------------------------------------------------------
Titus agreement Reading Bone Reconstruct, maintain and use existing
10/12/78 Fertilizer Co., road and construct, maintain and use
(now Ridgewood of proposed road designated as "Ash
Properties, Inc.) Disposal Area Access Road"
- -------------------------------------------------------------------------------------------------------
Titus agreement Process Recovery Easement for use of Ash Disposal Rd.,
8/23/89 Corp. (PRC) fence, gate, costs and expenses of
traffic signal to be shared by both
parties
- -------------------------------------------------------------------------------------------------------
Titus right-of-way Schuykill River 12' wide hiking and biking
7/7/95 Greenway Assn. recreational trail
- -------------------------------------------------------------------------------------------------------
S-44
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- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
Titus agreement Reading Co. and Passage in common over and
7/11/62 Eastern Real Estate along 24' wide strip of land,
Co. (now ConRail) each company owning 12'
- -------------------------------------------------------------------------------------------------------
Titus lease agreement Metropolitan Edison Training area
11/24/99 Company, d/b/a/ GPU
Energy
- -------------------------------------------------------------------------------------------------------
Tolna lease 7/29/97 Ellis, David Dwelling
- -------------------------------------------------------------------------------------------------------
Tolna deed 1/21/72 Orwig, Alvin E. and Grant and convey certain parcel
Betty A. of land together with 1.5 story
house, frame barn and other
improvements
- -------------------------------------------------------------------------------------------------------
Tolna lease 10/27/92 Haugh, William R. Farming
et. ux.
- -------------------------------------------------------------------------------------------------------
Tolna license 4/6/29 Shepperd, Lloyd W. Farming
- -------------------------------------------------------------------------------------------------------
Warren permit 12/2/63 US Army Corp of Authorizes to maintain
Engineers circulating water intake at
Warren
- -------------------------------------------------------------------------------------------------------
Warren agreement Morley, John R. Drill and sample monitoring
4/30/86 et ux. well
- -------------------------------------------------------------------------------------------------------
Warren Highway State of Pennsylvania Minimum use driveway to remove soil from
Occupancy Warren property
Permit 8/30/84 PennDOT
- -------------------------------------------------------------------------------------------------------
Warren Highway State of Pennsylvania Build roadway to unload fuel to
Occupancy Warren property
Permit 7/9/71 PennDOT
- -------------------------------------------------------------------------------------------------------
Warren agreement New York Central Private grade crossing 12' wide
2/17/58 RR co. (now
Allegheny & Eastern)
- -------------------------------------------------------------------------------------------------------
Warren agreement Pennsylvania RR Co. Private grade crossing 12' wide
12/4/53 (now Allegheny &
Eastern)
- -------------------------------------------------------------------------------------------------------
S-45
182
- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
Warren agreement Pennsylvania RR Co. Private grade crossing that
10/24/46 (now Allegheny & covers the main entrance an
Eastern) access to Warren property
- -------------------------------------------------------------------------------------------------------
Warren aerial grant Bell Telephone Co. Anchors and brace poles
4/14/69 of Pennsylvania
- -------------------------------------------------------------------------------------------------------
Warren interface grant Bell Telephone Co. Interface and/or terminal
of Pennsylvania equipment and pads, cables and
wires
- -------------------------------------------------------------------------------------------------------
Warren agreement PA American Water Lease of three-phase, 480V
1/24/66 Co., (Warren Water circuit
Co.)
- ------------------------------------------------------------------------------------------------------
Warren lease Robert H. Werner Land and 10' easement to
d/b/a Warren Hotel construct and maintain sewage
drainage bed and pipeline
- -----------------------------------------------------------------------------------------------------
Warren declaration of State of Pennsylvania Highway improvements to
taking 5/22/69 PennDOT Route 6 adjacent to plant
- -----------------------------------------------------------------------------------------------------
Warren easement Conewago Twp. Construct, maintain, operate
Municipal Authority and remove a 16" water line
- -----------------------------------------------------------------------------------------------------
Wayne lease 11/21/72 McCullough, William Farming
C., et ux.
- -----------------------------------------------------------------------------------------------------
Williamsburg agreement Pennsylvania RR Co. Private siding
9/26/13
- -----------------------------------------------------------------------------------------------------
Williamsburg lease 5/3/83 Stanley F. England Farming
Industrial
Development
- -----------------------------------------------------------------------------------------------------
Deep Creek easement 1/31/91 Site, Douglas et ux. Right-of-way
- -----------------------------------------------------------------------------------------------------
Deep Creek easement 5/31/39 Potomac Edison Co. Lines and wires (Sang Run #6)
- -----------------------------------------------------------------------------------------------------
Deep Creek easement 9/13/90 Legacy Homes Corp. 2 storm water discharges
- -----------------------------------------------------------------------------------------------------
Deep Creek grant Maybury, Robert H. Privilege for 30' roadway
et. al.
- -----------------------------------------------------------------------------------------------------
S-46
183
- --------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- --------------------------------------------------------------------------------
Deep Creek lease 9/22/97 Helbig, Jacob Premises at 141 Mayhew
Inn Road
- --------------------------------------------------------------------------------
Deep Creek lease 6/13/91 Elston, Thomas N. 3 lots
et.al.
- --------------------------------------------------------------------------------
East Flemington easement Raritan Twp. Sanitary sewer line
8/30/71 Municipal Utilities
Authority
- --------------------------------------------------------------------------------
Gilbert Station license Delaware Valley Athletic field
Midget League
- --------------------------------------------------------------------------------
Gilbert Station lease 4/15/76 Wolven, Eugene & House rental
Margot
- --------------------------------------------------------------------------------
Gilbert Station license Lippencott, Farming
Robert J.
- --------------------------------------------------------------------------------
Gilbert Station agreement Belvidere Delaware Railroad crossing
9/13/29 Railroad Company agreement
and the
Pennsylvania
Railroad Company
- --------------------------------------------------------------------------------
Glen Gardner license Bell Atlantic Construct tower and
agreement Systems, Inc. equipment shelter
1/3/91
- --------------------------------------------------------------------------------
Glen Gardner sub-license Mercer County Tower space sublease
4/23/92 Community College
- --------------------------------------------------------------------------------
Glen Gardner license R.L. Dischler Inc. Auto repair facility
- --------------------------------------------------------------------------------
H.C. Thuerk license Gulick, Richard Farming
- --------------------------------------------------------------------------------
Pohatcong license 3/15/95 Warren County Construct tower, shelter,
driveway, underground
propane tanks and access
- --------------------------------------------------------------------------------
Sayreville license 6/8/90 Tidelands Resource Sayreville sewer tie-in
Council as part of
Dept. of
Environmental
Protection
- --------------------------------------------------------------------------------
S-47
184
- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
Sayreville agreement Sayre & Fisher Brick Underground water distribution
12/18/30 Co. to Eastern N.J. pipeline
Power Co.
- -------------------------------------------------------------------------------------------------------
Sayreville permit 12/29/81 US Army Corp of Construct 312 ft. steel sheet
Engineers bulkhead to replace
deteriorating bulkhead
- -------------------------------------------------------------------------------------------------------
Sayreville license 10/8/86 U.S. Dept. of the Installation of monitoring of 2
Interior, Geological water observation wells
Survey
- -------------------------------------------------------------------------------------------------------
Sayreville easement 5/26/67 Enjay Chemical Co. Relocation of portion of
pipeline on Sayreville property
- -------------------------------------------------------------------------------------------------------
Sayreville license 3/23/82 N.J. Natural Gas Co. Construct and maintain gas
yard, access road and gas
pipeline on Sayreville property
- -------------------------------------------------------------------------------------------------------
Sayreville license 5/1/95 State of New Jersey Use and maintain 2 anchoring
through the Tidelands areas in the Raritan River
Resource Council
- -------------------------------------------------------------------------------------------------------
Sayreville deed 5/20/29 State of New Jersey Exclude tidewater from some of
the lands that lie under
tidewater
- -------------------------------------------------------------------------------------------------------
Sayreville indenture Sayre & Fisher Brick Lay, construct, maintain and
12/18/28 Co. to Eastern New operate pipeline for distribution
Jersey Power Co. of water
- -------------------------------------------------------------------------------------------------------
Sayreville lease agreement Jersey Central Power Containment area for the
11/25/99 & Light Company, storage of a denergized
d/b/a GPU Energy transformer
- -------------------------------------------------------------------------------------------------------
Werner license 8/1/56 N.J. Bell Telephone Install, maintain, use, repair and
Co. replace 9 conduits, cables and
manholes
- -------------------------------------------------------------------------------------------------------
Werner easement Middlesex Co. Construct, operate and maintain
10/17/86 Utilities Authority sanitary sewer line
- -------------------------------------------------------------------------------------------------------
S-48
185
- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
Werner bill of sale American Agricultural Purchase 1-store bldg. on
3/22/55 Chemical Co. Werner property
- -------------------------------------------------------------------------------------------------------
Werner agreement N.J. RR and Canal Right and privilege to
12/13/28 Co., Penn. RR, Central construct bridge across RR
RR of N.J. and Long right-of-way.
Branch RR
- -------------------------------------------------------------------------------------------------------
Werner lease 7/29/86, Consolidated RR Alternate access road into
amended 6/14/88 Corp. Werner property
- -------------------------------------------------------------------------------------------------------
Werner license 9/28/83 State of New Jersey Use and maintain 360 linear
ft. of reconstructed
buckhead at Werner Station
- -------------------------------------------------------------------------------------------------------
Werner lease 6/28/77 Consolidated RR Corp. Wire fence gate to connect w/
RR's fence between property
of RR and JCP&L
- -------------------------------------------------------------------------------------------------------
Werner agreement 7/1/53 Pennsylvania RR Co. Permission to erect billboard
- -------------------------------------------------------------------------------------------------------
Werner agreement 3/18/29 State of New Jersey Riparian grant
- -------------------------------------------------------------------------------------------------------
All properties letter agreement Lawyers Title Agreement for modification of
11/11/99 Insurance Corporation Werner owner's title insurance
policy to affirmatively insure
access post-closing when
certain conditions are met
- -------------------------------------------------------------------------------------------------------
All properties letter agreement Lawyers Tite Insurance Agreement regarding title
11/17/99 Corporation, Stewart insurance coverages and post-
Title Insurance Company closing issuance of, among
and Fidelity National other things, single tax lot
Title Insurance Company endorsements
of New
- -------------------------------------------------------------------------------------------------------
All properties letter agreement Lawyers Title Insurance Agreement regarding post-
11/4/99 Company closing issuance of lender's
title insurance policies
- -------------------------------------------------------------------------------------------------------
S-49
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- -------------------------------------------------------------------------------------------------------
TYPE OF
PROPERTY AGREEMENT PARTY PURPOSE
- -------------------------------------------------------------------------------------------------------
All properties letter agreement TitleServNY, agent Agreement regarding post-
11/15/99 for Stewart Title closing issuance of lender's title
Insurance Company insurance policies
and Fidelity National
Title Insurance
Company of New
York
- -------------------------------------------------------------------------------------------------------
All Co-Insurance Lawyers Title Co-Insurance Schedule and
Pennsylvania Schedule Insurance Endorsement for Pennsylvania
properties delivered Corporation, Stewart owner's title policy
11/24/99 Title Insurance
Company and
Fidelity National
Title Insurance
Company of New
York
- -------------------------------------------------------------------------------------------------------
All New Co-Insurance Lawyers Title Co-Insurance Schedule and
Jersey Schedule Insurance Endorsement for New Jersey
properties delivered Corporation, Stewart owner's title policy
11/24/99 Title Insurance
Company and
Fidelity National
Title Insurance
Company of New
York
- -------------------------------------------------------------------------------------------------------
Deep Creek Co-Insurance Lawyers Title Co-Insurance Schedule and
Schedule Insurance Endorsement for Deep Creek
delivered Corporation and owner's title policy
11/24/99 Stewart Title
Insurance Company
- -------------------------------------------------------------------------------------------------------
All letter agreement First American Title Agreement for re-insurance for
properties 11/17/99 Insurance Company owners' title policies
- -------------------------------------------------------------------------------------------------------
All letter agreement Transnation Title Agreement for re-insurance for
properties 11/17/99 Insurance Company owners' title policies
- -------------------------------------------------------------------------------------------------------
All letter agreement Commonwealth Land Agreement for re-insurance for
properties 11/17/99 Title Insurance owners' title policies
Company
- -------------------------------------------------------------------------------------------------------
S-50
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SCHEDULE 3.9
CAPITAL EXPENDITURES
CALENDAR YEAR 2000
- --------------------------------------------------------------------------------
1. PLANT PROJECTS UNIT(S) DOLLARS IN DESCRIPTION
THOUSANDS
- --------------------------------------------------------------------------------
A. Conemaugh Station* 1 30 Upgrade truck and
2 30 rail unloading facility
--
Total 60
* Sithe's share of total,
approved by the Owners
- --------------------------------------------------------------------------------
B. Keystone Station* 1 692 Coal yard upgrade and
2 692 landfill expansion
-----
Total 1,384
* Sithe's share of total,
approved by the Owners
- --------------------------------------------------------------------------------
C. Shawville Station 1,2,3,4 362 Pavilion Installation
---
Total 362
- --------------------------------------------------------------------------------
D. Portland Station 1 83 Coal handling system
2 125 and ash handling system
1,2 177 upgrades Pavilion
--- Installation
Total 385
- --------------------------------------------------------------------------------
E. Titus Station 1 397 Ash/coal system
improvements
2 397
3 397
-----
Total 1,191
- --------------------------------------------------------------------------------
S-51
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- ----------------------------------------------------------------------------------------------------------
2. SYSTEM PROJECTS DOLLARS IN THOUSANDS DESCRIPTION
- ----------------------------------------------------------------------------------------------------------
A. ABB Gimsplus** 1,000 Bidding and Settlement
Systems
- ----------------------------------------------------------------------------------------------------------
B. ABB GMS** 4,000 Energy Management System
- ----------------------------------------------------------------------------------------------------------
C. SAP MM/PM 4,500 Purchasing, Materials and
Implementation** Maintenance Management
Systems
- ----------------------------------------------------------------------------------------------------------
** Buyer shall notify Sellers by 5:00 p.m. New York City time, February 25,
2000, if Buyer agrees to fund these capital expenditures. If Buyer fails to
notify Sellers by such time or does not approve such capital expenditures,
these items shall automatically be deleted from this Schedule 3.9.
S-52
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SCHEDULE 3.11
LABOR MATTERS
1. Agreement effective May 1, 1997 between Met-Ed and Local Union 777 of the
International Brotherhood of Electrical Workers.
2. Agreement and Supplements effective November 1, 1996 between JCP&L and
Locals 327, 1289, 1298, 1303, 1309 and 1314 (Clerical & Operating) of the
International Brotherhood of Electrical Workers.
3. Agreement effective May 15, 1998 between the Penelec and Local Union 459 of
the International Brotherhood of Electrical Workers (Pennsylvania Basic
Labor Agreement).
4. Mobile Maintenance Agreement effective May 15, 1998 between the Penelec and
Local Union 459 of the International Brotherhood of Electrical Workers
(Pennsylvania Mobile Maintenance Agreement).
5. Divestiture Agreement for Local 459 between GPU, GPU Generation, Inc. and
Local 459, dated as of April 24, 1998.
6. Assumption Agreement for Local 459, dated November 22, 1999.
7. Supplement to Assumption Agreement for Local 459, dated February 11, 2000.
8. Memorandum of Understanding between GPU Generation, Inc. and Local 459 and
between GPU and Local 459, dated as of November 11, 1999.
9. Supplement to Divestiture Agreement for Local 459 regarding pension and
disability benefits issues, between GPU Energy and IBEW Local 459, dated
November 11, 1999.
10. Assumption Agreement for System Council U-3, dated as of November 22, 1999.
11. Divestiture Agreement for System Council U-3, between GPU, GPU Generation,
Inc., GPU/JCP&L, System Council U-3, Local 327 and Local 1289, dated as of
July 9, 1998.
12. Memorandum of Understanding for System Council U-3 between GPU/JCP&L, GPU
Generation, Inc., System Council U-3, Local 1314, Local 1289 and Local 327,
dated as of November 9, 1999.
13. Supplement to Divestiture Agreement for System Council U-3 between GPU,
System Council U-3, Local 1314, Local 327 and Local 1289, dated as of
November 9, 1999.
14. Assumption Agreement for Local l777, dated November 22, 1999.
15. Supplement to Assumption Agreement for Local 777, dated February 11, 2000.
16. Divestiture Agreement for Local 777, between GPU Energy, GPU Generation and
IBEW Local 777, dated April 24, 1998.
S-53
190
17. Memorandum of Understanding between GPU Generation and Local 777, dated as
of May 3, 1999.
18. Supplement to Divestiture Agreement for Local 777 regarding pension and
disability benefits issues, between GPU Energy and IBEW Local 777, dated
November 19, 1999.
19. Memorandum of Understanding regarding York Haven between GPU Generation,
Inc., GPU Energy and Local 777, dated as of November 24, 1999.
S-54
191
SCHEDULE 3.12
ERISA
1. Benefit Plans.
1. Sithe Energies Group Retirement 401(k) Plan.
2. Sithe Medical Plan.
3. Sithe Dental Plan.
4. Sithe Vision Services Plan.
5. Sithe Energies Group Health and Dependent Care Reimbursement Program.
6. Sick Leave Pay Policy.
7. Disability Leave Pay Policy.
8. Sithe Short Term Disability Plan.
9. Group Long Term Disability Plan for Sithe.
10. Sithe Group Term Life Insurance Plan.
11. Sithe Accidental Death and Dismemberment Plan.
12. Sithe Group Travel Accident Plan.
13. Sithe Supplemental Employee and Dependent Life Insurance Plan.
14. Sithe Vacation Pay Policy.
15. Sithe Educational Assistance Plan.
16. Sithe Employee Assistant Program.
17. Sithe Bonus and Profit Sharing Program.
18. Sithe Mid-Atlantic Medical Plan.
19. Sithe Mid-Atlantic Dental Plan.
20. Sithe Mid-Atlantic Vision Service Plan.
21. Sithe Mid-Atlantic Short Term Disability Plan.
22. Sithe Mid-Atlantic Long Term Disability Plan.
S-55
192
23. Sithe Mid-Atlantic Sick Leave Policy.
24. Sithe Mid-Atlantic Life Insurance and AD&D Plan.
25. Sithe Mid-Atlantic Supplemental Life Insurance Plan.
26. Sithe Mid-Atlantic Personal Accident Insurance.
27. Sithe Mid-Atlantic Educational Assistance Program.
28. Sithe Mid-Atlantic Group Specified Disease Plan.
29. Sithe Mid-Atlantic Severance Plan.
30. Sithe New England Power Services, Inc. Union Pension
Plan, as amended.
31. Sithe Pension Plan [not yet adopted - see 3.12.12].
32. Severance and Retention Agreements for Alan Metzler (Tier #3) and
Robert Sipes (Tier #4).
2. Exceptions To Qualification.
3.12.3 An application has been filed with the Internal Revenue Service for
a determination on the qualification of the Sithe New England Power Services,
Inc. Union Pension Plan, but no letter has yet been issued.
From the closing date of the transactions contemplated by the Sithe/GPU
Agreements ("GPU Closing") until the payment of wages of employees of the
Companies and their Subsidiaries for the payroll dated February 8, 2000,
certain deductions for contributions to the Sithe Energies Group Retirement
401(k) Plan ("401(k) Plan") were untimely made, and in the case of certain
employee after-tax contributions, were also untimely paid to the trust under the
401(k) Plan. These operational failures, attributable to the changeover of
payroll systems resulting from such transactions, have been corrected. It is
anticipated that Sithe will contribute an amount to the trust under the 401(k)
Plan on behalf of affected participants equal to lost investment earnings for
contributions that were deducted and contributed in a manner that was
inconsistent with the plan's customary timing for other plan participants for
the relevant time period.
3.12.7 A prohibited transaction occurred as a result of failure to timely
contribute employee after-tax contributions to the trust established under the
401(k) Plan for the period from the GPU Closing through February 8, 2000. As
soon as the excise tax can be calculated, Federal Form 5330 will be prepared
and filed with the Internal Revenue Service and the excise tax will be paid.
See discussion at 3.12.3.
3.12.8 The Severance and Retention Agreements for Alan Metzler and Robert
Sipes provide for additional benefits as a result of the transactions
contemplated by this Agreement.
S-56
193
3.12.10. Contributions of certain employees' after-tax contributions to
the trust established under the 401(k) Plan were untimely made. See discussion
at 3.12.3.
3.12.12. The Sithe Pension Plan ("Pension Plan"), a cash balance pension
plan, has been approved by the officers of Sithe effective January 1, 2000 and
has been formally announced to the non-represented employees of Sithe and its
subsidiaries, including the employees of the Companies and their Subsidiaries.
The Pension Plan is in the process of being drafted and has not yet been adopted
by the Board of Directors of Sithe. None of the groups of employees covered
under the Collective Bargaining Agreements are covered under the Pension Plan at
present.
S-57
194
SCHEDULE 3.13
EVENTS SUBSEQUENT TO NOVEMBER 24, 1999
None
S-58
195
SCHEDULE 3.14
TITLE TO PROPERTIES
The references to the following matters are for the information of Buyer. The
inclusion of each such matter does not constitute a representation with respect
to its materiality, is not intended to establish a standard of materiality or
significance and shall not be deemed to have such effect.
1. Liens
(see attached Lien Search Summary)
2. Title to Real Property
The attached documents should be read on the basis that the handwritten
changes, additions and deletions shown thereon have been made.
3. Vehicle Titles
Titles for automobiles purchased as part of the GPU Assets have been
transferred to the Sithe entity responsible for such vehicle (Sithe
Pennsylvania Holdings LLC, Sithe New Jersey Holdings LLC, or Sithe Maryland
Holdings LLC). Title transfers for other miscellaneous large equipment or
vehicles have been submitted to the responsible state agency and are currently
being processed.
S-59
196
LIEN SEARCH SUMMARY
- ---------------------------------------------------------------------------------------------------------------------
PARTY JURISDICTION SYNOPSIS
- ---------------------------------------------------------------------------------------------------------------------
GPU Generation, PA - Indiana County UCC search -- original financing statements: 1
Inc. (Conemaugh, Seward, -- In favor of U.S. Bank Leasing (Keystone owners
Shelocta) appear to be debtors, with Genco acting as agent).
Creates security interest in one (1) remanufactured
1500HP Twin Engine Switchgear Locomotive. Cost:
$667,550.00
- ---------------------------------------------------------------------------------------------------------------------
GPU Service New Jersey Sec. of State 8 original financing statements:
Corporation -- 1 in favor of Summit Bank (relates to equipment leased
or sold on conditional sale to GPU Service Corp. as
lessee or agent for GPU Nuclear Corporation, Penelec,
JCP&L and Met-Ed under Master Equipment Lease dated
12/1/91)(1)
-- 7 filings relate to equipment located either in Reading,
PA or Parsippany, NJ
- ---------------------------------------------------------------------------------------------------------------------
Jersey Central NJ - Morris County UCC search -- 2 original financing statements
Power & Light -- 1 in favor of First Pennsylvania Bank. Creates security
Company interest on leased equipment
-- 1 in favor of PHH Financial Services. Creates security
interest in 1 forklift
- ---------------------------------------------------------------------------------------------------------------------
Jersey Central NJ - Warren County UCC search -- 1 original financing statement
Power & Light (Warren, Pohatcong, Pequest) -- In favor of UMJ fka Summit Bank
- ---------------------------------------------------------------------------------------------------------------------
Jersey Central NJ Sec. of State UCC search -- 5 original financing statements:
Power & Light -- One in favor of First Fidelity Bank. Creates security
Company interest in property in Merrill Creek and a pumping
facility at the same site. Described in Trust Agreement
dated 6/1/88 between Southern Indiana Properties, Inc.
and the lessor. Appears to contain a partial release which
releases approximately 15 acres of land from the lien, and
a partial release which releases a parcel of ground located
in Warren, NJ. Amount of indebtedness not indicated.
-- One in favor of United Jersey Bank. Creates security
interest in all equipment in Master Equipment Lease.
Amount of indebtedness not indicated.
-- One in favor of La Touraine Coffee Co. Creates
security interest in a new "Fetco 62H," (4) new "Reg
Carriers," and (2) new "DC Carriers." Amount of
indebtedness is not indicated.
-- One in favor of Summit Bank. Creates security interest
in (14) fax machines of various models. Total
approximate value: $17,000.
-- One in favor of Summit Bank. Creates security interest
in all equipment as defined under Master Equipment
Lease. Amount of indebtedness not indicated.
- ---------------------------------------------------------------------------------------------------------------------
Metropolitan MD State Department of UCC search -- Original financing statements: 1: (dated
- ---------------------------------------------------------------------------------------------------------------------
(1) Seller has been informed by GPU that the obligations giving rise to all of
the filings in favor of Summit Bank f/k/a United Jersey Bank have been fully
paid and GPU is in the process of having these liens removed from record.
S-60
197
- ----------------------------------------------------------------------------------------------------------------
PARTY JURISDICTION SYNOPSIS
- ----------------------------------------------------------------------------------------------------------------
Edison Company Assessment and Taxation 11/2/87; does not appear to have expired)
- In favor of First Women's Bank of Maryland. Creates
security interest in all property of Met-Ed including
inventory; equipment; accounts, instruments,
documents, chattel paper and other rights to payment;
general intangibles. Amount of indebtedness not
indicated.
- ----------------------------------------------------------------------------------------------------------------
Metropolitan NJ Sec. of State UCC search - original financing statement: 1
Edison Company - 1 in favor of United Jersey Bank (as Lessor/Owner
Trustee) and First Fidelity Bank, National Association,
NJ (as Indenture Trustee) (notice filing for debtor's
interest in Lease dated 6/16/88)
- ----------------------------------------------------------------------------------------------------------------
Metropolitan PA - Berks County UCC search - 3 original financing statements:
Edison Company (Titus) - 1 in favor of United Jersey Bank. Creates security
interest in all equipment located in PA under a Master
Equipment Lease (dated 11/1/91). Amount of
indebtedness not indicated.
- 1 in favor of Summit Bank f/k/a United Jersey Bank.
Creates security interest in all equipment leased or
sold under Master Equipment Lease. Amount of
indebtedness not indicated.
- 1 in favor of Summit Bank f/k/a United Jersey Bank.
Creates security interest in various models of fax
machines. Total approximate value of faxes: $2000.
Exact amount of indebtedness not indicated.
Fixture/mineral/timber: 1 fixture filing
- In favor of Union Chelsea National Bank
- ---------------------------------------------------------------------------------------------------------------
Metropolitan PA - Northampton County UCC search - 3 original financing statements
Edison Company (Portland, Bangor Quarry, - 1 in favor of United Jersey Bank. Creates security
North Bangor, Portland interest in all equipment leased or sold on conditional
Adjacent, Gilbert Tank Farm) sale to Debtor under Master Equipment Lease. Amount
of indebtedness not indicated.
- 2 in favor of Summit Bank f/k/a United Jersey Bank. It
appears as though both create a security interest in all
equipment leased or sold under Master Equipment
Lease. Amount of indebtedness not indicated.
- ---------------------------------------------------------------------------------------------------------------
Metropolitan PA Sec. of Commonwealth UCC search - 7 original financing statements
Edison Company - 1 in favor of IBJ Schroder Bank & Trust Company
(assigned to United States Trust Company of New
York). Creates security interest in personal property
described in financing statement No. 3447 (not seen).
Amount of indebtedness not indicated. Various specific
equipment released or added.
- 1 in favor of First Union (f/k/a First Fidelity Bank,
National Association) (appears to have been assigned
to Corestates Bank, NA). Creates general security
interest in all Merrill Creek property. Purports to be
a true lease. Amount of indebtedness not indicated.
- 1 in favor of United Jersey Bank
- 1 in favor of Summit Bank (f/k/a United Jersey Bank
assigned from Somerset Investment Services, Ltd.).
Creates security interest in all equipment in the State
- ---------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------------
PARTY JURISDICTION SYNOPSIS
- ---------------------------------------------------------------------------------------------------------------------------
leased or sold under Master Equipment Lease.
Amount of indebtedness not indicated. (filing #21000565)
* 1 in favor of Summit Bank (f/k/a) United Jersey Bank)
(filing #28181210). Creates security interest in
all equipment leased or sold under Master Equipment Lease.
Amount of indebtedness not indicated.
* 1 in favor of Summit Bank (f/k/a United Jersey Bank)
(filing #28191396). Amount of indebtedness not
indicated; security interest not described. Refers to
previous financing statement which has lapsed.
* 1 in favor of Summit Bank f/k/a United Jersey Bank
- ---------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA - Blair County UCC search - 1 original financing statement:
Electric Company (Williamsburg) * 1 in favor of Summit Bank f/k/a United Jersey Bank (collateral
not described - refers to a previous financing statement that
lapsed, a copy of which is to be provided pursuant to
a pending search)
- ---------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA - Bradford County UCC search - 1 original financing statement:
Electric Company (East Sayre) * 1 in favor of Summit Bank FKA United Jersey Bank (as assigned
by Somerset Investment Services Ltd.). Appears to be notice
filing for general equipment leased under Master Lease to
which various GPU entities are parties, including Penelec,
Met-Ed and JCP&L.
- ---------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA - Cambria County UCC search - 1 original financing statements: 3
Electric Company (Genco Hqtrs.) * 1 in favor of United Jersey Bank (re: all equipment leased
or sold under conditional sale to debtor under Master Equipment
Lease dated 10/1/91)
* 1 in favor of Summit Bank F/K/A United Jersey Bank (as assignee
of Somerset Investment Services, LTD.)(notice filing re: all
equipment leased under Lease Agreement dated as of 12/1/91)
State tax lien - 1 tax lien
* In favor of Pennsylvania Secretary of Revenue for $45,100.83
assessed on 3/7/97
- ---------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA - Centre County UCC search - 2 original financial statements
Electric Company (Phillipsburg) * 1 in favor of Summit Bank f/k/a United Jersey Bank (notice filing re:
all equipment leased under Lease Agreement dated 12/1/91)
* 1 in favor of Summit Bank f/k/a United Jersey Bank (re: all
equipment leased or sold on conditional sale to Debtor under
Master Equipment Lease dated 12/1/91)
- ---------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA - Clarion County UCC search - 2 original financing statements
Electric Company (Piney) * One in favor of Summit National Bank f/k/a United Jersey Bank. Refers
to previous financing statement #1158-1992 which has lapsed, and
which creates security interest in various fax machines leased
under Lease Agreement (appears to be notice filings). Total
value approximately $8950.
* One in favor of Summit National Bank f/k/a/ United Jersey Bank. Refers
to previous financing statement #1228-1992 which has lapsed, and which
creates security interest in all equipment sold under Master Equipment
Lease. Amount of indebtedness not
- ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------
PARTY JURISDICTION SYNOPSIS
- --------------------------------------------------------------------------------------------------------------------------
indicated.
- --------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA - Clearfield County UCC search - 2 original financing statements
Electric Company (Shawville) - 2 in favor of Summit Bank f/k/a United Jersey Bank.
One creates security interest in all equipment which is or
may be located in PA that is leased or sold on conditional
sale to Debtor under Master Equipment Lease between Secured
Party (Lessor) and GPU (as Lessee or agent for Penelec).
- --------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA - Crawford County UCC search - 1 original financing statement
Electric Company (Wayne) - In favor of Summit Bank f/k/a United Jersey Bank.
Creates security interest in all equipment leased or sold
under a Master Equipment Lease. Refers to previous financing
statement for which CT is still looking.
Amount of indebtedness not indicated.
- --------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA - Erie County UCC search - 2 original financing statements
Electric Company (Erie West) - 1 in favor of Summit Bank f/k/a United Jersey Bank
(notice filing re/ all equipment leased under Lease Agreement
dated as of 12/1/91)
- 1 in favor of Summit Bank f/k/a United Jersey Bank
(covers equipment leased or sold on conditional sale to debtor
under Master Equipment Lease dated 12/1/91
- --------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA - Indiana County UCC search - 15 original financing statements
Electric Company (Conemaugh, Seward, - 1 in favor of First Fidelity Leasing Group, Inc. Creates
Shelocta) security interest in all equipment included in Master Lease
Agreement (this appears to be only one piece of equipment:
a "heavy duty loader"
- 1 in favor of U.S. Bank Leasing. Creates security interest in
two telephone systems located in Keystone Generating Station
(Shelocta) with an estimated cost of $218,259.00
- 1 in favor of U.S. Bank Leasing. Creates security interest in
(15) "NTZK16BA35 M2616 w/DISP PRFRMNC-PLUSSET," cost: $8,856.00.
- 1 in favor of U.S. Bank Leasing. Creates security interest in
(1) Volvo truck with components. Cost: $255,824.30.
- 1 in favor of PHH Financial Services. Creates security interest
in (1) VME/Michigan Wheel Loader w/ components (located in
Indiana Cty).
- 2 in favor of Summit Bank f/k/a/ United Jersey Bank.
Both appear to create security interest in all equipment
included under Master Equipment Lease.
- 4 in favor of Pitney Bowes
- 1 in favor of Marquis Leasing
- 3 in favor of United Jersey Bank
Mechanics lien - 1 lien
- 1 in favor of Anthony Crane Rental
- --------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA - Jefferson County UCC search - 1 original financing statement:
Electric Company (Brookville) - 1 in favor of Summit Bank (previous filing in favor of United
Jersey Bank, as assignee of Somerset Investment Services, Ltd.)
(covers all equipment leased or sold on conditional sale to
debtor under Master Equipment Lease dated 12/1/91)
- --------------------------------------------------------------------------------------------------------------------------
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- -----------------------------------------------------------------------------------------------------------------------------------
PARTY JURISDICTION SYNOPSIS
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA - Wyoming County UCC search - original financing statements: 1
Electric Company (Scottsville) -- 1 in favor of Summit Bank f/k/a/ United Jersey Bank (covers equipment leased
or sold on conditional sale to debtor under Master Equipment Lease Dated
12/19)
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania PA Sec. of Commonwealth UCC search - 11 Original financing statements
Electric Company -- 1 in favor of MetLife Capital Credit Corporation. Creates security interest in
(1) Kawasaki wheel loader. Amount of indebtedness not indicated.
-- 1 in favor of United Jersey Bank. Creates security interests in all equipment
lease or sold under Master Equipment Lease.
-- 1 in favor of PHH Financial Services. Creates security interest in (1)
tractor, located at Seward Gen. Plan. Amount of indebtedness not indicated.
-- 1 in favor of U.S. Bank Leasing. Original financing statement indicates
this statement should not be construed as creating a security interest.
-- 1 in favor of U.S. Bank Leasing. Creates security interest in telephone
systems located at Keystone Generating Station; cost: $218,259.00
-- 1 in favor of U.S. Bank Leasing. Creates security interest in what appears to
be analog/message waiting line equipment at Conemaugh Gen. Station. Cost
$15,277.50. Amount of indebtedness not indicated.
-- 1 in favor of U.S. Bank Leasing. Creates security interest in two telephone
systems at Conemaugh Generating Station. Cost $218,259.00. Amount of
indebtedness not indicated.
-- 1 in favor of U.S. Bank Leasing Creates security interest in 15 DISP
PRFRMNC-PLUSSET at Keystone Gen. Station. Cost $8,856.00
-- 1 in favor of Summit Bank f/k/a United Jersey Bank. Creates security interest
in all equipment leased or sold under Master Equipment Lease. Amount of
indebtedness not indicated.
-- 1 in favor of Summit Bank f/k/a United Jersey Bank. Amount of indebtedness
not indicated. Security interest not described.
-- 1 in favor of Summit Bank f/k/a United Jersey Bank. Creates security interest
in all equipment leased or sold under Master Equipment Lease. Amount of
indebtedness not indicated.
- -----------------------------------------------------------------------------------------------------------------------------------
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[TITLE EXCEPTIONS NOT INCLUDED]
202
SCHEDULE 3.17
ENVIRONMENTAL MATTERS
The references to the following matters are for the information of Buyer.
The inclusion of each such matter does not constitute a representation with
respect to its materiality, is not intended to establish a standard of
materiality or significance and shall not be deemed to have such effect.
1. The Seward Station is subject to a Consent Order and Agreement
that includes the remediation of a coal ash site. Cost estimates for remediation
of the site have ranged from approximately $5 million to $20 million.
2. Sithe New Jersey Holdings LLC is responsible for remediation at
several former GPU facilities in New Jersey under ISRA. Sithe New Jersey
Holdings LLC estimates the cost to remediate such sites to be approximately $5
million based on the level of financial security requested by the New Jersey
Department of Environmental Protection.
3. The U.S. Environmental Protection Agency ("EPA") recently filed
suits or announced its intention to file suits against a number of coal-fired
power facilities in Midwestern and Eastern States regarding alleged violations
of the prevention of significant deterioration and nonattainment provisions of
the New Source Review ("NSR") requirements under the Clean Air Act. In 1998, EPA
requested information relating to the Conemaugh Station as part of a broader
industry information request that has formed the basis for EPA's NSR actions
against coal-fired power plants.
4. Matters reflected in Schedule 3.6.
5. Matters Reflected in the Following Reports
Phase I Environmental Site Assessment Reports prepared by URS Greiner
Woodward-Clyde Consultants in April, 1998 for the following facilities:
Blossburg CT
Broad Street Office
Coho Site
Conemaugh Generating Station
Deep Creek Hydroelectric Generating Station
Former Williamsburg Generating Station
Keystone Generating Station
Orrtanna CT
Piney Hydroelectric Generating Station
Portland Generating Station
Seward Generating Station
Shawnee CT
Shawville Generating Station
Titus Generating Station
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Tolna CT
Warren Generating Station
Wayne CT
Preliminary Assessment Reports and Reports on Surrounding Properties prepared
by URS Greiner Woodward-Clyde Consultants in April, 1998 for the following
facilities:
Gilbert Generating Station
Glen Gardner CT
Sayreville Generating Station
Werner Generating Station
Phase I Environmental Site Assessment Reports prepared by URS Greiner
Woodward-Clyde Consultants in May/June 1998 for the following other facilities
and properties:
Atlantic Substation
Bangor Ash Disposal
Brookville Maintenance Facility
East Flemington Substation
East Sayre Substation
Erie West Substation
Gilbert Terminal
Hamilton CT
HC Theurk Property
Hunterstown CT
Jackson Substation
Mountain CT
North Bangor Substation
North Hershey Substation
Pequest River Substation
Phillipsburg Substation
Pohatcong Substation
Portland Adjacent Properties
Scottsville Vacant Property
Final Reports of Review of Database Records prepared by URS Greiner
Woodward-Cycle Consultants in June 1998 for properties surrounding the
following facilities:
Gilbert Generating Station
Glen Gardner CT
Sayreville Generating Station
Werner Generating Station
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204
Phase II Investigation Reports prepared by URS Greiner Woodward-Clyde
Consultants in July, 1998 for the following facilities:
Atlantic Substation
Bangor Ash
Blossburg CT
Broad Street Office
Coho Site
Conemaugh Generating Station
Deep Creek Hydroelectric Generating Station
Former Williamsburg Generating Station
Gilbert Generating Station
Gilbert Terminal
Glen Gardner CT
Hamilton CT
Hunterstown CT
Keystone Generating Station
Mountain CT
Orrtana CT
Piney Hydroelectric Generating Station
Portland Generating Station
Sayreville Generating Station
Seward Generating Station
Shawnee CT
Shawville Generating Station
Titus Generating Station
Tolna CT
Warren Generating Station
Wayne CT
Werner Generating Station
Additional Reports prepared by URS Greiner Woodward-Clyde Consultants:
Additional Phase II Investigation - Groundwater Sampling, Shawnee
Combustion Turbine Station, March 4, 1999.
Additional Phase II Investigation - Seward Generating Station,
October 1998.
Letter Report - Supplemental Soil Samples - Titus Generating Station,
September 1998.
Phase I Environmental Site Assessment Report, 88 Bridge Parcel,
September 23, 1999.
Addendum to Preliminary Assessment Report, Sayreville Generating Station,
September 2, 1999.
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Phase I Environmental Assessment Addendum Reports prepared by URS Greiner
Woodward-Clyde Consultants in November 1999 for the following facilities:
Conemaugh Generating Station
Gilbert Terminal Pipeline
Hunterstown CT
Keystone Generating Station
Piney Hydroelectric Generating Station
Seward Generating Station
Shawnee CT
The following correspondence from URS Greiner Woodward-Clyde Consultants
related to the Phase I Environmental Assessment Reports of April 1998:
Letter of November 22, 1999: Addendum to Environmental Site Assessment
Report: GPU Broad Street Office.
Letter of November 22, 1999: Addendum to Phase I Environmental Site
Assessment Report (May, 1998): GPU Erie
West Substation.
Letter of November 22, 1999: Addendum to Preliminary Assessment Report:
GPU Glenn Gardner Combustion Turbine
Station.
Letter of November 22, 1999: Addendum to Preliminary Assessment Report
(June 1998): GPU Gilbert Generating Station.
Letter of November 22, 1999: Second Addendum to Preliminary Assessment
Report: GPU Sayreville Generating Station.
Letter of November 22, 1999: Addendum to Phase I Environmental Site
Assessment Report (April 1998): GPU
Shawville Generating Station.
Letter of November 22, 1999: Addendum to Phase I Environmental Site
Assessment Report, Soil Borrow Area:
Warren Generating Station.
Letter of November 22, 1999: Addendum to Phase I Environmental Site
Assessment Report (June 1998): GPU Werner
Generating Station.
Letter of November 22, 1999: Addendum to Phase I Environmental Site
Assessment Report (April 1998): GPU Former
Williamsburg Generating Station.
Letter of November 22, 1999: Assessment of Crab Island: GPU Sayreville
Generating Station.
Letter of November 22, 1999: Addendum to Phase I Environmental Site
Assessment Report (April 1998): GPU
Shawnee Combustion Turbine.
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Updates to the above Phase I Reports, Phase II Reports, Letter Addenda and
Preliminary Assessment Reports prepared by URS Greiner Woodward-Clyde
Consultants in December 1999 for the following facilities:
Atlantic Substation
Bangor Ash Disposal
Blossburg CT
Broad Street Office
Brookville Maintenance Facility
Coho Site
Conemaugh Generating Station
Deep Creek Hydroelectric Generating Station
East Flemington Substation
East Sayre Substation
Erie West Substation
Former Williamsburg Generating Station
Gilbert Generating Station
Gilbert Terminal
Glen Gardner CT
Hamilton CT
HC Theurk Property
Hunterstown CT
Jackson Substation
Keystone Generating Station
Mountain CT
North Bangor Substation
North Hershey Substation
Orrtanna CT
Pequest River Substation
Phillipsburg Substation
Piney Hydroelectric Generating Station
Pohatcong Substation
Portland Adjacent Properties
Portland Adjacent Properties
Portland Generating Station
Sayreville Generating Station
Scottsville Vacant Property
Seward Generating Station
Shawnee CT
Shawville Generating Station
Titus Generating Station
Tolna CT
Warren Generating Station
Wayne CT
Werner Generating Station
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Plus the following additional reports:
Black & Veatch Corporation, Environmental Evaluation of GPU Generating
Assets, dated April 6, 1999.
Dennis M. McNair, et al., Water Quality Monitoring of Crooked Creek at the
Keystone Generating Plant 1992-93, dated August 1994.
R.W. Beck, Independent Assessment Report: Sithe Northeast Generating
Company, Inc., dated December 17, 1999.
6. Emission Allowances and Emission Reduction Credits
Attached are the following items:
A. Sulfur Dioxide (SO2) allowances currently held in Sellers' or Company
Accounts for the GPU Assets as recorded in EPA's Allowance Tracking System as
of February 9, 2000;
B. Nitrogen Oxide (NOx) Allowances currently held in Sellers' or
Company's Accounts for the GPU Assets as recorded in EPA's NOx Allowance
Tracking System as of February 9, 2000. The rights to certain additional
allocations of NOx allowances is governed by the New Jersey NOx Emission
Allowances letter agreement between Sithe New Jersey Holdings LLC and GPU, Inc.
dated November 24, 1999;
C. Estimated future allocations of NOx Allowances for the GPU Assets
based upon prior allocations and anticipated regulatory developments;
D. Emission Reduction Credits relating to the GPU Assets that have been
approved by each relevant Governmental Authority the rights to which are
presently held by either the Companies or their Subsidiaries, either directly
or through the ERC Administration Letter Agreement between Penelec and Sithe
Pennsylvania Holdings LLC, dated November 24, 1999.
With regard to the above items:
The SO2 and NOx allowances identified as being currently held in Sellers'
or Company's accounts do not reflect deductions that will occur in early 2000
for reconciliation with 1999 actual emissions;
Allowances identified for the Keystone and Conemaugh facilities reflect
the total allowances allocated for those facilities rather than Sellers' or its
subsidiaries' share in or rights to those allowances;
Future allocations of NOx allowances are subject to pending regulatory and
legal reviews and proceedings and, accordingly, are subject to modification. No
representation or warranty is made with respect to Buyer's actual receipt of
any such future allocation;
S-71
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No representation is made with respect to whether any particular Emission
Reduction Credit identified herein will qualify for or be deemed otherwise
sufficient for use by the Buyer (or subsequent owner of the rights thereto) for
compliance with any applicable Environmental Law.
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[LIST OF ENVIRONMENTAL ALLOWANCES NOT INCLUDED]
210
SCHEDULE 3.18
CERTAIN GPU MATTERS
1. GPU Post Closing Amounts.
2. The following agreements have not been executed by all parties
thereto:
Assignment and Assumption Agreement between the Conemaugh Station Owners
and Sithe Power Marketing, L.P., dated as of November 24, 1999.
Assignment and Assumption Agreement between the Keystone Station Owners
and Sithe Power Marketing, L.P., dated as of November 24, 1999.
Energy Services Agreement between the Conemaugh Station Owners and Sithe
Power Marketing, L.P., dated as of November 24, 1999.
Energy Services Agreement between the Keystone Station Owners and Sithe
Power Marketing, L.P., dated as of November 24, 1999.
3. Following Vivendi's September 1999 announcement of its intention to
sell Sithe, the Keystone/Conemaugh Owner's Committee (the "Owners Committee")
decided to hold a vote to decide whether to provide notice of termination of the
operating agreements between Northeast Management and the owners of each of
Keystone and Conemaugh. Pursuant to Section 1.1 of each operating agreement, for
a termination to be effective in January 2002, the owners were required to
provide notice on or prior to December 31, 1999. Some owners suggest voting to
terminate the operating agreements because the buyer of Sithe was unknown and in
any event the actual termination would not be effective until January 2002.
Furthermore, upon learning the identity of the buyer of Sithe, the Owners'
Committee could vote to cancel termination. However, if the Owners' Committee
delayed voting beyond December 31, 1999, the termination would not be effective
until January 2003. Sithe suggested that it would be willing to treat any
termination vote taken before June 30, 2000 to be effective as if it occurred
before December 31, 1999. The Owner's Committee voted not to give notice of
termination of the operating agreements and instead accepted Sithe's proposal.
The details of this matter were reflected in the minutes of the December 1999
meeting of the Owners Committee which have been previously provided to Buyer.
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SCHEDULE 3.19
SELLERS' CONSENTS AND APPROVALS
The following documents contain restrictions on assignment that may
require the counterparty's consent prior to assignment of the interests of
Sithe and certain of its Affiliates.
i. Assignment and Assumption Agreement between Conemaugh Station
Owners and Sithe Power Marketing, L.P., dated as of November 24, 1999.
ii. Assignment and Assumption Agreement between Keystone Station
Owners and Sithe Power Marketing, L.P., dated as of November 24, 1999.
iii. Energy Service Agreement between Conemaugh Station Owners and
Sithe Power Marketing, L.P., dated as of November 24, 1999.
iv. Energy Service Agreement between Keystone Station Owners and
Sithe Power Marketing, L.P., dated as of November 24, 1999.
v. Interim License Agreement between Electric Power Research
Institute, Inc. and Sithe, dated as of July 1, 1999.
vi. Agreement between New Energy Installation and Sales and Sithe,
dated as of July 16, 1999.
vii. ATW Software License Agreement between Electric Software
Products, Inc., Electric Power Research Institute, Inc. and Sithe, dated as
of November 12, 1999.
viii. CEM Reporting Workstation Software and DCM Software License
Agreement between Electric Software Products, Inc. and Sithe, dated as of
November 12, 1999.
ix. Coal Supply Agreement between Met-Ed and Eighty-Four Mining
Company, dated September 8, 1997, as amended December 10, 1998 and February
7, 2000 by Sithe Power Marketing L.P. and Consol Inc., authorized agent
for and on behalf of Eighty-Four Mining Company, Consol Pennsylvania Coal
Company, Nineveh Coal Company and Greenon Coal Company.
x. Certain agreements listed on Schedule 6.5.2(f)(A).
xi. Service Agreement for Gas Transportation and/or Standby Service
by and between Columbia Gas of Pennsylvania, Inc. and Sithe Power
Marketing, L.P., dated as of December 2, 1999.
xii. Large Volume Daily Service Agreement between Penn Fuel Gas, Inc.
and Sithe Power Marketing, L.P., dated as of November 29, 1999.
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xiii. Third Party Supplier Service Agreement by and between
Elizabethtown Gas Company and Sithe Power Marketing, L.P., dated as of
October 14, 1999.
xiv. Agreement to Provide Gas Transportation Service to Sithe Energies
Gilbert and/or Glen Gardner Generating Stations in New Jersey for the
Period November 24, 1999 through March 31, 1000, dated January 12, 2000.
xv. Memorandum of Assignment between GPU/Penelec Warren and Sithe
Power Marketing, L.P., dated as of December 2, 1999.
xvi. Rate IL Service Agreement by and between Sithe Power Marketing,
L.P. and UGI Utilities, Inc., dated as of November 24, 1999.
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SCHEDULE 3.21
INTELLECTUAL PROPERTY
TRADENAMES
- ----------------------------------------------------------------
STATION STATE COUNTY
- ----------------------------------------------------------------
Atlantic NJ Monmouth County
East Flemington NJ Hunterdon County
Gilbert Station NJ Hunterdon County
Gilbert Tank Farm PA Northampton County
Glen Gardner NJ Hunterdon County
H.C. Thuerck NJ Mercer County
Pequest River NJ Warren County
Pohatcong NJ Warren County
Sayreville NJ Middlesex County
Werner NJ Middlesex County
Conemaugh PA Indiana County
Keystone PA Armstrong County
Bangor Quarry (aka
Portland Ash site) PA Northampton County
Hamilton PA Adams County
Hunterstown PA Adams County
Jackson PA York County
Mountain PA Cumberland County
North Bangor PA Northampton County
North Hershey PA Dauphin County
Orrtanna PA Adams County
Portland Adjacent PA Northampton County
Portland Station PA Northampton County
Shawnee PA Monroe County
Titus PA Berks County
TMI 500 KV (aka Red Hill) PA Dauphin County
Tolna PA York County
Blossburg PA Tioga County
Brookville PA Jefferson County
Coho PA Erie County
Deep Creek MD Garrett County
East Sayre PA Bradford County
Erie West PA Erie County
Phillipsburg PA Centre County
Piney PA Clarion County
Rockwood PA Somerset County
Scottsville PA Wyoming County
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- ----------------------------------------------------------------
STATION STATE COUNTY
- ----------------------------------------------------------------
Seward PA Indiana County
- ----------------------------------------------------------------
Shawville PA Clearfield County
- ----------------------------------------------------------------
Shelocta PA Indiana County
- ----------------------------------------------------------------
Warren PA Warren County
- ----------------------------------------------------------------
Wayne PA Crawford County
- ----------------------------------------------------------------
Williamsburg PA Blair County
- ----------------------------------------------------------------
PATENTS
(a) Coal water slurry burner assembly.
Patent Number: 5,513,583
Issued: 10/27/94
Current Owner: Penelec
(b) Method for continuously co-firing pulverized coal and a coal-water
slurry.
Patent Number: 5,380,342
Issued: 1/10/93
Current Owner: Penelec
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SCHEDULE 4.3
SELLERS CONFLICTS
No Contract shall be deemed a Material Contract solely by reason of the
fact that it is referred to in this Schedule 4.3. The inclusion of the following
Contracts does not constitute a representation with respect to their
materiality, is not intended to establish a standard of materiality or
significance and shall not be deemed to have such effect.
See Schedule 3.19 for Contracts that may require consents and approvals.
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SCHEDULE 5.4
BUYER CONSENTS AND APPROVALS
1. Approval by the Federal Energy Regulatory Commission of the
transactions contemplated hereby pursuant to Section 203 of the Federal Power
Act.
2. Approval of the transactions contemplated hereby under the HSR Act.
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SCHEDULE 6.5
EXCEPTIONS TO ORDINARY COURSE OF BUSINESS
Notwithstanding the provisions of Section 6.5, the Companies shall be
permitted to enter into the following agreements:
1. Master Tax Lease between Northeast Management and Caterpillar Financial
Services Corporation to be executed for Northeast Management to lease
Caterpillar 988F for Seward Plant coal handling.
2. Transportation Contract by and between Norfolk Southern Railway Company
and Sithe Power Marketing, L.P. relating to coal transportation for the Portland
and Titus stations.
3. Sithe Pension Plan.
The Sithe Pension Plan, a cash balance pension plan, has been approved by the
officers of Sithe effective January 1, 2000 and has been formally announced to
the non-represented employees of Sithe and its subsidiaries, including the
employees of the Companies and their Subsidiaries. The Pension Plan is in the
process of being drafted and has not yet been adopted by the Board of Directors
of Sithe. None of the groups of employees covered under the Collective
Bargaining Agreements are covered under the Pension Plan at present. Sithe
considers that it is obliged to implement the Pension Plan on behalf of the
non-represented employees of Sithe and its subsidiaries as announced.
REPRESENTATIVES
Sellers' Representatives
- ------------------------
1. Ralph Grutsch, (212) 351-0046
2. Bill Hughes, (212) 351-0035
Sellers' Trading Representatives
- --------------------------------
1. Anthony Corso, (212) 351-0225
2. Mark Friedland, (212) 351-0026
Buyer's Representatives
- ----------------------
1. John Stout, (713) 207-2023
2. Paul Ruwe, (713) 945-7515
Buyer's Trading Representatives
- -------------------------------
1. Reliant Energy Services Real Time Desk, (713) 207-1512
2. Deron Harrington, (713) 207-1278
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SCHEDULE 6.5.2
CONTRACTS NOT TO BE AMENDED
1. Purchase and Sale Agreement between Met-Ed and Sithe, dated as of October
29, 1998, as amended by Amendment Nos. 1-9.
2. Purchase and Sale Agreement between Penelec and Sithe, dated as of October
29, 1998, as amended by Amendment Nos. 1-9.
3. Purchase and Sale Agreement between JCP&L and Sithe, dated October 29,
1998, as amended by Amendment Nos. 1-9.
4. Purchase and Sale Agreement between Met-Ed, JCP&L, GPU, and Sithe, dated
as of October 29, 1998, as amended by Amendment Nos. 1-9.
5. Amended and Restated Transition Power Purchase Agreement between Met-Ed,
Sithe, Sithe Pennsylvania Holdings LLC, and Sithe Power Marketing, L.P.,
dated as of November 24, 1999.
6. Amended and Restated Transition Power Purchase Agreement between Penelec,
Sithe, Sithe Pennsylvania Holdings LLC, Sithe Maryland Holdings LLC, and
Sithe Power Marketing, L.P., dated as of November 24, 1999.
7. Amended and Restated Transition Power Purchase Agreement between JCP&L,
Sithe, Sithe New Jersey Holdings LLC, and Sithe Power Marketing, L.P.,
dated as of November 24, 1999.
8. Interconnection Agreement between Conemaugh Station Owners and Conemaugh
Switching Station Owners, dated as of November 19, 1999.
9. Interconnection Agreement between Keystone Station Owners and Penelec dba
GPU Energy, dated as of November 19, 1999.
10. Amended and Restated Interconnection Agreement between Met-Ed and Sithe
Pennsylvania Holdings LLC, dated as of November 24, 1999.
11. Amended and Restated Interconnection Agreement between Penelec, Sithe
Pennsylvania Holdings LLC, and Sithe Maryland Holdings LLC, dated as of
November 24, 1999.
12. Amended and Restated Interconnection Agreement between JCP&L and Sithe New
Jersey Holdings LLC, dated as of November 24, 1999.
13. Conemaugh Switchyard Operating Agreement between Conemaugh Station Owners
and Penelec dba GPU Energy, dated as of November 24, 1999.
S-81
219
14. Energy Service Agreement between Conemaugh Station Owners and Sithe Power
Marketing, L.P., dated as of November 24, 1999.
15. Energy Service Agreement between Keystone Station Owners and Sithe Power
Marketing, L.P., dated as of November 24, 1999.
16. Conemaugh Operating Agreement between Penelec and Conemaugh Station Owners
dated as of December 1, 1967, as amended by Amendments dated June 4, 1969,
May 8, 1973, February 27, 1978, December 1, 1978, June 30, 1983, March 25,
1998 and November 24, 1999.
17. Memorandum of Owners' Agreement Keystone Steam Electric Station among
Keystone Station Owners, dated December 7, 1964.
18. Keystone Operating Agreement between Penelec and Keystone Station Owners,
dated as of December 1, 1967, as amended by Amendments dated May 8, 1973,
February 27, 1978, December 1, 1978, June 30, 1983 and March 25, 1998.
19. SPH Operating Agreement between Sithe Pennsylvania Holdings LLC and
Northeast Management, dated as of November 24, 1999.
20. Memorandum of Owners' Agreement Conemaugh Steam Electric Station among
Conemaugh Station Owners, dated as of August 1, 1966.
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\ SCHEDULE 6.5.2(f)(A)
TRADING CONTRACTS AT SIGNING
[SITHE LOGO]
POWER POSITION DETAIL REPORT
As of: February 15, 2000
Pool Direction Customer System ID Source MWs MW hs I/F Point Price Start End Hour Hour
- ---- --------- -------- --------- ------ --- ------ --- ----- ----- ----- --- ---- ----
Beg End
--- ---
PJM SALE WILLIAMS 10132 WEST HUB -50 -17,600.00 F WEST HUB $30.70 01-May-00 31-May-00 800 2300
PJM SALE WILLIAMS 10142 WEST HUB -50 -17,600.00 F WEST HUB $30.40 01-May-00 31-May-00 800 2300
PJM SALE AEPSC 10273 WEST HUB -50 -17,600.00 F WEST HUB $29.75 01-May-00 31-May-00 800 2300
PJM SALE AEPSC 10373 WEST HUB -50 -17,600.00 F WEST HUB $30.50 01-May-00 31-May-00 800 2300
PJM SALE AQUILA 10410 WEST HUB -50 -17,600.00 F WEST HUB $30.15 01-May-00 31-May-00 800 2300
PJM SALE WILLIAMS 10520 WEST HUB -50 -17,600.00 F WEST HUB $30.75 01-May-00 31-May-00 800 2300
PJM SALE PGET 10185 WEST HUB -50 -17,600.00 F WEST HUB $54.00 01-Jun-00 30-Jun-00 800 2300
PJM SALE GPUAR 10241 WEST HUB -50 -17,600.00 F WEST HUB $53.25 01-Jun-00 30-Jun-00 800 2300
PJM SALE PSE&G 10314 WEST HUB -50 -17,600.00 F WEST HUB $52.75 01-Jun-00 30-Jun-00 800 2300
PJM SALE PSE&G 10315 WEST HUB -50 -17,600.00 F WEST HUB $52.75 01-Jun-00 30-Jun-00 800 2300
PJM PURCHASE PSE&G 10456 WEST HUB 50 17,600.00 F WEST HUB $54.05 01-Jun-00 30-Jun-00 800 2300
PJM SALE NIMOE 10508 WEST HUB -50 -17,600.00 F WEST HUB $54.50 01-Jun-00 30-Jun-00 800 2300
PJM SALE AQUILA 10536 WEST HUB -50 -17,600.00 F WEST HUB $55.50 01-Jun-00 30-Jun-00 800 2300
PJM SALE PGET 10131 WEST HUB -50 -34,400.00 F WEST HUB $73.00 01-Jul-00 31-Aug-00 800 2300
PJM SALE AEPSC 10166 WEST HUB -50 -34,400.00 F WEST HUB $84.50 01-Jul-00 31-Aug-00 800 2300
PJM SALE AEPSC 10167 WEST HUB -50 -34,400.00 F WEST HUB $84.25 01-Jul-00 31-Aug-00 800 2300
PJM SALE PSE&G 10243 WEST HUB -50 -34,400.00 F WEST HUB $86.25 01-Jul-00 31-Aug-00 800 2300
PJM SALE PSE&G 10318 WEST HUB -50 -34,400.00 F WEST HUB $85.75 01-Jul-00 31-Aug-00 800 2300
PJM SALE PGET 10349 WEST HUB -50 -34,400.00 F WEST HUB $87.25 01-Jul-00 31-Aug-00 800 2300
PJM SALE PGET 10350 WEST HUB -50 -34,400.00 F WEST HUB $87.50 01-Jul-00 31-Aug-00 800 2300
PJM SALE EPMI 10372 WEST HUB -50 -34,400.00 F WEST HUB $88.75 01-Jul-00 31-Aug-00 800 2300
PJM SALE PSE&G 10417 WEST HUB -50 -34,400.00 F WEST HUB $89.00 01-Jul-00 31-Aug-00 800 2300
PJM PURCHASE AQUILA 10421 WEST HUB 50 34,400.00 F WEST HUB $88.25 01-Jul-00 31-Aug-00 800 2300
PJM SALE AEPSC 10455 WEST HUB -50 -34,400.00 F WEST HUB $89.50 01-Jul-00 31-Aug-00 800 2300
PJM SALE NIMOE 10509 WEST HUB -50 -34,400.00 F WEST HUB $91.35 01-Jul-00 31-Aug-00 800 2300
Pool Revenue/Cost Beg Day End Day
- ---- ------------ ------- -------
PJM ($540,320.00) MONDAY FRIDAY
PJM ($535,040.00) MONDAY FRIDAY
PJM ($523,600.00) MONDAY FRIDAY
PJM ($536,800.00) MONDAY FRIDAY
PJM ($530,640.00) MONDAY FRIDAY
PJM ($541,200.00) MONDAY FRIDAY
PJM ($950,400.00) MONDAY FRIDAY
PJM ($937,200.00) MONDAY FRIDAY
PJM ($928,400.00) MONDAY FRIDAY
PJM ($928,400.00) MONDAY FRIDAY
PJM $951,280.00 MONDAY FRIDAY
PJM ($959,200.00) MONDAY FRIDAY
PJM ($976,800.00) MONDAY FRIDAY
PJM ($2,511,200.00) MONDAY FRIDAY
PJM ($2,906,800.00) MONDAY FRIDAY
PJM ($2,898,200.00) MONDAY FRIDAY
PJM ($2,967,000.00) MONDAY FRIDAY
PJM ($2,949,800.00) MONDAY FRIDAY
PJM ($3,001,400.00) MONDAY FRIDAY
PJM ($3,010,000.00) MONDAY FRIDAY
PJM ($3,053,000.00) MONDAY FRIDAY
PJM ($3,061,600.00) MONDAY FRIDAY
PJM $3,035,800.00 MONDAY FRIDAY
PJM ($3,078,800.00) MONDAY FRIDAY
PJM ($3,142,440.00) MONDAY FRIDAY
S-83
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Pool Direction Customer System ID Source MWs MW hs I/F Point Price Start End Hour Hour
- ---- --------- -------- --------- ------ --- ------ --- ----- ----- ----- --- ---- ----
Beg End
--- ---
PJM SALE PGET 10567 WEST HUB -50 -34,400.00 F WEST HUB $95.00 01-Jul-00 31-Aug-00 800 2300
PJM SALE PSE&G 10186 WEST HUB -50 -16,000.00 F WEST HUB $33.00 01-Sep-00 30-Sep-00 800 2300
PJM SALE PSE&G 10317 WEST HUB -50 -16,000.00 F WEST HUB $32.75 01-Sep-00 30-Sep-00 800 2300
PJM PURCHASE PSE&G 10351 WEST HUB 50 16,000.00 F WEST HUB $33.00 01-Sep-00 30-Sep-00 800 2300
PJM SALE AEPSC 10550 WEST HUB -50 -16,000.00 F WEST HUB $33.25 01-Sep-00 30-Sep-00 800 2300
PJM SALE PSE&G 10551 WEST HUB -50 -16,000.00 F WEST HUB $33.50 01-Sep-00 30-Sep-00 800 2300
PJM SALE AEPSC 10583 WEST HUB -50 -16,000.00 F WEST HUB $34.00 01-Sep-00 30-Sep-00 800 2300
PJM SALE WILLIAMS 10135 WEST HUB -50 -81,900.00 F WEST HUB $18.00 01-Jan-00 31-Dec-00 100 700
PJM SALE WILLIAMS 10135 WEST HUB -50 -6,000.00 F WEST HUB $18.00 01-Jan-00 31-Dec-00 100 2400
PJM SALE WILLIAMS 10135 WEST HUB -50 -115,200.00 F WEST HUB $18.00 01-Jan-00 31-Dec-00 100 2400
PJM SALE WILLIAMS 10135 WEST HUB -50 -11,700.00 F WEST HUB $18.00 01-Jan-00 31-Dec-00 2400 2400
PJM SALE PGET 10158 WEST HUB -50 -187,200.00 F WEST HUB $38.40 01-Jan-00 31-Dec-00 800 2300
PJM SALE AEPSC 10168 WEST HUB -50 -187,200.00 F WEST HUB $38.65 01-Jan-00 31-Dec-00 800 2300
PJM SALE EPMI 10284 WEST HUB -50 -50,400.00 F WEST HUB $25.40 01-Oct-00 31-Dec-00 800 2300
PJM PURCHASE PSE&G 10403 WEST HUB 100 100,800.00 F WEST HUB $25.65 01-Oct-00 31-Dec-00 800 2300
PJM PURCHASE PSE&G 10470 WEST HUB 50 50,400.00 F WEST HUB $25.70 01-Oct-00 31-Dec-00 800 2300
PJM SALE AEPSC 10512 WEST HUB -50 -50,400.00 F WEST HUB $25.80 01-Oct-00 31-Dec-00 800 2300
PJM SALE AEPSC 10513 WEST HUB -50 -50,400.00 F WEST HUB $25.80 01-Oct-00 31-Dec-00 800 2300
PJM SALE AEPSC 10514 WEST HUB -50 -50,400.00 F WEST HUB $25.85 01-Oct-00 31-Dec-00 800 2300
PJM SALE EPMI 10518 WEST HUB -50 -50,400.00 F WEST HUB $25.90 01-Oct-00 31-Dec-00 800 2300
PJM SALE EPMI 10535 WEST HUB -50 -50,400.00 F WEST HUB $25.90 01-Oct-00 31-Dec-00 800 2300
PJM SALE SEMPRA 10444 WEST HUB -50 -33,600.00 F WEST HUB $30.90 01-Jan-01 28-Feb-01 800 2300
Pool Revenue/Cost Beg Day End Day
- ---- ------------ ------- -------
PJM ($3,268,000.00) MONDAY FRIDAY
PJM ($528,000.00) MONDAY FRIDAY
PJM ($524,000.00) MONDAY FRIDAY
PJM $528,000.00 MONDAY FRIDAY
PJM ($532,000.00) MONDAY FRIDAY
PJM ($536,000.00) MONDAY FRIDAY
PJM ($544,000.00) MONDAY FRIDAY
PJM ($1,474,200.00) MONDAY FRIDAY
PJM ($108,000.00) MONDAY FRIDAY
PJM ($2,073,600.00) SATURDAY SUNDAY
PJM ($210,600.00) MONDAY FRIDAY
PJM ($7,188,480.00) MONDAY FRIDAY
PJM ($7,235,280.00) MONDAY FRIDAY
PJM ($1,280,160.00) MONDAY FRIDAY
PJM $2,585,520.00 MONDAY FRIDAY
PJM $1,295,280.00 MONDAY FRIDAY
PJM ($1,300,320.00) MONDAY FRIDAY
PJM ($1,300,320.00) MONDAY FRIDAY
PJM ($1,302,840.00) MONDAY FRIDAY
PJM ($1,305,360.00) MONDAY FRIDAY
PJM ($1,305,360.00) MONDAY FRIDAY
PJM ($1,038,240.00) MONDAY FRIDAY
S-84
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222
SCHEDULE 6.5.2(f)(B)
Trading Contracts Executed Between Signing and Closing
S-85
223
SCHEDULE 6.5.2(j)
OUTAGES
_______________________________________________________________________________________________________
STATION DESCRIPTION DATE LENGTH
_______________________________________________________________________________________________________
Seward Unit 5-Air Htr Upgrade, 01/08/00-02/06/00 4 weeks
W/W Tube Replacement
Deep Creek Unit 1-Oil Circuit 01/10/00-01/21/00 2 weeks
Breakers, Annual
Inspection
Deep Creek Unit 25-Oil Circuit 01/24/00-02/04/00 2 weeks
Breakers, Annual
Inspection
Gilbert CC Stag 5 CT-Turbine & HSRG 01/28/00-03/12/00 2 weeks
Inspection
Titus CT4 03/06/00-03/10/00 1 weeks
Warren Boiler #4 03/06/00-03/26/00 3 weeks
Keystone (100%) Unit 2-LP Turbine Internal, 03/04/00-04/16/00 6 weeks
Boiler inspection, LP Turb.
Rotor Inspection, LP Gen.
Inspection, Chromized WW
Panel Replacement
Mountain CT2 03/13/00-03/15/00 3 days
Gilbert CC Stag 5 CT-Turbine & HSRG 03/13/00-04/16/00 5 weeks
Inspection
Gilbert CC Stag 5 CT-HSRG Inspection 03/27/00-04/09/00 2 weeks
Warren Boiler #3 03/27/00-04/16/00 3 weeks
Shawville Unit 1-Inspection 04/01/00-04/16/00 2 weeks
Portland Unit 1-Inspection 04/03/00-04/23/00 3 weeks
Seward Unit 4 04/08/00-04/30/00 3 weeks
Titus CT5 04/10/00-04/14/00 1 week
Sayreville Unit 4-Boiler Inspection 04/10/00-04/29/00 3 weeks
Shawville Unit 3-Turbine/Boiler 04/15/00-06/04/00 7 weeks
External Inspection,
Generator Internal, A & B
Sidewall and Division wall
Replacement Upper Slope
Tube Replacement, Chemical
Clean, Phase 2 ISI
Warren Unit 1-Header Inspection 04/17/00-05/07/00 3 weeks
Gilbert CC Stag 6 CT-Turbine/Generator 04/17/00-05/26/00 6 weeks
& HSRG Inspection
Gilbert CC Stag 8-Auxiliaries 04/23/00-05/07/00 2 weeks
Portland Unit 2-Inspection 05/01/00-05/07/00 1 weeks
Sayreville Unit 5-Boiler Inspection 05/01/00-05/20/00 3 weeks
_______________________________________________________________________________________________________
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- ------------------------------------------------------------------------------------------------------------
STATION DESCRIPTION DATE LENGTH
- ------------------------------------------------------------------------------------------------------------
Warren Boiler #2 05/08/00 - 05/28/00 3 weeks
- ------------------------------------------------------------------------------------------------------------
Hunterstown Unit 1 - Inservice Inspection 05/15/00 - 05/19/00 1 weeks
- ------------------------------------------------------------------------------------------------------------
Hunterstown Unit 2 - Inservice Inspection 05/22/00 - 06/02/00 1 weeks
- ------------------------------------------------------------------------------------------------------------
Hunterstown Unit 3 - Inservice Inspection 06/05/00 - 06/09/00 1 weeks
- ------------------------------------------------------------------------------------------------------------
Conemaugh (100%) Unit 1 - LP Turbine Internal, FWH Replacement, 09/09/00 - 09/17/00 9 weeks
Intermediate reheater replacement, replace
turbine EHC controls, boiler inspection, IP
turbine internal
- ------------------------------------------------------------------------------------------------------------
Gilbert CT - C1 09/11/00 - 09/17/00 1 weeks
- ------------------------------------------------------------------------------------------------------------
Tolna Unit 2 - Inservice Inspection/Generator 09/11/00 - 09/22/00 2 weeks
Retaining Rings
- ------------------------------------------------------------------------------------------------------------
Gilbert CT 9 09/24/00 - 09/30/00 1 weeks
- ------------------------------------------------------------------------------------------------------------
Tolna Unit 1 - Inservice Inspection 09/25/00 - 09/29/00 1 weeks
- ------------------------------------------------------------------------------------------------------------
Blossberg General Inspection, Borescope inspection of 09/25/00 - 10/01/00 1 weeks
combustion section/turbine 1st & 2nd stage buckets
- ------------------------------------------------------------------------------------------------------------
Warren CT Annual Combustor Inspection 09/25/00 - 10/08/00 2 weeks
- ------------------------------------------------------------------------------------------------------------
Mountain Unit 1 - Inservice Inspection 10/02/00 - 10/08/00 1 week
- ------------------------------------------------------------------------------------------------------------
Portland CT 3 - Standard inspection/Repair Outage 10/02/00 - 10/09/00 1 week
- ------------------------------------------------------------------------------------------------------------
Sayreville Unit 4 - Boiler Inspection 10/02/00 - 10/21/00 3 weeks
- ------------------------------------------------------------------------------------------------------------
Gilbert CC Stag 4 CT - Turbine Inspection 10/02/00 - 10/15/00 2 weeks
- ------------------------------------------------------------------------------------------------------------
Mountain Unit 2 - Inservice Inspection 10/09/00 - 10/13/00 1 week
- ------------------------------------------------------------------------------------------------------------
Orrtanna Inservice Inspection 10/16/00 - 10/20/00 1 week
- ------------------------------------------------------------------------------------------------------------
Gilbert CT - C2 10/16/00 - 10/22/00 1 week
- ------------------------------------------------------------------------------------------------------------
Portland CT 4 - Standard inspection/Repair Outage 10/16/00 - 10/23/00 1 week
- ------------------------------------------------------------------------------------------------------------
Wayne CT Annual Combustor Inspection 10/16/00 - 10/29/00 2 weeks
- ------------------------------------------------------------------------------------------------------------
Gilbert CT - C3 10/30/00 - 11/05/00 1 week
- ------------------------------------------------------------------------------------------------------------
Shawnee Standard inspection/Repair Outage 10/30/00 - 11/06/00 1 week
- ------------------------------------------------------------------------------------------------------------
Sayreville Unit 5 - Boiler inspection 11/06/00 - 11/25/00 3 weeks
- ------------------------------------------------------------------------------------------------------------
Piney Annual External - 1, 2, & 3 one week each 11/06/00 - 11/26/00 3 weeks
- ------------------------------------------------------------------------------------------------------------
Gilbert CT - C4 11/20/00 - 12/02/00 1 week
- ------------------------------------------------------------------------------------------------------------
S-87
225
SCHEDULE 6.16
AGREEMENTS TO BE RELEASED
1. Agreement by and between Pennsylvania Power and Light Company, Interstate
Energy Company and JCP&L, dated as of August 12, 1977.
2. Agreement Number 0568836 Power Operating Fuel Purchase Agreement between
Power Operating Company and Sithe Power Marketing, L.P.
3. Agreement Number 0526820 Ecolochem, Incorporation Purchase Order.
4. Agreement Number 0644036 Allen/Sherman/Hoff Purchase Order.
5. Amended and Restated Transition Power Purchase Agreement between Met-Ed,
Sithe, Sithe Pennsylvania Holdings LLC and Sithe Power Marketing, L.P.,
dated as of November 24, 1999.
6. Amended and Restated Transition Power Purchase Agreement between Penelec,
Sithe, Sithe Maryland Holdings LLC, Sithe Power Marketing, L.P. and Sithe
Pennsylvania Holdings LLC, dated as of November 24, 1999.
7. Amended and Restated Transition Power Purchase Agreement between JCP&L,
Sithe, Sithe Power Marketing, L.P. and Sithe New Jersey Holdings LLC, dated
as of November 24, 1999.
8. Assignment and Assumption Agreement among the Keystone Owners and Sithe
Power Marketing, L.P., dated as of November 24, 1999.
9. Assignment and Assumption Agreement among the Conemaugh Owners and Sithe
Power Marketing, L.P., dated as of November 24, 1999.
10. Agreement Number 0712069 Calgon Corporation Chemical Treatment Services
Agreement with Sithe Power Marketing, L.P.
11. Agreement Number 0650378 Ellis & Everard, Inc. Purchase Order with Sithe
Power Marketing, L.P.
12. Agreement Number 0496733 Gulf Oil Fuel Purchase Agreement between Gulf Oil
and Sithe Power Marketing, L.P.
13. Agreements Numbers 0501335, 0501411, 0501668, 0501894, 0501895, 0501940,
0502553 Shipley Oil Fuel Purchase Agreement between Shipley Oil and Sithe
Power Marketing, L.P.
14. Agreement Number 0568709 Tanoma Fuel Purchase Agreement between Tanoma
Energy, Inc. and Sithe Power Marketing, L.P.
S-88
226
15. Agreement Number 0712497 Tanoma Fuel Purchase Agreement between Tanoma Coal
Sales, Inc. and Sithe Power Marketing, L.P.
16. Agreement Number 0568731 Sky Haven Fuel Purchase Agreement between Sky
Haven and Sithe Power Marketing, L.P.
17. Agreement Number 0683322 White Star Fuel Purchase Agreement between White
Star Coal Company, Inc. and Sithe Power Marketing, L.P.
18. Agreement Number 0694065 Pipeline Petroleum Fuel Purchase Agreement for
Supply of No. 2 Fuel Oil to Shawnee Station between Pipeline Petroleum,
Inc. and Sithe Pennsylvania Holdings LLC, Sithe Maryland Holdings LLC and
Sithe New Jersey Holdings LLC.
19. Agreement Number 0708044 Buckeye Refining Co., LLC (American Refining) Fuel
Purchase for the Supply of No. 2 Oil to Keystone Station between Buckeye
and Sithe Power Marketing, L.P.
20. Agreement Number 0746584 Rosebud Fuel Purchase Agreement between Rosebud
Mining Company and Sithe Power Marketing, L.P.
21. Agreement Number 0708043 Buckeye Refining Co., LLC (American Refining) Fuel
Purchase for the Supply of No. 2 Oil to Conemaugh Station between Buckeye
and Sithe Power Marketing, L.P.
22. Agreement Number 0708039 Buckeye Refining Co., LLC (American Refining) Fuel
Purchase for the Supply of No. 2 Oil to Shawville, Seward and Warren
Stations between Buckeye and Sithe Power Marketing, L.P.
23. Agreement No. 0750019 by Fidelity Leasing, Inc. and Genco, executed on
December 8, 1999.
24. Service Agreement for Gas Transportation and/or Standby Service by and
between Columbia Gas of Pennsylvania, Inc. and Sithe Power Marketing, L.P.,
dated as of December 2, 1999.
25. Addendum to Services Agreement and Lease by and between New Jersey Natural
Gas Company and JCP&L, dated as of September 1, 1980.
26. Large Volume Daily Service Agreement between Penn Fuel Gas, Inc. and Sithe
Power Marketing, L.P., dated as of November 29, 1999.
27. Third Party Supplier Service Agreement by and between Elizabethtown Gas
Company and Sithe Power Marketing, L.P., dated as of October 14, 1999.
28. Agreement to Provide Gas Transportation Service to Sithe Energies Gilbert
and/or Glen Gardner Generating Stations in New Jersey for the Period
November 24, 1999 through March 31, 2000, dated January 12, 2000, dated
January 12, 2000.
S-89
227
29. Memorandum of Assignment between GPU/Penelec Warren and Sithe Power
Marketing, L.P., dated as of December 2, 1999.
30. Rate IL Service Agreement by and between Sithe Power Marketing, L.P. and
UGI Utilities, Inc., dated as of November 24, 1999.
31. Certain agreements listed on Schedule 6.5.2.(f)(A).
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228
SCHEDULE 7.4
APPROVALS AND FILINGS TO BE OBTAINED OR MADE PRIOR TO CLOSING
1. Approval by the Federal Energy Regulatory Commission of the
transactions contemplated hereby pursuant to Section 203 of the Federal Power
Act.
2. Approval of the transactions contemplated hereby under the HSR Act.
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229
Schedule 7.5
Topics to be Covered by Sellers' Counsel
Opinions covering the following topics will be addressed in one or more
opinions to be delivered by counsel to the Companies and the Sellers in a
customary form and subject to standard exceptions and qualifications:
1. Due incorporation or formation, existence, good standing of Sellers,
Companies, Subsidiaries of Companies.
2. Due authorization of execution, delivery and performance of transaction
documents. Due execution and delivery of transaction documents.
3. Enforceability of transaction documents, including transfer instruments
with respect to LLC Interests and Intercompany Notes.
4. Assuming that the Buyer purchases the Sithe Mid-Atlantic Stock to be
purchased by the Buyer under the Purchase Agreement in good faith and without
notice of any adverse claim within the meaning of the Uniform Commercial Code
as in effect in the State of New York on the Closing Date, upon the
consummation of the transactions contemplated by the Purchase Agreement, the
Buyer will own the Sithe Mid-Atlantic Stock free and clear of any adverse
claims, except for any adverse claims created by or at the behest of the Buyer.
5. No conflicts with (a) charters, bylaws, or other organizational documents
of Sellers, the Companies and their Subsidiaries, (b) New York law or Delaware
General Corporation Law or (c) certain identified contracts of Sellers,
Companies or controlled Subsidiaries of the Sellers.
6. Regulatory approvals under federal energy laws.
7. Applicable regulatory approvals under New Jersey, Maryland and
Pennsylvania State law.
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SCHEDULE 8.4
APPROVALS AND FILINGS TO BE OBTAINED OR MADE PRIOR TO CLOSING
1. Approval by the Federal Energy Regulatory Commission of the
transactions contemplated hereby pursuant to Section 203 of the Federal Power
Act.
2. Approval of the transactions contemplated hereby under the HSR Act.
3. The receipt of authorization letters from the New Jersey Department
of Environment Protection ("NJDEP") pursuant to ISRA for the Glen Gardner,
Sayreville, Werner and Gilbert facilities.
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Schedule 8.5
Topics to be Covered by Buyer's and Guarantor's Counsel
Opinions covering the following topics will be addressed in one or more opinions
to be delivered by counsel to Buyer and Guarantor in a customary form and
subject to standard exceptions and qualifications:
1. Due incorporation, existence, good standing of Buyer and Guarantor.
2. Due authorization of execution, delivery and performance of transaction
documents. Due execution and delivery of transaction documents.
3. Enforceability of transaction documents.
4. No conflicts with (a) charters, bylaws, or other organizational documents
of Buyer and Guarantor, (b) New York law, Texas law or Delaware General
Corporation Law or (c) certain identified contracts of Buyer and Guarantor.
5. Regulatory approvals under federal energy laws.
6. Applicable regulatory approvals under New Jersey, Maryland and
Pennsylvania State law.
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[INTENTIONALLY OMITTED]
S-95
233
SCHEDULE 9.3A
FORM OF TRANSFER INSTRUMENT FOR LLC INTERESTS
ASSIGNMENT OF LLC INTEREST
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
SITHE NORTHEAST GENERATING COMPANY, INC. ("Assignor") does hereby set over,
assign and transfer unto [RELIANT ENERGY POWER GENERATION, INC. or a subsidiary
of RELIANT ENERGY POWER GENERATION, INC.] ("Assignee"), all right title and
interest of Assignor in and to the limited liability company interests in Sithe
Pennsylvania Holdings LLC, a Delaware limited liability company, Sithe New
Jersey Holdings LLC, a Delaware limited liability company and Sithe Maryland
Holdings LLC, a Delaware limited liability company (each an "LLC" and,
collectively, the "LLCs"). Assignee agrees to amend the Limited Liability
Company Agreement of each LLC to reflect the admission of Assignee as a member
and to reflect the removal of Assignor.
IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed as
of
--------------------------------.
Sithe Northeast Generating Company, Inc.
By:
-------------------------------------
Acknowledgment
- --------------
The undersigned, Assignee, does
hereby acknowledge receipt of the
above assignment and consents to
all of the terms and conditions
therein contained.
[RELIANT ENERGY POWER GENERATION, INC.]
By:
------------------------------------
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234
SCHEDULE 9.3B
GENERAL TRANSFER AND CONVEYANCING INSTRUMENT
ASSIGNMENT AND TRANSFER AGREEMENT AND BILL OF SALE
ASSIGNMENT AND TRANSFER AGREEMENT AND BILL OF SALE, dated as of
__________, 2000 (this "Agreement"), by and among [entity or entities
designated by Reliant Energy Power Generation, Inc.] ("Assignee"), Sithe
Energies, Inc., a Delaware corporation ("Sithe"), Sithe Northeast Generating
Company, Inc., a Delaware corporation and an indirect wholly-owned Subsidiary
of Sithe ("Genco"), and Sithe Power Marketing L.P., a Delaware limited
partnership and an indirect wholly-owned Subsidiary of Sithe ("SPMLP" and,
together with Sithe and Genco, the "Sithe Entities") [OTHER SITHE SUBSIDIARIES
HOLDING ACQUIRED ASSETS].
W I T N E S S E T H:
WHEREAS, Sithe, Genco, Reliant Energy, Incorporated and Reliant Energy
Power Generation, Inc. are Parties to that certain Purchase Agreement, dated
of as February 19, 2000 (the "Purchase Agreement");
WHEREAS, it is the intention of the parties hereto to transfer the
Acquired Assets (as defined in the Purchase Agreement) (other than the Real
Property) by the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the Sithe Entities and
Assignee hereby agree as follows:
1. Capitalized terms which are used in this Agreement but are not
defined herein shall have the respective meanings ascribed to such terms in the
Purchase Agreement.
2. Subject to paragraphs 4, 5 and 7 below, the Sithe Entities hereby
assign, sell, convey, transfer, deliver, and set over, free and clear of any
material Liens (as the term "material Liens" is used in Section 3.14 of the
Purchase Agreement), other than Permitted Liens, all of the Acquired Assets to
the Assignee.
3. The Sithe Entities are not making any representations or warranties
of any nature or kind with respect to the Acquired Assets, except as expressly
set forth in the Purchase Agreement.
4. [Notwithstanding anything to the contrary set forth herein, the
agreements listed on Annex A hereto are partially assigned and assumed
hereunder as set forth on such Annex.]
5. [Notwithstanding anything to the contrary set forth herein, the
assignments and assumptions described in paragraph 2 hereof shall not include
any rights or obligations arising under the agreements identified on Annex B
hereto.]
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6. The Sithe Entities hereby agree with Assignee to execute and deliver
to Assignee such further documents and instruments as may be necessary or
reasonably requested by Assignee to confirm and perfect the assignment and
transfer to Assignee of the rights and obligations under the Purchase Agreement
with respect to those certain Acquired Assets identified herein.
7. To the extent that any rights of the Sithe Entities with respect to
any of the Acquired Assets 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 assignment of the same, if an attempted assignment
would constitute a breach thereof or be unlawful. The Sithe Entities and
Assignee agree that if any consent to an assignment of any Contract included in
the Acquired Assets shall not be obtained or if any attempted assignment would
be ineffective or would impair Assignee's rights and obligations under the
Contract in question so that Assignee would not in effect acquire the benefit
of all such rights and obligations, the Sithe Entities, at Assignee's option,
shall either (a) to the maximum extent permitted by law, appoint Assignee to be
the agent of the Sithe Entities with respect to any such Contract or (b) to the
maximum extent permitted by law and such Contract, enter into such reasonable
arrangements with Assignee or take such other actions as are necessary to
provide Assignee with the same or substantially similar rights and obligations
under such Contracts as Assignee may reasonably request.
8. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof. The invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
9. In the event that any provision of this Agreement is construed to
conflict with a provision of the Purchase Agreement, the provision in the
Purchase Agreement shall be deemed controlling.
10. This Agreement shall bind and shall inure to the benefit of the
respective parties and their permitted successors.
11. This Agreement shall be construed and enforced in accordance with the
laws of the State of New York without giving effect to the choice of law
principles thereof that would require the application of the laws of a
jurisdiction other than New York.
12. 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.
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
SITHE ENERGIES, INC.
By:
______________________________________________
Name:
Title:
SITHE NORTHEAST GENERATING COMPANY, INC.
By:
______________________________________________
Name:
Title:
SITHE POWER MARKETING, L.P.
By: SITHE AOG HOLDINGS, #1, INC.,
its general partner
By:
______________________________________________
Name:
Title:
[ENTITY OR ENTITIES DESIGNATED BY RELIANT ENERGY
POWER GENERATION, INC.]
By:
______________________________________________
Name:
Title:
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SCHEDULE 12.1
FORM OF ASSUMPTION INSTRUMENT
ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT, dated as of _________, 2000, among Reliant Energy
Power Generation, Inc., a Delaware corporation ("Buyer"), Sithe Energies, Inc.,
a Delaware corporation ("Sithe"), and Sithe Northeast Generating Company, Inc.,
a Delaware corporation ("Genco" and, together with Sithe, the "Sellers").
W I T N E S S E T H
WHEREAS, Buyer, Guarantor and the Sellers have entered into a Purchase
Agreement, dated as of February 19, 2000 (the "Purchase Agreement"; capitalized
terms used herein and not otherwise defined herein having the respective
meanings given in the Purchase Agreement), providing for the acquisition by
Buyer of the Intercompany Notes, the LLC Interests and the Mid-Atlantic Stock;
and
WHEREAS, pursuant to Section 12.1 of the Purchase Agreement, Buyer has
agreed to enter into this Assumption Agreement providing for the assumption by
Buyer of the GPU Liabilities;
NOW THEREFORE, in consideration for the Intercompany Notes, the LLC
Interests and the Mid-Atlantic Stock to be tranferred by the Sellers pursuant
to the Purchase Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and pursuant to the
terms and conditions of the Purchase Agreement, the parties hereto agree as
follows:
1. Assumption of Liabilities. Buyer hereby assumes all obligations and
liabilities of any kind, whether fixed, contingent, accrued or otherwise, that
either Seller or any Affiliate of any Seller (other than any Company or any
Subsidiary of any Company) may have under, with respect to or in connection
with the GPU Liabilities.
2. Representations and Warranties. The Sellers are not making any
representations or warranties of any nature or kind with respect to the GPU
Liabilities, except as expressly made and contained in the Purchase Agreement.
3. Conflicts with Purchase Agreement. In the event that any provision of
this Agreement is construed to conflict with a provision of the Purchase
Agreement, the provision in the Purchase Agreement shall be deemed controlling.
4. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York without giving effect to the
choice of law principles thereof which would require the application of the
laws of a jurisdiction other than New York.
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IN WITNESS WHEREOF, each party hereto has caused this Assumption Agreement
to be duly executed by its duly authorized officer as of the date first above
written.
RELIANT ENERGY POWER GENERATION, INC.
By_____________________________________
Name:
Title:
SITHE ENERGIES, INC.
By_____________________________________
Name:
Title:
SITHE NORTHEAST GENERATING COMPANY, INC.
By_____________________________________
Name:
Title:
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