EXECUTION
Stock Purchase Agreement
by and among
Edison Mission Energy,
EME del Caribe,
Mirant Corporation
Mirant EcoElectrica Investments I, Ltd.
and
Mirant EcoElectrica Finance, Ltd.
EcoElectrica, ▇.▇.
▇▇▇▇▇▇▇▇, Puerto Rico
Dated as of July 25, 2001
----- DENOTES CONFIDENTIAL INFORMATION THAT HAS BEEN OMITTED FROM THIS EXHIBIT
AND FILED SEPARATELY, ACCOMPANIED BY A CONFIDENTIAL TREATMENT REQUEST, WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934.
Schedules
Schedule 1 The Facility
Schedule 2 Disclosure Schedule
Schedule 2.3 Ownership of Capital Stock and Partnership Interests
Schedule 2.5 Assets and Permits
Schedule 2.6 Financial Statements
Schedule 2.7 Third Party Consents
Schedule 2.8 Governmental and Third Party Consents
Schedule 2.9 Litigation
Schedule 2.10 Contracts
Schedule 2.13 Environmental Matters
Schedule 2.16 Distributions
Schedule 3.4 Governmental Consents
Schedule 4.3 Guaranteed Indebtedness
Schedule 5.7 Partnership Effect Determination Scale
Schedule 8.1 Persons with Knowledge
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of July 25,
2001 by and among Edison Mission Energy, a California corporation (the
"Stockholder"); EME del Caribe, an entity organized under the laws of the Cayman
Islands ("del Caribe"); Mirant Corporation, a Delaware corporation ("Mirant");
Mirant EcoElectrica Investments I, Ltd., a British Virgin Islands limited
liability company ("Buyer 1") and wholly-owned, indirect subsidiary of Mirant;
and Mirant EcoElectrica Finance, Ltd., a British Virgin Islands limited
liability company ("Buyer 2," and, together with Buyer 1, the "Buyers") and
wholly-owned, indirect subsidiary of Mirant. Capitalized terms used in this
Agreement not otherwise defined have the meanings ascribed to them in Section
8.1 hereof.
A. del Caribe owns an indirect equity interest in a power plant
located in Puerto Rico, as set forth on Schedule 1 ----------
hereto (the "Facility").
B. EME del Caribe Holding GmbH, a wholly-owned subsidiary of the
Stockholder, owns all of the issued and outstanding shares of
capital stock of del Caribe.
C. EME del Caribe Holding GmbH desires to sell to Buyer 1, and Buyer
1 desires to purchase from the Stockholder, all of the del Caribe
Shares on the terms and conditions set forth in this Agreement.
D. The Stockholder desires to sell to Buyer 2, and Buyer 2 desires
to purchase from the Stockholder, the Project Note on the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
SALE AND PURCHASE
1.1 Agreement to Sell and Purchase. On and subject to the terms of this
Agreement, at the Closing (a) the Stockholder shall cause its wholly-owned,
indirect subsidiary, EME del Caribe Holding GmbH, to sell and transfer to Buyer
1, and Buyer 1 shall and Mirant shall cause Buyer 1 to purchase from EME del
Caribe Holding GmbH, the del Caribe Shares and (b) the Stockholder shall sell
and assign to Buyer 2, and Buyer 2 shall and Mirant shall cause Buyer 2 to
purchase and assume from the Stockholder, that certain KESI Subordinated
Promissory Note, dated December 15, 1997 (the "Project Note"), by the
Partnership in favor of the Stockholder, as an assignee thereof.
1.2 Purchase Price and Note Price.
(a) The purchase price for the del Caribe Shares (the
"Purchase Price") is an aggregate of Three Hundred Twenty Million U.S. dollars
($320,000,000), plus (i) ----------, less (ii) the sum of (A) all the
outstanding indebtedness, together with all accrued and unpaid interest thereon,
under the Project Note, as at May 31, 2001, and (B) the aggregate amount of the
Distributions.
(b) The purchase price for the Project Note (the "Note Price")
is an amount equal to all the outstanding indebtedness, together with all
accrued and unpaid interest thereon, under the Project Note, as at the Closing
Date.
1.3 Closing. Subject to Section 1.4, the Closing will take place at the
offices of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ on
such date that is three (3) business days after the conditions set forth in
Sections 6.1, 6.2(a) and 6.3(a) have either been satisfied or, in the case of
conditions not satisfied, waived in writing by the party entitled to the benefit
of such conditions (the "Closing Date").
1.4 Payment and Delivery. At the Closing, provided that all the
conditions set forth in Article 6 have either been satisfied or, in the case of
conditions not satisfied, waived in writing by the party entitled to the benefit
of such conditions:
(a) the Stockholder shall (i) cause EME del Caribe Holding
GmbH to transfer and deliver to Buyer 1 or its designees stock certificates,
duly endorsed in blank (or accompanied by duly executed stock powers),
representing the del Caribe Shares; and (ii) assign and deliver to Buyer 2 or
its designees the Project Note;
(b) Buyer 1 shall, and Mirant shall cause Buyer 1 to, pay, in
immediately available funds and in accordance with the Stockholder's duly
authorized wire transfer or other payment instructions, to EME del Caribe
Holding GmbH the Purchase Price; and
(c) Buyer 2 shall, and Mirant shall cause Buyer 2 to, pay, in
immediately available funds and in accordance with the Stockholder's duly
authorized wire transfer or other payment instructions, to the Stockholder the
Note Price.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER AND DEL CARIBE
Each representation and warranty contained in this Article 2 is
qualified by the disclosures made in the Disclosure Schedules attached hereto as
part of Schedule 2. This Article 2 and the Disclosure Schedules shall be read
together as an integrated provision. Except as set forth on the Disclosure
Schedules, the Stockholder and del Caribe hereby make the representations and
warranties to Mirant and Buyers as set forth below.
2.1 Organization and Good Standing. The Stockholder is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California. del Caribe is an entity duly organized, validly existing
and in good standing under the laws of the Cayman Islands, with full corporate
power and authority to carry on its business as such business is now conducted,
and to own, lease or operate its assets and properties. To the knowledge of the
Stockholder, the Partnership is duly formed, validly existing and are in good
standing under the laws of Bermuda. del Caribe and, to the knowledge of the
Stockholder, the Partnership are duly qualified to do business and in good
standing in every jurisdiction in which the character of the properties owned or
leased by them or the nature of the businesses conducted by them makes such
qualification necessary, except where failure to be so qualified would not have
a Material Adverse Effect. Complete and accurate copies of the charter documents
and bylaws of each of del Caribe and the organizational or partnership documents
of the Partnership, with all amendments thereto to the date hereof, have been
furnished to Buyers or its representatives.
2.2 Subsidiaries and Other Equity Interests.
(a) The Stockholder and del Caribe. The Stockholder,
indirectly through EME del Caribe Holding GmbH, owns all of the outstanding del
Caribe Shares. del Caribe owns one hundred (100) Class B ordinary shares (the
"Eco Holdings Shares") of EcoElectrica Holdings, Ltd., an entity organized under
the laws of the Cayman Islands ("Eco Holdings").
(b) Eco Holdings. Eco Holdings owns all of the outstanding
capital stock (the "Eco Limited Shares") of EcoElectrica Ltd., an entity
organized under the laws of the Cayman Islands, and a ninety-nine percent (99%)
limited partnership interest in the Partnership. EcoElectrica Ltd. owns a one
percent (1%) general partnership interest in the Partnership.
2.3 Ownership of Capital Stock and Partnership Interests.
(a) The authorized capital stock of del Caribe consists of
fifty thousand (50,000) ordinary shares, nominal value US$1.00 per share, of
which one hundred (100) shares are issued and outstanding (the "del Caribe
Shares").
(b) EME del Caribe Holding GmbH owns, and has good and valid
title to, and sole record and beneficial ownership of, all of the outstanding
del Caribe Shares. The del Caribe Shares are validly issued, fully paid and
nonassessable and are free and clear of any claims, liens, pledges, options,
security interests, trusts encumbrances or other rights or interests of any
person or entity.
(c) del Caribe has good and valid title to, and sole record
and beneficial ownership of, the Eco Holdings Shares. The Eco Holdings Shares
are owned free and clear of any claims, liens, pledges, options, security
interests, trusts, encumbrances or other rights or interests of any person or
entity.
(d) Eco Holdings has good and valid title to, and sole record
and beneficial ownership of, the Eco Limited Shares and, through its wholly
owned subsidiary, the Partnership Interests. Except as set forth on Schedule 2.3
to the Disclosure Schedules, the Eco Limited Shares and the Partnership
Interests are owned free and clear of any claims, liens, pledges, options,
security interests, trusts encumbrances or other rights or interests of any
person or entity.
(e) Except as set forth on Schedule 2.7 to the Disclosure
Schedules, neither the Stockholder nor del Caribe has granted, issued or agreed
to grant or issue any other equity interests in del Caribe or the Partnership
and there are no outstanding options, warrants, subscription rights, securities
that are convertible into or exchangeable for, or any other commitments of any
character relating to, any equity interests of del Caribe or, to the knowledge
of the Stockholder, the Partnership. Except for the Eco Holdings Shares (and the
equity interests owned directly or indirectly by Eco Holdings), del Caribe does
not directly or indirectly own, either of record or beneficially, any equity
interest in any other entity.
2.4 Authorization of Agreement. The Stockholder and del Caribe have all
requisite corporate power and authority to enter into this Agreement and to
perform their obligations hereunder. This Agreement and the other Transaction
Documents have (except for Transaction Documents to be executed and delivered
solely by Buyer) been duly and validly approved by the respective boards of
directors of the Stockholder and del Caribe and no other proceedings on the part
of the Stockholder or del Caribe are necessary to approve this Agreement and to
authorize the performance by the Stockholder and del Caribe of their obligations
hereunder and thereunder. This Agreement and the other Transaction Documents to
be delivered by the Stockholder and del Caribe: (a) have been (or upon execution
will have been) duly executed and delivered by the Stockholder and del Caribe,
and (b) constitute (or upon execution will constitute) legal, valid and binding
obligations of the Stockholder and del Caribe, enforceable against the
Stockholder and del Caribe in accordance with their respective terms, except as
such enforceability may be limited by the Bankruptcy Exception.
2.5 Assets and Permits. del Caribe is a holding company that conducts
no material business except for the ownership of the capital stock of Eco
Holdings. On the Closing Date, other than as set forth on Schedule 2.5 to the
Disclosure Schedules, (a) del Caribe will neither be a party to, nor have any
material obligations under, any material contract, other than this Agreement;
(b) none of the property of del Caribe will be subject to, or be bound by, any
material contract, other than this Agreement; and (c) del Caribe will not have
any material liabilities or obligations (whether accrued, absolute, contingent
or otherwise) or any material assets other than the capital stock of Eco
Holdings. Except as set forth on Schedule 2.7 to the Disclosure Schedules, there
are no outstanding agreements, options or commitments of any nature obligating
the Stockholder or del Caribe to transfer any of the assets of del Caribe or
rights or interests therein to any party. del Caribe and the Partnership
currently own, lease or otherwise have the right to use all of the property
necessary for the conduct of their respective businesses as currently conducted,
except where the absence of such right would not have a Material Adverse Effect.
del Caribe and the Partnership have all Licenses necessary for the conduct of
their respective businesses as currently conducted, except where the failure to
obtain the same would not have a Material Adverse Effect.
2.6 Financial Statements.
(a) Attached as Schedule 2.6 hereto are (i) an unaudited
balance sheet of del Caribe as of December 31, 2000; (ii) audited balance sheets
of the Partnership as of December 31, 1999 and 2000, and related audited
consolidated statements of income and cash flows for the years then ended; (iii)
actual and pro forma unaudited balance sheets of del Caribe as of May 31, 2001;
and (iv) an unaudited consolidated balance sheet of the Partnership as of May
31, 2001, and related unaudited statements of income and cash flows for the five
month period then ended (such statements specified in clauses (i) through (iv),
together with the related notes thereto, collectively, the "Financial
Statements"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles consistently applied, and fairly
present in all material respects the financial condition of del Caribe and the
Partnership, respectively, as of the dates thereof and the results of their
operations for the periods covered thereby except, in the case of the Financial
Statements of del Caribe and the Financial Statements of the Partnership at and
for the five months ended May 31, 2001, for the absence of notes, certain pro
forma adjustments and other matters noted therein and subject to normal
recurring year-end adjustments. Neither del Caribe nor the Partnership has any
liability or obligation (whether accrued, absolute, contingent or otherwise)
which, individually or in the aggregate, would have a Material Adverse Effect,
other than (w) liabilities reflected (but only to the extent so reflected) or
reserved against in the Financial Statements, (x) liabilities or obligations
that have arisen since May 31, 2001 in the ordinary course of business, none of
which, individually or in the aggregate, would have a Material Adverse Effect,
(y) liabilities or obligations disclosed herein or in any schedule hereto, or
(z) liabilities or obligations incurred in accordance with the terms of this
Agreement or any Contract.
(b) Since May 31, 2001, there has not been any event,
circumstance, condition, development or occurrence causing, resulting in or
having a Material Adverse Effect.
2.7 No Conflict or Violation. Except as set forth on Schedule 2.7 to
the Disclosure Schedules, the execution, delivery and performance by the
Stockholder and del Caribe of this Agreement and the other Transaction Documents
to be delivered by the Stockholder and del Caribe and the performance by the
Stockholder and del Caribe of their obligations hereunder and thereunder do not
and will not: (a) violate or conflict with any provision of the charter
documents or bylaws of the Stockholder or del Caribe or the partnership
agreement of the Partnership; (b) violate any provision or requirement of any
federal, state or local law, statute, judgment, order, writ, injunction, decree,
award, rule, or regulation of any Governmental Entity applicable to the
Stockholder, del Caribe or, to the knowledge of the Stockholder, the
Partnership, except for violations that would not have a Material Adverse
Effect; (c) violate in any material respect, result in a material breach of,
constitute (with due notice or lapse of time or both) a material default or
cause any material obligation, penalty, premium or right of termination to arise
or accrue under, any Contract; (d) result in the creation or imposition of any
material lien, charge or encumbrance of any kind whatsoever upon any of the
properties or assets of the Stockholder, del Caribe or, to knowledge of the
Stockholder, the Partnership, except where the creation of any such liens would
not have a Material Adverse Effect; or (e) result in the cancellation,
modification, revocation or suspension of any License, except where the loss of
such Licenses would not have a Material Adverse Effect.
2.8 Governmental and Third Party Consents. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the HSR Act, no filing with or notice to, and no
permit, authorization, consent or approval of, any Governmental Entity or third
party is necessary for the execution and delivery by the Stockholder and del
Caribe of this Agreement and the other Transaction Documents required to be
delivered by the Stockholder and del Caribe or the consummation of the
transactions contemplated hereby or thereby, except to the extent set forth on
Schedules 2.7 and 2.8 of the Disclosure Schedules or where the failure to obtain
such permits, authorizations, consents or approvals or to make such filings or
give such notices would not, individually or in the aggregate, have a Material
Adverse Effect.
2.9 Litigation. Except with respect to Tax matters (which are addressed
in Section 2.12) and environmental matters (which are addressed in Section
2.13), Schedule 2.9 of the Disclosure Schedule lists (a) each action, suit,
claim or proceeding (including, but not limited to, any arbitration proceeding)
pending or, to the knowledge of the Stockholder, threatened, and (b) each
investigation which, to the knowledge of the Stockholder, is pending or
threatened, against del Caribe or the Partnership, at law or in equity, or
before or by any Governmental Entity which, if determined adversely to del
Caribe or the Partnership, would have a Material Adverse Effect. For purposes of
the preceding sentence, no representation is made with respect to (i) any
proceeding before any Governmental Entity initiated by del Caribe or the
Partnership in which del Caribe or the Partnership is an applicant for any
License, to the extent the matters considered in such proceeding are limited to
the approval or authority requested in such application, or (ii) proceedings
initiated by a third party in which del Caribe or the Partnership is an
intervener, and the subject matter of such intervention is of general
applicability to similarly-situated parties. Neither del Caribe nor the
Partnership is in default with respect to any order, writ, injunction or decree
known to or served upon such entity of any Governmental Entity, except for
defaults which would not have a Material Adverse Effect.
2.10 Contracts. Schedule 2.10 of the Disclosure Schedule lists all of
the material contracts and agreements to which the Partnership is a party
relating to or affecting the operation of the Facility and which require an
annual payment in excess of One Million Dollars ($1,000,000) (the "Contracts").
To the knowledge of the Stockholder: (a) each Contract is valid, binding and in
full force and effect, and is enforceable by the Partnership in accordance with
its terms, except as enforceability may be limited by the Bankruptcy Exception
and except as would not have a Material Adverse Effect, (b) the Partnership has
performed in all material respects the obligations required to be performed by
it to date under each Contract, except for such failure or failures to perform
which would not have a Material Adverse Effect, and (c) the Partnership has not
received any notice of default under any Contract to which it is a party, except
as would not have a Material Adverse Effect.
2.11 Compliance with Applicable Law. Except with respect to Tax matters
(which are addressed in Section 2.12) and Environmental Laws (which are
addressed in Section 2.13), the operations of del Caribe and, to the knowledge
of the Stockholder, the Partnership are, and have been, conducted in all
material respects in accordance with all applicable laws, regulations, orders
and other requirements of all Governmental Entities having jurisdiction over del
Caribe and the Partnership or their respective assets, properties or operations,
except in any case where the failure to so conduct their operations would not
have a Material Adverse Effect. Except with respect to Tax matters (which are
addressed in Section 2.12) and Environmental Laws (which are addressed in
Section 2.13), del Caribe and, to the knowledge of the Stockholder, the
Partnership have not received any notice of any material violation of any such
law, regulation, order or other legal requirement, and are not in material
default with respect to any order, writ, judgment, award, injunction or decree
of any Governmental Entity, applicable to del Caribe, the Partnership or any of
their respective assets, properties or operations.
2.12 Tax Matters.
(a) Each of del Caribe, Eco Holdings, EcoElectrica Ltd. and
the Partnership (each, a "Taxpayer") has filed on a timely basis all Tax returns
required to be filed by a Taxpayer on or prior to the date hereof, except where
such instance of noncompliance would not have a Material Adverse Effect. As of
the time of filing, the foregoing Tax returns of del Caribe and the Partnership
were true and complete in all material respects.
(b) With respect to all amounts in respect of Taxes imposed on
each Taxpayer in any Taxable period or portion of a period ending on or before
the Closing Date (other than Taxes with respect to activities, events and
elections of Buyers or any Taxpayer on or after the Closing), all such Taxes
required to be paid to Taxing authorities reflected on such returns on or before
the date hereof have been paid, except such Taxes, if any, as are being
contested in good faith, Taxes which are not yet due and payable or are assumed
by Buyers under this Agreement. Each Taxpayer has complied with all Tax laws in
all material respects.
(c) No adjustments to the Tax liability of any Taxpayer have
been proposed in writing (and are currently pending) by any taxing authority in
connection with any tax return of any Taxpayer, except for adjustments that
would not have a Material Adverse Effect. All deficiencies asserted or
assessments made as a result of any examinations of any Taxpayer have been fully
paid, or are fully reflected as a liability in the financial statements of the
applicable Taxpayer, or are being contested in good faith.
(d) There are no liens for Taxes (other than for Taxes not yet
due and payable) on any of the assets of any Taxpayer.
(e) del Caribe is treated as a disregarded entity for U.S. Tax
purposes.
2.13 Environmental Matters. Subject to Schedule 2.13:
(a) Each of del Caribe and, to the knowledge of the
Stockholder, the Partnership comply in all material respects with all
Environmental Laws and has obtained and maintained in effect all Environmental
Permits and are in material compliance with all such Environmental Permits.
(b) Neither del Caribe nor, to the knowledge of the
Stockholder, the Partnership has performed, failed to perform or suffered any
act which will give rise to, or has otherwise incurred, material liability to
any person (governmental or not) under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq., or any other
Environmental Laws, nor has it received notice of any such liability or any
claim therefor.
(c) There are no pending or, to the knowledge of the
Stockholder, threatened administrative, judicial or regulatory proceedings, or,
to the knowledge of the Stockholder, any threatened actions or claims, or any
consent decrees or other agreements in effect that relate to environmental
conditions in, on, under, about or related to del Caribe, the Partnership or
their respective operations or the real properties leased or owned by them.
2.14 Insurance. Each of del Caribe and, to the knowledge of the
Stockholder, the Partnership holds (either directly or indirectly through
affiliated entities) valid policies of insurance of such types and in such
amounts as is customary for companies similarly situated.
2.15 Brokers. Except for Credit Suisse First Boston Corporation, no
broker, finder, investment banker, or other person is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement, based on contractual arrangements made by or on
behalf of the Stockholder or del Caribe.
2.16 Distributions. Neither the Stockholder nor del Caribe has received
a cash distribution from the Partnership under the Partnership Agreement after
January 1, 2001 other than the distributions, if any, listed on Schedule 2.16
(the "Distributions"). "Distributions" excludes, among other matters, payments
or obligations to the Stockholder or any of its Affiliates arising independently
under any other agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF MIRANT AND BUYERS
Mirant and Buyers hereby make the representations and warranties to the
Stockholder and del Caribe as set forth below.
3.1 Organization and Corporate Authority. Mirant is a corporation and
Buyers are limited liability companies, in each case, duly organized, validly
existing and in good standing under the laws of their respective jurisdictions
of organization and have all requisite corporate power and authority to enter
into this Agreement and the Transaction Documents and to perform their
respective obligations hereunder and thereunder. This Agreement and the other
Transaction Documents to be executed and delivered by Mirant and Buyers: (a)
have been (or upon execution will have been) duly executed and delivered by
Mirant and Buyers; (b) have been effectively authorized by all necessary action,
corporate or otherwise and no other proceedings on the part of Mirant or Buyers
are necessary to authorize the performance of their respective obligations
hereunder and thereunder; and (c) constitute (or upon execution will constitute)
legal, valid and binding obligations of Mirant and Buyers, enforceable against
Mirant and Buyers in accordance with their respective terms, except as such
enforceability may be limited by the Bankruptcy Exception.
3.2 No Conflict or Violation. The execution, delivery and performance
by Mirant and Buyers of this Agreement and the other Transaction Documents to be
executed and delivered by Mirant and Buyers and the performance by Mirant and
Buyers of their respective obligations hereunder and thereunder, do not and will
not: (a) violate or conflict with any provision of the charter documents or
bylaws of Mirant or Buyers; or (b) violate any provision or requirement of any
federal, state or local law, statute, judgment, order, writ, injunction, decree,
award, rule, or regulation of any Governmental Entity applicable to Mirant or
Buyers.
3.3 Litigation. There are no material claims, actions, suits, or
proceedings (including, but not limited to, any arbitration proceeding) of any
nature, at law or in equity, pending or, to the knowledge of Mirant or Buyers,
threatened by or against Mirant, Buyers, the directors, officers, employees,
agents of Mirant or Buyers, or any of their respective Affiliates involving,
affecting or relating to the transactions contemplated by this Agreement or the
performance of the respective obligations of Mirant and Buyers hereunder.
Neither Mirant nor either Buyer is subject to any order, writ, judgment, award,
injunction or decree of any Governmental Entity involving, affecting or relating
to the transactions contemplated by this Agreement or the performance of the
respective obligations of Mirant and Buyers hereunder.
3.4 Governmental Consents. Except as set forth on Schedule 3.4 hereof
and except for filings, permits, authorizations, consents and approvals as may
be required under, and other applicable requirements of, the HSR Act, no filing
with or notice to, and no permit, authorization, consent or approval of, any
Governmental Entity is necessary for the execution and delivery by Mirant or
Buyers of this Agreement and the other Transaction Documents required to be
delivered by Mirant or Buyers or the performance of the respective obligations
of Mirant and Buyers hereunder and thereunder.
3.5 Availability of Funds. On the Closing Date, Mirant and Buyers will
have sufficient funds available to enable Buyers to consummate the transactions
contemplated hereby and to permit Mirant and Buyers to timely perform all of
their respective obligations under this Agreement.
3.6 Qualified Buyers. Mirant and Buyers are qualified to obtain any
permits, licenses or authorizations necessary for Buyers to own del Caribe, the
Partnership and the Project Note and to operate the Facility as contemplated by
this Agreement.
3.7 Securities Matters.
(a) The del Caribe Shares and the Project Note to be received
by and assigned to Buyer 2 will be acquired for investment for Buyer 2's own
account, not with a view to the distribution of any part thereof, and Buyer 2
has no present intention of selling, granting any participation in, or otherwise
distributing the same. Neither Mirant nor either Buyer has any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
del Caribe Shares or the Project Note.
(b) Mirant and Buyers understand that the del Caribe Shares
and the Project Note are characterized as "restricted securities" under the U.S.
federal securities laws inasmuch as such securities are being acquired in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may not be resold in the absence of an
effective registration statement covering the del Caribe Shares and the Project
Note, as applicable, or an exemption from registration under the Securities Act.
3.8 Brokers. No broker, finder, investment banker, or other person is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement, based upon arrangements
made by or on behalf of Mirant or Buyers.
3.9 Non-Utility Status. Neither Mirant nor either Buyer is primarily
engaged in the generation or sale of electric power under Section 201 of the
Public Utility Regulatory Policies Act of 1978 (as incorporated in Section 3(17)
and 3(18) of the Federal Power Act), FERC's implementing regulations, and FERC's
precedent thereunder.
ARTICLE 4
CERTAIN AGREEMENTS
4.1 Access and Confidentiality.
(a) Upon the reasonable request of Buyers, the Stockholder and
del Caribe shall use commercially reasonable efforts to afford to Buyers and
Buyers' accountants, counsel and representatives full access, during normal
business hours throughout the period prior to the Closing (or the earlier
termination of this Agreement), to all of the properties, books, records and
contracts of del Caribe and the Partnership (including, without limitation, the
Partnership's accounting records, the workpapers of Partnership's independent
accountants, and all environmental studies, reports and other environmental
records of the Partnership), to the extent such disclosure does not conflict
with any confidentiality obligations of the Stockholder, del Caribe, Eco
Holdings or the Partnership.
(b) Neither Mirant, either Buyer nor any of their respective
directors, officers, employees, agents or representatives may, directly or
indirectly, disclose to any person or entity or use any Confidential Information
for any purpose other than to evaluate and consummate the transactions
contemplated by this Agreement and the other Transaction Documents. If Mirant or
either Buyer is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena, civil
investigative, demand, or similar process) to disclose any Confidential
Information, Mirant and Buyers shall promptly notify the Stockholder, del Caribe
and the Partnership so that the appropriate parties may seek an appropriate
protective order or waive compliance with the provisions of this Section 4.1(b).
If, in the absence of a protective order or the receipt of a waiver hereunder,
Mirant or either Buyer is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal, Mirant or either Buyer, as applicable,
may disclose the Confidential Information to the tribunal; provided, however,
that Mirant and Buyers shall use all commercially reasonable efforts to obtain
an order or other assurance that confidential treatment will be accorded to such
portion of the Confidential Information required to be disclosed.
4.2 Certain Changes and Conduct of Business. From and after the date of
this Agreement and until the Closing (or the earlier termination of this
Agreement), del Caribe shall, and the Stockholder shall cause del Caribe, to
conduct its business solely in the ordinary course consistent with past
practices. Without limiting the generality of the preceding sentence, except as
required or permitted pursuant to the terms hereof, del Caribe shall not, and
the Stockholder shall not permit del Caribe to do, any of the following without
obtaining the consent of Buyer 1, which consent shall not be unreasonably
withheld:
(a) make any change in the charter documents or bylaws of del
Caribe;
(b) issue any additional shares of capital stock or equity
securities or grant any option, warrant or right to acquire any capital stock or
equity securities or issue any security convertible into or exchangeable for the
capital stock of del Caribe, alter any term of any of the outstanding securities
of del Caribe, or make any change in the outstanding shares of capital stock or
other ownership interests or in the capitalization, whether by reason of a
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, stock dividend or otherwise;
(c) (i) issue any notes, bonds, debentures or other corporate
securities or grant any option, warrant or right to purchase any of the
foregoing, (ii) issue any securities convertible or exchangeable for debt
securities of del Caribe, or (iii) issue any options or other rights to acquire
directly or indirectly any debt securities of del Caribe or any security
convertible into or exchangeable for such debt securities; or
(d) commit itself to do any of the foregoing.
4.3 Stockholder Guarantees. The Stockholder and/or its Affiliates are
guarantors with respect to certain indebtedness or otherwise provide certain
forms of credit support, in each case as listed on Schedule 4.3 (the "Guaranteed
Indebtedness"). Prior to the Closing, Mirant or Buyer 1 shall cause the
Stockholder and its Affiliates to be replaced and released as guarantor or other
applicable status with respect to all of the Guaranteed Indebtedness.
4.4 [Intentionally omitted.]
4.5 [Intentionally omitted.]
4.6 Regulatory Approvals.
(a) Antitrust Notification. Mirant, Buyers, the Stockholder
and del Caribe shall, as promptly as practicable but in no event later than
twenty (20) days following the execution and delivery of this Agreement, each
file with the FTC and the DOJ the Notification and Report Form under the HSR
Act, if any, required in connection with the transactions contemplated hereby
and as promptly as practicable supply any additional information, if any,
requested in connection herewith pursuant to the HSR Act. Any such Notification
and Report Form and additional information, if any, submitted to the FTC or the
DOJ shall be in substantial compliance with the requirements of the HSR Act.
Each of Mirant, Buyers, the Stockholder and del Caribe shall furnish to the
others such information and assistance as the others may reasonably request in
connection with their preparation of any filing or submission which is necessary
under the HSR Act. Each of Mirant, Buyers, the Stockholder and del Caribe shall
keep the others apprised in a prompt manner of the status and substance of any
communications with, and inquiries or requests for additional information from,
the FTC and the DOJ and shall comply promptly with any such inquiry or request.
Each of Mirant, Buyers, the Stockholder and del Caribe shall use commercially
reasonable efforts to obtain the termination or expiration of any applicable
waiting period required under the HSR Act for the consummation of the
transactions contemplated hereby. Mirant and Buyers shall pay all filing fees
payable under the HSR Act in connection with the transactions contemplated
hereby, and each of Mirant, Buyers, the Stockholder and del Caribe shall pay its
own respective costs incurred in preparation of all reports and notifications
required under the HSR Act.
(b) Regulatory Approval Process. Mirant, Buyers, the
Stockholder and del Caribe shall, as promptly as practicable but in no event
later than thirty (30) days following the execution and delivery of this
Agreement, submit to the appropriate agencies or third parties all consent
requests, declarations, filings and registrations listed on Schedules 2.7, 2.8
and 3.4. With respect to any filings that may be required to be submitted to
FERC, Mirant, Buyers, the Stockholder and del Caribe shall cooperate to share
and develop information necessary for such filings and drafts of such filings
within fifteen (15) days following execution and delivery of this Agreement, and
shall give each other reasonable opportunity to comment on and to revise such
draft filings before such filings are submitted to FERC.
4.7 Efforts. Upon the terms and subject to the conditions of this
Agreement, each of the parties hereto shall use all its commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable consistent with applicable law
to cause the fulfillment of the conditions to Closing set forth herein and to
consummate and make effective in the most expeditious manner practicable the
transactions contemplated hereby.
4.8 Notice of Changes. Prior to the Closing, each party shall 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. If, as a result
of such development, Mirant or either Buyer has the right to terminate this
Agreement pursuant to Section 7.1 and Mirant and both Buyers fail to exercise
that right within the period of ten (10) days after such right accrues, then the
written notice delivered to Mirant or either Buyer pursuant to this Section 4.8
will be deemed to have amended this Agreement, including any appropriate
schedule hereto, to have qualified the representations and warranties contained
in Article 2 above, and to have cured any misrepresentation or breach of
warranty that otherwise might have existed hereunder by reason of the
development.
4.9 Certain Tax Matters.
(a) Tax Returns. The income of the Partnership attributable to
the Partnership Interests shall be apportioned to the period up to and including
the Closing Date (the "Pre-Closing Short Year") to del Caribe and the period
after the Closing Date (the "Post-Closing Short Year") by closing the books of
the Partnership as of the end of the Closing Date to Buyers. In the case of any
Taxes that are imposed on a periodic basis and are payable for a Taxable period
that includes (but does not end on) the Closing Date, the portion of such Tax
which relates to the portion of such Taxable period ending on the Closing Date
shall (i) in the case of Taxes that are not based on income or gross receipts
(e.g., property taxes), be deemed to be the total amount of such Taxes for the
period in question multiplied by a fraction, the numerator of which is the
number of days in the entire Taxable period ending on the Closing Date, and the
denominator of which is the total number of days in the entire Taxable period in
question, and (ii) in the case of Taxes that are based on income or gross
receipts, be deemed to be the Taxes that would be due if the relevant Taxable
period ended on the Closing Date.
(b) Authority. After the Closing, Mirant and Buyers shall, and
shall cause del Caribe and its Affiliates to provide the Stockholder and its
Affiliates with such powers of authority or other authorizations as are
reasonably necessary to empower them to execute and file Tax returns for which
they are responsible, file refund and similar claims for Taxes for which they
are responsible or entitled, and contest, settle and resolve any audits and
disputes over which they have control under this Agreement (including, without
limitation, any refund claims which evolve into audits or disputes).
(c) Cooperation. After the Closing, Mirant and Buyers, on the
one hand, and the Stockholder, on the other hand, shall provide prompt written
notice to the other of any pending or threatened Tax audit, assessment or
proceeding of which it becomes aware related to del Caribe or the Partnership
for whole or partial periods for which the other is responsible hereunder. Such
notice shall contain known factual information describing any potential
liability in reasonable detail and be accompanied by copies of any notice or
other document received from or sent to any Tax authority in respect of such
matters. After the Closing, Mirant and Buyers, on the one hand, and the
Stockholder, on the other hand, shall cooperate fully, and to the extent
reasonably requested by the other party, in connection with the filing of all
Tax Returns pursuant to this Agreement and any audit, litigation, or other
proceeding related to such Tax Returns. Such cooperation shall include the
retention and provision of records and information relevant to any such tax
filing, audit, litigation or other matter and making employees available on a
reasonable basis.
(d) Audits. The Stockholder shall control all audits and
contests relating to any Taxes for del Caribe and the Partnership for all Tax
periods ending on or prior to the Closing Date. Buyers shall control all audits
and contests relating to Taxes of del Caribe and the Partnership that arise
following the Closing Date, including Taxes related to the Post-Closing Short
Year.
(e) Coordination. Mirant and Buyers shall not, and shall cause
their respective Affiliates, del Caribe, Eco Holdings, EcoElectrica Ltd. and the
Partnership to not, take any action inconsistent with, contest any position with
respect to, attempt to recharacterize and/or voluntarily make any disclosure of
any kind to any third party, including, without limitation, any Governmental
Entity, with respect to any action, election, position, transaction, and/or
characterization made or taken by the Stockholder, del Caribe, Eco Holdings,
EcoElectrica Ltd. or the Partnership in respect of (i) any restructuring
activity required, permitted or associated with the completion of the
transactions contemplated by this Agreement or (ii) in respect of any Tax or
Taxes related to whole or partial Taxable periods or activities on or before the
Closing Date. The provisions of this Section 4.9(e) will not prohibit any
disclosure required by law, provided that no such disclosure may be made without
first promptly notifying the Stockholder and authorizing the Stockholder to
review and challenge the same.
(f) Transfer Taxes. All stamp, documentary, recording,
transfer and sales and use taxes incurred in connection with this Agreement and
the transactions contemplated hereby shall be borne by Buyers. Buyers at their
own expense shall file, to the extent required by applicable law, all necessary
Tax Returns and other documentation with respect to all such transfer or sales
and use taxes.
ARTICLE 5
INDEMNIFICATION
5.1 Indemnification by Stockholder.
(a) General. For a period of one (1) year following the
Closing Date and subject to the limits set forth in this Article 5, the
Stockholder and its successors and assigns shall indemnify, defend, reimburse
and hold harmless the Buyer Indemnitees, from and against any and all claims,
losses, damages, liabilities, obligations, assessments, penalties and interest,
demands, actions and expenses (including, without limitation, settlement costs
and any legal, accounting and other expenses for investigating or defending any
actions) ("Losses") reasonably incurred by any Buyer Indemnitee, arising out of
(i) the breach of any representation or warranty made by the Stockholder or del
Caribe in Article 2 of this Agreement; or (ii) the breach of any covenant,
agreement or obligation of the Stockholder or del Caribe contained in this
Agreement or any other Transaction Document. Notwithstanding the one-year time
limitation set forth above, the Stockholder's indemnification obligations under
this Section 5.1 arising from the breach of any representation or warranty made
by the Stockholder in (x) Section 2.12 of this Agreement shall continue until
such time as the applicable statute of limitations has expired on the right of
the applicable Governmental Entity to legally impose the Tax liability upon
which the Buyer Indemnitee's claimed Loss is based; and (y) Section 2.13 of this
Agreement shall continue for a period of two (2) years after the Closing Date.
Furthermore, notwithstanding the foregoing or anything else in this Agreement to
the contrary, in the event that any Buyer Indemnitee reasonably incurs Losses in
connection with the breach of any representation or warranty of the Stockholder
regarding Eco Holdings, EcoElectrica Ltd. and the Partnership, the Stockholder's
obligations under this Section 5.1 shall apply to only fifty percent (50%) of
such Losses.
5.2 Indemnification by Mirant and Buyers. For a period of one (1) year
following the Closing Date and subject to the limits set forth in this Article
5, Mirant, Buyers and their respective successors and assigns shall indemnify,
defend, reimburse and hold harmless the Stockholder Indemnitees from and against
any and all Losses reasonably incurred by any Stockholder Indemnitee arising out
of (i) the breach of any representation or warranty made by Mirant or either
Buyer in Article 3 of this Agreement; (ii) the breach of any covenant, agreement
or obligation of Mirant or either Buyer contained in this Agreement or any other
Transaction Document; or (iii) the ownership or operation of del Caribe, Eco
Holdings, EcoElectrica Ltd. or the Partnership after the Closing.
5.3 Indemnification Procedure.
(a) Whenever any claim (a "Claim") shall arise for
indemnification under this Article 5, the Indemnitee shall promptly (but in any
event within ten (10) days of the Indemnitee becoming aware of the Claim) give
written notice to the Indemnitor with respect to the Claim, which notice shall
include reliable information of the facts constituting the basis for the Claim.
Notwithstanding the foregoing, the failure to timely give such notice shall not
relieve the Indemnitor from any obligation under this Agreement, except to the
extent, if any, that the Indemnitor is materially prejudiced thereby. In the
event of any Claim resulting from or in connection with any claim or legal
proceedings by a third party (a "Third Party Claim"), the notice to the
Indemnitor shall specify, if known, the amount or an estimate of the amount of
liability arising therefrom. The Indemnitee shall not settle or compromise any
claim by any third party for which it is entitled to indemnification hereunder,
without the prior written consent of the Indemnitor unless suit shall have been
instituted against it and the Indemnitor shall not have taken control of such
suit after notification thereof as provided in Section 5.3(c) hereof.
(b) Upon receipt of written notice from the Indemnitee of a
Third Party Claim, the Indemnitor shall provide counsel (such counsel subject to
the reasonable approval of the Indemnitee) to defend the Indemnitee against the
matter from which the Third Party Claim arose, at the Indemnitor's sole cost,
risk and expense. The Indemnitee shall cooperate in all reasonable respects, at
the Indemnitor's sole cost, risk and expense, with the Indemnitor in the
investigation, trial, defense and any appeal arising from the matter from which
the Third Party Claim arose. The Indemnitee shall be entitled to participate in
(but not control) the defense of any such action, with counsel at its own
expense. The Indemnitor shall have the right to elect to settle any claim for
monetary damages without the Indemnitee's consent only if the settlement
includes a complete release of the Indemnitee. If the settlement does not
include such a release, it will be subject to the consent of the Indemnitee,
which will not be unreasonably withheld; provided, however, if the Indemnitee
fails to give such consent within twenty (20) days of being requested to do so,
the Indemnitee shall, at its expense, assume the defense of such Third Party
Claim and regardless of the outcome of such matter, the Indemnitor's liability
hereunder shall be limited to the amount of the proposed settlement. The
Indemnitor may not admit any liability of the Indemnitee or waive any of the
Indemnitee's rights without the Indemnitee's prior written consent, which will
not be unreasonably withheld. If the subject of any Third Party Claim results in
a judgment or settlement, the Indemnitor shall promptly pay such judgment or
settlement.
(c) If the Indemnitor (i) fails to assume the defense of the
subject of any Third Party Claim in accordance with the terms of Section 5.3(b),
(ii) fails diligently to prosecute such defense, or (iii) has, in the
Indemnitee's reasonable good faith judgment, a conflict of interest, the
Indemnitee may defend against the subject of the Claim, at the Indemnitor's sole
cost, risk and expense, in such manner and on such terms as the Indemnitee deems
appropriate, including, without limitation, settling the subject of the Claim;
provided, however, that any compromise or settlement shall be subject to the
Indemnitor's consent, which consent will not be unreasonably withheld. If the
Indemnitee defends the subject of a Claim in accordance with this Section
5.3(c), the Indemnitor shall cooperate with the Indemnitee and its counsel, at
the Indemnitor's sole cost, risk and expense, in all reasonable respects, and
shall deliver to the Indemnitee or its counsel copies of all pleadings and other
information within the Indemnitor's knowledge or possession reasonably requested
by the Indemnitee or its counsel that are relevant to the defense of the subject
of any such Claim and that will not prejudice the Indemnitor's position, claims
or defenses. The Indemnitee shall maintain confidentiality with respect to all
such information consistent with the conduct of a defense hereunder.
5.4 Payment. All payments owing under this Article 5 will be made
promptly as indemnifiable Losses are incurred. If the Indemnitee defends the
subject matter of any Claim in accordance with Section 5.3(c), the expenses
(including reasonable attorneys' fees and costs) incurred by the Indemnitee
shall be paid by the Indemnitor in advance of the final disposition of such
matter as incurred by the Indemnitee; provided that the Indemnitee undertakes in
writing to repay any such advances in the event that it is ultimately determined
that the Indemnitee is not entitled to indemnification under the terms of this
Agreement or applicable law.
5.5 Limitations.
(a) Notwithstanding any provision of this Agreement to the
contrary, the Stockholder shall have no obligation to indemnify any Buyer
Indemnitee under this Article 5 or to pay damages in respect of contract or
other claims arising under this Agreement or any other Transaction Document
unless the Buyer Indemnitees have suffered indemnifiable Losses hereunder in an
aggregate amount attributable to all Claims and obligors in excess of One
Million Five Hundred Thousand Dollars ($1,500,000) (the "Threshold"); ----------
Once the aggregate amount of Losses exceeds the Threshold, the Buyer Indemnitees
shall be entitled to recover the full amount of all Losses in excess of the
Threshold.
(b) In no event will the ----------, exceed the lesser of
(i) --------- the PREPA Resolution Amount and (ii) ----------. Notwithstanding
any provision of this Agreement to the contrary, the ---------.
(c) Notwithstanding any provision of this Agreement to the
contrary, neither Mirant nor either Buyer shall have any obligation to indemnify
any Stockholder Indemnitee under this Article 5 or to pay damages in respect of
contract or other claims arising under this Agreement or any other Transaction
Document unless the Stockholder Indemnitees have suffered indemnifiable Losses
in an aggregate amount attributable to all Claims in excess of the Threshold;
provided, however, that Mirant's and Buyers' obligations to indemnify any
Stockholder Indemnitee for any Losses arising from any breach of this Agreement
by Mirant or either Buyer of their obligation to pay, or directly or indirectly
resulting in the failure of Mirant and Buyers to pay, the Purchase Price and the
Note Price under this Agreement, will not be subject to the Threshold. Subject
to the foregoing proviso, once the aggregate amount of Losses exceeds the
Threshold, the Stockholder Indemnitees shall be entitled to recover the full
amount of all Losses in excess of the Threshold.
(d) Notwithstanding any provision of this Agreement to the
contrary, the maximum aggregate liability of Mirant and Buyers to the
Stockholder Indemnitees for all claims arising under this Agreement and the
other Transaction Documents equals $32,000,000; provided, however, that Mirant's
and Buyers' obligations to indemnify any Stockholder Indemnitee for any Losses
arising from any breach of this Agreement by Mirant or either Buyer of their
obligation to pay, or directly or indirectly resulting in the failure of both
Mirant and Buyer to pay, the Purchase Price and the Note Price under this
Agreement, will not be subject to such limitation.
(e) No Indemnitee shall be entitled to indemnification under
this Article 5 for Losses (i) directly or indirectly caused by a willful or
negligent act of such Indemnitee or a breach by such Indemnitee of any
representation, warranty, covenant or other agreement set forth in this
Agreement or any duty to the potential Indemnitor or (ii) covered by insurance
proceeds from insurance owned and paid for by the Stockholder, del Caribe, Eco
Holdings or the Partnership prior to the Closing, to the extent that the Buyer
Indemnitees actually receive such insurance proceeds to cover such Losses.
5.6 Survival. The representations and warranties made in this Agreement
or in any exhibit, schedule, or any other Transaction Document or certificate
shall survive any investigation made by any party hereto and the Closing of the
transactions contemplated hereby until the first anniversary of the Closing
Date; provided, however, that the representations and warranties set forth in
(i) Section 2.12 of this Agreement shall survive until such time as the
applicable statute of limitations has expired on the right of the applicable
Governmental Entity to legally impose the Tax liability upon which the Buyer
Indemnitee's claimed Loss is based and (ii) Section 2.14 of this Agreement shall
survive for a period of two (2) years after the Closing Date. No party will be
liable to another under any warranty or representation after the applicable
expiration of such warranty or representation; provided, however, that if a
claim or notice is given under this Article 5 with respect to any representation
or warranty prior to the applicable expiration date, such claim may be pursued
to resolution notwithstanding expiration of the representation or warranty under
which the claim was brought.
5.7 ----------
(a) PREPA Resolution ----------
(i) Subject to the limitations set forth in this Article 5, in
the event of a pre-Closing PREPA Resolution which requires ----------, in
accordance with the ---------- of the PREPA Resolution, ----------. Also, in the
event of a pre-Closing PREPA Resolution, ---------- equal to the lesser of (A)
---------- of the Partnership Effect, if any, and (B) that portion of the
Partnership Effect, if any, such that, when ---------- under the PREPA
Resolution equals ----------
(ii) Subject to the limitations set forth in this Article 5,
in the event of a pre-Closing PREPA Resolution that requires ---------- or of
any PREPA Resolution that ---------- (A) ---------- equal to the lesser of (1)
---------- and (2) ----------; and (B) ---------- equal to the lesser of (1)
---------- of the Partnership Effect, if any, and (2) that portion of the
Partnership Effect, if any, such that ---------- under the PREPA Resolution
equals ---------.
(iii)In the event that no PREPA Resolution ----------. In the
event that no PREPA Resolution ----------.
(b) PREPA Resolution ----------. In the event of a pre-Closing
PREPA Resolution ----------
(c) Required Approvals. Prior to the Closing Date, ----------- PREPA
Resolution ---------- pursuant to which (i) the PREPA Resolution Amount
----------, or (ii) the PREPA Resolution is -----------. After the Closing Date
but prior to the first anniversary of the Closing Date, ---------- PREPA
Resolution ----------- pursuant to which (x) the PREPA Resolution Amount
----------, or (y) the PREPA Resolution ----------. Notwithstanding the
foregoing sentence, ----------- for a PREPA Resolution ----------- relating to
such PREPA Resolution -----------.
(d) ----------. In the event that at anytime -----------. In the event
that ---------- results in a PREPA Resolution, ----------: (i) --------- by
which the PREPA Resolution Amount ----------, in the event that the PREPA
Resolution Amount is ---------- or (ii) ----------, in the event that the PREPA
Resolution Amount -----------.
(e) PREPA Resolution ----------. During such time as ---------- in any
PREPA Resolution pursuant to this Section 5.7, (i) --------- to achieve a PREPA
Resolution; and (ii) ----------. ----------
5.8 Exclusivity of Indemnification. The indemnification provisions of
this Article 5 are intended to provide the exclusive remedy as to all Losses
that any party hereunder may incur arising from or relating to the transactions
contemplated by this Agreement. Each party hereby waives, to the extent that it
may do so, any other rights or remedies that may arise under any applicable
statute, rule or regulation; provided, however, that the foregoing shall not be
interpreted to limit the types of remedies, including specific performance or
other equitable remedies, which may be sought by an Indemnitee in connection
with a breach of any covenant or agreement contained herein and shall not limit
any available remedy for a willful misrepresentation or breach by another party.
5.9 Consequential Damages and Remedies. No party will be liable to any
other party in connection with this Agreement, or any of the transactions
contemplated hereby, for any consequential, punitive, special or indirect
damages. Each party hereby expressly releases the other parties, their
respective Affiliates, directors, officers, employees, agents and
representatives from any such liability.
ARTICLE 6
CONDITIONS TO CLOSING
6.1 Conditions to Obligations of Each Party. The obligations of the
Stockholder and del Caribe, on the one hand, and Mirant and Buyers, on the other
hand, to consummate the transactions contemplated hereby are subject to the
fulfillment to the reasonable satisfaction of the party entitled to the benefit
of such condition, on or before the Closing Date, of the conditions set forth in
this Section 6.1, any one or more of which may be waived in writing by the party
entitled to the benefit of such condition.
(a) No Action or Proceeding. No preliminary or permanent
injunction or other order issued by any Governmental Entity that declares this
Agreement invalid in any material respect or prevents or would be violated by
the consummation of the transactions contemplated hereby, or which would have a
Material Adverse Effect, is in effect. No action or proceeding has been
instituted or threatened by any Governmental Entity, other person, or entity
which seeks to prevent or delay the consummation of the transactions
contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement, the result of which could constitute a
Material Adverse Effect.
(b) Consents, Approvals and Filings. All consents,
authorizations and approvals from, and all declarations, filings and
registrations with, governmental agencies or third parties that are listed on
Schedules 2.7, 2.8 and 3.4 shall have been obtained or made, as appropriate. All
waiting periods under the HSR Act shall have expired or been properly
terminated.
6.2 Conditions to Obligations of Mirant and Buyers. The obligations of
Mirant and Buyers to consummate the transactions contemplated hereby are subject
to the fulfillment, on or before the Closing Date, of the conditions set forth
in this Section 6.2, any one or more of which may be waived by Mirant or either
Buyer in writing in their discretion.
(a) Representations and Warranties; Covenants. The
representations and warranties of the Stockholder and del Caribe contained in
this Agreement (as revised, modified or updated pursuant to Section 4.8 hereof)
shall be true and correct in all material respects on the Closing Date;
provided, however, that if any portion of any such representation or warranty is
already qualified by materiality, for purposes of determining whether this
condition has been satisfied with respect to such portion of such representation
or warranty, such portion of such representation or warranty as so qualified
must be true and correct in all respects. The Stockholder and del Caribe shall
have performed in all material respects all obligations required to be performed
by each of them under this Agreement on or before the Closing Date.
(b) Secretaries' Certificates. At the Closing, the
Stockholder and del Caribe shall have delivered to Buyers a certificate dated as
of the Closing Date certifying to the effect of Section 6.2(a) signed by the
respective Secretaries of the Stockholder and del Caribe.
(c) Consents and Approvals. All consents, waivers,
authorizations and approvals required under Schedule 2.7 of the Disclosure
Schedule, the absence of which could result in material liability to Buyers or a
Material Adverse Effect, shall have been duly obtained in form reasonably
satisfactory to Buyers, shall be in full force and effect on the Closing Date
and the executed copies thereof shall have been delivered to Buyers on or before
the Closing Date.
(d) LNG Term-Out Under Credit Agreement. The Term-Out of all
Construction Loans into Term Loans shall have been completed pursuant to Section
2.01(b) of the Credit Agreement, dated October 31, 1997 and as amended on
December 15, 1997, between the Partnership and ABN AMRO Bank N.V., as the
administrative agent.
(e) Stock Books. The Stockholder shall have caused EME del
Caribe Holdings GmbH to have delivered to Buyer 1 the stock books, stock
ledgers, minute books and corporate seals of del Caribe.
(f) Resignation of Directors. Buyer 1 shall have received
written resignations of the directors of del Caribe.
(g) Satisfaction of Other Closing Conditions. All conditions
to the respective obligations of Mirant and Buyers pursuant to Article 6 of that
certain Stock Purchase Agreement, of even date herewith, by and among Enron
Asset Holdings, LLC, a Delaware limited liability company, Mirant and Buyers
have been either satisfied or waived.
6.3 Conditions to Obligations of the Stockholder. The obligations of
the Stockholder to consummate the transactions contemplated hereby are subject
to the fulfillment, on or before the Closing Date, of the conditions set forth
in this Section 6.3, any one or more of which may be waived by the Stockholder
in writing in its discretion.
(a) Representations and Warranties; Covenants. The
representations and warranties of Mirant and Buyers contained in this Agreement
shall be true and correct in all material respects as of the date hereof and on
the Closing Date; provided, however, that if any portion of any such
representation or warranty is already qualified by materiality, for purposes of
determining whether this condition has been satisfied with respect to such
portion of such representation or warranty, such portion of such representation
or warranty as so qualified must be true and correct in all respects. Mirant and
Buyers shall have performed in all material respects all obligations required to
be performed by them under this Agreement on or before the Closing Date.
(b) Secretaries' Certificates. At the Closing, Mirant and
Buyers shall have delivered to the Stockholder a certificate dated as of the
Closing Date certifying to the effect of Section 6.3(a) signed by the respective
Secretaries of Mirant and Buyers.
(c) Removal as Guarantor. Mirant and Buyers shall have caused
the Stockholder to be removed as a guarantor of the Guaranteed Indebtedness in
accordance with Section 4.3.
ARTICLE 7
TERMINATION AND ABANDONMENT
7.1 Termination. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to the Closing:
(a) by Mirant or either Buyer, if (i) the Stockholder or del
Caribe fails to comply in any materially adverse respect with any of its or
their covenants or agreements contained herein, (ii) any of the representations
and warranties of the Stockholder or del Caribe set forth in Article 2 hereof
(as revised, modified or updated pursuant to Section 4.8 hereof) is breached or
is inaccurate in any materially adverse respect, or (iii) any event has occurred
or circumstances exist which have a Material Adverse Effect; provided, however,
that neither Mirant nor either Buyer may terminate this Agreement pursuant to
this Section 7.1(a) if (x) the Stockholder and del Caribe have cured such
material noncompliance, breach, inaccuracy or Material Adverse Effect within
fifteen (15) business days after the receipt of written notice thereof by Mirant
or either Buyer or (y) Mirant or either Buyer has breached in any material
respect any of its representations, warranties or obligations under this
Agreement;
(b) by the Stockholder or del Caribe, if (i) Mirant or either
Buyer fails to comply in any materially adverse respect with any of its
covenants or agreements contained herein, or (ii) any of the representations and
warranties of Mirant or either Buyer set forth in Section 3 hereof is breached
or is inaccurate in any materially adverse respect; provided, however, that
neither the Stockholder nor del Caribe may terminate this Agreement pursuant to
this Section 7.1(b) if (x) Mirant and Buyers have cured such noncompliance,
breach or inaccuracy within fifteen (15) business days after the receipt of
written notice thereof by the Stockholder or del Caribe or (y) either the
Stockholder or del Caribe has breached in any material respect any of its
representations, warranties or obligations under this Agreement; or
(c) by the Stockholder or del Caribe, on the one hand, or
Mirant or either Buyer, on the other hand, if (i) a Governmental Entity has
issued a nonappealable order, decree or ruling or taken any other action (which
order, decree or ruling the parties hereto have used all their commercially
reasonable efforts to lift), which permanently restrains, enjoins or otherwise
prohibits the transactions contemplated by this Agreement; or (ii) a condition
to the terminating party's performance hereunder has not been satisfied or
waived prior to December 31, 2001; provided, however, that a party may not
terminate this Agreement pursuant to this Section 7.1(c) if such party's failure
to fulfill any of its obligations under this Agreement is the reason for the
occurrence of either of the foregoing clauses (i) or (ii) hereof.
7.2 Notice of Termination. In the event of termination of this
Agreement pursuant to Section 7.1 hereof, written notice shall be given
forthwith by the terminating party to the other parties and this Agreement will
terminate and the transactions contemplated hereby will be abandoned in
accordance with the terms of this Article 7, without further action by any
party.
7.3 Effect of Termination. If this Agreement is terminated as provided
in this Article 7, no party to this Agreement will have any liability or further
obligation to any other party to this Agreement, except as provided in Sections
4.1(b), 8.10, 8.11, 8.13, and 8.14 and except that termination of this Agreement
will not affect any liability of any party for any breach of this Agreement
prior to termination, or any breach at any time of the provisions hereof
surviving termination.
ARTICLE 8
MISCELLANEOUS
8.1 Definitions.
(a) "Action" means any action, suit, counterclaim, cross-claim, appeal,
arbitration or mediation for any relief against a party hereunder or any of its
Affiliates, successors or assigns, declaratory or otherwise, to enforce the
terms of this Agreement or to declare rights under this Agreement.
(b) "Affiliate" has the meaning ascribed to it in Rule 405 under the Securities
Act.
(c) "Bankruptcy Exception" means the limitations on enforceability imposed by
general principles of equity and bankruptcy, insolvency, reorganization and
moratorium and other similar laws relating to creditors' rights. (d) "Buyer 1"
has the meaning ascribed to it in the preamble to this Agreement.
(e) "Buyer 2" has the meaning ascribed to it in the preamble to this Agreement.
(f) "Buyers" has the meaning ascribed to it in the preamble to this Agreement.
(g) "Buyer Indemnitees" means Buyer 1 and its directors, officers and employees.
(h) ----------
(i) "capital stock" means common stock, preferred stock, partnership interests,
limited liability company interests or other ownership interests of the issuer
thereof.
(j) "Claim" has the meaning ascribed to it in Section 5.3(a) hereof.
(k) "Closing" means the consummation of the sale by the Stockholder, and the
purchase by Buyers, of the del Caribe Shares and the Project Note in accordance
with the terms of this Agreement.
(l) "Closing Date" has the meaning ascribed to it in Section 1.2 hereof.
(m) "Confidential Information" means any information not in the public domain,
in any form, whether acquired prior to or after the Closing Date, received from
the Stockholder, del Caribe or any of their advisors relating to the business
and operations of the Stockholder, del Caribe, Eco Holdings, the Partnership and
their respective Affiliates, including, without limitation, information
regarding vendors, suppliers, trade secrets, training programs, technical
information, contracts, systems, procedures, know-how, trade names,
improvements, price lists, financial or other data, business plans, computer
programs, software systems, internal reports, personnel files or any other
compilation of information, written or unwritten, which is or was used in the
business of the Stockholder, del Caribe, Eco Holdings, the Partnership or their
respective Affiliates, except for information (i) that was or becomes generally
available to the public, other than as a result of disclosure by either Buyer;
or (ii) that is received by either Buyer or any of its Affiliates on a
nonconfidential basis from a third party that is not prohibited from disclosing
such information by obligation to the Stockholder, del Caribe, the Eco Holdings
or the Partnership.
(n) "Contracts" has the meaning ascribed to it in Section 2.10 hereof.
(o) "Decision" means any judgment, order, ruling, or award granted with respect
to an Action.
(p) "del Caribe" has the meaning ascribed to it in the preamble of this
Agreement.
(q) "del Caribe Shares" has the meaning ascribed to it in Section 2.3(a)hereof.
(r) "Disclosure Schedule" means the disclosure schedule of the Stockholder and
del Caribe attached hereto as Schedule 2 and the other schedules included
therein.
(s) "Distributions" has the meaning ascribed to it in Section 2.16 hereof.
(t) "DOJ" means the United States Department of Justice.
(u) "Eco Holdings" has the meaning ascribed to it in Section 2.2(a) hereof.
(v) "Eco Holdings Shares" has the meaning ascribed to it in Section 2.2(a)
hereof.
(w) "Eco Limited Shares" has the meaning ascribed to it in Section 2.2(b)
hereof.
(x) "Environmental Laws" means all applicable laws, regulations and other
requirements of Governmental Entities or duties under common law (other than the
same relating to Taxes) relating to toxic or hazardous substances, wastes,
pollution or to the protection of health, safety or the environment.
(y) "Environmental Permits" means all licenses, permits and other authorizations
or registrations required under all Environmental Laws.
(z) "Facility" has the meaning ascribed to it in Recital A hereof.
(aa) "FERC" means the Federal Energy Regulatory Commission.
(bb) "Financial Statements" has the meaning ascribed to it in Section 2.6(a).
(cc) "FTC" means the United States Federal Trade Commission.
(dd) "Governmental Entity" means any court, arbitrator, federal, state or local
government agency, regulatory body, or other governmental authority.
(ee) "Guaranteed Indebtedness" has the meaning ascribed to it in Section 4.3.
hereof.
(ff) "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
(gg) "Indemnitee" means the party entitled to indemnification under Article 5
hereof.
(hh) "Indemnitor" means the party obligated to provide indemnity under Article 5
hereof.
(ii) "knowledge" or "known" means, with respect to any individual, the actual
knowledge of such individual or, in the case of the Stockholder, the actual
knowledge, without independent investigation, of the persons identified on
Schedule 8.1 hereto of such entity. (jj) "License" means any permit, license or
other governmental authorization.
(kk) "Losses" has the meaning ascribed to it in Section 5.1 hereof.
(ll) "Material Adverse Effect" means one or more effects that, individually or
in the aggregate, are materially adverse to the business, assets, financial
condition or results of operations of the Partnership, taken as a whole;
provided, however, that any such effect or effects arising from any circumstance
not disclosed in this Agreement or the schedules hereto that result, or would be
reasonably likely to result, in an uninsured loss in excess of $30,000,000 to
the Partnership will be conclusively presumed to constitute a "Material Adverse
Effect;" provided, further, that, notwithstanding the foregoing, none of the
following will be deemed, individually or together, to constitute a "Material
Adverse Effect:" (x) any changes, circumstances or effects resulting from or
relating to changes or developments in the economy, financial markets, commodity
markets, laws, regulations or rules in the applicable electric power markets
(including, without limitation, changes in laws or regulations affecting owners
or providers of electric generation, transmission or distribution as a group and
not the Partnership exclusively) or in the political climate generally or in any
specific region; (y) any changes in conditions or developments generally
applicable to the industries in which the Partnership is involved; and (z) any
changes, circumstances or effects attributable to the announcement or pendency
of the transactions contemplated by this Agreement (including any cancellations
of or delays in customer agreements, any reductions in sales, any disruption in
supplier, distributor, partner or similar relationships or any loss of
employees), or resulting from or relating to compliance with the terms of, or
the taking of any action required by, this Agreement. (mm) ---------- (nn)
"Mirant" has the meaning ascribed to it in the preamble to this Agreement.
(oo) ----------
(pp) "Partnership" means EcoElectrica, L.P., an exempt limited partnership
organized under the laws of Bermuda.
(qq) "Partnership Agreement" means that certain First Amended and Restated
Limited Partnership Agreement, dated December 10,
1997, of the Partnership, as subsequently amended.
(rr) "Partnership Effect" means ----------
(ss) "Partnership Interests" means the 99% limited partnership interest in the
Partnership held by Eco Holdings and the 1% general partnership interest in the
Partnership held by its wholly-owned subsidiary, EcoElectrica Ltd. (tt)
"Post-Closing Short Year" has the meaning ascribed to it in Section 4.9(a)
hereof.
(uu) "PREPA" means the Puerto Rico Electric Power Authority.
(vv) ----------
(ww) "----------" means ---------under any PREPA Resolution.
(xx) ----------
(yy) "PREPA Resolution" means ----------.
(zz) "PREPA Resolution Amount" means either (i) ---------- (ii) the Partnership
Effect; or (iii) the sum of ---------- pursuant to a PREPA Resolution. (aaa)
"Pre-Closing Short Year" has the meaning ascribed to it in Section 4.9(a)
hereof.
(bbb) "Prevailing Party" has the meaning ascribed to it in Section 8.14.
(ccc) "Purchase Price" has the meaning ascribed to it in Section 1.3 hereof.
(ddd) "Securities Act" means the Securities Act of 1933, as amended.
(eee) "Stockholder" has the meaning ascribed to it in the preamble of this
Agreement.
(fff) ----------
(ggg) "Stockholder Indemnitees" means the Stockholder and its Affiliates, and
the directors, officers and employees of any of them. (hhh) ---------- (iii)
"Tax" or "Taxes" means all taxes, imposts, duties or assessments of any kind or
nature whatsoever, and howsoever described or denominated, including, without
limitation, income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental, ad
valorem, customs duties, capital, wealth, capital stock, franchise, profits,
withholding, social security (or similar), sales, use, transfer, registration,
value added, alternative or add-on minimum, estimated, or other tax or charge of
any kind whatsoever, including any interest, penalty, or addition thereto,
whether disputed or not, imposed by any governmental authority.
(jjj) "Taxpayer" has the meaning ascribed to it in Section 2.12(a) hereof.
(kkk) "Threshold" has the meaning ascribed to it in Section 5.5(a) hereof.
(lll) "Transaction Documents" means this Agreement, the assignment of the
Project Note and all necessary stock powers required to be delivered in
connection with the consummation of the transactions contemplated by this
Agreement.
8.2 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed given upon personal delivery
or three (3) days after being mailed by certified or registered mail, postage
prepaid, return receipt requested, or one (1) business day after being sent via
a nationally recognized overnight courier service if overnight courier service
is requested from such service or upon receipt of electronic or other
confirmation of transmission if sent via facsimile, to the parties, their
successors in interest or their assignees at the following addresses and
telephone numbers, or at such other addresses or telephone numbers as the
parties may designate by written notice in accordance with this Section 8.2:
If to Mirant or Mirant EcoElectrica Investments I, Ltd.
either Buyer: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: J.R. ▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
If to the Stockholder Edison Mission Energy
or del Caribe: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.:
Facsimile No.:
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
With a copy to: ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
8.3 Assignability and Parties in Interest. This Agreement and the
rights, interests or obligations hereunder may not be assigned by any of the
parties hereto without the prior written consent of the other parties hereto;
provided, however, that this Agreement may be assigned to an Affiliate, but that
no such assignment will relieve Mirant or either Buyer of any of their
respective obligations hereunder. This Agreement shall inure to the benefit of
and be binding upon Mirant, Buyers, the Stockholder, del Caribe and their
respective permitted successors and assigns. Nothing in this Agreement will
confer upon any person or entity not a party to this Agreement, or the legal
representatives of such person or entity, any rights or remedies of any nature
or kind whatsoever under or by reason of this Agreement.
8.4 Publicity. No press release or other public announcement or
disclosure related to this Agreement or the transactions contemplated herein
(including but not limited to the terms and conditions of this Agreement) shall
be issued or made without the prior approval of either Buyer, on the one hand,
and the Stockholder, on the other hand. The foregoing shall not prohibit any
disclosure (a) required by law or (b) in connection with any financing or
refinancing of indebtedness by any party hereto; provided that such disclosure
is made pursuant to Section 4.1(b) hereof and that the disclosing party consults
with the other parties at least one (1) business day in advance of such
disclosure. To the extent a disclosure is required by law, the disclosing party
shall cooperate with the other parties hereto to prepare an appropriate
confidential treatment request with the applicable Governmental Entity in order
to prevent disclosure of any sensitive matters as to which the disclosing party
believes there exists a good faith argument for confidential treatment.
8.5 Complete Agreement. This Agreement, the exhibits and schedules
hereto and the other Transaction Documents contain or will contain the entire
agreement between the parties hereto with respect to the transactions
contemplated herein and therein and shall supersede all previous oral and
written and all contemporaneous oral negotiations, commitments, and
understandings including, without limitation, all letters, memoranda or other
documents or communications, whether oral, written or electronic, submitted or
made by (a) Mirant, either Buyer or their respective agents or representatives
to the Stockholder, del Caribe, Credit Suisse First Boston Corporation or any of
their respective agents or representatives, or (b) the Stockholder, del Caribe,
Credit Suisse First Boston Corporation or their respective agents or
representatives to Mirant, either Buyer or any of their respective agents or
representatives, in connection with the bidding process which occurred prior to
the execution of this Agreement or otherwise in connection with the negotiation
and execution of this Agreement. No communications by or on behalf of the
Stockholder or del Caribe, including responses to any questions or inquiries,
whether orally, in writing or electronically, and no information provided in any
data room or any copies of any information from any data room provided to Mirant
or either Buyer or any other information shall be deemed to (x) constitute a
representation, warranty or an agreement of the Stockholder or del Caribe, or
(y) be part of this Agreement.
8.6 Acknowledgment; Independent Due Diligence. Mirant and Buyers
acknowledge that neither the Stockholder nor del Caribe has made any
representation or warranty, expressed or implied, as to the accuracy or
completeness of any information regarding the Stockholder, del Caribe, Eco
Holdings, the Partnership or the Facility not included in this Agreement and the
schedules hereto. Without limiting the generality of the foregoing, no
representation or warranty is made with respect to any information in the
Confidential Information Memorandum, dated April 2001, or any supplement or
amendment thereto provided in connection with the solicitation of proposals to
enter into the transactions contemplated by this Agreement, such information
having been provided for the convenience of Mirant and Buyers in order to assist
Mirant and Buyers in framing their due diligence efforts. Mirant and Buyers
further acknowledge that: (a) Mirant and Buyers, either alone or together with
any individuals or entities Mirant and Buyers have retained to advise them with
respect to the transactions contemplated hereby, have knowledge and experience
in transactions of this type and in the business of the Stockholder and del
Caribe, and is therefore capable of evaluating the risks and merits of acquiring
the del Caribe Shares; (b) they have relied on their own independent
investigation, and has not relied on any information or representations
furnished by the Stockholder, del Caribe or any representative or agent thereof
(except as specifically set forth herein), in determining to enter into this
Agreement; (c) neither the Stockholder, del Caribe nor any representative or
agent thereof has given any investment, legal or other advice or rendered any
opinion as to whether the purchase of the del Caribe Shares is prudent, and
Mirant and Buyers are not relying on any representation or warranty by the
Stockholder or del Caribe or any representative or agent thereof except as set
forth in this Agreement; (d) Mirant and Buyers have conducted extensive due
diligence, including a review of the documents contained in a data room prepared
by or on behalf of the Stockholder and del Caribe; and (e) the Stockholder and
del Caribe have made available to Mirant and Buyers all documents, records and
books pertaining to del Caribe, Eco Holdings, the Partnership and the Facility
that Mirant, Buyers and their attorneys, accountants, advisors have requested,
and Mirant, Buyers and their attorneys, accountants and advisors have had the
opportunity to visit the Facilities, and ask questions and receive answers
concerning del Caribe, Eco Holdings, the Partnership, and the Facility and the
terms and conditions of this Agreement. All such questions have been answered to
the full and complete satisfaction of Mirant and Buyers.
8.7 Disclaimer Regarding Assets. Except as otherwise expressly provided
herein, each of the Stockholder and del Caribe expressly disclaim any
representations or warranties of any kind or nature, express or implied, as to
the condition, value or quality of the assets or operations of del Caribe, Eco
Holdings, the Partnership, the Facility or the prospects (financial and
otherwise), risks and other incidents of del Caribe, Eco Holdings, the
Partnership or the Facility and each of the Stockholder and del Caribe
specifically disclaims any representation or warranty of merchantability, usage,
suitability or fitness for any particular purpose with respect to such assets,
or any part thereof, or as to the workmanship thereof, or the absence of any
defects therein, whether latent or patent, or compliance with environmental
requirements, or as to the condition of, or the rights of del Caribe, Eco
Holdings, the Partnership or the Facility in, or their title to, any of their
assets, or any part thereof, or whether del Caribe, Eco Holdings, the
Partnership or the Facility possess sufficient real property or personal
property interests to own or operate such assets. Except as expressly provided
herein, no schedule or exhibit to this Agreement, nor any other material or
information provided by or communications made by the Stockholder, del Caribe or
any of their respective representatives will cause or create any warranty,
express or implied, as to the condition, value or quality of such assets.
Without limiting the generality of the foregoing, no representation or warranty
is made with respect to the accuracy of any information provided in any site
tours or on any web site, or in any meetings with management or other personnel
of del Caribe, Eco Holdings, the Partnership, the Facility or their respective
representatives, except as expressly set forth herein.
8.8 Modifications, Amendments and Waivers. At any time prior to the
Closing Date or termination of this Agreement, any party may (a) waive any
inaccuracies in the representations and warranties of any other party contained
in this Agreement or in any other Transaction Document; and (b) waive compliance
by any other party with any of the covenants or agreements contained in this
Agreement. No waiver of any of the provisions of this Agreement will be
considered, or will constitute, a waiver of any of the rights or remedies, at
law or equity, of the party entitled to the benefit of such provisions unless
made in writing and executed by the party entitled to the benefit of such
provision.
8.9 Headings; References. The headings contained in this Agreement and
the other Transaction Documents are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. References
herein to articles, sections, schedules and exhibits refer to the referenced
articles, sections, schedules or exhibits hereof unless otherwise specified.
8.10 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of California.
8.11 Submission to Jurisdiction. All actions or proceedings arising in
connection with this Agreement shall be tried and litigated exclusively in the
state or federal courts located in the County of Orange, State of California.
The aforementioned choice of venue is intended by the parties to be mandatory
and not permissive in nature, thereby precluding the possibility of litigation
between the parties with respect to or arising out of this Agreement in any
jurisdiction other than that specified in this paragraph. Each party hereby
waives any right it may have to assert the doctrine of forum non conveniens or
similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this paragraph, and stipulates that the state and federal courts
located in the County of Orange, State of California shall have in personam
jurisdiction over each of them for the purpose of litigating any such dispute,
controversy, or proceeding. Each party hereby authorizes and accepts service of
process sufficient for personal jurisdiction in any action against it as
contemplated by this Section 8.11 by registered or certified mail, return
receipt requested, postage prepaid, to its address for the giving of notices as
set forth in Section 8.2. Nothing herein shall affect the right of any party to
serve process in any other manner permitted by law.
8.12 Severability. Any provision of this Agreement which is invalid,
illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality, or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal, or unenforceable in any other jurisdiction.
8.13 Expenses of Transactions. All fees, costs and expenses incurred by
Mirant and Buyers in connection with the transactions contemplated by this
Agreement shall be borne by Mirant and Buyers and all fees, costs and expenses
incurred by Stockholder or del Caribe in connection with the transactions
contemplated by this Agreement shall be borne by the Stockholder. The
Stockholder or del Caribe shall be liable for any fees or commissions payable to
Credit Suisse First Boston Corporation in connection with the transactions
contemplated by this Agreement to the extent they become due pursuant to
contractual arrangements made by or on behalf of the Stockholder.
8.14 Attorneys' Fees. If Mirant, either Buyer or any of their
Affiliates, successors or assigns brings any Action against the Stockholder, del
Caribe or any of their Affiliates, successors or assigns, or if the Stockholder,
del Caribe or any of their Affiliates, successors or assigns brings any Action
against Mirant, either Buyer or any of their Affiliates, successors or assigns,
in addition to any damages and costs which the prevailing party otherwise would
be entitled, the nonprevailing party shall pay to the prevailing party its
actual attorneys' fees and costs incurred in bringing and prosecuting such
Action and/or enforcing any Decision granted therein, all of which shall be
deemed to have accrued on the commencement of such Action and shall be paid
whether or not such action is prosecuted to a Decision. Any Decision entered in
such Action shall contain a specific provision providing for the recovery of
attorneys' fees and costs incurred in enforcing such Decision. For the purposes
of this Section 8.14, attorneys' fees shall include, without limitation, fees
incurred in the following: (a) postjudgment motions and collection actions; (b)
contempt proceedings; (c) garnishment, levy and debtor and third party
examinations; (d) discovery; and (e) bankruptcy litigation. For purposes of this
Section 8.14, the "prevailing party" means the party who agrees to dismiss an
action on the other party's payment of the sum allegedly due or performance of
the covenants allegedly breached, or who obtains substantially the relief sought
by it. If there are multiple claims, the prevailing party shall be determined
with respect to each claim separately. The prevailing party shall be the party
who has obtained the greater relief in connection with any particular claim,
although, with respect to any claim, it may be determined that there is no
prevailing party.
8.15 Waiver.
(a) Whether or not expressly stated in this Agreement, all of
Buyers' payment obligations under this Agreement are the joint and several
obligations of Mirant and Buyers.
(b) Without in any manner limiting the obligations of Mirant
or either Buyer hereunder, the Stockholder may, subject to the terms and
conditions hereof, (i) accept partial payments from Mirant or either Buyer on
account of the obligations; (ii) create new indebtedness or renew, compromise,
extend, increase, accelerate and otherwise change the time for payment of, or
otherwise change the terms of, any of the Transaction Documents, or any part
thereof; (iii) release or substitute Mirant or either Buyer, and otherwise deal
with Mirant or either Buyer as the Stockholder may determine in accordance with
the terms hereof and applicable law; (iv) settle or release, either by agreement
or by operation of law, Mirant or either Buyer; and (v) proceed directly against
the property of Mirant or either Buyer without proceeding against the other to
collect and recover the full amount of the obligations or any portion thereof,
and Mirant and each Buyer waives any right to require the Stockholder to proceed
against the other, or pursue any other remedy in the Stockholder's power
whatsoever.
(c) Mirant and each Buyer hereby waives any defense arising by
reason of any disability or other defense of the other or by reason of the
cessation from any action of any kind against the other. The Stockholder may, at
its election, exercise any right or remedy it may have against Mirant or either
Buyer without affecting or impairing in any way the liability of the other
hereunder. The Stockholder's rights under this Agreement and the other
Transaction Documents will be enforceable without regard to the validity,
regularity or enforceability of the obligations of Mirant or either Buyer or any
document evidencing the same.
(d) Until all of the obligations under this Agreement and the
other Transaction Documents have been fully and finally satisfied, neither
Mirant nor either Buyer shall have any right of subrogation to any of the rights
of the Stockholder against Mirant or either Buyer and Mirant and each Buyer
waives any right to enforce any remedy which the Stockholder now has or may
hereafter have against Mirant or either Buyer.
(e) Mirant and each Buyer waives all rights and defenses
arising out of an election of remedies by the Stockholder even though that
election of remedies has destroyed Mirant's or either Buyers' rights of
subrogation, reimbursement and/or contribution against the other.
8.16 Further Assurances. Upon the reasonable request of a party or
parties hereto at any time after the Closing Date, the other party or parties
shall forthwith execute and deliver such further instruments of assignment,
transfer, conveyance, endorsement, direction or authorization and other
documents as the requesting party or parties or its or their counsel may
reasonably request in order to effectuate the purposes of this Agreement.
8.17 Counterparts. Facsimile transmission of any signed original
document and/or retransmission of any signed facsimile transmission will be
deemed the same as delivery of an original. At the request of any party, the
parties will confirm facsimile transmission by signing a duplicate original
document. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which shall constitute but one and the same
instrument.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first written above.
MIRANT:
Mirant Corporation,
a Delaware corporation
By:
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Name:
------------------------------------------------
Title:
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BUYER 1:
Mirant EcoElectrica Investments I, Ltd.,
a British Virgin Islands limited liability company
By:
------------------------------------------------
Name:
------------------------------------------------
Title:
------------------------------------------------
BUYER 2:
Mirant EcoElectrica Finance, Ltd.,
a British Virgin Islands limited liability company
By:
------------------------------------------------
Name:
------------------------------------------------
Title:
------------------------------------------------
THE STOCKHOLDER:
Edison Mission Energy,
a California corporation
By:
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Name:
-----------------------------------------------
Title:
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DEL CARIBE:
EME del Caribe,
an entity organized under the laws of the Cayman Islands
By:
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Name:
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Title:
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SCHEDULE 1
THE FACILITY
EcoElectrica Penuelas, Puerto Rico
2
SCHEDULE 2
DISCLOSURE SCHEDULE
The following are exceptions to the representations and warranties of
the Stockholder contained in that certain Stock Purchase Agreement (the
"Agreement") by and among Edison Mission Energy, a California corporation; EME
del Caribe, an entity organized under the laws of the Cayman Islands; Mirant
Corporation, a Delaware corporation ("Mirant"); Mirant EcoElectrica Investments
I, Ltd., a British Virgin Islands limited liability company ("Buyer 1") and
wholly-owned, indirect subsidiary of Mirant; Mirant EcoElectrica Finance, Ltd.,
a British Virgin Islands limited liability company and wholly-owned, indirect
subsidiary of Mirant. All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Agreement. The numbered
schedules contained in these Disclosure Schedules correspond to the section
numbers in the Agreement; provided, however, that any item disclosed in any
particular schedule contained in these Disclosure Schedules shall constitute an
exception to all other representations or warranties made in the Agreement to
which such item applies.
SCHEDULE 2.3
Ownership of Capital Stock and Partnership Interests
The Partnership Interests are pledged pursuant to that certain Credit Agreement,
dated October 31, 1997 and as amended, with ABN AMRO Bank N.V., as the
administrative agent.
SCHEDULE 2.5
Assets and Permits
1. Shareholder's Agreement, dated December 10, 1997 and as amended, by and
between del Caribe, Eco Holdings and Buenergia Gas & Power, Ltd.
2. Administrative Services Agreement, dated October 31, 1997, with EME del
Caribe (as successor in interest to KES Bermuda Inc., effective as of
December 23, 1998).
SCHEDULE 2.6
Financial Statements
The following financial statements are attached:
1. An unaudited balance sheet of del Caribe as of December 31, 2000.
2. An audited balance sheet of the Partnership as of December 31, 1999, and
related audited statements of income and cash flows for the year then
ended.
3. An audited balance sheet of the Partnership as of December 31, 2000, and
related audited statements of income and cash flows for the year then
ended.
4. An actual unaudited balance sheet of del Caribe as of May 31, 2001.
5. A pro forma unaudited balance sheet of del Caribe as of May 31, 2001.
6. An unaudited balance sheet of the Partnership as of May 31, 2001, and
related unaudited statements of income and cash flows for the five-month
period then ended.
-----Forty-five pages of financial statements omitted pursuant to the request
for confidential treatment submitted to the Securities and Exchange
Commission-----
SCHEDULE 2.7
Third Party Consents
Unless the prior written consent or waiver of the other party to each
of the following contracts is obtained, the consummation of the transactions
contemplated by the Agreement may violate, result in a material breach of,
constitute a material default or cause a material obligation, penalty, premium
or right of termination to arise or accrue under the following contracts:
1. If Buyer 1 is a utility or a utility affiliate, Power Purchase and
Operating Agreement, dated March 10, 1995 and as amended, with Puerto Rico
Electric Power Authority.
2. Credit Agreement, dated October 31, 1997 and as amended, with ABN AMRO Bank
N.V., as the administrative agent.
3. Master Guarantee and Support Instrument, dated December 23, 1998, with ABN
AMRO Bank N.V. and The Chase Manhattan Bank.
SCHEDULE 2.8
Governmental and Third Party Consents
1. Filing with Office of Industrial Tax Exemption of Puerto Rico, request for
approval of transfer of Partnership Tax exemption.
2. If Buyer 1 is a utility or a utility affiliate, Puerto Rico Electric Power
Authority waiver of requirement under the Power Purchase Agreement that the
Partnership maintain Qualifying Facility status with respect to utility
ownership level.
3. See Schedule 2.7.
SCHEDULE 2.9
Litigation
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1. ----------
2. ----------
3. ----------
4. ----------
5. ----------
6. ----------
7. ----------
SCHEDULE 2.10
Contracts
1. First Amended and Restated Limited Partnership Agreement, dated December
10, 1997 and as amended, of EcoElectrica, L.P.
2. Power Purchase and Operating Agreement, dated March 10, 1995 and as
amended, with The Puerto Rico Electric Power Authority.
3. Water Supply Agreement, dated May 6, 1997, with the Puerto Rico Aqueduct
and Sewer Authority and Puerto Rico Electric Power Authority.
4. LNG Sales Agreement, dated July 31, 1997 together with various letter
agreements related thereto, with Cabot LNG Corporation.
5. LNG Tolling Services Agreement, dated October 31, 1997, with Enron LNG
Power (Atlantic) Ltd. and Tolling Counterparty Payment Guarantee, dated
October 31, 1997.
6. LPG Storage and Services Agreement, dated October 21, 1997, with ProCaribe.
7. Operations, Maintenance and Fuel Management Agreement, dated October 31,
1997, with El Puerto Rico Operations, Inc.
8. Marine Facilities Agreement, dated April 1, 1996, with the Puerto Rico
Ports Authority.
9. Credit Agreement, dated October 31, 1997 and as amended, with ABN AMRO Bank
N.V., as the administrative agent.
10. Subordinated Reimbursement Agreement, dated October 31, 1997, with The
Chase Manhattan Bank.
11. Administrative Services Agreement, dated October 31, 1997, with EME del
Caribe (as successor in interest to KES Bermuda Inc., effective as of
December 23, 1998).
12. Amended and Restated Onshore Construction Contract, dated October 31, 1997
and together with all applicable change orders, with Enron Power I (Puerto
Rico), Inc.
13. Amended and Restated Offshore Supply Agreement, dated October 31, 1997 and
together with all applicable change orders, with Enron Equipment
Procurement Company.
14. KESI Subordinated Promissory Note, dated December 15, 1997, with Kenetech
Energy Services, which was assigned to the Stockholder pursuant to an
Assignment and Assumption Agreement, dated December 23, 1998, with KESI.
15. EDC Subordinated Promissory Note, dated December 15, 1997, with Enron
Development Corp.
16. ISDA Master Agreement, dated October 31, 1997 together with all applicable
confirmation letters, between Banque Paribas and EcoElectrica, L.P.
17. Collective Bargaining Agreement negotiated with United Steelworkers.
18. See Schedule 4.3 hereto and Schedule 4.3 to that certain Stock Purchase
Agreement, of even date herewith, among Enron Asset Holdings, LLC, Mirant
EcoElectrica Investments I, Ltd., Mirant EcoElectrica Finance and Mirant
Corporation with respect to guarantees relating to the Partnership.
19. See Schedule 2.9 ----------.
SCHEDULE 2.13
Environmental Matters
1. Notice of Violation: On April 5, 2000, the Partnership received a Notice of
Violation (the "NOV") from the United States Environmental Protection
Agency Region II (the "EPA"). The NOV alleges various violations of the PSD
permit issued to the Partnership on October 1, 1996, authorizing the
construction and operation of the project, including (i) failure to install
a SCR system prior to February 13, 2000; (ii) failure to conduct
performance testing of each of the two combustion gas turbines; (iii)
causing excess emissions of NOX; (iv) failure to operate a CEMS to measure
and record NOX concentrations prior to November 12, 1999; and (v) failure
to submit a written excess emissions report to the EPA within 30 days of
the end of the calendar quarter.
----------
2. Compliance Order: On April 10, 2000, the Partnership received a Compliance
Order from the EPA, ordering that the Partnership (i) within 10 days of the
date of receipt, submit to EPA all initial notifications for the gas
turbine and duct burners required pursuant to ss.60.7 of the General
Provisions of the NSPS; (ii) within 10 days of receipt submit to EPA a
schedule of when the initial performance tests will be conducted; (iii)
provide EPA at least 30 days prior notice of any performance tests that are
scheduled; (iv) provide a written report of the results of the performance
test to the EPA within 15 days after completion of such test and (v) comply
at all times with the requirements of 40 C.F.R. Part 60, Subparts Db and
Subpart GG. The Partnership is working with the EPA regarding the testing
and is complying with the Compliance Order.
3. Compliance Order: On May 15, 2000, the Partnership received an
Administrative Compliance Order ("ACO") from the Region 2 Offices of the
USEPA located in New York. The order was based on the NPDES permit issued
to the Partnership on January 16, 1997, becoming effective on June 1, 1997
and expiring on May 31, 2002. There are four permitted outfalls. The ACO
alleged permit violations ordering the Partnership to comply with the
monitoring and reporting requirements of the permit for Free Available
Chlorine. In addition, the ACO required that an Action Plan be submitted
and instituted that would address effluent limitations re: Dissolved
Oxygen, pH and Total Suspended Solids as well as the sampling and reporting
provisions of the permit. On February 21, 2001, the Partnership received a
letter from the Region 2 Office of the USEPA informing the Partnership that
the ACO had been "closed-out."
4. ----------
SCHEDULE 2.16
Distributions
No distributions have been made in 2001.
SCHEDULE 3.4
GOVERNMENTAL CONSENTS
FUCO filing with the Securities and Exchange Commission.
SCHEDULE 4.3
GUARANTEED INDEBTEDNESS
1. Master Guarantee and Support Instrument, dated December 23, 1998 (including
all supplements thereunder), with ABN AMRO Bank N.V. and The Chase
Manhattan Bank.
2. Guarantee Assumption Agreement, dated December 23, 1998. The Partnership
entered into an Option to Purchase Agreement with Union Carbide Caribe Inc.
("▇▇▇▇") under which the Partnership agreed to indemnify ▇▇▇▇ with respect
to certain post-closing activities (property damage or personal injury) and
environmental contamination on the plant site. This indemnity obligation
was guaranteed by Enron Power Corp. and Kenetech Energy Systems Inc.,
("KES") pursuant to a Guaranty dated November 25, 1997 (the "▇▇▇▇
Guaranty").
SCHEDULE 5.7 Partnership Effect
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---------- Corresponding
---------- Parartnership Effect
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SCHEDULE 8.1
PERSONS WITH KNOWLEDGE
1. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
2. ▇▇▇▇ ▇▇▇▇▇▇▇
3. ▇▇▇▇▇▇ ▇▇▇▇
