Exhibit 10-1
XXXXX CITY ELECTRIC GENERATING STATION
ASSET PURCHASE AGREEMENT
BY AND AMONG
PENNSYLVANIA ELECTRIC COMPANY, NGE GENERATION, INC., and NEW YORK
STATE ELECTRIC & GAS CORPORATION as SELLERS,
MISSION ENERGY WESTSIDE, INC., as BUYER
Dated as of August 1, 1998
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 Definitions. . . . . . . . . . . . . . . . . . . . 1
1.2 Certain Interpretive Matters . . . . . . . . . . .13
ARTICLE II
PURCHASE AND SALE
2.1 Transfer of Assets . . . . . . . . . . . . . . . .13
2.2 Excluded Assets. . . . . . . . . . . . . . . . . .15
2.3 Assumed Liabilities. . . . . . . . . . . . . . . .16
2.4 Excluded Liabilities . . . . . . . . . . . . . . .18
2.5 Control of Litigation. . . . . . . . . . . . . . .20
ARTICLE III
THE CLOSING
3.1 Closing. . . . . . . . . . . . . . . . . . . . . .20
3.2 Payment of Purchase Price. . . . . . . . . . . . .21
3.3 Adjustment to Purchase Price . . . . . . . . . . .21
3.4 Allocation of Purchase Price . . . . . . . . . . .22
3.5 Prorations . . . . . . . . . . . . . . . . . . . .23
3.6 Deliveries by Sellers. . . . . . . . . . . . . . .24
3.7 Deliveries by Buyer. . . . . . . . . . . . . . . .25
3.8 Ancillary Agreements . . . . . . . . . . . . . . .26
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND DISCLAIMERS OF SELLERS
4.1 Incorporation; Qualification . . . . . . . . . . .26
4.2 Authority Relative to this Agreement . . . . . . .26
4.3 Consents and Approvals; No Violation . . . . . . .26
4.4 Insurance. . . . . . . . . . . . . . . . . . . . .27
4.5 Title and Related Matters. . . . . . . . . . . . .28
4.6 Real Property Leases . . . . . . . . . . . . . . .28
4.7 Environmental Matters. . . . . . . . . . . . . . .28
4.8 Labor Matters. . . . . . . . . . . . . . . . . . .29
4.9 Benefit Plans: ERISA . . . . . . . . . . . . . . .29
4.10 Real Property. . . . . . . . . . . . . . . . . . .30
4.11 Condemnation . . . . . . . . . . . . . . . . . . .30
4.12 Contracts and Leases . . . . . . . . . . . . . . .30
4.13 Legal Proceedings, etc.. . . . . . . . . . . . . .31
4.14 Permits. . . . . . . . . . . . . . . . . . . . . .31
4.15 Taxes. . . . . . . . . . . . . . . . . . . . . . .31
4.16 Intellectual Property. . . . . . . . . . . . . . .32
4.17 Capital Expenditures . . . . . . . . . . . . . . .32
4.18 Compliance with Laws . . . . . . . . . . . . . . .32
4.19 Disclaimers Regarding Purchased Assets . . . . . .33
4.20 Transmission . . . . . . . . . . . . . . . . . . .33
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
5.1 Organization . . . . . . . . . . . . . . . . . . .34
5.2 Authority Relative to this Agreement . . . . . . .34
5.3 Consents and Approvals; No Violation . . . . . . .34
5.4 Availability of Funds. . . . . . . . . . . . . . .35
5.5 Financial Representations. . . . . . . . . . . . .35
5.6 Legal Proceedings. . . . . . . . . . . . . . . . .35
5.7 No Knowledge of Sellers' Breach. . . . . . . . . .35
5.8 Qualified Buyer. . . . . . . . . . . . . . . . . .36
5.9 Inspections. . . . . . . . . . . . . . . . . . . .36
5.10 WARN Act . . . . . . . . . . . . . . . . . . . . .36
ARTICLE VI
COVENANTS OF THE PARTIES
6.1 Conduct of Business Relating to the Purchased
Assets . . . . . . . . . . . . . . . . . . . . . .36
6.2 Access to Information. . . . . . . . . . . . . . .38
6.3 Public Statements. . . . . . . . . . . . . . . . .41
6.4 Expenses . . . . . . . . . . . . . . . . . . . . .41
6.5 Further Assurances . . . . . . . . . . . . . . . .41
6.6 Consents and Approvals . . . . . . . . . . . . . .43
6.7 Fees and Commissions . . . . . . . . . . . . . . .45
6.8 Tax Matters. . . . . . . . . . . . . . . . . . . .45
6.9 Advice of Changes. . . . . . . . . . . . . . . . .46
6.10 Employees. . . . . . . . . . . . . . . . . . . . .47
6.11 Risk of Loss . . . . . . . . . . . . . . . . . . .51
6.12 Additional Covenants of Buyer. . . . . . . . . . .52
ARTICLE VII
CONDITIONS
7.1 Conditions to Obligations of Buyer . . . . . . . .52
7.2 Conditions to Obligations of Sellers . . . . . . .54
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification. . . . . . . . . . . . . . . . . .57
8.2 Defense of Claims. . . . . . . . . . . . . . . . .59
ARTICLE IX
TERMINATION AND ABANDONMENT
9.1 Termination. . . . . . . . . . . . . . . . . . . .61
9.2 Procedure and Effect of No-Default Termination . .63
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Several Liability of Each Seller . . . . . . . . .63
10.2 Amendment and Modification . . . . . . . . . . . .63
10.3 Waiver of Compliance; Consents . . . . . . . . . .63
10.4 No Survival. . . . . . . . . . . . . . . . . . . .63
10.5 Notices. . . . . . . . . . . . . . . . . . . . . .64
10.6 Assignment . . . . . . . . . . . . . . . . . . . .65
10.7 Governing Law. . . . . . . . . . . . . . . . . . .66
10.8 Counterparts . . . . . . . . . . . . . . . . . . .66
10.9 Interpretation . . . . . . . . . . . . . . . . . .66
10.10 Schedules and Exhibits . . . . . . . . . . . . . .66
10.11 Entire Agreement . . . . . . . . . . . . . . . . .66
10.12 Bulk Sales Laws . . . . . . . . . . . . . . . . .67
10.13 U.S. Dollars . . . . . . . . . . . . . . . . . . .67
10.14 Zoning Classification . . . . . . . . . . . . . .67
10.15 Sewage Facilities . . . . . . . . . . . . . . . .67
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Form of Xxxx of Sale
Exhibit C Form of Easement and Attachment Agreement
Exhibit D Form of FIRPTA Affidavit
Exhibit E Form of Interconnection Agreement
Exhibit F Form of Special Warranty Deed
Exhibit G Form of Transition Power Purchase Agreement
Exhibit H Guaranty
SCHEDULES
1.1(69) Permitted Encumbrances
1.1(97) Transferable Permits (both environmental and non-
environmental)
2.1 Schedule of Purchased Assets
2.1(c) Schedule of Tangible Personal Property to be Conveyed
to Buyer
2.1(h) Schedule of Emission Reduction Credits
2.1(l) Intellectual Property
2.2(a) Description of Transmission and other Assets not
included in Conveyance
3.3(a)(i) Schedule of Inventory
4.3(a) Third Party Consents
4.3(b) Sellers' Required Regulatory Approvals
4.4 Insurance Exceptions
4.5 Exceptions to Title
4.6 Real Property Leases
4.7 Schedule of Environmental Matters
4.8 Schedule of Noncompliance with Employment Laws
4.9(a) Schedule of Benefit Plans
4.9(b) Benefit Plan Exceptions
4.l0 Description of Real Property
4.11 Notices of Condemnation
4.12(a) List of Contracts
4.12(b) List of Non-assignable Contracts
4.12(c) List of Defaults under the Contracts
4.13 List of Litigation
4.14(a) List of Permit Violations
4.14(b) List of material Permits (other than Transferable
Permits)
4.15 Tax Matters
4.16 Intellectual Property Exceptions
5.3(a) Third Party Consents
5.3(b) Buyer's Required Regulatory Approvals
6.1 Schedule of Permitted Activities prior to Closing
6.10(b) Schedule of Non-Union Employees
6.10(d) IBEW Collective Bargaining Agreement
6.10(h) Schedule of Severance Benefits
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of August 1, 1998, by and
among Pennsylvania Electric Company, a Pennsylvania corporation
("Penelec"), New York State Electric & Gas Corporation, a New
York corporation ("NYSEG"), NGE Generation, Inc., a New York
corporation ("NGE"), (Penelec, NGE and NYSEG, collectively,
"Sellers"), and Mission Energy Westside, Inc., a California
corporation ("Buyer"). Sellers and Buyer are referred to
individually as a "Party," and collectively as the "Parties."
W I T N E S S E T H
WHEREAS, each of Penelec and NGE owns as tenant-in-common a
50% undivided interest in the Xxxxx City Electric Generating
Station (the "Facility") located near Indiana, Pennsylvania, and
certain facilities and other assets associated therewith and
ancillary thereto; and
WHEREAS, Penelec and NGE have heretofore agreed jointly to
divest themselves of the Facility;
WHEREAS, Buyer, a wholly owned subsidiary of Edison Mission
Energy, a California corporation ("Buyer Parent", and together
with Buyer, "Buyer Entities") desires to purchase and assume, and
Penelec and NGE desire to sell and assign, the Purchased Assets
(as defined in Section 2.1 below) and certain associated
liabilities, upon the terms and conditions hereinafter set forth
in this Agreement;
WHEREAS, to induce Sellers to execute this Agreement, Buyer
Parent is executing and delivering a certain Guaranty dated the
date hereof ("Guaranty") in favor of Sellers.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth,
and intending to be legally bound hereby, the Parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following
terms have the meanings specified in this Section 1.1.
(1) "Affiliate" has the meaning set forth in Rule 12b-2 of
the General Rules and Regulations under the Securities Exchange
Act of 1934.
(2) "Agreement" means this Asset Purchase Agreement together
with the Schedules and Exhibits hereto, as the same may be from
time to time amended.
(3) "Ancillary Agreements" means the Interconnection
Agreement, the Easement and Attachment Agreement and the
Transition Power Purchase Agreements, as the same may be from
time to time amended.
(4) "Assignment and Assumption Agreement" means the
Assignment and Assumption Agreement between Sellers and Buyer
substantially in the form of Exhibit A hereto, by which Sellers
shall subject to the terms and conditions hereof, assign the
Sellers' Agreements, the Real Property Leases, certain intangible
assets and other Purchased Assets to Buyer and whereby Buyer
shall assume the Assumed Liabilities.
(5) "Assumed Liabilities" has the meaning set forth in
Section 2.3.
(6) "Benefit Plans" has the meaning set forth in Section
4.9.
(7) "Xxxx of Sale" means the Xxxx of Sale, substantially in
the form of Exhibit B hereto, to be delivered at the Closing,
with respect to the Tangible Personal Property included in the
Purchased Assets transferred to Buyer at the Closing.
(8) "Buyer Material Adverse Effect" has the meaning set
forth in Section 5.3(a).
(9) "Business Day" shall mean any day other than Saturday,
Sunday and any day on which banking institutions in New York
State or the Commonwealth of Pennsylvania are authorized by law
or other governmental action to close.
(10) "Buyer Benefit Plans" has the meaning set forth in
Section 6.10(f).
(11) "Buyer Indemnitee" has the meaning set forth in Section
8.1(b).
(12) "Buyer Required Regulatory Approvals" has the meaning
set forth in Section 5.3(b).
(13) "Capital Expenditures" has the meaning set forth in
Section 3.3(a).
(14) "CERCLA" means the Federal Comprehensive Environmental
Response, Compensation, and Liability Act, as amended.
(15) "Closing" has the meaning set forth in Section 3.1.
(16) "Closing Adjustment" has the meaning set forth in
Section 3.3(b).
(17) "Closing Date" has the meaning set forth in Section
3.1.
(18) "COBRA" means the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.
(19) "Code" means the Internal Revenue Code of 1986, as
amended.
(20) "Commercially Reasonable Efforts" means efforts which
are reasonably within the contemplation of the Parties at the
time of executing this Agreement and which do not require the
performing Party to expend any funds other than expenditures
which are customary and reasonable in transactions of the kind
and nature contemplated by this Agreement in order for the
performing Party to satisfy its obligations hereunder.
(21) "Confidentiality Agreement" means the Confidentiality
Agreement, dated April 1, 1998, by and among Sellers and Buyer
Parent.
(22) "Direct Claim" has the meaning set forth in Section
8.2(c).
(23) "Easements" means, with respect to the Purchased
Assets, the easements and access rights to be granted by Buyer to
Penelec and NYSEG pursuant to the Easement and Attachment
Agreement, including, without limitation, easements authorizing
access, use, maintenance, construction, repair, replacement and
other activities by Penelec and NYSEG, as further described in
the Easement and Attachment Agreement.
(24) "Easement and Attachment Agreement" means the Easement,
License and Attachment Agreement between Buyer, Penelec and
NYSEG, in the form of Exhibit C hereto, executed on the date
hereof, whereby Buyer will provide Penelec and NYSEG with
Easements with respect to the Real Property transferred to Buyer
and whereby Penelec and NYSEG will provide Buyer with certain
attachment rights with respect to certain real property owned by
Penelec and NYSEG.
(25) "Emission Allowance" means all present and future
authorizations to emit specified units of pollutants or Hazardous
Substances, which units are established by the Governmental
Authority with jurisdiction over the Plant under (i) an air
pollution control and emission reduction program designed to
mitigate global warming, interstate or intra-state transport of
air pollutants; (ii) a program designed to mitigate impairment of
surface waters, watersheds, or groundwater; or (iii) any
pollution reduction program with a similar purpose. Allowances
include allowances, as described above, regardless as to whether
the Governmental Authority establishing such Allowances
designates such allowances by a name other than "allowances."
(26) "Emission Reduction Credits" means credits, in units
that are established by the Governmental Authority with
jurisdiction over the Plant that has obtained the credits,
resulting from reductions in the emissions of air pollutants from
an emitting source or facility (including, without limitation,
and to the extent allowable under applicable law, reductions from
shut-downs or control of emissions beyond that required by
applicable law) that: (i) have been identified by the PaDEP as
complying with applicable Pennsylvania law governing the
establishment of such credits (including, without limitation,
that such emissions reductions are enforceable, permanent,
quantifiable and surplus) and listed in the Emissions Reduction
Credit Registry maintained by the PaDEP or with respect to which
such identification and listing are pending; or (ii) have been
certified by any other applicable Governmental Authority as
complying with the law and regulations governing the
establishment of such credits (including, without limitation,
certification that such emissions reductions are enforceable,
permanent, quantifiable and surplus). The term includes Emission
Reduction Credits that have been approved by the PaDEP and are
awaiting USEPA approval. The term also includes certified air
emissions reductions, as described above, regardless as to
whether the Governmental Authority certifying such reductions
designates such certified air emissions reductions by a name
other than "emission reduction credits."
(27) "Encumbrances" means any mortgages, pledges, liens,
security interests, conditional and installment sale agreements,
activity and use limitations, conservation easements, deed
restrictions, encumbrances and charges of any kind.
(28) "Environmental Claim" means any and all pending and/or
threatened administrative or judicial actions, suits, orders,
claims, liens, notices, notices of violations, investigations,
complaints, requests for information, proceedings, or other
written communication, whether criminal or civil, pursuant to or
relating to any applicable Environmental Law by any person
(including, but not limited to, any Governmental Authority,
private person and citizens' group) based upon, alleging,
asserting, or claiming any actual or potential (a) violation of,
or liability under any Environmental Law, (b) violation of any
Environmental Permit, or (c) liability for investigatory costs,
cleanup costs, removal costs, remedial costs, response costs,
natural resource damages, property damage, personal injury,
fines, or penalties arising out of, based on, resulting from, or
related to the presence, Release, or threatened Release into the
environment of any Hazardous Substances at any location related
to the Purchased Assets, including, but not limited to, any off-
Site location to which Hazardous Substances, or materials
containing Hazardous Substances, were sent for handling, storage,
treatment, or disposal.
(29) "Environmental Condition" means the presence or Release
to the environment, whether at the Site or at an off-Site
location, of Hazardous Substances, including any migration of
those Hazardous Substances through air, soil or groundwater to or
from the Site or any off-Site location regardless of when such
presence or Release occurred or is discovered.
(30) "Environmental Laws" means all Federal, state and
local, provincial and foreign, civil and criminal laws,
regulations, rules, ordinances, codes, decrees, judgments,
directives, or judicial or administrative orders relating to
pollution or protection of the environment, natural resources or
human health and safety, including, without limitation, laws
relating to Releases or threatened Releases of Hazardous
Substances (including, without limitation, Releases to ambient
air, surface water, groundwater, land, surface and subsurface
strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, Release, transport,
disposal or handling of Hazardous Substances. "Environmental
Laws" include, without limitation, CERCLA, the Hazardous
Materials Transportation Act (49 U.S.C. sec. 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. sec. 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. sec.
1251 et seq.), the Clean Air Act (42 U.S.C. sec. 7401 et seq.),
the Toxic Substances Control Act (15 U.S.C. sec. 2601 et seq.),
the Oil Pollution Act (33 U.S.C. sec. 2701 et seq.), the
Emergency Planning and Community Right-to-Know Act (42 U.S.C.
sec. 11001 et seq.), the Occupational Safety and Health Act (29
U.S.C. sec. 651 et seq.),the Pennsylvania Hazardous Sites Cleanup
Act (35 P.S. par. 6020.101 et seq.), the Pennsylvania Solid Waste
Management Act (35 P.S. par. 6018.101 et seq.), the Pennsylvania
Clean Stream Law (35 P.S. par. 691.1 et seq. ) and all other
state laws analogous to any of the above.
(31) "Environmental Permits" has the meaning set forth in
Section 4.7(a).
(32) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
(33) "ERISA Affiliate" has the meaning set forth in Section
2.4(j).
(34) "ERISA Affiliate Plans" has the meaning set forth in
Section 2.4(j).
(35) "Estimated Adjustment" has the meaning set forth in
Section 3.3(b).
(36) "Estimated Closing Statement" has the meaning set forth
in Section 3.3(b).
(37) "Excluded Assets" has the meaning set forth in Section
2.2.
(38) "Excluded Liabilities" has the meaning set forth in
Section 2.4.
(39) "Facilities Act" has the meaning set forth in Section
10.15.
(40) "FERC" means the Federal Energy Regulatory Commission
or any successor agency thereto.
(41) "FIRPTA Affidavit" means the Foreign Investment in Real
Property Tax Act Certification and Affidavit, substantially in
the form of Exhibit D hereto.
(42) "Genco" means GPU Generation, Inc., a Pennsylvania
corporation and wholly-owned subsidiary of GPU.
(43) "Good Utility Practices" mean any of the practices,
methods and acts engaged in or approved by a significant portion
of the electric utility industry during the relevant time period,
or any of the practices, methods or acts which, in the exercise
of reasonable judgment in light of the facts known at the time
the decision was made, could have been expected to accomplish the
desired result at a reasonable cost consistent with good business
practices, reliability, safety and expedition. Good Utility
Practices are not intended to be limited to the optimum
practices, methods or acts to the exclusion of all others, but
rather to be acceptable practices, methods or acts generally
accepted in the industry.
(44) "Governmental Authority" means any federal, state,
local or other governmental, regulatory or administrative agency,
commission, department, board, or other governmental subdivision,
court, tribunal, arbitrating body or other governmental
authority.
(45) "GPU" means GPU, Inc., a Pennsylvania corporation and
parent company of Penelec.
(46) "Hazardous Substances" means (a) any petrochemical or
petroleum products, oil or coal ash, radioactive materials, radon
gas, asbestos in any form that is or could become friable, urea
formaldehyde foam insulation and transformers or other equipment
that contain dielectric fluid which may contain levels of
polychlorinated biphenyls; (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials,"
"hazardous constituents," "restricted hazardous materials,"
"extremely hazardous substances," "toxic substances,"
"contaminants," "pollutants," "toxic pollutants" or words of
similar meaning and regulatory effect under any applicable
Environmental Law; and (c) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated
by any applicable Environmental Law.
(47) "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
(48) "IBEW" means Local 459 of the International Brotherhood
of Electrical Workers.
(49) "IBEW Collective Bargaining Agreement" has the meaning
set forth in Section 6.10(d).
(50) "Income Tax" means any federal, state, local or foreign
Tax (a) based upon, measured by or calculated with respect to net
income, profits or receipts (including, without limitation,
capital gains Taxes and minimum Taxes) or (b) based upon,
measured by or calculated with respect to multiple bases
(including, without limitation, corporate franchise taxes) if one
or more of the bases on which such Tax may be based, measured by
or calculated with respect to, is described in clause (a), in
each case together with any interest, penalties, or additions to
such Tax.
(51) "Indemnifiable Loss" has the meaning set forth in
Section 8.1(a).
(52) "Indemnifying Party" has the meaning set forth in
Section 8.1(e).
(53) "Indemnitee" has the meaning set forth in Section
8.1(d).
(54) "Independent Accounting Firm" means such independent
accounting firm of national reputation as is mutually appointed
by Sellers and Buyer.
(55) "Inspection" means all tests, reviews, examinations,
inspections, investigations, verifications, samplings and similar
activities conducted by Buyer or its agents or Representatives
with respect to the Purchased Assets prior to the Closing.
(56) "Intellectual Property" means all patents and patent
rights, trademarks and trademark rights, inventions, copyrights
and copyright rights owned by the Sellers and necessary for the
operation and maintenance of the Purchased Assets, and all
pending applications for registrations of patents, trademarks,
and copyrights, as set forth as part of Schedule 2.1(l)
(57) "Interconnection Agreement" means the Interconnection
Agreement, between Penelec, NYSEG and Buyer, in the form of
Exhibit E hereto, executed on the date hereof, under which
Penelec and NYSEG will provide Buyer with interconnection service
to certain of their respective transmission facilities and
whereby Buyer will provide Penelec and NYSEG with continuing
access to certain of the Purchased Assets after the Closing Date.
(58) "Inventories" means coal, fuel oil or alternative fuel
inventories, limestone, materials, spare parts, consumable
supplies and chemical and gas inventories relating to the
operation of the Plant located at, or in transit to, the Plant.
(59) "Knowledge" means the actual knowledge of the corporate
officers or managerial representatives of the specified Person
charged with responsibility for the particular function as of the
date of the this Agreement, or, with respect to any certificate
delivered pursuant to this Agreement, the date of delivery of the
certificate.
(60) "Material Adverse Effect" means any change in, or
effect on the Purchased Assets that is materially adverse to the
operations or condition (financial or otherwise) of the Purchased
Assets, taken as a whole, other than: (a) any change affecting
the international, national, regional or local electric industry
as a whole and not Sellers specifically and exclusively; (b) any
change or effect resulting from changes in the international,
national, regional or local wholesale or retail markets for
electric power; (c) any change or effect resulting from changes
in the international, national, regional or local markets for any
fuel used in connection with the Purchased Assets; (d) any change
or effect resulting from, changes in the North American,
national, regional or local electric transmission systems or
operations thereof; (e) any materially adverse change in or
effect on the Purchased Assets which is cured (including by the
payment of money) by the Sellers before the Termination Date; (f)
any order of any court or Governmental Authority or legislature
applicable to providers of generation, transmission or
distribution of electricity generally that imposes restrictions,
regulations or other requirements thereon; and (g) any change or
effect resulting from action or inaction by a Governmental
Authority with respect to an independent system operator or
retail access in Pennsylvania or New York.
(61) "Mine Indemnities" means the indemnification agreements
included in (x) the Termination Agreement, dated as of
February 11, 1993, among NYSEG, Penelec, The Xxxxx Mining
Company, The Valley Camp Coal Company and Quaker State
Corporation and (y) Amendment No. 5 to the Coal Sales Agreement,
dated November 22, 1994, among NYSEG, Penelec, Helvetia Coal
Company and Rochester & Pittsburgh Coal Company.
(62) "Mines" means the Xxxxx and Helvetia coal mines and
associated facilities which are located on the Real Property.
(63) "Non-Union Employees" has the meaning as set forth in
Section 6.10(b).
(64) "NYDEC" means the New York Department of Environmental
Conservation and any successor agency thereto.
(65) "NYPSC" means the Public Service Commission of the
State of New York and any successor agency thereto.
(66) "PaPUC" means the Pennsylvania Public Utility
Commission and any successor agency thereto.
(67) "PaDEP" means the Pennsylvania Department of
Environmental Protection and any successor agency thereto.
(68) "Permits" has the meaning set forth in Section 4.14.
(69) "Permitted Encumbrances" means: (i) the Easements;
(ii) those exceptions to title to the Purchased Assets listed in
Schedule 4.5 and those Encumbrances set forth in Schedule
1.1(69); (iii) statutory liens for Taxes or other governmental
charges or assessments not yet due or delinquent or the validity
of which is being contested in good faith by appropriate
proceedings provided that the aggregate amount being so contested
does not exceed $500,000; (iv) mechanics', carriers', workers',
repairers' and other similar liens arising or incurred in the
ordinary course of business relating to obligations as to which
there is no default on the part of the Sellers or the validity of
which are being contested in good faith, and which do not,
individually or in the aggregate, exceed $500,000; (v) zoning,
entitlement, conservation restriction and other land use and
environmental regulations by Governmental Authorities; and (vi)
such other liens, imperfections in or failure of title, charges,
easements, restrictions and Encumbrances which do not materially,
individually or in the aggregate, detract from the value of the
Purchased Assets as currently used or materially interfere with
the present use of the Purchased Assets and neither secure
indebtedness, nor individually or in the aggregate create a
Material Adverse Effect.
(70) "Person" means any individual, partnership, limited
liability company, joint venture, corporation, trust,
unincorporated organization, or governmental entity or any
department or agency thereof.
(71) "Plant" means the three-unit coal-fired generating
station and related assets as more fully identified on Schedule
2.1 attached hereto.
(72) "Post-Closing Adjustment" has the meaning set forth in
Section 3.3(c).
(73) "Post-Closing Statement" has the meaning set forth in
Section 3.3(c).
(74) "Proposed Post-Closing Adjustment" has the meaning set
forth in Section 3.3(c).
(75) "Proprietary Information" of a Party means all
information about the Party or its Affiliates, including their
respective properties or operations, furnished to the other Party
or its Representatives by the Party or its Representatives, after
the date hereof, regardless of the manner or medium in which it
is furnished. Proprietary Information does not include
information that: (a) is or becomes generally available to the
public, other than as a result of a disclosure by the other Party
or its Representatives; (b) was available to the other Party on a
nonconfidential basis prior to its disclosure by the Party or its
Representatives; (c) becomes available to the other Party on a
nonconfidential basis from a person, other than the Party or its
Representatives, who is not otherwise bound by a confidentiality
agreement with the Party or its Representatives, or is not
otherwise under any obligation to the Party or any of its
Representatives not to transmit the information to the other
Party or its Representatives; (d) is independently developed by
the other Party; or (e) was disclosed pursuant to the
Confidentiality Agreement and remains subject to the terms and
conditions of the Confidentiality Agreement.
(76) "Purchased Assets" has the meaning set forth in Section
2.1.
(77) "Purchase Price" has the meaning set forth in Section
3.2.
(78) "Qualifying Offer" has the meaning set forth in Section
6.10(b).
(79) "Real Property" has the meaning set forth in Section
2.1(a).
(80) "Real Property Leases" has the meaning set forth in
Section 4.6.
(81) "Release" means release, spill, leak, discharge,
dispose of, pump, pour, emit, empty, inject, xxxxx, dump or allow
to escape into or through the environment.
(82) "Remediation" means action of any kind to address a
Release or the presence of Hazardous Substances at the Site or an
off-Site location including, without limitation, any or all of
the following activities to the extent they relate to or arise
from the presence of a Hazardous Substance at the Site or an off-
Site location: (a) monitoring, investigation, assessment,
treatment, cleanup, containment, removal, mitigation, response or
restoration work; (b) obtaining any permits, consents, approvals
or authorizations of any Governmental Authority necessary to
conduct any such activity; (c) preparing and implementing any
plans or studies for any such activity; (d) obtaining a written
notice from a Governmental Authority with jurisdiction over the
Site or an off-Site location under Environmental Laws that no
material additional work is required by such Governmental
Authority; (e) the use, implementation, application,
installation, operation or maintenance of removal actions on the
Site or an off-Site location, remedial technologies applied to
the surface or subsurface soils, excavation and off-Site
treatment or disposal of soils, systems for long term treatment
of surface water or ground water, engineering controls or
institutional controls; and (f) any other activities reasonably
determined by a Party to be necessary or appropriate or required
under Environmental Laws to address the presence or Release of
Hazardous Substances at the Site or an off-Site location.
(83) "Replacement Welfare Plans" has the meaning set forth
in Section 6.10(e)
(84) "Representatives" of a Party means the Party's
Affiliates and their directors, officers, employees, agents,
partners, advisors (including, without limitation, accountants,
counsel, environmental consultants, financial advisors and other
authorized representatives) and parents and other controlling
persons.
(85) "SEC" means the Securities and Exchange Commission and
any successor agency thereto.
(86) "Sellers' Agreements" means those contracts,
agreements, licenses and leases relating to the ownership,
operation and maintenance of the Plant and being assigned to
Buyer as part of the Purchased Assets, including without
limitation the IBEW Collective Bargaining Agreement.
(87) "Sellers' Indemnitee" has the meaning set forth in
Section 8.1 (a).
(88) "Sellers' Required Regulatory Approvals" has the
meaning set forth in Section 4.3(b).
(89) "Site" means the Real Property (including improvements)
forming a part of, or used or usable in connection with the
operation of, the Plant, including any disposal sites included in
Real Property. Any reference to the Site shall include, by
definition, the surface and subsurface elements, including the
soils and groundwater present at the Site, and any reference to
items "at the Site" shall include all items "at, on, in, upon,
over, across, under and within" the Site.
(90) "Subsidiary" when used in reference to any Person means
any entity of which outstanding securities having ordinary voting
power to elect a majority of the Board of Directors or other
Persons performing similar functions of such entity are owned
directly or indirectly by such Person.
(91) Reserved.
(92) "Tangible Personal Property" has the meaning set forth
in Section 2.1(c).
(93) "Taxes" means all taxes, charges, fees, levies,
penalties or other assessments imposed by any federal, state or
local or foreign taxing authority, including, but not limited to,
income, excise, property, sales, transfer, franchise, payroll,
withholding, social security, gross receipts, license, stamp,
occupation, employment or other taxes, including any interest,
penalties or additions attributable thereto.
(94) "Tax Return" means any return, report, information
return, declaration, claim for refund or other document
(including any schedule or related or supporting information)
required to be supplied to any taxing authority with respect to
Taxes including amendments thereto.
(95) "Termination Date" has the meaning set forth in Section
9.1(b).
(96) "Third Party Claim" has the meaning set forth in
Section 8.2(a).
(97) "Transferable Permits" means those Permits and
Environmental Permits which may be transferred to Buyer without a
filing with, notice to, consent or approval of any Governmental
Authority, and are set forth in Schedule 1.1 (97).
(98) "Transferred Employees" means Transferred Non-Union
Employees and Transferred Union Employees.
(99) "Transferred Non-Union Employees" has the meaning set
forth in Section 6.10(b).
(100) "Transferred Union Employees" has the meaning set
forth in Section 6.10(b).
(101) "Transferring Employee Records" means records related
to Sellers' personnel who will become employees of Buyer only to
the extent such files pertain to: (i) skill and development
training and biographies, (ii) seniority histories, (iii) salary
and benefit information, (iv) Occupational, Safety and Health
Administration reports, and (v) active medical restriction forms.
(102) "Transition Power Purchase Agreements" means the
agreements between Penelec and Buyer and NYSEG and Buyer,
respectively, in the form of Exhibit G hereto, executed on the
date hereof, relating to the sale of installed capacity to
Penelec and NYSEG, respectively, for a specified period of time
following the Closing Date.
(103) "Transmission Assets" has the meaning set forth in
Section 2.2(a).
(104) "USEPA" means the United States Environmental
Protection Agency and any successor agency thereto.
(105) "Year 2000 Compliant" has the meaning set forth in
Section 4.19. "Year 2000 Compliance" has a meaning correlative to
the foregoing.
(106) "WARN Act" means the Federal Worker Adjustment
Retraining and Notification Act of 1988, as amended.
1.2 Certain Interpretive Matters. In this Agreement,
unless the context otherwise required, the singular shall include
the plural, the masculine shall include the feminine and neuter,
and vice versa. The term "includes" or "including" shall mean
"including without limitation." References to a Section,
Article, Exhibit or Schedule shall mean a Section, Article,
Exhibit or Schedule of this Agreement, and reference to a given
agreement or instrument shall be a reference to that agreement or
instrument as modified, amended, supplemented and restated
through the date as of which such reference is made.
ARTICLE II
PURCHASE AND SALE
2.1 Transfer of Assets. Upon the terms and subject to
the satisfaction of the conditions contained in this Agreement,
at the Closing each of Penelec and NGE will sell, assign, convey,
transfer and deliver to Buyer, and Buyer will purchase, assume
and acquire from each such Seller, free and clear of all
Encumbrances (except for Permitted Encumbrances), and subject to
Section 2.2, all of such Seller s right, title and interest in
and to all of the assets constituting, or used in and necessary
for generation purposes to the operation of, the Plant, including
without limitation those assets identified in Schedule 2.1 and
those assets described below (but excluding the Excluded Assets),
each as in existence on the Closing Date (collectively,
"Purchased Assets"):
(a) Those certain parcels of real property (including
all buildings, facilities and other improvements thereon and all
appurtenances thereto) described in Schedule 4.10 (the "Real
Property"), but subject to the Permitted Encumbrances and those
exceptions listed in Schedule 4.5 and except as otherwise
constituting part of the Excluded Assets;
(b) All Inventories and Emission Allowances;
(c) All machinery, mobile or otherwise, equipment
(including communications equipment), vehicles, tools, furniture
and furnishings and other personal property located on the Real
Property on the Closing Date, including, without limitation, the
items of personal property included in Schedule 2.1(c), together
with all the personal property of Sellers used principally in the
operation of the Plant and listed in Schedule 2.1(c), other than
property used or primarily usable as part of the Transmission
Assets or otherwise constituting part of the Excluded Assets
(collectively, "Tangible Personal Property");
(d) Subject to the provisions of Section 6.5(c), all
Sellers' Agreements;
(e) Subject to the provisions of Section 6.5(c), all
Real Property Leases;
(f) All Transferable Permits;
(g) All books, operating records, operating, safety
and maintenance manuals, engineering design plans, documents,
blueprints and as built plans, specifications, procedures and
similar items of Sellers relating specifically to the
aforementioned assets and necessary for the operation of the Plant
(subject to the right of Sellers to retain copies of same for their
use) other than such items which are proprietary to third parties
and accounting records;
(h) All Emission Reduction Credits associated with
the Plant and identified in Schedule 2.1(h) that have accrued prior
to, or that accrue on or after, the date of this Agreement but
prior to the Closing Date;
(i) All unexpired, transferable warranties and
guarantees from third parties with respect to any item of Real
Property or personal property constituting part of the Purchased
Assets, as of the Closing Date;
(j) The name of the Plant. It is expressly understood
that Sellers are not assigning or transferring to Buyer any right
to use the name "Pennsylvania Electric Company", "Penelec", "GPU",
"GPU Energy", "GPU Generation", "GPU Genco", "New York State
Electric & Gas Corporation", "NYSEG", "NGE" or "NGE Generation" or
any related or similar trade names, trademarks, service marks,
corporate names and logos or any part, derivative or combination
thereof;
(k) All drafts, memoranda, reports, information,
technology, and specifications relating to the Sellers' plans for
Year 2000 Compliance;
(l) The Intellectual Property described on Schedule
2.1(l); and
(m) The substation equipment set forth in Schedule A
to the Interconnection Agreement and designated therein as being
transferred to Buyer.
2.2 Excluded Assets. Notwithstanding anything to the
contrary in this Agreement, nothing in this Agreement will
constitute or be construed as conferring on Buyer, and Buyer is not
acquiring, any right, title or interest in or to the following
specific assets which are associated with the Purchased Assets, but
which are hereby specifically excluded from the sale and the
definition of Purchased Assets herein (the "Excluded Assets"):
(a) Except as expressly identified in Schedule
2.1(c), the electrical transmission or distribution facilities (as
opposed to generation facilities) of Sellers or any of their
Affiliates located at the Site or forming part of the Plant
(whether or not regarded as a "transmission" or "generation" asset
for regulatory or accounting purposes), including all switchyard
facilities, substation facilities and support equipment, as well as
all permits, contracts and warranties, to the extent they relate to
such transmission and distribution assets (collectively, the
"Transmission Assets"), and those certain assets, facilities and
agreements all as identified on Schedule 2.2(a) attached hereto;
(b) Certain switches and meters in the Plant, gas
facilities, revenue meters and remote testing units, drainage pipes
and systems, as identified in the Easement and Attachment
Agreement;
(c) Certificates of deposit, shares of stock,
securities, bonds, debentures, evidences of indebtedness, and
interests in joint ventures, partnerships, limited liability
companies and other entities;
(d) All cash, cash equivalents, bank deposits,
accounts and notes receivable (trade or otherwise), and any income,
sales, payroll or other tax receivables;
(e) The rights of Sellers and their Affiliates to the
names "Pennsylvania Electric Company", "Penelec", "GPU", "GPU
Energy", "GPU Generation", "GPU Genco", "New York State Electric &
Gas Corporation", "NYSEG", "NGE" and "NGE Generation" or any
related or similar trade names, trademarks, service marks,
corporate names or logos, or any part, derivative or combination
thereof;
(f) All tariffs, agreements and arrangements to which
Sellers are a party for the purchase or sale of electric capacity
and/or energy or for the purchase of transmission or ancillary
services;
(g) The rights of Sellers in and to any causes of
action against third parties (including indemnification and
contribution) relating to any Real Property or personal property,
Permits, Environmental Permits, Taxes, Real Property Leases or
Sellers' Agreements, if any, including any claims for refunds,
prepayments, offsets, recoupment, insurance proceeds, condemnation
awards, judgments and the like, whether received as payment or
credit against future liabilities, relating specifically to the
Plant or the Site and relating to any period prior to the Closing
Date except that Buyer shall be deemed to be a third party
beneficiary of the Mine Indemnitees to the extent permitted by such
agreements;
(h) All personnel records of Sellers or their
Affiliates relating to the Transferred Employees other than
Transferring Employee Records or other records, the disclosure of
which is required by law, or legal or regulatory process or
subpoena; and
(i) Any and all of Sellers' rights in any contract
representing an intercompany transaction between Sellers and an
Affiliate of Sellers, whether or not such transaction relates to
the provision of goods and services, payment arrangements,
intercompany charges or balances, or the like.
2.3 Assumed Liabilities. On the Closing Date, Buyer shall
deliver to Sellers the Assignment and Assumption Agreement pursuant
to which Buyer shall assume and agree to discharge when due,
without recourse to Sellers, all of the following liabilities and
obligations of Sellers, direct or indirect, known or unknown,
absolute or contingent, which relate to the Purchased Assets, other
than Excluded Liabilities, in accordance with the respective terms
and subject to the respective conditions thereof (collectively,
"Assumed Liabilities"):
(a) All liabilities and obligations of Sellers
arising on or after the Closing Date under the Sellers' Agreements,
the Real Property Leases, and the Transferable Permits in
accordance with the terms thereof, including, without limitation,
(i) the contracts, licenses, agreements and personal property
leases entered into by Sellers with respect to the Purchased
Assets, whether or not disclosed on Schedule 4.12(a) and (ii) the
contracts, licenses, agreements and personal property leases
entered into by Sellers with respect to the Purchased Assets after
the date hereof consistent with the terms of this Agreement, except
in each case to the extent such liabilities and obligations, but
for a breach or default by Sellers, would have been paid, performed
or otherwise discharged on or prior to the Closing Date or to the
extent the same arise out of any such breach or default or out of
any event which after the giving of notice would constitute a
default by Sellers;
(b) All liabilities and obligations associated with
the Purchased Assets in respect of Taxes for which Buyer is liable
pursuant to Sections 3.5 or 6.8(a) hereof;
(c) All liabilities and obligations with respect to
the Transferred Employees on and after the Closing Date for which
(i) Buyer is responsible pursuant to Section 6.10 and (ii) the
grievances and arbitration proceedings arising out of or under the
Collective Bargaining Agreement prior to (as set forth in Schedule
4.8), on or after the Closing Date;
(d) Any liability, obligation or responsibility under
or related to Environmental Laws or the common law, whether such
liability or obligation or responsibility is known or unknown,
contingent or accrued, arising as a result of or in connection with
(i) any violation or alleged violation of Environmental Laws,
whether prior to, on or after the Closing Date, with respect to the
ownership or operation of any of the Purchased Assets, including,
but not limited to, the Mines (except to the extent Sellers receive
indemnity payments under the Mine Indemnities); (ii) loss of life,
injury to persons or property or damage to natural resources
(whether or not such loss, injury or damage arose or was made
manifest before the Closing Date or arises or becomes manifest on
or after the Closing Date) caused (or allegedly caused) by the
presence or Release of Hazardous Substances at, on, in, under,
adjacent to or migrating from the Purchased Assets prior to, on or
after the Closing Date, including, but not limited to, Hazardous
Substances contained in building materials at or adjacent to the
Purchased Assets or in the soil, surface water, sediments,
groundwater, landfill cells, or in other environmental media at or
near the Purchased Assets; and (iii) the Remediation (whether or
not such Remediation commenced before the Closing Date or commences
on or after the Closing Date) of Hazardous Substances that are
present or have been Released prior to, on or after the Closing
Date at, on, in, under, adjacent to or migrating from, the
Purchased Assets or in the soil, surface water, sediments,
groundwater, landfill cells or in other environmental media at or
adjacent to the Purchased Assets; provided, that nothing set forth
in this subsection 2.3(d) shall require Buyer to assume any
liabilities or obligations that are expressly excluded in Section
2.4 including without limitation liability for toxic torts as set
forth in Section 2.4(i); provided, further, however, that nothing
set forth in this subsection 2.3(d) or otherwise herein shall
require Buyer to assume any obligation for payment of fines,
penalties or costs imposed by a Governmental Authority to the
extent such obligations arise out of or relate to acts or omissions
of the Sellers prior to the Closing that constitute violations of
the New Source Performance Standards, Prevention of Significant
Deterioration or New Source Review regulations under the Clean Air
Act.
(e) All liabilities and obligations of Sellers with
respect to the Purchased Assets under the agreements or consent
orders set forth on Schedule 4.7 arising on or after the Closing;
and
(f) With respect to the Purchased Assets, any Tax
that may be imposed by any federal, state or local government on
the ownership, sale, operation or use of the Purchased Assets on or
after the Closing Date, except for any Income Taxes attributable to
income received by Sellers.
2.4 Excluded Liabilities. Buyer shall not assume or be
obligated to pay, perform or otherwise discharge the following
liabilities or obligations (the "Excluded Liabilities"):
(a) Any liabilities or obligations of Sellers in
respect of any Excluded Assets or other assets of Sellers which are
not Purchased Assets;
(b) Any liabilities or obligations in respect of
Taxes attributable to the ownership, operation or use of Purchased
Assets for taxable periods, or portions thereof, ending before the
Closing Date, except for Taxes for which Buyer is liable pursuant
to Sections 3.5 or 6.8(a) hereof;
(c) Any liabilities or obligations of Sellers
accruing under any of the Sellers' Agreements prior to the Closing
Date;
(d) Any and all asserted or unasserted liabilities or
obligations to third parties (including employees) for personal
injury or tort, or similar causes of action arising solely out of
the ownership or operation of the Purchased Assets prior to the
Closing Date, other than any liabilities or obligations which have
been assumed by Buyer under Section 2.3(d);
(e) Any fines, penalties or costs imposed by a
Governmental Authority resulting from (i) an investigation,
proceeding, request for information or inspection before or by a
Governmental Authority pending prior to the Closing Date but only
regarding acts which occurred prior to the Closing Date, or (ii)
illegal acts, willful misconduct or gross negligence of Sellers
prior to the Closing Date, other than, any such fines, penalties or
costs which have been assumed by Buyer under Section 2.3(d);
(f) Any payment obligations of Sellers for goods
delivered or services rendered prior to the Closing Date,
including, but not limited to, rental payments pursuant to the Real
Property Leases and Personal Property Leases;
(g) Any liability, obligation or responsibility under
or related to Environmental Laws or the common law, whether such
liability or obligation or responsibility is known or unknown,
contingent or accrued, arising as a result of or in connection with
loss of life, injury to persons or property or damage to natural
resources (whether or not such loss, injury or damage arose or was
made manifest before the Closing Date or arises or becomes manifest
on or after the Closing Date) to the extent caused (or allegedly
caused) by the off-Site disposal, storage, transportation,
discharge, Release, or recycling of Hazardous Substances, or the
arrangement for such activities, of Hazardous Substances, prior to
the Closing Date, in connection with the ownership or operation of
the Purchased Assets, provided that for purposes of this Section
"off-Site" does not include any location to which Hazardous
Substances disposed of or Released at the Purchased Assets have
migrated;
(h) Any liability, obligation or responsibility under
or related to Environmental Laws or the common law, whether such
liability or obligation or responsibility is known or unknown,
contingent or accrued, arising as a result of or in connection with
the investigation and/or Remediation (whether or not such
investigation or Remediation commenced before the Closing Date or
commences on or after the Closing Date) of Hazardous Substances
that are disposed, stored, transported, discharged, Released,
recycled, or the arrangement of such activities, prior to the
Closing Date, in connection with the ownership or operation of the
Purchased Assets, at any off-Site location, provided that for
purposes of this Section "off-Site" does not include any location
to which Hazardous Substances disposed of or Released at the
Purchased Assets have migrated;
(i) Third party liability for toxic torts arising as
a result of or in connection with loss of life or injury to persons
(whether or not such loss or injury arose or was made manifest on
or after the Closing Date) caused (or allegedly caused) by the
presence or Release of Hazardous Substances at, on, in, under,
adjacent to or migrating from the Purchased Assets prior to the
Closing Date;
(j) Subject to Section 6.10, any liabilities or
obligations relating to any Benefit Plan maintained by the Sellers
or any trade or business (whether or not incorporated) which is or
ever has been under common control, or which is or ever has been
treated as a single employer, with a Seller under Section 414(b),
(c), (m) or (o) of the Code ("ERISA Affiliate") or to which a
Seller and any ERISA Affiliate contributed thereunder (the "ERISA
Affiliate Plans"), including any multi-employer plan, maintained
by, contributed to, or obligated to contribute to, at any time, by
a Seller or any ERISA Affiliate, including but not limited to any
liability (i) relating to benefits payable under any Benefit Plans
(ii) relating to the Pension Benefit Guaranty Corporation under
Title IV of ERISA; (iii) relating to a multi-employer plan; (iv)
with respect to non-compliance with the notice and benefit
continuation requirements of COBRA; (v) with respect to any
noncompliance with ERISA or any other applicable laws; or (vi) with
respect to any suit, proceeding or claim which is brought against
Buyer, any Benefit Plan, ERISA Affiliate Plan, any fiduciary or
former fiduciary of any such Benefit Plan or ERISA Affiliate Plan;
(k) Subject to Section 6.10, any liabilities or
obligations relating to the employment or termination of
employment, including discrimination, wrongful discharge, unfair
labor practices, or constructive termination by a Seller of any
individual, attributable to any actions or inactions by the Sellers
prior to the Closing Date other than such actions or inactions
taken at the written direction of Buyer;
(l) Subject to Section 6.10, any obligations for
wages, overtime, employment taxes, severance pay, transition
payments in respect of compensation or similar benefits accruing or
arising prior to the Closing under any term or provision of any
contract, plan, instrument or agreement relating to any of the
Purchased Assets; and
(m) Any liability of a Seller arising out of a breach
by a Seller or any of its Affiliates of any of their respective
obligations under this Agreement or the Ancillary Agreements.
2.5 Control of Litigation. The Parties agree and
acknowledge that Sellers shall be entitled exclusively to control,
defend and settle any litigation, administrative or regulatory
proceeding, and any investigation or Remediation activities
(including without limitation any environmental mitigation or
Remediation activities), arising out of or related to any Excluded
Liabilities, and Buyer agrees to cooperate fully in connection
therewith.
ARTICLE III
THE CLOSING
3.1 Closing. Upon the terms and subject to the
satisfaction of the conditions contained in Article VII of this
Agreement, the sale, assignment, conveyance, transfer and
delivery of the Purchased Assets to Buyer, the payment of the
Purchase Price to Sellers, and the consummation of the other
respective obligations of the Parties contemplated by this
Agreement shall take place at a closing (the "Closing"), to be
held at the offices of Berlack, Israels & Xxxxxxxx LLP, 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m. local time, or
another mutually acceptable time and location, on the date that
is fifteen (15) Business Days following the date on which the
last of the conditions precedent to Closing set forth in Article
VII of this Agreement have been either satisfied or waived by the
Party for whose benefit such conditions precedent exist or such
other date as the Parties may mutually agree. The date of
Closing is hereinafter called the "Closing Date." The Closing
shall be effective for all purposes as of 12:01 a.m. on the
Closing Date.
3.2 Payment of Purchase Price. Upon the terms and
subject to the satisfaction of the conditions contained in this
Agreement, in consideration of the aforesaid sale, assignment,
conveyance, transfer and delivery of the Purchased Assets, Buyer
will pay or cause to be paid to Sellers at the Closing an
aggregate amount of one billion, eight hundred and one million
United States Dollars(U.S. $1,801,000,000.00) (the "Purchase
Price") plus or minus any adjustments pursuant to the provisions
of this Agreement, by wire transfer of immediately available
funds denominated in U.S. dollars or by such other means as are
agreed upon by Sellers and Buyer.
3.3 Adjustment to Purchase Price. (a) Subject to Section
3.3(b), at the Closing, the Purchase Price shall be adjusted,
without duplication, to account for the items set forth in this
Section 3.3(a):
(i) The Purchase Price shall be increased or
decreased, as applicable, to reflect the difference between
the book value of all Inventories as of the Closing Date and
the value of all Inventories as of December 31, 1997 reflected
on Schedule 3.3(a)(i).
(ii) The Purchase Price shall be adjusted to
account for the items prorated as of the Closing Date pursuant
to Section 3.5.
(iii) The Purchase Price shall be increased by
the amount expended, or for which liabilities are incurred, by
Sellers between the date hereof and the Closing Date for
capital additions to or replacements of property, plant and
equipment included in the Purchased Assets and other
expenditures or repairs on property, plant and equipment
included in the Purchased Assets that would be capitalized by
Sellers in accordance with normal accounting policies of
Sellers and their Affiliates (together, "Capital
Expenditures"), which are not described on Schedule 6.1 and
which either (A) are mandated after the date of this Agreement
by any Governmental Authority (subject to Buyer's right to
direct Sellers to contest such mandates by appropriate
proceedings at Buyer's expense and provided there is no
adverse impact on the Purchased Assets); or (B) do not fall
within category (A) above but do not exceed in the aggregate
$500,000; or (C) are approved in writing by Buyer.
(b) At least ten (10) Business Days prior to the Closing
Date, Sellers shall prepare and deliver to Buyer an estimated
closing statement (the "Estimated Closing Statement") that shall
set forth Sellers' best estimate of all estimated adjustments to
the Purchase Price required by Section 3.3(a) (the "Estimated
Adjustment"). Within five (5) Business Days following the delivery
of the Estimated Closing Statement by Sellers to Buyer, Buyer may
object in good faith to the Estimated Adjustment in writing. If
Buyer objects to the Estimated Adjustment, the Parties shall
attempt to resolve their differences by negotiation. If the
Parties are unable to do so within three (3) Business Days prior to
the Closing Date (or if Buyer does not object to the Estimated
Adjustment), the Purchase Price shall be adjusted (the "Closing
Adjustment") for the Closing by the amount of the Estimated
Adjustment not in dispute. The disputed portion shall be paid as
a Post-Closing Adjustment to the extent required by Section 3.3(c).
(c) Within sixty (60) days following the Closing
Date, Sellers shall prepare and deliver to Buyer a final closing
statement (the "Post-Closing Statement") that shall set forth all
adjustments to the Purchase Price required by Section 3.3(a) (the
"Proposed Post-Closing Adjustment"). The Post-Closing Statement
shall be prepared using the same accounting principles, policies
and methods as Sellers have historically used in connection with
the calculation of the items reflected on such Post-Closing
Statement. Within thirty (30) days following the delivery of the
Post-Closing Statement by Sellers to Buyer, Buyer may object to the
Proposed Post-Closing Adjustment in writing. Sellers agree to
cooperate with Buyer to provide Buyer and Buyer's Representatives
information used to prepare the Post-Closing Statement and
information relating thereto. If Buyer objects to the Proposed
Post-Closing Adjustment, the Parties shall attempt to resolve such
dispute by negotiation. If the Parties are unable to resolve such
dispute within thirty (30) days of any objection by Buyer, the
Parties shall appoint the Independent Accounting Firm, which shall,
at Sellers' and Buyer's joint expense, review the Proposed Post-
Closing Adjustment and determine the appropriate adjustment to the
Purchase Price, if any, within thirty (30) days of such
appointment. The Parties agree to cooperate with the Independent
Accounting Firm and provide it with such information as it
reasonably requests to enable it to make such determination. The
finding of such Independent Accounting Firm shall be binding on the
Parties hereto. Upon determination of the appropriate adjustment
(the "Post-Closing Adjustment") by agreement of the Parties or by
binding determination of the Independent Accounting Firm, if the
Post-Closing Adjustment is more or less than the Closing
Adjustment, the Party owing the difference shall deliver such
difference to the other Party no later than two (2) Business Days
after such determination, in immediately available funds or in any
other manner as reasonably requested by the payee.
3.4 Allocation of Purchase Price. Buyer and Sellers shall
endeavor to agree upon an allocation among the Purchased Assets of
the sum of the Purchase Price and the Assumed Liabilities
consistent with Section 1060 of the Code and the Treasury
Regulations thereunder within sixty (60) days of the date of this
Agreement. Each of Buyer and Sellers agree to file Internal Revenue
Service Form 8594, and all federal, state, local and foreign Tax
Returns, in accordance with any such agreed to allocation. Each
of Buyer and Sellers shall report the transactions contemplated by
this Agreement for federal Tax and all other Tax purposes in a
manner consistent with any such agreed to allocation determined
pursuant to this Section 3.4. Each of Buyer and Sellers agree to
provide the other promptly with any information required to
complete Form 8594. Buyer and Sellers shall notify and provide the
other with reasonable assistance in the event of an examination,
audit or other proceeding regarding any allocation of the Purchase
Price agreed to pursuant to this Section 3.4.
3.5 Prorations. (a) Buyer and Sellers agree that all of
the items normally prorated, including those listed below (but not
including Income Taxes), relating to the business and operation of
the Purchased Assets shall be prorated as of the Closing Date, with
Sellers liable to the extent such items relate to any time period
prior to the Closing Date, and Buyer liable to the extent such
items relate to periods commencing with the Closing Date (measured
in the same units used to compute the item in question, otherwise
measured by calendar days):
(i) Personal property, real estate and occupancy
Taxes, assessments and other charges, if any, on or with
respect to the business and operation of the Purchased Assets;
(ii) Rent, Taxes and all other items (including
prepaid services or goods not included in Inventory) payable
by or to Sellers under any of the Sellers' Agreements;
(iii) Any permit, license, registration, compliance
assurance fees or other fees with respect to any Transferable
Permit;
(iv) Sewer rents and charges for water,
telephone, electricity and other utilities; and
(v) Rent and Taxes and other items payable by
Sellers under the Real Property Leases assigned to Buyer.
(b) In connection with the prorations referred to in
(a) above, in the event that actual figures are not available at
the Closing Date, the proration shall be based upon the actual
Taxes or other amounts accrued through the Closing Date or paid for
the most recent year (or other appropriate period) for which actual
Taxes or other amounts paid are available. Such prorated Taxes or
other amounts shall be re-prorated and paid to the appropriate
Party within sixty (60) days of the date that the previously
unavailable actual figures become available. The prorations shall
be based on the number of days in a year or other appropriate
period (i) before the Closing Date and (ii) including and after the
Closing Date. Sellers and Buyer agree to furnish each other with
such documents and other records as may be reasonably requested in
order to confirm all adjustment and proration calculations made
pursuant to this Section 3.5.
Notwithstanding anything to the contrary herein, no
proration shall be made under this Section 3.5 with respect to
Taxes payable under the Pennsylvania Public Utility Realty Tax Act
("XXXXX"). Buyer shall be fully responsible for all Taxes payable
under XXXXX for the year in which the Closing occurs.
3.6 Deliveries by Sellers. At the Closing, each of
Sellers as to itself will deliver, or cause to be delivered, the
following to Buyer:
(a) The Xxxx of Sale, duly executed by Penelec and NGE;
(b) Copies of any and all governmental and other third party
consents, waivers or approvals obtained by Sellers with respect to
the transfer of the Purchased Assets, or the consummation of the
transactions contemplated by this Agreement;
(c) The opinions of counsel and officer's certificates
contemplated by Section 7.1;
(d) One or more special warranty deeds conveying the Real
Property to Buyer, in substantially the form of Exhibit F hereto,
duly executed and acknowledged by Penelec and NGE and in recordable
form;
(e) The Assignment and Assumption Agreement, duly executed
by Penelec and NGE;
(f) A FIRPTA Affidavit, duly executed by Sellers;
(g) Copies, certified by the Secretary or Assistant
Secretary of each Seller, of corporate resolutions authorizing the
execution and delivery of this Agreement and all of the agreements
and instruments to be executed and delivered by Sellers in
connection herewith, and the consummation of the transactions
contemplated hereby;
(h) A certificate of the Secretary or Assistant Secretary
of each Seller identifying the name and title and bearing the
signatures of the officers of such Seller authorized to execute and
deliver this Agreement and the other agreements and instruments
contemplated hereby;
(i) Certificates of Good Standing with respect to the
Sellers, issued by the Secretary of the State of each Sellers'
state of incorporation, as applicable;
(j) To the extent available, originals of all Sellers'
Agreements, Real Property Leases and Transferable Permits and, if
not available, true and correct copies thereof;
(k) All such other instruments of assignment, transfer or
conveyance as shall, in the reasonable opinion of Buyer and its
counsel, be necessary or desirable to transfer to Buyer the
Purchased Assets, in accordance with this Agreement and where
necessary or desirable in recordable form; and
(l) Such other agreements, documents, instruments and
writings as are required to be delivered by Sellers at or prior to
the Closing Date pursuant to this Agreement or otherwise reasonably
required in connection herewith.
3.7 Deliveries by Buyer. At the Closing, Buyer will
deliver, or cause to be delivered, the following to Sellers:
(a) The Purchase Price, as adjusted pursuant to Section 3.3,
by wire transfer of immediately available funds in accordance with
Sellers' instructions or by such other means as may be agreed to by
Sellers and Buyer;
(b) The opinions of counsel and officer's certificates
contemplated by Section 7.2;
(c) The Assignment and Assumption Agreement, duly executed
by Buyer;
(d) Copies, certified by the Secretary or Assistant
Secretary of Buyer and Buyer Parent, respectively, of resolutions
authorizing the execution and delivery of this Agreement, the
Guaranty and all of the agreements and instruments to be executed
and delivered by Buyer in connection herewith, and the consummation
of the transactions contemplated hereby;
(e) A certificate of the Secretary or Assistant Secretary
of Buyer and Buyer Parent, respectively, identifying the name and
title and bearing the signatures of the officers of Buyer
authorized to execute and deliver this Agreement, the Guaranty and
the other agreements contemplated hereby;
(f) All such other instruments of assumption as shall, in
the reasonable opinion of Sellers and their counsel, be necessary
for Buyer to assume the Assumed Liabilities in accordance with this
Agreement;
(g) Copies of any and all governmental and other third
party consents, waivers or approvals obtained by Buyer with respect
to the transfer of the Purchased Assets, or the consummation of the
transactions contemplated by this Agreement;
(h) Certificates of Insurance relating to the insurance
policies required pursuant to Article 10 of the Interconnection
Agreement; and
(i) Such other agreements, documents, instruments and
writings as are required to be delivered by Buyer at or prior to
the Closing Date pursuant to this Agreement or otherwise reasonably
required in connection herewith.
3.8 Ancillary Agreements. The Parties acknowledge that
the Ancillary Agreements have been executed on the date hereof.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND DISCLAIMERS OF SELLERS
Each of Sellers severally as to itself, in the case of
Sections 4.1, 4.2, 4.3, 4.5 and 4.15, and, subject to Section
10.1, jointly and severally, as to all other representations and
warranties, represents and warrants to Buyer as follows:
4.1 Incorporation; Qualification. Such Seller is a
corporation duly incorporated, validly existing and in good
standing under the laws of the state of its incorporation and has
all requisite corporate power and authority to own, lease, and
operate its material properties and assets and to carry on its
business as is now being conducted. Such Seller is duly qualified
to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction in which its business as now
being conducted shall require it to be so qualified, except where
the failure to be so qualified would not have a Material Adverse
Effect. Such Seller has heretofore delivered to Buyer true,
complete and correct copies of its Certificate of Incorporation
and Bylaws as currently in effect.
4.2 Authority Relative to this Agreement. Such Seller
has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated by
it hereby. The execution and delivery of this Agreement by such
Seller and the consummation of the transactions contemplated by
such Seller hereby have been duly and validly authorized by all
necessary corporate action required on the part of such Seller
and this Agreement has been duly and validly executed and
delivered by such Seller. Subject to the receipt of Sellers'
Required Regulatory Approvals, this Agreement constitutes the
legal, valid and binding agreement of such Seller, enforceable
against such Seller in accordance with its terms, except that
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws affecting or relating to enforcement of
creditors' rights generally and general principles of equity
(regardless of whether enforcement is considered in a proceeding
at law or in equity).
4.3 Consents and Approvals; No Violation. (a)
Except as set forth in Schedule 4.3(a), and subject to obtaining
Sellers' Required Regulatory Approvals, neither the execution and
delivery of this Agreement by such Seller nor the consummation by
such Seller of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the
Certificate of Incorporation or Bylaws of such Seller, (ii)
result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, material
agreement or other instrument or obligation to which such Seller
is a party or by which it, or any of the Purchased Assets may be
bound, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or
consents have been obtained or which, would not, individually or
in the aggregate, create a Material Adverse Effect; or (iii)
constitute violations of any law, regulation, order, judgment or
decree applicable to such Seller, which violations, individually
or in the aggregate, would create a Material Adverse Effect.
(b) Except as set forth in Schedule 4.3(b), (the
filings and approvals referred to in Schedule 4.3(b) are
collectively referred to as the "Sellers' Required Regulatory
Approvals"), no consent or approval of, filing with, or notice
to, any Governmental Authority is necessary for the execution and
delivery of this Agreement by such Seller, or the consummation by
such Seller of the transactions contemplated hereby, other than
(i) such consents, approvals, filings or notices which, if not
obtained or made, will not prevent such Seller from performing
its material obligations hereunder and (ii) such consents,
approvals, filings or notices which become applicable to such
Seller or the Purchased Assets as a result of the specific
regulatory status of Buyer (or any of its Affiliates) or as a
result of any other facts that specifically relate to the
business or activities in which Buyer (or any of its Affiliates)
is or proposes to be engaged.
4.4 Insurance. Except as set forth in Schedule 4.4, all
material policies of fire, liability, workers' compensation and
other forms of insurance owned or held by, or on behalf of,
Sellers with respect to the business, operations or employees at
the Plant or the Purchased Assets are in full force and effect,
all premiums with respect thereto covering all periods up to and
including the date hereof has been paid (other than retroactive
premiums which may be payable with respect to comprehensive
general liability and workers' compensation insurance policies),
and no notice of cancellation or termination has been received
with respect to any such policy which was not replaced on
substantially similar terms prior to the date of such
cancellation. Except as described in Schedule 4.4, within the 36
months preceding the date of this Agreement, the Sellers have not
been refused any insurance with respect to the Purchased Assets
nor has their coverage been limited by any insurance carrier to
which they have applied for any such insurance or with which they
have carried insurance during the last twelve (12) months.
4.5 Title and Related Matters. Except as set forth in
Schedule 4.5 and subject to Permitted Encumbrances, (i) each of
Penelec and NGE is the owner of record title to a 50% undivided
interest in the Real Property and has good and valid title to the
other Purchased Assets which it purports to own, free and clear
of all Encumbrances and (ii) each such Seller shall convey to
Buyer such title with respect to the Real Property as a reputable
title company doing business in the Commonwealth of Pennsylvania
would insure.
4.6 Real Property Leases. Schedule 4.6 lists, as of the
date of this Agreement, all real property leases under which each
Seller is a lessee or lessor and which relate to the Purchased
Assets ("Real Property Leases"). Except as set forth in Schedule
4.6, all such leases are valid, binding and enforceable against
Sellers in accordance with their terms; there are no existing
material defaults by Sellers or, to such Sellers' Knowledge, any
other party thereunder; and no event has occurred which (whether
with or without notice, lapse of time or both) would constitute a
material default by Sellers or, to Sellers' Knowledge, any other
party thereunder. Sellers have delivered to Buyer true, correct
and complete copies of each of the Real Property Leases.
4.7 Environmental Matters. Except as disclosed in
Schedule 4.7 or in the "Phase I" and "Phase II" environmental
site assessments prepared by Sellers' outside environmental
consultants ("Environmental Reports") and made available for
inspection by Buyer:
(a) The Sellers hold, and are in substantial
compliance with, all permits, certificates, certifications,
licenses and governmental authorizations under Environmental Laws
("Environmental Permits") that are required for Sellers to conduct
the business and operations of the Purchased Assets, and Sellers
are otherwise in compliance with applicable Environmental Laws with
respect to the business and operations of the Purchased Assets
except for such failures to hold or comply with required
Environmental Permits, or such failures to be in compliance with
applicable Environmental Laws, as would not, individually or in the
aggregate, create a Material Adverse Effect;
(b) None of Sellers has received any written request
for information, or been notified that it is a potentially
responsible party, under CERCLA or any similar state law with
respect to the Real Property;
(c) None of the Sellers has entered into or agreed to
any consent decree or order relating to the Purchased Assets, or is
subject to any outstanding judgment, decree, or judicial order
relating to compliance with any Environmental Law or to
investigation or cleanup of Hazardous Substances under any
Environmental Law relating to the Purchased Assets.
(d) To Sellers' Knowledge, no Releases of Hazardous
Substances have occurred at, from, in, on, or under the Site, and
no Hazardous Substances are present in, on, about or migrating from
the Site that could give rise to an Environmental Claim related to
the Purchased Assets for which Remediation reasonably could be
required, except in any such case to the extent that any such
Releases would not, individually or in the aggregate, create a
Material Adverse Effect.
The representations and warranties made in this Section 4.7
are the Sellers' exclusive representations and warranties relating
to environmental matters.
4.8 Labor Matters. Sellers have previously delivered to
Buyer true and correct copies of all collective bargaining
agreements to which Sellers are a party or are subject and which
relate to the business and operations of the Purchased Assets.
With respect to the business or operations of the Purchased Assets,
except to the extent set forth in Schedule 4.8 and except for such
matters as will not, individually or in the aggregate, create a
Material Adverse Effect, (a) Sellers are in compliance with all
applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours; (b) neither
Seller has received written notice of any unfair labor practice
complaint against such Seller pending before the National Labor
Relations Board; (c) no arbitration proceeding arising out of or
under any collective bargaining agreements is pending against
either Seller; and (d) Sellers have not experienced any work
stoppage within the three-year period prior to the date hereof and
to Sellers' Knowledge none is currently threatened.
4.9 Benefit Plans: ERISA. (a)Schedule 4.9(a) lists all
deferred compensation, profit-sharing, retirement and pension
plans, including multi-employer plans (of which none exist), and
all material bonus, fringe benefit and other employee benefit plans
maintained or with respect to which contributions are made by
Penelec or Genco in respect of the current employees of Penelec
or Genco connected with the Purchased Assets ("Benefit Plans").
True and complete copies of all such Benefit Plans have been made
available to Buyer.
(b) Except as set forth in Schedule 4.9(b), Sellers and
the ERISA Affiliates have fulfilled their respective obligations
under the minimum funding requirements of Section 302 of ERISA, and
Section 412 of the Code, with respect to each Benefit Plan which is
an "employee pension benefit plan" as defined in Section 3(2) of
ERISA and each such plan is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code.
Except as set forth in Schedule 4.9(b), neither the Sellers nor any
ERISA Affiliate has incurred any liability under Section 4062(b) of
ERISA to the Pension Benefit Guaranty Corporation in connection
with any Benefit Plan which is subject to Title IV of ERISA or any
withdrawal liability, nor is there any reportable event (as defined
in Section 4043 of ERISA), except as set forth in Schedule 4.9(b).
Except as set forth in Schedule 4.9(b), the Internal Revenue
Service has issued a letter for each Benefit Plan which is intended
to be qualified under Section 401(a) of the Code, which letter
determines that such plan is exempt from United States Federal
Income Tax under Section 401(a) and 501(a) of the Code, and there
has been no occurrence since the date of any such determination
letter which has affected adversely such qualification.
(c) Neither the Sellers nor any ERISA Affiliate has
engaged in any transaction within the meaning of Section 4069(b) or
Section 4212(c) of ERISA. No Benefit Plan is a multi-employer
plan.
(d) To the extent the Sellers maintain a "group health
plan" within the meaning of Section 5000(b) (1) of the Code,
Sellers have materially complied in good faith with the notice and
continuation requirements of Section 4980B of the Code, COBRA, Part
6 of Subtitle B of Title I of ERISA and the regulations thereunder.
4.10 Real Property. Schedule 4.10 contains a description
of the Real Property owned by Penelec and NGE and included in the
Purchased Assets. True and correct copies of any current surveys,
abstracts or title opinions in Sellers' possession and any policies
of title insurance currently in force and in the possession of
Sellers with respect to the Real Property have heretofore been made
available to Buyer.
4.11 Condemnation. Except as set forth in Schedule 4.11,
Sellers have not received any written notices of and otherwise have
no Knowledge of any pending or threatened proceedings or
governmental actions to condemn or take by power of eminent domain
all or any part of the Purchased Assets.
4.12 Contracts and Leases. (a) Schedule 4.12(a) lists
each written contract, license, agreement, or personal property
lease which is material to the business or operations of the
Purchased Assets, other than any contract, license, agreement or
personal property lease which is listed or described on another
Schedule, or which is expected to expire or terminate prior to the
Closing Date, or which provides for annual payments by the Sellers
after the date hereof of less than $250,000 or payments by the
Sellers after the date hereof of less than $1,000,000 in the
aggregate.
(b) Except as disclosed in Schedule 4.12(b), each
Sellers' Agreement (i) constitutes a legal, valid and binding
obligation of the applicable Seller and, to each Seller's
Knowledge, constitutes a valid and binding obligation of the other
parties thereto, and (ii) may be transferred to Buyer pursuant to
this Agreement without the consent of the other parties thereto and
will continue in full force and effect thereafter, unless in any
such case the impact of such lack of legality, validity or binding
nature, or inability to transfer, would not, individually or in the
aggregate, create a Material Adverse Effect.
(c) Except as set forth in Schedule 4.12(c), there is
not, under the Sellers' Agreements, any default or event which,
with notice or lapse of time or both, would constitute a default on
the part of the Sellers or to each Seller's Knowledge, any of the
other parties thereto, except such events of default and other
events which would not, individually or in the aggregate, create a
Material Adverse Effect.
4.13 Legal Proceedings etc. Except as set forth in
Schedule 4.13, there are no actions or proceedings pending against
Sellers before any court, arbitrator or Governmental Authority,
which could, individually or in the aggregate, reasonably be
expected to create a Material Adverse Effect. Except as set forth
in Schedule 4.13, neither Seller is subject to any outstanding
judgments, rules, orders, writs, injunctions or decrees of any
court, arbitrator or Governmental Authority which would,
individually or in the aggregate, create a Material Adverse Effect.
4.14 Permits. (a) The Sellers have all permits, licenses,
franchises and other governmental authorizations, consents and
approvals, (other than Environmental Permits, which are addressed
in Section 4.7 hereof) (collectively, "Permits") necessary to own
and operate the Purchased Assets except where the failure to have
such Permits would not, individually or in the aggregate, create a
Material Adverse Effect. Except as disclosed on Schedule 4.14(a),
Sellers have not received any notification that any Seller is in
violation of any such Permits, except notifications of violations
which would not, individually or in the aggregate, create a
Material Adverse Effect. Sellers are in compliance with all such
Permits except where non-compliance would not, individually or in
the aggregate, create a Material Adverse Effect.
(b) Schedule 4.14(b) sets forth all material Permits
and Environmental Permits, other than Transferable Permits (which
are set forth on Schedule 1.1(96)) related to the Purchased Assets.
4.15 Taxes. Penelec and NGE have filed all returns that
are required to be filed by it with respect to any Tax relating to
the Purchased Assets, and Penelec and NGE have each paid all Taxes
that have become due as indicated thereon, except where such Tax is
being contested in good faith by appropriate proceedings, or where
the failure to so file or pay would not reasonably be expected to
create a Material Adverse Effect. Penelec and NGE have complied in
all material respects with all applicable laws, rules and
regulations relating to withholding Taxes relating to Transferred
Employees. All Tax Returns relating to the Purchased Assets are
true, correct and complete in all material respects. Except as set
forth in Schedule 4.15, no notice of deficiency or assessment has
been received from any taxing authority with respect to liabilities
for Taxes of such Sellers in respect of the Purchased Assets, which
have not been fully paid or finally settled, and any such
deficiency shown in Schedule 4.15 is being contested in good faith
through appropriate proceedings. Except as set forth in Schedule
4.15, there are no outstanding agreements or waivers extending the
applicable statutory periods of limitation for Taxes associated
with the Purchased Assets that will be binding upon Buyer after the
Closing. None of the Purchased Assets 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, and none of the Purchased Assets is "tax-exempt use"
property within the meaning of Section 168(h) of the Code.
Schedule 4.15 sets forth the taxing jurisdictions in which either
Penelec or NGE own assets or conduct 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 any Taxes of Penelec or NGE.
4.16 Intellectual Property. Schedule 2.1(l) sets forth
all Intellectual Property used in and, individually or in the
aggregate with other Intellectual Property, is material to the
operation or business of the Purchased Assets, each of which a
Seller or its Affiliates either has all right, title and interest
in or valid and binding rights under contract to use. Except as
disclosed in Schedule 4.16, (i) the Sellers are not, nor have they
received any notice that they are, in default (or with the giving
of notice or lapse of time or both, would be in default), under any
contract to use such Intellectual Property, and (ii), to Sellers'
Knowledge, such Intellectual Property is not being infringed by any
other Person. Sellers have not received notice that they are
infringing any Intellectual Property of any other Person in
connection with the operation or business of the Purchased Assets,
and Sellers, to their Knowledge, are not infringing any
Intellectual Property of any other Person the effect of which,
individually or in the aggregate, would have a Material Adverse
Effect.
4.17 Capital Expenditures. Except as set forth in Schedule
6.1, there are no capital expenditures associated with the
Purchased Assets that are planned by Sellers through December 31,
1999.
4.18 Compliance With Laws. The Sellers are in compliance
with all applicable laws, rules and regulations with respect to the
ownership or operation of the Purchased Assets except where the
failure to be in compliance would not, individually or in the
aggregate, create a Material Adverse Effect.
4.19 DISCLAIMERS REGARDING PURCHASED ASSETS. EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE IV,
THE PURCHASED ASSETS ARE SOLD "AS IS, WHERE IS", AND EACH SELLER
EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND
OR NATURE, EXPRESS OR IMPLIED, AS TO LIABILITIES, OPERATIONS OF THE
PLANT, THE TITLE, CONDITION, VALUE OR QUALITY OF THE PURCHASED
ASSETS OR THE PROSPECTS (FINANCIAL AND OTHERWISE), RISKS AND OTHER
INCIDENTS OF THE PURCHASED ASSETS AND EACH SELLER SPECIFICALLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE,
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO
THE PURCHASED ASSETS, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP
THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR
PATENT, OR COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS, OR THE
APPLICABILITY OF ANY GOVERNMENTAL REQUIREMENTS, INCLUDING BUT NOT
LIMITED TO ANY ENVIRONMENTAL LAWS, OR WHETHER EACH SELLER POSSESSES
SUFFICIENT REAL PROPERTY OR PERSONAL PROPERTY TO OPERATE THE
PURCHASED ASSETS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN,
EACH SELLER FURTHER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR
WARRANTY REGARDING THE ABSENCE OF HAZARDOUS SUBSTANCES OR LIABILITY
OR POTENTIAL LIABILITY ARISING UNDER ENVIRONMENTAL LAWS WITH
RESPECT TO THE PURCHASED ASSETS. WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, EACH
SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF ANY
KIND REGARDING THE CONDITION OF THE PURCHASED ASSETS OR THE
SUITABILITY OF THE PURCHASED ASSETS FOR OPERATION AS A POWER PLANT
AND NO SCHEDULE OR EXHIBIT TO THIS AGREEMENT, NOR ANY OTHER
MATERIAL OR INFORMATION PROVIDED BY OR COMMUNICATIONS MADE BY EACH
SELLER OR THEIR REPRESENTATIVES, OR BY ANY BROKER OR INVESTMENT
BANKER, WILL CAUSE OR CREATE ANY WARRANTY, EXPRESS OR IMPLIED, AS
TO THE TITLE, CONDITION, VALUE OR QUALITY OF THE PURCHASED ASSETS.
The Sellers make no warranties and representations of any
kind, whether direct or implied, that any of the hardware,
software, and firmware product (including embedded microcontrollers
in non-computer equipment) which may be included in the Purchased
Assets to be transferred under this Agreement (the "Computer
Systems") is Year 2000 Compliant. For purposes hereof, "Year 2000
Compliant" shall mean that the Computer Systems will correctly
differentiate between years, in different centuries, that end in
the same two digits, and will accurately process date/time data
(including, but not limited to, calculating, comparing, and
sequencing) from, into, and between the twentieth and twenty-first
centuries, including leap year calculations.
4.20 Transmission. NYSEG represents and warrants that
Buyer shall not be obligated to pay a NYSEG transmission charge in
connection with any NYPP Economy Energy transaction as defined in
the NYPP Agreement as effective and on file with FERC without
waiving NYSEG's right to NYPP Economy Energy Transaction
Transmission Fund payments.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
5.1 Organization. Buyer is a California corporation,
duly organized, validly existing and in good standing under the
laws of the state of its organization and has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as is now being
conducted. Buyer is, or by the Closing will be, qualified to do
business in the Commonwealth of Pennsylvania. Buyer has
heretofore delivered to Sellers complete and correct copies of
its Certificate of Incorporation and Bylaws (or other similar
governing documents) as currently in effect.
5.2 Authority Relative to this Agreement. Buyer has full
corporate power and authority to execute and deliver this
Agreement and the Ancillary Agreements and to consummate the
transactions contemplated by it hereby and thereby. The
execution and delivery of this Agreement and the Ancillary
Agreements by Buyer and the consummation of the transactions
contemplated hereby and thereby by Buyer have been duly and
validly authorized by all necessary corporate action required on
the part of Buyer. This Agreement and the Ancillary Agreements
have been duly and validly executed and delivered by Buyer.
Subject to the receipt of Buyer Required Regulatory Approvals,
this Agreement and the Ancillary Agreements constitute legal,
valid and binding agreements of Buyer, enforceable against Buyer
in accordance with their terms, except that such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other
similar laws affecting or relating to enforcement of creditors'
rights generally and general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in
equity).
5.3 Consents and Approvals; No Violation.
(a) Except as set forth in Schedule 5.3(a), and
subject to obtaining Buyer Required Regulatory Approvals, neither
the execution and delivery of this Agreement and the Ancillary
Agreements by Buyer nor the consummation by Buyer of the
transactions contemplated hereby and thereby will (i) conflict with
or result in any breach of any provision of the Certificate of
Incorporation or Bylaws (or other similar governing documents) of
Buyer, or (ii) result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
material agreement or other instrument or obligation to which Buyer
or any of its Subsidiaries is a party or by which any of their
respective assets may be bound, except for such defaults (or rights
of termination, cancellation or acceleration) as to which requisite
waivers or consents have been obtained or which would not,
individually or in the aggregate, have a material adverse effects
on the business, assets, operations or condition (financial or
otherwise) of Buyer Entities ("Buyer Material Adverse Effect") or
(iii) violate any law, regulation, order, judgment or decree
applicable to Buyer, which violations, individually or in the
aggregate, would create a Buyer Material Adverse Effect.
(b) Except as set forth in Schedule 5.3(b) (the
filings and approvals referred to in such Schedule are collectively
referred to as the "Buyer Required Regulatory Approvals"), no
consent or approval of, filing with, or notice to, any Governmental
Authority is necessary for Buyer's execution and delivery of this
Agreement and the Ancillary Agreements, or the consummation by
Buyer of the transactions contemplated hereby and thereby, other
than such consents, approvals, filings or notices, which, if not
obtained or made, will not prevent Buyer from performing its
obligations under this Agreement and the Ancillary Agreements.
5.4 Availability of Funds. Buyer has sufficient funds and
lines of credit available to it or has received binding written
commitments from creditworthy financial institutions, copies of
which have been provided to Sellers, to provide sufficient funds on
the Closing Date to pay the Purchase Price and to permit Buyer to
timely perform all of its obligations under this Agreement and the
Ancillary Agreements.
5.5 Financial Representations. Buyer Parent has provided
Sellers with its balance sheet, income statement and statement of
changes in cash flows for each of the preceding three fiscal years
and most recent interim period. Such financial statements have been
prepared in accordance with generally accepted accounting
principles and fairly reflect the financial posture and results of
operations of Buyer Parent as at and for the periods therein.
5.6 Legal Proceedings. There are no actions or
proceedings pending against Buyer Entities before any court or
arbitrator or Governmental Authority, which, individually or in the
aggregate, could reasonably be expected to create a Buyer Material
Adverse Effect. Buyer Entities are not subject to any outstanding
judgments, rules, orders, writs, injunctions or decrees of any
court, arbitrator or Governmental Authority which would,
individually or in the aggregate, create a Buyer Material Adverse
Effect.
5.7 No Knowledge of Sellers' Breach. Buyer Entities have
no Knowledge of any breach by Sellers of any representation or
warranty of Sellers, or of any other condition or circumstance that
would excuse Buyer from its timely performance of its obligations
hereunder. Buyer Entities shall notify Sellers promptly if any such
information comes to their attention prior to the Closing.
5.8 Qualified Buyer. Buyer is qualified to obtain any
Permits and Environmental Permits necessary for Buyer to own and
operate the Purchased Assets as of the Closing. Without limiting
the foregoing, Buyer is not aware of any reason or circumstance
that would prevent Buyer from procuring Buyer Required Regulatory
Approvals associated with Exempt Wholesale Generator (as defined in
the Public Utility Holding Company Act of 1935) status and market-
based rate authorization specified in items 3 and 2 of Schedule
5.3(b).
5.9 Inspections. Subject to the restrictions set forth
in Section 6.2(a), Buyer acknowledges and agrees that it has, prior
to its execution of this Agreement, (i) reviewed the Environmental
Reports, (ii) had full opportunity to conduct to its satisfaction
Inspections of the Purchased Assets, including the Site, and (iii)
fully completed and approved the results of all Inspections of the
Purchased Assets. Subject to the restrictions set forth in Section
6.2(a), Buyer acknowledges that it is satisfied through such
review and Inspections that no further investigation and study on
or of the Site is necessary for the purposes of acquiring the
Purchased Assets for Buyer's intended use. Buyer acknowledges and
agrees that it hereby assumes the risk that adverse past, present,
and future physical characteristics and Environmental Conditions
may not have been revealed by its Inspections and the
investigations of the Purchased Assets contained in the
Environmental Reports. In making its decision to execute this
Agreement, and to purchase the Purchased Assets, Buyer has relied
on and will rely upon, among other things, the results of its
Inspections and the Environmental Reports.
5.10 WARN Act. Buyer does not intend to engage in a
Plant Closing or Mass Layoff as such terms are defined in the WARN
Act within sixty days of the Closing Date.
ARTICLE VI
COVENANTS OF THE PARTIES
6.1 Conduct of Business Relating to the Purchased Assets.
(a) Except as described in Schedule 6.1 or as expressly
contemplated by this Agreement or to the extent Buyer otherwise
consents in writing, during the period from the date of this
Agreement to the Closing Date, Sellers (i) will operate the
Purchased Assets in the ordinary course of business consistent with
the past practices of Sellers or their Affiliates or with Good
Utility Practices, (ii) shall use all Commercially Reasonable
Efforts to preserve intact the Purchased Assets, and endeavor to
preserve the goodwill and relationships with customers, suppliers
and others having business dealings with it, (iii) shall maintain
the insurance coverage described in Section 4.4, (iv) shall comply
with all applicable laws relating to the Purchased Assets,
including without limitation, all Environmental Laws, except where
the failure to so comply would not result in a Material Adverse
Effect, and (v) shall continue with Sellers' program, or (at
Buyer's expense) as Buyer may direct, to install such equipment or
software with respect to Year 2000 Compliance in accordance with
Sellers' plans referred to in Section 2.1(k). Without limiting the
generality of the foregoing, and, except as contemplated in this
Agreement or as described in Schedule 6.1, or as required under
applicable law or by any Governmental Authority, prior to the
Closing Date, without the prior written consent of Buyer, Sellers
shall not with respect to the Purchased Assets:
(i) Make any material change in the levels
of Inventories customarily maintained by Sellers or their
Affiliates with respect to the Purchased Assets, other than
changes which are consistent with Good Utility Practices;
(ii) Sell, lease (as lessor), encumber,
pledge, transfer or otherwise dispose of, any material
Purchased Assets individually or in the aggregate (except for
Purchased Assets used, consumed or replaced in the ordinary
course of business consistent with past practices of Sellers
or their Affiliates or with Good Utility Practices) other than
to encumber Purchased Assets with Permitted Encumbrances;
(iii) Modify, amend or voluntarily
terminate prior to the expiration date any of the Sellers'
Agreements or Real Property Leases or any of the Permits or
Environmental Permits in any material respect, other than (a)
in the ordinary course of business, to the extent consistent
with the past practices of Sellers or their Affiliates or with
Good Utility Practices, (b) with cause, to the extent
consistent with past practices of Sellers or their Affiliates
or with Good Utility Practices, or (c) as may be required in
connection with transferring Sellers' rights or obligations
thereunder to Buyer pursuant to this Agreement;
(iv) Except as otherwise provided herein,
enter into any commitment for the purchase, sale, or
transportation of fuel having a term greater than six months
and not terminable on or before the Closing Date either (i)
automatically, or (ii) by option of Sellers (or, after the
Closing, by Buyer) in its sole discretion, if the aggregate
payment under such commitment for fuel and all other
outstanding commitments for fuel not previously approved by
Buyer would exceed $1,000,000;
(v) Sell, lease or otherwise dispose of
Emission Allowances, or Emission Reduction Credits identified
in Schedule 2.1(h), except to the extent necessary to operate
the Purchased Assets in accordance with this Section 6.1;
(vi) Except as otherwise provided herein,
enter into any contract, agreement, commitment or arrangement
relating to the Purchased Assets that individually exceeds
$250,000 or in the aggregate exceeds $1,000,000 unless it is
terminable by Sellers (or, after the Closing, by Buyer)
without penalty or premium upon no more than sixty (60) days
notice;
(vii) Except as otherwise required by the terms of
the IBEW Collective Bargaining Agreement (as defined in
Section 6.10(d)), (a) hire at, or transfer to the Purchased
Assets, any new employees prior to the Closing, other than to
fill vacancies in existing positions in the reasonable
discretion of Sellers, (b) materially increase salaries or
wages of employees employed in connection with the Purchased
Assets prior to the Closing, (c) take any action prior to the
Closing to effect a material change in the Collective
Bargaining Agreement, or (d) take any action prior to the
Closing to materially increase the aggregate benefits payable
to the employees employed in connection with the Purchased
Assets;
(viii) Make any Capital Expenditures except as permitted
by Section 3.3(a)(iii) or for Sellers' account; and
(ix) Except as otherwise provided herein, enter into
any written or oral contract, agreement, commitment or
arrangement with respect to any of the proscribed transactions
set forth in the foregoing paragraphs (i) through (viii).
6.2 Access to Information.
(a) Between the date of this Agreement and the Closing
Date, Sellers will, at reasonable times and upon reasonable notice:
(i) give Buyer and its Representatives reasonable access to its
managerial personnel and to all books, records, plans, equipment,
offices and other facilities and properties constituting the
Purchased Assets; (ii) furnish Buyer with such financial and
operating data and other information with respect to the Purchased
Assets as Buyer may from time to time reasonably request, and
permit Buyer to make such reasonable Inspections thereof as Buyer
may request; (iii) furnish Buyer at its request a copy of each
material report, schedule or other document filed by Sellers or any
of their Affiliates with respect to the Purchased Assets with the
SEC, FERC, NYPSC, NYDEC, PaPUC, PaDEP or any other Governmental
Authority; and (iv) furnish Buyer with all such other information
as shall be reasonably necessary to enable Buyer to verify the
accuracy of the representations and warranties of Sellers contained
in this Agreement; provided, however, that (A) any such inspections
and investigations shall be conducted in such a manner as not to
interfere unreasonably with the operation of the Purchased Assets,
(B) Sellers shall not be required to take any action which would
constitute a waiver of the attorney-client privilege, and (C)
Sellers need not supply Buyer with any information which Sellers
are under a legal or contractual obligation not to supply.
Notwithstanding anything in this Section 6.2 to the contrary,
Sellers will only furnish or provide such access to Transferring
Employee Records and will not furnish or provide access to other
employee personnel records or medical information unless required
by law or specifically authorized by the affected employee and
Buyer shall not have the right to perform or conduct any
environmental sampling or testing at, in, on, or underneath the
Purchased Assets.
(b) Each Party shall, and shall use its best efforts
to cause its Representatives to, (i) keep all Proprietary
Information of the other Party confidential and not to disclose or
reveal any such Proprietary Information to any person other than
such Party's Representatives and (ii) not use such Proprietary
Information other than in connection with the consummation of the
transactions contemplated hereby. After the Closing Date, any
Proprietary Information to the extent related to the Purchased
Assets shall no longer be subject to the restrictions set forth
herein. The obligations of the Parties under this Section 6.2(b)
shall be in full force and effect for three (3) years from the date
hereof and will survive the termination of this Agreement, the
discharge of all other obligations owed by the Parties to each
other and the closing of the transactions contemplated by this
Agreement.
(c) For a period of seven (7) years after the Closing
Date (or such longer period as may be required by applicable law),
each Party and its Representatives shall have reasonable access to
all of the books and records of the Purchased Assets, including all
Transferring Employee Records in the possession of the other Party
to the extent that such access may reasonably be required by such
Party in connection with the Assumed Liabilities or the Excluded
Liabilities, or other matters relating to or affected by the
operation of the Purchased Assets. Such access shall be afforded
by the Party in possession of any such books and records upon
receipt of reasonable advance written notice and during normal
business hours. The Party exercising this right of access shall be
solely responsible for any costs or expenses incurred by it or the
other Party with respect to such access pursuant to this Section
6.2(c). If the Party in possession of such books and records shall
desire to dispose of any books and records upon or prior to the
expiration of such seven-year period (or any such longer period),
such Party shall, prior to such disposition, give the other Party
a reasonable opportunity at such other Party's reasonable expense,
to segregate and remove such books and records as such other Party
may select.
(d) Notwithstanding the terms of Section 6.2(b)
above, the Parties agree that prior to the Closing Buyer may reveal
or disclose Proprietary Information to any other Persons in
connection with Buyer's financing of its purchase of the Purchased
Assets or any equity participation in Buyer's purchase of the
Purchased Assets (provided that such Persons agree in writing to
maintain the confidentiality of the Proprietary Information in
accordance with this Agreement).
(e) Upon the other Party's prior written approval
(which will not be unreasonably withheld), either Party may provide
Proprietary Information of the other Party to the NYPSC, the PaPUC,
the SEC, the FERC or any other Governmental Authority with
jurisdiction or any stock exchange, as may be necessary to obtain
Sellers' Required Regulatory Approvals, or Buyer Required
Regulatory Approvals, respectively, or to comply generally with any
relevant law or regulation. The disclosing Party will seek
confidential treatment for the Proprietary Information provided to
any Governmental Authority and the disclosing Party will notify the
other Party as far in advance as is practicable of its intention to
release to any Governmental Authority any Proprietary Information.
(f) Except as specifically provided herein or in the
Confidentiality Agreement, nothing in this Section shall impair or
modify any of the rights or obligations of Buyer or its Affiliates
under the Confidentiality Agreement, all of which remain in effect
until termination of such agreement in accordance with its terms.
(g) Except as may be permitted in the Confidentiality
Agreement, Buyer agrees that, prior to the Closing Date, it will
not contact any vendors, suppliers, employees, or other contracting
parties of Sellers or their Affiliates with respect to any aspect
of the Purchased Assets or the transactions contemplated hereby,
without the prior written consent of Sellers, which consent shall
not be unreasonably withheld.
(h) (i) Buyer shall be entitled to inspect, in
accordance with this Section 6.2(h), all of the Purchased Assets
located adjacent to any Point of Interconnection (as defined in the
Interconnection Agreement), as shown in Schedule A to the
Interconnection Agreement, to verify and/or determine the accuracy
of the data, drawings, and records described in such Schedule. The
Parties shall cooperate to schedule Buyer's inspection at the
Facility so that any interference with the operation of the
Facility is minimized, to the extent reasonably feasible, and so
that Buyer may complete its inspections of the Facility within
thirty (30) working days of commencement of inspections and within
two (2) months after the execution of this Agreement.
(ii) Sellers shall provide, or shall cause to be
provided, to Buyer, access to the Facility at the times scheduled
for the inspections. Buyer shall provide qualified engineering,
operations, and maintenance personnel to escort Buyer's personnel
and to assist Buyer's personnel in conducting the inspections.
Sellers and Buyer shall each bear their own costs of participating
in the inspections. At a mutually convenient time not more than
one (1) month after Buyer has completed its inspections, the
Parties shall meet to discuss whether, as a result of the
inspections, it is appropriate to modify Schedule A to the
Interconnection Agreement to portray more accurately the Points of
Interconnection. Any modification to any portion of Schedule A of
the Interconnection Agreement to which the Parties agree shall
thereafter be deemed part of Schedule A of the Interconnection
Agreement for all purposes under the Interconnection Agreement.
6.3 Public Statements. Subject to the requirements
imposed by any applicable law or any Governmental Authority or
stock exchange, prior to the Closing Date, no press release or
other public announcement or public statement or comment in
response to any inquiry relating to the transactions contemplated
by this Agreement shall be issued or made by any Party without the
prior approval of the other Parties (which approval shall not be
unreasonably withheld). The Parties agree to cooperate in
preparing such announcements.
6.4 Expenses. Except to the extent specifically provided
herein, whether or not the transactions contemplated hereby are
consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be
borne by the Party incurring such costs and expenses.
Notwithstanding anything to the contrary herein, Buyer will be
responsible for (a) all costs and expenses associated with the
obtaining of any title insurance policy and all endorsements
thereto that Buyer elects to obtain and (b) all filing fees under
the HSR Act.
6.5 Further Assurances.
(a) Subject to the terms and conditions of this
Agreement, each of the Parties hereto shall use its best efforts to
take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the purchase
and sale of the Purchased Assets pursuant to this Agreement and the
assumption of the Assumed Liabilities, including without limitation
using its best efforts to ensure satisfaction of the conditions
precedent to each Party's obligations hereunder, including
obtaining all necessary consents, approvals, and authorizations of
third parties and Governmental Authorities required to be obtained
in order to consummate the transactions hereunder, and to
effectuate a transfer of the Transferable Permits to Buyer. Buyer
agrees to perform all conditions required of Buyer in connection
with the Sellers' Required Regulatory Approvals, other than those
conditions which would create a Buyer Material Adverse Effect.
Neither of the Parties hereto shall, without prior written consent
of the other Party, take or fail to take any action, which might
reasonably be expected to prevent or materially impede, interfere
with or delay the transactions contemplated by this Agreement.
Buyer further agrees that prior to the Closing Date, it will
neither enter into any other contract to acquire, nor acquire,
electric generation facilities or uncommitted generation capacity
located in New York State if Buyer's proposed acquisition of such
additional electric generation facilities or uncommitted generation
capacity might reasonably be expected to prevent or materially
impede, interfere with or delay the transactions contemplated by
this Agreement. Buyer shall give Sellers reasonable advance notice
(and in any event not less than 10 days) before Buyer contracts to
acquire or acquires any electric generation facility or uncommitted
generation capacity located in New York.
(b) In the event that any Purchased Asset shall not
have been conveyed to Buyer at the Closing, each Seller shall,
subject to Section 6.5(c) and (d), use Commercially Reasonable
Efforts to convey such asset to Buyer as promptly as is practicable
after the Closing. In the event that any Easement shall not have
been granted by Buyer to Penelec or NYSEG at the Closing, Buyer
shall use Commercially Reasonable Efforts to grant such Easement to
Penelec or NYSEG as promptly as is practicable after the Closing.
(c) To the extent that Sellers' rights under any
Sellers' Agreement or Real Property Lease may not be assigned
without the consent of another Person which consent has not been
obtained by the Closing Date, this Agreement shall not constitute
an agreement to assign the same, if an attempted assignment would
constitute a breach thereof or be unlawful. Sellers and Buyer
agree that if any consent to an assignment of any material Sellers'
Agreement or Real Property Lease shall not be obtained or if any
attempted assignment would be ineffective or would impair Buyer's
rights and obligations under the material Sellers' Agreement or
Real Property Lease in question, so that Buyer would not in effect
acquire the benefit of all such rights and obligations, Sellers, at
Buyer's option and to the maximum extent permitted by law and such
material Sellers' Agreement or Real Property Lease, shall, after
the Closing Date, appoint Buyer to be Sellers' agent with respect
to such material Sellers' Agreement or Real Property Lease, or, to
the maximum extent permitted by law and such material Sellers'
Agreement or Real Property Lease, enter into such reasonable
arrangements with Buyer or take such other actions as are necessary
to provide Buyer with the same or substantially similar rights and
obligations of such material Sellers' Agreement or Real Property
Lease as Buyer may reasonably request. Sellers and Buyer shall
cooperate and shall each use Commercially Reasonable Efforts prior
to and after the Closing Date to obtain an assignment of such
material Sellers' Agreement or Real Property Lease to Buyer. For
purposes of this Section 6.5(c), all Sellers' Agreements listed on
Schedule 4.12(a) are deemed to be "material."
(d) To the extent that Sellers' rights under any
warranty or guaranty described in Section 2.1(i) may not be
assigned without the consent of another Person, which consent has
not been obtained by the Closing Date, this Agreement shall not
constitute an agreement to assign same, if an attempted assignment
would constitute a breach thereof, or be unlawful. Sellers and
Buyer agree that if any consent to an assignment of any such
warranty or guaranty shall not be obtained, or if any attempted
assignment would be ineffective or would impair Buyer's rights and
obligations under the warranty or guaranty in question, so that
Buyer would not in effect acquire the benefit of all such rights
and obligations, Sellers, at Buyer's expense, shall use
Commercially Reasonable Efforts, to the extent permitted by law and
such warranty or guaranty, to enforce such warranty or guaranty for
the benefit of Buyer so as to provide Buyer to the maximum extent
possible with the benefits and obligations of such warranty or
guaranty.
6.6 Consents and Approvals.
(a) As promptly as possible after the date of this
Agreement, Sellers and Buyer, as applicable, shall each file or
cause to be filed with the Federal Trade Commission and the United
States Department of Justice any notifications required to be filed
under the HSR Act and the rules and regulations promulgated
thereunder with respect to the transactions contemplated hereby.
The Parties shall use their respective best efforts to respond
promptly to any requests for additional information made by either
of such agencies, and to cause the waiting periods under the HSR
Act to terminate or expire at the earliest possible date after the
date of filing. Buyer will pay all filing fees under the HSR Act
but each Party will bear its own costs of the preparation of any
filing.
(b) As promptly as possible after the date of this
Agreement, Buyer shall file with the FERC an application requesting
Exempt Wholesale Generator status for Buyer, which filing may be
made individually by Buyer or jointly with the Sellers in
conjunction with other filings to be made with the FERC under this
Agreement, as reasonably determined by the Parties. Prior to
Buyer's submission of that application with the FERC, Buyer shall
submit such application to the Sellers for review and comment and
Buyer shall incorporate into the application any revisions
reasonably requested by Sellers. Buyer shall be solely responsible
for the cost of preparing and filing this application, any
petition(s) for rehearing, or any re-application. If Buyer's
initial application for Exempt Wholesale Generator status is
rejected by the FERC, Buyer agrees to petition the FERC for
rehearing and/or to re-submit an application with the FERC, as
reasonably required by the Sellers, provided that in either case
the action directed by the Sellers does not create a Buyer Material
Adverse Effect.
(c) As promptly as possible after the date of this
Agreement, Buyer shall file with the FERC an application requesting
authorization under Section 205 of the Federal Power Act to sell
electric generating capacity and energy, but not other services,
including, without limitation, ancillary services, at wholesale at
market-based rates, which filing may be made individually by Buyer
or jointly with Sellers in conjunction with other filings to be
made with the FERC under this Agreement, as reasonably determined
by the Parties. Prior to the filing of that application with the
FERC, Buyer shall submit such application to the Sellers for review
and comment and Buyer shall incorporate into the application any
revisions reasonably requested by the Sellers. Buyer shall be
solely responsible for the cost of preparing and filing this
application, any petition(s) for rehearing, or any reapplication.
If Buyer's initial application for market-based rate authorization
results in a FERC request for additional information or is rejected
by the FERC, Buyer shall provide that information promptly, to
petition the FERC for rehearing and/or to re-submit an application
with the FERC, as reasonably required by the Sellers, provided that
the Sellers shall have a reasonable opportunity to make changes to
such a petition or re-submission application and, provided further,
that the action directed by the Seller does not create a Buyer
Material Adverse Effect.
(d) As promptly as possible, and in any case within
sixty (60) days, after the date of this Agreement, Sellers and
Buyer, as applicable, shall file with the NYPSC, the PaPUC, the
FERC and any other Governmental Authority, and make any other
filings required to be made with respect to the transactions
contemplated hereby. The Parties shall respond promptly to any
requests for additional information made by such agencies, and use
their respective best efforts to cause regulatory approval to be
obtained at the earliest possible date after the date of filing.
Each Party will bear its own costs of the preparation of any such
filing.
(e) Sellers and Buyer shall cooperate with each other
and promptly prepare and file notifications with, and request Tax
clearances from, state and local taxing authorities in
jurisdictions in which a portion of the Purchase Price may be
required to be withheld or in which Buyer would otherwise be liable
for any Tax liabilities of Sellers pursuant to such state and local
Tax law.
(f) Buyer shall have the primary responsibility for
securing the transfer, reissuance or procurement of the Permits
and Environmental Permits (other than Transferable Permits)
effective as of the Closing Date. Sellers shall cooperate with
Buyer's efforts in this regard and assist in any transfer or
reissuance of a Permit or Environmental Permit held by Sellers or
the procurement of any other Permit or Environmental Permit when so
requested by Buyer.
6.7 Fees and Commissions. Each Seller, on the one hand,
and Buyer, on the other hand, represent and warrant to the other
that, except for Xxxxxxx, Xxxxx & Co., which are acting for and at
the expense of Sellers, and Xxxxxx Brothers Inc., which is acting
for and at the expense of Buyer, no broker, finder or other Person
is entitled to any brokerage fees, commissions or finder's fees in
connection with the transaction contemplated hereby by reason of
any action taken by the Party making such representation. Each
Seller, on the one hand, and Buyer, on the other hand, will pay to
the other or otherwise discharge, and will indemnify and hold the
other harmless from and against, any and all claims or liabilities
for all brokerage fees, commissions and finder's fees (other than
the fees, commissions and finder's fees payable to the parties
listed above) incurred by reason of any action taken by the
indemnifying party.
6.8 Tax Matters.
(a) All transfer and sales taxes incurred in
connection with this Agreement and the transactions contemplated
hereby (including, without limitation, (a) Pennsylvania sales tax;
(b) the Pennsylvania transfer tax on conveyances of interests in
real property; and (c) Pennsylvania sales tax and transfer tax on
deeds) shall be borne by Buyer. Sellers shall file, to the extent
required by, or permissible under, applicable law, all necessary
Tax Returns and other documentation with respect to all such
transfer and sales taxes, and, if required by applicable law, Buyer
shall join in the execution of any such Tax Returns and other
documentation. Prior to the Closing Date, to the extent
applicable, Buyer shall provide to Sellers appropriate certificates
of Tax exemption from each applicable taxing authority.
(b) With respect to Taxes to be prorated in
accordance with Section 3.5 of this Agreement, Buyer shall prepare
and timely file all Tax Returns required to be filed after the
Closing Date with respect to the Purchased Assets, if any, and
shall duly and timely pay all such Taxes shown to be due on such
Tax Returns. Buyer's preparation of any such Tax Returns shall be
subject to Sellers' approval, which approval shall not be
unreasonably withheld. Buyer shall make such Tax Returns available
for Sellers' review and approval no later than fifteen (15)
Business Days prior to the due date for filing each such Tax
Return.
(c) Buyer and Sellers shall provide the other with
such assistance as may reasonably be requested by the other Party
in connection with the preparation of any Tax Return, any audit or
other examination by any taxing authority, or any judicial or
administrative proceedings relating to liability for Taxes, and
each shall retain and provide the requesting party with any records
or information which may be relevant to such return, audit,
examination or proceedings. Any information obtained pursuant to
this Section 6.8(c) or pursuant to any other Section hereof
providing for the sharing of information or review of any Tax
Return or other instrument relating to Taxes shall be kept
confidential by the parties hereto.
(d) Disputes. In the event that a dispute arises
between Sellers and Buyer regarding Taxes, or any amount due under
this Section 6.8, the Parties shall attempt in good faith to
resolve such dispute and any agreed upon amount shall be paid to
the appropriate Party. If such dispute is not resolved within 30
days, the Parties shall submit the dispute to the Independent
Accounting Firm for resolution, which resolution shall be final,
conclusive and binding on the Parties. Notwithstanding anything in
this Agreement to the contrary, the fees and expenses of the
Independent Accounting Firm in resolving the dispute shall be borne
50% by Sellers and 50% by Buyer. Any payment required to be made
as a result of the resolution of the dispute by the Independent
Accounting Firm shall be made within ten days after such
resolution, together with any interest determined by the
Independent Accounting Firm to be appropriate.
6.9 Advice of Changes. Prior to the Closing, each Party
will promptly advise the other in writing with respect to any
matter arising after execution of this Agreement of which that
Party obtains Knowledge and which, if existing or occurring at the
date of this Agreement, would have been required to be set forth in
this Agreement, including any of the Schedules hereto. Sellers may
at any time notify Buyer of any development causing a breach of any
of its representations and warranties in Article IV. Unless Buyer
has the right to terminate this Agreement pursuant to Section
9.1(f) below by reason of the developments and exercises that right
within the period of fifteen (15) days after such right accrues,
the written notice pursuant to this Section 6.9 will be deemed to
have amended this Agreement, including the appropriate Schedule, to
have qualified the representations and warranties contained in
Article IV above, and to have cured any misrepresentation or breach
of warranty that otherwise might have existed hereunder by reason
of the development.
6.10 Employees.
(a) At least 90 days prior to the Closing Date, Buyer
is required to offer employment, effective on the Closing Date, to
those employees of Penelec who are covered by the IBEW Collective
Bargaining Agreement as defined in Section 6.10(d) below, and who
are employed in positions relating to the Purchased Assets ("Union
Employees"). At least 90 days prior to the Closing Date, Buyer
shall provide Sellers with notice of its staffing level
requirements, listed by classification and operation, and shall be
required to offer employment only to that number of Union Employees
necessary to satisfy such staffing level requirements. In each
classification, Union Employees shall be so offered employment in
order of their seniority.
(b) At least 90 days prior to the Closing Date, Buyer
is also required to make reasonable efforts to make a Qualifying
Offer of employment, effective on the Closing Date, to those
salaried employees of Penelec or Genco who are listed in, or are in
a function or whose employment responsibilities are listed in,
Schedule 6.10(b) ("Non-Union Employees"). Each person who becomes
employed by Buyer pursuant to Section 6.10(a) or (b) (whether
pursuant to a Qualifying Offer or otherwise) shall be referred to
herein as a "Transferred Union Employee" or "Transferred Non-Union
Employee", respectively. As used herein, the term "Qualifying
Offer" means an offer of at least 85% of an employee's current
total annual cash compensation at the time the offer was made
(consisting of base salary and target incentive bonus). Schedule
6.10(b) sets forth, for each of the Non-Union Employees listed
therein, their current base salaries and target incentive bonuses.
(c) All offers of employment made pursuant to
Sections 6.10(a) or (b) shall be made (i) in accordance with
seniority and all applicable laws and regulations, and (ii) for
Union Employees, in accordance with the IBEW Collective Bargaining
Agreement.
(d) Schedule 6.10(d) sets forth the collective
bargaining agreement, and amendments thereto, to which Penelec is
a party with the IBEW in connection with the Purchased Assets
("IBEW Collective Bargaining Agreement"). Transferred Union
Employees shall retain their seniority and receive full credit for
service with Penelec in connection with entitlement to vacation and
all other benefits and rights under the IBEW Collective Bargaining
Agreement and under each compensation, retirement or other employee
benefit plan or program Buyer is required to maintain for
Transferred Union Employees pursuant to the IBEW Collective
Bargaining Agreement. With respect to Transferred Union Employees,
on the Closing Date, Buyer shall assume the IBEW Collective
Bargaining Agreement for the duration of its term as it relates to
Transferred Union Employees to be employed at the Plant in
positions covered by the IBEW Collective Bargaining Agreement and
shall comply with all applicable obligations under the IBEW
Collective Bargaining Agreement. Consistent with the obligations
under the IBEW Collective Bargaining Agreement and applicable laws,
Buyer shall be required to establish and maintain a pension plan
and other employer benefit programs for the Transferred Union
Employees for the duration of the term of the IBEW Collective
Bargaining Agreement which are substantially equivalent to the
Penelec plans and programs in effect for the Transferred Union
Employees immediately prior to the Closing Date (the "Penelec
Plans"), and which provide at least the same level of benefits or
coverage as do the Penelec Plans for the duration of the IBEW
Collective Bargaining Agreement. Buyer further agrees to recognize
the IBEW as the collective bargaining agent for the Transferred
Union Employees.
(e) As of the Closing Date, all Transferred Non-Union
Employees shall commence participation in welfare benefit plans of
Buyer or its Affiliates (the "Replacement Welfare Plans"). Buyer
shall (i) waive all limitations as to pre-existing condition
exclusions and waiting periods with respect to the Transferred Non-
Union Employees under the Replacement Welfare Plans, other than,
but only to the extent of, limitations or waiting periods that were
in effect with respect to such employees under the welfare plans
maintained by Genco, Penelec or their Affiliates and that have not
been satisfied as of the Closing Date, and (ii) provide each
Transferred Non-Union Employee with credit for any copayments and
deductibles paid prior to the Closing Date in satisfying any
deductible or out-of-pocket requirements under the Replacement
Welfare Plans (on a pro-rata basis in the event of a difference in
plan years).
(f) Transferred Non-Union Employees shall be given
credit for all service with Genco, Penelec and their Affiliates
under all deferred compensation, profit-sharing, 401(k), retirement
and pension plans, incentive compensation, bonus, fringe benefit
and other employee benefit plans, programs and arrangements of
Buyer ("Buyer Benefit Plans") in which they may become
participants. The service credit so given shall be for purposes of
eligibility and vesting, but not for level of benefits and benefit
accrual.
(g) To the extent allowable by law, Buyer shall take
any and all necessary action to cause the trustee of any defined
contribution plan of Buyer or its Affiliates in which any
Transferred Employee becomes a participant to accept a direct
"rollover" of all or a portion of said employee's "eligible
rollover distribution" within the meaning of Section 402 of the
Code from the GPU Companies Employee Savings Plan for Non-
Bargaining Employees or the Penelec Employee Savings Plan for
Bargaining Unit Employees (the "Sellers' Savings Plans") if
requested to do so by the Transferred Employee. Buyer agrees that
the property so rolled over and the assets so transferred may
include promissory notes evidencing loans from the Sellers' Savings
Plans to Transferred Employees that are outstanding as of the
Closing Date. However, except as otherwise provided in Section
6.10(d), any defined contribution plan of Buyer or its Affiliates
accepting such a rollover or transfer shall not be required to (x)
make any further loans to any Transferred Employee after the
Closing Date or (y) permit any additional investment to be made in
GPU common stock on behalf of any Transferred Employee after the
Closing Date.
(h) Buyer shall pay or provide to Transferred
Employees the benefits described in subparagraphs (i), (ii) and
(iii) of this Section 6.10(h), and shall reimburse the Sellers for
the benefits they will provide to Union Employees and Non-Union
Employees in accordance with subparagraph (iv) of this Section
6.10(h).
(i) Buyer shall make a transition incentive
payment in the amount of $2,500 to each Transferred Union
Employee. Payment shall be made as soon as practicable after,
but in any event no later than 60 days following, the Closing
Date.
(ii) In the case of each Transferred Non-Union
Employee who is initially assigned by Buyer to a principal
place of work that is at least 50 miles farther from the
employee's principal residence than was his principal place of
work immediately prior to the Closing Date and who relocates
his or her principal residence to the vicinity of his or her
new principal place of work within 12 months following the
Closing Date, Buyer shall reimburse the employee for all
"moving expenses" within the meaning of Section 217(b) of the
Code incurred by the employee and other members of his or her
household in connection with such relocation, up to a maximum
aggregate amount of $5,000. Claims for reimbursement for such
expenses shall be filed in accordance with such procedures,
and shall be accompanied by such substantiation of the
expenses for which reimbursement is sought, as Buyer may
reasonably request. All claims for reimbursement shall be
processed, and qualifying expenses shall be reimbursed, as
soon as practicable after, but in any event no later than 60
days following, the date on which the employee's claim for
reimbursement is submitted to Buyer.
(iii) Buyer shall provide the severance benefits
described in Section 1 of Schedule 6.10(h) to each Transferred
Employee who is "Involuntarily Terminated" (as defined below)
(a) within 12 months after the Closing Date or (b), in the
case of any Transferred Non-Union Employee who had attained
age 50 and had completed at least 10 Years of Service (as
defined in Section 1(c) of Schedule 6.10(h)) prior to the
Closing Date, on or any time prior to June 30, 2004. For
purposes of this Section 6.10(h) and Schedule 6.10(h), a
Transferred Employee shall be treated as "Involuntarily
Terminated" if his or her employment with Buyer and all of its
Affiliates is terminated by Buyer or any of its Affiliates for
any reason other than for cause, disability or mandatory
retirement. A Transferred Employee who voluntarily leaves
employment with Buyer and all of its Affiliates as a result of
a reduction of more than 15% in the rate of his or her total
annual cash compensation (including both base salary and
target incentive award) shall also be treated as having been
Involuntarily Terminated. Buyer shall require any Transferred
Employee who is Involuntarily Terminated, as a condition to
receiving the severance benefits described in Section 1(b),
(c), (d), (e) and (g) of Schedule 6.10(h), to execute a
release of claims against Penelec or Genco, as applicable, and
Buyer, in such form as Buyer and Sellers shall agree upon.
(iv) At the Closing or as soon thereafter as
practicable, but in any event no later than 60 days following
the Closing Date, Buyer shall pay to Sellers, in addition to
all other amounts to be paid by Buyer to Sellers hereunder, an
amount equal to the aggregate estimated cost that the Sellers
will or may incur in providing the severance, pension, health
care and group term life insurance benefits described in
Section 2 of Schedule 6.10(h) to the Union Employees and Non-
Union Employees therein described. The estimated cost of such
benefits shall be calculated by the actuarial firm regularly
engaged to provide actuarial services to the GPU Companies
with respect to their pension, health care and life insurance
plans, and shall be determined using the same assumptions as
to mortality, turnover, interest rate and other actuarial
assumption as used by such firm in determining the cost of
benefits under the GPU Companies' pension, health and group
term life insurance plans for purposes of their most recently
issued financial statements prior to the Closing Date.
(i) Sellers shall be responsible for any payments
required under their voluntary early retirement plans offered in
connection with the transfer of the Purchased Assets. Within
thirty (30) days following the last day that any Union Employee or
Non-Union Employee may elect to participate in such plans, Sellers
shall provide Buyer with a list of all such employees who have so
elected.
(j) Sellers shall be responsible, with respect to the
Purchased Assets, for performing and discharging all requirements
under the WARN Act and under applicable state and local laws and
regulations for the notification of its employees of any
"employment loss" within the meaning of the WARN Act which occurs
prior to the Closing Date.
(k) Sellers are responsible for extending and
continuing to extend COBRA continuation coverage to all employees
and former employees, and qualified beneficiaries of such employees
and former employees, who become or became entitled to such COBRA
continuation coverage on or before the Closing Date, including
those for whom the Closing Date occurs during their COBRA election
period.
(l) Sellers shall pay to all Sellers' employees that
Buyer offers employment pursuant to Section 6.10 hereof, all
compensation, bonus, vacation and holiday compensation, workers'
compensation or other employment benefits that are payable in cash
which have accrued to such employees through and including the
Closing Date, at such times as provided under the terms of the
applicable compensation or benefit programs.
6.11 Risk of Loss.
(a) From the date hereof through the Closing Date,
all risk of loss or damage to the property included in the
Purchased Assets shall be borne by Sellers, other than loss or
damage caused by the acts or negligence of Buyer or any Buyer
Representative, which loss or damage shall be the responsibility of
Buyer.
(b) If, before the Closing Date, all or any portion
of the Purchased Assets is (i) taken by eminent domain or is the
subject of a pending or (to the Knowledge of Sellers) contemplated
taking which has not been consummated, or (ii) damaged or destroyed
by fire or other casualty, Sellers shall notify Buyer promptly in
writing of such fact, and (x) in the case of a condemnation,
Sellers shall assign or pay, as the case may be, any proceeds
thereof to Buyer at the Closing and (y) in the case of a casualty,
Sellers shall either restore the damage or assign the insurance
proceeds therefor (and pay the amount of any deductible and/or
self-insured amount in respect of such casualty) to Buyer at the
Closing. Notwithstanding the above, if such casualty or loss
results in a Material Adverse Effect, Buyer and Sellers shall
negotiate to settle the loss resulting from such taking (and such
negotiation shall include, without limitation, the negotiation of
a fair and equitable adjustment to the Purchase Price). If no such
settlement is reached within sixty (60) days after Sellers have
notified Buyer of such casualty or loss, then Buyer or Sellers may
terminate this Agreement pursuant to Section 9.1(i). In the event
of damage or destruction which Sellers elect to restore, Sellers
will have the right to postpone the Closing for up to four (4)
months. Buyer will have the right to inspect and observe, or have
its representatives inspect or observe, all repairs necessitated by
any such damage or destruction.
6.12 Additional Covenants of Buyer. Notwithstanding
any other provision hereof, Buyer covenants and agrees that, after
the Closing Date, Buyer will not make any modifications to the
Purchased Assets or take any action which would result in a loss of
the exclusion of interest on the pollution control bonds issued on
behalf of Penelec or NYSEG in connection with the Purchased Assets
from gross income for federal income purposes under Section 103 of
the Code. Buyer further covenants and agrees that, in the event
that Buyer transfers any of the Purchased Assets, Buyer shall
obtain from its transferee a covenant and agreement that is
analogous to Buyer's covenant and agreement pursuant to the
immediately preceding sentence, as well as a covenant and agreement
that is analogous to that of this sentence. This covenant shall
survive Closing and shall continue in effect so long as the
pollution control bonds remain outstanding.
ARTICLE VII
CONDITIONS
7.1 Conditions to Obligations of Buyer. The obligation
of Buyer to effect the purchase of the Purchased Assets and the
other transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date (or
the waiver by Buyer) of the following conditions:
(a) The waiting period under the HSR Act applicable
to the consummation of the sale of the Purchased Assets
contemplated hereby shall have expired or been terminated.
(b) No preliminary or permanent injunction or other
order or decree by any federal or state court or Governmental
Authority which prevents the consummation of the sale of the
Purchased Assets contemplated herein shall have been issued and
remain in effect (each Party agreeing to use its reasonable best
efforts to have any such injunction, order or decree lifted) and no
statute, rule or regulation shall have been enacted by any state or
federal government or Governmental Authority which prohibits the
consummation of the sale of the Purchased Assets;
(c) Buyer shall have received all of Buyer's Required
Regulatory Approvals, in form and substance reasonably satisfactory
(including no material adverse conditions) to it;
(d) Sellers shall have performed and complied in all
material respects with the covenants and agreements contained in
this Agreement which are required to be performed and complied with
by Sellers on or prior to the Closing Date;
(e) The representations and warranties of Sellers set
forth in this Agreement shall be true and correct in all material
respects as of the Closing Date as though made at and as of the
Closing Date;
(f) Buyer shall have received certificates from an
authorized officer of each Seller, dated the Closing Date, to the
effect that, to such officer's Knowledge, the conditions set forth
in Section 7.1(d) and (e) have been satisfied by such Seller;
(g) Buyer shall have received an opinion from each
Seller's counsel reasonably acceptable to Buyer, dated the Closing
Date and reasonably satisfactory in form and substance to Buyer and
its counsel, substantially to the effect that:
(i) Such Seller is a corporation duly
incorporated, validly existing and in good standing under the
laws its state of incorporation and Seller has the corporate
power and authority to own, lease and operate its material
assets and properties and to carry on its business as is now
conducted, and to execute and deliver the Agreement and each
Ancillary Agreement and to consummate the transactions
contemplated by it thereby; and the execution and delivery of
the Agreement by such Seller and the consummation of the sale
of the Purchased Assets contemplated thereby have been duly
and validly authorized by all necessary corporate action
required on the part of such Seller;
(ii) The Agreement and each Ancillary Agreement
has been duly and validly executed and delivered by such
Seller and constitutes a legal, valid and binding agreement of
such Seller, enforceable in accordance with its terms, except
that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally and general
principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity);
(iii) The execution, delivery and performance of
the Agreement and each Ancillary Agreement by such Seller does
not (A) conflict with the Certificate of Incorporation or
Bylaws of such Seller or (B) to the knowledge of such counsel,
constitute a violation of or default under those agreements or
instruments set forth on a Schedule attached to the opinion
and which have been identified to such counsel as all the
agreements and instruments which are material to the business
or financial condition of such Seller;
(iv) The Xxxx of Sale, the deeds, the Assignment
and Assumption Agreement and other transfer instruments
described in Section 3.6 are in proper form to transfer to
Buyer such title as was held by such Seller to the Purchased
Assets;
(v) No consent or approval of, filing with, or
notice to, any Governmental Authority is necessary for the
execution and delivery of this Agreement by such Seller or the
consummation by such Seller of the transactions contemplated
hereby, other than (i) such consents, approvals, filings or
notices set forth in Schedule 4.3(b) or which, if not obtained
or made, will not prevent such Seller from performing its
material obligations hereunder and (ii) such consents,
approvals, filings or notices which become applicable to
Sellers or the Purchased Assets as a result of the specific
regulatory status of Buyer (or any of its Affiliates) or as a
result of any other facts that specifically relate to the
business or activities in which Buyer (or any of its
Affiliates) is or proposes to be engaged.
In rendering the foregoing opinion, each Seller's counsel may
rely on opinions of local law reasonably acceptable to Buyer.
(h) Sellers shall have delivered, or caused to be
delivered, to Buyer at the Closing, Sellers' closing deliveries
described in Section 3.6.
(i) Buyer shall have received from a title insurance
company ALTA title owner's insurance policies on the Real Property
insuring title as described in Section 4.5, subject only to
Permitted Encumbrances reasonably acceptable to Buyer and standard
printed exceptions. A Permitted Encumbrance which is not removed
prior to Closing shall be deemed reasonably acceptable to Buyer as
aforesaid unless such Permitted Encumbrance would have a Material
Adverse Effect. Buyer shall provide Sellers with a copy of a
preliminary title report and survey for the Real Property as soon
as it is available.
(j) Since the date of this Agreement, no Material
Adverse Effect shall have occurred and be continuing.
7.2 Conditions to Obligations of Sellers. The obligation
of Sellers to effect the sale of the Purchased Assets and the other
transactions contemplated by this Agreement shall be subject to the
fulfillment at or prior to the Closing Date (or the waiver by
Sellers) of the following conditions:
(a) The waiting period under the HSR Act applicable
to the consummation of the sale of the Purchased Assets
contemplated hereby shall have expired or been terminated;
(b) No preliminary or permanent injunction or other
order or decree by any federal or state court which prevents the
consummation of the sale of the Purchased Assets contemplated
herein shall have been issued and remain in effect (each Party
agreeing to use its reasonable best efforts to have any such
injunction, order or decree lifted) and no statute, rule or
regulation shall have been enacted by any state or federal
government or Governmental Authority in the United States which
prohibits the consummation of the sale of the Purchased Assets;
(c) NGE and NYSEG shall have received all of Sellers'
Required Regulatory Approvals applicable to NGE or NYSEG, in form
and substance reasonably satisfactory (including no material
adverse conditions) to it;
(d) Penelec shall have received all of Sellers'
Required Regulatory Approvals applicable to Penelec, in form and
substance reasonably satisfactory (including no material adverse
conditions) to it;
(e) All consents and approvals for the consummation
of the sale of the Purchased Assets contemplated hereby required
under the terms of any note, bond, mortgage, indenture, material
agreement or other instrument or obligation to which any Seller is
party or by which any Seller, or any of the Purchased Assets, may
be bound, shall have been obtained, other than those which if not
obtained, would not, individually and in the aggregate, create a
Material Adverse Effect;
(f) Buyer shall have performed and complied with in
all material respects the covenants and agreements contained in
this Agreement which are required to be performed and complied with
by Buyer on or prior to the Closing Date;
(g) The representations and warranties of Buyer set
forth in this Agreement shall be true and correct in all material
respects as of the Closing Date as though made at and as of the
Closing Date;
(h) Sellers shall have received a certificate from an
authorized officer of Buyer, dated the Closing Date, to the effect
that, to such officer's Knowledge, the conditions set forth in
Sections 7.2(f) and (g) have been satisfied by Buyer;
(i) Effective upon Closing, Buyer shall have assumed,
as set forth in Section 6.10, all of the applicable obligations
under the IBEW Collective Bargaining Agreement as they relate to
Transferred Union Employees;
(j) Sellers shall have received an opinion from
Buyer's counsel reasonably acceptable to Sellers, dated the Closing
Date and satisfactory in form and substance to Sellers and their
counsel, substantially to the effect that:
(i) Each Buyer Entity is a California
corporation duly organized, validly existing and in good
standing under the laws of the state of its organization and
is qualified to do business in the Commonwealth of
Pennsylvania and has the full corporate power and authority to
own, lease and operate its material assets and properties and
to carry on its business as is now conducted, and to execute
and deliver the Agreement and the Ancillary Agreements by
Buyer and the Guaranty by Buyer Parent and to consummate the
transactions contemplated thereby; and the execution and
delivery of the Agreement and the Ancillary Agreements by
Buyer and the Guaranty by Buyer Parent, and the consummation
of the transactions contemplated thereby have been duly
authorized by all necessary corporate action required on the
part of Buyer and Buyer Parent;
(ii) The Agreement, the Ancillary Agreements and
the Guaranty have been duly and validly executed and delivered
by Buyer and Buyer Parent, as applicable, and constitute
legal, valid and binding agreements of Buyer and Buyer Parent,
as applicable, enforceable against Buyer and Buyer Parent, as
applicable, in accordance with their terms, except that such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance
or other similar laws affecting or relating to enforcement of
creditor's rights generally and general principles of equity
(regardless of whether enforcement is considered in a
proceeding at law or in equity);
(iii) The execution, delivery and performance
of the Agreement and the Ancillary Agreements by Buyer and the
Guaranty by Buyer Parent does not (A) conflict with the
Certificate of Incorporation or Bylaws (or other
organizational documents), as currently in effect, of Buyer
and Buyer Parent or (B) to the knowledge of such counsel,
constitute a violation of or default under those agreements or
instruments set forth on a Schedule attached to the opinion
and which have been identified to such counsel as all the
agreements and instruments which are material to the business
or financial condition of Buyer or Buyer Parent;
(iv) The Assignment and Assumption Agreement and
other transfer instruments described in Section 3.7 are in
proper form for Buyer to assume the Assumed Liabilities; and
(v) No consent or approval of, filing with, or
notice to, any Governmental Authority is necessary for Buyer's
execution and delivery of the Agreement and the Ancillary
Agreements, Buyer Parent's execution and delivery of the
Guaranty, or the consummation by Buyer and Buyer Parent of the
transactions contemplated hereby and thereby, other than such
consents, approvals, filings or notices, which, if not
obtained or made, will not prevent Buyer or Buyer Parent from
performing its respective obligations under the Agreement, the
Ancillary Agreements and Guaranty.
(k) Buyer shall have delivered, or caused to be
delivered, to Sellers at the Closing, Buyer's closing deliveries
described in Section 3.7.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification.
(a) Buyer shall indemnify, defend and hold harmless
Sellers, their officers, directors, employees, shareholders,
Affiliates and agents (each, a "Sellers' Indemnitee") from and
against any and all claims, demands, suits, losses, liabilities,
damages, obligations, payments, costs and expenses (including,
without limitation, the costs and expenses of any and all actions,
suits, proceedings, assessments, judgments, settlements and
compromises relating thereto and reasonable attorneys' fees and
reasonable disbursements in connection therewith) (each, an
"Indemnifiable Loss"), asserted against or suffered by any Sellers'
Indemnitee relating to, resulting from or arising out of (i) any
breach by Buyer of any covenant or agreement of Buyer contained
in this Agreement or the representations and warranties contained
in Sections 5.1, 5.2 and 5.3, (ii) the Assumed Liabilities, (iii)
any loss or damages resulting from or arising out of any
Inspection, or (iv) any Third Party Claims against a Sellers'
Indemnitee arising out of or in connection with Buyer's ownership
or operation of the Plant and other Purchased Assets on or after
the Closing Date.
(b) Sellers shall jointly and severally, except as
otherwise specified in Section 10.1, defend and hold harmless
Buyer, its officers, directors, employees, shareholders, Affiliates
and agents (each, a "Buyer Indemnitee") from and against any and
all Indemnifiable Losses asserted against or suffered by any Buyer
Indemnitee relating to, resulting from or arising out of (i) any
breach by Sellers of any covenant or agreement of Sellers contained
in this Agreement or the representations and warranties contained
in Sections 4.1, 4.2 and 4.3, (ii) the Excluded Liabilities, (iii)
noncompliance by Sellers with any bulk sales or transfer laws as
provided in Section 10.12, or (iv) any Third Party Claims against
a Buyer Indemnitee arising out of or in connection with Sellers'
ownership or operation of the Excluded Assets on or after the
Closing Date.
(c) Buyer, for itself and on behalf of its
Representatives and Affiliates, does hereby release, hold harmless
and forever discharge Sellers, their Representatives and
Affiliates, from any and all Indemnifiable Losses of any kind or
character, whether known or unknown, hidden or concealed, resulting
from or arising out of any Environmental Condition or violation of
Environmental Law relating to the Purchased Assets other than any
liabilities or obligations described in Sections 2.4(g), (h) and
(i). Buyer hereby waives any and all rights and benefits with
respect to such Indemnifiable Losses that it now has, or in the
future may have conferred upon it by virtue of any statute or
common law principle which provides that a general release does not
extend to claims which a party does not know or suspect to exist in
its favor at the time of executing the release, if knowledge of
such claims would have materially affected such party's settlement
with the obligor. In this connection, Buyer hereby acknowledges
that it is aware that factual matters now unknown to it may have
given or may hereafter give rise to Indemnifiable Losses that are
presently unknown, unanticipated and unsuspected, and it further
agrees that this release has been negotiated and agreed upon in
light of that awareness and they nevertheless hereby intend to
release Sellers and their Representatives and Affiliates from the
Indemnifiable Losses described in the first sentence of this
paragraph.
(d) Notwithstanding anything to the contrary
contained herein:
(i) Any Person entitled to receive
indemnification under this Agreement (an "Indemnitee") shall
use Commercially Reasonable Efforts to mitigate all losses,
damages and the like relating to a claim under these
indemnification provisions, including availing itself of any
defenses, limitations, rights of contribution, claims against
third Persons and other rights at law or equity. The
Indemnitee's Commercially Reasonable Efforts shall include the
reasonable expenditure of money to mitigate or otherwise
reduce or eliminate any loss or expenses for which
indemnification would otherwise be due, and the Indemnitor
shall reimburse the Indemnitee for the Indemnitee's reasonable
expenditures in undertaking the mitigation.
(ii) Any Indemnifiable Loss shall be net of (i)
the dollar amount of any insurance or other proceeds actually
receivable by the Indemnitee or any of its Affiliates with
respect to the Indemnifiable Loss, and (ii) income tax
benefits to the Indemnitee, to the extent realized by the
Indemnitee. Any party seeking indemnity hereunder shall use
Commercially Reasonable Efforts to seek coverage (including
both costs of defense and indemnity) under applicable
insurance policies with respect to any such Indemnifiable
Loss.
(e) The expiration or termination of any covenant or
agreement shall not affect the Parties' obligations under this
Section 8.1 if the Indemnitee provided the Person required to
provide indemnification under this Agreement (the "Indemnifying
Party") with proper notice of the claim or event for which
indemnification is sought prior to such expiration, termination or
extinguishment.
(f) Except to the extent otherwise provided in
Article IX, the rights and remedies of Sellers and Buyer under
this Article VIII are exclusive and in lieu of any and all other
rights and remedies which Sellers and Buyer may have under this
Agreement or otherwise for monetary relief, with respect to (i) any
breach of or failure to perform any covenant, agreement, or
representation or warranty set forth in this Agreement, after the
occurrence of the Closing, or (ii) the Assumed Liabilities or the
Excluded Liabilities, as the case may be. The indemnification
obligations of the Parties set forth in this Article VIII apply
only to matters arising out of this Agreement, excluding the
Ancillary Agreements. Any Indemnifiable Loss arising under or
pursuant to an Ancillary Agreement shall be governed by the
indemnification obligations, if any, contained in the Ancillary
Agreement under which the Indemnifiable Loss arises.
(g) Notwithstanding anything to the contrary herein,
no party (including an Indemnitee) shall be entitled to recover
from any other party (including an Indemnifying Party) for any
liabilities, damages, obligations, payments losses, costs, or
expenses under this Agreement any amount in excess of the actual
compensatory damages, court costs and reasonable attorney's and
other advisor fees suffered by such party. Buyer and Sellers waive
any right to recover punitive, incidental, special, exemplary and
consequential damages arising in connection with or with respect to
this Agreement. The provisions of this Section 8.1(g) shall not
apply to indemnification for a Third Party Claim.
8.2 Defense of Claims.
(a) If any Indemnitee receives notice of the assertion
of any claim or of the commencement of any claim, action, or
proceeding made or brought by any Person who is not a party to this
Agreement or any Affiliate of a Party to this Agreement (a "Third
Party Claim") with respect to which indemnification is to be sought
from an Indemnifying Party, the Indemnitee shall give such
Indemnifying Party reasonably prompt written notice thereof, but in
any event such notice shall not be given later than ten (10)
calendar days after the Indemnitee's receipt of notice of such
Third Party Claim. Such notice shall describe the nature of the
Third Party Claim in reasonable detail and shall indicate the
estimated amount, if practicable, of the Indemnifiable Loss that
has been or may be sustained by the Indemnitee. The Indemnifying
Party will have the right to participate in or, by giving written
notice to the Indemnitee, to elect to assume the defense of any
Third Party Claim at such Indemnifying Party's expense and by such
Indemnifying Party's own counsel, provided that the counsel for the
Indemnifying Party who shall conduct the defense of such Third
Party Claim shall be reasonably satisfactory to the Indemnitee. The
Indemnitee shall cooperate in good faith in such defense at such
Indemnitee's own expense. If an Indemnifying Party elects not to
assume the defense of any Third Party Claim, the Indemnitee may
compromise or settle such Third Party Claim over the objection of
the Indemnifying Party, which settlement or compromise shall
conclusively establish the Indemnifying Party's liability pursuant
to this Agreement.
(b) (i) If, within ten (10) calendar days after an
Indemnitee provides written notice to the Indemnifying Party of any
Third Party Claims, the Indemnitee receives written notice from the
Indemnifying Party that such Indemnifying Party has elected to
assume the defense of such Third Party Claim as provided in Section
8.2(a), the Indemnifying Party will not be liable for any legal
expenses subsequently incurred by the Indemnitee in connection with
the defense thereof; provided, however, that if the Indemnifying
Party shall fail to take reasonable steps necessary to defend
diligently such Third Party Claim within twenty (20) calendar days
after receiving notice from the Indemnitee that the Indemnitee
believes the Indemnifying Party has failed to take such steps, the
Indemnitee may assume its own defense and the Indemnifying Party
shall be liable for all reasonable expenses thereof. (ii) Without
the prior written consent of the Indemnitee, the Indemnifying Party
shall not enter into any settlement of any Third Party Claim which
would lead to liability or create any financial or other obligation
on the part of the Indemnitee for which the Indemnitee is not
entitled to indemnification hereunder. If a firm offer is made to
settle a Third Party Claim without leading to liability or the
creation of a financial or other obligation on the part of the
Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder and the Indemnifying Party desires to
accept and agree to such offer, the Indemnifying Party shall give
written notice to the Indemnitee to that effect. If the Indemnitee
fails to consent to such firm offer within ten (10) calendar days
after its receipt of such notice, the Indemnifying Party shall be
relieved of its obligations to defend such Third Party Claim and
the Indemnitee may contest or defend such Third Party Claim. In
such event, the maximum liability of the Indemnifying Party as to
such Third Party Claim will be the amount of such settlement offer
plus reasonable costs and expenses paid or incurred by Indemnitee
up to the date of said notice.
(c) Any claim by an Indemnitee on account of an
Indemnifiable Loss which does not result from a Third Party Claim
(a "Direct Claim") shall be asserted by giving the Indemnifying
Party reasonably prompt written notice thereof, stating the nature
of such claim in reasonable detail and indicating the estimated
amount, if practicable, but in any event such notice shall not be
given later than ten (10) calendar days after the Indemnitee
becomes aware of such Direct Claim, and the Indemnifying Party
shall have a period of thirty (30) calendar days within which to
respond to such Direct Claim. If the Indemnifying Party does not
respond within such thirty (30) calendar day period, the
Indemnifying Party shall be deemed to have accepted such claim. If
the Indemnifying Party rejects such claim, the Indemnitee will be
free to seek enforcement of its right to indemnification under this
Agreement.
(d) If the amount of any Indemnifiable Loss, at any
time subsequent to the making of an indemnity payment in respect
thereof, is reduced by recovery, settlement or otherwise under or
pursuant to any insurance coverage, or pursuant to any claim,
recovery, settlement or payment by, from or against any other
entity, the amount of such reduction, less any costs, expenses or
premiums incurred in connection therewith (together with interest
thereon from the date of payment thereof at the publicly announced
prime rate then in effect of Chase Manhattan Bank) shall promptly
be repaid by the Indemnitee to the Indemnifying Party.
(e) A failure to give timely notice as provided in
this Section 8.2 shall not affect the rights or obligations of any
Party hereunder except if, and only to the extent that, as a result
of such failure, the Party which was entitled to receive such
notice was actually prejudiced as a result of such failure.
ARTICLE IX
TERMINATION
9.1 Termination. (a) This Agreement may be terminated at
any time prior to the Closing Date by mutual written consent of
Sellers and Buyer.
(b) This Agreement may be terminated by Sellers or
Buyer if (i) any Federal or state court of competent jurisdiction
shall have issued an order, judgment or decree permanently
restraining, enjoining or otherwise prohibiting the Closing, and
such order, judgment or decree shall have become final and
nonappeallable or (ii) any statute, rule, order or regulation shall
have been enacted or issued by any Governmental Authority which,
directly or indirectly, prohibits the consummation of the Closing;
or (iii) the Closing contemplated hereby shall have not occurred on
or before the day which is 12 months from the date of this
Agreement (the "Termination Date"); provided that the right to
terminate this Agreement under this Section 9.1(b) (iii) shall not
be available to any Party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date; and
provided, further, that if on the day which is 12 months from the
date of this Agreement the conditions to the Closing set forth in
Section 7.1(b) or 7.2(c) or (d) shall not have been fulfilled but
all other conditions to the Closing shall be fulfilled or shall be
capable of being fulfilled, then the Termination Date shall be the
day which is 18 months from the date of this Agreement.
(c) Except as otherwise provided in this Agreement,
this Agreement may be terminated by Buyer if any of Buyer Required
Regulatory Approvals, the receipt of which is a condition to the
obligation of Buyer to consummate the Closing as set forth in
Section 7.1(b), shall have been denied (and a petition for
rehearing or refiling of an application initially denied without
prejudice shall also have been denied) or shall have been granted
but are not in form and substance reasonably satisfactory to Buyer.
(d) This Agreement may be terminated by Sellers, if
any of the Sellers' Required Regulatory Approvals applicable to
Penelec, the receipt of which is a condition to the obligation of
Penelec to consummate the Closing as set forth in Section 7.2(d),
shall have been denied (and a petition for rehearing or refiling of
an application initially denied without prejudice shall also have
been denied) or shall have been granted but are not in form and
substance reasonably satisfactory to Penelec.
(e) This Agreement may be terminated by Sellers, if
any of Sellers' Required Regulatory Approvals applicable to NGE or
NYSEG, the receipt of which is a condition to the obligations of
NGE or NYSEG to consummate the Closing as set forth in Section
7.2(c) have been denied (and a petition for rehearing or refiling
of an application initially denied without prejudice shall also
have been denied), or shall have been granted but are not in form
and substance reasonably satisfactory to NGE and NYSEG.
(f) This Agreement may be terminated by Buyer if
there has been a violation or breach by Sellers of any covenant,
representation or warranty contained in this Agreement which has
resulted in a Material Adverse Effect and such violation or breach
is not cured by the earlier of the Closing Date or the date thirty
(30) days after receipt by Sellers of notice specifying
particularly such violation or breach, and such violation or breach
has not been waived by Buyer.
(g) This Agreement may be terminated by Sellers, if
there has been a material violation or breach by Buyer of any
covenant, representation or warranty contained in this Agreement
and such violation or breach is not cured by the earlier of the
Closing Date or the date thirty (30) days after receipt by Buyer of
notice specifying particularly such violation or breach, and such
violation or breach has not been waived by Sellers.
(h) This Agreement may be terminated by Sellers if
there shall have occurred any change that is materially adverse to
the business, operations or conditions (financial or otherwise) of
Buyer.
(i) This Agreement may be terminated by either of
Sellers or Buyer in accordance with the provisions of Section
6.11(b).
9.2 Procedure and Effect of No-Default Termination. In
the event of termination of this Agreement by either or both of the
Parties pursuant to Section 9, written notice thereof shall
forthwith be given by the terminating Party to the other Party,
whereupon, if this Agreement is terminated pursuant to any of
Sections 9.1(a) through (e) and 9.1(h) and (i), the liabilities of
the Parties hereunder will terminate, except as otherwise expressly
provided in this Agreement, and thereafter neither Party shall have
any recourse against the other by reason of this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Several Liability of each Seller. Notwithstanding
anything to the contrary contained herein, but subject to Section
10.4, it is expressly understood and agreed that (i) the
obligations and covenants of the Sellers in Section 3.6 and the
representations and warranties of Sellers in Sections 4.1, 4.2,
4.3, 4.5, 4.15 and 6.7 (and any indemnity under Article VIII
relating thereto) are made severally as to itself in the case of
Penelec, and jointly and severally in the case of NYSEG and NGE
as to themselves; and (ii) all other obligations and covenants of
the Sellers and all other representations and warranties of the
Sellers hereunder (except for Section 4.20 which is made solely
by NYSEG) are made severally by Penelec on the one hand, and
jointly and severally by NYSEG and NGE on the other, such that
Penelec on the one hand, and NYSEG and NGE on the other, shall in
no event be liable to Buyer hereunder for more than 50% of any
Indemnifiable Loss incurred by Buyer under the indemnity
agreement in Article VIII or otherwise under this Agreement for a
breach of such representation, warranty, obligation or covenant.
10.2 Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified or supplemented only by
written agreement of Sellers and Buyer.
10.3 Waiver of Compliance; Consents. Except as
otherwise provided in this Agreement, any failure of any of the
Parties to comply with any obligation, covenant, agreement or
condition herein may be waived by the Party entitled to the
benefits thereof only by a written instrument signed by the Party
granting such waiver, but such waiver of such obligation,
covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent failure to comply
therewith.
10.4 No Survival. Each and every representation,
warranty and covenant contained in this Agreement (other than the
covenants contained in Sections 3.3(c), 3.4, 3.5(b), 6.2, 6.4,
6.5, 6.6(f), 6.7, 6.8, 6.10, 6.12, 9.4, and in Articles VIII and
X, which provisions shall survive the delivery of the deed(s) and
the Closing in accordance with their terms and the
representations and warranties set forth in Sections 4.1, 4.2,
4.3, 5.1, 5.2 and 5.3, and claims arising under Sections 6.1 and
6.6(e), which representations and warranties and such claims
shall survive the Closing for eighteen (18) months from the
Closing Date) shall expire with, and be terminated and
extinguished by the consummation of the sale of the Purchased
Assets and shall merge into the deed(s) pursuant hereto and the
transfer of the Assumed Liabilities pursuant to this Agreement
and such representations, warranties and covenants shall not
survive the Closing Date; and none of Sellers, Buyer or any
officer, director, trustee or Affiliate of any of them shall be
under any liability whatsoever with respect to any such
representation, warranty or covenant.
10.5 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally or by facsimile transmission, or mailed by
overnight courier or registered or certified mail (return receipt
requested), postage prepaid, to the recipient Party at its
address (or at such other address or facsimile number for a Party
as shall be specified by like notice; provided however, that
notices of a change of address shall be effective only upon
receipt thereof):
(a) If to Sellers, to:
(Penelec)
c/o GPU Service, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxx
Vice President
(NGE or NYSEG)
0000 Xxxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Vice President and Secretary
with a copy to:
(if to Penelec)
Berlack, Israels & Xxxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
(if to NGE or NYSEG)
Xxxxx Xxxxxxxx & Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Xxxxx X. Xxxxxxxxx, Esq.
(b) if to Buyer, to:
Mission Energy Westside, Inc.
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx
President
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
10.6 Assignment. 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, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by
any Party hereto, including by operation of law, without the
prior written consent of each other Party, nor is this Agreement
intended to confer upon any other Person except the Parties
hereto any rights, interests, obligations or remedies hereunder.
No provision of this Agreement shall create any third party
beneficiary rights in any employee or former employee of Sellers
(including any beneficiary or dependent thereof) in respect of
continued employment or resumed employment, and no provision of
this Agreement shall create any rights in any such Persons in
respect of any benefits that may be provided, directly or
indirectly, under any employee benefit plan or arrangement except
as expressly provided for thereunder. Notwithstanding the
foregoing, (i) Buyer may assign all of its rights and obligations
hereunder to any majority owned Subsidiary (direct or indirect)
and upon Sellers' receipt of notice from Buyer of any such
assignment, such assignee will be deemed to have assumed,
ratified, agreed to be bound by and perform all such obligations,
and all references herein to "Buyer" shall thereafter be deemed
to be references to such assignee, in each case without the
necessity for further act or evidence by the Parties hereto or
such assignee, and (ii) Buyer or its permitted assignee may
assign, transfer, pledge or otherwise dispose of (absolutely or
as security) its rights and interests hereunder to a trustee,
lending institutions or other party for the purposes of leasing,
financing or refinancing the Purchased Assets, including such an
assignment, transfer or other disposition upon or pursuant to the
exercise of remedies with respect to such leasing, financing or
refinancing, or by way of assignments, transfers, pledges, or
other dispositions in lieu thereof; provided, however, that no
such assignment in clause (i) or (ii) shall relieve or discharge
Buyer from any of its obligations hereunder. The Sellers agree,
at Buyer's expense, to execute and deliver such documents as may
be reasonably necessary to accomplish any such assignment,
transfer, pledge or other disposition of rights and interests
hereunder so long as the Sellers' rights under this Agreement are
not thereby altered, amended, diminished or otherwise impaired.
10.7 Governing Law. This Agreement shall be governed by
and construed in accordance with the law of the State of New York
(without giving effect to conflict of law principles) as to all
matters, including but not limited to matters of validity, con-
struction, effect, performance and remedies. THE PARTIES HERETO
AGREE THAT VENUE IN ANY AND ALL ACTIONS AND PROCEEDINGS RELATED
TO THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN THE STATE
AND FEDERAL COURTS IN AND FOR NEW YORK COUNTY, NEW YORK, WHICH
COURTS SHALL HAVE EXCLUSIVE JURISDICTION FOR SUCH PURPOSE, AND
THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF SUCH COURTS AND IRREVOCABLY WAIVE THE DEFENSE OF
AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR
PROCEEDING. SERVICE OF PROCESS MAY BE MADE IN ANY MANNER
RECOGNIZED BY SUCH COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
10.8 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.
10.9 Interpretation. The articles, section and schedule
headings contained in this Agreement are solely for the purpose
of reference, are not part of the agreement of the parties and
shall not in any way affect the meaning or interpretation of this
Agreement.
10.10 Schedules and Exhibits. Except as otherwise provided
in this Agreement, all Exhibits and Schedules referred to herein
are intended to be and hereby are specifically made a part of
this Agreement.
10.11 Entire Agreement. This Agreement, the Confidentiality
Agreement, and the Ancillary Agreements including the Exhibits,
Schedules, documents, certificates and instruments referred to
herein or therein, embody the entire agreement and understanding
of the Parties hereto in respect of the transactions contemplated
by this Agreement. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other
than those expressly set forth or referred to herein or therein.
It is expressly acknowledged and agreed that there are no
restrictions, promises, representations, warranties, covenants or
undertakings contained in any material made available to Buyer
pursuant to the terms of the Confidentiality Agreement (including
the Offering Memorandum dated April 1998, previously delivered to
Buyer by Sellers and Xxxxxxx, Xxxxx & Co.). This Agreement
supersedes all prior agreements and understandings between the
Parties other than the Confidentiality Agreement with respect to
such transactions.
10.12 Bulk Sales Laws. Buyer acknowledges that,
notwithstanding anything in this Agreement to the contrary,
Sellers will not comply with the provision of the bulk sales laws
of any jurisdiction in connection with the transactions
contemplated by this Agreement. Buyer hereby waives compliance
by Sellers with the provisions of the bulk sales laws of all
applicable jurisdictions.
10.13 U.S. Dollars. Unless otherwise stated, all dollar
amounts set forth herein are United States (U.S.) dollars.
10.14 Zoning Classification. Buyer acknowledges that the
Real Property is not zoned.
10.15 Sewage Facilities. Buyer acknowledges that there is no
community (municipal) sewage system available to serve the Real
Property. Accordingly, any additional sewage disposal planned by
Buyer will require an individual (on-site) sewage system and all
necessary permits as required by the Pennsylvania Sewage
Facilities Act (the "Facilities Act"). Buyer recognizes that
certain of the existing individual sewage systems on the Real
Property may have been installed pursuant to exemptions from the
requirements of the Facilities Act or prior to the enactment of
the Facilities Act and that soils and site testing may not have
been performed in connection therewith. The owner of the
property or properties served by such a system, at the time of
any malfunction, may be held liable for any contamination,
pollution, public health hazard or nuisance which occurs as the
result of such malfunction.
IN WITNESS WHEREOF, Sellers and Buyer have caused this
Agreement to be signed by their respective duly authorized
officers as of the date first above written.
PENNSYLVANIA ELECTRIC COMPANY NGE GENERATION, INC.
By: ___________________________ By: _____________________
Name: Xxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President and Title: Executive Vice President
Chief Financial Officer
MISSION ENERGY WESTSIDE, INC. NEW YORK STATE ELECTRIC & GAS
CORPORATION
By:_____________________________ By:______________________
Name: Xxxxx X. Xxxx Name: Xxxxxxx X. Xxxxxxxx
Title: President Title: Executive Vice President
