EXHIBIT 2.1
Southern Power has requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Southern Power has omitted such portions
from this filing and filed them separately with the Securities and Exchange
Commission. Such omissions are designated as "[**]."
PURCHASE AND SALE AGREEMENT
by and between
CP OLEANDER, LP and CP OLEANDER I, INC.,
as Sellers,
CONSTELLATION POWER, INC.
and
SP NEWCO I LLC and SP NEWCO II LLC,
as Purchasers
and
SOUTHERN POWER COMPANY, as Purchasers' Parent
for the Sale of the Partnership Interests of
OLEANDER POWER PROJECT, LP
Dated as of April 8, 2005
Table of Contents
Page No.
ARTICLE 1 DEFINITIONS....................................- 1 -
Section 1.1 Certain Defined Terms.................- 1 -
Section 1.2 Certain Interpretive Matters.........- 12 -
ARTICLE 2 PURCHASE AND SALE.............................- 13 -
Section 2.1 Purchase and Sale....................- 13 -
ARTICLE 3 CLOSING; PURCHASE PRICE.......................- 14 -
Section 3.1 Closing..............................- 14 -
Section 3.2 Initial Purchase Price...............- 15 -
Section 3.3 Adjustment to Initial Purchase Price.- 15 -
Section 3.4 Estimated Adjustment Statement.......- 15 -
Section 3.5 Final Adjustment Statement...........- 16 -
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLERS
AND CPI.......................................- 17 -
Section 4.1 Organization and Existence...........- 17 -
Section 4.2 Execution, Delivery and
Enforceability.......................- 17 -
Section 4.3 Ownership............................- 18 -
Section 4.4 Capitalization.......................- 18 -
Section 4.5 No Violation.........................- 18 -
Section 4.6 Business.............................- 19 -
Section 4.7 Compliance with Laws.................- 19 -
Section 4.8 Permits..............................- 19 -
Section 4.9 Litigation...........................- 20 -
Section 4.10 Existing Contracts...................- 21 -
Section 4.11 Personal Property....................- 21 -
Section 4.12 Real Property........................- 21 -
Section 4.13 Intellectual Property................- 22 -
Section 4.14 Brokers..............................- 22 -
Section 4.15 Environmental Compliance.............- 22 -
Section 4.16 Tax Matters..........................- 23 -
Section 4.17 Employees............................- 25 -
Section 4.18 No Subsidiaries......................- 25 -
Section 4.19 Financial Statements.................- 25 -
Section 4.20 Undisclosed Liabilities..............- 25 -
Section 4.21 Absence of Certain Financial
Changes or Events....................- 25 -
Section 4.22 Consents and Approvals...............- 26 -
Section 4.23 Labor Matters........................- 26 -
Section 4.24 Insurance............................- 27 -
Section 4.25 Reserved.............................- 27 -
- i -
Section 4.26 No Knowledge of Purchasers' Breach...- 27 -
Section 4.27 Existing Title Policy................- 27 -
Section 4.28 No Notices...........................- 27 -
Section 4.29 No Assessments.......................- 27 -
Section 4.30 Surveys..............................- 28 -
Section 4.31 Accounts Receivable..................- 28 -
Section 4.32 Defective Work.......................- 28 -
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PURCHASERS
AND PURCHASERS' PARENT........................- 28 -
Section 5.1 Organization and Existence...........- 28 -
Section 5.2 Execution, Delivery and
Enforceability.......................- 28 -
Section 5.3 No Violation.........................- 29 -
Section 5.4 Compliance with Laws.................- 29 -
Section 5.5 Litigation...........................- 29 -
Section 5.6 Brokers..............................- 30 -
Section 5.7 Financing............................- 30 -
Section 5.8 Purchasers' Qualifications...........- 30 -
Section 5.9 As Is" Sale; Disclaimer of
Representations and Warranties;
Further Acknowledgements by
Purchasers and Purchasers' Parent....- 30 -
Section 5.10 No Knowledge of Sellers' Breach......- 31 -
Section 5.11 Characteristics of Purchasers;
No Distribution......................- 31 -
Section 5.12 Inspection...........................- 32 -
Section 5.13 Consents and Approvals...............- 32 -
Section 5.14 Bankruptcy...........................- 32 -
Section 5.15 Employee Benefit Plans...............- 32 -
ARTICLE 6 COVENANTS OF EACH PARTY.......................- 32 -
Section 6.1 Efforts to Close.....................- 32 -
Section 6.2 Updating.............................- 33 -
Section 6.3 Conduct Pending Closing..............- 34 -
Section 6.4 Regulatory Approvals.................- 36 -
Section 6.5 Tax Matters..........................- 37 -
Section 6.6 Risk of Loss.........................- 41 -
Section 6.7 Insurance............................- 42 -
Section 6.8 Announcements........................- 42 -
Section 6.9 Post Closing - Further Assurances....- 43 -
Section 6.10 Post Closing - Information and
Records..............................- 43 -
Section 6.11 Use of Seller Marks..................- 44 -
Section 6.12 Excluded Assets......................- 45 -
Section 6.13 Excluded Liabilities.................- 45 -
Section 6.14 Additional Covenants of the
Purchasers and Sellers...............- 45 -
Section 6.15 LTSA Parts Transfer..................- 45 -
Section 6.16 Seller Guarantees....................- 46 -
Section 6.17 Payment of Intercompany Arrangements.- 46 -
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Section 6.18 Employees............................- 46 -
Section 6.19 Creditworthiness.....................- 47 -
ARTICLE 7 ACCESS AND CONFIDENTIALITY; TRANSITION
PROCEDURES....................................- 47 -
Section 7.1 General Access.......................- 47 -
Section 7.2 Transition Period Procedures.........- 48 -
Section 7.3 Indemnification......................- 49 -
Section 7.4 Confidential Information.............- 49 -
Section 7.5 No Other Contact.....................- 50 -
ARTICLE 8 INDEMNIFICATION...............................- 50 -
Section 8.1 Exclusivity..........................- 50 -
Section 8.2 Indemnification by Sellers and CPI...- 50 -
Section 8.3 Indemnification by Purchasers........- 51 -
Section 8.4 Notice of Claim......................- 52 -
Section 8.5 Defense of Third Party Claims........- 52 -
Section 8.6 Cooperation..........................- 53 -
Section 8.7 Mitigation and Limitation of Claims..- 53 -
Section 8.8 Adjustment to Purchase Price.........- 54 -
Section 8.9 Specific Performance.................- 54 -
Section 8.10 Survival; Time Limitation for
Indemnification......................- 54 -
ARTICLE 9 PURCHASER'S CONDITIONS TO CLOSING.............- 55 -
Section 9.1 Compliance with Provisions...........- 55 -
Section 9.2 Reserved.............................- 55 -
Section 9.3 No Restraint.........................- 55 -
Section 9.4 Required Regulatory Approvals and
Consents.............................- 55 -
Section 9.5 Representations and Warranties.......- 56 -
Section 9.6 Officer's Certificate................- 56 -
Section 9.7 Material Adverse Effect..............- 56 -
Section 9.8 Reserved.............................- 56 -
Section 9.9 No Termination.......................- 56 -
Section 9.10 Receipt of Other Documents...........- 56 -
Section 9.11 Title Insurance......................- 57 -
Section 9.12 Certificates of Occupancy............- 58 -
Section 9.13 Certificates of Non-Foreign Status...- 58 -
Section 9.14 Units Operability....................- 58 -
ARTICLE 10 SELLERS' CONDITIONS TO CLOSING................- 58 -
Section 10.1 Compliance with Provisions...........- 58 -
Section 10.2 Reserved.............................- 58 -
Section 10.3 No Restraint.........................- 58 -
Section 10.4 Required Regulatory Approvals and
Consents.............................- 58 -
Section 10.5 Representations and Warranties.......- 59 -
- iii -
Section 10.6 Officer's Certificate................- 59 -
Section 10.7 [**].................................- 59 -
Section 10.8 No Termination.......................- 59 -
Section 10.9 Receipt of Other Documents...........- 59 -
ARTICLE 11 TERMINATION...................................- 60 -
Section 11.1 Termination..........................- 60 -
Section 11.2 Procedure and Effect of Termination..- 61 -
ARTICLE 12 GENERAL PROVISIONS............................- 61 -
Section 12.1 Expenses.............................- 61 -
Section 12.2 Entire Document; Modification or
Amendment............................- 61 -
Section 12.3 Schedules and Exhibits...............- 61 -
Section 12.4 Counterparts.........................- 62 -
Section 12.5 Severability.........................- 62 -
Section 12.6 Assignability........................- 62 -
Section 12.7 Captions.............................- 62 -
Section 12.8 Governing Law and Forum..............- 62 -
Section 12.9 Notices..............................- 62 -
Section 12.10 No Third Party Beneficiaries.........- 64 -
Section 12.11 No Relationship......................- 64 -
Section 12.12 Construction of Agreement............- 64 -
Section 12.13 Indemnification Not Affected by
Knowledge; No Waiver.................- 65 -
Section 12.14 Waiver of Compliance.................- 65 -
Section 12.15 Consents Not Unreasonably Withheld...- 65 -
Section 12.16 Survival.............................- 65 -
Section 12.17 Time of Essence......................- 66 -
Section 12.18 Purchasers' Parent Support...........- 66 -
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EXHIBITS AND SCHEDULES
Item Description
Exhibit 1.1 Assignment and Assumption Agreement (Excluded Assets
and Liabilities)
Exhibit 1.2 Assignment and Assumption Agreement
Schedule 1.1A Existing Title Policy
Schedule 1.1B Intercompany Arrangements
Schedule 1.1C Sellers' Persons With Knowledge
Schedule 1.1D Purchasers' Persons With Knowledge
Schedule 1.1E Liens
Schedule 1.1F Purchasers' Required Consents
Schedule 1.1G Purchasers' Required Regulatory Approvals
Schedule 1.1H Sellers' Required Consents
Schedule 1.1I Sellers' Required Regulatory Approvals
Schedule 3.4(a) OPP Net Working Capital Adjustment
Schedule 3.4(a)(i) Parts Inventory
Schedule 3.4(a)(ii) Demineralized Water
Schedule 3.4(a)(iii) LTSA Capital Spares
Schedule 4.4 Capitalization
Schedule 4.7 Compliance With Laws
Schedule 4.8 Permits
Schedule 4.9 Litigation
Schedule 4.10(a) Existing Contracts
Schedule 4.10(b) Exceptions Related to Certain Existing Contracts
- v -
Schedule 4.11 Personal Property
Schedule 4.12 Real Property Owned by OPP
Schedule 4.15 Environmental Laws
Schedule 4.16 Tax Matters
Schedule 4.16(e) Tax Deficiencies Being Contested by OPP
Schedule 4.24 Seller Insurance Policies
Schedule 6.12(a) Excluded Assets
Schedule 6.16 Seller Guarantees
Schedule 6.18 Employees
Schedule 7.2 Transition Plan
Schedule 9.11 Title Policy Endorsements
- vi -
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT, dated as of April 8, 2005
(the "Effective Date"), is made and entered into by and between CP Oleander, LP
("CPO"), a limited partnership organized under the laws of the State of
Maryland, and CP Oleander I, Inc. ("CPOI"), a Maryland corporation (each of the
foregoing sometimes individually referred to herein as a "Seller", and
collectively, as the "Sellers"), Constellation Power, Inc., a Maryland
corporation ("CPI") and SP Newco I LLC, a Delaware limited liability company
("GP Purchaser") and SP Newco II LLC, a Delaware limited liability company ("LP
Purchaser") and Southern Power Company, a Delaware corporation ("Purchasers'
Parent") (each of the foregoing sometimes individually referred to herein as a
"Party" and, collectively, as the "Parties").
RECITALS
A. CPO is the record and beneficial owner of a ninety-nine percent
(99%) limited partnership interest (the "LP Interest") in Oleander Power
Project, LP, a limited partnership organized under the laws of the State of
Florida ("OPP").
B. CPOI is the record and beneficial owner of a one percent (1%)
general partnership interest (the "GP Interest") in OPP.
C. The LP Interest and the GP Interest may sometimes be referred to
herein as the "Partnership Interests".
D. OPP owns and operates the Oleander Station (as defined in Section
1.1).
E. CPI currently employs all of the employees employed at the Oleander
Station.
▇. ▇▇▇▇▇▇▇ desire to sell to Purchasers, and Purchasers desire to
purchase and acquire from Sellers, all of the Partnership Interests (the
"Transactions") on the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the foregoing recitals and
the agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, do hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1. Certain Defined Terms. The following terms when used in this
Agreement (or in the Schedules and Exhibits to this Agreement) with initial
letters capitalized have the meanings set forth below:
"Accounts Receivable" means the amounts due for goods, services and
sales of capacity and energy provided to third parties through the Closing Date,
determined in accordance with GAAP.
- 1 -
"Affiliate" of a specified Person means any other Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by or
is under common control with the specified Person. For the purposes of this
definition, "control," when used with respect to any specified Person, means the
possession of the power to direct the management or policies of the specified
Person, directly or indirectly, whether through the ownership of voting
securities, partnership or limited liability company interests, by contract or
otherwise.
"Agreement" means this Purchase and Sale Agreement, together with the
Schedules and Exhibits hereto.
"Annexation and Sewer Agreement" means that certain "Annexation and
Sewer Agreement" by and between the City of Cocoa, Florida and Oleander Power
Project, L.P., dated February 8, 2000.
"Applicable Laws" means all laws, statutes, rules, regulations,
ordinances, orders, judgments, writs, injunctions, licenses, Permits, the
Stipulated Settlement Agreement, the Conservation Easement, the Annexation and
Sewer Agreement, decrees or codes of Governmental Authorities which apply to
either Seller, CPI, Purchasers, Purchasers' Parent, OPP, the Oleander Station,
this Agreement, or the Transactions.
"Assignment and Assumption Agreement (Excluded Assets and Liabilities)"
means that certain Assignment and Assumption Agreement, substantially in the
form of Exhibit 1.1, to be executed and delivered by CPI and OPP at Closing.
"Audited Financial Statements" has the meaning set forth in Section
4.19.
"Balance Sheet" has the meaning set forth in Section 4.19.
"Business" means the business and operations of OPP.
"Business Day" means a day other than Saturday, Sunday or a day on
which banks in the City of New York, New York are required to be closed for
business.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" has the meaning set forth in Section 7.4(a).
"Confidentiality Agreement" means that certain confidentiality
agreement, dated September 28, 2004, entered into between Purchasers (or an
Affiliate of Purchasers) and Constellation Power, Inc., in connection with the
Transactions.
"Conservation Easement" means that certain Conservation Easement from
Oleander Power Project, L.P., to the State of Florida Department of
- 2 -
Environmental Protection, recorded in Official Records Book 4199, page 1281, and
re-recorded in Official Records Book 4208, page 1368, in the Public Records of
Brevard County, Florida.
"CPI" has the meaning set forth in the introductory paragraph of this
Agreement.
"CPO" has the meaning set forth in the introductory paragraph of this
Agreement.
"CPOI" has the meaning set forth in the introductory paragraph of this
Agreement.
"Disclosing Party" has the meaning set forth in Section 7.4(a).
"Dollars" or "$" means dollars in lawful currency of the United States.
"Due Diligence Materials" means (a) the due diligence materials
distributed or otherwise made available in written or digital form by or on
behalf of Sellers to Purchasers including, without limitation, (i) all written
answers to questions provided by or on behalf of Sellers to Purchasers, (ii) all
materials provided by Sellers or their Affiliates on compact disks related to
the Transactions, (iii) all documents and materials made available to Purchasers
during any visit to the Oleander Station, and (b) the additional materials
referred to in Schedule 1.1A.
"Effective Date" has the meaning set forth in the preamble to this
Agreement.
"Effective Time" has the meaning set forth in Section 3.1.
"Employee" shall have the meaning set forth in Section 6.18(a).
"Employee Benefit Plans" means any retirement, pension, profit sharing,
deferred compensation, stock bonus, 401(k), savings, bonus, incentive,
cafeteria, medical, dental, vision, hospitalization, life insurance, accidental
death and dismemberment, medical expense reimbursement, dependent care
assistance, tuition reimbursement, disability, sick pay, holiday, vacation,
severance, change of control, stock purchase, stock option, restricted stock,
phantom stock, stock appreciation rights, fringe benefit or other employee
benefit plan, fund, policy, program, contract, arrangement or payroll practice
of any kind (including any "employee benefit plan," as defined in Section 3(3)
of ERISA) or any employment, consulting or personal services contract, whether
written or oral, qualified or nonqualified, funded or unfunded, or domestic or
foreign, (a) sponsored, maintained or contributed to by any of CPI, OPP, the
Sellers or an ERISA Affiliate or to which any of the foregoing is a party, (b)
covering or benefiting any current or former officer, employee, agent, director
or independent contractor of any of CPI, OPP, the Sellers or an ERISA Affiliate
(or any dependent or beneficiary of any such individual), or (c) with respect to
which any of CPI, OPP, the Sellers or an ERISA Affiliate has (or could have) any
obligation or liability.
"Encumbrances" means any and all mortgages, pledges, claims, liens,
security interests, options, warrants, purchase rights, rights of first refusal,
conditional and installment sales agreements, easements, equities, charges,
activity and use restrictions and limitations, covenants, encroachments,
exceptions, rights-of-way, deed restrictions, defects or imperfections of title,
encumbrances and charges of any kind, and any restrictions on rights to
transfer, to use, or to receive income or on voting rights.
- 3 -
"Environmental Laws" means all federal, state, and local laws,
regulations, rules, ordinances, codes, decrees, judgments, directives, or
judicial or administrative orders or common law relating to pollution or
protection of the environment, plants, animals, natural resources or human
health and safety, as the same may be amended or adopted, including, without
limitation, laws relating to Releases or threatened Releases of Hazardous
Substances (including, without limitation, Releases to ambient air, surface
water, groundwater, land, surface and subsurface strata) or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, Release,
transport, disposal or handling of Hazardous Substances, including, but not
limited to: the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 et seq.; the Resource Conservation and Recovery Act, 42
U.S.C. ss. 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. ss.
1251 et seq.; the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Hazardous
Materials Transportation Act, 49 U.S.C. ss. 1471 et seq.; the Toxic Substances
Control Act, 15 U.S.C. ▇▇.▇▇. 2601 through 2629; the Oil Pollution Act, 33
U.S.C. ss. 2701 et seq.; the Emergency Planning and Community Right-to-Know Act,
42 U.S.C. ss. 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. ▇▇.▇▇. 300f
through 300j; the Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq.;
the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. ss. 1201 et
seq.; any similar laws of the State of Florida or of any other Governmental
Authority having jurisdiction over the site at which the Oleander Station is
located or otherwise applicable to the Oleander Station or its owner or
operator; provided, however, that "Environmental Laws" shall not include the
Stipulated Settlement Agreement, the Conservation Easement and the Annexation
and Sewer Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any person or entity that, together with any of
Sellers, OPP or CPI, is treated as a single employer under Section 414(b), (c),
(m) or (o) of the Code.
"Estimated Adjustment Statement" has the meaning set forth in Section
3.4.
"Excluded Assets" has the meaning provided in Section 6.12.
"Excluded Liabilities" has the meaning set forth in Section 6.13.
"Existing Contracts" means the contracts, agreements, arrangements,
leases, real property covenants, restrictions, reservations and title
restrictions, easements of any nature, other than the Permits, to which (a) OPP
is a party or by or to which it, the Oleander Station, or any other assets owned
or used by OPP, is or are bound or subject to or (b) either Seller or CPI or any
Affiliate of any of them is a party and by which OPP or the Oleander Station or
any related assets are bound or to which they are subject.
"Existing Title Policy" means the title policy issued to OPP listed in
Schedule 1.1A.
"FERC" means the Federal Energy Regulatory Commission or its successor.
"Final Adjustment Statement" has the meaning set forth in Section 3.5.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
- 4 -
"GEII" means General Electric International, Inc.
"Governmental Authority" means any federal, state, local, municipal or
foreign (a) governmental, regulatory or administrative agency, commission, body
or other authority exercising or entitled to exercise any administrative,
executive, judicial, legislative, police, regulatory, custodial, or authority or
power; and (b) court or governmental tribunal.
"GP Interests" has the meaning set forth in the Recitals to this
Agreement.
"GP Purchaser" has the meaning set forth in the introductory paragraph
of this Agreement.
"Hazardous Substances" means any chemical, material or substance in any
form, whether solid, liquid, gaseous, semisolid, or any combination thereof,
whether waste material, raw material, chemical, finished product, byproduct, or
any other material or article, that is listed or regulated under applicable
Environmental Laws as a "hazardous" or "toxic" substance or waste, chemical,
waste or other material, or as a "contaminant" or "pollutant" (or words of
similar meaning or regulatory effect) or is otherwise listed or regulated under
applicable Environmental Laws because it poses a hazard to human health or the
environment, including without limitation, petroleum products, asbestos, urea
formaldehyde foam insulation, and lead-containing paints or coatings.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended from time to time.
"Income Tax" means any Tax imposed by any Governmental Authority based
upon, measured by or calculated with respect to net income or profits (including
capital gains Taxes and minimum Taxes) together with any interest, penalties or
additions attributable to such Tax.
"Indemnifiable Claim" has the meaning set forth in Section 8.7.
"Indemnitee" has the meaning set forth in Section 8.4.
"Indemnitor" has the meaning set forth in Section 8.4.
"Independent Accounting Firm" means Ernst & Young, or such other
nationally recognized, independent accounting firm as mutually agreed to by
Sellers and Purchasers for purposes of this Agreement.
"Initial Purchase Price" has the meaning set forth in Section 3.2.
"Intercompany Arrangements" means, collectively, any contract or
arrangement in respect of any intercompany transaction between OPP, on the one
hand, and Sellers or any of their Affiliates (other than OPP) on the other hand,
whether or not such transaction relates to any contribution to capital, loan,
the provision of goods or services, tax sharing arrangements, payment
arrangements, intercompany advances, charges or balances or the like, and
including without limitation, the contracts and arrangements set forth in
Schedule 1.1B.
- 5 -
"IRS" means the Internal Revenue Service.
"Knowledge" or similar terms used in this Agreement with respect to a
Party means: (a) in the case of (i) Sellers or CPI, the actual knowledge of the
individuals listed in Schedule 1.1C as of the Effective Date (or, with respect
to the officer's certificate delivered pursuant to Section 9.6, the date of
delivery of the certificate); and (b) in the case of Purchasers or Purchasers'
Parent, the actual knowledge of the individuals listed in Schedule 1.1D as of
the Effective Date (or, with respect to the officer's certificate delivered
pursuant to Section 10.6, the date of delivery of the certificate).
"LP Interests" has the meaning set forth in the Recitals to this
Agreement.
"LP Purchaser" has the meaning set forth in the introductory paragraph
of this Agreement.
"Losses" has the meaning set forth in Section 8.2(a).
"LTSA" means, collectively, that certain Long Term Service Agreement
between GEII and CPI, as amended and restated as of June 21, 2002, and all
amendments thereto.
"LTSA Capital Spares" shall mean those LTSA capital spares listed in
Schedule 3.4(a)(iii).
"Material Adverse Effect" means (a) any event, circumstance or
condition materially impairing a Party's authority, right, or ability to (i)
consummate the Transactions, or (ii) transfer the Partnership Interests as
contemplated hereby, or (b) any change in, or effect on, OPP or the Oleander
Station that is materially adverse to the finance, operations or physical
condition of OPP or the Oleander Station, but excluding:
(1) any change or effect generally affecting the international,
national, regional or local electric generating, transmission or distribution
industry as a whole;
(2) any change or effect resulting from changes in the international,
national, regional or local wholesale or retail markets for electric power;
(3) any change or effect resulting from the international, national,
regional or local markets for fuel used at the Oleander Station;
(4) any change in or effect on the North American, national, regional
or local transmission system;
(5) any change or changes cured (including by the payment of money)
before the earlier of the Closing and the termination of the Agreement pursuant
to Section 11.1;
(6) any order or act of any Governmental Authority applicable to
providers of generation, transmission or distribution of electricity generally
that imposes restrictions, regulations or other requirements thereon, except to
the extent specifically relating to OPP, the Oleander Station or the
Transactions;
- 6 -
(7) any change or effect resulting from action or inaction by a
Governmental Authority with respect to retail access in the State of Florida;
(8) any change or effect resulting from one or more changes in the
rules established by any independent system operator, regional transmission
organization or reliability entity that exercises any control over OPP, the
Oleander Station, or facilities associated therewith, including interconnection
facilities on which the Oleander Station relies;
(9) any change or effect resulting from changes in the national or
international securities markets;
(10) any change or effect resulting from or associated with acts of
war, national disaster, acts of God, or terrorism that does not directly affect
the Oleander Station;
(11) the financial or other condition of the purchasers or their
Affiliates under the Power Purchase Agreements;
(12) any change in any Applicable Laws; or
(13) any change in the financial condition or results of operations of
OPP or the Oleander Station caused by the pending sale of the Partnership
Interests to Purchasers as contemplated by this Agreement;
provided, that, subject to those events described in items (1) through (13)
above, any event, circumstance, condition, change or effect described in the
opening paragraph of this definition that, individually or in the aggregate,
causes or would reasonably be likely to result in costs to OPP in an amount of
Fifteen Million Dollars ($15,000,000) or more shall in all cases constitute a
"Material Adverse Effect" (the Parties acknowledging that the foregoing Fifteen
Million Dollars ($15,000,000) is not intended to be a floor with respect to the
determination as to whether a "Material Adverse Effect" has occurred); provided
further, that any determination as to whether any condition or other matter has
a Material Adverse Effect shall be made only after taking into account proceeds
received under all effective insurance coverages (including self-insurance, if
applicable) and effective third party indemnification with respect to such
condition or matter.
"Net Worth" means the dollar value calculated by subtracting
liabilities from total assets (excluding goodwill and other intangible assets
described in FASB Statement 142) as such terms are determined in accordance with
GAAP.
"Notice of Claim" has the meaning set forth in Section 8.4.
"Oleander Station" means the electricity generation facilities,
including any interconnection and transmission facilities, owned by OPP,
commonly known as the Oleander Power Project located in Cocoa, Florida and all
related personal and real property and interests therein or related thereto,
including without limitation (a) any LTSA Capital Spares owned by CPI that are
to be transferred to OPP pursuant to Section 6.15 and (b) the "Property," as
that term is defined in the Existing Title Policy.
"OPP" has the meaning set forth in the Recitals to this Agreement.
- 7 -
"ordinary course of business" means, with respect to OPP, the operation
of the Oleander Station in the ordinary course consistent with past custom and
practice.
"Organizational Documents" of a Party means the certificate of
formation, articles of incorporation, or certificate of limited partnership, as
the case may be, and the by-laws, limited liability company agreement or limited
partnership agreement, as the case may be.
"Owned Real Property" has the meaning set forth in Section 4.12.
"Party" and "Parties" have the meaning set forth in the introductory
paragraph of this Agreement.
"Partnership Interests" has the meaning set forth in the Recitals to
this Agreement.
"Permits" has the meaning provided in Section 4.8.
"Permitted Encumbrances" means:
(a) liens for Property Taxes and other governmental charges and
assessments which are not yet due and payable, or Taxes the validity of which is
being contested in good faith by appropriate proceedings;
(b) all exceptions set forth in the Existing Title Policy, that certain
Pipeline Easement from Oleander Power Project Limited Partnership to Florida Gas
Transmission Company dated October 7, 2002, and recorded in Official Records
Book 4736, Page 622, of the Public Records of Brevard County, Florida, and that
certain Water Line and Ingress/Egress Easement from Oleander Power Project
Limited Partnership to City of Cocoa, Florida dated April 3, 2002, and recorded
in Official Records Book 4977, Page 3889, of the Public Records of Brevard
County, Florida, to the extent the same are not otherwise a Permitted
Encumbrance under another clause of this definition;
(c) all exceptions, restrictions, easements, charges, rights-of-way and
monetary and non-monetary encumbrances which are set forth in any Permit;
(d) mechanics', carriers', workers', repairers' and other similar
liens, up to Fifty Thousand Dollars ($50,000) in the aggregate, and the rights
of customers, suppliers and subcontractors arising or incurred in the ordinary
course of business;
(e) purchase money security interests in respect of personal property
arising or incurred in the ordinary course of business, up to Fifty Thousand
Dollars ($50,000) in the aggregate;
(f) zoning, entitlement, conservation restriction and other land use
and environmental regulations of any Governmental Authority;
(g) Encumbrances of record (other than Encumbrances securing
indebtedness of Sellers for money borrowed which are not covered by any other
clause of this definition) that would not, individually or in the aggregate,
have a Material Adverse Effect;
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(h) restrictions and regulations imposed by any Governmental Authority
or any local, state, regional, national or international reliability council, or
any independent system operator or regional transmission organization with
jurisdiction or control over either OPP or the Oleander Station;
(i) Encumbrances with respect to the assets of Oleander Station created
by or resulting from the acts or omissions of Purchasers;
(j) claims, equities and other Encumbrances arising under the Existing
Contracts which will be and are discharged or released either prior to, or
simultaneously with, the Closing;
(k) liens listed in Schedule 1.1E;
(l) such other Encumbrances (not described in the other subsections of
this definition) or imperfections in or failures of title that would not,
individually or in the aggregate, have a Material Adverse Effect and which in
any event do not exceed One Hundred Thousand Dollars ($100,000) in the
aggregate; and
(m) any restrictions contained in or imposed by Sellers' Required
Regulatory Approvals, Sellers' Required Consents, Purchasers' Required
Regulatory Approvals and Purchasers' Required Consents.
"Person" means any individual, partnership, joint venture, corporation,
limited liability company, trust, association or unincorporated organization,
any Governmental Authority, or any other entity.
"Personal Property" has the meaning set forth in Section 4.11.
"Power Purchase Agreements" means collectively the Power Purchase
Agreement, dated as of February 1, 2000, between OPP and Seminole Electric
Cooperative, Inc., as amended, and the Energy Services Agreement (No. 1), dated
as of April 30, 2001, between Florida Power & Light Company and OPP, as amended.
"Property Taxes" has the meaning set forth in Section 6.5(b).
"Prudent Utility Practices" means, any of the practices, methods and
activities generally accepted or approved by a significant portion of the
electric utility industry during the relevant time period as good practices
applicable to generating facilities of similar design, size and capacity or any
of the practices, methods or activities which, in the exercise of reasonable
judgment in light of the facts known at the time the decision was made (other
than the fact that such operator is in the process of selling the facility),
could have been expected to accomplish the desired result at a reasonable cost
consistent with good business practices, reliability, safety, expedition and
Applicable Laws. Prudent Utility Practices are not intended to be limited to the
optimal practices, methods or acts to the exclusion of all others, but rather to
be practices, methods or acts generally accepted or approved by a significant
portion of the electric utility industry during the relevant time period in the
region covered by the Florida Reliability Coordinating Council or its successor.
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"Purchase Price" has the meaning set forth in Section 3.3.
"Purchaser" means either the LP Purchaser or the GP Purchaser, as the
case may be.
"Purchaser Claims" has the meaning set forth in Section 8.2(a).
"Purchaser Indemnified Parties" has the meaning set forth in Section
8.2(a).
"Purchasers" means LP Purchaser and GP Purchaser.
"Purchasers' Parent" has the meaning set forth in the introductory
paragraph of this Agreement.
"Purchasers' Required Consents" means the consent of any Person
specified in Schedule 1.1F, other than a Governmental Authority, necessary for
Purchasers' consummation of the Transactions.
"Purchasers' Required Regulatory Approvals" means approval of the
Transactions by any Governmental Authority specified in Schedule 1.1G.
"Receiving Party" has the meaning set forth in Section 7.4(a).
"Recognized Environmental Condition" means the presence or Release to
the environment (including air, surface water, groundwater, sediments, land,
surface, soil and subsurface strata or within any building, structure, facility
or fixture), at, to or from the Oleander Station, of Hazardous Substances,
including any migration of Hazardous Substances through air, soil, sediments,
surface water or groundwater at, to or from the Oleander Station regardless of
when such presence or Release occurred or is discovered.
"Records" has the meaning set forth in Section 6.10(a).
"Release" means any release, spill, leak, discharge, abandonment,
disposal, pumping, pouring, emitting, emptying, injecting, leaching, dumping,
depositing, dispersing, allowing to escape or migrate into or through the
environment (including ambient air, surface water, ground water, land surface,
subsurface strata, soil and sediments, or within any building, structure,
facility or fixture) of any Hazardous Substance, including the abandonment or
discarding of Hazardous Substances in barrels, drums, or other containers.
"Remediation" means any action of any kind to address a Recognized
Environmental Condition or Release or threatened Release or the presence of
Hazardous Substances on or in the air, soil, surface water, groundwater, land
surface, subsurface strata or sediments, including the following: (a)
monitoring, investigation, cleanup, containment, remediation, removal,
mitigation, response or restoration work; (b) obtaining any permits, consents,
approvals or authorizations of any Governmental Authority necessary to conduct
any such work; (c) preparing and implementing any plans or studies for such
work; (d) obtaining a written notice from a Governmental Authority with
jurisdiction under applicable Environmental Laws that no material additional
work is required by such Governmental Authority; (e) any response to, or
preparation for, any investigation, inquiry, order, hearing or other proceeding
by or before any Governmental Authority with respect to any such Recognized
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Environmental Condition, Release or threatened Release or presence of Hazardous
Substances; (f) cost recovery, indemnification or reimbursement for such actions
performed by a Governmental Authority or other third party and (g) any other
activities reasonably determined by Sellers or OPP to be necessary or
appropriate or required under Environmental Laws to address a Recognized
Environmental Condition, the presence of or Release of Hazardous Substances in
the air, soil, surface water, groundwater, land surface, subsurface strata or
sediments at the Oleander Station or any other off-site location.
"Schedules" means the disclosure schedules attached to this Agreement.
"Securities Act" has the meaning set forth in Section 5.11.
"Seller" and "Sellers" have the meaning set forth in the introductory
paragraph of this Agreement.
"Seller Claims" has the meaning set forth in Section 8.3(a).
"Seller Guarantees" means any and all obligations relating to the
contracts, agreements, guarantees, letters of credit, bonds and other credit
assurances of a comparable nature of Sellers or any of their Affiliates (other
than OPP) for the benefit of any counterparties of OPP and listed or described
in Schedule 6.16.
"Seller Indemnified Parties" has the meaning set forth in Section
8.3(a).
"Seller Insurance Policies" means all insurance policies set forth on
Schedule 4.24.
"Seller Marks" means the name "Constellation", "Constellation Energy",
"Constellation Power" and all other trade names, trademarks and service marks
owned by Sellers or any of their Affiliates, excluding the names "Oleander,"
"Oleander Station" and "Oleander Power Project."
"Sellers' Required Consents" means (a) the consent of any Person
specified in Schedule 1.1H other than a Governmental Authority necessary for
Sellers' consummation of the Transactions, and (b) the consent of any Person
required by any of the Existing Contracts or the Permits for Sellers'
consummation of the Transactions.
"Sellers' Required Regulatory Approvals" means approval of the
Transactions by any Governmental Authority specified in Schedule 1.1I.
"Stipulated Settlement Agreement" means that certain Stipulated
Settlement Agreement, dated August 12, 1999, between the Board of County
Commissioners of Brevard County, Florida and OPP and Constellation Power
Development, Inc., a Maryland Corporation.
"Tax" or "Taxes" means any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property (including
assessments, fees or other charges based on the use or ownership of real
property), personal property, transactional, sales, use, transfer, registration,
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value added, alternative or add-on minimum, estimated tax, or other tax of any
kind whatsoever, or any liability for unclaimed property or escheatment under
common law principles, including any interest, penalty or addition thereto,
whether disputed or not, including, without limitation, any item for which
liability arises as a transferee or successor-in-interest.
"Tax Proceeding" has the meaning set forth in Section 6.5(d).
"Tax Return" means any return, report, information return, declaration,
claim for refund, or other document, together with all amendments and
supplements thereto (including all related or supporting information), required
to be filed with any Governmental Authority responsible for the administration
of Applicable Laws governing Taxes.
"Termination Date" has the meaning set forth in Section 11.1(b).
"Third Party Claim" means a claim by a Person that is not included
among the Seller Indemnified Parties or the Purchaser Indemnified Parties,
including any claim for the costs of conducting Remediation, or seeking an order
or demanding that a Person undertake Remediation.
"Transactions" has the meaning set forth in the Recitals to this
Agreement.
"Transfer Tax" means any sales Tax, transfer Tax, transaction Tax,
conveyance fee, recording fee, use Tax, stamp Tax, stock transfer Tax or other
similar Tax, including, without limitation, any liability or obligation arising
as a result of the Transactions, including any related penalties, interest and
additions thereto, but excluding for all purposes of this definition of
"Transfer Tax", Income Taxes.
"Transition Period" means the period commencing with the Effective Date
and ending as of the Effective Time (or earlier termination of this Agreement).
"Treasury Regulations" means proposed, temporary and final regulations
of the Department of Treasury promulgated under the Code.
"Unaudited Financial Statements" has the meaning set forth in Section
4.19.
"Units" means the gas turbine-generators located at and comprising part
of the Oleander Station, or any of them, as the context may require.
Section 1.2 Certain Interpretive Matters. In this Agreement, unless the
context otherwise requires:
(a) the singular number includes the plural number and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity;
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(c) reference to any agreement (including this Agreement), document or
instrument means such agreement, document or instrument as amended or modified
and in effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof;
(d) reference to any Article, Section, Schedule or Exhibit means such
Article, Section, Schedule or Exhibit of or to this Agreement, and references in
any Article, Section, Schedule, Exhibit or definition to any clause means such
clause of such Article, Section, Schedule, Exhibit or definition;
(e) any accounting term used and not otherwise defined in this
Agreement has the meaning assigned to such term in accordance with GAAP;
(f) "hereunder," "hereof," "hereto" and words of similar import are
references to this Agreement as a whole and not to any particular Section or
other provision hereof or thereof;
(g) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding or
succeeding such term;
(h) relative to the determination of any period of time, "from" means
"from and including," "to" means "to but excluding" and "through" means "through
and including;"
(i) reference to any law (including statutes and ordinances) means such
law as amended, modified codified or reenacted, in whole or in part, and in
effect from time to time, including rules and regulations promulgated
thereunder; and
(j) any agreement, instrument, insurance policy, statute, regulation,
rule or order defined or referred to herein or in any agreement or instrument
that is referred to herein means such agreement, instrument, insurance policy,
statute, regulation, rule or order as from time to time amended, modified, or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes, regulations, rules or orders) by
succession of comparable successor statutes, regulations, rules or orders and
references to all attachments thereto and instruments incorporated therein.
ARTICLE 2
PURCHASE AND SALE
Section 2.1 Purchase and Sale. Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement, at the Closing,
(a) CPO shall sell and convey the LP Interests to LP Purchaser;
(b) CPOI shall sell and convey the GP Interests to GP Purchaser;
(c) LP Purchaser shall purchase and receive the LP Interests from
CPI; and
(d) GP Purchaser shall purchase and receive the GP Interests from
CPOI.
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ARTICLE 3
CLOSING; PURCHASE PRICE
Section 3.1 Closing. Subject to the terms and conditions of this
Agreement, proceedings for the consummation of the Transactions (the "Closing")
will take place at the offices of Constellation Energy Group, Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, at 10:00 a.m. local time, on a
mutually acceptable date within ten (10) Business Days following the date on
which the conditions set forth in Article 9 and Article 10, other than those
conditions that by their nature are to be satisfied at the Closing, have been
either satisfied or waived by the Party for whose benefit such conditions exist,
or at such other time and place as the Parties may mutually agree, and in no
event later than the Termination Date. The date on which such proceedings
actually occur is referred to herein as the "Closing Date" and the Closing shall
be effective for all purposes hereunder as of 11:59 p.m. local Baltimore,
Maryland time on the Closing Date (the "Effective Time"). Subject to the
provisions of Article 11, failure to consummate the purchase and sale provided
for in this Agreement on the date and time and at the place determined pursuant
to this Section 3.1 will not result in the termination of this Agreement and
will not relieve any Party of any obligation under this Agreement. At the
Closing, and subject to the terms and conditions of this Agreement, the
following will occur, with all such actions, and all other actions to be taken
at the Closing in accordance with this Agreement to occur simultaneously:
(a) Deliveries by Sellers. At Closing, Sellers shall execute and
deliver, or cause to be executed and delivered, to Purchasers the following:
(i) instruments of assignment which are in a form sufficient
to evidence and effect the valid transfer of full title (A) of the LP
Interests to the LP Purchaser and (B) the GP Interests to the GP
Purchaser, in each case, free and clear of all Encumbrances;
(ii) the Assignment and Assumption Agreement (Excluded Assets
and Liabilities), properly executed by each of the Sellers;
(iii) other than as set forth on Schedule 6.12(a), the
partnership books, company records and files of OPP related to the
Oleander Station and the records of CPI related to the Transferred
Employees (as permitted by Applicable Laws) and those related to the
operation and maintenance of the Oleander Station; provided, however,
that Sellers shall not be required to deliver any (and may redact from
the foregoing) information to the extent that the disclosure of such
information would (A) violate any court or administrative order, (B)
disclose information about the activities of Sellers or their
Affiliates (other than OPP) where such information is unrelated to OPP,
the Business or the Oleander Station, or (C) disclose proprietary
information of Sellers or any of their Affiliates pertaining to
proprietary safety, operating and maintenance procedures and manuals,
energy project evaluation, energy or natural gas price curves or
projections, or other economic predictive models;
(iv) evidence of termination of all Intercompany Arrangements
in such a manner that there is and will be no claims against or
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liability to OPP arising out of such Intercompany Arrangements or the
termination thereof, all as, and in a manner, reasonably satisfactory
to Purchasers (and subject to Section 6.17);
(v) those documents required to be delivered to Purchasers by
Sellers pursuant to Article 9;
(vi) any other documents or instruments as may be reasonably
necessary to effect or facilitate the Transactions to the extent
reasonably requested by Purchasers of Sellers not less than five (5)
Business Days prior to the Closing; and
(vii) an assignment and assumption agreement substantially in
the form of Exhibit 1.2, properly executed by CPI and OPP, pursuant to
which (A) all rights and obligations of CPI under the LTSA were
assigned and delegated to OPP prior to the Closing and (B) title to any
LTSA Capital Spares owned by CPI were transferred to OPP prior to the
Closing;
(b) Deliveries by Purchasers. At Closing, Purchasers shall deliver, or
cause to be delivered, to Sellers the following:
(i) (A) the LP Purchaser shall deliver to Sellers ninety-nine
percent (99%) of the Initial Purchase Price, and (B) the GP Purchaser
shall deliver to Sellers one percent (1%) of the Initial Purchase
Price, in each case, subject to increase or reduction by ninety-nine
percent (99%) and one percent (1%), respectively, of the amount
determined pursuant to Section 3.4, by wire transfer of immediately
available funds to an account or accounts designated by Sellers in
writing not less than two (2) Business Days prior to the Closing Date;
(ii) those documents required to be delivered to Sellers by
Purchasers pursuant to Article 10; and
(iii) any other documents or instruments as may be reasonably
necessary to effect or facilitate the Transactions to the extent
reasonably requested by Sellers of Purchasers not less than five (5)
Business Days prior to the Closing.
Section 3.2 Initial Purchase Price. If the Closing occurs on or prior
to June 1, 2005, then the initial purchase price for the Partnership Interests
shall be Two Hundred and Six Million Dollars ($206,000,000) (the "Initial
Purchase Price"). If the Closing occurs after June 1, 2005, then for each day
after June 1, 2005, the Initial Purchase Price shall be adjusted downward by an
amount equal to Fifty-Thousand Dollars ($50,000) per day.
Section 3.3 Adjustment to Initial Purchase Price. The Initial Purchase
Price shall be subject to such adjustments as are specified in Section 3.2,
Section 3.4, Section 3.5, Section 6.5, Section 6.6 and ARTICLE 8, if any (the
Initial Purchase Price as so adjusted is herein referred to as the "Purchase
Price").
Section 3.4 Estimated Adjustment Statement.
(a) By or before 10:00 a.m. on the third Business Day prior to the
scheduled Closing Date, Sellers shall prepare and deliver to Purchasers a
statement (the "Estimated Adjustment Statement") that sets forth as of the close
of business on the Closing Date the net working capital of OPP as of the Closing
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Date as calculated as set forth on Schedule 3.4(a). In the event the Closing is
not scheduled to occur on the last day of a given month, then the items that are
included in the Estimated Adjustment Statement shall be prorated to the extent
applicable as of the Closing Date as set forth on Schedule 3.4(a). The Estimated
Adjustment Statement and all determinations associated therewith will be
prepared or calculated, as applicable, in conformity with GAAP, applied on a
basis consistent with the financial statements made available to Purchasers
under Section 4.19, using the format set forth in Schedule 3.4(a).
(b) In the event the result of the Estimated Adjustment Statement is a
negative number, then the Initial Purchase Price will be reduced by an amount
equal to the absolute value of such number, and if the result is a positive
number, then the Initial Purchase Price will be increased by an amount equal to
such number.
(c) In the event the Closing is not scheduled to occur on the last day
of a given month, then the items that are included in the Estimated Adjustment
Statement shall be prorated to the extent applicable as of the Closing Date by
multiplying the amount of each such item representing the full calendar month by
a fraction, the numerator of which is the Closing Date and the denominator of
which is the number of days there are in the month in which the Closing occurs,
provided that to the extent items may be determined on a daily basis, such
amounts will be allocated on a daily basis.
Section 3.5 Final Adjustment Statement.
(a) Within forty-five (45) days following the Closing Date, Purchasers
shall prepare and deliver to Sellers a final statement (the "Final Adjustment
Statement") that sets forth the same information as included in the Estimated
Adjustment Statement provided pursuant to Section 3.4(a) above, adjusted to take
into account the final amounts as of the Effective Time determined in accordance
with the standard set forth in Section 3.4. Sellers shall provide to Purchasers
copies of all invoices or other billing information actually received or sent by
Sellers during this forty-five (45) day period to allow Purchasers to prepare
the Final Adjustment Statement in accordance with this Section. The Final
Adjustment Statement shall be accompanied by such backup information and
schedules as are reasonably required in order for Sellers to understand and
verify the accuracy of the computation of the amount(s) set forth therein. In
the event the Closing does not occur on the last day of a given month, then the
items that are included in the Final Adjustment Statement shall be prorated to
the extent applicable as of the Closing Date as set forth on Schedule 3.4(a).
(b) The Parties shall attempt to agree upon the Final Adjustment
Statement within thirty (30) days following the delivery thereof to Sellers. If
Sellers dispute any item set forth on the Final Adjustment Statement, Sellers
shall give Purchasers written notice thereof within thirty (30) days following
the delivery to Sellers of the Final Adjustment Statement setting forth in
reasonable detail the disputed item or items. If Sellers have not delivered such
notice to Purchasers within such thirty (30) day period, the Final Adjustment
Statement shall be deemed to be final and, to the extent the Final Adjustment
Statement reflects an adjustment to the Initial Purchase Price that is different
from the adjustment calculated pursuant to Section 3.4, the Party that benefited
from the variance in the adjustment made on the Closing Date shall pay to the
other Party the variance amount within five (5) days following the expiration of
such thirty (30) day period. If Sellers have delivered a notice of a dispute to
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Purchasers, the undisputed portion of the variance amount, if any, shall be paid
to the Party entitled to receive the same within five (5) Business Days
following the delivery of the notice by Sellers to Purchasers, and the Parties
shall jointly engage the Independent Accounting Firm and shall direct the
Independent Accounting Firm to make a final, binding determination of all such
disputes within forty-five (45) days of presentation to the Independent
Accounting Firm by the Parties of the information that each such Party believes
supports its position with respect to each disputed item. Such information shall
be presented by each Party to the Independent Accounting Firm within ten (10)
days following the selection thereof. The Parties will further direct the
Independent Accounting Firm to deliver a written notice to Purchasers and
Sellers setting forth its determination with respect to each disputed item. The
results of such determination will be final and binding, and the balance of the
variance amount, if any, resulting from such determination will be paid to the
Party entitled to receive the same within ten (10) days of the Independent
Accounting Firm's notice of its determination. The fees and expenses of the
Independent Accounting Firm shall be borne in equal parts by the Purchasers on
the one hand, and the Sellers, on the other, and further agree that in
connection with the engagement of the Independent Accounting Firm, each of the
Purchasers and the Sellers will, if requested by the Auditors, execute a
reasonable engagement letter including customary indemnities.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLERS AND CPI
Except as set forth in the Schedules to this Agreement, each of the
Sellers and CPI, jointly and severally, represent and warrant to Purchasers, as
of the Effective Date, as follows:
Section 4.1 Organization and Existence.
(a) CPO is a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Maryland.
(b) Each of CPI and CPOI is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Maryland.
(c) OPP is a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Florida and has all requisite power
and authority to own, lease and operate its properties and to carry on the
Business as it is now being conducted.
(d) Each of the Sellers is duly qualified to do business and in good
standing in each other jurisdiction, if any, in which it is required to be so
qualified, except where such failure would not, individually or in the
aggregate, have a Material Adverse Effect.
(e) The Sellers have made available to Purchasers complete and correct
copies of the current Organizational Documents of each Seller and of OPP.
Section 4.2 Execution, Delivery and Enforceability. Each Seller and CPI
has all requisite power and authority to execute and deliver, and perform its
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obligations under, this Agreement and to consummate the Transactions. The
execution, delivery and performance by each Seller and CPI of this Agreement and
the consummation of the Transactions have been duly and validly authorized by
all necessary corporate action required on the part of each Seller and CPI,
respectively, and no other corporate proceedings on the part of a Seller or CPI
are necessary to authorize this Agreement or to consummate the Transactions.
Assuming Purchasers' and Purchasers' Parent's due authorization, execution and
delivery of this Agreement, this Agreement constitutes the valid and legally
binding obligation of each Seller and CPI, enforceable against each Seller and
CPI, respectively, in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws of general application relating to or affecting the enforcement of
creditors' rights and by general equitable principles.
Section 4.3 Ownership. CPO is the record and beneficial owner of the LP
Interest and CPOI is the record and beneficial owner of the GP Interest and all
such Partnership Interests are free and clear of any Encumbrances. The
Partnership Interests constitute all of the duly authorized and validly issued
and outstanding partnership interests of OPP.
Section 4.4 Capitalization. The Partnership Interests were not issued
in violation of the preemptive rights of any Person. There are no outstanding
options, warrants, purchase rights, subscription rights, conversion rights or
other rights of any kind (preemptive or otherwise) to acquire any partnership
interests of OPP, or securities convertible into or exchangeable for, or which
otherwise confer on the holder thereof any right to acquire, any partnership
interests of OPP, nor is OPP committed to issue, sell or otherwise cause to
become outstanding any such option, warrant, right or security, except
obligations to Purchasers under this Agreement. Except as shown on Schedule 4.4,
other than this Agreement, there are no agreements or understandings concerning
the ownership, voting, or disposition of the Partnership Interests.
Section 4.5 No Violation. Subject to Sellers' obtaining Sellers'
Required Regulatory Approvals and Sellers' Required Consents, and except for
compliance with the requirements of the HSR Act, neither the execution or
delivery by Sellers or CPI of this Agreement, nor Sellers' nor CPI's compliance
with any provision hereof, nor Sellers' nor CPI's consummation of the
Transactions will:
(a) violate, or conflict with, or result in a breach of any provisions
of the Organizational Documents of the Sellers, CPI or OPP;
(b) result in a default (or give rise to any right of termination,
cancellation or acceleration or create a condition that, with notice or lapse of
time, or both, would create a default or give rise to a cancellation,
termination or acceleration) under, or conflict with any of, or give any Person
the right to modify, the terms, conditions or provisions of, any note, bond,
mortgage, indenture, license, or agreement (including, without limitation, the
Existing Contracts) or other instrument or obligation to which a Seller, CPI or
OPP is a party or by which a Seller, CPI or OPP may be bound, except for such
defaults (or rights of termination or acceleration) as to which requisite
waivers or consents have been, or prior to the Closing will have been, obtained;
- 18 -
(c) violate, contravene or conflict with, or result in a material
breach of any Applicable Law;
(d) contravene, conflict with, or result in a violation of any of the
terms or requirements of any Permit that is held by OPP or that otherwise
relates to the Business of, or any of the assets owned or used by, OPP;
(e) require the consent or approval of, filing with, or notice to any
Person which, if not obtained, would prevent Sellers or CPI from performing
their obligations hereunder; or
(f) result in the imposition of any Encumbrances upon or with respect
to the Partnership Interests or any of the assets owned or used by OPP.
Section 4.6 Business. The only business engaged in by OPP is the
construction, ownership, operation, and maintenance of the Oleander Station, the
generation and wholesale sale of electric energy and capacity from the Oleander
Station and any and all other activities related or incidental to the foregoing.
Section 4.7 Compliance with Laws. Except as set forth in Schedule 4.7,
(a) OPP is in compliance with all Applicable Laws and all orders and
judgments of any Governmental Authority.
(b) OPP is not in receipt of any notice or other communication (whether
oral or written) from any Governmental Authority or any other Person regarding
(i) any actual, alleged, possible, or potential violation of, or failure to
comply with, any Applicable Laws, or (ii) any actual, alleged, possible, or
potential obligation on the part of OPP to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature.
Notwithstanding the foregoing, this Section 4.7 does not address
Environmental Laws, which are addressed exclusively in Section 4.15, Tax
Matters, which are addressed exclusively in Section 4.16, or Labor Matters,
which are addressed exclusively in Section 4.23.
Section 4.8 Permits. Except as set forth in Schedule 4.8:
(a) OPP holds or has received all permits, registrations,
notifications, franchises, licenses, certificates, and other authorizations,
consents and approvals of all Governmental Authorities required in order for OPP
to own, operate and maintain the Oleander Station, to operate as an electric
wholesale generator, as determined by FERC, and to generate and sell electric
energy, capacity and ancillary services at market-based rates, as authorized by
FERC (collectively, "Permits");
(b) OPP is in compliance with all Permits;
(c) OPP is not in receipt of any written notice of any noncompliance
with any Permit, nor to Sellers' Knowledge, is being threatened with any such
notice, that: (i) any such existing Permit will be revoked, modified or
terminated, or (ii) any pending application for the renewal of any existing
Permit will be denied, conditioned or delayed;
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(d) To Sellers' Knowledge, all applications required to have been filed
for the renewal of all Permits have been duly filed on a timely basis with the
appropriate Governmental Authority, and all other filings required to have been
made with respect to such Permits have been duly made on a timely basis with the
appropriate Governmental Authority; and
(e) To Sellers' Knowledge, all statements, assertions and calculations
in any pending application for a Permit were and remain true and accurate in all
material respects.
Section 4.9 Litigation.
(a) Except as set forth in Schedule 4.9, there is no claim, action,
proceeding or investigation or inquiry pending or, to Sellers' Knowledge,
threatened, against or relating to Sellers, CPI, OPP, Oleander Station or other
assets owned or used by OPP before any arbitrator or Governmental Authority, and
no judgment, decree or order of any court, arbitrator or Governmental Authority,
which, individually or in the aggregate, may result, or has resulted, in:
(i) the institution of legal proceedings to prohibit, delay or
restrain, or otherwise interfere with, the performance of this Agreement or the
consummation of the Transactions by Sellers or CPI;
(ii) a claim against Purchasers or their Affiliates for
damages as a result of Sellers' or CPI's entering into this Agreement or the
consummation by Sellers or CPI of the Transactions;
(iii) a material impairment of Sellers' or CPI's ability to
perform its obligations under this Agreement; or
(iv) a Material Adverse Effect.
(b) Except as set forth in Schedule 4.9, there is no claim, action,
proceeding or investigation or inquiry pending or, to Sellers' Knowledge,
threatened, against or relating to OPP or the Oleander Station or other assets
owned or used by OPP before any arbitrator or Governmental Authority. To
Sellers' Knowledge, no event has occurred or circumstance exists that could
reasonably be expected to give rise to or serve as a basis for the commencement
of any such claim, action, proceeding, investigation or inquiry.
(c) Except as set forth in Schedule 4.9,
(i) no judgment, decree or order of any arbitrator or
Governmental Authority has been issued to OPP or is applicable to the Oleander
Station or any other assets owned or used by OPP; and
(ii) neither Seller is subject to any judgment, decree, or
order of any arbitrator or Governmental Authority that relates to the Business
of, or any assets owned or used by, OPP.
(d) Sellers have made available to Purchasers copies of all pleadings,
correspondence and other documents relating to the items listed in Schedule 4.9.
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Section 4.10 Existing Contracts.
(a) There are no Existing Contracts, except for Permitted Encumbrances
and for Existing Contracts which (i) are listed in Schedule 4.10(a), (ii) will
expire prior to the Closing Date, or (iii) which may be terminated at a cost of
less than One Hundred Thousand Dollars ($100,000) by OPP upon one hundred eighty
(180) days' notice or less.
(b) Except as set forth in Schedule 4.10(b), there is not under any of
the Existing Contracts, any default (and there has not occurred any event that
has or may give rise to any right of termination, cancellation or acceleration)
by OPP or by either Seller or CPI or any Affiliate of any of them, nor any event
which, with notice or lapse of time or both, would constitute an event of
default by OPP or by either Seller or CPI or any Affiliate of any of them,
except for such events of default and other events as to which requisite waivers
have been, or prior to Closing will have been, obtained.
(c) No third party has alleged, nor to the Sellers' Knowledge,
threatened to allege that any Seller or OPP, or any other party to an Existing
Contract, is in breach of or default under any Existing Contract, nor has any
party to any Existing Contract threatened in writing, or to Sellers' Knowledge
verbally, that it intends to terminate such Existing Contract.
(d) To Sellers' Knowledge, each other Person that has any obligation or
liability under any Existing Contract under which OPP has any rights, is in full
compliance with all applicable terms and requirements of such Existing Contract.
(e) No claim, action, proceeding or investigation is pending or, to
Sellers' Knowledge, threatened against OPP or either Seller challenging the
enforceability of any of the Existing Contracts specified in Schedule 4.10(a).
(f) Sellers have delivered or made available to Purchasers true and
complete copies of all Existing Contracts listed in Schedule 4.10(a) including
all amendments thereto. There are no oral amendments to any of the Existing
Contracts listed in Schedule 4.10(a).
Section 4.11 Personal Property.
(a) Except as set forth on Schedule 4.11, OPP has good and valid title
to all personal property currently used by OPP to own, operate or maintain
Oleander Station (the "Personal Property"), free and clear of all Encumbrances
other than Permitted Encumbrances.
(b) Schedules 3.4(a)(i) and 3.4(a)(iii) list all of the gas
turbine-generator spare parts acquired under the LTSA. Either CPI or OPP has
good and valid title to all of such spare parts, free and clear of all
Encumbrances.
Section 4.12 Real Property. Schedule 4.12 lists all real property
interests owned by OPP (the "Owned Real Property"). To Sellers' Knowledge, the
Owned Real Property constitutes all real property currently used by and
necessary for, and is sufficient for, OPP to own, operate and maintain Oleander
Station and conduct its Business in the ordinary course of business. The Owned
Real Property is owned of record free and clear of all Encumbrances other than
Permitted Encumbrances. Neither Sellers nor OPP has received notice of the
institution or proposed institution of any condemnation proceedings in respect
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of any of the Owned Real Property. None of the Owned Real Property is leased to
any Person.
Section 4.13 Intellectual Property. Except for the Excluded Assets, OPP
owns, or is licensed or otherwise possesses sufficient legally enforceable
rights to use, all (and has not operated so as to infringe any) patents,
copyrights, trademarks, service marks, technology, know-how, computer software
programs and applications, databases and any other tangible or intangible
proprietary information or materials that are currently used in the operation of
the Oleander Station.
Section 4.14 Brokers. All negotiations relating to this Agreement or
the Transactions for the benefit of Sellers and CPI have been carried on by
Sellers and CPI in such a manner as not to give rise to any claim against
Purchasers (by reason of Sellers' or CPI's actions) for a brokerage commission,
finder's fee or other like payment to any Person.
Section 4.15 Environmental Compliance. To Sellers' Knowledge:
(a) except as set forth in Schedule 4.15:
(i) No Hazardous Substances are present and there has not been
a Release of Hazardous Substances, on, at, beneath, migrating from, or
otherwise affecting the Oleander Station that: (A) constitutes an
unremedied non-compliance with or violation of any Environmental Law if
the effect of such violation imposes a Remediation obligation or fine,
penalty or other economic liability or imposes any other required
activity with respect to such Release of Hazardous Substances on the
part of Sellers, CPI and/or OPP; (B) currently imposes any
release-reporting obligations on Sellers, CPI and/or OPP under any
Environmental Law that have not been or are not being complied with;
(C) currently imposes any clean-up or Remediation obligations on
Sellers, CPI and/or OPP under any Environmental Law, or (D) if not
Remediated may reasonably be expected to result in any such imposition
of obligation or liability described in items (A), (B), or (C);
(ii) Sellers, CPI, OPP and the Oleander Station have been and
are currently in compliance with all Environmental Laws that apply to
the Oleander Station or otherwise affect the Oleander Station or OPP;
(iii) Each of Sellers, CPI, OPP and the Oleander Station has
had and has all Permits required under applicable Environmental Laws
for the operation of the Oleander Station, is in compliance with all
such Permits and has not received any written notice, or to Sellers',
CPI's, and/or OPP's Knowledge, any verbal notice, that: (i) any such
existing Permit will be revoked, modified, or terminated; or (ii) any
pending application for any new such Permit or renewal of any such
existing Permit will be denied, delayed, or conditioned; and
(iv) Neither Sellers, CPI, OPP nor the Oleander Station has
entered into, and the Oleander Station is not subject to, any action,
order, judgment, suit, investigation, inquiry, proceeding, decree,
agreement, or injunction of any Governmental Authority relating to
liability or potential liability under any Environmental Laws, other
than matters that have been resolved in a final and binding proceeding
and for which neither OPP nor Oleander Station has any further
liability, cost, or expense exposure;
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(v) There are no material environmental capital expenditures
currently required or anticipated under any applicable Environmental
Laws in order to maintain or achieve compliance by Seller, CPI, and OPP
with all applicable Environmental Laws and Permits with respect to the
Oleander Station;
(vi) No portion of the Oleander Station, and no property to
which Hazardous Substances originating on or from the Oleander Station,
has been sent for treatment or disposal, is listed or is proposed for
listing on the National Priorities List or analogous federal, state,
regional or local list of sites requiring Remediation;
(vii) There are no liens imposed or in the process of being
imposed on the Oleander Station arising under or pursuant to any
Environmental Law and no notices or deed restrictions relating to the
presence of Hazardous Substances on such properties are required to be
filed or prepared pursuant to any Environmental Law; and
(viii) No portion of the Oleander Station has been used as a
dump or landfill and Seller, CPI and/or OPP has not filled-in any
wetlands except in compliance with Environmental Laws and Permits.
Neither PCBs nor asbestos-containing materials are present on, at,
adjacent to, below, or inside the Oleander Station.
(b) Except as set forth on Schedule 4.15, there are no pending, or to
the Knowledge of Sellers, CPI and/or OPP, threatened proceedings, actions,
investigations, inquiries, requests for information, or other claims,
liabilities or potential liabilities arising under any Environmental Laws
regarding the Oleander Station or the Release or threatened Release of any
Hazardous Substances thereon, therefrom, or adjacent thereto.
Section 4.16 Tax Matters.
(a) except as set forth on Schedule 4.16, for all periods ending prior
to or on the Closing Date, all Tax Returns required to be filed by or with
respect to OPP have been or will be timely filed with the appropriate taxing
authorities in all jurisdictions in which such Tax Returns are required to be
filed, regardless of when such Tax Returns are required to be filed. OPP shall
reserve rights to obtain necessary information from and have access to all books
and records for periods prior to the Closing Date in order to facilitate the
preparation of Tax Returns, administer audit proceedings and prepare amended Tax
Returns or refund claims to comply with all Applicable Law, filing requirements
and audit and other Tax related proceedings for periods prior to or on the
Closing Date;
(b) except as set forth on Schedule 4.16, for all periods ending prior
to or on the Closing Date, such Tax Returns are or will be true and correct in
all material respects, and all Taxes legally due on or prior to the Closing Date
have been or will be timely paid;
(c) OPP has not extended or waived the application of any statute of
limitations of any jurisdiction regarding the assessment or collection of any
Tax;
(d) except for requests for extensions of time for filing any
partnership informational return of income (Federal Form 1065 or similar state
or local form), OPP has not requested any extension of time within which to file
any Tax Return;
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(e) no material notice of deficiency or assessment has been received
from any taxing authority with respect to liabilities for Taxes of OPP, which
have not been fully paid or finally settled; provided, that any such deficiency
shown in Schedule 4.16(e) is being contested in good faith through appropriate
proceedings;
(f) there are no audits, disputes, claims, assessments, deficiency
notices, levies, administrative proceedings, or lawsuits pending, or to the
Knowledge of Sellers, threatened against or with respect to OPP by any taxing
authority;
(g) none of the assets or properties of OPP is or will be required to
be treated as tax-exempt use property within the meaning of Section 168(h) of
the Code and Treasury Regulations thereunder;
(h) OPP has no liability for the Taxes of any other Person as a
transferee or successor, by contract or otherwise;
(i) except as set forth on Schedule 4.16, OPP has not agreed to nor is
it required to make any adjustments under Section 481(a) of the Code and
Treasury Regulations thereunder by reason of a change of accounting method or
otherwise;
(j) no Governmental Authority in a jurisdiction where OPP does not file
Tax Returns has made a claim, assertion, or threat that OPP (or Sellers by
virtue of OPP's operations or ownership of Oleander Station) (i) is or may be
subject to taxation by such jurisdiction or (ii) is or may be required to file
Tax Returns in such jurisdiction;
(k) OPP has made available to Purchasers correct and complete copies of
all federal, state, and local Tax Returns filed with respect to OPP for all Tax
years of OPP;
(l) OPP has not engaged in any transactions subject to Section 6111 or
6112 of the Code or Treasury Regulations Sections 1.6011-4, 301.6111-1T,
▇▇▇-▇▇▇▇-▇, or 301.6112-1.
(m) OPP does not conduct any Business in or derive income from any
state, local or foreign jurisdiction other than those jurisdictions for which
Tax Returns have been duly filed by OPP;
(n) OPP is properly characterized as a "partnership" within the meaning
of Section 7701(a)(2) of the Code and Treasury Regulation Section
301.7701-3(b)(1)(i) and any comparable provision of state, local or foreign law,
and OPP has never been a "corporation" within the meaning of Section 7701(a)(3)
of the Code and Treasury Regulation Section 301.7701-3(a) and 301.7701-2(b)(2);
and
(o) for all periods prior to Closing, OPP has withheld and paid over to
the appropriate taxing authority all material Taxes required to be paid or
withheld and paid over in connection with amounts paid or owing to any employee,
agents or representatives or independent contractor.
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Section 4.17 Employees.
(a) OPP does not have, and on the Closing Date will not have, any
employees or officers and OPP has no liability or obligation with respect to any
Employee Benefit Plan or any employees of OPP Affiliates or any other
individuals that have performed work at or in connection with the Oleander
Station.
(b) Each and every employee currently in the O&M Technician position at
the Oleander Station is satisfactorily performing the duties of the O&M
Technician position in accordance with CPI's performance standards.
(c) No employee in the O&M Technician position is on active discipline
or has previously been disciplined since the opening of the Oleander Station.
(d) Each and every employee in the O&M Technician position has
qualified on the Edison Electric Institute aptitude test applicable to and
validated for the O&M Technician position at the Oleander Station.
Section 4.18 No Subsidiaries. OPP does not own or hold, directly or
indirectly, nor have any right or obligation to acquire, any equity or other
ownership interest in any corporations, limited liability companies,
partnerships, joint ventures, or other Person.
Section 4.19 Financial Statements. Sellers have made available to
Purchasers the audited balance sheet and income statement of OPP for the years
ended December 31, 2002, December 31, 2003 and December 31, 2004 (if available)
(collectively, the "Audited Financial Statements"); provided, that if the
audited balance sheet and income statement of OPP for the year ended December
31, 2004 are not available, Sellers have made available to Purchasers the
unaudited balance sheet and income statement of OPP as of the year ended
December 31, 2004 (the "Unaudited Financial Statements"). The foregoing balance
sheet for the year ended December 31, 2004 (with respect to either the Audited
Financial Statements or the Unaudited Financial Statements, as applicable) is
collectively referred to herein as the "Balance Sheet". The Audited Financial
Statements and the Unaudited Financial Statements, if any, were prepared in
accordance with GAAP consistently applied (except that the Unaudited Financial
Statements, if any, do not include footnotes required by GAAP) and fairly
present in all material respects the financial position and results of
operations of OPP as of the date thereof and for the periods covered thereby.
Section 4.20 Undisclosed Liabilities. To Sellers' Knowledge and except
as otherwise disclosed on the Schedules to this Agreement, OPP has no liability
or obligation, whether fixed or contingent, secured or unsecured, of a nature
required by GAAP to be reflected on its balance sheet or disclosed in the notes
thereto, which are not accrued or reserved against on the Balance Sheet or
disclosed in the notes thereto, except those which were incurred in the ordinary
course of business after the date of the Balance Sheet in accordance with
Section 6.3.
Section 4.21 Absence of Certain Financial Changes or Events. Except as
otherwise contemplated by this Agreement, since December 31, 2004, there has not
been: (a) any event or occurrence resulting in a Material Adverse Effect; (b)
any entry into any agreement, commitment or transaction (including, without
limitation, any borrowing, capital expenditure or capital financing) by OPP
- 25 -
which is material to the Business of OPP, except agreements, commitments or
transactions in the ordinary course of business or as contemplated hereby; or
(c) any change by OPP in accounting methods, principles or practices except as
required or permitted by GAAP.
Section 4.22 Consents and Approvals. To Sellers' Knowledge, there are
no reason(s) that the Closing conditions set forth in Articles 9 and 10 cannot
be satisfied. To Sellers' Knowledge, Sellers are qualified to obtain and there
are no conditions in existence which could reasonably be expected to delay,
impede or condition the receipt by Sellers of Sellers' Required Regulatory
Approvals or Sellers' Required Consents, except to the extent that the receipt
of any Sellers' Required Regulatory Approval is subject to the discretion of the
applicable Governmental Authority or any Sellers' Required Consents are subject
to the discretion of a third party. No consent, approval, authorization or
permit of, or filing with or notification to, any Person is required for or in
connection with the execution and delivery of this Agreement by Sellers or for
or in connection with the consummation of the Transactions and performance of
the terms and conditions contemplated hereby by Sellers, except for: (a)
Sellers' Required Regulatory Approvals; (b) Sellers' Required Consents; and (c)
consents, approvals, authorizations, permits, filings, or notices that, if not
obtained or made, would not, individually or in the aggregate, result in Losses
in excess of One Hundred Thousand Dollars ($100,000).
Section 4.23 Labor Matters. With respect to the ownership or operation
of the Oleander Station:
(a) CPI, OPP and each of the Sellers are in compliance with all
Applicable Laws respecting employment and employment practices, occupational
health and safety, payroll taxes, accrued benefits, terms and conditions of
employment and wages and hours, and there are no claims pending, or, to the
Sellers' Knowledge, threatened in relation to any such matters;
(b) As of the date hereof, Sellers and CPI have no Knowledge of any
claim of representation by a third party of, or of any organizing drive by a
third party seeking to represent, all or any portion of employees, working at
the Oleander Station, or representation petition concerning the workforce at the
Oleander Station.
(c) Sellers and CPI each represent that (i) neither they, nor any of
their Affiliates, nor OPP, are a party to, or are bound by, any collective
bargaining agreement with respect to any employees assigned to the Oleander
Station, (ii) to their Knowledge, no present union organizing efforts are
underway with respect to any such employees, and (iii) no claim has been made by
any union as to the representation of any such employees;
(d) On the Closing Date and thereafter, and except as set forth in this
Agreement, neither OPP nor Purchasers will have any obligations or liability,
whether funded or not funded, related to any Employee Benefit Plan with respect
to any employees assigned to the Oleander Station at any time prior to the
Closing Date;
(e) Except as otherwise provided herein, neither OPP, nor CPI, nor
Sellers, have made any commitments or representations to any Person regarding
(i) employment at the Oleander Station after the Closing Date, (ii) any benefits
to be provided by OPP or Purchasers or any Affiliate of Purchasers after the
sale of the Oleander Station, or (iii) any other terms and conditions of
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employment by OPP or Purchasers or any Affiliate of Purchasers following the
Closing Date.
(f) Neither Sellers, nor CPI, nor OPP: (i) have received written notice
of any unfair labor practice complaint against them pending before the National
Labor Relations Board; (ii) have received written notice that any petition in
respect of employees who provide services at the Oleander Station has been filed
with the National Labor Relations Board; (iii) within the past one-hundred
eighty (180) days, have experienced any primary work stoppage at the Oleander
Station; or (iv) are a party to any contract or other agreement with any labor
union representing employees who provide services at the Oleander Station.
Section 4.24 Insurance. The Oleander Station and OPP's tangible assets
are covered by the Seller Insurance Policies, and with the coverages, limits and
deductibles as set forth on Schedule 4.24. Such coverages, limits and
deductibles are sufficient to comply with insurance requirements of the Existing
Contracts.
Section 4.25 Reserved.
Section 4.26 No Knowledge of Purchasers' Breach. Neither Sellers, CPI
nor any of their respective Affiliates or representatives has Knowledge of any
breach of any representation or warranty by Purchasers or of any other condition
or circumstance that would excuse Sellers or CPI from their timely performance
of their respective obligations hereunder. Each of Sellers or CPI shall notify
Purchasers as promptly as practicable if any such information comes to their
attention prior to Closing.
Section 4.27 Existing Title Policy. No claims have been made by Sellers
or OPP under any existing title policy relating to Oleander Station issued to
OPP, the Sellers or any Affiliate of Sellers or OPP. Sellers have heretofore
made available to Purchasers a true, correct and complete copy of the Existing
Title Policy.
Section 4.28 No Notices. Neither Sellers nor OPP has received any
written notice of (a) any pending or threatened condemnation, taking or similar
proceeding affecting Oleander Station or any portion thereof, (b) any pending
public improvements in or about any portion of Oleander Station which could
result in a special assessment or any reassessments against or affecting
Oleander Station, or (c) any building code, zoning, entitlement, conservation
restriction or other land use regulation violation by OPP, any predecessors in
title to Oleander Station or with respect to Oleander Station.
Section 4.29 No Assessments. Other than real property ad valorem taxes,
neither Sellers nor OPP has received written notice of any assessments that have
been made against Oleander Station that are unpaid, whether or not they have
become liens, and no impact fees or similar charges or sums are payable as
result of the construction of the improvements constituting a portion of
Oleander Station. If Oleander Station, or any part thereof, shall be, or shall
have been affected by an assessment or assessments, made on or before the
Effective Date, and that are, or may become payable in installments, then for
the purposes of this Agreement all of the unpaid installments of any such
assessments, including those that are to become due and payable after the
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Closing, shall be deemed to be due and payable immediately and shall be paid and
discharged in full by Sellers at the Closing.
Section 4.30 Surveys. Sellers have heretofore made available to
Purchasers the most current boundary and "as-built" surveys of Oleander Station
in the possession or control of Sellers.
Section 4.31 Accounts Receivable. Sellers have provided to Purchasers a
true and correct aging report for all Accounts Receivable of OPP, and Sellers
have not received any notice of any contest, claim or request of set-off from
any obligor of any such Accounts Receivable relating to the amount or validity
of such Accounts Receivable.
Section 4.32 Defective Work. To Sellers' Knowledge, there are no
pending claims for defective work, equipment or materials relating to the
Oleander Station made by OPP, CPI or the Sellers against any Person.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASERS AND PURCHASERS' PARENT
Each Purchaser and Purchasers' Parent, jointly and severally, represent
and warrant to Sellers as of the Effective Date as follows:
Section 5.1 Organization and Existence.
(a) Each Purchaser is a limited liability company, duly organized,
validly existing and in good standing under the laws of the State of Delaware.
(b) Purchasers' Parent is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware.
Section 5.2 Execution, Delivery and Enforceability.
(a) With respect to each Purchaser (i) it has all requisite power and
authority to execute and deliver, and to perform its obligations under this
Agreement and to consummate the Transactions, (ii) the execution, delivery and
performance of this Agreement and the consummation of the Transactions have been
duly and validly authorized by all necessary company action required on the part
of such Purchaser, (iii) no other company proceedings on the part of such
Purchaser are necessary to authorize this Agreement or to consummate the
Transactions, and (iv) assuming the due authorization, execution and delivery of
this Agreement by Sellers and CPI, this Agreement constitutes the valid and
legally binding obligation of such Purchaser, enforceable against such Purchaser
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws of
general application relating to or affecting the enforcement of creditors'
rights and by general equitable principles.
- 28 -
(b) With respect to Purchasers' Parent, (i) it has all requisite
corporate power and authority to execute and deliver, and to perform its
obligations under this Agreement and to consummate the Transactions, (ii) the
execution, delivery and performance of this Agreement and the consummation of
the Transactions have been duly and validly authorized by all necessary
corporate action required on the part of Purchasers' Parent, (iii) no other
corporate proceedings on the part of Purchasers' Parent are necessary to
authorize this Agreement or to consummate the Transactions, and (iv) assuming
the due authorization, execution and delivery of this Agreement by Sellers, this
Agreement constitutes the valid and legally binding obligation of Purchasers'
Parent, enforceable against Purchasers' Parent in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general application relating
to or affecting the enforcement of creditors' rights and by general equitable
principles.
Section 5.3 No Violation. Subject to Purchasers' obtaining the
Purchasers' Required Regulatory Approvals and the Purchasers' Required Consents,
neither the execution or delivery by each Purchaser or Purchasers' Parent of
this Agreement, nor such Purchaser's or Purchasers' Parent's compliance with any
provision hereof, nor such Purchaser's or Purchasers' Parent's consummation of
the Transactions will:
(a) violate, or conflict with, or result in a breach of any provisions
of the Organizational Documents of any Purchaser or of Purchasers' Parent;
(b) result in a default (or give rise to any right of termination,
cancellation or acceleration) under or conflict with any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license, or
agreement or other instrument or obligation to which any Purchaser or
Purchasers' Parent is a party or by which any Purchaser or Purchasers' Parent
may be bound, except for such defaults (or rights of termination or
acceleration) as to which requisite waivers or consents have been, or prior to
the Closing will have been, obtained, or which would not, individually or in the
aggregate, create a Material Adverse Effect;
(c) violate any law, rule, regulation, order, writ, injunction, or
decree, applicable to any Purchaser or to Purchasers' Parent or any of their
respective assets, except where such violations, individually or in the
aggregate, would not create a Material Adverse Effect and will not affect the
validity or enforceability of this Agreement or the validity of the
Transactions; or
(d) require the consent or approval of, filing with, or notice to any
Person which, if not obtained, would prevent any Purchaser or Purchasers' Parent
from performing its obligations hereunder.
Section 5.4 Compliance with Laws. To each Purchaser's and Purchasers'
Parent's Knowledge, each Purchaser and Purchasers' Parent is in compliance with
all Applicable Laws and all orders and judgments of any Governmental Authority,
except where such non-compliance would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 5.5 Litigation. There is no claim, action, proceeding or
investigation pending or, to Purchaser' and Purchasers' Parent's Knowledge
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threatened, against or relating to such Purchaser or Purchasers' Parent or any
of their respective Affiliates before any arbitrator or Governmental Authority,
and no judgment, decree or order of any arbitrator or Governmental Authority,
which, individually or in the aggregate, may result in, or has resulted in:
(a) the institution of legal proceedings to prohibit or restrain or
otherwise interfere with the performance of this Agreement by Purchasers or
Purchasers' Parent, or the consummation of the Transactions by Purchasers or
Purchasers' Parent;
(b) a claim against Sellers or their Affiliates for damages as a result
of any Purchaser or Purchasers' Parent's entering into this Agreement or the
consummation by any Purchaser or Purchasers' Parent of the Transactions;
(c) a material impairment of any Purchaser's or Purchasers' Parent's
ability to perform its obligations under this Agreement; or
(d) a Material Adverse Effect.
Section 5.6 Brokers. All negotiations relating to this Agreement or the
Transactions for the benefit of Purchasers and Purchasers' Parent have been
carried on by Purchasers and Purchasers' Parent, as applicable, in such a manner
as not to give rise to any claim against Sellers or CPI (by reason of
Purchasers' or of Purchasers' Parent's actions) for a brokerage commission,
finder's fee or other like payment to any Person.
Section 5.7 Financing. Each Purchaser represents and warrants (only
with respect to itself) that it has now, or at the Closing will have, liquid
capital or committed sources therefor sufficient to permit such Purchaser to
perform fully and timely its obligations under this Agreement.
Section 5.8 Purchasers' Qualifications. Purchasers and Purchasers'
Parent represent and warrant to Sellers that they have no Knowledge of any
reason(s) that the Closing conditions set forth in Articles 9 and 10 cannot be
satisfied. To Purchasers' Knowledge, Purchasers are qualified to obtain and
there are no conditions in existence which could reasonably be expected to
delay, impede or condition the receipt by Purchasers of Purchasers' Required
Regulatory Approvals or Purchasers' Required Consents. The provisions of this
Section 5.8 are not applicable to the extent that the receipt of any Purchasers'
Required Regulatory Approval is subject to the discretion of the applicable
Governmental Authority or any Purchasers' Required Consents are subject to the
discretion of a third party.
Section 5.9 "As Is" Sale; Disclaimer of Representations and Warranties;
Further Acknowledgements by Purchasers and Purchasers' Parent.
(a) "As Is" Sale. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ANY OTHER
PROVISION OF THIS AGREEMENT, PURCHASERS AND PURCHASERS' PARENT UNDERSTAND AND
AGREE THAT SELLERS AND CPI ARE NOT MAKING ANY REPRESENTATION, WARRANTY OR
COVENANT WHATSOEVER, EXPRESS, IMPLIED, AT COMMON LAW, STATUTORY OR OTHERWISE,
EXCEPT FOR THE REPRESENTATIONS, WARRANTIES OR COVENANTS EXPRESSLY SET FORTH IN
THIS AGREEMENT, AND PURCHASERS AND PURCHASERS' PARENT FURTHER UNDERSTAND AND
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AGREE THAT, EXCEPT FOR THE REPRESENTATIONS, WARRANTIES AND COVENANTS EXPRESSLY
SET FORTH IN THIS AGREEMENT, (i) THE PARTNERSHIP INTERESTS ARE BEING ACQUIRED,
AND ALL OF THE ASSETS OF OPP, INCLUDING THE OLEANDER STATION, ACQUIRED THEREBY
ARE LIKEWISE BEING ACQUIRED, "AS IS, WHERE IS" ON THE CLOSING DATE, AND IN THEIR
CONDITION ON THE CLOSING DATE "WITH ALL FAULTS", AND (ii) PURCHASERS AND
PURCHASERS' PARENT ARE RELYING ON THEIR OWN EXAMINATION OF OPP AND SUCH ASSETS
IN PURCHASING THE PARTNERSHIP INTERESTS HEREUNDER.
(b) Disclaimer of Representations and Warranties. WITHOUT LIMITING THE
GENERALITY OF SECTION 5.9(a) AND EXCEPT FOR THE REPRESENTATIONS, WARRANTIES,
COVENANTS, INDEMNITIES AND OTHER RIGHTS EXPRESSLY SET FORTH IN THIS AGREEMENT,
PURCHASERS AND PURCHASERS' PARENT UNDERSTAND AND AGREE THAT SELLERS AND CPI
OTHERWISE EXPRESSLY DISCLAIM AND NEGATE ANY OTHER REPRESENTATIONS, WARRANTIES OR
COVENANTS, EXPRESS OR IMPLIED, AT COMMON LAW, STATUTORY, OR OTHERWISE AS TO (i)
LIABILITIES, (ii) OPERATION OF THE ASSETS OF OPP, INCLUDING THE OLEANDER
STATION, TITLE, CONDITION, VALUE OR QUALITY OF SUCH ASSETS OR THE BUSINESS,
CONDITION (FINANCIAL OR OTHERWISE), OR PROSPECTS OF OPP, RISKS AND OTHER
INCIDENTS OF THE PARTNERSHIP INTERESTS OR SUCH ASSETS, (iii) 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, (iv) THE PRESENCE OR ABSENCE OF ANY HAZARDOUS SUBSTANCES IN, ON, OR
DISPOSED OR DISCHARGED FROM, THE OLEANDER STATION AND OTHER ASSETS OF OPP , OR
(v) ANY INFRINGEMENT BY SELLERS, CPI, OPP, OR ANY OF THEIR AFFILIATES OF ANY
PATENT OR PROPRIETARY RIGHT OF ANY THIRD PARTY. PURCHASERS AND PURCHASERS'
PARENT FURTHER AGREE THAT NO INFORMATION OR MATERIAL PROVIDED BY OR
COMMUNICATION MADE BY SELLERS OR CPI OR ANY REPRESENTATIVE OF SELLER OR CPI
PRIOR TO THE EFFECTIVE DATE WILL CONSTITUTE, CREATE OR OTHERWISE CAUSE TO EXIST
ANY REPRESENTATION OR WARRANTY DISCLAIMED BY THE FOREGOING.
Section 5.10 No Knowledge of Sellers' Breach. Neither Purchaser,
Purchasers' Parent nor any of their respective Affiliates or representatives has
Knowledge of any breach of any representation or warranty by Sellers or CPI or
of any other condition or circumstance that would excuse Purchaser or
Purchasers' Parent from their timely performance of their respective obligations
hereunder. Each of Purchaser and Purchasers' Parent shall notify Sellers as
promptly as practicable if any such information comes to their attention prior
to Closing.
Section 5.11 Characteristics of Purchasers; No Distribution. Each
Purchaser and Purchasers' Parent, prior to entering into this Agreement, was
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advised by its counsel, accountants, financial advisors, and such other Persons
it has deemed appropriate concerning this Agreement and has relied solely on
Sellers' and CPI's representations, warranties and covenants expressly contained
herein and its independent investigation and evaluation of, and appraisal and
judgment with respect to, OPP, the Business, assets, including the Oleander
Station, liabilities, results of operations, condition (financial or otherwise),
and prospects of OPP, and the revenue, price, and expense assumptions applicable
thereto. Purchasers hereby acknowledge that the Partnership Interests are not
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or registered or qualified for sale under any state securities laws and cannot
be resold without registration thereunder or exemption therefrom. Each Purchaser
is an "accredited investor," as such term is defined in Regulation D of the
Securities Act and will acquire the Partnership Interests for its own account
and not with a view to a sale or distribution thereof in violation of the
Securities Act, and the rules and regulations thereunder, any applicable state
"blue sky" laws or any other applicable securities laws. Each Purchaser has
sufficient knowledge and experience in financial and business matters to enable
it to evaluate the risks of investment in the Partnership Interests.
Section 5.12 Inspection. Purchaser acknowledges that, prior to its
execution of this Agreement, it has been afforded access to and the opportunity
to inspect each of the Oleander Station, the Existing Contracts, the Permits,
and all other Due Diligence Materials to the extent it deems necessary or
advisable in connection with its decision to enter into this Agreement, and to
consummate the Transactions.
Section 5.13 Consents and Approvals. No consent, approval,
authorization, or permit of, or filing with or notification to, any Person is
required for or in connection with the execution and delivery of this Agreement
by any Purchaser or Purchasers' Parent or for or in connection with the
consummation of the Transactions and performance of the terms and conditions
contemplated hereby by each Purchaser and Purchasers' Parent, except for: (a)
Purchasers' Required Regulatory Approvals; (c) Purchasers' Required Consents;
and (c) consents, approvals, authorizations, permits, filings, or notices that,
if not obtained or made, would not, individually or in the aggregate, result in
Losses in excess of One Hundred Thousand Dollars ($100,000).
Section 5.14 Bankruptcy. There are no bankruptcy, reorganization, or
arrangement proceedings pending against, being contemplated by, or to the
Knowledge of each Purchaser or Purchasers' Parent, threatened against any
Purchaser or Purchasers' Parent.
Section 5.15 Employee Benefit Plans. The benefit plan summaries
provided to Sellers by Purchasers contain true and accurate information with
respect to the benefit plans and programs described therein.
ARTICLE 6
COVENANTS OF EACH PARTY
Section 6.1 Efforts to Close.
(a) Subject to this Section 6.1, each of the Parties agrees to use
their commercially reasonable efforts to consummate and make effective, as soon
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as reasonably practicable, and in any event on or prior to September 30, 2005,
the Transactions, including the satisfaction of all conditions thereto set forth
herein. Such actions shall include, exercising their commercially reasonable
efforts to obtain the consents, authorizations and approvals of all private
parties and any Governmental Authority whose consent is reasonably necessary to
effectuate the Transactions, including, in the case of Sellers, Sellers'
Required Regulatory Approvals and Sellers' Required Consents, and in the case of
Purchasers, Purchasers' Required Regulatory Approvals and Purchasers' Required
Consents, and effecting all other necessary registrations and filings, including
filings under Applicable Laws, and all other necessary filings with any
Governmental Authority. In furtherance of this Section 6.1, each Party shall
designate a representative to act as the primary point of contact for all
communications between the Parties between the Effective Date and the Closing
Date with respect to this Agreement and the Transactions.
(b) All appearances, presentations, briefs, and proposals made or
submitted by or on behalf of any Party before any Governmental Authority in
connection with the approval of this Agreement or the Transactions shall be
subject to the joint approval or disapproval in advance and the joint control of
the Parties, acting with the advice of their respective counsel, and each Party
will consult and fully cooperate with the other Party, and consider in good
faith the views of the other Party, in connection with any such appearance,
presentation, brief, or proposal; provided, that nothing will prevent a Party
from responding to a subpoena or other legal process as required by law or
submitting factual information in response to a request therefor. Each Party
will provide the other with copies of all written communications from
Governmental Authorities relating to the approval or disapproval of this
Agreement or the Transactions.
Section 6.2 Updating. Each Party shall promptly notify the other Party
of any, or of any fact or condition that constitutes or causes any, changes or
additions to any of the Schedules to this Agreement provided by such Party, if
any, to correct any matter that would constitute, a breach of any representation
or warranty of such Party in Articles 4 or 5, as the case may be, of this
Agreement as of a reasonably current date prior to the Closing, but in any event
not later than five (5) Business Days prior thereto. No such updates made
pursuant to this Section 6.2 shall be deemed to cure any inaccuracy of any
representation or warranty made in this Agreement as of the date hereof, unless
the Party for whose benefit such representation or warranty was made
specifically agrees thereto in writing, nor shall any such notification be
considered to constitute or give rise to a waiver by the Party for whose benefit
such representation or warranty was made of any condition set forth in this
Agreement. Sellers shall notify Purchasers promptly of the occurrence of any
casualty, physical damage, destruction or physical loss respecting, or any
adverse change in, the physical condition of the Oleander Station, subject to
ordinary wear and tear and to routine maintenance. Sellers will notify
Purchasers promptly regarding any proceeding or threatened proceeding involving
the condemnation of, or eminent domain proceeding regarding, the Oleander
Station. The Parties will cooperate and work in good faith to complete and
update such Schedules in a manner consistent with the provisions of this Section
6.2 and the other requirements of this Agreement. For purposes of determining
whether Purchasers' conditions set forth in Section 9.5 have been fulfilled, the
Schedules shall be deemed to include only the information contained therein on
the Effective Date. Each Party agrees to advise the other Party promptly in
writing of any matter or occurrence of which it has or obtains Knowledge which
may constitute a breach by any Party of any representation, warranty or covenant
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contained in this Agreement, or of any reason of which it has or obtains
Knowledge why a condition to the performance of any Party's obligations
hereunder may not be satisfied on or before the Closing Date.
Section 6.3 Conduct Pending Closing.
(a) Prior to the consummation of the Transactions or the termination or
expiration of this Agreement pursuant to its terms, unless Purchasers shall
otherwise consent in writing, which consent shall not be unreasonably withheld,
Sellers shall, and shall cause OPP to (and CPI shall, in the case of subsections
(viii), (ix) and (xiii) below) do the following:
(i) (A) operate, maintain and repair the Oleander Station in
accordance with (1) the ordinary course of business and (2) Prudent
Utility Practices, and (B) use commercially reasonable efforts to
collect all Accounts Receivable of OPP on a timely basis;
(ii) cause GEII to complete a Combustion Inspection (as that
term is defined in the LTSA) of the fourth Unit of Oleander Station
(turbine serial number 297841) in accordance with the provisions of the
LTSA;
(iii) except as required by their terms, not amend, terminate
prior to the expiration date, renew, or renegotiate in any material
respect any Existing Contract required to be listed in Schedule 4.10(a)
and which would cause OPP to incur an obligation in excess of One
Hundred Thousand Dollars ($100,000), or enter into any new contract or
agreement that would (if it existed on the date hereof) have been
required to be listed in Schedule 4.10(a) and which would cause OPP to
incur an obligation in excess of One Hundred Thousand Dollars
($100,000), or fail to comply in all material respects with their
obligations under any such Existing Contract;
(iv) not sell, lease, transfer or dispose of, or make any
contract for the sale, lease, transfer or disposition of, any material
assets or properties of OPP or any assets or properties of OPP which
would cause OPP to incur an obligation in excess of One Hundred
Thousand Dollars ($100,000);
(v) not (A) issue any partnership interests in OPP or
securities convertible into partnership interests in OPP, or
repurchase, redeem, or otherwise acquire any such partnership
interests; (B) merge into or with or consolidate with any other Person
or acquire all or substantially all of the business or assets of any
Person or convert to any other form of business organization; (C) make
any material change in their Organizational Documents; (D) purchase any
securities of any Person; or (E) incur any additional obligations for
borrowed money or guarantee or otherwise become liable for the
obligations of any Person;
(vi) not take any action or enter into any commitment with
respect to or in contemplation of any liquidation, dissolution,
recapitalization, reorganization, or other winding up of the Business;
(vii) not change their accounting policies or practices
(including, without limitation, any change in depreciation or
amortization policies), except as required under GAAP;
(viii) not enter into any employment, contractor, consulting
or employee leasing agreement or cause OPP to incur any liability or
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obligation under any Employee Benefit Plan, and not make any
commitments or representations regarding employment at the Oleander
Station, or any terms or conditions of employment that Purchasers might
offer to any Person after Closing;
(ix) not grant any express Encumbrance on any assets of OPP
(or on any of the LTSA Capital Spares, or any of the Parts Inventory
listed in Schedule 3.4(a)(i), or any of the items listed in Schedule
4.11, in each case, as owned by CPI that are to be transferred to OPP
pursuant to Section 6.15), except to the extent (A) required incident
to the operation of the assets of OPP and the Business in the ordinary
course of business, or (B) required or evidenced by any Existing
Contract, and then only to the extent that the Encumbrances identified
in (A) and (B) above would not, individually or in the aggregate,
exceed One Hundred Thousand Dollars ($100,000);
(x) maintain in full force and effect the Seller Insurance
Policies with the coverages, limits and deductibles set forth on
Schedule 4.24;
(xi) not take any action which would cause any of Sellers'
representations and warranties set forth in Article 4 to be incorrect
in any material respect as of the Closing;
(xii) use their commercially reasonable efforts to litigate
against, and to obtain the lifting of, any injunction, restraining or
other order, restraint, prohibition, action, suit, law or penalty
related to, or in connection with the consummation of the Transactions,
whether brought by any Governmental Authority, third party, or
otherwise; and
(xiii) Sellers shall cooperate with Purchasers to amend that
certain Oleander Power Project, LP Agreement of Limited Partnership
dated October 29, 1998 among CP Oleander I, Inc. and CP Oleander
Limited Partnership such that the transfer of the Partnership Interests
may be effected simultaneously at the Closing without causing a
dissolution of the partnership.
(b) Notwithstanding anything to the contrary in Section 6.3(a), Sellers
shall not be (i) obligated to make or cause OPP to make expenditures other than
in the ordinary course of business consistent with past practices or to
otherwise suffer any material economic detriment, or (ii) precluded from, and
OPP shall not be precluded from, instituting, participating in or completing any
program designed to promote compliance or complying with Applicable Laws or
other good business practices with respect to the Oleander Station; provided,
that notwithstanding anything to the contrary in Section 6.3(a), Sellers may
take or may cause OPP to take (x) actions which are required by Applicable Laws,
(y) reasonable actions in connection with any emergency or other force majeure
event, or (z) actions otherwise contemplated by this Agreement or disclosed in
any Schedule to this Agreement.
(c) Until such time, if any, as this Agreement is terminated pursuant
to Section 11.1, Sellers will not, and will cause OPP and each of their
Affiliates not to, directly or indirectly solicit, initiate, or encourage any
inquiries or proposals from, discuss or negotiate with, provide any non-public
information to, or consider the merits of any unsolicited inquiries or proposals
from, any Person (other than Purchasers) relating to any transaction involving
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the sale of the Business or substantially all of the assets of OPP, or any of
the Partnership Interests of OPP, or any merger, consolidation, business
combination, or similar transaction involving OPP.
(d) Neither Seller will, before or after the Closing, take any action
that could be expected to subject either Seller, or the LP Interest or the GP
Interest, to intangibles Tax in the State of Florida.
(e) Purchasers and Purchasers' Parent shall use their commercially
reasonable efforts to obtain the lifting of, any injunction, restraining or
other order, restraint, prohibition, action, suit, law or penalty related to, or
in connection with the consummation of the Transactions.
(f) The Parties agree that, prior to the Closing, the names of the
Purchasers shall be changed to "SP Oleander I LLC" and "SP Oleander II LLC" or
such other names as the Purchasers may select.
Section 6.4 Regulatory Approvals.
(a) Sellers will each, and will cause OPP to, make all filings required
by Applicable Laws to be made by them in order to consummate the Transactions.
Purchasers will make all filings required to be made by them under Applicable
Laws in order to consummate the Transactions. Without limiting the generality of
the foregoing, as promptly as practicable, and in any event, using all
commercially reasonable efforts to do so within twenty (20) days after the
Effective Date, Sellers and Purchasers shall each file or cause to be filed, as
such filings are required of each of Sellers and of Purchasers, respectively,
(a) with the Federal Trade Commission and the Department of Justice all
notifications required to be filed under the HSR Act and the rules and
regulations promulgated thereunder, with respect to the Transactions and (b)
with FERC, the Section 203 filing. The Parties shall consult with each other as
to the appropriate time of filing such notifications and shall agree in good
faith upon the timing of such filings, respond promptly to any requests for
additional information made by either of such agencies, and cause the waiting
periods under the HSR Act to terminate or expire at the earliest possible date
after the date of filing. The Parties will each pay one-half of the filing fees
to be paid in connection with the filings under the HSR Act.
(b) Sellers and Purchasers shall cooperate with each other and (i)
promptly prepare and file all necessary documentation, (ii) effect all necessary
applications, notices, petitions and filings and execute all agreements and
documents, and (iii) use all commercially reasonable efforts obtain all
necessary consents, approvals and authorizations of all other parties, in the
case of each of the foregoing clauses (i), (ii) and (iii), necessary or
advisable to consummate the Transactions. Sellers and Purchasers shall use their
best efforts to file for all Sellers' Required Regulatory Approvals and
Purchasers' Required Regulatory Approvals, respectively, within thirty (30) days
after the Effective Date. Sellers shall have the right to review and approve in
advance all characterizations of the information relating to OPP or its assets;
and each of Sellers and Purchasers shall have the right to review in advance all
characterizations of the information relating to the Transactions which appear
in any filing made in connection with the Transactions.
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(c) Without limiting the generality of each Party's undertakings
pursuant to Sections 6.4(a) and 6.4(b), each Party shall:
(i) take promptly any or all of the following actions to the
extent necessary to eliminate any concerns on the part of any
Governmental Authority regarding the legality of such Party's
consummation of the Transactions under any Applicable Laws: enter into
negotiations; provide information; make proposals; or enter into and
perform agreements or submit to judicial or administrative orders,
whether before or after the Closing; and
(ii) use commercially reasonable efforts (including taking the
steps contemplated by Section 6.4(b)(i)) to prevent the entry in a
judicial or administrative proceeding brought under any Applicable Laws
by any Governmental Authority or any other Person for a permanent or
preliminary injunction or other order that would make consummation of
the Transactions by such Party unlawful or that would prevent or delay
such consummation; and
(iii) take promptly, in the event that such an injunction or
order has been issued in such a proceeding, any and all reasonable
steps, including the appeal thereof, the posting of a bond, or the
steps contemplated by Section 6.4(b)(i), necessary to vacate, modify,
or suspend such injunction or order so as to permit such consummation
by such Party on a schedule as close as possible to that contemplated
by this Agreement.
(d) Effective as of the Closing Date, Purchasers shall have the
responsibility for securing the transfer, re-issuance or procurement of the
Permits, to the extent required by Applicable Laws. Before and after the
Closing, Sellers shall use commercially reasonable efforts to cooperate with
Purchasers' efforts in this regard and assist in any transfer or re-issuance of
Permits.
Section 6.5 Tax Matters.
(a) Subject to Section 6.5(j), all Transfer Taxes incurred in
connection with this Agreement and the Transactions shall be paid by Purchasers
if and when due. Purchasers will file, to the extent required by Applicable
Laws, all necessary Tax Returns and other documentation with respect to all such
Transfer Taxes. To the extent required by Applicable Laws, but subject to their
review and approval, Sellers or any of their Affiliates will join in the
execution of any such Tax Returns or other documentation. Sellers will be
entitled to review in advance such Tax Returns as it or their Affiliates may be
required to join and execute and such Tax Returns shall be subject to Sellers'
approval.
(b) Real, tangible personal and intangible personal property Taxes
("Property Taxes") of OPP attributable to any fiscal period (or portion thereof)
ending on or prior to the Closing Date shall be for the account of Sellers. With
respect to any fiscal period beginning prior to and ending after the Closing
Date, the amount of Property Taxes attributable to the portion of the fiscal
period beginning prior to and ending on the Closing Date shall be determined by
multiplying the entire amount of such Property Taxes for such fiscal period by a
fraction, the numerator of which is the number of days in such fiscal period
prior to the Closing Date plus one, and the denominator of which is the total
number of days in such fiscal period. Upon receipt of the ▇▇▇▇, assessment or
demand for such Property Taxes, Purchasers shall invoice Sellers for their share
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of such Property Taxes, and Sellers shall remit the invoiced amount to
Purchasers within 15 days.
(c) Any Tax Return to be prepared pursuant to the provisions of this
Section 6.5(c) shall be prepared in a manner consistent with practices followed
in prior years with respect to similar Tax Returns, except for changes required
by changes in Applicable Laws or fact. To the extent that any items are not
covered by past practices, such Tax Returns shall be prepared in accordance with
reasonable Tax accounting practices selected by Purchasers. The filing of any
Tax Returns, or the payment of any Taxes, described in this Section 6.5(c) shall
be made on a timely basis in accordance with Applicable Laws. The following
provisions shall govern the allocation of responsibility as between the Parties
for certain Tax matters following the Closing Date:
(i) Sellers shall prepare or cause to be prepared and file or
cause to be filed all Tax Returns for OPP for all periods ending on or
prior to the Closing Date regardless of when such Tax Returns are to be
filed. Sellers shall pay, or cause to be paid the Taxes and shall
receive or be entitled to receive tax refunds or reimbursements of Tax
attributable to OPP with respect to all periods on or prior to the
Closing Date. Notwithstanding anything to the contrary herein, Sellers
agree that with respect to any sales and use tax for periods ending on
or prior to the Closing Date, in addition to the obligations set forth
above, Sellers shall be solely responsible for any and all
administrative or legal proceedings with respect thereto.
(ii) Purchasers shall prepare or cause to be prepared and file
or cause to be filed any Tax Returns of OPP for Tax periods which begin
before or on the Closing Date and end after the Closing Date. Sellers
shall pay, or cause to be paid, to Purchasers within fifteen (15) days
after the date on which Taxes are paid with respect to such periods an
amount equal to the portion of such Taxes, which relates to the portion
of such Tax period ending on the Closing Date, other than Taxes
becoming due as a result of actions taken by Purchasers following the
Closing and Transfer Taxes.
(d) Each Party shall provide the other Party with such assistance as
may reasonably be requested by the other Party in connection with the
preparation of any Tax Return, or any audit or other examination by any taxing
authority, or any judicial or administrative proceedings relating to any
liability for Taxes (a "Tax Proceeding"), and each will retain and provide the
requesting Party with any records or information which may be relevant to such
Tax Return or Tax Proceeding. Any reasonable out-of-pocket expenses incurred in
providing such assistance shall be borne by the requesting party. Any
information obtained pursuant to this Section 6.5 or pursuant to any other
Section hereof providing for the sharing of information relating to or review of
any Tax Return or other schedule relating to Taxes shall be kept confidential by
the Parties in accordance with Section 7.4.
(e) On or before the Closing Date, Sellers shall ensure that no Tax
indemnity agreement, Tax allocation agreement, or Tax sharing agreement with
respect to OPP is in force or effect and that there shall be no liability of OPP
after the Closing Date under any such agreement.
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(f) Sellers and CPI shall jointly and severally indemnify and hold
Purchasers harmless from and against any and all Losses that Purchasers may
suffer for (i) any Taxes attributable to OPP to the extent such Losses are
attributable to any breach or inaccuracy of any of the representations or
warranties contained in Section 4.16; (ii) any Taxes attributable to Sellers'
interest in OPP for all periods ending on or prior to the Closing Date (or for
any Tax year beginning before and ending after the Closing Date to the extent
allocable (determined in a manner consistent with Section 6.5(b) to the portion
of such period beginning before and ending on the Closing Date); and (iii)
Losses for any Taxes to the extent such Losses are attributable to, arise out
of, or are based upon the breach by the Sellers or the failure of the Sellers to
perform (or cause to have performed) any of the covenants in this Section 6.5.
Any amount paid by the Sellers or CPI pursuant to this Section shall be treated
as an adjustment to the Purchase Price. Sellers' liability under this Section
6.5(f) shall not be subject to the limitations set forth in Section 8.2(b) or
Section 8.7(c).
(g) In the case of any Tax Proceeding for which any Seller is or may be
liable pursuant to this Agreement, Purchasers shall inform such Seller within
twenty (20) days of the receipt of any notice of such Tax Proceeding. If a claim
for Taxes or Losses is made and Purchasers intend to seek indemnity with respect
thereto under Section 6.5(f), Purchasers shall promptly furnish written notice
to Sellers of such claim. Failure of Purchasers to so notify Sellers within
thirty (30) days of the claim being made against Purchasers shall not terminate
rights of Purchasers to indemnity by Sellers or CPI with respect to such claim,
except to the extent Sellers are actually prejudiced by such failure. Sellers
shall have thirty (30) days after receipt of such notice to undertake, conduct
and control (through counsel of their own choosing and at their own expense) the
settlement or defense thereof, and Purchasers shall cooperate with Sellers in
connection therewith. Sellers shall permit Purchasers to participate in such
settlement or defense through counsel chosen by Purchasers (but the fees and
expenses of such counsel shall be paid by Purchasers). So long as Sellers, at
Sellers' cost and expense, (i) have undertaken the defense of, and assumed full
responsibility for all indemnified Losses or Taxes with respect to, such claim,
(ii) are contesting such claim in good faith, by appropriate proceedings, and
(iii) have taken such action (including the posting of a bond, deposit or other
security) as may be necessary to prevent any action to foreclose a lien against
or attachment of the property of Purchasers for payment of such claim,
Purchasers shall not pay or settle any such claim. Purchasers shall execute or
cause to be executed powers of attorney or other documents necessary to enable
Sellers to take all actions desired by Sellers with respect to such Tax
Proceeding. Sellers shall have the right to control, in their sole discretion,
any such Tax Proceedings and to initiate any claim for refund, file any amended
return, pay such Taxes, or enter into any settlement agreement with a
Governmental Authority, or take any other action which it deems appropriate with
respect to such Taxes; provided, however, that Sellers shall not, without
Purchasers' prior written consent agree to any settlement with respect to any
Tax if such settlement would adversely affect the Tax liability of Purchasers;
provided further, that Sellers shall, pursuant to Section 6.5(f), indemnify,
defend and hold Purchasers harmless against any such adverse effect on the Tax
liability of Purchasers as a result of such settlement. Notwithstanding
compliance by Sellers with the preceding sentence, Purchasers may elect to pay
or settle any such claim, but upon such election it shall thereby automatically,
and without any further action by any Party, irrevocably waive any right to
indemnity by Sellers with respect to such claim. If within thirty (30) days
after the receipt of Purchasers' notice of a claim of indemnity hereunder,
Sellers do not notify Purchasers that they elect (at Sellers' cost and expense)
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to undertake the defense thereof and assume full responsibility for all
indemnified Losses or Taxes with respect thereto, or give such notice and
thereafter fail to contest such claim in good faith or to prevent action to
foreclose a lien against or attachment of Purchasers' property as provided
above, Purchasers shall have the right to contest, settle or compromise such
claim and Purchasers shall not thereby waive any right to indemnity with respect
to such claim under this Agreement.
(h) Any refund of Taxes paid or payable with respect to Taxes
attributable to OPP shall be promptly paid as follows (or to the extent payable
but not paid due to offset against other Taxes shall be promptly paid by the
Party receiving the benefit of the offset as follows): (i) to Sellers if
attributable to Taxes with respect to any Tax year or portion thereof ending on
or before the Closing Date (or for any Tax year beginning before and ending
after the Closing Date to the extent allocable (determined in a manner
consistent with Section 6.5(b)) to the portion of such period beginning before
and ending on the Closing Date); and (ii) to Purchasers if attributable to Taxes
with respect to any Tax year or portion thereof beginning after the Closing Date
(or for any Tax year beginning before and ending after the Closing Date to the
extent allocable (determined in a manner consistent with Section 6.5(b)) to the
portion of such period ending after the Closing Date).
(i) In the event that a dispute arises between Sellers and Purchasers
as to the amount of Taxes, the Parties shall attempt in good faith to resolve
such dispute, and any amount so agreed upon shall be paid to the appropriate
Party. If such dispute is not resolved within thirty (30) days thereafter, the
Parties shall submit the dispute to the Independent Accounting Firm for
resolution, which resolution shall be final, conclusive and binding on the
Parties. The Independent Accounting Firm shall be instructed to deliver to the
Parties a written resolution of the dispute within twenty (20) Business Days
from the date of its engagement. For purposes of this Section 6.5(i), the
Independent Accounting Firm may determine the issues in dispute following such
procedures, consistent with the provisions of this Agreement, as it deems
appropriate to the circumstances and with reference to the amounts in issue. The
Parties do not intend to impose any particular procedures upon the Independent
Accounting Firm, it being the desire of the Parties that any such disagreement
shall be resolved as expeditiously and inexpensively as reasonably practicable.
The Independent Accounting Firm shall have no liability to the Parties in
connection with such services except for acts of bad faith, willful misconduct
or gross negligence, and the Parties shall provide such indemnities to the
Independent Accounting Firm as it may reasonably request. Notwithstanding
anything in this Agreement to the contrary, the fees and expenses of the
Independent Accounting Firm in resolving the dispute shall be borne equally by
Sellers and Purchasers. Any payment required to be made as a result of the
resolution of the dispute by the Independent Accounting Firm shall be made
within ten (10) days after such resolution, together with any interest
determined by the Independent Accounting Firm to be appropriate.
(j) Upon written notice from Purchasers, Sellers shall include in their
final partnership tax returns for OPP, an election under Section 754 of the
Code.
(k) Neither Seller is a "foreign person" which would subject Purchasers
to the withholding tax provisions of Section 1445 of the Code.
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(l) Notwithstanding anything in this Agreement to the contrary, (i) CPI
shall be responsible for, and shall indemnify and reimburse OPP and Purchasers
for, any and all Taxes arising out of any transfer of title of spare parts for
the Units from CPI to OPP as described in Section 6.15, and (ii) Sellers shall
be responsible for and shall indemnify and reimburse Purchasers and OPP for, all
Taxes arising from any transfer of Excluded Assets from OPP to Sellers or any of
their Affiliates under Section 6.12(b).
Section 6.6 Risk of Loss.
(a) Following the Effective Date and through and expiring on the
Closing Date, all risk of loss or damage to the assets and properties of OPP,
including the Oleander Station, shall be borne by Sellers.
(b) If before the Closing Date all or any portion of the Oleander
Station becomes subject to any condemnation or eminent domain proceeding (the
"Condemned Portion"), Sellers shall notify Purchasers promptly in writing of
such fact. If the fair market value of the Condemned Portion is equal to or less
than twenty-five percent (25%) of the Initial Purchase Price and the remaining
portion of the Oleander Station may be operated in a manner substantially
similar to that in which the entire Oleander Station was operated immediately
prior to the Effective Date, Sellers shall reduce the Initial Purchase Price by
the fair market value of the Condemned Portion (such value to be determined as
of the date immediately prior to such condemnation or eminent domain proceeding)
and retain any claim, settlement, or proceeds thereof related to such proceeding
to which Sellers or any Affiliate of Sellers may be entitled; provided, that
Purchasers shall exercise commercially reasonable efforts (at Sellers' expense)
to cooperate with Sellers in Sellers' efforts to obtain any such claim,
settlement, or proceeds. Any failure of a condition to Closing related to any
such proceeding of which Sellers shall have so notified Purchasers shall be
deemed not to exist; provided, that Sellers exercises their election pursuant to
the preceding sentence within a reasonable period of time. If, before the
Closing Date, all or any portion of the Oleander Station becomes subject to or
is threatened with any condemnation or eminent domain proceeding and the fair
market value of the Condemned Portion is greater than twenty-five percent (25%)
of the Initial Purchase Price, then Purchasers may elect either to (i) require
Sellers upon the Closing to assign to Purchasers any claim, settlement, or
proceeds thereof related to such proceeding to which Sellers or any Affiliate of
Sellers may be entitled and proceed with the Transactions, or (ii) terminate
this Agreement.
(c) If before the Closing Date all or any portion of the Oleander
Station is damaged or destroyed (the "Damaged Portion") (whether by fire, theft,
vandalism or other casualty) in whole or in part, and the cost of repair of the
Damaged Portion is less than twenty-five percent (25%) of the Initial Purchase
Price, and the Damaged Portion of the Oleander Station may be repaired or
restored (to its pre-damaged or pre-destroyed condition), Sellers shall, at
their option, either (i) bear the costs of repairing and restoring the Damaged
Portion to a condition such that it operates in a manner substantially similar
to that immediately prior to the date of such damage or destruction and, if
necessary, delay the Closing and any right to terminate this Agreement for a
reasonable time (not to exceed one hundred eighty (180) days) necessary to
accomplish the same, or (ii) proceed with the Transactions and, upon the
Closing, transfer to Purchasers the proceeds (or the right to the proceeds) of
any applicable insurance to which Sellers or any Affiliate of Sellers (other
than OPP) may be entitled plus reimbursement for all other Losses incurred by
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Purchasers (including without limitation any insurance deductibles and any lost
revenue or damages incurred by OPP following the Closing under Existing
Contracts) to repair and restore the Damaged Portion to a condition such that it
operates in a manner substantially similar to that immediately prior to the date
of such damage or destruction. Any failure of a condition to Closing related to
any such damage or destruction of which Sellers shall have so notified
Purchasers shall be deemed not to exist; provided, that Sellers exercise their
election pursuant to the preceding sentence within a reasonable period of time.
If the Oleander Station is damaged or destroyed (whether by fire, theft,
vandalism or other casualty) in whole or in part prior to the Closing and the
cost of repair of the Damaged Portion is greater than twenty-five percent (25%)
of the Initial Purchase Price, or the Damaged Portion cannot be repaired or
restored (to its pre-damaged or pre-destroyed condition), then Purchasers may,
at their option (x) require Sellers to (1) bear the costs of repairing and
restoring the Damaged Portion to a condition such that it operates in a manner
substantially similar to that immediately prior to the date of such damage or
destruction and, if necessary, delay the Closing and any right to terminate this
Agreement for a reasonable time (not to exceed one hundred eighty (180) days)
necessary to accomplish the same, or (2) proceed with the Transactions and, upon
the Closing, transfer to Purchasers the proceeds (or the right to the proceeds)
of any applicable insurance to which Sellers or any Affiliate of Sellers (other
than OPP) may be entitled plus reimbursement for any insurance deductibles to
repair and restore the Damaged Portion to a condition such that it operates in a
manner substantially similar to that immediately prior to the date of such
damage or destruction, or (y) terminate this Agreement.
Section 6.7 Insurance. Purchasers acknowledge and agree that effective
upon the Closing, the Seller Insurance Policies shall be terminated or modified
to exclude coverage of OPP and the Oleander Station by Sellers, and, as a
result, Purchasers shall be obligated at or before Closing to obtain at their
sole cost and expense replacement insurance policies providing coverage for
claims made and arising after the Closing Date, including insurance required by
any third party to be maintained by or for the benefit of OPP. Purchasers
further acknowledge and agree that Purchasers may need to provide to certain
Governmental Authorities and third parties evidence of such replacement or
substitute insurance coverage for the continued operations of the Business of
OPP following the Closing. Notwithstanding Section 6.12 or Section 6.13, if any
claims are made arising from events that occur prior to the Closing Date that do
not arise out of damage or destruction of the Oleander Station provided for in
Section 6.6 and that relate solely to the Business of OPP and such claims may be
covered by the Seller Insurance Policies, then Sellers shall cooperate with
Purchasers so that OPP can file, notice, and otherwise pursue such claims and
recover proceeds under the terms of such policies.
Section 6.8 Announcements. Subject to Section 6.1, prior to the Closing
Date no press release or other public announcement, or public statement or
comment in response to any inquiry, relating to this Agreement or the
Transactions shall be issued or made by either Purchasers or Sellers, or any of
their Affiliates, without the approval of Purchasers or Sellers, as the case may
be; provided, however, that a press release or other public announcement,
regulatory filing, statement or comment made without such approval shall not be
in violation of this Section 6.8 if it is made in order to comply with
Applicable Laws or stock exchange rules and in the reasonable judgment of the
party making such release or announcement, based upon advice of counsel, prior
review and joint approval, despite reasonable efforts to obtain the same, would
prevent dissemination of such release or announcement in a timely enough fashion
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to comply with such Applicable Laws or rules; provided, further, that in all
instances prompt notice from the Purchasers or Sellers, as the case may be,
shall be provided to the Purchasers or Sellers, as the case may be, with respect
to any such release, announcement, statement or comment.
Section 6.9 Post Closing - Further Assurances. At any time or from time
to time after the Closing, each Party will, upon the reasonable request of the
other Party, execute and deliver any further instruments or documents, and
exercise commercially reasonable efforts to take such further actions as may
reasonably be required, to fulfill and implement the terms of this Agreement or
realize the benefits intended to be afforded hereby. After the Closing, and upon
prior reasonable request, each Party shall exercise commercially reasonable
efforts to cooperate with the other, at the requesting Party's expense
(including out-of-pocket expenses to third parties incurred by any Party and, in
the case of Sellers, the reasonable value of the time expended by their
personnel or the personnel of any of their Affiliates, including the wages or
other benefits paid or payable to their respective officers, directors or
employees, that are reasonably attributable to furnishing assistance requested
by Purchasers hereunder), in furnishing non-privileged Records, information,
testimony and other assistance in connection with any inquiries, actions,
audits, proceedings or disputes involving any of the Parties (other than in
connection with disputes between the Parties) and based upon contracts,
arrangements or acts of Sellers, CPI, OPP or Purchasers, which were in effect or
occurred on, prior to, or after Closing and which relate to OPP or the Oleander
Station, including, without limitation, arranging discussions with (and calling
as a witness) officers, directors, employees, agents, and representatives of
Purchasers or Sellers.
Section 6.10 Post Closing - Information and Records.
(a) For a period of five (5) years after the Closing (or, if requested
in writing by Sellers within five (5) years after the Closing, until the closing
of any Tax Proceeding with respect to Sellers' Tax Returns for all periods prior
to and including the Closing, if later), Purchasers will not dispose of any
books, records, documents, contracts, data or information, whether in electronic
or physical form, and the software and computer hardware necessary to retrieve
such data or information ("Records"), reasonably relating to OPP and the
Oleander Station delivered to it by Sellers or in the possession of OPP as of
the Closing without first giving notice to Sellers thereof and permitting
Sellers to retain or copy such books and records as it may select. During such
period, Purchasers will permit Sellers to examine (during normal business hours
and upon reasonable notice) and make copies, at Sellers' expense and subject to
such confidentiality restrictions as Purchasers may reasonably impose, of such
Records for any reasonable purpose, including any litigation now pending or
hereafter commenced against Sellers or their Affiliates (other than litigation
with Purchasers or OPP), or the preparation of income or other Tax Returns.
Notwithstanding the above, Purchasers shall maintain fixed asset records to
document and support Tax basis of all fixed assets from the inception of OPP and
make such records available to Sellers if requested in writing for any period(s)
subsequent to the inception of OPP and prior to Closing.
(b) During such five (5) year time period, Purchasers will provide to
Sellers, at Sellers' expense, copies of such Records reasonably relating to OPP
and the Oleander Station delivered to it by Sellers or in the possession of OPP
as of the Closing for any reasonable purpose, including any litigation now
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pending or hereafter commenced against Sellers or their Affiliates by any Person
(other than litigation with Purchasers or OPP). Sellers will provide reasonable
notice to Purchasers of their need to access such Records.
(c) If privileged and/or attorney work product documents or
information, including communications between Sellers or their Affiliates and
any of their respective counsel, are disclosed to Purchasers in the Records
delivered by Sellers or in the possession of OPP as of the Closing, then each of
the Purchasers agree that (i) such disclosure is inadvertent, (ii) such
disclosure will not constitute a waiver, in whole or in part, of any privilege
or work product, (iii) such information will constitute Confidential Information
subject to the provisions of Section 7.4, and (iv) it will promptly return to
Sellers all copies of such Records in the possession of OPP, such Purchaser or
Purchasers' Affiliates, agents, employees or representatives (including lenders
and financial advisors).
(d) If privileged and/or attorney work product documents or
information, including communications between Purchasers or Purchasers' Parent
and either of their counsel or OPP and its counsel, are disclosed to Sellers in
the books, records, documents or other information delivered by Purchasers or
Purchasers' Parent or OPP, each of the Sellers agrees (i) such disclosure is
inadvertent, (ii) such disclosure will not constitute a waiver, in whole or in
part, of any privilege or work product, (iii) such information will constitute
Confidential Information subject to the provisions of Section 7.4, and (iv) it
will promptly return to Purchasers or Purchasers' Parent, or OPP, all copies of
such books, records, documents or other information in the possession of such
Seller or its Affiliates, agents, employees or representatives (including
lenders and financial advisors).
Section 6.11 Use of Seller Marks. Upon Closing, Seller Marks will
appear on some of the assets of OPP, including on signage at the Oleander
Station, and on supplies, materials, stationery, brochures, advertising
materials, manuals and similar consumable items of OPP. Except as provided in
the next sentence, Purchasers acknowledge and agree that they do not have and,
upon consummation of the Transactions shall not have, any right, title,
interest, license, or any other right whatsoever to the Seller Marks. As soon as
practicable and in no event later than thirty (30) days following the Closing
Date, Purchasers shall (a) remove any Seller Marks from, or cover or conceal the
Seller Marks on, the assets of OPP, including signage at the Oleander Station,
and provide written verification thereof to Sellers after completing such
removal, and (b) return or destroy (with reasonable certifications of
destruction) all other assets of OPP that contain any Seller Marks that are not
removable. Purchasers agree never to challenge Sellers' or their Affiliates'
ownership of the Seller Marks or any application for registration thereof or any
registration thereof or any rights of Sellers or their Affiliates therein as a
result, directly or indirectly, of its ownership of OPP. Purchasers will not
conduct any business or offer any goods or services under any Seller Marks.
Purchasers will not send, or cause to be sent, any correspondence or other
materials to any Person on any stationery that contains any Seller Marks or
otherwise operate OPP in any manner which would or might reasonably be expected
to confuse any Person into believing that Purchasers have any right, title,
interest, or license to use any Seller Marks.
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Section 6.12 Excluded Assets.
(a) Notwithstanding anything to the contrary contained in this
Agreement, the Transactions shall exclude the following (the "Excluded Assets"):
(i) except as required in Section 6.6(c) and Section 6.7, all
Seller Insurance Policies and rights under any Seller Insurance
Policies in respect of any and all claims made under such policies
whether such claims are asserted before or after the Closing Date and
all rights to any proceeds payable under any such policy;
(ii) any and all of OPP's rights arising under any and all
Intercompany Arrangements;
(iii) the Seller Marks; and
(iv) the assets listed in Schedule 6.12(a).
(b) Prior to the Closing Date, Sellers may cause OPP to transfer any
Excluded Asset to Sellers or any of their Affiliates; provided, however, that
any Excluded Asset not so transferred prior to the Closing Date shall be deemed
to have been transferred to Sellers without any further action.
Section 6.13 Excluded Liabilities. Notwithstanding anything to the
contrary contained in this Agreement, the Transactions shall exclude, and
Sellers hereby assume as of the Closing Date, the following (the "Excluded
Liabilities"):
(a) any liabilities or obligations of OPP in respect of the
Intercompany Arrangements or the termination thereof; and
(b) any liabilities or obligations of OPP in respect of any Excluded
Asset.
Section 6.14 Additional Covenants of the Purchasers and Sellers.
(a) Each Purchaser and Purchasers' Parent hereby agrees with and
covenants to Sellers, that prior to consummation of the Transactions or the
termination or expiration of this Agreement pursuant to its terms, unless
Sellers shall otherwise consent in writing, each Purchaser and Purchasers'
Parent shall not take any action which would cause any of such Purchaser's and
Purchasers' Parent's representations and warranties set forth in Article 5 to be
false as of the Closing in any material respect.
(b) Each of the Sellers, and CPI, hereby agree with and covenant to
Purchasers, that prior to consummation of the Transactions or the termination or
expiration of this Agreement pursuant to its terms, unless Purchasers shall
otherwise consent in writing, such Party shall not take any action which would
cause any of such Seller's or CPI's representations and warranties set forth in
Article 4 to be false as of the Closing in any material respect.
Section 6.15 Transfer of LTSA Capital Spares and Other Equipment. Prior
to or at the Closing, CPI will cause all of its right, title and interest in and
to any LTSA Capital Spares or the Parts Inventory listed in Schedule 3.4(a)(i),
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in each case, to be transferred, free and clear of all Encumbrances (other than
as set forth in the LTSA), to OPP. Except for the Excluded Assets, prior to or
at the Closing, Sellers will, or will cause their Affiliates to, transfer all of
the right, title and interest in and to any items listed in Schedule 4.11, free
and clear of all Encumbrances, to OPP.
Section 6.16 Seller Guarantees. The Parties shall cooperate and use
commercially reasonable efforts in order that, effective as of the Closing Date,
(a) the Seller Guarantees and any liabilities related thereto shall be released
as to Sellers and their Affiliates, and (b) substitute arrangements, if
required, of Purchasers or their Affiliates shall be in effect. If the Parties
are unable to cause any of the Seller Guarantees to be released as to Sellers
and their Affiliates prior to the Closing Date, then any such Sellers Guarantees
shall remain in effect and Purchasers shall provide (or cause to be provided) to
Sellers a guaranty, cash, or a letter of credit, in a form and from a Person
reasonably acceptable to Sellers guaranteeing the performance by Purchasers of
all obligations under such unreleased Seller Guarantees from and after the
Closing Date.
Section 6.17 Payment of Intercompany Arrangements. Sellers shall cause
all Intercompany Arrangements to be cancelled and terminated, and all amounts
due and owing as of the Closing Date thereunder to be satisfied in full by
Sellers or any Affiliates of Sellers (other than OPP), prior to or concurrently
with the Closing.
Section 6.18 Employees.
(a) Effective as of the Closing Date, Purchasers agree to offer
employment at substantially comparable base compensation levels to each of the
O&M Technicians employed at the Oleander Station that are listed on Schedule
6.18 and who are actively at work on the day prior to the Closing or who are on
an approved leave of absence, other than an absence due to a long-term
disability; provided, however, that such offer of employment shall be contingent
upon a background check and drug test, the results of which are satisfactory to
Purchasers as determined in accordance with its standard policies and
procedures. Each such employee who is offered and accepts immediate employment
with Purchasers effective as of the Closing Date will be referred to herein as
an "Employee." Nothing herein shall be deemed to require Purchasers to continue
to employ any Employee for any specified period of time except as may be
required by Applicable Laws.
(b) As of the first day of the calendar month following the Closing
Date with respect to the medical, dental and life insurance welfare plans
maintained or sponsored by Sellers or their Affiliates and as of the Closing
Date with respect to all other employee welfare plans (as such term is defined
in ERISA) maintained or sponsored by Sellers or their Affiliates, each Employee
shall cease to participate in the employee welfare benefit plans (as such term
is defined in ERISA) maintained or sponsored by Sellers or their Affiliates and
shall, upon timely and proper enrollment by such Employee, commence
participation in any applicable employee welfare benefit plan of Purchasers or
their Affiliates in which such Employee is eligible to participate.
(c) [**]
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(d) [**]
(e) [**]
Section 6.19 Creditworthiness
(a) At any time prior to the date that is eighteen (18) months after
the Closing Date, if the Net Worth of CPI is reduced to a dollar value that is
less than Two Hundred Million Dollars ($200,000,000), or if CPI disposes of
substantially all of its electric generation assets, then Sellers shall cause
CPI to be replaced for all purposes of this Agreement by Constellation Energy
Group, Inc.
(b) At any time prior to the date that is eighteen (18) months after
the Closing Date, if the Net Worth of Purchasers' Parent is reduced to a dollar
value that is less than Two Hundred Million Dollars ($200,000,000), or if
Purchasers' Parent disposes of substantially all of its electric generation
assets, then Purchasers shall at their option either (i) cause Southern Power
Company to be replaced for all purposes of this Agreement by The Southern
Company or (ii) provide Sellers with eligible collateral (either in the form of
cash deposited into an escrow account or a letter of credit in a form acceptable
to Sellers) in support of the obligations of Purchasers under this Agreement in
an amount not to exceed [**].
ARTICLE 7
ACCESS AND CONFIDENTIALITY; TRANSITION PROCEDURES
Section 7.1 General Access. Subject to the provisions of Section 7.2,
during the Transition Period, Sellers shall permit (and Sellers shall cause OPP
to permit) Purchasers and their representatives:
(a) to have reasonable access, at reasonable times and upon reasonable
advance notice and in a manner so as not to interfere unduly with the business
operations of Sellers or OPP, to the Records of OPP relating to its Business and
the Oleander Station insofar as the same may be disclosed without (i) violating
any legal constraints or any legal obligation, (ii) waiving any attorney/client,
work product, or like privilege, (iii) disclosing confidential information about
the activities of Sellers or their Affiliates (other than OPP) that is unrelated
to OPP, the Business or the Oleander Station, or (iv) disclosing proprietary
models of Sellers or any of their Affiliates pertaining to energy project
evaluation, energy or natural gas price curves or projections, or other economic
predictive models; and
(b) subject to Sellers' receipt of any required consent of any third
Person and upon reasonable advance notice to Sellers, to conduct at reasonable
times and at Purchasers' sole risk, cost, and expense, in the presence of
representatives of Sellers, reasonable inspections of the Oleander Station;
provided, no soil, ground water or other environmental testing shall be
conducted.
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Section 7.2 Transition Period Procedures.
(a) The Parties acknowledge and agree that in order to ensure that upon
Closing the transition of the ownership and operation of the Oleander Station is
as smooth and orderly as is reasonably practicable, representatives of
Purchasers shall be entitled to become familiar with the Oleander Station, to be
introduced to, and have the opportunity to meet with, suppliers, other vendors
and customers of OPP, and to conduct the activities described on the Transition
Plan included in Schedule 7.2.
(b) Promptly after the Effective Date, Sellers will inform Purchasers
regarding the planned operation schedule of each Unit for the next six (6)
months. In addition to the activities described in subsection (a) of this
Section 7.2, Purchasers shall be allowed to send an observer to Oleander Station
to observe the operation of each of the Units. Such observer may return to
Oleander Station on multiple occasions, including such occasions as may be
necessary for the observer to observe each Unit's operations immediately after
the Effective Date and to observe their operations immediately prior to the
scheduled Closing Date. The observer shall be allowed to monitor and record
performance of each Unit and shall be allowed access to historical performance
data following operation and shutdown of each of the Units. Items that may be
monitored include without limitation: (i) individual CT gross power output (at
the generator terminals); (ii) individual CT fuel consumption; (iii) ambient
temperature; (iv) ambient pressure; (v) ambient relative humidity; (vi) average
exhaust temperature; (vii) exhaust temperature profile; (viii) compressor
discharge pressure; (ix) compressor discharge temperature; (x) IGV angle; (xi)
water injection flow rate (if applicable for oil firing); (xii) NOx emissions;
and (xiii) CO2 emissions.
(c) In no event shall any meetings with suppliers, other vendors or
customers of OPP be conducted prior to the Closing without Purchasers'
representatives being notified in writing of, and having an opportunity to be
present at, such meeting, nor shall Purchasers, or any of their Affiliates
otherwise contact or communicate directly with any supplier, other vendor or
customer of OPP prior to the Closing without Sellers' prior written consent
unless Sellers' representatives participate therein. Notwithstanding anything
above to the contrary, Purchasers may, prior to the Closing Date, conduct
conversations, meetings and negotiations with third parties (including, without
limitation, third parties who are or may be suppliers or vendors to CPI or OPP
or to Sellers (e.g., GEII)), without notice to or the presence of a
representative of Sellers or their Affiliates, regarding the provision of goods
or services to OPP after the Closing Date, which conversations, meetings and
negotiations shall expressly be limited to the rights and obligations of OPP as
an Affiliate of Purchasers and not Sellers.
(d) Notwithstanding anything to the contrary contained in this
Agreement, subject to this sub-section (d) of Section 7.2, the Parties agree and
understand that Sellers will not be providing any transition services on or
after the Closing Date to Purchasers. Sellers agree to cooperate with Purchasers
and to use commercially reasonable efforts to assist Purchasers in a safe and
adequate transition; provided, however, that in the event Sellers fail to
provide to Purchasers within a reasonable period of time prior to Closing the
information and assistance Purchasers reasonably need in order to complete a
safe and adequate transition on or before the Closing Date, then Sellers shall
provide transition services (at Sellers' sole cost and expense) for ninety (90)
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days after Closing such that Purchasers are able to complete a safe and adequate
transition.
Section 7.3 Indemnification. Purchasers agree to indemnify, protect,
and hold harmless, release, and defend the Seller Indemnified Parties and OPP
from and against any and all Losses arising, in whole or in part, from the acts
or omissions of the Purchaser Indemnified Parties during the Transition Period
in connection with Purchasers' inspection or assessment of the Oleander Station
and other assets and Records of Sellers or OPP, including claims for personal
injuries, property damage, and reasonable attorneys' fees and expenses, and all
such inspections and assessments shall be at Purchasers' sole risk. The
provisions set forth in Section 8.4, Section 8.5, Section 8.6, Section 8.7(a)
and Section 8.7(b) shall apply to any indemnification by Purchasers under this
Section 7.3. For the avoidance of doubt, Section 8.7(c) shall not apply to any
indemnification by Purchasers under this Section 7.3.
Section 7.4 Confidential Information.
(a) For purposes hereof, the "Confidential Information" of a Party (the
"Disclosing Party") means such information about the Disclosing Party that is
provided to another Party (the "Receiving Party") and is at the time of such
provision designated by the Disclosing Party to the Receiving Party to be
confidential. Except as otherwise provided in this Agreement, a Receiving Party
shall not, without the prior written consent of the Disclosing Party, disclose
the Confidential Information of a Disclosing Party to any other Person or use
the Confidential Information of a Disclosing Party other than in connection with
this Agreement and the consummation of the Transactions. Notwithstanding the
foregoing, a Receiving Party's obligations under this Section shall not apply to
(i) information which is now in the public domain, or which later enters the
public domain, through no action on such Receiving Party's part in violation of
this Agreement; or (ii) information which was already in the Receiving Party's
possession at the time of its disclosure, and which was not acquired by the
Receiving Party from the Disclosing Party on a confidential basis. The Parties
acknowledge that the Due Diligence Materials are Confidential Information of
Sellers.
(b) Notwithstanding the foregoing, a Receiving Party may, without
requirement of consent of the Disclosing Party, disclose a Disclosing Party's
Confidential Information (i) to its management group, employees and professional
advisors (including attorneys) in connection with the Transactions; (ii) to the
extent such disclosure is required under Applicable Laws (including as may be
reasonably necessary to obtain the approval of any Governmental Authority to
consummate the Transactions) or is required of a third party in order to
consummate the Transactions; and (iii) in connection with any action or
proceeding to enforce the Receiving Party's rights under this Agreement.
Further, the obligations of confidentiality above, as they relate to the
Transactions, shall not apply to the tax structure or tax treatment of the
Transactions, and each Party (and any employee, representative, or agent of any
Party) may disclose to any and all persons, without limitation of any kind, the
tax structure and tax treatment of the Transactions and all materials of any
kind (including opinions or other tax analysis) that are provided to such Party
relating to such tax treatment and tax structure; provided, that such disclosure
shall not include the name (or other identifying information not relevant to the
tax structure or tax treatment) of any person and shall not include information
for which nondisclosure is reasonably necessary in order to comply with
applicable securities laws.
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(c) The provisions of this Section 7.4 shall survive (including
survival of any termination of this Agreement) for a period equal to two (2)
years after the Effective Date. If this Agreement is terminated prior to
Closing, then each Receiving Party shall return to the relevant Disclosing
Party, as soon as practicable, all originals and copies of written or recorded
information constituting the Confidential Information of such Disclosing Party.
If the Closing occurs, then notwithstanding anything herein to the contrary,
Purchasers shall not be restricted in any manner whatsoever in their use or
disclosure of any information that constitutes an asset of OPP. The provisions
of this Section 7.4 supersede the provisions of the Confidentiality Agreement,
which is hereby made null and void.
Section 7.5 No Other Contact. Except as otherwise provided for in this
Agreement, Purchasers shall not otherwise contact or correspond with any
customer, employee, or other Person associated with OPP or the Oleander Station
with respect to the Transactions, without the prior written consent of Sellers.
ARTICLE 8
INDEMNIFICATION
Section 8.1 Exclusivity. Except as provided in Section 6.5(f) and
except for fraud, willful misconduct, willful misrepresentation, or willful
breach of a representation, warranty, covenant or agreement hereunder, and
except as set forth in Articles 9, 10 and 11, the rights and remedies of CPI,
Sellers and the Seller Indemnified Parties, on the one hand, and Purchasers and
the Purchaser Indemnified Parties, on the other hand, for money damages under
this Article are, solely as between CPI, Sellers and the Seller Indemnified
Parties on the one hand, and Purchasers and the Purchaser Indemnified Parties on
the other hand, exclusive and in lieu of any and all other rights and remedies
for money damages which each of CPI, Sellers and the Seller Indemnified Parties
on the one hand, and Purchasers and the Purchaser Indemnified Parties on the
other hand, may have under this Agreement or under Applicable Laws with respect
to any Indemnifiable Claim, whether at law or in equity.
Section 8.2 Indemnification by Sellers and CPI.
(a) Purchaser Claims. Except as otherwise provided in Section 6.5(f),
each of Sellers and CPI, jointly and severally, will indemnify, protect, defend
and hold harmless Purchasers and their Affiliates, and each of their officers,
directors, employees, attorneys, agents and successors and assigns
(collectively, the "Purchaser Indemnified Parties"), from and against any and
all demands, suits, penalties, fines, liens, judgments, obligations, damages,
claims, losses, liabilities, payments, costs and expenses, including without
limitation reasonable legal, accounting and other expenses in connection
therewith and including without limitation costs and expenses incurred in
connection with investigations and settlement proceedings ("Losses"), which
arise out of, are in connection with, or relate to, the following (collectively,
"Purchaser Claims"):
(i) any breach or violation of any covenant, obligation or
agreement of Sellers or CPI set forth in this Agreement;
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(ii) any breach or inaccuracy of the representations or
warranties made, as of the Effective Date or as of the Closing Date (as
per Sections 9.5 and 9.6), by Sellers or CPI in Article 4 (without
giving effect to any updates, disclosures or supplements thereto);
(iii) any claims or liability arising out of, or in connection
with, including without limitation in connection with the termination
of, any Intercompany Arrangements;
(iv) if the Closing occurs, any of the Excluded Assets or
Excluded Liabilities, including without limitation, the failure of
Sellers to pay, discharge or perform any of the Excluded Liabilities as
and when due; and
(v) if the Closing occurs, any Losses arising out of, or in
connection with the matters referenced on Schedule 4.8, including
without limitation any lost revenue or damages under the Existing
Contracts.
(b) Limitations on Sellers' and CPI's Indemnification Obligation.
Except for any Purchaser Claims arising under Section 8.2(a)(i) as the result of
the willful failure of either Seller or of CPI to comply with a covenant or
obligation under this Agreement and except for any Purchaser Claims arising
under Sections 8.2(a)(iii) and 8.2(a)(v), which claims shall not be subject to,
or count towards, any limitations, the aggregate damages to which the Purchaser
Indemnified Parties will be entitled for all Purchaser Claims shall be limited
to [**]; provided, that Purchaser Claims arising under Section 8.2(a)(ii) due to
the breach or inaccuracy of representations or warranties made (as of the
Effective Date or as of the Closing Date (per Sections 9.5 and 9.6)) by Sellers
or CPI in the following Sections shall not be subject to such, or any,
limitation and shall not count toward any such limitation: Sections 4.1, 4.2,
4.3, 4.4, 4.6, 4.14, 4.16 and 4.18.
Section 8.3 Indemnification by Purchasers.
(a) Sellers' Claims. Each of Purchasers and Purchasers' Parent, jointly
and severally, will indemnify, protect, defend and hold harmless each of CPI,
Sellers and their Affiliates and each of their officers, directors, employees,
attorneys, agents and successors and assigns (collectively, the "Seller
Indemnified Parties"), from and against any and all Losses which arise out of or
relate to the following (collectively, "Seller Claims"):
(i) any breach or violation of any covenant, obligation or
agreement of Purchasers set forth in this Agreement;
(ii) any breach or inaccuracy of any of the representations or
warranties made, as of the Effective Date or the Closing Date, by
Purchasers in Article 5; and
(iii) if the Closing occurs, the Business, the ownership,
operation or use of any of the assets of OPP, including the Oleander
Station (but excluding the Excluded Assets), the failure to pay,
perform or discharge any liabilities or obligations of OPP (but
excluding the Excluded Liabilities), or any other matter relating to or
arising out of the Business of OPP, the ownership, operation or use of
any of the assets of OPP, including the Oleander Station (but excluding
the Excluded Assets), relating, in each case, only to Losses arising
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after the Closing Date, and only to the extent such Losses do not
constitute claims under Section 6.5 or Purchaser Claims under Section
8.2(a) (subject to the limitations in this Agreement).
(b) Limitations on Purchasers' Indemnification Obligations. Except for
any Seller Claims arising under Section 8.3(a)(i) as the result of the willful
failure of either Purchaser to comply with a covenant obligation under this
Agreement, which claims shall not be subject to, or count towards, any
limitations, the aggregate damages to which the Seller Indemnified Parties will
be entitled for all Seller Claims shall be limited to [**]; provided, that
Seller Claims arising under Section 8.3(a)(ii) due to the breach or inaccuracy
of representations or warranties made (as of the Effective Date or as of the
Closing Date (per Section 10.5 and 10.6)) by Purchasers or Purchasers' Parent in
the following Sections shall not be subject to such, or any, limitation and
shall not count toward any such limitation: Sections 5.1, 5.2 and 5.6.
Section 8.4 Notice of Claim. Subject to the terms of this Agreement and
upon a Party's receipt of notice of the assertion of a claim or of the
commencement of any suit, action or proceeding made or brought by any Person who
is not a Party to this Agreement or an Affiliate of any Party, the Party seeking
indemnification hereunder (the "Indemnitee") will promptly notify the Party
against whom indemnification is sought (the "Indemnitor") in writing of any
damage, claim, loss, liability or expense which the Indemnitee has determined
has given or could give rise to a claim under Section 7.3 or Section 8.2 or
Section 8.3. Such written notice is herein referred to as a "Notice of Claim." A
Notice of Claim will specify, in reasonable detail, the material facts known to
the Indemnitee regarding the claim. Subject to the terms of this Agreement, the
failure to provide (or timely provide) a Notice of Claim will not affect the
Indemnitee's rights to indemnification; provided, however, that the Indemnitor
is not obligated to indemnify the Indemnitee for the increased amount of any
claim which the Indemnitor can demonstrate would otherwise have been payable to
the extent that the increase resulted from the Indemnitee's failure to timely
deliver a Notice of Claim.
Section 8.5 Defense of Third Party Claims.
(a) The Indemnitor shall be entitled to defend any Third Party Claim
against the Indemnitee; provided, however, that the Indemnitee shall be entitled
to participate in such defense, with counsel of its choice and at its own
expense, and if the Indemnitor does not provide a competent and vigorous defense
then the Indemnitee's participation shall be at the expense of the Indemnitor.
The Indemnitor and Indemnitee shall each provide such reasonable cooperation and
access to its books, records and properties as the Indemnitee shall reasonably
request with respect to such matter, and the Parties shall cooperate with each
other in order to ensure the proper and adequate defense.
(b) An Indemnitor shall not settle any claim subject to indemnification
hereunder without the prior written consent of the Indemnitee, which consent
shall not be unreasonably withheld or delayed (provided that an Indemnitee shall
not be deemed to be unreasonably withholding its consent if such settlement does
not include a full release of the Indemnitee).
(c) With regard to claims of Indemnitees to whom indemnification is
payable hereunder, such indemnification shall be paid by the Indemnitor (or
amounts may be set off by the Indemnitee) upon the earliest to occur of (i) the
entry of a judgment against the Indemnitee and the expiration of any applicable
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appeal period, (ii) the entry of an unappealable judgment or final appellate
decision against the Indemnitee, (iii) the settlement of the claim, or (iv) with
respect to claims before any administrative or regulatory authority when the
Loss is finally determined and not subject to further review or appeal;
provided, however, that the Indemnitor shall pay on the Indemnitee's demand any
cost or expenses reasonably incurred by the Indemnitor in defending or otherwise
dealing with such claim.
(d) If an Indemnitee is entitled to indemnification under this
Agreement as a result of a Third Party Claim, and the Indemnitor fails to assume
the defense of such claim, then the Indemnitee will contest, or with the prior
written consent of such Indemnitor, settle such claim; provided, however, that
no such contest need be made, and settlement or full payment of any such claim
may be made without consent of the Indemnitee, if in the written opinion of an
independent third party counsel chosen by the Indemnitee, such claim is
meritorious.
(e) The Indemnitee may not settle or compromise any Third Party Claim
so long as the Indemnitor is defending it in good faith.
Section 8.6 Cooperation. The Party defending a Third Party Claim will:
(a) consult with the other Party throughout the pendency of the Third Party
Claim regarding the investigation, defense, settlement, trial, appeal or other
resolution of the Third Party Claim; and (b) afford the other Party the
opportunity to be associated in the defense of the Third Party Claim. The
Parties will cooperate in the defense of the Third Party Claim. The Indemnitee
will make available to the Indemnitor or its representatives all Records and
other materials reasonably required by them for use in contesting any Third
Party Claim (which Records and other materials shall be subject to Section 7.4).
If requested by the Indemnitor, the Indemnitee will cooperate with the
Indemnitor and its counsel in contesting any Third Party Claim that the
Indemnitor elects to contest or, if appropriate, in making any counterclaim
against the Person asserting the claim or demand, or any cross-complaint against
any Person. The Indemnitor will reimburse the Indemnitee for any expenses
incurred by Indemnitee in cooperating with or acting at the request of the
Indemnitor.
Section 8.7 Mitigation and Limitation of Claims. As used in this
Agreement, the term "Indemnifiable Claim" means any Purchaser Claims or Seller
Claims. Notwithstanding anything to the contrary contained herein:
(a) the Indemnitee will take all reasonable steps to mitigate all
Losses, damages and the like relating to an Indemnifiable Claim, including
availing itself of any defenses, limitations, rights of contribution, claims
against third Persons and other rights at law or equity, and will provide such
evidence and documentation of the nature and extent of the Indemnifiable Claim
as may be reasonably requested by the Indemnitor. The Indemnitee's reasonable
steps include the reasonable expenditure of money to mitigate or otherwise
reduce or eliminate any loss or expense for which indemnification would
otherwise be due under this Article 8, and the Indemnitor will reimburse the
Indemnitee for the Indemnitee's reasonable expenditures in undertaking the
mitigation, together with interest thereon from the date of payment to the date
of repayment at a variable rate of interest equal to the "prime rate" in effect
during such period as published in The Wall Street Journal;
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(b) except as otherwise contemplated in this Agreement, any
Indemnifiable Claim shall be limited to the amount of actual out-of-pocket
damages sustained by the Indemnitee by reason of the occurrence or event giving
rise to such Indemnifiable Claim, net of insurance recoveries; provided, that,
subject to the limitations set forth in Sections 8.3(b) and 8.7(c), a Seller
Claim for a breach of this Agreement by Purchaser that results in a termination
of this Agreement or other failure to consummate the Transactions may include
any other remedies available at law; and
(c) if the Closing occurs, no Party shall have any liability or
obligation to indemnify under Section 8.2(a)(ii) or Section 8.3(a)(ii), as the
case may be, unless the aggregate amount for which such Party would be liable
thereunder, but for this provision, exceeds [**]. Nothing in this Section 8.7(c)
is intended to modify or limit a Party's liability or obligation hereunder for
other Indemnifiable Claims. For purposes of this Section 8.7(c) only, to the
extent that it is the subject of indemnification under Section 8.2(a)(ii) and
under any other subsection of Section 8.2, such claim will not be considered the
subject of indemnity under Section 8.2(a)(ii).
Section 8.8 Adjustment to Purchase Price. Any and all payments required
to be made under this Article 8 shall be treated as an adjustment to the
Purchase Price.
Section 8.9 Specific Performance.
(a) Sellers acknowledge that the Transactions are unique and that
Purchasers will be irreparably injured should such Transactions not be
consummated in accordance with the terms and conditions of this Agreement.
Consequently, Purchasers will not have an adequate remedy at law if Sellers
shall fail to sell the Partnership Interests when required to do so hereunder.
In such event, Purchasers shall have the right, in addition to any other remedy
available in equity or law, to specific performance of such obligations by
Sellers, subject to Purchasers' performance of their obligations hereunder, and
Sellers agree not to take a position in any proceeding to the effect that
Purchasers have an adequate remedy at law.
(b) Purchasers acknowledge that the Transactions are unique and that
Sellers will be irreparably injured should such Transactions not be consummated
in accordance with the terms and conditions of this Agreement. Consequently,
Sellers will not have an adequate remedy at law if Purchasers shall fail to
purchase the Partnership Interests when required to do so hereunder. In such
event, Sellers shall have the right, in addition to any other remedy available
in equity or law, to specific performance of such obligation by Purchasers,
subject to Sellers' performance of their obligations hereunder, and Purchasers
agree not to take a position in any proceeding to the effect that Sellers have
an adequate remedy at law.
Section 8.10 Survival; Time Limitation for Indemnification. The terms
and provisions of this Agreement shall survive the Closing. Notwithstanding the
foregoing, if the Closing occurs, then after Closing, (a) any assertion by
Purchasers or any Purchaser Indemnified Party that Sellers or CPI are liable to
Purchasers or any Purchaser Indemnified Party for indemnification under the
terms of this Agreement or otherwise in connection with the Transactions must be
made in writing and must be given to Sellers (or not at all) or CPI on or prior
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to the date that is eighteen (18) months after the Closing Date, except for
matters addressed in Section 6.5(f), which must be made in writing and must be
given to Sellers (or not at all) on or prior to the date that is ninety (90)
days after the date on which the applicable statute of limitations expires with
respect to the matters covered thereby, and (b) any assertion by Sellers or any
Seller Indemnified Party that Purchasers or Purchasers' Parent are liable to
Seller or any Seller Indemnified Party for indemnification under the terms of
this Agreement or otherwise in connection with the Transactions must be made in
writing and must be given to Purchasers or Purchasers' Parent (or not at all) on
or prior to the date that is eighteen (18) months after the Closing Date.
ARTICLE 9
PURCHASERS' CONDITIONS TO CLOSING
The obligation of Purchasers to consummate the Transactions shall be
subject to fulfillment at or prior to the Closing of the following conditions,
except to the extent Purchasers waive such fulfillment in writing:
Section 9.1 Compliance with Provisions. Each of Sellers and CPI shall
have performed or complied in all material respects with all covenants and
agreements contained in this Agreement on their respective parts required to be
performed or complied with at or prior to the Closing.
Section 9.2 Reserved.
Section 9.3 No Restraint. There shall be no:
(a) injunction, restraining order or order of any nature issued and
outstanding by any Governmental Authority of competent jurisdiction over the
Parties which directs that the Transactions shall not be consummated as herein
provided;
(b) suit, action or other proceeding by any third party pending or
threatened (pursuant to a written notification), wherein such complainant seeks
the restraint or prohibition of the consummation of the Transactions; or
(c) action taken, or law enacted, promulgated or deemed applicable to
the Transactions, by any Governmental Authority of competent jurisdiction over
the Parties which would render the purchase and sale of the Partnership
Interests illegal.
Section 9.4 Required Regulatory Approvals and Consents.
(a) Without limiting the applicability of Section 6.1 and Section 6.4,
with respect to the purchase and sale of the Partnership Interests, Purchasers
shall have received all of Purchasers' Required Regulatory Approvals and
Purchasers' Required Consents. In the event that any such Purchasers' Required
Regulatory Approval or Purchasers' Required Consents requires any modification
to this Agreement or the Transactions, imposes any condition to the effectuation
of the Transactions, or places any restrictions upon Purchasers' or Purchasers'
Parent's indirect ownership of the Oleander Station, then such modifications,
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conditions or restrictions shall be subject to Purchasers' approval to the
extent that such modifications, conditions and restrictions, if any, are not
contemplated by this Agreement and would, individually or in the aggregate, have
a material adverse effect upon Purchasers, Purchasers' Affiliates or the
Oleander Station after the Closing; provided, however, that Purchasers shall be
deemed to have approved of any such modifications, conditions or restrictions to
the extent that Purchasers fail to disapprove of same in a written notice to
Sellers received no later than fifteen (15) Business Days following the public
announcement of the decision of the Governmental Authority.
(b) The Sellers shall have received the Sellers' Required Regulatory
Approvals and Sellers' Required Consents, and such approvals and consents must
be in full force and effect.
Section 9.5 Representations and Warranties. The representations and
warranties of Sellers and of CPI set forth in this Agreement that are qualified
with respect to materiality (whether by reference to Material Adverse Effect or
otherwise) shall be true and correct (without giving any effect to any
notification under Section 6.2), and the representations and warranties of
Sellers and of CPI set forth in this Agreement that are not so qualified shall
be true and correct, in all material respects, on and as of the Closing Date, in
each case as though made on and as of the Closing Date (without giving any
effect to any notification under Section 6.2).
Section 9.6 Officer's Certificate. Purchasers shall have received a
certificate executed by an authorized officer of each of Sellers and CPI (in a
form reasonably acceptable to Purchasers), dated the Closing Date, wherein
Sellers and CPI and each represent and warrant that the conditions set forth in
Section 9.1 and Section 9.5 have been satisfied by Sellers and CPI.
Section 9.7 Material Adverse Effect. Subject to Section 6.6, since the
Effective Date, no Material Adverse Effect shall have occurred and be
continuing.
Section 9.8 Reserved.
Section 9.9 No Termination. Neither Party shall have exercised any
termination right such Party is entitled to exercise pursuant to Section 11.1.
Section 9.10 Receipt of Other Documents. Purchasers shall have received
the following:
(a) A certificate of good standing with respect to each of Sellers and
CPI, as of a recent date (not to exceed thirty (30) days of the Closing Date),
issued by the Secretary of State of the State of Maryland;
(b) Copies, certified by the Secretary or an Assistant Secretary of
each of Sellers and CPI, of resolutions of each of Sellers and of CPI
authorizing the execution and delivery by each of Sellers and of CPI of this
Agreement, and authorizing or ratifying of all of the other agreements and
instruments to be executed and delivered by Sellers and by CPI, respectively, in
connection herewith;
(c) A certificate of the Secretary or an Assistant Secretary of each
Seller and of CPI, identifying the name and title and bearing the signatures of
the respective individuals authorized by each Seller and CPI to execute and
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deliver this Agreement and the other agreements and instruments contemplated
hereby;
(d) Copies of the Organizational Documents of each Seller and CPI,
certified as of a recent date (not to exceed thirty (30) days of the Closing
Date) by the appropriate government official of each of their jurisdictions of
formation and a copy of the by-laws of each Seller and CPI, certified by a duly
authorized officer, together with a certificate of a duly authorized officer of
each Seller and CPI, that none of such documents have been amended on or after
the Effective Date;
(e) A certificate of good standing with respect to OPP, as of recent
date, issued by the Secretary of State of the State of Florida and each other
state in which OPP is qualified to do business;
(f) Originals of all books and records, including original construction
drawings and P&IDs, of OPP and of each Seller and of CPI, relating solely or
primarily to the Business, the Oleander Station or OPP including, without
limitation, both hard copies and any available electronic files and copies;
(g) An instrument terminating any Intercompany Arrangements, executed
and delivered by OPP and the Sellers' or other Affiliate as necessary, in form
and substance reasonably satisfactory to Purchasers;
(h) A receipt for the Purchase Price, as adjusted pursuant to the terms
of this Agreement;
(i) An instrument or instruments releasing OPP of any and all liability
for or relating to all of the Excluded Liabilities in form and substance
satisfactory to the Purchasers; and
(j) Such other documents as Purchasers may reasonably request for the
purpose of (i) evidencing the accuracy of any of Sellers' or CPI's
representations and warranties, (ii) evidencing the performance by either
Seller, or by CPI, or the compliance by either Seller, or by CPI, with, any
covenant or obligation required to be performed or complied with by such Seller
or CPI, respectively, (iii) evidencing the satisfaction of any condition
referred to in this Article 9, or (iv) otherwise facilitating the consummation
or performance of any of the Transactions.
Section 9.11 Title Insurance. Purchasers shall have received from
Lawyers Title Insurance Corporation or another title insurance company selected
by Purchasers (collectively with any co-insurer or re-insurer, as applicable,
the "Title Company") an ALTA Owner's Policy of Title Insurance insuring OPP,
having an effective date not sooner than the date and time of Closing, in form
and substance reasonably satisfactory to Purchasers, and including the
endorsements listed on Schedule 9.11 attached hereto, insuring (at the Title
Company's regular rates; provided, however, that the foregoing shall not be
deemed to prohibit Purchasers from receiving any rebate with respect thereto
which may be available to the insured in Florida, but the receipt of such rebate
shall not be a condition to closing) the fee simple title to the Owned Real
Property, subject only to the Permitted Encumbrances. Purchasers shall provide
Sellers with a copy of each title report or commitment received by Purchasers
from the Title Company prior to Closing.
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Section 9.12 Certificates of Occupancy Purchasers shall have received
from Sellers original certificates of occupancy for all space within Oleander
Station to the extent same are in the possession or control of Sellers or OPP.
Section 9.13 Certificates of Non-Foreign Status. Purchasers shall have
received from Sellers Certificates of Non-Foreign Status of each Seller and such
other tax affidavits reasonably requested by Purchasers.
Section 9.14 Units Operability. As of the Closing Date, each of the
Units shall be operational, dispatchable, and capable of meeting customers'
scheduling requirements, each in accordance with the Power Purchase Agreements.
ARTICLE 10
SELLERS' CONDITIONS TO CLOSING
The obligation of Sellers to consummate the Transactions shall be
subject to fulfillment at or prior to the Closing of the following conditions,
except to the extent Sellers waive such fulfillment in writing:
Section 10.1 Compliance with Provisions. Purchasers shall have
performed or complied in all material respects with all covenants and agreements
contained in this Agreement on its part required to be performed or complied
with at or prior to the Closing, including but not limited to the payment of the
Initial Purchase Price, as adjusted pursuant to Section 3.2, to Sellers.
Section 10.2 Reserved.
Section 10.3 No Restraint. There shall be no:
(a) injunction, restraining order or order of any nature issued and
outstanding by any Governmental Authority of competent jurisdiction over the
Parties which directs that the Transactions shall not be consummated as herein
provided;
(b) suit, action or other proceeding by any Governmental Authority of
competent jurisdiction over the Parties pending or threatened (pursuant to a
written notification), wherein such complainant seeks the restraint or
prohibition of the consummation of the Transactions; or
(c) action taken, or law enacted, promulgated or deemed applicable to
the Transactions, by any Governmental Authority of competent jurisdiction over
the Parties which would render the purchase and sale of the Partnership
Interests illegal.
Section 10.4 Required Regulatory Approvals and Consents.
(a) Without limiting the generality of Section 6.1 and Section 6.4,
with respect to the purchase and sale of the Partnership Interests, Sellers
shall have received all of Sellers' Required Regulatory Approvals and Sellers'
Required Consents. In the event that any such Approval requires any modification
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to this Agreement or the Transactions, imposes any condition to the effectuation
of the Transactions, or places any restrictions upon Sellers' indirect ownership
of the Oleander Station, then such modifications, conditions or restrictions
shall be subject to Sellers' approval to the extent that such modifications,
conditions and restrictions, if any, are not contemplated by this Agreement and
would, individually or in the aggregate have a material adverse effect upon
Sellers, their indirect ownership of the Oleander Station or the operation of
the Oleander Station prior to the Closing; provided, however, that Sellers shall
be deemed to have approved of any such modifications, conditions or restrictions
to the extent that Sellers fail to disapprove of same in a written notice to
Sellers received no later than fifteen (15) Business Days following the public
announcement of the decision of the Governmental Authority.
(b) Purchasers shall have received the Purchasers' Regulatory Approvals
and Purchasers' Required Consents.
Section 10.5 Representations and Warranties. The representations and
warranties of Purchasers set forth in this Agreement that are qualified with
respect to materiality (whether by reference to Material Adverse Effect or
otherwise) shall be true and correct, and the representations and warranties
that are not so qualified shall be true and correct in all material respects, on
and as of the Closing Date, in each case as though made on and as of the Closing
Date.
Section 10.6 Officer's Certificate. Sellers shall have received a
certificate from Purchasers in a form reasonably acceptable to Sellers, executed
on their behalf by an authorized officer, dated the Closing Date, to the effect
that the conditions set forth in Section 10.1 and Section 10.5 have been
satisfied by Purchasers.
Section 10.7 [**].
Section 10.8 No Termination. Neither Party shall have exercised any
termination right such Party is entitled to exercise pursuant to Section 11.1.
Section 10.9 Receipt of Other Documents. Sellers shall have received
the following:
(a) A certificate of good standing with respect to each Purchaser, and
to Purchasers' Parent, as of a recent date, issued by the appropriate government
official of its respective jurisdiction of formation;
(b) Copies of the Organizational Documents of each Purchaser, and of
Purchasers' Parent, certified as of a recent date by the appropriate government
official of their respective jurisdictions of formation and a copy of the
by-laws of each Purchaser and of Purchasers' Parent certified by a duly
authorized officer, together with a certificate of a duly authorized officer of
each Purchaser and of Purchasers' Parent that none of such documents have been
amended on or after the Effective Date;
(c) Copies, certified by a duly authorized officer of each Purchaser
and of Purchasers' Parent, of resolutions of the respective governing board of
such Purchaser, and of Purchasers' Parent, authorizing the execution and
delivery by such Purchaser, and by Purchasers' Parent, of this Agreement, and
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authorizing or ratifying all of the other agreements and instruments, in each
case, to be executed and delivered by such Purchaser, and by Purchasers' Parent,
in connection herewith;
(d) A certificate of a duly authorized officer of each Purchaser, and
of Purchasers' Parent, identifying the name and title and bearing the signatures
of the officers of such Purchaser, and of Purchasers' Parent, authorized to
execute and deliver this Agreement, and the other agreements and instruments
contemplated hereby;
(e) Insurance certificates evidencing compliance with Section 6.7; and
(f) Such other documents as Sellers may reasonably request for the
purpose of (i) evidencing the accuracy of any Purchasers' or Purchasers'
Parent's representations and warranties, (ii) evidencing the performance by
either Purchaser of, or of Purchasers' Parent of, or the compliance by either
Purchaser with, or of Purchasers' Parent with, any covenant or obligation
required to be performed or complied with by such Purchaser, or by Purchasers'
Parent (iii) evidencing the satisfaction of any condition referred to in this
Article 10, or (iv) otherwise facilitating the consummation or performance of
any of the Transactions.
ARTICLE 11
TERMINATION
Section 11.1 Termination.
(a) This Agreement may be terminated at any time prior to the Closing
by mutual written consent of the Parties.
(b) Except as provided in Section 6.6(c), this Agreement may be
terminated by any Party if the Closing shall not have occurred on or before
September 30, 2005 (the "Termination Date"); provided, however, that the right
to terminate this Agreement under this Section 11.1(b) shall not be available to
a Party whose failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Closing to occur by such date.
(c) This Agreement may be terminated by Purchasers at any time prior to
the Closing if there has been a violation or breach by Sellers or CPI of any
agreement, covenant, representation or warranty contained in this Agreement
which has not been waived by Purchasers and such violation or breach constitutes
a Material Adverse Effect and is not cured within thirty (30) days after
Sellers' receipt of notice from Purchasers concerning such violation or breach.
(d) This Agreement may be terminated by Sellers at any time prior to
the Closing if there has been a violation or breach by Purchasers of any
agreement, covenant, representation or warranty contained in this Agreement
which has not been waived by Sellers and such violation or breach constitutes a
Material Adverse Effect and is not cured within thirty (30) days after
Purchasers' receipt of notice from Sellers concerning such violation or breach.
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(e) This Agreement may be terminated by Purchasers in accordance with
the provisions of Section 6.6(b) or Section 6.6(c).
Section 11.2 Procedure and Effect of Termination.
(a) If there has been a termination pursuant to Section 11.1, then this
Agreement shall be deemed terminated, and all further obligations of the Parties
hereunder shall terminate, except that the obligations set forth in Sections
6.8, 7.2, 7.3, and 7.4 and in Article 8, this Article 11 and Article 12 shall
survive. In the event of such termination of this Agreement, there shall be no
liability for damages on the part of a Party to the other Party under and by
reason of this Agreement or the Transactions except as set forth in Article 8
and except for liability resulting from the fraud or willful misconduct of a
Party, the remedies for which shall not be limited by the provisions of this
Agreement. The foregoing provisions shall not, however, limit or restrict the
availability of specific performance or other injunctive or equitable relief to
the extent that specific performance or such other relief would otherwise be
available to Purchasers hereunder.
(b) In the event a Party shall elect to terminate this Agreement
pursuant to Section 11.1, such Party shall forthwith provide notice thereof to
the other Party whereupon this Agreement shall terminate and the Transactions
shall be abandoned. Upon any such termination, all filings, applications and
other submissions made pursuant to this Agreement shall, to the extent
practicable, be withdrawn from the respective Governmental Authority by the
Party having filed or submitted the same.
ARTICLE 12
GENERAL PROVISIONS
Section 12.1 Expenses. Whether or not the Transactions are consummated,
except as otherwise expressly provided in any other provision of this Agreement
(and except to the extent such costs and expenses constitute damages, expenses
or costs that are the subject of indemnity under Article 8), all costs and
expenses (including attorneys' and consultants' fees, costs and expenses)
incurred in connection with this Agreement and the Transactions shall be paid by
the Party incurring such expenses; provided, that all fees, charges and costs of
economists and other experts, if any, jointly retained by the Parties in
connection with submissions made to any Governmental Authority and advice in
connection therewith respecting approval of the Transactions will be borne in
equal portions by Purchasers and Sellers.
Section 12.2 Entire Document; Modification or Amendment. This Agreement
(including the Exhibits and Schedules hereto) and the Confidentiality Agreement
contain the entire agreement between the Parties with respect to the
Transactions, and supersede all negotiations, representations, warranties,
commitments, offers, contracts and writings (except for the Confidentiality
Agreement) prior to the execution date of this Agreement, written or oral. No
modification or amendment of any provision of this Agreement shall be effective
unless made in writing and duly signed by the Parties referring specifically to
this Agreement.
Section 12.3 Schedules and Exhibits. All Schedules and Exhibits hereto
which are referred to herein are hereby made a part hereof and incorporated
herein by such reference. Each Schedule to this Agreement shall be deemed to
include and incorporate all disclosures made on the other Schedules to this
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Agreement. Unless expressly stated to the contrary in this Agreement, certain
information set forth in the Schedules is included solely for informational
purposes, is not an admission of liability with respect to the matters covered
by the information, and may not be required to be disclosed pursuant to this
Agreement.
Section 12.4 Counterparts. This Agreement may be executed in one or
more counterparts, each of which is an original, but all of which together
constitute one and the same instrument. Any telecopy or other facsimile
transmission of a signature page shall be deemed an original, binding
counterpart signature page.
Section 12.5 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be valid, binding and
enforceable under Applicable Laws, but if any provision of this Agreement is
held to be invalid, void (or voidable) or unenforceable under Applicable Laws,
such provision shall be ineffective only to the extent held to be invalid, void
(or voidable) or unenforceable, without affecting the remainder of such
provision or the remaining provisions of this Agreement. Upon such determination
that any term or other provision is invalid, illegal, or incapable of being
enforced, the Parties shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the Parties as closely as possible in an
acceptable manner to the end that the Transactions are fulfilled to the extent
possible. To the extent permitted by Applicable Laws, the Parties waive any
provision of Applicable Law that renders any provision hereof prohibited or
unenforceable in any respect.
Section 12.6 Assignability. The rights under this Agreement shall not
be assignable or transferable nor the duties delegable by any Party without the
prior written consent of the other Party, which consent may be granted or
withheld in such other Party's sole discretion.
Section 12.7 Captions. The captions of the various Articles, Sections,
Exhibits and Schedules of this Agreement have been inserted only for convenience
of reference and do not modify, explain, enlarge or restrict any of the
provisions of this Agreement.
Section 12.8 Governing Law and Forum. This Agreement and the rights and
obligations of the parties hereunder and the Transactions shall be governed by,
and construed in accordance with, the law of the State of New York. Each of the
Parties hereby irrevocably and unconditionally submits to the jurisdiction of
any court of the State of New York and any federal court located in New York
County, New York, solely for the limited purpose of any proceeding relating to
this Agreement. The Parties irrevocably waive their rights to a jury trial with
respect to any action or claim airing out of any dispute in connection with this
Agreement or the Transactions.
Section 12.9 Notices. All notices, requests, demands and other
communications under this Agreement must be in writing and must be delivered in
person or sent by certified mail, postage prepaid, by overnight delivery, or by
telefacsimile and properly addressed as follows:
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If to CP Oleander, LP:
CP Oleander, LP
c/o Constellation Energy Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
If to CP Oleander I, Inc.:
CP Oleander I, Inc.
c/o Constellation Energy Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
If to Constellation Power, Inc.:
Constellation Power, Inc.
c/o Constellation Energy Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
With copies to:
Constellation Energy Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: ▇▇▇.▇▇▇.▇▇▇▇
If to SP Newco I LLC:
SP Newco I LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and CEO
If to SP Newco II LLC:
SP Newco II LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and CEO
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If to Southern Power Company:
Southern Power Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and CEO
With copies to:
Southern Power Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Any Party may from time to time change its address for the purpose of
notices to that Party by a similar notice specifying a new address, but no such
change is effective until it is actually received by the Party sought to be
charged with its contents. Notices, requests, demands or other communications
under this Agreement which are addressed as provided in this Section 12.9 given
by overnight delivery or mail shall be effective (a) upon delivery, if delivered
personally or by overnight delivery or (b) five (5) days following deposit in
the United States mail, postage prepaid, if delivered by mail. Notices which are
addressed as provided in this Section 12.9 given by telefacsimile shall be
effective upon actual receipt if received during the recipient's normal business
hours, or at the beginning of the recipient's next business day after receipt if
not received during the recipient's normal business hours. All notices by
telefacsimile shall be confirmed promptly by the sender after transmission in
writing by certified mail or overnight delivery.
Section 12.10 No Third Party Beneficiaries. Except as may be
specifically set forth in this Agreement, nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any Persons other than the Parties and their
respective permitted successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any third
Persons to any Party, nor give any third Persons any right of subrogation or
action against any Party.
Section 12.11 No Relationship. Nothing in this Agreement creates or is
intended to create an association, trust, partnership, joint venture or any
other entity or similar legal relationship between Sellers and their Affiliates
on the one hand, and Purchasers and their Affiliates on the other hand, or
impose a trust, partnership or fiduciary duty, obligation, or liability on or
with respect to Sellers and their Affiliates on the one hand, and Purchasers and
their Affiliates on the other hand. Neither Sellers and their Affiliates on the
one hand, and Purchasers and their Affiliates on the other hand, is or shall act
as or be the agent or representative of the other Party.
Section 12.12 Construction of Agreement. This Agreement and any
documents or instruments delivered pursuant hereto shall be construed without
regard to the identity of the Person who drafted the various provisions of the
same. Each and every provision of this Agreement and such other documents and
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instruments shall be construed as though the Parties participated equally in the
drafting of the same. Consequently, the Parties acknowledge and agree that any
rule of construction that a document is to be construed against the drafting
party shall not be applicable either to this Agreement or such other documents
and instruments.
Section 12.13 Indemnification Not Affected by Knowledge; No Waiver. The
right to indemnification, payment of damages or other remedy based on the
representations, warranties, covenants and obligations under this Agreement will
not be affected by any investigation conducted with respect to, or any Knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of damages, or other remedy based on such
representations, warranties, covenants and obligations.
Section 12.14 Waiver of Compliance. Except as provided in Section
12.13, to the extent permitted by Applicable Laws, any failure of any of the
Parties to comply with any obligation, covenant, agreement or condition set
forth herein may be waived by the Party entitled to the benefit thereof only by
a written instrument signed by such Party, but any such waiver shall not operate
as a waiver of, or estoppel with respect to, any prior or subsequent failure to
comply therewith. The failure of a Party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of such
rights.
Section 12.15 Consents Not Unreasonably Withheld. Wherever the consent
or approval of any Party is required under this Agreement, such consent or
approval shall not be unreasonably withheld, delayed or conditioned unless such
consent or approval is to be given by such Party at the sole or absolute
discretion of such Party or is otherwise similarly qualified.
Section 12.16 Survival.
(a) The representations and warranties given or made by any Party in
Articles 4 or 5 hereof or in any certificate or other writing furnished in
connection herewith shall survive the Closing for a period of eighteen (18)
months after the Closing Date and shall thereafter terminate and be of no
further force or effect; provided, that:
(i) all representations and warranties relating to Taxes and
Tax Returns shall survive the Closing (including for purposes of
Section 6.5) for ninety (90) days after the date on which the
applicable statutes of limitation (plus any extensions or waivers
thereof) expires with respect to the matter covered thereby; and
(ii) notwithstanding any other provision of this Agreement,
any representation or warranty as to which a claim (including a
contingent claim) shall have been asserted during the survival period
shall continue in effect with respect to such claim until such claim
shall have been finally resolved or settled.
Subject to Sections 4.26, 5.9 and 5.10, each Party shall be entitled to
rely upon the representations and warranties of the other Party set forth
herein, notwithstanding any investigation or audit conducted before or after the
- 65 -
Closing Date or the decision of any Party to complete the Closing.
(b) The covenants and agreements of the Parties contained in this
Agreement, including those set forth in Article 8, shall survive the Closing
indefinitely, unless otherwise specified herein.
Section 12.17 Time of Essence. Time is of the essence with regard to
all data and time periods set forth or referred to in this Agreement. If the
date specified in this Agreement for giving any notice or taking any action is
not a Business Day (or if the period during which any notice is required to be
given or any action taken expires on a date which is not a Business Day), then
the date for giving such notice or taking such action (and the expiration date
of such period during which notice is required to be given or action taken)
shall be the next day which is a Business Day.
Section 12.18 Purchasers' Parent Support. From the Effective Date until
the Closing Date, Purchasers' Parent agrees to provide Purchasers with funds
sufficient to enable Purchasers to pay the Purchase Price and any adjustments
thereto required by this Agreement.
[SIGNATURE PAGE FOLLOWS]
- 66 -
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
CP OLEANDER, LP
By CP FLORDIA INVESTORS, INC., its General Partner
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: President
STATE OF MARYLAND, COUNTY/CITY OF BALTIMORE , TO WIT:
-------------------------------------
On this 7th day of April, 2005, before me appeared ▇▇▇▇ ▇. ▇▇▇▇ being
duly authorized, who signed this Agreement on behalf of CP Florida Investors,
Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------------
NOTARY PUBLIC
My Commission Expires: 7/7/07
---------------------------
CP OLEANDER I, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: President
STATE OF MARYLAND, COUNTY/CITY OF BALTIMORE , TO WIT:
-------------------------------------
On this 7th day of April, 2005, before me appeared ▇▇▇▇ ▇. ▇▇▇▇, being
duly authorized, who signed this Agreement on behalf of CP Oleander I, Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------------
NOTARY PUBLIC
My Commission Expires: 7/7/07
---------------------------
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CONSTELLATION POWER, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
STATE OF MARYLAND, COUNTY/CITY OF BALTIMORE , TO WIT:
-------------------------------------
On this 7th day of April, 2005, before me appeared ▇▇▇▇ ▇. ▇▇▇▇, being
duly authorized, who signed this Agreement on behalf of Constellation Power,
Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------------
NOTARY PUBLIC
My Commission Expires: 7/7/07
---------------------------
- 68 -
SP NEWCO I LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
STATE OF ALABAMA, COUNTY/CITY OF BIRMINGHAM , TO WIT:
--------------------------------------
On this 8th day of April, 2005, before me appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
being duly authorized, who signed this Agreement on behalf of SP Newco I LLC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------
NOTARY PUBLIC
My Commission Expires: 2/27/06
---------------------------
SP NEWCO II LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
STATE OF ALABAMA, COUNTY/CITY OF BIRMINGHAM , TO WIT:
--------------------------------------
On this 8th day of April, 2005, before me appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
being duly authorized, who signed this Agreement on behalf of SP Newco II LLC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------
NOTARY PUBLIC
My Commission Expires: 2/27/06
---------------------------
- 69 -
SOUTHERN POWER COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
STATE OF ALABAMA, COUNTY/CITY OF BIRMINGHAM , TO WIT:
--------------------------------------
On this 8th day of April, 2005, before me appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
being duly authorized, who signed this Agreement on behalf of Southern Power
Company.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------
NOTARY PUBLIC
My Commission Expires: 2/27/06
---------------------------
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