PURCHASE AND SALE AGREEMENT
BY AND AMONG
EDISON MISSION ENERGY
P & L COAL HOLDINGS CORPORATION
AND
GOLD FIELDS MINING CORPORATION
DATED AS OF MAY 10, 2000
TABLE OF CONTENTS
SECTION 1
PURCHASE AND SALE OF THE INTERESTS
Page
1.1 Sale and Purchase.......................................................1
1.2 Excluded Assets and Liabilities.........................................1
1.3 Purchase Price..........................................................2
1.4 Reimbursement of Operating Expenses.....................................5
1.5 Payments Under Pre-Closing Incentive Plan...............................5
SECTION 2
THE CLOSING
2.1 Place and Date..........................................................5
2.2 Deliveries by Seller....................................................6
2.3 Deliveries by Buyer.....................................................7
2.4 Further Assurances......................................................7
SECTION 3
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Organization and Qualification..........................................7
3.2 Interests...............................................................8
3.3 Authority...............................................................9
3.4 No Violations...........................................................9
3.5 Financial Statements...................................................10
3.6 Absence of Certain Changes or Events...................................10
3.7 Title to and Condition of Assets.......................................11
3.8 Compliance With Regulations; Authorizations............................11
3.9 Material Contracts.....................................................11
3.10 Taxes..................................................................13
3.11 Employees..............................................................14
3.12 Litigation.............................................................14
3.13 Intellectual Property..................................................15
3.14 Employee Plans and Benefits............................................15
3.15 Labor Matters..........................................................16
3.16 Environmental Matters..................................................17
3.17 Year 2000 Compliance...................................................18
3.18 Insurance..............................................................18
3.19 Broker's or Finder's Fees..............................................18
3.20 Bank Accounts..........................................................19
3.21 Risk Management........................................................19
3.22 Disclosure; Representations For NUG Subsidiaries.......................19
SECTION 4
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Organization...........................................................19
4.2 Authority..............................................................19
4.3 No Violations..........................................................19
4.4 Litigation.............................................................20
4.5 Broker's or Finder's Fees..............................................20
4.6 Nature of Purchase.....................................................20
4.7 Accredited Investor....................................................21
4.8 Access to Information..................................................21
SECTION 5
COVENANTS OF SELLER
5.1 Affirmative Covenants..................................................21
5.2 Negative Covenants.....................................................21
5.3 Sale of Interests......................................................22
5.4 Updated Schedules......................................................22
5.5 Access.................................................................23
5.6 Modification of Certain Power Trading Contracts........................23
5.7 Transfer of NUG Subsidiaries...........................................23
5.8 Termination of Affiliate Transactions..................................24
SECTION 6
ADDITIONAL COVENANTS OF THE PARTIES
6.1 Employees..............................................................24
6.2 Other Employee Matters.................................................25
6.3 Covenant Not to Compete; Hiring........................................26
6.4 Records................................................................27
6.5 Guarantee of Administration Agreements; Reacquisition of NUG Interests.27
6.6 Consents and Filings...................................................28
6.7 Resignation of Managers................................................28
6.8 Insurance..............................................................28
6.9 Replacement of Cash Collateral.........................................28
6.10 Administration Agreements..............................................29
6.11 PPA/Loan Transaction...................................................29
6.12 Publicity..............................................................29
SECTION 7
TAX MATTERS
7.1 Tax Elections..........................................................30
7.2 Tax Returns............................................................30
7.3 Cooperation on Tax Matters.............................................32
7.4 Tax Sharing Agreements.................................................32
7.5 Certain Transfer Taxes.................................................32
7.6 Section 280G Tax.......................................................33
SECTION 8
CONDITIONS
8.1 Conditions to the Obligations of Buyer.................................33
8.2 Conditions to the Obligations of Seller................................34
SECTION 9
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.1 Survival...............................................................35
9.2 Indemnification........................................................35
9.3 Indemnification Procedures.............................................38
SECTION 10
DEFINITIONS
10.1 Definitions............................................................39
10.2 Certain Rules of Construction..........................................45
SECTION 11
MISCELLANEOUS PROVISIONS
11.1 Termination............................................................45
11.2 Amendment and Modification.............................................46
11.3 Waiver of Compliance; Consents.........................................46
11.4 Assignment.............................................................46
11.5 Expenses, Transfer Taxes, Etc..........................................46
11.6 Governing Law..........................................................47
11.7 Counterparts...........................................................47
11.8 Notices................................................................47
11.9 Specific Performance...................................................47
11.10 Headings...............................................................48
11.11 Entire Agreement.......................................................48
11.12 Severability...........................................................48
11.13 Exhibits and Schedules.................................................48
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (this "Agreement") is entered into as of
May 10, 2000, by and among Edison Mission Energy, a California corporation
("Buyer"), P&L Coal Holdings Corporation, a Delaware corporation ("P&L"), and
Gold Fields Mining Corporation, a Delaware corporation ("Gold Fields," and
together with P&L, "Seller").
RECITALS
A. Gold Fields owns a 99% membership interest in Citizens Power LLC, a
Delaware limited liability company ("Citizens Power"). P&L owns a 1% membership
interest in Citizens Power. Citizens Power owns a 100% membership interest in
Citizens Power Sales LLC, a Delaware limited liability company ("CP Sales", and
together with Citizens Power, "Citizens").
B. Citizens is engaged in the business of marketing and trading electrical
energy, capacity and transmission, natural gas, crude oil and related products,
and emissions allowances, and restructuring electrical power contracts in
connection with certain non-utility electric generating facilities (the
"Business").
C. Based upon the representations, warranties and agreements herein made by
Seller, and subject to the terms and conditions contained in this Agreement,
Buyer desires to acquire all of the membership interests in Citizens Power held,
directly or indirectly, by Seller (together, the "Interests").
D. Based upon the representations, warranties and agreements herein made by
Buyer, and subject to the terms and conditions contained in this Agreement,
Seller desires to sell the Interests.
In consideration of the foregoing and the mutual representations,
warranties, covenants, and agreements herein contained, Seller and Buyer agree
as follows:
SECTION 1
PURCHASE AND SALE OF THE INTERESTS
1.1 Sale and Purchase. Subject to the terms and conditions of this
Agreement, at the Closing P&L shall sell, convey, assign, transfer and deliver
to Buyer, or to a majority-owned direct or indirect subsidiary designated by
Buyer ("Newco") all of its membership interests in Citizens Power, and Gold
Fields shall sell, convey, assign, transfer and deliver to Buyer, or to a
majority-owned subsidiary designated by Buyer ("Newco Sub", which may be the
same or a different entity from Newco), all of its membership interest in
Citizens Power. Buyer, Newco and/or Newco Sub shall purchase and acquire all
right, title and interest of Seller in and to the Interests, free and clear of
all Encumbrances.
1.2 Excluded Assets and Liabilities.
(a) Buyer understands and agrees that, subject to the terms set forth
herein, Citizens shall transfer, assign or distribute to Seller, an
affiliate designated by Seller ("Seller Affiliate") or a third party prior
to the Closing the following assets (the "Excluded Assets"):
(i) All cash and cash equivalents, such as certificates of
deposit, Treasury bills and other marketable securities, on Citizens'
balance sheet prior to the Closing, including, subject to the
provisions of Sections 1.4 and 6.9 hereof, any cash and cash
equivalents which collateralize Citizens' obligations under Power
Trading Contracts, other than Retained Cash, provided that such
Excluded Assets shall not be distributed to Seller other than in
accordance with Citizens' past practices until immediately prior to
the Closing;
(ii) All membership or other equity interests in the NUG
Subsidiaries, other than any Retained Interest;
(iii) All rights and obligations of Citizens Power under the
Reimbursement Agreement dated as of May 7, 1997 between Citizens Power
and UDG-SPS, Inc.;
(iv) All deferred costs associated with the Excluded NUG
Transactions; and
(v) All rights and obligations of Citizens Power in connection
with the two secured promissory notes by Meridian Trust Company dated
September 25, 1987.
(b) Citizens shall transfer or assign to Seller or a Seller Affiliate
prior to the Closing all of Citizens' obligations, if any, to Employees
under the Employee Plans described in Section 6.2(a) hereof, and Seller or
Seller Affiliate shall assume all such obligations.
1.3 Purchase Price.
(a) The purchase price (the "Purchase Price") for the Interests shall
consist of:
(i) twenty five million dollars ($25,000,000); plus
(ii) subject to Seller's compliance with the requirements of
Section 6.9 hereof and the satisfaction of the condition set forth in
Section 8.1(f) hereof, the amount of all cash and cash equivalents on
Citizens' balance sheet as of the Closing Date (the "Retained Cash"),
after giving effect to the transfer, assignment, or distribution of
the Excluded Assets as contemplated by Section 1.2 hereof, and
excluding any cash or cash equivalents contributed to Citizens from
Buyer as of the Closing, plus;
(iii) subject to the provisions of Section 5.6 hereof, the Net
Unrealized Fair Market Value of all Power Trading Contracts on
Citizens' balance sheet as of the Closing Date (the "Portfolio
Payment"), excluding (A) any NUG Power Trading Contract (including all
gas swap agreements between CP Sales and CoEnergy Trading Company
related to HPS), (B) any Power Trading Contract the value of which is
reflected in the Retained Interest Payment, and (C) the General
Trading Reserve; plus
(iv) the sum of the value of the Retained Interests, if any, in
each NUG Subsidiary as of the Closing Date, which value shall be the
amount that, if paid for the Retained Interest, would result in an
after-tax internal rate of return on such Retained Interest over its
remaining life as of the Closing Date of 12%, with tax amortization or
deductions of such NUG Subsidiary having been computed using a 15-year
life and such further tax assumptions as agreed by Seller and Buyer
(the "Retained Interest Payment");
provided if Citizens' Net Book Value as of the Closing Date, assuming
consummation of the transactions contemplated by this Agreement,
including the transfer, assignment or distribution of the Excluded
Assets, is less than zero, the Purchase Price shall be reduced by the
amount by which Citizens' Net Book Value is less than zero. In no
event shall the Purchase Price be increased based on Citizens' Net
Book Value as of the Closing Date. A sample calculation of the
Purchase Price (other than the Retained Interest Payment), based on
the financial statements attached as Schedule 3.5 hereto as if the
Balance Sheet Date were the Closing Date, is attached as Schedule
1.3(a) hereto. The Parties shall use good faith efforts to develop a
sample calculation of the Retained Interest Payment prior to Closing.
For purposes of clarification, if the amount of the Portfolio Payment
is negative, the absolute value of such amount shall be deducted from
the Purchase Price.
(b) The Retained Cash, Portfolio Payment, Retained Interest Payment
and Citizens' Net Book Value as of the Closing Date will be determined as
follows:
(i) Between five (5) and seven (7) business days prior to the
Closing Date, Seller shall deliver to Buyer a detailed calculation
(the "Estimated Closing Calculation") of the estimated Retained Cash,
Portfolio Payment, Retained Interest Payment and Citizens' Net Book
Value as of the Closing Date, in each case assuming consummation of
the transactions contemplated by this Agreement, including the
transfer, assignment or distribution of the Excluded Assets. The
Estimated Closing Calculation shall be accompanied by detailed
supporting documentation, shall include an unaudited statement of the
Retained Cash, Portfolio Payment, Retained Interest Payment and
Citizens' Net Book Value, in each case prepared in accordance with
generally accepted accounting principles applied in a manner
consistent with Citizens' past practices, as modified by this
Agreement, and Seller's Certificate. The Estimated Closing Calculation
shall be subject to Buyer's reasonable approval.
(ii) On the business day immediately prior to the Closing Date,
Seller shall furnish to Buyer an updated Estimated Closing Calculation
and Seller's Certificate. Such updated calculation shall be
accompanied by an explanation of any differences between the Retained
Cash, Portfolio Payment, Retained Interest Payment and Citizens' Net
Book Value set forth on the original Estimated Closing Calculation,
and shall be subject to Buyer's reasonable approval. Buyer shall pay
to Seller at Closing the Purchase Price shown in the approved updated
Estimated Closing Calculation (the "Closing Calculation").
(iii) Within five (5) business days after the Closing Date,
Seller shall deliver to Buyer an updated Closing Calculation (in its
final form, the "Final Calculation") and Seller's Certificate. Buyer
shall cause Citizens to assist Seller in preparing the Final
Calculation. If within thirty (30) calendar days following delivery,
Buyer has not given Seller notice of its objection to the Final
Calculation, then Buyer will be deemed to have accepted the Retained
Cash, Portfolio Payment, Retained Interest Payment and Net Book Value
shown in the Final Calculation. Buyer shall be entitled to review
Seller's workpapers relating to the Final Calculation during such
period, or the period of any good faith negotiation pursuant to
subparagraph (iv) below. Any notice of objection shall specify in
reasonable detail the nature and basis of any objection, including
issues which are not in dispute.
(iv) If Buyer gives timely notice of such objection, then the
parties shall, during the thirty (30) days following delivery of such
notice, use good faith efforts to resolve disputed issues. During such
period, Seller may review Buyer's workpapers prepared in connection
with disputed issues. Disputed issues which the parties are unable to
resolve will be submitted to an Accounting Firm for resolution. If
disputed issues are submitted to an Accounting Firm for resolution:
(A) each party will furnish to the Accounting Firm such workpapers and
other documents and information relating to the disputed issues as the
Accounting Firm may request and are available to that party, and will
be afforded the opportunity to present to the Accounting Firm any
material relating to the determination and to discuss the
determination with the Accounting Firm; (B) the determination of the
Accounting Firm, set forth in a notice to be delivered to both parties
by the Accounting Firm, will be binding and conclusive on the parties;
and (C) Buyer and Seller will each bear one-half of the fees and
expenses of the Accounting Firm for such determination.
(v) Any difference between the Purchase Price shown on the
Closing Calculation and the Final Calculation (after resolution of
disputed issues, if any), together with interest at 9% compounded
monthly beginning on the Closing Date and ending on the date of
payment, shall be paid by one party to the other within three (3)
business days after Buyer's acceptance of the Final Calculation, or
any subsequent resolution of disputed issues. If such difference
exceeds $2,000,000, Seller shall reimburse Buyer or Citizens for any
third-party fees and expenses incurred in connection with Buyer's
review of the Final Calculation, including the fees and expenses of
any accounting firms retained by Buyer or Citizens to review the Final
Calculation, as well as Buyer's share of the fees and expenses of the
Accounting Firm. Each party shall otherwise bear itself all other fees
and expenses incurred by it in connection with this Section 1.3.
1.4 Reimbursement of Operating Expenses. Seller shall, to the extent
reasonably practicable, cause Citizens to pay on or prior to the Closing Date
(and prior to the transfer, assignment or distribution of cash and cash
equivalents which constitute Excluded Assets as contemplated by Section 1.2(a)
hereof) all operating expenses for periods prior to the Closing, including but
not limited to expenses for property, state and local Taxes, salaries and
benefits of Employees, insurance and audit, tax and consulting services incurred
prior to Closing. For purposes of this Section 1.4, operating expenses shall not
include (i) accounts payable with respect to Power Trading Contracts, (ii)
deferred expenses associated with asset restructuring transactions, and (iii)
operating expenses of the NUG Subsidiaries. To the extent this is not reasonably
practicable, Seller shall promptly reimburse Buyer or Citizens for operating
expenses paid by Buyer or Citizens after the Closing but properly allocated to
periods prior to the Closing, unless and to the extent that reserves for such
operating expenses are included in the Final Calculation of Net Book Value.
Buyer shall (or shall cause Citizens to) reimburse Seller for operating expenses
prepaid by Citizens as of the Closing Date (as shown in the Final Calculation of
Net Book Value), but properly allocated to periods after the Closing.
Notwithstanding the foregoing, Seller shall be solely liable for obligations
under the Employee Plans described in Section 6.2(a) hereof.
1.5 Payments Under Pre-Closing Incentive Plan. All calculations of Net Book
Value shall include appropriate accruals for Citizens' obligations under the
Pre-Closing Incentive Plan. Buyer shall cause Citizens to pay amounts earned by
Employees under the terms of such plan, and shall cause Citizens not to modify
or amend the provisions of such plan without Seller's approval. If the amounts
earned by Employees and paid by Citizens under the Pre-Closing Incentive Plan
vary from the amounts accrued for such obligations in the Final Calculation of
Net Book Value, Seller shall promptly reimburse Citizens, or Buyer shall cause
Citizens to promptly reimburse Seller, for the difference.
SECTION 2
THE CLOSING
2.1 Place and Date. Unless this Agreement shall have been terminated
pursuant to Section 11.1 hereof, the closing of the purchase and sale of the
Interests shall take place at or be directed from the offices of Nixon Peabody
LLP, 101 Federal Street, Boston, Massachusetts 02110, at 10:00 a.m., local time,
on June 30, 2000, or if the conditions set forth in Section 8 shall not by then
have been satisfied or waived, on the second business day after the day on which
the last of the conditions set forth in Section 8 is satisfied or waived (such
event being called the "Closing" and such date, the "Closing Date"), provided
that the Closing Date may be delayed for up to ten (10) business days at the
request of Seller if required in connection with the consummation of the
transactions contemplated by Section 5.7 hereof.
2.2 Deliveries by Seller. At the Closing, Seller shall deliver to Buyer,
Newco and/or Newco Sub, as appropriate, the following:
(a) An Assignment of Interests or such other instruments of transfer
or conveyance necessary or desirable to convey title to the Interests to
Buyer, Newco and/or Newco Sub, in form reasonably acceptable to Buyer and
duly executed by Seller;
(b) A cross-receipt for the amount delivered by Buyer pursuant to
Section 2.3(a) hereof, duly executed by Seller;
(c) Amendments to the Limited Liability Company Agreements of each NUG
Subsidiary in which Citizens will hold a Retained Interest after the
Closing Date in form reasonably approved by Seller and Buyer and duly
executed by Citizens and Seller or the applicable Seller Affiliate and/or
third party;
(d) A certificate executed by a responsible officer of Seller, in form
reasonably satisfactory to Buyer and dated as of the Closing Date,
certifying (i) the accuracy of Seller's representations and warranties set
forth in Section 3 as of the Closing Date (or as of such date as may be
specifically set forth in Section 3), and (ii) Seller's compliance with
each of its covenants to be performed pursuant to this Agreement on or
before the Closing Date;
(e) Any updated schedules and other information required pursuant to
Section 5.4 hereof;
(f) A Support Services Agreement in the form of Exhibit B hereto, duly
executed by Citizens and Seller or a Seller Affiliate; and
(g) Certificates dated the Closing Date duly executed on behalf of
each Seller by its Secretary or Assistant Secretary attaching:
(i) a copy of the resolutions of the Board of Directors of Seller
authorizing and approving this Agreement and the consummation of the
transactions contemplated hereby, and authorizing the officers of
Seller to take any actions and to execute all documents and
instruments to be executed, delivered or filed by them pursuant to or
in connection with this Agreement;
(ii) certificates of good standing for Seller and Citizens,
certified by the Secretary of State of the State of Delaware as of a
date within fifteen (15) business days of the Closing Date;
(iii) specimen signatures of the incumbent officers of Seller
executing this Agreement and the documents executed and delivered
pursuant to or in connection with this Agreement; and
(iv) a true and correct copy of Citizens' Certificate of
Formation and Limited Liability Company Agreement, certified by the
Secretary or an Assistant Secretary of Citizens.
2.3 Deliveries by Buyer. At the Closing, Buyer shall deliver to Seller the
following:
(a) Cash, by wire transfer to an account designated by Seller, in the
amount equal to the Purchase Price;
(b) A cross-receipt for the Interests, duly executed by Buyer, Newco
and/or Newco Sub, as applicable;
(c) A certificate executed by a responsible officer of Buyer, in form
reasonably satisfactory to Seller and dated as of the Closing Date,
certifying as to (i) the accuracy of Buyer's representations and warranties
set forth in Section 4 as of the Closing Date (or as of such date as may be
specifically set forth in Section 4), and (ii) Buyer's compliance with each
of its covenants to be performed pursuant to this Agreement on or before
the Closing Date;
(d) Pursuant to Section 6.5 hereof, Performance Guarantees
(Administration Agreement) in the form of Exhibit C hereto, duly executed
by Buyer; and
(e) A certificate dated the Closing Date and signed on behalf of Buyer
by its Secretary or Assistant Secretary attaching:
(i) a copy of the resolutions of the Board of Directors of Buyer
authorizing and approving this Agreement and the consummation of the
transactions contemplated hereby, and authorizing the officers of
Buyer to take any actions and to execute all documents and instruments
to be executed, delivered or filed by it pursuant to or in connection
with this Agreement;
(ii) a certificate of good standing for Buyer, certified by the
Secretary of State of the State of California as of a date within
fifteen (15) business days of the Closing Date; and
(iii) specimen signatures of the incumbent officers of Buyer
executing this Agreement and the documents executed and delivered
pursuant to or in connection with this Agreement.
2.4 Further Assurances. Each of the parties hereto will cooperate with the
other and execute and deliver to the other party hereto such other instruments
and documents and take such other actions as may be reasonably requested from
time to time by the other party hereto as necessary to carry out, evidence and
confirm the intended purposes of this Agreement.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization and Qualification.
(a) Citizens, each NUG Subsidiary (other than Newhall Funding Company)
and each Other Subsidiary are limited liability companies duly formed and
existing in good standing under the laws of the State of Delaware, with
full power and authority to own, lease, and operate their properties and to
carry on their businesses as now conducted. Newhall Funding Company is a
voluntary association under a Declaration of Trust, the beneficial
interests of which are divided into transferable certificates of
participation, generally referred to as a Massachusetts business trust,
duly organized and existing under the laws of the Commonwealth of
Massachusetts, with full power and authority to own, lease or operate its
properties and to carry on its business as now conducted. Each Seller is a
corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware, with full power and authority to own,
lease, and operate its properties and to carry on its business as now
conducted.
(b) Seller, Citizens and each NUG Subsidiary are registered, licensed
or qualified to do business as a foreign corporation, limited liability
company, partnership or business trust, as the case may be, and are in good
standing in the other jurisdictions in which they conduct business. None of
the Other Subsidiaries has conducted any business.
(c) Seller has previously furnished to Buyer complete and correct
copies of the Certificate of Formation and Limited Liability Company
Agreement of Citizens, each NUG Subsidiary (other than Newhall Funding
Company) and each Other Subsidiary, and the Declaration of Trust of Newhall
Funding Company, in each case as amended or restated to the date hereof.
Such documents are in full force and effect, have not been further modified
or amended, and neither Seller, Citizens, any NUG Subsidiary nor any Other
Subsidiary is in violation of any of the provisions thereof.
3.2 Interests.
(a) P&L owns a 1% membership interest in Citizens Power beneficially
and of record, free and clear of any Encumbrances. Gold Fields owns a 99%
membership interest in Citizens Power beneficially and of record, free and
clear of any Encumbrances. Citizens Power owns a 100% membership interest
in CP Sales beneficially and of record, free and clear of any Encumbrances.
Citizens or the other entities shown on Schedule 3.2 hereto own the
membership or other interests in each NUG Subsidiary and each Other
Subsidiary shown on Schedule 3.2 hereto beneficially and of record, free
and clear of all Encumbrances, except as shown on Schedule 3.2 hereto.
(b) The Interests constitute all of the issued and outstanding
membership or other equity or capital interests of Citizens. The membership
or other interests shown in Schedule 3.2 hereto constitute all of the
issued and outstanding membership or other equity or capital interests of
each NUG Subsidiary and each Other Subsidiary. Except as contemplated by
this Agreement, there are no options, warrants, convertible securities or
other rights relating to the issuance, sale, assignment or transfer of any
membership, partnership or other equity or capital interest in Citizens,
any NUG Subsidiary, or any Other Subsidiary. Except as shown in Schedule
3.2 hereto, Citizens has no equity or capital interest in any corporation,
partnership, limited liability company, joint venture, business trust or
any other entity, and no options, warrants, convertible securities or other
rights with respect to any such interests.
(c) Upon consummation of the Closing, Buyer, Newco and/or Newco Sub
will acquire good and marketable title to the Interests free and clear of
all Encumbrances.
(d) There are no voting trust, member agreements, proxies or other
similar agreements in effect with respect to the voting of the Interests or
the membership or other equity or capital interests of any NUG Subsidiary
or Other Subsidiary, other than as may be set forth in the Limited
Liability Company Agreements furnished to Buyer pursuant to Section 3.1(c)
hereof. Seller and Citizens have made all capital contributions to Citizens
or the NUG Subsidiaries required to be made by them, and there are no
capital calls pending or contemplated with respect thereto.
3.3 Authority. Seller has the corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery by Seller of this Agreement, and the consummation of
the transactions contemplated hereby, have been duly authorized and approved by
all necessary corporate action. This Agreement has been duly and validly
executed and delivered by Seller and constitutes the legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
except to the extent that enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and by general equitable principles.
3.4 No Violations. Except as specifically set forth to the contrary on
Schedule 3.4 hereto, neither the execution or delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, including without
limitation the sale of the Interests to Buyer, Newco and/or Newco Sub and the
transfer, assignment or distribution of the Excluded Assets:
(a) Requires Seller, Citizens or any NUG Subsidiary to make any filing
or registration with, or obtain the consent, authorization, approval, or
permit of, any Governmental Authority or non-governmental Person, except as
required under the HSR Act and the FPA;
(b) Results in a violation of any order, writ, injunction, judgment,
decree, or award of any Governmental Authority, or any Regulation to which
Seller, Citizens, any NUG Subsidiary, or any of their respective properties
or assets are subject;
(c) Results in a violation or breach of, a conflict with any provision
of, or a default (or an event which, with notice or lapse of time or both,
would constitute a default) under (i) the Certificate of Incorporation or
Bylaws of Seller, (ii) the Certificate of Formation or Limited Liability
Company Agreement of Citizens, any NUG Subsidiary (other than Newhall
Funding Company) or any Other Subsidiary, or (iii) the Declaration of Trust
of Newhall Funding Company; or
(d) Results in a violation or breach of, a conflict with any provision
of, or a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or gives rise to a right to additional
payment under, to accelerate or to terminate, any mortgage, contract,
agreement, deed of trust, license, lease, or other instrument, arrangement,
commitment, obligation, understanding, or restriction of any kind to which
Seller, Citizens or any NUG Subsidiary is a party or by which any of their
respective properties or assets may be bound, or will cause, or give any
Person grounds to cause, to be accelerated (with notice or lapse of time or
both) the maturity of, or will increase, any liability or obligation of,
any of them;
and, as to (a), (b) and (d), the result of which either individually or in
the aggregate would have a Material Adverse Effect.
3.5 Financial Statements. Schedule 3.5 hereto sets forth (a) the unaudited
balance sheet of Citizens as of April 30 , 2000 (the "Balance Sheet Date") and
the related unaudited statements of income for the month then ended, and (b) the
unaudited pro-forma balance sheet of Citizens (after giving effect to the
transactions contemplated hereby) as of the Balance Sheet Date and the related
unaudited pro-forma statements of income for the month then ended. Except as set
forth on Schedule 3.5 hereto, the financial statements in Schedule 3.5 (i) were
prepared in accordance with generally accepted accounting principles
consistently applied by Citizens throughout the periods indicated, and (ii)
subject to the foregoing, fairly present in all material respects the financial
position and condition of Citizens as of the Balance Sheet Date and the results
of its operations for the periods indicated. Except for liabilities that in the
aggregate would not have a Material Adverse Effect, to Seller's and Citizens'
knowledge there are no liabilities, fixed or contingent, of Citizens other than:
(A) liabilities disclosed or adequately provided for in the balance sheets set
forth in Schedule 3.5 hereto; (B) liabilities previously disclosed to Buyer and
listed in Schedule 3.5 hereto, and (C) liabilities incurred in the ordinary
course of business since the Balance Sheet Date consistent with past practice.
The line item identified as "Assets from risk management activities" in the
unaudited balance sheet and the unaudited proforma balance sheet includes a $4
million trading and price risk management reserve (the "General Trading
Reserve") which is not necessary to accurately reflect the Net Unrealized Fair
Market Value of the Power Trading Contracts.
3.6 Absence of Certain Changes or Events. Except as specifically set forth
to the contrary on Schedule 3.6 hereto, or as specifically contemplated by this
Agreement, since the Balance Sheet Date, Citizens has operated its Business in
the ordinary course consistent with past practice, and has not:
(a) Suffered any Material Adverse Effect, or any event or condition of
any character, which, individually or in the aggregate, has had or could
reasonably be expected to have a Material Adverse Effect;
(b) Incurred any material obligation or liability (absolute, accrued,
contingent, or otherwise), except under Power Trading Contracts entered
into in the ordinary course of business consistent with its risk management
policies;
(c) Materially changed the compensation or benefits of any Employee,
including granting any material severance or termination benefits;
(d) Made any capital expenditure, or commitment for a capital
expenditure, for additions to property, plant, equipment, or intangible
property, exceeding $25,000 in the aggregate;
(e) Made any change in any method of accounting or accounting practice
or in any tax procedures or elections;
(f) Terminated or suffered a termination of (excluding a termination
in accordance with its terms) or cancelled, extended, amended or otherwise
modified or waived any rights under any Material Contract (other than
extensions, amendments, modifications or waivers in the ordinary course of
business which, individually or in the aggregate, are not material to the
Business), including releasing or waiving any material portion of any
collateral or credit enhancement delivered by a counterparty thereto; or
(g) Agreed, whether in writing or otherwise, or made any arrangement,
whether or not legally binding, to take any of the foregoing actions.
3.7 Title to and Condition of Assets. Except as set forth on Schedule 3.7
hereto, Citizens has good and marketable title, or valid and effective leasehold
rights in the case of leased property, to all of its personal property, free and
clear of all Encumbrances, except for Permitted Encumbrances. Citizens' tangible
personal property is in good operating condition and repair (ordinary wear and
tear excepted) and is usable by Citizens in the ordinary course of business
consistent with its past practices.
3.8 Compliance With Regulations; Authorizations. Citizens and each NUG
Subsidiary have conducted their business in compliance with each, have complied
with each, and are not in violation of any, Regulation to which their business,
operations, assets or properties are subject, except for violations, if any,
which individually or in the aggregate would not have a Material Adverse Effect.
Neither Seller nor Citizens has received written notice of any such violation or
any investigation concerning any such possible violation. Schedule 3.8 hereto
lists all Authorizations which are in any manner necessary for the conduct of
Citizens' and each NUG Subsidiary's business as now conducted or for the
ownership and use of their assets. Citizens and each NUG Subsidiary hold or are
parties to all such Authorizations and are in material compliance with all such
Authorizations, except for violations, if any, which individually or in the
aggregate would not have a Material Adverse Effect. There is no action,
proceeding or investigation pending or, to the knowledge of Seller or Citizens,
threatened regarding suspension or cancellation of any Authorization. 3.9
Material Contracts. Schedule
3.9 hereto sets forth all of the following contracts, whether written or
oral, to which Citizens or a NUG Subsidiary is a party or is otherwise bound or
subject to (each a "Material Contract" and collectively the "Material
Contracts"):
(a) any material agreement with respect to the restructuring of a
contract for the purchase or sale of electric energy or capacity of a
non-utility electric generating facility (for purposes of this clause (a),
an agreement of a NUG Subsidiary shall be deemed material if it has a
material effect on the Retained Interest Payment for such NUG Subsidiary);
(b) any guaranty by Citizens of, or agreement by Citizens to indemnify
any Person with respect to, any obligation of any NUG Subsidiary, or by
Citizens or any NUG Subsidiary of any obligation of Seller or any Affiliate
of Seller;
(c) any agreement between or among Citizens, any NUG Subsidiary,
Seller or any Affiliate of Seller;
(d) any agreement related to the borrowing of monies, or issuance of
any note, bond, indenture, or other evidence of indebtedness or guarantee
of the indebtedness of others (other than the obligations of the NUG
Subsidiaries that are listed in parts A and B of Schedule 3.9 hereto);
(e) any lease of real property or office space;
(f) any Power Trading Contract, including a description of the type of
contractand the counterparty thereto, and any letters of credit,
collateral, guarantees or other credit enhancements posted or delivered in
connection therewith;
(g) [intentionally omitted];
(h) any agreement for the trading, management, bidding, settlement, or
scheduling of electric energy, capacity or transmission, coal, natural gas,
crude oil or related products, or NOx or other emissions allowances, which
does not constitute a Power Trading Contract; and
(i) any other agreement which is material to Citizens or the Business,
excluding any agreement entered into in the ordinary course of business
which would constitute a Material Contract solely because it imposes
confidentiality or nondisclosure obligations upon Citizens with respect to
the confidential or proprietary information of a third party.
Schedule 3.9 hereto also includes, and the Material Contracts shall
include, any guaranty by any third party of any obligation of Citizens. Schedule
3.9 hereto does not include, but the Material Contracts shall include, any
employment, severance, retention or other compensation agreements or
arrangements with Employees or consultants which are not Employee Plans
("Employment Agreements"). True and complete copies of all Material Contracts
(or with respect to Power Trading Contracts, forms of master contracts and
confirmations) have been made available to Buyer, including all amendments and
modifications with respect thereto. With respect to each Material Contract,
except as set forth in Schedule 3.9 hereto: (i) there has been no breach or
default under any such contract by Citizens or any NUG Subsidiary or, to the
knowledge of Seller or Citizens, by any other party thereto, and no event which,
with notice or lapse of time or both, would constitute a default thereunder,
including any past due receivable thereunder; (ii) there are no disagreements
with respect to performance of the terms and conditions thereof (other than as
set forth in Schedule 3.12 hereto); (iii) such contract is a valid and binding
obligation of Citizens or the NUG Subsidiary, is in full force and effect with
respect to Citizens or the NUG Subsidiary and is enforceable against Citizens or
the NUG Subsidiary in accordance with its terms; (iv) all sums due and payable
for the period up to and including the Closing have been paid, or will be paid
by Citizens or the NUG Subsidiary on or prior to the Closing Date; (v) no
waiver, indulgence or postponement of any party's obligations thereunder has
been granted, except for such matters which, individually or in the aggregate,
would not have a Material Adverse Effect; and (vi) Citizens has not assigned all
or any part of its rights under a Material Contract to any other Person. No NUG
Subsidiary has assigned all or any part of its rights under a Material Contract
to any Person other than a trustee for the benefit of the NUG Subsidiary's
lenders.
3.10 Taxes.
(a) Citizens, the Seller Group, the NUG Subsidiaries and/or the Other
Subsidiaries have filed all Tax Returns required to be filed with respect
to Citizens, the NUG Subsidiaries, the Other Subsidiaries and their
respective assets, and have paid all Taxes due and owing with respect to
Citizens, the NUG Subsidiaries, the Other Subsidiaries and their respective
assets, except for Taxes being diligently contested in good faith by
appropriate proceedings, all of which are listed on Schedule 3.10 hereto.
Citizens, the Seller Group, the NUG Subsidiaries and the Other Subsidiaries
have complied with all applicable Regulations relating to withholding Taxes
with respect to Citizens, the NUG Subsidiaries, and the Other Subsidiaries.
All Tax Returns relating to Citizens, the NUG Subsidiaries and the Other
Subsidiaries or their respective assets are true, correct and complete.
(b) All Taxes related to Citizens, the NUG Subsidiaries and/or the
Other Subsidiaries and their respective assets, including, without
limitation, such Taxes shown on any income Tax Returns filed by Seller
Group for each taxable period during which Citizens was a member of the
Seller Group, or claimed to be due by any taxing authority from or in
respect of Citizens, have been properly accrued or paid. Except as set
forth in Schedule 3.10 hereto, no notice of deficiency or assessment has
been received from any taxing authority regarding liabilities for Taxes
with respect to Citizens, the NUG Subsidiaries, the Other Subsidiaries or
their respective assets, which have not been fully paid or finally settled,
and any such deficiency is being diligently contested in good faith through
appropriate proceedings. Except as set forth in Schedule 3.10 hereto, there
are no outstanding agreements or waivers extending the applicable statutory
periods of limitation for Taxes associated with Citizens, the NUG
Subsidiaries, the Other Subsidiaries or their respective assets that will
be binding upon Buyer or Citizens after the Closing Date. None of the
assets of Citizens, any NUG Subsidiary or any Other Subsidiary is property
that is required to be treated as being owned by any other Person pursuant
to the so-called safe harbor lease provisions of former Section 168(f) of
the Code, or is "tax-exempt use" property within the meaning of Section
168(h) of the Code. Schedule 3.10 hereto also sets forth the taxing
jurisdictions in which either Citizens or the Seller Group own assets or
conducts business that require a notification to a taxing authority of the
transactions contemplated by this Agreement, if the failure to make such
notification, or obtain Tax clearance certificates in connection therewith,
would either require Buyer to withhold any portion of the Purchase Price or
subject Buyer to any liability for Taxes of Citizens or the Seller Group.
(c) Citizens has made all deposits required by law to be made with
respect to withholding and other employment taxes, and has withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor, or
other party.
(d) Neither Seller, Seller Group, Citizens, any NUG Subsidiary nor any
Other Subsidiary has previously made an election under Section 754 of the
Code with respect to Citizens, any NUG Subsidiary in which Citizens will
have a 100% Retained Interest, or any Other Subsidiary.
(e) Each of Citizens, the NUG Subsidiaries and the Other Subsidiaries
is treated as a "disregarded entity" (as defined in Treasury Regulations
Section 301.7701-3), except for Citizens Power and any NUG Subsidiary in
which Citizens will have less than a 100% Retained Interest, which may be
treated as partnerships for U.S. federal income tax purposes. Neither
Seller, Seller Group, Citizens, any NUG Subsidiary nor any Other Subsidiary
has made an election or taken any action to treat Citizens, any NUG
Subsidiary, or any Other Subsidiary as an association taxable as a
corporation for U.S. federal income tax purposes. Neither Seller, Seller
Group, Citizens, any NUG Subsidiary or any Other Subsidiary has received
any notice, statement or inquiry from any taxing Governmental Authority
which would treat Citizens, any NUG Subsidiary or any Other Subsidiary as
taxable as a corporation or questions their taxable status.
3.11 Employees. Schedule 3.11 hereto is a true and complete list of the
names and dates of hire of each employee employed by Citizens (the "Employees").
Seller has previously furnished to Buyer a complete and correct list of the
current salary, fiscal year [2000 bonus, and other compensation of each
Employee, including any options or stock granted to such Employee under P&L's
1998 Stock Purchase and Option Plan, amounts to be paid to repurchase shares of
stock granted under such plan, any severance benefit and any additional
compensation or bonus (including any increase in severance benefit) or any other
rights or benefits, which the Employee is entitled to in the event of a
relocation, or reduction in title, salary or duties. Except as set forth on
Schedule 3.11 hereto, each Employee has executed an Employment Agreement.
3.12 Litigation. Except as set forth on Schedule 3.12 hereto, no
litigation, including any arbitration, investigation or other proceeding of or
before any Governmental Authority is pending or, to the knowledge of Seller or
Citizens, threatened that in any way involves or relates to Citizens or any NUG
Subsidiary, or to Seller's ability to consummate the transactions contemplated
by this Agreement, including the transfer of the Interests and the assignment,
transfer or distribution of the Excluded Assets, and to the knowledge of Seller
or Citizens there is no basis for any such action. Neither Seller, Citizens nor
any NUG Subsidiary is a party to or subject to the provisions of any judgment,
order, writ, injunction, decree or award of any Governmental Authority which may
have a Material Adverse Effect, or may adversely affect the transactions
contemplated hereby.
3.13 Intellectual Property. Schedule 3.13 hereto is a complete and accurate
schedule of all patents, copyrights, trademarks, service marks, trade names,
trade secrets, software and processes, owned by Citizens, or in which it has any
rights or licenses, and which are used in connection with its Business
("Intellectual Property"). To Seller's and Citizens' knowledge: (a) the
ownership and use of the Intellectual Property do not violate or infringe on any
patent, copyright, trade secret, trademark, service mark, trade name, or any
other proprietary or personal right of any Person; and (b) Citizens has not
infringed and is not now infringing on any such right belonging to any Person.
Except as set forth on Schedule 3.13 hereto, Citizens is not a party to any
license, agreement, or arrangement, whether as licensee, licensor, or otherwise,
with respect to the Intellectual Property.
3.14 Employee Plans and Benefits. Set forth in Schedule 3.14 hereto is a
list of each "employee welfare benefit plan" or "employee pension benefit plan"
(as those terms are respectively defined in Sections 3(1) and 3(2) of ERISA),
and each other qualified or non-qualified pension, retirement or deferred
compensation plan, profit-sharing or incentive compensation plan, stock plan,
unemployment compensation plan, vacation pay, severance pay, bonus or benefit
arrangement, health, welfare, insurance or hospitalization program, or other
material benefit arrangement, including all other contracts, arrangements,
commitments and policies, written or oral, whether or not such contracts,
arrangements, commitments or policies constitute an "employee benefit plan" (as
defined in Section 3(37) of ERISA), which covers any Employee, is sponsored,
maintained or contributed to or required to be contributed to by Citizens, or
with respect to which Citizens has or may have any liability, contingent or
otherwise after the Closing (collectively, the "Employee Plans"). For purposes
of clarification, the term Employee Plans does not include any Employment
Agreement delivered pursuant to Section 3.9 hereof. Citizens is not a party to
any pension or welfare benefit plan that is a "multi-employer plan" within the
meaning of Section 4001(a)(3) of ERISA, and as of the Closing Date, Citizens
will have no withdrawal or other liability with respect to any "multi-employer
plan" of Seller or any other Person. No Employee Plan is or was a "defined
benefit plan" as defined under Section 3(35) of ERISA, and no Employee Plan is
or was covered by Title IV of ERISA, as described in Section 4021 of ERISA. With
respect to each Employee Plan, except as set forth on Schedule 3.14 hereto:
(a) Seller has previously provided to Buyer with respect to each
Employee Plan, if applicable: (i) all material documents embodying or
relating to such plan (including any related trust agreement or other
funding vehicle, other than the Pre-Closing Incentive Plan, which Seller
shall provide to Buyer prior to Closing); (ii) the most recent summary plan
description; (iii) the most recent actuarial report of valuation; (iv) the
most recent annual and periodic accounting of the assets of the plan
(including a complete copy, including all attachments, of the most recently
filed Form 5500), and (v) the most recent determination letter, if any,
issued by the Internal Revenue Service with respect to any plan intended to
be qualified under Section 401(a) of the Code;
(b) Citizens has performed all obligations required to be performed by
it under each Employee Plan, and is not in default under or in violation of
any Employee Plan;
(c) Each Employee Plan has been established and maintained in
accordance with its terms and in compliance with all applicable
Regulations, including all disclosure and reporting requirements under
ERISA, and no "prohibited transaction" as defined in Section 406 of ERISA
and Section 4975 of the Code has occurred with respect to any Employee
Plan, and no penalties have been assessed under Section 502(1) of ERISA
with respect to any Employee Plan;
(d) Each Employee Plan intended to qualify under Section 401 of the
Code is, and since its inception has been, so qualified and a determination
letter has been issued by the Internal Revenue Service to the effect that
each such Employee Plan is so qualified and that each trust forming a part
of any such employee Plan is exempt from tax pursuant to Section 501(a) of
the Code, and no circumstances exist which would adversely affect this
qualification or exemption;
(e) There are no actions, proceedings, arbitrations, suits or claims
pending, or to the knowledge of Seller or Citizens threatened or
anticipated (other than routine claims for benefits) with respect to any
Employee Plan;
(f) No proposed amendment to, written interpretation of or
announcement (written or oral) relating to any Employee Plan has or will
subject Buyer or Citizens to any liability, and each Employee Plan can be
amended, terminated or otherwise discontinued without liability to
Citizens; and
(g) No Employee Plan is under audit or investigation by any
Governmental Authority, and to the knowledge of Seller and Citizens, no
such audit or investigation is pending or threatened.
(h) The Business is not now nor will it thereafter by the passage of
time be subject to any lien imposed under Section 412(n) of the Code by
reason of the failure of Seller or any Affiliate to make timely
installments or other payments required by Section 412 of the Code, and no
event has occurred that will or could subject any Employee Plan (or any
trust or funding vehicle thereto) to a tax under Section 511 of the Code.
(i) With respect to Employees, there are no post-retirement medical or
health plans, except as required by Section 4980B of the Code, and no
post-retirement life insurance or other benefit plans.
3.15 Labor Matters.
(a) Except as set forth in Schedule 3.12 hereto, there are no material
disputes, grievances or disciplinary actions pending or, to Seller's and
Citizens' knowledge, threatened between Citizens and any of its present or
former employees. Citizens has complied in all material respects with all
provisions of all Regulations relating to the employment of labor and has
no liability for any arrears of wages or taxes or penalties for failure to
comply with any such Regulations.
(b) Except as specifically set forth in the Employment Agreements
delivered pursuant to Section 3.9 hereof or in Schedule 3.14 hereto:
(i) Citizens is not a party to any management, employment or
other contract providing for the employment or rendition of services,
and no Employee has any employment arrangement, other than as an
employee at will;
(ii) there are no employment benefit plans, programs or
arrangements in which any current or former employee of Citizens may
participate; and
(iii) there are no collective bargaining agreements or other
agreements with any labor union or other employee organization with
respect to Citizens' employees (and no such agreement is currently
being requested by, or is under discussion by management with, any
group of employees or others).
(c) Citizens has no liability or obligation to any former employee
under any Employment Agreement or Employee Plan. No provision of any
Employee Plan will impose upon Buyer, upon consummation of the Closing or
otherwise, any liability or obligation with respect to any employee
benefit, plan, practice or compensation. Neither Seller nor Citizens has
established or adopted any targets for any Annual Incentive Award (as
defined in the Employment Agreements), or any other Employee bonus plan or
arrangement for any period after the Closing. No Employee has any rights or
claims under The Energy Group's Long Term Incentive Plan or Citizens
Power's Employee Phantom Unit Option Plan, and all obligations to Employees
under such plans have been fully satisfied. As of the Closing, (i) no
Employee shall have any rights or claims under any Equity Payment Agreement
related to Citizens Power's Employee Phantom Unit Option Plan, and (ii)
except for the right to exercise vested options for 12 months after the
Closing Date in certain circumstances, the ownership of shares of P&L
Common Stock issued pursuant thereto, and the right to "put" to P&L shares
of P&L Common Stock issued pursuant thereto, no Employee shall have any
rights or claims under P&L's 1998 Stock Purchase and Option Plan.
(d) No Employee is entitled to any increase in compensation or bonus,
or any other rights or benefits (including any increase in severance
benefits), as a result of the transactions contemplated by this Agreement,
including the change in control of Citizens resulting from Buyer's
acquisition of the Interests, except for the potential bonuses under the
provisions of the Pre-Closing Incentive Plan as disclosed to Buyer pursuant
to Section 3.14(a) hereof.
3.16 Environmental Matters.
(a) To Seller's and Citizens' knowledge, there are no past or present
actions, activities, circumstances, conditions, events, or incidents
arising out of, based upon, resulting from or relating to the operation of
Citizens' business or ownership or use of its assets, including, without
limitation, the release, emission, discharge or disposal of any Hazardous
Substance, that (i) could reasonably be expected to result in the
incurrence of costs under Environmental Laws or otherwise, or (ii) could
reasonably be expected to form the basis of any Environmental Notice
against or with respect to any person or entity.
(b) For purposes of this Agreement:
(i) "Environmental Notice" means any notice or claim by any
Person alleging potential liability (including, without limitation,
potential liability for investigatory costs, cleanup costs,
governmental costs, or harm, injuries or damages to any person,
property, natural resources, or any fines or penalties) arising out
of, based upon, resulting from, or relating to (A) the emission,
discharge, storage, disposal, release or threatened release of any
Hazardous Substance, or (B) circumstances forming the basis of any
violation, or alleged violation, of any applicable Environmental Law.
(ii) "Environmental Laws" means all Regulations governing
pollution, the protection of human health, the protection of the
environment, or the emission, discharge, storage, disposal, release or
threatened release of any hazardous, or potentially hazardous,
material.
(iii) "Hazardous Substance" shall mean any hazardous substance
within the meaning of 101(14) of CERCLA, 42 U.S.C. ss. 9601(14), or
any pollutant, contaminant, chemical or other toxic, radioactive,
ignitable, corrosive, reactive or otherwise hazardous substance
(including but not limited to asbestos), waste or material that, in
each case, is regulated under any Environmental Law.
3.17 Year 2000 Compliance. Seller has conducted a comprehensive review and
assessment of the Year 2000 compliance of the information technology used by
Citizens. Based on the foregoing review, assessment and inquiry, to Seller's
knowledge all information technology used by Citizens which is material to the
Business is in Year 2000 Compliance.
3.18 Insurance. Citizens is covered by those insurance policies listed on
Schedule 3.18 hereto. Neither Seller nor Citizens has received any notices of
cancellation or non-renewal with respect to any such policies, all premiums due
thereon have been paid, and Seller and Citizens have complied with all material
provisions thereof. There are no material claims pending under any such
policies.
3.19 Broker's or Finder's Fees. Except for Lehman Brothers Inc., whose fees
will be paid by Seller, no agent, broker, investment bank, person, firm, or
other entity acting on behalf of or under authority of Seller, Citizens or any
of their Affiliates, is or will be entitled to any broker's or finder's fee or
any commission, financial advisory fee, or similar fee, directly or indirectly,
in connection with any of the transactions contemplated by this Agreement.
Seller shall be solely liable for the payment of any such fee, and shall
indemnify Buyer and Citizens with respect to such fees.
3.20 Bank Accounts. Schedule 3.20 hereto sets forth a list of the name of
every bank and other financial institution with which Citizens maintains an
account (whether checking, savings or otherwise), lock box or safe deposit box,
and the account numbers thereof.
3.21 Risk Management. Seller has previously furnished to Buyer a complete
and correct copy of Citizens' Trading and Risk Management Guidelines dated
December 16, 1999, which set forth Citizens' material trading and risk
management policies relating to the Business. Such policies are in full force
and effect, and have not been further amended or modified. Except as set forth
in Schedule 3.21 hereto, Citizens has conducted its business in compliance with
such policies and, since February 28, 1999, no violation of or exception to such
policies has occurred.
3.22 Disclosure; Representations For NUG Subsidiaries.
(a) No representation or warranty of Seller in this Agreement or in
any schedule attached hereto contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary
in order to make the statements made therein not misleading.
(b) The representations and warranties of Seller in this Section 3
regarding the NUG Subsidiaries shall not apply to (i) the Excluded NUG
Subsidiaries, and (ii) any other NUG Subsidiary if, as of the Closing Date,
Citizens does not hold any membership or other equity or capital interest
in such NUG Subsidiary. Notwithstanding the foregoing, the representations
and warranties of Seller with respect to the Material Contracts set forth
in Section 3.9(a) and (b) shall apply to any agreement of Citizens with
respect to any NUG Subsidiary.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Organization. Buyer is a corporation duly organized, validly existing,
and in good standing under the laws of the State of California.
4.2 Authority. Buyer has the corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery by Buyer of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized and approved by
all necessary corporate action. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes a legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except to the extent that enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, and by general equitable principles.
4.3 No Violations. Neither the execution or delivery of this Agreement, nor
the consummation of the transactions contemplated hereby:
(a) Requires Buyer to make any filing or registration with, or obtain
the consent, authorization, approval, or permit of, any Governmental
Authority or non-governmental Person, except as required under the HSR Act
and the FPA;
(b) Results in a violation of any order, writ, injunction, judgment,
decree, or award of any Governmental Authority, or any Regulation to which
Buyer or any of its properties or assets is subject;
(c) Results in a violation or breach of, a conflict with any provision
of, or a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, the Articles of Incorporation or Bylaws
of Buyer; or
(d) Results in a violation or breach of, a conflict with any provision
of, or a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or gives rise to a right to additional
payment under or to, terminate any mortgage, contract, agreement, deed of
trust, license, lease, or other instrument, arrangement, commitment,
obligation, understanding, or restriction of any kind to which Buyer is a
party or by which any of its properties may be bound, or will cause, or
give any Person grounds to cause, to be accelerated (with notice or lapse
of time or both) the maturity of, or will increase, any liability or
obligation of Buyer;
and, as to (a), (b) and (d), the result of which, either individually or in
the aggregate, would have a material adverse effect on the financial
condition, results of operations, or business of Buyer.
4.4 Litigation. No litigation, including any arbitration, investigation or
other proceeding of or before any Governmental Authority is pending or, to the
knowledge of Buyer, threatened that in any way involves or relates to Buyer's
ability to consummate the transactions contemplated by this Agreement and to the
knowledge of Buyer, there is no basis for any such action.
4.5 Broker's or Finder's Fees. Except for J.P. Morgan and Co. and Arthur
Andersen LLP, whose fees will be paid by Buyer, no agent, broker, investment
bank, person, firm, or other entity acting on behalf of or under authority of
Buyer or any of its Affiliates, is or will be entitled to any broker's or
finder's fee or any commission, financial advisory fee, or similar fee, directly
or indirectly, in connection with any of the transactions contemplated by this
Agreement. Buyer shall be solely liable for the payment of any such fee and
shall indemnify Seller with respect to such fees.
4.6 Nature of Purchase. Buyer is purchasing the Interests for its own
account for investment, not as a nominee or agent, and not with a view to the
resale or distribution of the Interests or any part thereof. Buyer has no
present intention of selling, granting any participation in, or otherwise
distributing the Interests. None of Buyer or its Affiliates has entered into any
contract, undertaking, agreement or arrangement with any Person for resale of
the Interests. Buyer acknowledges that the offering of the Interests pursuant to
this Agreement has not been and will not be registered under the Securities Act
or any state securities or blue sky laws on the grounds that the offering and
sale of the Interests contemplated by this Agreement is exempt from registration
pursuant to exemptions available under such laws, and that Seller's reliance
upon such exemptions is predicated upon Buyer's representations set forth in
this Agreement.
4.7 Accredited Investor. Buyer is an "accredited investor" within the
meaning of Regulation D promulgated under the Securities Act, is sophisticated
in the markets in which Citizens operates, and has the knowledge and experience
necessary to evaluate the merits and risks of an investment in the Interests and
the consummation of this Agreement and the transactions contemplated hereby.
4.8 Access to Information. Buyer acknowledges that Seller and Citizens have
made available to Buyer the opportunity to ask questions of, and receive answers
from, appropriate management of Seller and Citizens, and the opportunity to
obtain any additional information necessary to verify the accuracy of the
information provided by Seller and Citizens. Buyer has made its own
investigation and independent analysis and evaluation of Citizens and the
Business, including Buyer's own estimate of the value of Citizens, and the
merits and risks associated with its acquisition of the Interests and its
ownership of Citizens and the Business. Buyer acknowledges that it has
undertaken such review of the assets, liabilities, financial condition, cash
flow, books, records and Business of Citizens as it deems necessary in
connection with the transactions contemplated by this Agreement.
SECTION 5
COVENANTS OF SELLER
5.1 Affirmative Covenants. Seller covenants and agrees that, prior to the
Closing and except as otherwise permitted specifically by this Agreement or
agreed to in writing by Buyer, Citizens shall:
(a) Conduct its business only in the ordinary course consistent with
past practice, including without limitation continuing to comply with
existing risk management policies and collateral and credit enhancement
requirements related to Power Trading Contracts;
(b) Preserve substantially intact its business organization and
maintain its rights, Authorizations, insurance and bonds and, other than
paying current liabilities, operate its business in a manner consistent
with the preservation of its assets;
(c) Use commercially reasonable efforts to keep available the services
of its Employees, and maintain the relations and goodwill with the persons
having business relations with it; and
(d) Comply in all material respects with all Regulations and
Authorizations applicable to it and its business and operations, assets or
properties.
5.2 Negative Covenants. Seller covenants and agrees that, prior to the
Closing and except as otherwise permitted specifically by this Agreement or
agreed to in writing by Buyer, Citizens shall not:
(a) Cause nor permit to occur any of the events or occurrences
described in Section 3.6 hereof, except Citizens may terminate a Material
Contract by reason of the default of the counterparty thereto, provided
that Seller shall notify Buyer of any such termination;
(b) Acquire or agree to acquire any business or any person or entity,
or otherwise acquire or agree to acquire any material assets of any other
person or entity;
(c) Sell, lease, exchange, mortgage, pledge, transfer or otherwise
dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer
or otherwise dispose of, any material portion of its assets;
(d) Enter into any contract which would constitute a Material Contract
(including any commitment with respect to the restructuring of a contract
for the purchase or sale of electric energy or capacity with a non-utility
electric generating facility for which Citizens could be required to hold a
Retained Interest), other than a Power Trading Contract in the ordinary
course of business or any contract described in Schedule 5.2(d) hereto;
(e) modify any existing Employee Plan or approve or adopt any new
Employee Plan, or declare any bonus payable to any Employee;
(f) accelerate the collection of any accounts receivable through use of
discounts or any other means;
(g) make any distributions to Seller by way of redemption of Interests
or otherwise; or
(h) Agree in writing or otherwise to do any of the foregoing.
5.3 Sale of Interests.
(a) Seller shall not directly or indirectly sell or encumber all or
any part of the Interests, or initiate or participate in any discussions or
negotiations or enter into any agreement to do any of the foregoing.
(b) Except as permitted specifically by this Agreement, Seller shall
not, and shall cause Citizens not to, directly or indirectly, sell or
encumber all or any part of Citizens' assets, or initiate or participate in
any discussions or negotiations or enter into any agreement to do any of
the foregoing. Except as permitted specifically by this Agreement, neither
Seller nor Citizens shall provide any confidential information concerning
Citizens' Business to any third party.
5.4 Updated Schedules. To the extent any information reflected on any
schedule hereto changes between the date hereof and the Closing Date, Seller
shall provide updated schedules on the Closing Date which shall contain true and
complete information as of the Closing Date, provided that such updated
Schedules shall not be deemed to modify, amend or supplement the representations
and warranties of Seller or the Schedules hereto for the purposes of Sections 8,
9 and 11.1 hereof, unless Buyer shall have consented thereto in writing.
5.5 Access. Seller shall cause Citizens to give to Buyer's officers,
employees, counsel, accountants and other representatives access to and the
right to inspect Citizens' premises, during normal business hours, including all
of the premises, assets, records, contracts and other documents relating to its
Business, and shall permit them to consult with the employees, accountants,
counsel and agents of Seller and Citizens for the purpose of making such
investigation of Citizens' Business as Buyer shall desire to make, provided that
such access shall not unreasonably interfere with Seller's or Citizens' business
and operations, and that Buyer shall comply with the terms and conditions of the
Confidentiality Agreement entered into between Citizens Power and Edison
International dated July 23, 1999. Furthermore, Seller shall cause Citizens to
furnish to Buyer all such documents and copies of documents and records and
information with respect to Citizens or the NUG Subsidiaries and copies of any
working papers relating thereto as Buyer shall from time to time reasonably
request.
5.6 Modification of Certain Power Trading Contracts.
(a) If, prior to the Closing Date, CP Sales obtains a written waiver
from Hartford Power Sales, L.L.C. ("HPS") waiving HPS' rights to refunds
under Section 4.1(d) of Power Sales Agreement A dated December 31, 1996, as
amended, between CP Sales and HPS (or such refund provision in such
agreement has been terminated), and such waiver (or termination) has been
consented to by HPS's lenders, then the Net Unrealized Fair Market Value of
the rights of CP Sales to refunds under Section 4.1(d) of the Schedule A to
Amended and Restated Power Sales Agreement dated as of December 26, 1996,
as amended ("NUSCO PPA") between CP Sales and Northeast Utilities Service
Company ("NUSCO") shall be taken into account in calculating the Portfolio
Payment.
(b) If, prior to the Closing Date, CP Sales obtains the written
agreement of HPS, and the consent of its lenders, to suspend performance
under the Supplemental Power Sales Agreement dated as of August 6, 1999,
between HPS and CP Sales (pursuant to which CP Sales agreed to sell and HPS
agreed to purchase 54,250 MWh per year from September 1, 1999 through
August 31, 2001), thereby releasing CP Sales to (i) sell energy which it
has agreed to purchase from FPL Energy Power Marketing, Inc. pursuant to a
Power Purchase Letter Agreement dated August 6, 1999 ("FPLE PPA") to other
parties, and (ii) sell energy which CP Sales has agreed to purchase from
NUSCO pursuant to the NUSCO PPA in excess of HPS' obligations under its
power sales agreement with The Connecticut Light and Power Company ("Excess
MWh"), then the Net Unrealized Fair Market Value of the FPLE PPA and the
Excess MWh shall be taken into account in calculating the Portfolio
Payment.
5.7 Transfer of NUG Subsidiaries. Seller shall and shall cause Citizens to
transfer, assign or distribute to Seller, a Seller Affiliate or a third party
purchaser all of Citizens' membership or other equity or capital interests in
the NUG Subsidiaries, other than the Retained Interests, on or before the
Closing Date, and to secure, at its sole cost and expense, such third party
consents as may be required in connection with such transfer, assignment or
distribution including the consents set forth on Schedule 3.4 hereto. Without
limiting the foregoing, Seller shall use commercially reasonable efforts to
secure any consent required under the financing agreements for such NUG
Subsidiaries for such transfer, assignment or distribution. Citizens shall not
incur additional obligations in connection with any such transfer, assignment or
distribution without Buyer's approval.
5.8 Termination of Affiliate Transactions. On or before the Closing, Seller
shall cancel, or shall cause Citizens, the NUG Subsidiaries and the Other
Subsidiaries to pay and satisfy in full, all obligations payable to Seller and
its Affiliates and shall cancel, or shall pay and satisfy in full, all
obligations payable to Citizens, the NUG Subsidiaries and any Other Subsidiaries
by Seller and its Affiliates. Notwithstanding the foregoing, the agreement set
forth in Part C.2 of Schedule 3.9 hereto shall be terminated only if would not
be reflected on a balance sheet of Citizens prepared in accordance with
generally accepted accounting principles consistently applied after Seller
transferred the membership interests in Citizens to Buyer.
SECTION 6
ADDITIONAL COVENANTS OF THE PARTIES
6.1 Employees.
(a) Seller shall cause Citizens to terminate the employment of the
Excluded Employees as of the Closing Date, and shall, or shall cause a
Seller Affiliate to, offer to employ the Excluded Employees as of the
Closing Date on terms mutually acceptable to Seller and each Excluded
Employee and disclosed to Buyer. Such terms shall include a provision that
the Employee will relinquish any current or future claims or rights against
Buyer and Citizens with respect to his or her existing Employment Agreement
or any Employee Plans.
(b) Buyer shall offer to have Citizens continue to employ the
Employees identified on a list previously delivered by Buyer to Seller (the
"Key Employees") as of the Closing Date pursuant to employment agreements
mutually acceptable to Buyer and each Key Employee.
(c) Buyer shall offer to have Citizens continue to employ all
Employees employed by Citizens immediately prior to the Closing (other than
the Excluded Employees or Key Employees) as of the Closing Date under
employee benefit plans, programs and arrangements having benefits not less
favorable in the aggregate to the Employees than the Employee Plans (other
than the Phantom Unit Option Plan and P&L's 1998 Stock Purchase and Option
Plan), provided that nothing in this Agreement shall require Buyer or
Citizens to provide or maintain any specific plan, program or arrangement.
In the case of any new plan, program or arrangement, Buyer shall cause
Citizens to provide that periods of service with Citizens or any Affiliate
of Citizens (including Seller) prior to the Closing shall be credited for
eligibility and vesting purposes (if applicable, and without duplication)
with respect to such new plan, program or arrangement.
(d) On such date as may be requested by Seller for a particular
Excluded Employee, but not later than March 31, 2001, Buyer shall, or shall
cause Citizens to, offer to employ the Excluded Employee on terms mutually
acceptable to Buyer and each Excluded Employee. Each Excluded Employee
shall receive the same salary (subject to salary increases consistent with
Citizens' past practices) and bonus level he had on the date prior to the
Closing as shown on the list delivered pursuant to Section 3.11 hereof. For
the purpose of benefit plans provided by Buyer or Citizens, to the extent
permitted under applicable plan documents, there shall not be a break in
service for the period that the Excluded Employee was employed by Seller.
Seller shall, at Buyer's request, use commercially reasonable efforts to
assist Buyer and Citizens in employing any Excluded Employee.
6.2 Other Employee Matters.
(a) Notwithstanding the provisions of Section 1.4 hereof, Seller shall
pay and be solely responsible for, and shall defend, indemnify and hold
Buyer and Citizens harmless with respect to, all amounts payable and other
obligations to Employees or others under: (i) Citizens Power's Employee
Phantom Unit Option Plan, any Employee Phantom Unit Option Plan Option
Agreement pursuant thereto or any Equity Payment Agreement related thereto;
(ii) P&L's 1998 Stock Purchase and Option Plan, or any Common Stock
Issuance Agreement, Common Stock Ownership Agreement, Non-Qualified Stock
Option Agreement, Incentive Stock Option Agreement, Stock Purchase
Agreement, or any other agreement with Seller pursuant thereto; (iii) the
Citizens Power FY00 Incentive Plan, and any Annual Incentive Award or other
bonus compensation payable under any Employment Agreement or otherwise for
the period prior to Closing, except to the extent accrued in the Final
Calculation of Net Book Value; and (iv) any employee benefit plan, if any,
not listed on Schedule 3.14 hereto, including The Energy Group Long Term
Incentive Plan.
(b) Seller shall pay (or, prior to the Closing, cause Citizens to pay)
to each Employee who is not a Retained Employee (including all Excluded
Employees) all salaries and benefits (including the arrangements, plans and
programs set forth in Schedule 3.14 hereto) accrued on behalf of such
Employee (or attributable to expenses properly incurred by that Employee)
as of the Closing Date. Seller agrees to be responsible for all liabilities
and obligations whatsoever in connection with claims made by or on behalf
of any such Employee in respect of salary, wages, bonuses and benefits, and
all other amounts, if any, that may be payable to such employees by Seller
or Citizens pursuant to the terms of any applicable Regulation or
agreement, as well as any severance pay, salary continuation, group health
care continuation coverage, and similar obligations relating to the
cessation of any such person's employment with Citizens. Seller shall not
be responsible for any such liabilities and obligations with respect to any
Retained Employee, except for any liabilities and obligations accrued as of
the Closing Date.
(c) Buyer shall not assume or otherwise incur liability for, and
nothing in this Agreement shall be construed or interpreted to mean that
Buyer is assuming or has assumed, any obligation or liability relating to
or arising out of any Employee's employment with, or the cessation of any
Employee's employment with, Citizens. No provision in this Agreement is
intended to or shall confer any rights, whether to employment,
compensation, benefits or otherwise, to any Employee.
6.3 Covenant Not to Compete; Hiring. From and after the date hereof,
neither Seller nor any Affiliate of Seller (other than Citizens) shall, directly
or indirectly:
(a) for a period of two and one-help years after the Closing, own,
manage, operate, control, or participate in the ownership, management,
operation or control of, the business of restructuring electrical power
contracts in connection with non-utility electric generating facilties,
except that (i) Seller or a Seller Affiliate shall, pursuant to Sections
1.2 and 5.7 hereof, own the NUG Subsidiaries (other than any Retained
Interest of Citizens) and may exercise its rights in connection with such
ownership, including selling, transferring or monetizing the NUG
Subsidiaries or any portion of Seller's or a Seller Affiliate's interest
therein, (ii) Seller or a Seller Affiliate shall have the sole right, at
its own cost and expense, to pursue from the date hereof until December 31,
2000 (or such earlier date that such transactions have closed or abandoned
by Seller) the asset restructuring transactions listed in Schedule 6.3
hereto (the "Excluded NUG Transactions"), provided that if an Excluded NUG
Transaction reaches Ready to Close Status by December 31, 2000, Seller
shall continue to have the sole right to pursue such transaction, and
provided further that Buyer or Citizens shall have the sole right to pursue
an Excluded NUG Transaction which is abandoned by Seller; (iii) Seller may
develop PPA/Loan Transactions; and (iv) the restrictions set forth in this
Section 6.3(a) shall apply only to Seller and Seller Affiliates owned
directly or indirectly by Seller;
(b) for a period of two and one-half years after the Closing, hire, or
solicit for hiring, any Employee (except that Seller or Seller Affiliate
may hire any Excluded Employee until such Employee is hired by Buyer or
Citizens pursuant to Section 6.1(d) hereof), or
(c) divulge to anyone any knowledge or information of any type
whatsoever of a confidential or proprietary nature relating to Citizens,
except to the extent required to be disclosed by applicable Regulation or
court order. For purposes of the foregoing, confidential or proprietary
information of Citizens shall not include (i) information which becomes
generally available to the public other than as a result of unauthorized
disclosure by Seller, its representatives, or Persons to whom Seller or its
representatives have made the information available, (ii) information which
has been released without restriction by Citizens to another Person, and
(iii) information which can be shown by written documentation to have been
received by Seller on a non-confidential basis, prior to receipt from
Citizens, from a third party lawfully possessing and lawfully entitled to
disclose such material to Seller. Nothing contained in this paragraph (c)
shall limit any rights Seller may have under the Software License Agreement
between Citizens and P&L dated August 1, 1999.
The parties hereto specifically acknowledge and agree that the remedy at
law for any breach of the foregoing will be inadequate and that the Buyer,
in addition to any other relief available to it, shall be entitled to
temporary and permanent injunctive relief without the necessity of proving
actual damage. In the event that the provisions of this Section 6.3 should
ever be deemed to exceed the limitation provided by applicable law, then
the parties hereto agree that such provisions shall be reformed to set
forth the maximum limitations permitted.
6.4 Records. Until the later of (a) three (3) years following the Closing
Date, or (b) the expiration of the applicable statute of limitations period,
Buyer shall cause Citizens to provide Seller with reasonable access to, or
copies of, Citizens' files and records to the degree reasonably necessary to
permit Seller to comply with or contest any applicable legal, tax or accounting
policy or requirement, or any related legal or regulatory proceeding. All costs
incurred by Buyer or Citizens in connection with such requests shall be borne
and paid or reimbursed by Seller.
6.5 Guarantee of Administration Agreements; Reacquisition of NUG Interests.
(a) Buyer (or an affiliate of Buyer reasonably satisfactory to Seller)
shall, if required by a lender under any financing agreement for a NUG
Subsidiary as a condition of such lender's consent to the transactions
contemplated by this Agreement, enter into a Performance Guaranty
(Administration Agreement) in the form of Exhibit C hereto (with such
changes that do not increase Buyer's obligations or risks thereunder as may
be reasonably be requested by such lenders) of Citizens' obligations under
the applicable Administration Agreement on the Closing Date.
(b) Buyer (or an affiliate of Buyer reasonably satisfactory to Seller)
shall, if required by a third party purchaser of an interest in a NUG
Subsidiary from Citizens before the Closing Date, or from Seller or a
Seller Affiliate after the Closing Date, or by a lender under any financing
agreement for the NUG Subsidiary as a condition of such lender's consent to
such purchase, enter into a Performance Guaranty (Administration Agreement)
in the form of Exhibit C hereto (with such changes that do not increase
Buyer's obligations or risks thereunder as may reasonably be requested by
such purchasers or lenders) of Citizens' obligations under the applicable
Administration Agreement, on the later of (i) the Closing Date or (ii) the
closing date for such purchase.
(c) Buyer shall, if requested by Seller , cause Citizens to reacquire
a 25% membership interest in HPS. from Seller or a Seller Affiliate on or
before December 31, 2000. In connection with the foregoing:
(i) the purchase price for such membership interest shall be the
amount that, if paid for such interest, would result in an after-tax
internal rate of return on such interest over its remaining life as of
the date reacquired by Citizens (the "NUG Closing Date") of 12%, with
tax amortization having been computed using a 15-year life and such
further tax assumptions as agreed by Seller and Buyer;
(ii) Seller shall, in connection with such reacquisition, make as
of the NUG Closing Date the representations and warranties in Section
3 hereof regarding HPS;
(iii) Citizens shall receive the benefit of any representations,
warranties, and covenants and agreements made by Seller or Seller
Affiliate in favor of the third party purchaser of the interests in
HPS; and
(iv) the Retained Interest shall be reacquired on such other
terms reasonably satisfactory to Buyer, including such amendments to
the Limited Liability Company Agreement of HPS as may be approved by
Buyer.
6.6 Consents and Filings. The parties shall make such filings with and or
seek such authorizations, consents and approvals from Governmental Authorities
as may be necessary to consummate the transactions contemplated by this
Agreement, including those required under the HSR Act and the FPA. In connection
with the foregoing:
(a) Seller shall cause Citizens to promptly file or cause to be filed
with the FERC an application to transfer jurisdictional facilities to Buyer
pursuant to Section 203 of the FPA, and to request that the effective date
of such transfer be coterminous with the Closing Date. Buyer shall provide
reasonable assistance to Seller and Citizens in obtaining approval of such
application.
(b) Buyer and Seller will promptly file, or cause to be filed, with
the United States Federal Trade Commission and the Antitrust Division of
the United States Department of Justice, the Notification and Report
required by the HSR Act, including all requisite documents, materials and
information therefore required by the HSR Act. Buyer and Seller shall (i)
furnish to each other such necessary information and reasonable assistance
as the other may reasonably request in connection with its preparation of
any filing or submission as is necessary under the HSR Act, and (ii) keep
each other apprised of the status of any inquiries or requests for
additional information made by any Governmental Authority with respect to
the HSR Act.
6.7 Resignation of Managers. Seller shall, as of the Closing Date, cause
the persons listed on Schedule 6.7 hereto to resign as members of the Board of
Managers of Citizens.
6.8 Insurance. From and after the Closing, Seller shall use commercially
reasonable efforts to retain for Citizens the right, subject to the terms of the
policies, to make post-Closing insurance claims under the insurance policies set
forth on Schedule 3.18 hereto for covered losses arising from occurrences
related to Citizens' business prior to the Closing, and receive recoveries for
such claims directly. Buyer acknowledges that, except as set forth on Schedule
3.18 hereto, the insurance coverages listed thereon are part of Seller's
insurance policies, and will cease on the Closing Date.
6.9 Replacement of Cash Collateral. Schedule 6.9 hereto contains a
description of all cash or cash equivalents on Citizens' balance sheet which
collateralize, directly or indirectly through any letter of credit or other
credit enhancement, the obligations of Citizens to a counterparty to a Power
Trading Contract. Seller shall, and shall cause Citizens to, cooperate with any
efforts by Buyer to replace any such cash or cash equivalents on Citizens'
balance sheet as of the Closing with cash or cash equivalents contributed to
Citizens from Buyer as of the Closing. Citizens shall not transfer, assign or
distribute such cash or cash equivalents pursuant to Section 1.2 hereof unless
such counterparty has approved the replacement thereof.
6.10 Administration Agreements.
(a) Seller shall pay to Citizens the annual fees set forth on Schedule
6.10(a) hereto for as long as Citizens performs its obligations under the
Administration Agreements for the NUG Subsidiaries described therein.
(b) Buyer shall, if requested by Seller, cause Citizens to enter into
an administration agreement with respect to an Excluded NUG Transaction
that reaches Ready to Close Status by December 31, 2000, on substantially
the same terms as the form of administration agreement set forth in Exhibit
E hereto. Citizens shall be entitled to the following annual fee for the
services under such agreement: (a) for the first two such Excluded NUG
Transactions, $50,000 each; and (b) for the remaining six such Excluded NUG
Transactions, $25,000 each. In no event shall Buyer, Citizens or any of
their respective Affiliates be required to own any membership or other
equity or capital interest with respect to any Person in connection with an
Excluded NUG Transaction.
6.11 PPA/Loan Transaction. In the event Citizens proposes to pursue any
PPA/Loan Transaction involving either termination or replacement power
structures within three (3) years after the Closing Date, Buyer shall cause
Citizens to offer exclusively to Seller the opportunity to jointly develop such
transaction by delivery to Seller of written notice describing the proposed
transaction in reasonable detail. Any such joint development shall be pursued on
mutually agreeable terms to be determined on a case by case basis. Citizens may
pursue the proposed PPA/Loan Transaction without Seller's involvement, and
Seller shall have no rights with respect thereto, if (a) Seller declines to
participate in such PPA/Loan Transaction; or (b) the parties are unable to agree
upon mutually acceptable terms within thirty (30) days of delivery of notice of
such transaction by Citizens.
6.12 Publicity. The parties intend that the initial public announcement of
the transactions contemplated by this Agreement shall be made by press releases
of Seller and Buyer issued simultaneously. Each party shall allow the other
reasonable time to review and comment on such release in advance of its issuance
and use reasonable efforts in good faith to accept the reasonable and good faith
comments of the other party. Notwithstanding the foregoing, the parties agree
that the Purchase Price shall remain confidential and shall not be disclosed to
any other Persons, other than each party's attorneys, auditors, and other
advisors, provided that each party shall be responsible for ensuring that such
Persons keep the Purchase Price confidential, and except that each party may
make such disclosures as may be required by applicable Regulations, subject to
delivery of prior written notice thereof to the other party and commercially
reasonable efforts to secure confidential treatment, to the extent available,
for such information.
SECTION 7
TAX MATTERS
7.1 Tax Elections. Neither Seller, Seller Group, Citizens, any NUG
Subsidiary, nor any Other Subsidiary shall make an election under Section 754 of
the Code with respect to Citizens, any NUG Subsidiary in which Citizens will
have a 100% Retained Interest, or any Other Subsidiary. If necessary, consistent
with the prior sentence, an election shall be included on Citizens', the NUG
Subsidiaries' in which Citizens will have a 100% Retained Interest, and the
Other Subsidiaries' partnership Tax Returns for the Tax year ending on (or
including) the Closing Date to terminate any election previously made under
Section 754 of the Code.
7.2 Tax Returns.
(a) Income Tax Returns for Periods Through the Closing Date. Seller
will include the taxable income of Citizens, the NUG Subsidiaries and the
Other Subsidiaries or the taxable income with respect to their respective
assets on the Seller Group's income Tax Returns for all periods up to and
including the Closing Date, and pay any income Taxes attributable to such
income. Buyer will cause Citizens to furnish Tax information to Seller for
inclusion in the Seller Group's income Tax Return for the period (or
portion thereof) which includes the Closing Date. The income of Citizens
will be apportioned to the period up to and including the Closing Date and
the period after the Closing Date by closing the books of Citizens as of
the end of the Closing Date.
(b) Tax Periods Ending on or Before the Closing Date. Buyer shall
prepare or cause to be prepared and file or cause to be filed all Tax
Returns for Citizens, the NUG Subsidiaries in which Citizens holds a
Retained Interest and the Other Subsidiaries for all periods ending on or
prior to the Closing Date which are filed after the Closing Date other than
the Seller Group's income Tax Returns. Buyer shall permit Seller to review
each such Tax Return described in the preceding sentence at least 10 days
prior to filing and to comment on each such Tax Return, and shall make such
revisions to such Tax Returns as may be reasonably requested by Seller.
Seller shall remit Taxes of Citizens with respect to such pre-Closing
periods or portions thereof to Buyer within 15 days after notification is
given to Seller by Buyer or Citizens of the imposition, assessment, notice
or payment of such Taxes, provided that Seller shall not be required to
remit to Buyer any amount for Taxes to the extent such amount is
specifically identified and reflected as a liability for unpaid Taxes in
the Final Calculation of Net Book Value and the Purchase Price is reduced
by such amount.
(c) Tax Periods Beginning Before and Ending After the Closing Date.
Buyer shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of Citizens, the NUG Subsidiaries in which Citizens holds a
Retained Interest and the Other Subsidiaries for Tax periods that begin
before the Closing Date and end after the Closing Date. Buyer shall permit
Seller to review each such Tax Return described in the preceding sentence
at least 10 days prior to filing and to comment on each such Tax Return,
and shall consider making such revisions to such Tax Returns as may be
reasonably requested by Seller. Seller shall remit to Buyer within 15 days
after notification to Seller by Buyer or Citizens of the imposition,
assessment, notice or payment of Taxes with respect to such periods an
amount equal to the portion of such Taxes which relates to the portion of
such taxable period ending on the Closing Date. For purposes of this
Section 7.2(c), in the case of any Taxes that are imposed on a periodic
basis and are payable for a taxable period that includes (but does not end
on) the Closing Date, the portion of such Tax which relates to the portion
of such taxable period ending on the Closing Date shall (i) in the case of
any Taxes other than Taxes based upon or related to income, receipts,
salaries or wages, be deemed to be the amount of such Tax for the entire
taxable period multiplied by a fraction the numerator of which is the
number of days in the taxable period ending on the Closing Date and the
denominator of which is the number of days in the entire taxable period,
and (ii) in the case of any Tax based upon or related to income, receipts,
salaries or wages, be deemed equal to the amount which would be payable if
the relevant taxable period ended on the Closing Date. Any credits relating
to a taxable period that begins before and ends after the Closing Date
shall be taken into account as though the relevant taxable period ended on
the Closing Date. All determinations necessary to give effect to the
foregoing allocations shall be made in a manner consistent with generally
accepted accounting principles and tax accounting rules.
(d) Refunds; Tax Benefits; Tax Assessments. Any Tax refunds with
respect to Citizens that are received by Buyer or Citizens, and any amounts
credited against Tax to which Buyer or Citizens become entitled, that
relate to Tax periods or portions thereof ending on or before the Closing
Date (as allocated pursuant to Section 7.2 hereof) shall be for the account
of Seller, and Buyer shall pay over to Seller any such refund or portion
thereof or the amount of any such credit within 15 days after final receipt
or crediting to Buyer's account. Any Tax assessment, imposition, liability
or notice with respect to Citizens, the NUG Subsidiaries or their
respective assets that related to Tax periods ending on or before the
Closing Date shall be for the account of Seller, as allocated pursuant to
Section 7.2 hereof, and Seller shall remit to Buyer or Citizens any such
Tax due within 15 days of notification to Seller by Buyer or Citizens of
the imposition, assessment, notice or payment of such Taxes.
(e) Audits.
(i) Seller will allow Buyer, Citizens and their counsel to
participate at their own expense in any Tax audits of the Seller
Group's income Tax Returns to the extent such audits may potentially
adversely affect Citizens, any NUG Subsidiary in which Citizens holds
a Retained Interest, and any Other Subsidiary. In such an event,
Seller will not settle any such audit in a manner which would
adversely affect Citizens without the prior written consent of the
Buyer. Seller will notify Buyer within 30 days of the commencement of
such audit.
(ii) Buyer will allow Seller and Seller's counsel to participate
at Seller's own expense in any Tax audits of Citizens' Tax Returns to
the extent such audits relate to periods prior to the Closing Date.
Buyer will notify Seller within 30 days of the commencement of such
audit. Seller shall pay to Buyer the amount of any Tax audit
deficiency asserted against Citizens or Buyer will respect to any
period prior to the Closing Date with respect to Citizens' Taxes
within 15 days after notification is given to Seller by either Buyer
or Citizens.
7.3 Cooperation on Tax Matters.
(a) Buyer, Seller and Citizens shall cooperate fully, as and to the
extent reasonably requested by the other party, in connection with the
filing of Tax Returns pursuant to this Section and any tax audit,
litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's request) the
provision of records and information which are reasonably relevant to any
such audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Buyer and Seller agree (i)
to retain all books and records with respect to Tax matters pertinent to
Citizens relating to any taxable period beginning before the Closing Date
until the expiration of the statute of limitations (and, to the extent
notified by Buyer or Seller, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered
into with any taxing authority, and (ii) to give the other party reasonable
written notice prior to transferring, destroying or discarding any such
books and records and, if the other party so requests, shall allow the
other party to take possession of such books and records. Any information
obtained pursuant to this section or pursuant to any other section in this
Agreement providing for the sharing of information shall be kept
confidential by the parties hereto. On or before the Closing Date, Seller
shall furnish Buyer with copies of all Tax Returns that have been filed by
Citizens or the NUG Subsidiaries with respect to those entities or their
respective assets.
(b) Buyer and Seller further agree, upon request, to use their best
efforts to obtain any certificate or other document from any Governmental
Authority or any other Person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed (including, but not limited to,
with respect to the transactions contemplated hereby).
(c) Buyer and Seller further agree, upon request, to provide the other
party with all information that either party may be required to report
pursuant to Code ss. 6043 and all Regulations promulgated thereunder.
7.4 Tax Sharing Agreements. Any tax sharing agreement between Seller and
Citizens shall be terminated as of the Closing and will have no further effect
for any taxable year (whether the current year, a future year, or a past year).
7.5 Certain Transfer Taxes. All transfer, documentary, sales, use, stamp,
registration, deed transfer, share transfer and other such Taxes and fees
(including any penalties and interest) incurred in connection with the
transactions contemplated under this Agreement (including any Massachusetts
State gains Tax and any similar tax imposed in other states or subdivisions),
shall be paid by Seller when due, and Seller will, at its own expense, file all
necessary Tax Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees, and, if
required by applicable law, Buyer will, and will cause its Affiliates to, join
in the execution of any such Tax Returns and other documentation.
7.6 Section 280G Tax. Any Tax imposed under section 4999 of the Code
because of a payment which is covered by Section 280G of the Code for which
Citizens or Seller is liable because of any agreement, whether oral or written,
as a result of this transaction (other than any employment agreement described
in Sections 6.1(b) and (c) hereof), or any transaction or event occurring on or
before the Closing Date, will be the sole responsibility of Seller.
SECTION 8
CONDITIONS
8.1 Conditions to the Obligations of Buyer. The obligations of Buyer under
this Agreement are subject to the satisfaction at or before the Closing of the
following conditions (any of which Buyer may waive):
(a) All of the representations and warranties of Seller contained
herein or in any schedule or document delivered by Seller to Buyer pursuant
to the provisions hereof shall have been true on the date hereof and shall
be true on the Closing Date with the same effect as though such
representations and warranties were made as of such date, except for
changes permitted or contemplated by this Agreement and except that those
representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date.
(b) Seller shall have performed and complied in all material respects
with all covenants, agreements and conditions required by this Agreement to
be performed or complied with by it prior to or at the Closing.
(c) On the Closing Date, no suit, action or other proceeding, or
injunction or final judgment relating thereto, shall be threatened or be
pending before any Governmental Authority in which it is sought to restrain
or prohibit or to obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby, and
no investigation that might result in any such suit, action or proceeding
shall be pending or threatened.
(d) There shall have been no material adverse change in the Business
since the Balance Sheet Date, except as contemplated by this Agreement.
(e) On the Closing Date: (i) all of the Employees listed on a letter
previously delivered by Buyer to Seller; and (ii) at least 80% of the other
Key Employees , shall have entered into employment agreements on the terms
set forth therein, or if such terms are not acceptable to any such
Employee, on such other terms acceptable to Buyer, and shall continue to be
employed by Citizens.
(f) As of the Closing Date, the Retained Cash shall not exceed the
lesser of (i) the amount required to collateralize, directly or indirectly
through any letter of credit or other credit enhancement, the obligations
of Citizens to a counterparty to a Power Trading Contract in effect as of
the Closing Date, and (ii) $10 million.
(g) Citizens shall have transferred, assigned or distributed to
Seller, a Seller Affiliate or a third party the Excluded Assets and the
liabilities described in Section 1.2(b) hereof on the terms set forth in
Sections 1.2 and 5.7 hereof.
(h) The applicable waiting period under the HSR Act shall have expired
or been terminated. FERC shall have issued a final order approving
Citizens' application to transfer jurisdictional facilities to Buyer
pursuant to Section 203 of the FPA. All other consents or approvals of any
Governmental Authority (including FERC) or third party required for the
consummation of the transactions contemplated by this Agreement shall have
been obtained.
(i) Buyer shall have received the opinion of Nixon Peabody LLP,
special counsel to Seller, Jeffery L. Klinger, general counsel of Seller,
and Donald S. McCauley, general counsel of Citizens, in the form of Exhibit
D hereto.
8.2 Conditions to the Obligations of Seller. The obligations of Seller
under this Agreement are subject to the satisfaction at or before the Closing of
the following conditions (any of which Seller may waive):
(a) All of the representations and warranties of Buyer contained
herein or in any schedule or document delivered by Buyer to Seller pursuant
to the provisions hereof shall have been true on the date hereof and shall
be true on the Closing Date with the same effect as though such
representations and warranties were made as of such date, except for
changes permitted or contemplated by this Agreement and except that those
representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date.
(b) Buyer shall have performed and complied in all material respects
with all covenants, agreements and conditions required by this Agreement to
be performed or complied with by it prior to or at the Closing.
(c) On the Closing Date, no suit, action or other proceeding, or
injunction or final judgment relating thereto, shall be threatened or be
pending before any Governmental Authority in which it is sought to restrain
or prohibit or to obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby, and
no investigation that might result in any such suit, action or proceeding
shall be pending or threatened.
(d) The applicable waiting period under the HSR Act shall have expired
or been terminated. FERC shall have issued a final order approving
Citizens' application to transfer jurisdictional facilities to Buyer
pursuant to Section 203 of the FPA. All other consents or approvals of any
Governmental Authority (including FERC) or third party required for the
consummation of the transactions contemplated by this Agreement shall have
been obtained.
(e) Seller shall have received the opinion of Munger, Tolles & Olson,
LLP special counsel to Buyer, and Martha Spikes, Corporate Secretary and
counsel to Buyer, in the form of Exhibit D hereto.
SECTION 9
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.1 Survival.
The representations and warranties of the parties hereto contained herein
or in any certificate or other writing delivered pursuant hereto or in
connection herewith shall survive the Closing of the transactions contemplated
hereby for a period of two (2) years, except as provided in Sections 9.2(d) and
(e) hereof. For purposes of clarification, the representations and warranties in
Section 3.10 shall survive for the period set forth in Section 9.2(d) hereof.
Notwithstanding the foregoing, the representations and warranties of Seller set
forth in Section 3.2 hereof shall survive the Closing until the statute of
limitations with respect to any third-party claims arising from the breach of
such representations and warranties expires.
9.2 Indemnification.
(a) In addition to the obligations set forth in Sections 1.4 and 6.2
above, Seller hereby agrees to indemnify and defend Buyer and Citizens (and
their respective Affiliates) against, and agrees to hold them harmless
from, any and all damage, loss, liability, and expense (including, without
limitation, reasonable expenses of investigation and attorney's fees and
expenses in connection with any action, suit, proceeding, claim,
investigation, or other loss) (collectively "Losses") incurred or suffered
by any of them arising out of or relating to:
(i) Any breach of any covenant or agreement by Seller pursuant to
this Agreement, or any inaccuracy in the representations and
warranties of Seller set forth in Section 3.2 hereof;
(ii) Any inaccuracy in any other representation or warranty made
by Seller (including any representation and warranty made by Seller to
Citizens' knowledge) pursuant to this Agreement, provided that Seller
shall have no liability under this clause (ii): (x) unless the
aggregate of all Losses for which Seller would, but for this proviso,
be liable exceed on a cumulative basis $200,000, in which event Seller
shall be liable for all such cumulative Losses; and (y) for Losses in
excess of the Purchase Price;
(iii) Any NUG Power Trading Contract or NUG Guaranty (including
any Losses which Citizens may incur pursuant to the Administration
Agreements by reason of a NUG Subsidiary's breach or default under any
Note Purchase Agreement or Project Document (as defined in the
Administration Agreements)), excluding (x) any Losses caused by
Citizens' failure to perform services under the Administration
Agreements after the Closing in a prudent and efficient manner as
required thereunder, and (y) any Losses under any NUG Power Trading
Contract or NUG Guaranty caused by the negligent act or omission of
Citizens after the Closing;
(iv) The Excluded Payable;
(v) The liabilities assumed by Seller pursuant to Section 1.2(b)
hereof; and
(vi) Any third-party claim related to or arising out of Citizens'
business, or any act or omission of Citizens or Seller, on or prior to
the Closing Date, including claims of present and former employees
(including Excluded Employees) under Employment Agreements and
Employee Plans;
provided that Seller shall have no obligation to indemnify or defend
Buyer with respect to any act or omission of Buyer or its Affiliates.
(b) Buyer agrees to indemnify and defend Seller (and its Affiliates)
against, and agrees to hold them harmless from, any and all Losses incurred
or suffered by any of them arising out of or relating to:
(i) Any breach of any covenant or agreement by Buyer, or any
inaccuracy in any representation or warranty made by Buyer, pursuant
to this Agreement; and
(ii) Any third-party claim related to or arising out of Citizens'
business, or any act or omission of Buyer or Citizens, after the
Closing Date;
provided: that Buyer shall have no obligation to indemnify or defend
Seller with respect to any act or omission of Seller or its
Affiliates.
(c) The amount of any Losses for which indemnification is provided
under this Section 9 shall be net of any reserves for such Losses which
were accounted for in the Final Calculation.
(d) Seller hereby agrees to indemnify and hold Citizens and Buyer (and
their respective Affiliates) harmless from any and all Tax liabilities
relating to Citizens, any NUG Subsidiary or any Other Subsidiary or their
respective assets attributable to periods (or portions thereof) or
transactions occurring prior to the Closing, provided that Seller shall not
be required to remit to Buyer any amount for Taxes to the extent such
amount is specifically identified and reflected as a liability in the Final
Calculation of Net Book Value and the Purchase Price is reduced by such
amount. Seller will remit these Taxes to Buyer within 15 days after
notification is given to Seller by Buyer or Citizens of their imposition,
assessment, notice or payment, unless Seller takes appropriate steps to
contest the imposition of the Taxes, at Seller's expense, in which case
Seller will remit such Taxes, with any interest and penalties imposed
thereon, to Buyer within 15 days after the final determination of such Tax
liability (provided that if such Taxes are required to be paid prior to
such contest, Seller shall pay such Taxes prior to such contest, when due).
The liability for all Taxes attributable to these periods shall remain with
Seller until 30 days after the statute of limitations for each indemnified
Tax expires, and will not be limited in time by Section 9.1 hereof.
(e) Buyer hereby agrees to indemnify and hold Seller (and its
Affiliates) harmless from any and all Tax liabilities relating to Citizens
or any Other Subsidiary or their respective assets attributable to periods
(or portions thereof) or transactions occurring after to the Closing. Buyer
will remit these Taxes to Seller within 15 days after notification is given
to Buyer by Seller of their imposition, assessment, notice or payment,
unless Buyer takes appropriate steps to contest the imposition of the
Taxes, at Buyer's expense, in which case Buyer will remit such Taxes, with
any interest and penalties imposed thereon, to Seller within 15 days after
the final determination of such Tax liability (provided that if such Taxes
are required to be paid prior to such contest, Buyer shall pay such Taxes
prior to such contest, when due). The liability for all Taxes attributable
to these periods shall remain with Citizens until 30 days after the statute
of limitations for each indemnified Tax expires, and will not be limited in
time by Section 9.1 hereof.
(f) With respect to Seller's obligation to indemnify Citizens for
Losses under the Excluded Payable:
(i) Seller shall promptly pay to Citizens the amount of the
Excluded Payable if the counterparty thereto makes a demand on
Citizens for payment, and Citizens pays the Excluded Payable and
provides Seller with proof of payment;
(ii) Buyer shall cause Citizens not to contact the counterparty
and advise it of the Excluded Payable; and
(iii) The provisions of Section 9.3(b) hereof shall not otherwise
apply with respect to claims for such Losses.
(g) Absent intentional misrepresentation, fraud or gross negligence,
or unless otherwise specifically provided herein, and except for Seller's
breach of the covenants under Section 6.3 hereof, the sole exclusive remedy
for damages of a party hereto for any breach of the covenants and
agreements of the other party, or any inaccuracy in the representations and
warranties of the other party, contained in this Agreement shall be the
remedies set forth in this Section 9.
(h) With respect to Seller's obligation to indemnify Citizens for
Losses under any NUG Power Trading Contract or NUG Guaranty pursuant to
Section 9.2(a)(iii) hereof, the following additional provisions shall
apply, provided that the failure of Buyer or Citizens to timely comply with
such provisions shall not release Seller from liability with respect to
such Losses except to the extent Seller is actually prejudiced by such
failure:
(i) Seller and Buyer shall use commercially reasonable efforts to
(x) assign Citizens' rights and obligations under any NUG Power
Trading Contract with a NUG Subsidiary to the counterparty from which
Citizens acquires power resold to the NUG Subsidiary under such NUG
Power Trading Contract, and (y) assign Citizens' rights and
obligations under the NUG Power Trading Contract with such
counterparty to the applicable NUG Subsidiary, so that the
counterparty is selling power directly to the NUG Subsidiary. Buyer
and Seller shall also use commercially reasonable efforts to obtain
any necessary consent of the counterparties and other Persons with
respect to the assignments, provided that neither Buyer nor Citizens
shall be required to guarantee the obligation of any NUG Subsidiary in
connection therewith, or to pay any sums to secure such consents;
(ii) Buyer shall, to the extent practicable, cause Citizens to
give Seller prompt written notice by facsimile whenever Buyer or
Citizens becomes aware of an event which could reasonably be expected
to give rise to Losses under any NUG Power Trading Contract or NUG
Guaranty, excluding any event involving an act or omission by Seller,
any Affiliate of Seller or a NUG Subsidiary;
(iii) Buyer shall cause Citizens to take commercially reasonable
efforts to mitigate any Losses under any NUG Power Trading Contract or
any NUG Guaranty, excluding any Losses involving an act or omission by
Seller, any Affiliate of Seller or a NUG Subsidiary, and to consult
with Seller on the commercially reasonable efforts being taken to
mitigate any such Losses; and
(iv) Seller shall reimburse Citizens for all out of pocket
expenses reasonably incurred by Citizens in taking commercially
reasonable efforts to mitigate any Losses.
9.3 Indemnification Procedures. Except as otherwise specifically provided
in Section 9.3(b):
(a) Any party seeking indemnification under this Section 9 (an
"Indemnified Party") shall give each party from whom indemnification is
being sought (each, an "Indemnifying Party") notice of any matter which
such Indemnified Party has determined has given or could give rise to a
right of indemnification under this Agreement, within 60 days of such
determination, stating the amount of the Losses, if known.
(b) The obligations of an Indemnifying Party under this Section 9 with
respect to Losses arising from the claim of any third party which are
subject to the indemnification provided for in this Section 9 ("Third Party
Claims") shall be governed by and contingent upon the following additional
terms and conditions: If an Indemnified Party shall receive notice of any
Third Party Claim, the Indemnified Party shall give the Indemnifying Party
notice of such Third Party Claim within 15 days of the receipt by the
Indemnified Party of such notice; provided, however, that the failure
timely to provide such notice shall not release the Indemnifying Party from
any of its obligations under this Section 9 except to the extent that the
Indemnifying Party is prejudiced by such failure. The Indemnifying Party
shall assume and control the defense of such Third Party Claim at its
expense and through counsel of its choice who is reasonably acceptable to
the Indemnified Party; provided, that if there exists or is reasonably
likely to exist a conflict of interest that would make it inappropriate for
the same counsel to represent both the Indemnified Party and the
Indemnifying Party, then the Indemnified Party shall be entitled to retain
its own counsel (which shall be reasonably satisfactory to the Indemnifying
Party) at the expense of the Indemnifying Party. In the event that the
Indemnifying Party undertakes such defense against a Third Party Claim as
provided above, the Indemnified Party shall cooperate with the Indemnifying
Party in such defense and make available to the Indemnifying Party, at the
Indemnifying Party's expense, all witnesses and pertinent records,
materials and information in the Indemnified Party's possession or under
the Indemnified Party's control as the Indemnifying Party may reasonably
require. In the event that the Indemnifying Party fails to undertake such
defense and the Indemnified Party is conducting the defense against a Third
Party Claim, the Indemnifying Party shall cooperate with the Indemnified
Party in such defense and make available to the Indemnified Party, at the
Indemnifying Party's expense, all such witnesses, records, materials and
information in the Indemnifying Party's possession or under the
Indemnifying Party's control as the Indemnified Party may reasonably
require.
(c) Without the written consent of the Indemnified Party, the
Indemnifying Party shall not (i) settle or compromise any Third Party Claim
or consent to the entry of any judgment which does not include as an
unconditional term thereof the delivery by the claimant or plaintiff to the
Indemnified Party of a written release from all liability in respect of
such Third Party Claim, or (ii) settle or compromise any Third Party Claim
in any manner or consent to the entry of any judgment or order that may
adversely affect the Indemnified Party other than as a result of money
damages or other money payments for which the Indemnifying Party has
acknowledged in writing its obligation and ability to indemnify the
Indemnified Party in full.
SECTION 10
DEFINITIONS
10.1 Definitions.
(a) "Accounting Firm" means an independent nationally recognized
accounting firm mutually agreed upon by Buyer and Seller or, if the parties
are unable to agree, by Buyer's and Seller's respective independent
accountants.
(b) "Administration Agreements" means the Material Contracts
identified as "Administration Agreements," "Scheduling Agreements," or
"Servicing Agreements" in part C of Schedule 3.9 hereto.
(c) "Affiliate" means, with respect to any Person, any subsidiary,
officer or director of such Person and any other Person which, directly or
indirectly, controls, is controlled by or is under common control with,
such Person, whether through the ownership of securities, by contract or
otherwise.
(d) "Agreement" has the meaning set forth in the introductory
paragraph hereto.
(e) "Authorizations" means any certificates of occupancy, licenses,
permits, registrations, authorizations, use agreements, orders,
applications, filings or approvals of any Government Authority.
(f) "Balance Sheet Date" has the meaning set forth in Section 3.5.
(g) "Business" has the meaning set forth in the recitals hereto.
(h) "Buyer" has the meaning set forth in the introductory paragraph
hereto.
(i) "Citizens" means Citizens Power and CP Sales or, where the context
requires, each, either or both of them.
(j) "Citizens' knowledge" or "knowledge of Citizens" means the actual
knowledge after due inquiry of the following individuals: Mark Maisto, John
Malloy, Donald S. McCauley, Paul D. Jacob and Lawrence Silverstein.
(k) "Citizens Power" has the meaning set forth in the recitals hereto.
(l) "Closing" has the meaning set forth in Section 2.1.
(m) "Closing Calculation" has the meaning set forth in Section 1.3(b).
(n) "Closing Date" has the meaning set forth in Section 2.1.
(o) "Code" means the Internal Revenue Code of 1986 and all regulations
promulgated thereunder, as the same have been amended from time to time.
(p) "CP Sales" has the meaning set forth in the recitals hereto.
(q) "Employment Agreement" has the meaning set forth in Section 3.9.
(r) "Employee Plans" has the meaning set forth in Section 3.14.
(s) "Employees" has the meaning set forth in Section 3.11.
(t) "Encumbrances" means liens, pledges, claims, charges, security
interests, or other encumbrances of any nature whatsoever.
(u) "Environmental Laws" has the meaning set forth in Section
3.16(b)(ii).
(v) "Environmental Notice" has the meaning set forth in Section
3.16(b)(i).
(w) "ERISA" means the Employee Retirement Income Security Act of 1974
and all regulations promulgated thereunder, as the same have been amended
from time to time.
(x) "Estimated Closing Calculation" has the meaning set forth in
Section 1.3(b).
(y) "Excess MWh" has the meaning set forth in Section 5.6(b).
(z) "Excluded Assets" has the meaning set forth in Section 1.2.
(aa) "Excluded Employees" means up to four (4) employees in Citizens'
asset restructuring group to be identified by Seller prior to Closing, but
in any event not including Larry Silverstein.
(bb) "Excluded Payable" means the trade payable described in the
letter dated as of the date hereof from Citizens to Buyer, with any
interest, late fees and penalties accrued thereon.
(cc) "Excluded NUG Subsidiaries" means Newhall Funding Company, CL
Power Sales Three, LLC, CP Power Sales Four, L.L.C., CP Power Sales Eleven
L.L.C., CP Power Sales Sixteen, L.L.C. and CL Funding, L.L.C.
(dd) "Excluded NUG Transactions" has the meaning set forth in Section
6.3.
(ee) "FERC" means the Federal Energy Regulatory Commission or any
successor thereto.
(ff) "Final Calculation" has the meaning set forth in Section 1.3(b).
(gg) "FPLE PPA" has the meaning set forth in Section 5.6(b).
(hh) "FPA" means the Federal Power Act and all regulations promulgated
thereunder, as the same have been amended from time to time.
(ii) "General Trading Reserve has the meaning set forth in Section
3.5.
(jj) "Gold Fields" has the meaning set forth in the introductory
paragraph hereto.
(kk) "Governmental Authority" means any federal, state, local,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, or any court or other tribunal, in each case
having jurisdiction over the applicable matter.
(ll) "Hazardous Substance" has the meaning set forth in Section
3.16(b)(iii).
(mm) "HPS" has the meaning set forth in Section 5.6(a).
(nn) "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 and all regulations promulgated thereunder, as the same have been
amended from time to time.
(oo) "Indemnified Party" has the meaning set forth in Section 9.3(a).
(pp) "Indemnifying Party" has the meaning set forth in Section 9.3(a).
(qq) "Interests" has the meaning set forth in the recitals hereto.
(rr) "Intellectual Property" has the meaning set forth in Section
3.13.
(ss) "Key Employees" has the meaning set forth in Section 6.1(b).
(tt) "Losses" has the meaning set forth in Section 9.2.
(uu) "Material Adverse Effect" means (i) with respect to Citizens, an
effect which is materially adverse to the financial condition, results of
operation or business of Citizens as a whole, excluding the NUG
Subsidiaries, and (ii) with respect to a NUG Subsidiary, an effect which is
materially adverse to the financial condition, results of operation or
business of the NUG Subsidiary as a whole.
(vv) "Material Contract" has the meaning set forth in Section 3.9.
(ww) "Net Book Value" means Citizens' book value determined in
accordance with generally accepted accounting principles applied in a
manner consistent with Citizens' past practices, excluding from such
determination (i) any Retained Cash; (ii) the value of any Power Trading
Contracts (but not any payables or receivables related thereto); (iii) any
Retained Interest in a NUG Subsidiary; (iv) the Excluded Payable; (v) the
General Trading Reserve; and (vi) goodwill.
(xx) "Net Unrealized Fair Market Value" means, with respect to any
Power Trading Contract, net unrealized fair market value calculated as
follows:
(i) for physical contracts, calculated in accordance with
Citizens' standard procedures described in Appendix A to Citizens'
risk management policies previously disclosed to Buyer pursuant to
Section 3.21;
(ii) for physical and financial "European" call and put options,
calculated using Financial Engineering Associates, Inc.'s European
Black model; and
(iii) for other Power Trading Contracts, calculated in accordance
with procedures mutually acceptable to the Parties or, if the Parties
are unable to agree to such procedures within ten (10) business days
of this Agreement, as determined by an Accounting Firm.
(yy) "Newco" has the meaning set forth in Section 1.1.
(zz) "Newco Sub" has the meaning set forth in Section 1.1.
(aaa) "NUG Closing Date" has the meaning set forth in Section 6.5(c).
(bbb) "NUG Guaranty" means (i) any guaranty by Citizens of the
obligations of, or indemnity by Citizens with respect to the actions or
omissions of, or other agreement or arrangement pursuant to which Citizens
assumes or is responsible for any costs, expenses, obligations or
liabilities of, a NUG Subsidiary, including the Material Contracts set
forth in Section B of Schedule 3.9 hereto; (ii) the Tax Indemnity Agreement
dated as of November 29, 1996 among United Development Group - Hartford,
Inc., W. John Fair and Citizens Power; and (iii) the Memorandum of
Understanding dated March 24, 2000 between CP Sales and Northeast Utilities
Service Company re: Restructuring of Power Sales Agreement between Citizens
Power Sales LLC and Northeast Utilities Service Company, and all agreements
contemplated thereunder.
(ccc) "NUG Power Trading Contract" means any Power Trading Contract of
Citizens with or related to a NUG Subsidiary, including the Power Trading
Contracts set forth in Section A of Schedule 3.9 hereto.
(ddd) "NUG Subsidiaries" means CP Holdings One, L.L.C., CL Power Sales
One, L.L.C., CL Power Sales Two, L.L.C., CL Power Sales Three, L.L.C., CL
Power Sales Six, L.L.C., CL Power Sales Seven, L.L.C., CL Power Sales
Eight, L.L.C., CL Power Sales Nine, L.L.C., CL Power Sales Ten, L.L.C., CP
Power Sales Eleven, L.L.C., CL Power Sales Twelve, L.L.C., CL Power Sales
Sixteen, L.L.C., Newhall Funding Company, Hartford Power Sales, L.L.C., CL
Funding. L.L.C., CL Hartford L.L.C., and Athens Funding, L.L.C.
(eee) "NUSCO" has the meaning set forth in Section 5.6(a).
(fff) "NUSCO PPA" has the meaning set forth in Section 5.6(a).
(ggg) Other Subsidiaries" means the entities identified in Schedule
3.2 hereto which are not NUG Subsidiaries.
(hhh) "P&L" has the meaning set forth in the introductory paragraph
hereto.
(iii) "Permitted Encumbrances" means liens for current taxes not yet
due and payable.
(jjj) "Person" means an individual, corporation, partnership, limited
liability company, limited liability partnership, joint venture, trust,
unincorporated association, Governmental Authority or any other entity.
(kkk) "Portfolio Payment" has the meaning set forth in Section 1.3(a).
(lll) "Power Trading Contract" means any contract for the purchase or
sale of (i) electric energy, capacity, or transmission, (ii) coal, natural
gas, crude oil and related products, and (iii) NOx or other emissions
allowances, including any physical, option, forward, future, swap or other
derivative contract with respect thereto.
(mmm) "PPA/Loan Transaction" means a transaction in which the owner of
a non-utility electric generating facility ceases to be obligated under a
long-term electrical power purchase agreement with a utility purchaser and
enters into a power purchase agreement with a replacement entity, which
makes a loan to the owner.
(nnn) "Pre-Closing Incentive Plan" means the Citizens Power Short-Term
FY 2001 Incentive Plan, which shall be disclosed to Buyer pursuant to
Section 3.14(a).
(ooo) "Purchase Price" has the meaning set forth in Section 1.3(a).
(ppp) "Ready to Close Status" means any Excluded NUG Transaction as to
which either (i) application for necessary regulatory approvals has been
made, or (ii) binding agreements have been executed with the non-utility
generator and the purchasing utility, and no regulatory approval is
required. The achievement of financial close is not a prerequisite to Ready
to Close Status.
(qqq) "Regulations" means any law, statute, ordinance, rule or
regulation of any Governmental Authority.
(rrr) "Retained Cash" has the meaning set forth in Section 1.3(a).
(sss) "Retained Employee" means an Employee who continues to be
employed by Citizens after the Closing Date.
(ttt) "Retained Interest" means, with respect to any NUG Subsidiary,
the membership interest in such subsidiary set forth on Schedule 3.2(a)
hereto which Citizens shall continue to hold after the Closing Date.
(uuu) "Retained Interest Payment" has the meaning forth in Section
1.3(a).
(vvv) "Securities Act" means the Securities Act of 1933 and all
regulations promulgated thereunder, as the same shall have been amended
from time to time.
(www) "Seller" means P&L and Gold Fields or, where the context
requires, each, either or both of them. P&L and Gold Fields shall be
jointly and severally liable for all obligations of Seller under this
Agreement.
(xxx) "Seller Affiliate" has the meaning set forth in Section 1.2.
(yyy) "Seller Group" means (i) respect to federal income Taxes, the
affiliated group of corporations (as defined in Code ss. 1504(a) with due
regard to Code ss. 1504(c)) of which Seller and Citizens are members, and
(ii) with respect to state or local income Taxes, the consolidated,
combined, unitary, or similar group of which Seller and Citizens are (or
will be for the 2000 taxable year of Seller) members.
(zzz) "Seller's Certificate" means a certificate executed by Seller
that the Estimated Closing Calculation, Closing Calculation or Final
Calculation, as applicable, has been prepared in compliance with the
requirements of Section 1.3(b) and that the General Trading Reserve is not
necessary to reflect the Net Unrealized Fair Market Value of the Power
Trading Contracts, as reflected in the Portfolio Payment stated therein.
(aaaa) "Tax Returns" means all federal, state, local and foreign tax
returns, reports, statements, elections and other similar filings.
(bbbb) "Taxes" means any federal, state, local or foreign taxes,
assessments, deficiencies, fees, levies and other governmental charges or
impositions, including without limitation all income tax, unemployment
compensation, social security, payroll, sales and use, excise, privilege,
property, ad valorem, franchise, license and any other tax or similar
governmental charge or imposition under any Regulations, including
interest, penalties and additions thereon.
(cccc) "Third Party Claims" has the meaning set forth in Section
9.3(b).
(dddd) "Year 2000 Compliance" means, with respect to any Person's
information technology, the information technology is designed to be used
prior to, during, and after the calendar year 2000 A.D., and the
information technology used during each such time period will accurately
receive, provide and process date/time data (including, but not limited to,
calculating, comparing and sequencing) from, into and between the years
1999 and 2000, including leap year calculations, and will not malfunction,
cease to function, or provide invalid or incorrect results as a result of
date/time data, to the extent that other information technology, used in
combination with such information technology, properly exchanges date/time
data with it.
10.2 Certain Rules of Construction. References in this Agreement to any
gender shall include references to all genders. Unless the context otherwise
requires, references in the singular include references in the plural and vice
versa. References to a party to this Agreement or to other agreements described
herein means those Persons executing such agreements. The words "include",
"including" or "includes" shall be deemed to be followed by the phrase "without
limitation" or the phrase "but not limited to" in all places where such words
appear in this Agreement. The inclusion of any contract, agreement or matter on
any schedule shall not be deemed an admission by Seller that such contract,
agreement or matter is material or required to be disclosed or that all similar
contracts, agreements or matters have been disclosed except as otherwise
expressly required by the terms of this Agreement. This Agreement is the joint
drafting product of Seller and Buyer and each provision has been subject to
negotiation and agreement and shall not be construed for or against either party
as drafter thereof.
SECTION 11
MISCELLANEOUS PROVISIONS
11.1 Termination.
(a) This Agreement may be terminated by written notice of termination
at any time before the Closing Date only as follows:
(i) by mutual written consent of Seller and Buyer;
(ii) by Buyer, if the conditions precedent set forth in Section
8.1 hereof shall have become incapable of fulfillment, and shall not
have been waived by Buyer;
(iii) by Seller, if the conditions precedent set forth in Section
8.2 hereof shall have become incapable of fulfillment, and shall not
have been waived by Seller; or
(iv) by Buyer or Seller, if the Closing does not occur prior to
October 31, 2000,
provided that the Party terminating the Agreement pursuant to clauses
(ii), (iii) or (iv) is not in breach of any of its representations,
warranties, covenants or agreements contained in this Agreement.
(b) In the event of the termination hereof pursuant to the provisions
of this Section 11, this Agreement shall become void and have no effect,
without any liability on the part of any of the parties or their Affiliates
in respect of this Agreement, unless the termination was the result of the
representations and warranties of a party being materially incorrect when
made or the material breach by such party of a covenant hereunder in which
event the party whose representations and warranties were incorrect or who
breached such covenant shall be liable to the other party for all actual
losses and damages resulting therefrom, including, without limitation, all
costs and expenses of the other party in connection with the preparation,
negotiation, execution and performance of this Agreement.
11.2 Amendment and Modification. This Agreement may be amended, modified,
or supplemented only by written agreement of the parties hereto.
11.3 Waiver of Compliance; Consents. Any failure of a party to comply with
any obligation, covenant, agreement, or condition herein may be waived by the
other party; provided, that any such waiver may be made only by a specific
written instrument signed by the party granting such waiver. Such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
11.4 Assignment. No party hereto shall assign any of its rights or
obligations hereunder by merger, operation of law or otherwise, without the
prior written consent of the other party hereto. Subject to the preceding
sentence, this Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Nothing contained in this Agreement shall give any other
Person any legal or equitable right, remedy or claim under or with respect to
this Agreement or the transactions contemplated hereby.
11.5 Expenses, Transfer Taxes, Etc. All fees and expenses (including all
fees of counsel and accountants) incurred by any party in connection with the
negotiation and execution of this Agreement shall be borne by the party
incurring such fees and expenses, provided that Seller shall pay all sales and
transfer taxes and recording and processing fees imposed on or payable by virtue
of the transfer, assignment or distribution of the Excluded Assets, and shall
indemnify, reimburse and hold harmless Buyer in respect of the liability for
payment of or failure to pay any such taxes or the filing of or failure to file
any reports required in connection therewith.
11.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of New York applicable to contracts made
and to be performed within the State of New York by residents of the State of
New York.
11.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.8 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed by registered or certified mail (return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
If to Seller:
Peabody Group
701 Market Street
St. Louis, Missouri 63101-1826
Attention: Roger B. Walcott, Executive Vice President
with a copy to:
Jeffery L. Klinger, Vice President, Legal Services
If to Buyer:
Edison Mission Energy
18101 Von Karman Avenue, Suite 1700
Irvine, California 92612
Attention: General Counsel
with a copy to:
Edison International
2244 Walnut Grove Avenue
Rosemead, California 91770
Attention: Ted Craver
11.9 Specific Performance. Each of the parties acknowledges that money
damages would not be a sufficient remedy for any breach of this Agreement and
that irreparable harm would result if this Agreement were not specifically
enforced. Therefore, the rights and obligations of the parties under this
Agreement shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. A party's right to specific
performance shall be in addition to all other legal or equitable remedies
available to such party.
11.10 Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.11 Entire Agreement. This Agreement, including the exhibits, schedules,
and other documents and instruments referred to herein, embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
Notwithstanding the foregoing, the Parties shall continue to comply with the
terms and conditions of the Confidentiality Agreement entered into between
Citizens Power and Edison International dated July 23, 1999 up to the Closing
Date.
11.12 Severability. If any one or more provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal, or unenforceable provision had never
been contained herein.
11.13 Exhibits and Schedules. All exhibits and schedules attached hereto
are hereby incorporated in and made a part as if set forth in full herein.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
EDISON MISSION ENERGY
By: /s/ Alan J. Fohrer
------------------------------
Name: Alan J. Fohrer
Title: President and Chief Executive Officer
P & L COAL HOLDINGS CORPORATION
By: /s/ Roger B. Walcott
------------------------------
Name: Roger B. Walcott
Title: Executive Vice President
GOLD FIELDS MINING CORPORATION
By: /s/ Roger B. Walcott
------------------------------
Name: Roger B. Walcott
Title: Vice President
TABLE OF CONTENTS
EXHIBITS:
Exhibit A Intentionally Omitted
Exhibit B Form of Support Services Agreement
Exhibit C Form of Performance Guaranty (Administration Agreement)
Exhibit D Opinion of Counsel to Seller
Exhibit E Opinion of Counsel to Buyer
Exhibit F Form of Administration Agreement
SCHEDULES:
Schedule 1.3(a) Sample Purchase Price Calculation
Schedule 3.2 Subsidiaries
Schedule 3.2(a) Retained Interests
Schedule 3.4 Seller Consents and Conflicts
Schedule 3.5 Financial Statements
Schedule 3.6 Certain Changes Since Balance Sheet Date
Schedule 3.7 Title to and Condition of Assets
Schedule 3.8 Authorizations
Schedule 3.9 Material Contracts
Schedule 3.10 Tax Matters
Schedule 3.11 Employees
Schedule 3.12 Litigation
Schedule 3.13 Intellectual Property
Schedule 3.14 Employee Plans
Schedule 3.18 Insurance
Schedule 3.20 Bank Accounts
Schedule 3.21 Risk Management Policies
Schedule 5.2(d) Additional Material Contracts
Schedule 6.3(a) Excluded NUG Transactions
Schedule 6.7 Resignation of Members of Board of Managers
Schedule 6.9 Description of Cash Collateral
Schedule 6.10(a) Administration Agreement Fees