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EXHIBIT 10.21
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GENERATING PLANT
AND GAS TURBINE
ASSET PURCHASE AND SALE AGREEMENT
FOR
▇▇▇▇▇▇ KILL GENERATING PLANTS
LOCATED AT STATEN ISLAND, RICHMOND COUNTY, NEW YORK
AND
ASTORIA GAS TURBINES
LOCATED AT ASTORIA, QUEENS COUNTY, NEW YORK
By and Between
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
and
NRG ENERGY, INC.
Dated as of January 27, 1999
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Definitions ................................................... 1
SECTION 1.02. Accounting Terms .............................................. 14
ARTICLE II
Purchase and Sale; Assumption of Certain Liabilities
SECTION 2.01. Purchase and Sale ............................................ 15
SECTION 2.02. Auctioned Assets and Retained Assets ......................... 15
SECTION 2.03. Assumed Obligations and Retained
Liabilities ................................................ 19
SECTION 2.04. Third Party Consents ......................................... 24
ARTICLE III
Purchase Price
SECTION 3.01. Purchase Price ............................................... 24
SECTION 3.02. Post-Closing Adjustment ...................................... 24
SECTION 3.03. Allocation of Purchase Price ................................. 26
ARTICLE IV
The Closing
SECTION 4.01. Time and Place of Closing .................................... 27
SECTION 4.02. Payment of Purchase Price and Estimated
Adjustment Amount .......................................... ▇▇
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▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ and Warranties of Seller
SECTION 5.01. Organization; Qualification ................................... 28
SECTION 5.02. Authority Relative to This Agreement .......................... 28
SECTION 5.03. Consents and Approvals; No Violation .......................... 28
SECTION 5.04. Year 2000 ..................................................... 30
SECTION 5.05. Personal Property ............................................. 30
SECTION 5.06. Real Estate ................................................... 30
SECTION 5.07. Leases ........................................................ 30
SECTION 5.08. Certain Contracts and Arrangements ............................ 30
SECTION 5.09. Legal Proceedings ............................................. 31
SECTION 5.10. Permits; Compliance with Law .................................. 31
SECTION 5.11. Environmental Matters ......................................... 32
SECTION 5.12. Labor Matters ................................................. 33
SECTION 5.13. ERISA; Benefit Plans .......................................... 33
SECTION 5.14. Taxes ......................................................... 34
SECTION 5.15. Independent Engineering Assessments;
Condition of Auctioned Assets .............................. 35
SECTION 5.16. Undisclosed Liabilities ....................................... 35
SECTION 5.17. Brokers ....................................................... 36
SECTION 5.18. Insurance ..................................................... 36
ARTICLE VI
Representations and Warranties of Buyer
SECTION 6.01. Organization .................................................. 36
SECTION 6.02. Authority Relative to This Agreement .......................... 37
SECTION 6.03. Consents and Approvals; No Violation .......................... 37
SECTION 6.04. Brokers ....................................................... 39
ARTICLE VII
Covenants of the Parties
SECTION 7.01. Conduct of Business Relating to the
Auctioned Assets .......................................... 39
SECTION 7.02. Access to Information ........................................ 41
SECTION 7.03. Consents and Approvals; Transferable
Permits .................................................... 43
SECTION 7.04. Further Assurances ............................................ 44
SECTION 7.05. Public Statements ............................................. 46
SECTION 7.06. Tax Matters ................................................... 46
SECTION 7.07. Bulk Sales or Transfer Laws ................................... 47
SECTION 7.08. Storage ....................................................... 47
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SECTION 7.09. Information Resources ......................................... 48
SECTION 7.10. Witness Services .............................................. 48
SECTION 7.11. Consent Orders ................................................ 49
SECTION 7.12. Nitrogen Oxide Allowances ..................................... 49
SECTION 7.13. Trade Names ................................................... 49
ARTICLE VIII
Conditions
SECTION 8.01. Conditions Precedent to Each Party's Obligation To Effect
the Purchase and Sale ...................................... 49
SECTION 8.02. Conditions Precedent to Obligation of Buyer To Effect the
Purchase and Sale .......................................... 50
SECTION 8.03. Conditions Precedent to Obligation of Seller To Effect the
Purchase and Sale .......................................... 52
ARTICLE IX
Employee Matters
SECTION 9.01. Employee Matters .............................................. 54
SECTION 9.02. Continuation of Equivalent Benefit
Plans/Credited Service ..................................... 55
SECTION 9.03. Pension Plan .................................................. 56
SECTION 9.04. 401(k) Plan ................................................... 58
SECTION 9.05. Welfare Plans ................................................. 59
SECTION 9.06. Short- and Long-Term Disability ............................... 60
SECTION 9.07. Life Insurance and Accidental Death
and Dismemberment Insurance................................ 60
SECTION 9.08. Severance ..................................................... 60
SECTION 9.09. Workers Compensation .......................................... 62
ARTICLE X
Indemnification and Dispute Resolution
SECTION 10.01. Indemnification .............................................. 62
SECTION 10.02. Third Party Claims Procedures ................................ 65
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ARTICLE XI
Termination
SECTION 11.01. Termination. . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE XII
Miscellaneous Provisions
SECTION 12.01. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 12.02. Amendment and Modification; Extension;
Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 12.03. No Survival of Representations or
Warranties . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 12.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 12.05. Assignment; No Third Party
Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 12.06. Governing Law . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 12.07. Counterparts . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 12.08. Interpretation . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 12.09. Jurisdiction and Enforcement . . . . . . . . . . . . . . . . 70
SECTION 12.10. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 12.11. Severability . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 12.12. Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . 72
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SCHEDULES AND EXHIBITS
Schedule 2.02(a)(ii) Spare Parts
Schedule 2.02(a)(iii)(A) Buyer Personal Property Located on
Buyer Real Estate
Schedule 2.02(a)(iii)(B) Buyer Personal Property Located on
Seller Real Estate
Schedule 2.02(a)(iv) Assigned Contracts
Schedule 2.02(a)(v) Transferable Permits
Schedule 2.02(a)(vi) S02 Allowances
Schedule 2.02(b)(ii)(A) Seller Personal Property Located on
Buyer Real Estate
Schedule 2.02(b)(ii)(C) Communications Equipment
Schedule 2.03(a)(iv) Seller Consent Orders
Schedule 2.03(b)(iii)(C) Retained Environmental Liabilities
Schedule 5.03(a) Contracts Requiring Third Party
Consents
Schedule 5.08(a) Material Contracts
Schedule 5.09 Legal Proceedings
Schedule 5.10(a)(i) Exceptions Under Permits
Schedule 5.10(a)(ii) Non-Environmental Violations
Schedule 5.10(b) Nontransferable Permits and
Environmental Permits
Schedule 5.11 Environmental Matters
Schedule 5.13 Benefit Plans
Schedule 5.15(a) Exceptions to Independent
Engineering Assessment
Schedule 5.15(b) Changes to Auctioned Assets
Schedule 5.16 Other Undisclosed Liabilities
Schedule 9.01(a) Job Titles
Schedule 9.01(b) Collective Bargaining Agreements
Exhibit A-1 Form of ▇▇▇▇▇▇ Kill Zoning Lot
Development Agreement between
Seller and Buyer
Exhibit A-2 Form of Astoria Zoning Lot
Development Agreement between
Seller and Astoria Buyer
Exhibit A-3 Form of Astoria Zoning Lot
Development Agreement between
Seller and Buyer
Exhibit B-1 Form of Deed of Conveyance for
Richmond County
Exhibit B-2 Form of Deed of Conveyance for
Queens County
Exhibit C Form of FIRPTA Affidavit
Exhibit D Form of Opinion of ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq., General Counsel of
Seller
Exhibit E Form of Opinion of Counsel to Buyer
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Exhibit F Summary of Terms and Conditions for
License for A-11 Dock between
Seller and Buyer
Exhibit G Form of Transition Capacity
Agreement between Seller and Buyer
Exhibit H Form of ▇▇▇▇▇▇ Kill Declaration of
Subdivision Easements
Exhibit I Form of Astoria Declaration of
Subdivision Easements
Exhibit J Form of Guarantee Agreement
Exhibit K Form of Opinion of Counsel to ▇▇▇▇▇▇▇▇▇
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GENERATING PLANT AND GAS TURBINE ASSET
PURCHASE AND SALE AGREEMENT (including the
Schedules hereto, this "Agreement"), dated as
of January 27, 1999, by and between
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,
a New York corporation ("Seller"), and NRG
ENERGY, INC., a Delaware corporation ("Buyer",
collectively with Seller, the "Parties").
WHEREAS Seller has offered the Auctioned Assets (as defined herein) for
sale at auction pursuant to the Order Authorizing the Process for Auctioning of
Generation Plant issued by the PSC (as defined herein) and effective as of July
21, 1998; and
WHEREAS Buyer desires to purchase, and Seller desires to sell, the
Auctioned Assets upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the Parties agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. (a) As used in this Agreement, the following
terms have the following meanings:
"A-11 License" means the license from Seller to Buyer in respect of the
A-11 dock at Astoria, the material terms of which shall be substantially as set
forth in Exhibit F.
"Accountants" shall have the meaning set forth in Section 3.02(b).
"Adjustment Amount" shall have the meaning set forth in Section
3.02(a).
"Adjustment Date" shall have the meaning set forth in Section 3.02(c).
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"Adjustment Statement" shall have the meaning set forth in Section
3.02(a).
"Affected Employees" shall have the meaning set forth in Section
9.01(a).
"Affected Union Employees" shall have the meaning set forth in Section
9.01(b).
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended.
"Agreement" shall have the meaning set forth in the Preamble.
"Allocation" shall have the meaning set forth in Section 3.03.
"Ancillary Agreements" means the Continuing Site Agreements, the
Declaration of Easements Agreements, the Declarations of Subdivision Easements,
the Zoning Lot Development Agreements, the Transition Capacity Agreement, the
deeds contemplated by Section 8.02(e)(i) and any other agreement to which Buyer
and Seller are party and which is expressly identified by its terms as an
Ancillary Agreement hereunder.
"Applicable Law" shall have the meaning set forth in Section 3.03.
"▇▇▇▇▇▇ Kill Continuing Site Agreement" means the ▇▇▇▇▇▇ Kill
Continuing Site Agreement dated as of even date herewith between Seller and
Buyer.
"▇▇▇▇▇▇ Kill Declaration of Easements Agreement" means the ▇▇▇▇▇▇
Kill Declaration of Easements Agreement dated as of even date herewith between
Seller and Buyer.
"▇▇▇▇▇▇ Kill Declaration of Subdivision Easements" means the ▇▇▇▇▇▇
Kill Declaration of Subdivision Easements to be made by Seller substantially in
the form of Exhibit H, except for changes required by any Governmental Authority
to the extent that no such change materially and adversely impairs the continued
use and operation of the Auctioned Assets as currently conducted.
"▇▇▇▇▇▇ Kill Zoning Lot Development Agreement" means the ▇▇▇▇▇▇ Kill
Zoning Lot Development Agreement between Seller and Buyer in the form of Exhibit
A-1.
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"Assumed Consent Order Obligations" shall have the meaning set forth in
Section 2.03 (a)(iv).
"Assumed Obligations" shall have the meaning set forth in Section
2.03(a).
"Astoria Acquiror" means the person referred to as "Buyer" under the
Generating Plant and Gas Turbine Asset Purchase and Sale Agreement for Astoria
Generating Plants, Gowanus Gas Turbines and Narrows Gas Turbines between Seller
and such person.
"Astoria Declaration of Easements" means the Astoria Declaration of
Easements by Seller dated as of even date herewith, as may be modified in
accordance with changes requested by the Astoria Acquiror to the extent that no
such change materially and adversely impairs the continued use and operation of
the Auctioned Assets as currently conducted.
"Astoria Declaration of Subdivision Easements" means the Astoria
Declaration of Subdivision Easements to be made by Seller substantially in the
form of Exhibit I, except for changes required by any Governmental Authority or
requested by the Astoria Acquiror to the extent that no such change materially
and adversely impairs the continued use and operation of the Auctioned Assets as
currently conducted.
"Astoria Gas Turbine Continuing Site Agreement" means the Astoria Gas
Turbine Continuing Site Agreement dated as of even date herewith between Seller
and Buyer.
"Astoria Zoning Lot Development Agreement" means (a) the Astoria Zoning
Lot Development Agreement between Seller and Astoria Acquiror, in the form of
Exhibit A-2, if executed and delivered prior to the Closing Date or (b) the
Astoria Zoning Lot Development Agreement between Seller and Buyer, in the form
of Exhibit A-3.
"Auctioned Assets" shall have the meaning set forth in Section 2.02
(a).
"Benefit Plans" shall have the meaning set forth in Section 5.13.
"Bidder Confidentiality Agreements" shall have the meaning set forth
in Section 7.02(b).
"Business Day" means any day other than Saturday, Sunday and any day
which is a legal holiday or a day on
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which banking institutions in New York are authorized or required by law or
other action of a Governmental Authority to close.
"Buyer" shall have the meaning set forth in the Preamble.
"Buyer Assets" shall have the meaning set forth in Section 2.03(a)(x).
"Buyer Benefit Plans" shall have the meaning set forth in Section
9.02(c).
"Buyer Facilities" shall mean the "Buyer Facilities" under the ▇▇▇▇▇▇
Kill Declaration of Easements Agreement, together with the "Parcel C Facilities"
under the Astoria Declaration of Easements.
"Buyer Indemnitees" shall have the meaning set forth in Section
10.01(a).
"Buyer Material Adverse Effect" shall have the meaning set forth in
Section 6.03(a).
"Buyer Real Estate" shall have the meaning set forth in Section
2.02(a)(i).
"Buyer Required Regulatory Approvals" shall have the meaning set forth
in Section 6.03(b).
"Buyer's 401(k) Plans" shall have the meaning set forth in Section
9.04(a).
"Buyer's Pension Plans" shall have the meaning set forth in Section
9.03(a).
"Buyer's Welfare Plans" shall have the meaning set forth in Section
9.05(a).
"Closing" shall have the meaning set forth in Section 4.01.
"Closing Date" shall have the meaning set forth in Section 4.01.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collective Bargaining Agreements" shall have the meaning set forth in
Section 9.01(b).
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"Communications Equipment" means the equipment, systems, switches and
lines used in connection with voice, data and other communications activities.
"Confidentiality Agreement" means the Confidentiality Agreement dated
August 19, 1998 between Seller and Buyer.
"Continued Employee" shall have the meaning set forth in Section
9.01(a).
"Continued Non-Union Employee" shall have the meaning set forth in
Section 9.02(a).
"Continued Union Employee" shall have the meaning set forth in Section
9.01(b).
"Continuing Site Agreements" means the ▇▇▇▇▇▇ Kill Continuing Site
Agreement and the Astoria Gas Turbine Continuing Site Agreement.
"Contracts" shall have the meaning set forth in Section 2.02(a)(iv).
"Conveyance Plans" shall have the meaning set forth in Section
2.02(a)(i).
"Declaration of Easements Agreements" means the ▇▇▇▇▇▇ Kill Declaration
of Easements Agreement and the Astoria Declaration of Easements.
"Declarations of Subdivision Easements" means the ▇▇▇▇▇▇ Kill
Declaration of Subdivision Easements and the Astoria Declaration of Subdivision
Easements.
"Emission Reduction Credits" means credits, in units that are
established by the environmental regulatory agency with jurisdiction over the
source or facility that has obtained the credits, resulting from a reduction in
the emissions of air pollutants from an emitting source or facility (including,
and to the extent allowable under applicable law, reductions from retirements,
control of emissions beyond that required by applicable law and fuel switching),
that: (i) have been certified by NYSDEC as complying with the law and
regulations of the State of New York governing the establishment of such credits
(including that such emissions reductions are real, enforceable, permanent and
quantifiable); or (ii) have been certified by any other applicable regulatory
authority as complying with the law and regulations governing the establishment
of such credits (including that such emissions
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reductions are real, enforceable, permanent and quantifiable). Emission
Reduction Credits include certified air emissions reductions, as described
above, regardless of whether the regulatory agency certifying such reductions
designates such certified air emissions reductions by a name other than
"emissions reduction credits".
"Encumbrances" means any mortgages, pledges, liens, security interests,
conditional and installment sale agreements, activity and use limitations,
exceptions, conservation easements, rights-of-way, deed restrictions,
encumbrances and charges of any kind.
"Environmental Laws" means all former, current and future Federal,
state, local and foreign laws (including common law), treaties, regulations,
rules, ordinances, codes, decrees, judgments, directives or orders (including
consent orders) and Environmental Permits, in each case, relating to pollution
or protection of the environment or natural resources, including laws relating
to Releases or threatened Releases, or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, arrangement for
disposal, transport, recycling or handling, of Hazardous Substances.
"Environmental Liability" means all liabilities, obligations, damages,
losses, claims, actions, suits, judgments, orders, fines, penalties, fees,
expenses and costs, including: (i) remediation costs, engineering costs,
environmental consultant fees, laboratory fees, permitting fees, investigation
costs and defense costs and reasonable attorneys' fees and expenses; (if) any
claims, demands and causes of action relating to or resulting from any personal
injury (including wrongful death), property damage (real or personal) or natural
resource damage; and (iii) any penalties, fines or costs associated with the
failure to comply with any Environmental Law.
"Environmental Permits" means the permits, licenses, consents,
approvals and other governmental authorizations with respect to Environmental
Laws relating primarily to the power generation operations of the Generating
Plants or the Gas Turbines.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall have the meaning set forth in Section 5.13.
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"Estimated Adjustment Amount" shall have the meaning set forth in
Section 4.02.
"FERC" means the Federal Energy Regulatory Commission.
"Federal Power Act" shall have the meaning set forth in Section
5.03(b).
"Filed Seller SEC Documents" means the reports, schedules, forms,
statements and other documents filed by Seller with the Securities and Exchange
Commission since January 1, 1997, and publicly available prior to the date of
this Agreement.
"Final Allocation" shall have the meaning set forth in Section 3.03.
"GAAP" shall have the meaning set forth in Section 1.02.
"Gas Turbines" means the gas turbine units comprised of the ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ through GT5 and GT7 through GT13.
"Generating Facilities" means the Generating Plants, the Gas Turbines
and any additional generating plants, gas turbines or other generating
facilities constructed by Buyer after the Closing Date at the site of any
Auctioned Assets.
"Generating Plants" means the two steam turbine generating units
designated as ▇▇▇▇▇▇ Kill units 2 and 3.
"Governmental Authority" means any court, administrative or regulatory
agency or commission or other governmental entity or instrumentality, domestic,
foreign or supranational or any department thereof.
"Guarantee Agreement" means the Guarantee Agreement to be entered into
between Guarantor and Seller substantially in the form of Exhibit J.
"Guarantor" means NRG Energy, Inc.
"Hazardous Substances" means (i) any petrochemical or petroleum
products, crude oil or any fraction thereof, ash, radioactive materials, radon
gas, asbestos in any form, urea formaldehyde foam insulation or polychlorinated
biphenyls, (ii) any chemicals, materials, substances or wastes defined as or
included in the definition of
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"hazardous substances," "hazardous wastes," "hazardous materials," "restricted
hazardous materials," "extremely hazardous substances," "toxic substances,"
"contaminants" or "pollutants" or words of similar meaning and regulatory effect
contained in any Environmental Law or (iii) any other chemical, material,
substance or waste which is prohibited, limited or regulated by any
Environmental Law.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Income Tax" means any Federal, state, local or foreign Tax or surtax
(i) based upon, measured by or calculated with respect to net income, profits or
receipts (including the New York State Gross Receipts Tax (including the excess
dividends tax), the New York City Public Utilities Excise Tax, any and all
municipal gross receipts Taxes, capital gains Taxes and minimum Taxes) or (ii)
based upon, measured by or calculated with respect to multiple bases (including
corporate franchise taxes) if one or more of the bases on which such Tax may be
based, measured by or calculated with respect to, is described in clause (i), in
each case, together with any interest, penalties, or additions to such Tax.
"Indemnifiable Loss" shall have the meaning set forth in Section
10.01(a).
"Indemnifying Party" shall have the meaning set forth in Section
10.01(c).
"Indemnitee" shall have the meaning set forth in Section 10.01(c).
"Independent Engineering Assessments" shall have the meaning set forth
in Section 5.15.
"Interconnection Facilities" means those items of switching equipment,
switchyard controls, protective relays and related facilities of Seller that are
used by Seller in connection with the provision of Interconnection Services.
"Interconnection Services" means the service provided by Seller to
Buyer to interconnect the Generating Facilities to the Transmission System.
"Inventory Survey" shall have the meaning set forth in Section 3.02(a).
"ISO" means the New York Independent System Operator.
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"Local 1-2" shall have the meaning set forth in Section 9.01(a).
"Local 1-2 Collective Bargaining Agreement" shall have the meaning set
forth in Section 9-01(a).
"Local 3" shall have the meaning set forth in Section 9.01(a).
"Local 3 Collective Bargaining Agreement" shall have the meaning set
forth in Section 9.01(a).
"Material Adverse Effect" means any change, or effect on the Auctioned
Assets, that is materially adverse to the business, operations or condition
(financial or otherwise) of the Auctioned Assets, taken as a whole, other than
(i) any change or effect resulting from changes in the international, national,
regional or local wholesale or retail energy, capacity or ancillary services
electric power markets, (ii) any change or effect resulting from changes in the
international, national, regional or local markets for fuel, (iii) any change or
effect resulting from changes in the national, regional or local electric
transmission systems, (iv) any change or effect resulting from any bid cap,
price limitation, market power mitigation measure, including the Mitigation
Measures, or other regulatory or legislative measure in respect of transmission
services or the wholesale or retail energy, capacity or ancillary services
markets adopted or approved (or failed to be adopted or approved) by FERC, the
PSC or any other Governmental Authority or proposed by any person, (v) any
change or effect resulting from any regulation, rule, procedure or order adopted
or proposed (or failed to be adopted or proposed) by or with respect to, or
related to, the ISO, (vi) any change or effect resulting from any action or
measure taken or adopted, or proposed to be taken or adopted, by any local,
state, regional, national or international reliability organization and (vii)
any materially adverse change in or effect on the Auctioned Assets which is
cured by Seller before the Closing Date.
"Mitigation Measures" shall have the meaning set forth in Section
6.03(b).
"MMS" means the Material Management System, which is an information
resources system served by Seller's mainframe computer.
"NYPA" means the Power Authority of the State of New York.
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"NYPA Assignment" means the assignment to be entered into by Buyer,
Seller and NYPA pursuant to which certain rights and obligations under the NYPA
Agreements shall be assigned and amended.
"NYPA Agreements" means the Post Closing Agreement dated as of December
13, 1974, between Seller and NYPA, as amended, and the Astoria Operating
Agreement dated January 5, 1981, between Seller and NYPA, as amended.
"NYSDEC" means the New York State Department of Environmental
Conservation.
"Off-Site" means any location except (i) the Auctioned Assets and (ii)
any location to or under which Hazardous Substances present or Released at the
Auctioned Assets have migrated.
"Offering Memorandum" means the Offering Memorandum dated August 1998
describing the Generating Plants and the Gas Turbines, and the materials
delivered with such Offering Memorandum, as such Offering Memorandum and such
materials may have been amended or supplemented.
"Operating Records" shall have the meaning set forth in Section
2.02(a)(viii).
"Party" shall have the meaning set forth in the Preamble.
"Permits" means the permits, licenses, consents, approvals and other
governmental authorizations (other than with respect to Environmental Laws)
relating primarily to the power generation operations of the Generating Plants
or the Gas Turbines.
"Permitted Exceptions" means (i) all exceptions, restrictions,
easements, charges, rights-of-way and monetary and nonmonetary encumbrances
which are set forth in any Permits or Environmental Permits, (ii) statutory
liens for current taxes or assessments not yet due or delinquent or the validity
of which is being contested in good faith by appropriate proceedings, (iii)
mechanics', carriers', workers', repairers' and other similar liens arising or
incurred in the ordinary course of business relating to obligations as to which
there is no default on the part of Seller or the validity of which are being
contested in good faith by appropriate proceedings, (iv) zoning, entitlement,
conservation restriction and other land use and environmental regulations by
Governmental Authorities, (v) such title matters set forth in the Certificate of
Title
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No. NY981785, as amended, and the Certificate of Title No. NY981605, as amended,
in each case issued by the Title Company and which would not, individually or in
the aggregate, reasonably be expected to materially impair the continued use and
operation of the Auctioned Assets as currently conducted, (vi) all matters
disclosed on the surveys prepared by GEOD Corporation and any other facts that
would be disclosed by an accurate survey and physical inspection of the Buyer
Real Estate, (vii) the VISY Option Agreement, (viii) Encumbrances, easements or
other restrictions created pursuant to or provided for in any Ancillary
Agreement, (ix) restrictions and regulations imposed by the ISO, any
Governmental Authority or any local, state, regional, national or international
reliability council and (x) such other Encumbrances or imperfections in or
failure of title which would not, individually or in the aggregate, reasonably
be expected to materially impair the continued use and operation of the
Auctioned Assets as currently conducted.
"person" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization or Governmental
Authority.
"PPMIS" means the Power Plant Maintenance Information System, which is
an information resources system served by Seller's mainframe computer.
"Prorated Items" shall have the meaning set forth in Section 2.03(a)
(viii).
"Protective Relaying System" means the system relating to the
Generating Facilities comprised of components collectively used to detect
defective power system elements or other conditions of an abnormal nature,
initiate appropriate control circuit action in response thereto and isolate the
appropriate system elements in order to minimize damage to equipment and
interruption to service.
"PSC" means the New York State Public Service Commission.
"Purchase Price" shall have the meaning set forth in Section 3.01.
"Release" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including ambient air, surface water,
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groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
"Restraints" shall have the meaning set forth in Section 8.01(b).
"Retained Assets" shall have the meaning set forth in Section 2.02(b).
"Retained Liabilities" shall have the meaning set forth in Section
2.03(b).
"Revenue Meters" means all meters measuring demand, energy and reactive
components, and all pulse isolation relays, pulse conversion relays and
associated totalizing and remote access pulse recorder equipment, in each case,
required to measure the transfer of energy between the Parties.
"Segregated Reimbursement Accounts" shall have the meaning set forth in
Section 9.05(b).
"Seller" shall have the meaning set forth in the Preamble.
"Seller Assets" shall have the meaning set forth in Section 2.03(b)(x).
"Seller Consent Orders" shall have the meaning set forth in Section
2.03(a)(iv).
"Seller Facilities" shall mean the "Seller Facilities" under the ▇▇▇▇▇▇
Kill Declaration of Easements Agreement, together with the "Parcel A Facilities"
under the Astoria Declaration of Easements.
"Seller Indemnitees" shall have the meaning set forth in Section
10.01(b).
"Seller Real Estate" means all real property and leaseholds or other
interests in real property of Seller (including the premises on which the
Substations are located), other than Buyer Real Estate.
"Seller Required Regulatory Approvals" shall have the meaning set forth
in Section 5.03(b).
"Seller's 401(k) Plans" shall have the meaning set forth in Section
9.04(a).
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"Seller's Pension Plans" shall have the meaning set forth in Section
9.03(a).
"Seller's Reimbursement Account Plans" shall have the meaning set forth
in Section 9.05(b).
"SO2 Allowances" means allowances that have been allocated to Seller
for the Generating Plants or the Gas Turbines by the Administrator of the United
States Environmental Protection Agency under Title IV of the Clean Air Act
authorizing the emission of one ton of sulfur dioxide per allowance during or
after the year 2000.
"Substations" shall have the meaning set forth in Section 2.02(b)(i).
"Tax Benefit" means, with respect to any Indemnifiable Loss for any
person, the positive excess, if any, of the Tax liability of such person without
regard to such Indemnifiable Loss over the Tax liability of such person taking
into account such Indemnifiable Loss, with all other circumstances remaining
unchanged.
"Tax Cost" means, with respect to any indemnity payment for any person,
the positive excess, if any, of the Tax liability of such person taking such
indemnity payment into account over the Tax liability of such person without
regard to such payment, with all other circumstances remaining unchanged.
"Tax Return" means any return, report, information return or other
document (including any related or supporting information) required to be
supplied to any authority with respect to Taxes.
"Taxes" means all taxes, surtaxes, charges, fees, levies, penalties or
other assessments imposed by any United States Federal, state or local or
foreign taxing authority, including Income Tax, excise, property, sales,
transfer, franchise, special franchise, payroll, recording, withholding, social
security or other taxes, or any liability for taxes incurred by reason of
joining in the filing of any consolidated, combined or unitary Tax Returns, in
each case including any interest, penalties or additions attributable thereto;
provided, however, that "Taxes" shall not include sewer rents or charges for
water.
"Termination Date" shall have the meaning set forth in Section
11.01(b).
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"Third Party Claim" shall have the meaning set forth in Section
10.02(a).
"Title Company" means Commonwealth Land Title Insurance Company or any
other reputable title insurance company licensed to do business in New York.
"Transferable Permits" shall have the meaning set forth in Section
2.02(a)(v).
"Transferring Employee Records" shall have the meaning set forth in
Section 2.02(a)(viii).
"Transferring Employees" shall have the meaning set forth in Section
2.02(a)(viii).
"Transition Capacity Agreement" means the Transition Capacity Agreement
to be entered into between Seller and Buyer substantially in the form of Exhibit
G.
"Transmission System" shall have the meaning set forth in Section 2.02
(b)(i).
"VISY" means VISY Paper (NY), Inc.
"VISY Option Agreement" means the Option Agreement, executed as of
December 28, 1995, between Seller and VISY.
"VISY Option Parcel" means that certain parcel of real property defined
in the VISY Option Agreement as the "Option Parcel".
"Zoning Lot Development Agreements" means the ▇▇▇▇▇▇ Kill Zoning Lot
Development Agreement and the Astoria Zoning Lot Development Agreement.
SECTION 1.02. Accounting Terms. Any accounting terms used in this
Agreement or the Ancillary Agreements shall, unless otherwise specifically
provided, have the meanings customarily given them in accordance with United
States generally accepted accounting principles ("GAAP") and all financial
computations hereunder or thereunder shall, unless otherwise specifically
provided, be computed in accordance with GAAP consistently applied.
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ARTICLE II
Purchase and Sale; Assumption of Certain Liabilities
SECTION 2.01. Purchase and Sale. Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement, at the Closing,
Seller agrees to sell, assign, convey, transfer and deliver to Buyer, and Buyer
agrees to purchase, assume and acquire from Seller all the Auctioned Assets. In
the case of any Auctioned Assets not located at the Generating Plants or Gas
Turbines (including supplies, materials and spare parts inventory), Buyer agrees
that (i) from and after the Closing, except to the extent specifically otherwise
provided in the Ancillary Agreements, Buyer will bear all risk of casualty or
loss with regard to such Auctioned Assets (regardless of whether they remain on
Seller's property or otherwise in Seller's possession) and (ii) Seller shall
store such Auctioned Assets in accordance with Section 7.08.
SECTION 2.02. Auctioned Assets and Retained Assets. (a) Auctioned
Assets. The term "Auctioned Assets" means all the assets, real and personal
property, goodwill and rights of Seller of whatever kind and nature, whether
tangible or intangible, in each case, primarily relating to the power generation
operations of the Generating Plants or the Gas Turbines, other than the Retained
Assets, including:
(i) all real property and leaseholds or other interests in real
property of Seller relating primarily to the power generation operations of
the Generating Plants or the Gas Turbines described (A) as Parcel A, Parcel
C and Parcel D as shown on the ▇▇▇▇▇▇ Kill Generating Station Conveyance
Plan dated January 9, 1999 and (B) Parcel C as shown on the Astoria
Generating Station Conveyance Plan dated January 9, 1999, in each case, as
may hereafter be amended in immaterial respects (collectively, the
"Conveyance Plans"), together with all buildings, improvements, structures
and fixtures thereon, subject to Permitted Exceptions or Encumbrances
otherwise disclosed to Buyer in this Agreement or the Ancillary Agreements
with respect thereto (the "Buyer Real Estate"); provided, however, that
"Buyer Real Estate" shall not include the VISY Option Parcel if the sale
thereof by Seller to VISY pursuant to the VISY Option Agreement is
consummated prior to the Closing;
(ii) subject to Section 2.04, all inventories of fuels, supplies,
materials and spare parts relating primarily to the power generation
operations of the
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Generating Plants or the Gas Turbines, together with and subject to (A) all
Permitted Exceptions or Encumbrances otherwise disclosed to Buyer in this
Agreement or the Ancillary Agreements with respect thereto and (B) all
warranties against manufacturers and vendors relating thereto, including the
spare parts listed on Schedule 2.02(a)(ii), in each case, other than assets
that become obsolete or that are used, consumed, replaced or disposed in the
ordinary course of business consistent with past practice or as permitted by
this Agreement;
(iii) subject to Section 2.04, (A) the machinery, equipment,
facilities, furniture and other personal property (other than vehicles)
relating primarily to the power generation operations of the Generating
Plants or the Gas Turbines, including a stand-alone local area network, coal
handling equipment and other items of personal property located on Buyer
Real Estate or temporarily removed from Buyer Real Estate for repairs,
servicing or maintenance and listed on Schedule 2.02(a)(iii)(A) and (B)
machinery, equipment, facilities, furniture and other personal property
located on Seller Real Estate or temporarily removed from Seller Real Estate
for repairs, servicing or maintenance and listed on Schedule
2.02(a)(iii)(B), in each case, (1) together with and subject to (x) all
Permitted Exceptions or Encumbrances otherwise disclosed to Buyer in this
Agreement or the Ancillary Agreements with respect thereto and (y) all
warranties against manufacturers or vendors relating thereto and (2) other
than assets that become obsolete or that are used, consumed, replaced or
disposed in the ordinary course of business consistent with past practice or
as permitted by this Agreement;
(iv) subject to Section 2.04, all right, title and interest of Seller
in, to and under all contracts, agreements, personal property leases
(whether Seller is lessor or lessee thereunder), commitments and all other
legally binding arrangements (other than Seller Consent Orders), whether
oral or written (A) set forth on Schedule 2.02 (a)(iv) or (b) otherwise
relating primarily to the power generation operations of the Generating
Plants or the Gas Turbines and entered into by Seller in accordance with
Section 7.01 (the "Contracts"), in each case, to the extent in full force
and effect on the Closing Date;
(v) subject to section 7.03(c), the Permits and Environmental Permits
that are transferred or
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transferable by Seller to Buyer (collectively, the "Transferable Permits"),
including the Transferable Permits set forth on Schedule 2.02(a)(v), in each
case, to the extent in full force and effect on the Closing Date;
(vi) the SO2 Allowances listed on Schedule 2.02(a)(vi);
(vii) all nitrogen oxide allowances allocated to the Generating Plants
or the Gas Turbines by NYSDEC under the New York State Nitrogen Oxides
Budget Program that have not been used on or prior to the Closing Date (it
being understood that, for purposes of this Agreement, one nitrogen oxide
allowance shall be deemed "used" for each ton of actual nitrogen oxide
emitted from the Generating Plants or Gas Turbines between May 1 of any year
and September 30 of such year, inclusive);
(viii) (A) all data, information, books, operating records, operating,
safety and maintenance manuals, engineering design plans, blueprints and
as-built plans, specifications, procedures, facility compliance plans,
environmental procedures and similar records of Seller relating primarily to
the power generation operations of the Generating Plants or the Gas
Turbines, to the extent in Seller's possession or readily available
(collectively, "Operating Records"), and (B) all personnel files relating to
employees of Seller to be employed by Buyer after the Closing Date in
accordance with Article IX (the "Transferring Employees"), to the extent in
Seller's possession and readily available and to the extent such files
pertain to (1) skill and development training and resumes, (2) seniority
histories, (3) salary and benefit information, (4) Occupational Safety and
Health Act medical reports, (5) active medical restriction forms and (6) any
other matters, disclosure of which by Seller to Buyer is permitted under
applicable law without the consent of the Transferring Employee, but not
including any performance evaluations or disciplinary records (collectively,
the "Transferring Employee Records"); provided, however, that Seller shall
be permitted to retain copies, or originals to the extent it provides Buyer
with copies of same, of all Operating Records and Transferring Employee
Records; and
(ix) (A) except as provided in Section 2.02(b)(iv) the software
relating primarily to the power generation operations of the Generating
Plants or the Gas Turbines
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(provided, however, that Buyer acknowledges that it will require licenses
from third parties in order to be legally entitled to use such software),
and (B) a nonexclusive, royalty-free license to use solely in connection
with the Auctioned Assets the software or other copyrighted material owned
by Seller located at Buyer Real Estate.
(b) Retained Assets. The term "Retained Assets" means:
(i) the transmission and distribution facilities owned, controlled or
operated by Seller for purposes of providing point-to-point transmission
service, network integration service and distribution service and other
related purposes, including the real property and equipment located at the
Fresh Kills Substations, the Astoria East Substation, the Astoria West
Substation and the North Queens Substation (collectively, the
"SUBSTATIONS"), used in controlling continuity between the Generating
Plants and Gas Turbines and the transmission and distribution facilities
and for other purposes (the "Transmission System");
(ii) (A) except as set forth in Section 2.02(a)(iii), all
Interconnection Facilities and other transmission, distribution and
substation machinery, equipment and facilities and related support
equipment located on Buyer Real Estate or Seller Real Estate or temporarily
removed from Buyer Real Estate or Seller Real Estate for repairs, servicing
or maintenance, including items listed on Schedule 2.02(b)(ii)(A); (B)
all Revenue Meters Installed by Seller; (C) Communications Equipment and
related support equipment (1) located on Buyer Real Estate or temporarily
removed from Buyer Real Estate for repairs, servicing or maintenance and
listed on Schedule 2.02(b)(ii)(C) or acquired by Seller after the date of
this Agreement and designated by Seller as a Retained Asset or (2) located
on Seller Real Estate or temporarily removed from Seller Real Estate for
repairs, servicing or maintenance; and (D) all Protective Relaying Systems
not located on Buyer Real Estate;
(iii) all cash, cash equivalents, bank deposits and accounts
receivable held or owned by Seller;
(iv) (A) all mainframe computer systems of Seller, (B) the code to
all software described in Section 2.02(a)(ix)(13), and (C) all software,
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copyrights, know-how or other proprietary information relating primarily to
any other Retained Assets or any Retained Liabilities, including software,
copyrights, know-how or other proprietary information licensed to Buyer
pursuant to Section 2.02(a)(ix)(B);
(v) the names "Consolidated Edison", "Con Edison", "Con Ed",
"Consolidated Edison Company", "Consolidated Edison Company of New York,
Inc.", "Consolidated Edison, Inc.", "New York Edison", "Brooklyn Edison",
"Staten Island Edison" and "Edison" and any related or similar trade names,
trademarks, service marks or logos (and any rights to and in the same,
including any right to use the same);
(vi) subject to Section 7.06(d), any refund or credit related to
Taxes attributable to taxable periods (or portions thereof) prior to the
Closing Date, and sewer rents or water charges or any other liabilities or
obligations paid prior to the Closing Date in respect of the Auctioned
Assets;
(vii) all personnel records (other than Transferring Employee
Records) and all other records (other than Operating Records);
(viii) (A) all Emission Reduction Credits held or possessed by Seller
and (B) SO2 Allowances held or possessed by Seller and not listed on
Schedule 2.02(a)(vi); and
(ix) any other asset that is not described in this Agreement as an
Auctioned Asset.
SECTION 2.03. Assumed Obligations and Retained Liabilities. (a)
Assumed Obligations. At the Closing, Buyer shall assume, and from and after the
Closing, shall discharge, all of the liabilities and obligations, direct or
indirect, known or unknown, absolute or contingent, which relate to the
Auctioned Assets or are otherwise specified below, other than the Retained
Liabilities (collectively, the "Assumed Obligations"), including:
(i) except as set forth in Section 2.03(b)(ii), any liabilities and
obligations under the Contracts;
(ii) any liabilities and obligations for goods delivered or services
rendered on or after the Closing Date relatinq to the Auctioned Assets;
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(iii) except as set forth in Sections 2.03(b)(iii) or (iv), any
Environmental Liability arising out of or in connection with (A) any
violation or alleged violation of, or noncompliance or alleged
noncompliance with, any Environmental Laws, prior to, on or after the
Closing Date, with respect to the ownership or operation of the Auctioned
Assets, notwithstanding that, as contemplated by Section 7.03(c), Seller
may remain the "holder of record" with respect to certain Transferable
Permits, (B) the condition of any Auctioned Assets prior to, on or after
the Closing Date, including any actual or alleged presence, Release or
threatened Release of any Hazardous Substance at, on, in, under or
migrating onto or from, the Auctioned Assets, prior to, on or after the
Closing Date (except for any such Release from equipment or property owned
or operated by Seller and located on, or constituting, Seller Real Estate
adjacent to Buyer Real Estate that occurs on or after the Closing Date),
(C) any Release or threatened Release of any Hazardous Substance on or
after the Closing Date from the Buyer Facilities or otherwise originating
from, or relating to, any equipment owned or used by Buyer that is located
on Seller Real Estate or (D) the transportation, storage, Release,
threatened Release or recycling of, or arrangement for such activities with
respect to, Hazardous Substances generated in respect of the Auctioned
Assets at or to any location, on or after the Closing Date;
(iv) any liabilities and obligations relating to the Auctioned Assets
under the consent orders listed on Schedule 2.03(a)(iv) (the "Seller
Consent Orders") and identified thereon as "Assumed Consent Order
Obligations" (the "Assumed Consent Order Obligations");
(v) except as set forth in Section 2.03(b)(iv), any liabilities and
obligations with respect to the Permits to the extent arising or accruing
on or after the Closing Date;
(vi) (A) all wages, overtime, employment taxes, severance pay,
transition payments, workers compensation benefits, occupational safety and
health liabilities or other similar liabilities and obligations in respect
of Transferring Employees to the extent arising or accruing on or after the
Closing Date, and (B) all other liabilities and obligations with respect to
the Transferring Employees for which Buyer is responsible pursuant to
Article IX;
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(vii) (A) any liabilities and obligations (other than any
Environmental Liabilities which are Retained Liabilities) in respect of any
personal injury or property damage claim relating to, resulting from or
arising out of the Generating Plants or Gas Turbines or (B) any liabilities
and obligations in respect of any discrimination, wrongful discharge or
unfair labor practice claim by any Transferring Employee, in the case of
each of the foregoing clauses (A) and (B), to the extent arising or
accruing on or after the Closing Date;
(viii) any liabilities and obligations, with respect to the periods
that include the Closing Date, with respect to real or personal property
rent, taxes based on the ownership or use of property, utilities charges
and similar charges that primarily relate to the Generating Plants or the
Gas Turbines (collectively, the "Prorated Items"), to the extent such
Prorated Items relate to the period from and after the Closing Date,
including (A) personal property taxes, real estate and occupancy taxes,
assessments and other charges (which shall be apportioned as provided in
the Zoning Lot Development Agreements), (B) rent and all other items
payable by Seller under any Contract, (C) any fees with respect to any
Transferable Permit and (D) sewer rents and charges for water, telephone,
electricity and other utilities, in each case calculated by multiplying the
amount of any such Prorated item by a fraction the numerator of which is
the number of days in such period from and after the Closing Date and the
denominator of which is the number of days in such period;
(ix) any liabilities and obligations in respect of Taxes (other than
Prorated items) attributable to the Auctioned Assets arising or accruing
during taxable periods (or portions thereof) beginning on or after the
Closing Date;
(x) any liabilities and obligations in respect of damage to property
or personal injury or death relating to, resulting from or arising out of
any property, machinery, equipment, facilities or systems from time to time
owned by Buyer or its Affiliates subject to the Ancillary Agreements or
employed by Buyer in connection with the performance of the Ancillary
Agreements ("Buyer Assets"), or any Protective Relaying System owned by
Seller as contemplated by the Continuing Site Agreement, regardless of
whether the property damage or
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personal injury is caused by a Seller Indemnitee or a Buyer Indemnitee; and
(xi) any liabilities and obligations under the Ancillary Agreements in
respect of the Auctioned Assets to the extent arising on or after the
Closing Date.
(b) Retained Liabilities Buyer Shall not assume or be obligated to
pay, perform or otherwise discharge the following liabilities or obligations
(the "Retained Liabilities"):
(i) any liabilities and obligations of Seller primarily relating to
any Retained Assets (other than as contemplated by Section 2.03(a)(x));
(ii) any payment obligations of Seller, including under Contracts, for
goods delivered or services rendered prior to the Closing Date;
(iii) (A) any Environmental Liability of Seller arising out of or in
connection with the transportation, storage, Release, threatened Release or
recycling of, or arrangement for such activities with respect to, Hazardous
Substances at or to any Off-Site location, prior to the Closing Date, (B)
any Environmental Liability of Seller arising out of or in connection with
any Release or threatened Release of any Hazardous Substance on or after
the Closing Date from the Seller Facilities or otherwise originating from,
or relating to, any equipment owned or used by Seller that is located on
Buyer Real Estate, (C) all liabilities and obligations of Seller arising
out of or in connection with matters set forth on Schedule 2.03(b)(iii)(C)
and (D) any liabilities and obligations relating to Auctioned Assets under
the Seller Consent Orders, except Assumed Consent Order obligations;
(iv) any monetary fines (excluding (A) natural resource damages, (B)
cleanup or remediation costs and (C) other costs of a similar nature)
imposed by a Governmental Authority to the extent arising out of or
relating to acts or omissions of Seller in respect of the Auctioned Assets
prior to the Closing Date;
(v) (A) all wages, overtime, employment taxes, severance pay,
transition payments, workers compensation benefits, occupational safety and
health liabilities or other similar liabilities and obligations in respect
of Transferring Employees to the
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extent arising or accruing prior to the Closing Date and (B) all other
liabilities and obligations with respect to the Transferring Employees for
which Seller is responsible pursuant to Article IX;
(vi)(A) any liabilities and obligations (other than any Environmental
Liabilities which are Assumed Obligations) in respect of any personal
injury or property damage claim relating to the Generating Plants or Gas
Turbines or (B) any liabilities and obligations in respect of any
discrimination, wrongful discharge or unfair labor practice claim by any
Transferring Employee, in the case of each of the foregoing clauses (A) and
(B), to the extent arising out of or relating to acts or omissions of
Seller prior to the Closing Date;
(vii) any liabilities and obligations, with respect to the period
prior to the Closing Date, for the Prorated Items, calculated as set forth
in Section 2.03(a)(viii);
(viii) any liabilities and obligations in respect of Taxes (other
than Prorated Items) attributable to the Auctioned Assets arising or
accruing during taxable periods (or portions thereof) ending before the
Closing Date, including Income Taxes attributable to income realized by
Seller pursuant to the transactions contemplated by this Agreement;
(ix) any liabilities and obligations arising after the date of this
Agreement in respect of which Seller has provided pursuant to Section
7.01(d)(ii) that such liabilities and obligations shall not be assumed or
retained by Buyer;
(x) any liabilities and obligations in respect of damage to
property or personal injury or death relating to, resulting from or arising
out of any property, machinery, equipment, facilities or systems from time
to time owned by Seller or its Affiliates subject to the Ancillary
Agreements or employed by Seller in connection with the performance of the
Ancillary Agreements ("Seller Assets"), regardless of whether the property
damage or personal injury is caused by a Seller Indemnitee or a Buyer
Indemnitee; and
(xi) any liabilities and obligations under the Ancillary Agreements
in respect of the Retained Assets.
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SECTION 2.04. Third Party Consents (a) Notwithstanding Section 2.02
(a) (ii), (iii) or (iv), to the extent that Seller's rights under any
Contract or warranty may not be assigned without the consent of another
person which consent has not been obtained, this Agreement shall not
constitute an agreement to assign the same if an attempted assignment would
constitute a breach thereof or be unlawful, and Seller, at its expense,
shall use its reasonable best efforts to obtain prior to the Closing any
such required consents.
(b) Seller and Buyer agree that if any consent to an assignment of
any such Contract or warranty shall not be obtained or if any attempted
assignment would in Seller's reasonable opinion be ineffective or would
impair any material rights and obligations of Buyer under such Contract or
warranty, as applicable, so that Buyer would not acquire the benefit of all
such rights and obligations, Seller, to the maximum extent permitted by law
and such Contract or warranty, as applicable, shall after the Closing
appoint Buyer to be Seller's representative and agent with respect to such
Contract or warranty, as applicable, and Seller shall, to the maximum
extent permitted by law and such Contract or warranty, as applicable, enter
into such reasonable arrangements with Buyer as are necessary to provide
Buyer with the benefits and obligations of such Contract or warranty, as
applicable. Seller and Buyer shall cooperate and shall each use their
reasonable best efforts after the Closing to obtain an assignment of each
such Contract or warranty, as applicable, to Buyer.
ARTICLE III
Purchase Price
SECTION 3.01. Purchase Price. The purchase price for the Auctioned
Assets shall be $505,000,000 minus the net proceeds received by Seller
pursuant to the sale of the VISY Option Parcel by Seller to VISY if the
sale thereof is consummated prior to the Closing (the "Purchase Price").
SECTION 3.02. Post-Closing Adjustment. (a) Within 20 Business Days
after the Closing, Seller shall prepare and deliver to Buyer a statement
(an "Adjustment Statement") which reflects the book cost, as reflected on
the books of Seller as of the Closing Date, of all fuel inventory and
supplies, materials and spare parts inventory included in the Auctioned
Assets (the "Adjustment Amount") and, upon request of Buyer, related
accounting material used by Seller to prepare the Adjustment Statement. The
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Adjustment Amount will be based, in respect of fuel, on the actual fuel
inventory on the Closing Date and, in respect of supplies, materials and
spare parts, on an inventory survey conducted within ten Business Days
prior to the Closing Date, in each case, consistent with the inventory
procedures of Seller in effect as of the date of this Agreement (the
"Inventory Survey"). Seller will permit an employee, or representative, of
Buyer to observe the Inventory Survey. The Adjustment Statement shall be
prepared using (i) GAAP and (ii) the same rolling average unit costs that
Seller has historically used to calculate the book cost of its fuel and
supplies, materials and spare parts inventory. Buyer agrees to cooperate
with Seller in connection with the preparation of the Adjustment Statement
and related information, and shall provide to Seller such access, books,
records and information as may be reasonably requested from time to time.
(b) Buyer may dispute the quantity delivered or quality of any
inventory item shown on the Adjustment Statement, or the mathematical
calculations reflected therein, by notifying Seller in writing of the
disputed amount, and the basis of such dispute, within 20 Business Days of
Buyer's receipt of the Adjustment Statement; provided, however, that in
respect of the quality of any inventory item, Buyer may not dispute
Seller's normal and customary methods for accounting for excess inventory.
Buyer shall have no right to dispute any other matter in respect of the
Adjustment Statement, including historical rolling average unit costs used
to calculate the book cost of the inventory or the appropriateness, under
GAAP or otherwise, of using such historical rolling average unit cost to
determine the book cost of any particular item of inventory. In the event
of a dispute with respect to the quantity or quality of any inventory item
shown on the Adjustment Statement, or the mathematical calculations
reflected therein, Buyer and Seller shall attempt to reconcile their
differences and any resolution by them as to any disputed amounts shall be
final, binding and conclusive on the Parties. If Buyer and Seller are
unable to reach a resolution of such differences within 20 Business Days of
receipt of Buyer's written notice of dispute to Seller, Buyer and Seller
shall submit the amounts remaining in dispute for determination and
resolution to PricewaterhouseCoopers LLP or any other accounting firm of
recognized national standing reasonably acceptable to Seller and Buyer (the
"Accountants"), which shall be instructed to determine and report to the
Parties, within 20 Business Days after such submission, upon such remaining
disputed amounts, and such report shall be final, binding and conclusive on
the Parties with respect to the amounts disputed. Buyer and
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Seller shall each pay one-half of the fees and disbursements of the
Accountants in connection with the resolution of such disputed amounts.
(c) If the Adjustment Amount is greater or less than the Estimated
Adjustment Amount, then on the Adjustment Date (as defined below), (i) to
the extent that the Adjustment Amount exceeds the Estimated Adjustment
Amount, Buyer shall pay to Seller the amount of such excess and (ii) to the
extent that the Adjustment Amount is less than the Estimated Adjustment
Amount, Seller shall pay to Buyer the amount of such deficiency.
"Adjustment Date" means (1) if Buyer does not disagree in any respect with
the Adjustment Statement, the twenty-third Business Day following Buyer's
receipt of the Adjustment Statement or (2) if Buyer shall disagree in any
respect with the Adjustment Statement, the third Business Day following
either the resolution of such disagreement by the Parties or a final
determination by the Accountants in accordance with Section 3.02 (b). Any
amount paid under this Section 3.02(c) shall be paid with interest for the
period commencing on the Closing Date through the date of payment,
calculated at the prime rate of the Chase Manhattan Bank in effect on the
Closing Date, and in cash by wire transfer of immediately available funds.
SECTION 3.03. Allocation of Purchase Price. Buyer shall deliver to
Seller at Closing a preliminary allocation among the Auctioned Assets of
the Purchase Price and among such other consideration paid to Seller
pursuant to this Agreement that is properly includible in Buyer's tax basis
for the Auctioned Assets for Federal income tax purposes, and, as soon as
practicable following the Closing (but in any event within 10 Business Days
following the final determination of the Adjustment Amount), Buyer shall
prepare and deliver to Seller a final allocation of the Purchase Price and
additional consideration described in the preceding clause, and the
post-closing adjustment pursuant to Section 3.02, among the Auctioned
Assets (the "Allocation"). The Allocation shall be consistent with
Section 1060 of the Code and the Treasury Regulations thereunder. Seller
hereby agrees to accept Buyer's Allocation unless Seller determines that
such Allocation was not prepared in accordance with Section 1060 of the
Code and the regulations thereunder ("Applicable Law"). If Seller so
determines, Seller shall within 20 Business Days thereafter propose any
changes necessary to cause the Allocation to be prepared in accordance with
Applicable Law. Within 10 Business Days following delivery of such proposed
changes, Buyer shall provide Seller with a statement of any objections to
such proposed changes, together with a
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reasonably detailed explanation of the reasons therefor. If Buyer and
Seller are unable to resolve any disputed objections within 10 Business
Days thereafter, such objections shall be referred to the Accountants,
whose review will be limited to whether Buyer's Allocation of such disputed
items regarding the Allocation was prepared in accordance with Applicable
Law. The Accountants shall be instructed to deliver to Seller and Buyer a
written determination of the proper allocation of such disputed items
within 20 Business Days. Such determination shall be conclusive and binding
upon the parties hereto for all purposes, and the Allocation shall be so
adjusted (the Allocation, including the adjustment, if any, to be referred
to as the "Final Allocation"). The fees and disbursements of the
Accountants attributable to the Allocation shall be shared equally by Buyer
and Seller. Each of Buyer and Seller agrees to timely file Internal Revenue
Service Form 8594, and all Federal, state, local and foreign Tax Returns,
in accordance with such Final Allocation and to report the transactions
contemplated by this Agreement for Federal Income Tax and all other tax
purposes in a manner consistent with the Final Allocation. Each of Buyer
and Seller agrees to promptly provide the other party with any additional
information and reasonable assistance required to complete Form 8594, or
compute Taxes arising in connection with (or otherwise affected by) the
transactions contemplated hereunder. Each of Buyer and Seller shall timely
notify the other Party and each shall timely provide the other Party with
reasonable assistance in the event of an examination, audit or other
proceeding regarding the Final Allocation.
ARTICLE IV
The Closing
SECTION 4.01. Time and Place of Closing. Upon the terms and
subject to the satisfaction of the conditions contained in Article VIII,
the closing of the sale of the Auctioned Assets contemplated by this
Agreement (the "Closing") will take place on such date as the Parties may
agree, which date shall be as soon as practicable, but no later than ten
Business Days, following the date on which all of the conditions set forth
in Article VIII have been satisfied or waived, at the offices of Cravath,
Swaine & ▇▇▇▇▇ in New York City or at such other place or time as the
Parties may agree. The date and time at which the Closing actually occurs
is hereinafter referred to as the "Closing Date".
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SECTION 4.02. Payment of Purchase Price and Estimated Adjustment
Amount. At the Closing, Buyer will pay or cause to be paid to Seller by wire
transfer of immediately available funds to an account previously designated in
writing by Seller an amount in United States dollars equal to (a) the Purchase
Price plus or minus (b) Seller's good faith estimate of the Adjustment Amount
(the "Estimated Adjustment Amount"), which estimate shall be provided to Buyer
no later than five Business Days prior to the Closing.
ARTICLE V
Representations and Warranties of Seller
Seller represents and warrants to Buyer as follows:
SECTION 5.01. Organization; Qualification. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of New York and has all requisite corporate power and authority to own, lease
and operate the Auctioned Assets and to carry on the business of the Auctioned
Assets as currently conducted.
SECTION 5.02. Authority Relative to This Agreement. Seller has all
necessary corporate power and authority to execute and deliver this Agreement
and the Ancillary Agreements and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by Seller of this Agreement and
the Ancillary Agreements and the consummation by Seller of the transactions
contemplated hereby and thereby have been duly and validly authorized by the
Board of Trustees of Seller or by a committee thereof to whom such authority has
been delegated and no other corporate proceedings on the part of Seller are
necessary to authorize this Agreement or the Ancillary Agreements or the
consummation of the transactions contemplated hereby or thereby. This Agreement
and the Ancillary Agreements have been duly and validly executed and delivered
by Seller and, assuming that this Agreement and the Ancillary Agreements
constitute valid and binding agreements of Buyer and each other party thereto,
subject to the receipt of the Seller Required Regulatory Approvals and the Buyer
Required Regulatory Approvals, constitute valid and binding agreements of
Seller, enforceable against Seller in accordance with their respective terms.
SECTION 5.03. Consents and Approvals; No Violation (a) Subject to
obtaining the Seller Required
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Regulatory Approvals and the Buyer Required Regulatory Approvals, neither the
execution and delivery of this Agreement or the Ancillary Agreements by Seller
nor the sale by Seller of the Auctioned Assets pursuant to this Agreement will
(i) conflict with or result in any breach of any provision of the Certificate of
Incorporation or By-laws of Seller, (ii) except as set forth on Schedule
5.03(a), result in a default (or give rise to any right of termination,
cancelation or acceleration) under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, agreement, lease or other
instrument or obligation to which Seller is a party or by which Seller, or any
of the Auctioned Assets, may be bound, except for such defaults (or rights of
termination, cancelation or acceleration) as to which requisite waivers or
consents have been obtained or which would not, individually or in the
aggregate, create a material Adverse Effect or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Seller, or the
Auctioned Assets, except for such violations which would not, individually or in
the aggregate, create a Material Adverse Effect.
(b) Except for (i) application by Seller to, and the approval of, the
PSC, pursuant to sections 70 of the Public Service Law of the State of New York,
of the transfer to Buyer of the Auctioned Assets, (ii) the filings by Seller and
Buyer required by the HSR Act and the expiration or earlier termination of all
waiting periods under the HSR Act, (iii) application by Seller to, and the
approval of, FERC under (A) Section 203 of the Federal Power Act of 1935 (the
"Federal Power Act") with respect to the transfer of Auctioned Assets
constituting jurisdictional assets under the Federal Power Act and (B) Section
205 of the Federal Power Act with respect to each Continuing Site Agreement and
any wholesale power sales agreement to be entered into by Seller and Buyer,
including the Transition Capacity Agreement, (iv) the issuance of approval by
the New York City Department of Buildings and, to the extent required, the New
York City Department of Business Services of the tax lot subdivision
contemplated by this Agreement in a form suitable for submission to the New York
City Department of Finance for the issuance of tax lot numbers and (v)
declarations, filings or registrations with, or notices to, or authorizations,
consents or approvals of, any Governmental Authority which become applicable to
Seller or the transactions contemplated hereby or by the Ancillary Agreements as
a result of the specific regulatory status or jurisdiction of incorporation or
organization of Buyer (or any of its Affiliates) or as a result of any other
facts that specifically relate to the business or activities in which Buyer (or
any of its Affiliates) is or proposes to be
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engaged (collectively, the "Seller Required Regulatory Approvals"), no
declaration, filing or registration with, or notice to, or authorization,
consent or approval of any Governmental Authority is necessary for the
consummation by Seller of the transactions contemplated hereby or by the
Ancillary Agreements, other than such declarations, filings, registrations,
notices, authorizations, consents or approvals (A) which, it not obtained or
made, would not, individually or in the aggregate, create a Material Adverse
Effect or (B) which relate to the Transferable Permits.
(c) To the knowledge of Seller, there is no reason that it should fail
to obtain the Seller Required Regulatory Approvals.
SECTION 5.04. Year 2000. Seller has informed Buyer of the status, as
of the date of this Agreement, of measures to prevent computer software,
hardware and embedded systems used in connection with the Auctioned Assets from
experiencing malfunctions or other usage problems in connection with years
beginning with "20", except for such malfunctions or other usage problems which
would not, individually or in the aggregate, create a Material Adverse Effect.
SECTION 5.05. Personal Property. Except for Permitted Exceptions,
Seller has good and marketable title, free and clear of all Encumbrances, to all
personal property included in the Auctioned Assets.
SECTION 5.06. Real Estate. The Conveyance Plans contain descriptions of
the Buyer Real Estate. Copies of the most recent real property surveys and title
insurance information in the possession of Seller with respect to the Buyer Real
Estate or any portion thereof have heretofore been delivered by Seller to Buyer
or made available for inspection by Buyer, receipt of which is hereby
acknowledged by Buyer.
SECTION 5.07. As of the date of this Agreement, Seller is neither a
tenant nor a licensee under any real property leases which (a) are to be
transferred and assigned to Buyer on the Closing Date and (b) (i) provide for
annual payments of more than $100,000 or (ii) are material to the Auctioned
Assets.
SECTION 5.08. certain Contract and Arrangments. (a) Except for (i) any
contract or agreement listed on Schedule 2.02 (a) (iv) or Schedule 5.08 (a)
and (ii) Contracts which will expire prior to the Closing Date or that are 40
permitted to be entered into under this Agreement, Seller is
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not a party to any contract which is material to the business or operations of
the Auctioned Assets.
(b) Each Contract (i) constitutes a valid and binding obligation of
Seller, and, to the knowledge of Seller, constitutes a valid and binding
obligation of the other parties thereto, (ii) to the knowledge of Seller, is in
full force and effect and (iii) other than Contracts covered by Section 2.04, to
the knowledge of Seller, may be transferred to Buyer pursuant to this Agreement
and will continue in full force and effect thereafter, in each case, without
breaching the terms thereof or resulting in the forfeiture or impairment of any
rights thereunder, except for such breaches, forfeitures or impairments which
would not, individually or in the aggregate, create a Material Adverse Effect.
(c) There is not, under any of the Contracts, any default or event
which, with notice or lapse of time or both, would constitute a default by
Seller, except for such events of default and other events as to which requisite
waivers or consents have been obtained or which would not, individually or in
the aggregate, create a Material Adverse Effect.
SECTION 5.09. Legal Proceeding. Except as set forth on Schedule 5.09
or in the Filed Seller SEC Documents, as of the date of this Agreement, there
are no claims, actions, proceedings or investigations pending or, to the
knowledge of Seller, threatened against or relating to Seller which would,
individually or in the aggregate, be reasonably expected to create a Material
Adverse Effect. With respect to the business or operations of the Auctioned
Assets, Seller is not, as of the date of this Agreement, subject to any
outstanding judgment, rule, order, writ, injunction or decree of any court,
governmental or regulatory authority which would create a Material Adverse
Effect. The representations and warranties of Seller set forth in this Section
5.09 shall not apply to, and do not cover, any environmental matters which, with
respect to any representations and warranties of Seller, are exclusively
governed by Section 5.11.
SECTION 5.10. Permits; Compliance with Law.
(a) Except as set forth on Schedule 5. 10 (a) (i) , Seller holds, and is
in compliance with, all Permits necessary to conduct the business and operations
of the Auctioned Assets as currently conducted, and, to the knowledge of Seller,
Seller is otherwise in compliance with all laws, statutes, orders, rules,
regulations, ordinances or judgments of any Governmental Authority applicable to
the business and
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operations of the Auctioned Assets, except for such failures to hold or comply
with such Permits, or such failures to be in compliance with such laws,
statutes, orders, rules, regulations, ordinances or judgments, which would not,
individually or in the aggregate, create a Material Adverse Effect. Except as
set forth on Schedule 5.10(a)(ii), Seller has not received any written
notification that it is in violation of any of such Permits or laws, statutes,
orders, rules, regulations, ordinances or judgments, except for notifications of
violations which would not, individually or in the aggregate, create a Material
Adverse Effect. The representations and warranties of Seller set forth in this
Section 5.10 shall not apply to, and do not cover, any environmental matters
which, with respect to any representations and warranties of Seller, are
exclusively governed by Section 5.11.
(b) Notwithstanding the last sentence of Section 5.10(a), except as set
forth on Schedule 5.10(b), there are no material Permits or material
Environmental Permits that, in each case, are not Transferable Permits and are
required for Buyer to conduct the business and operations of the Auctioned
Assets as currently conducted.
SECTION 5.11. Environmental Matters. (a) Except as set forth in
Schedule 5.11 or disclosed in the Filed Seller SEC Documents, Seller holds, and
is in compliance with, the Environmental Permits required for Seller to conduct
the business and operations of the Auctioned Assets as currently conducted under
applicable Environmental Laws, and, to the knowledge of Seller, Seller is
otherwise in compliance with applicable Environmental Laws with respect to the
business and operations of the Auctioned Assets, except for such failures to
hold or comply with such Environmental Permits, or such failures to be in
compliance with such Environmental Laws, which would not, individually or in the
aggregate, create a Material Adverse Effect.
(b) Except as set forth in Schedule 5.11 or disclosed in the Filed
Seller SEC Documents, Seller has not received any written notice of violation of
any Environmental Law or any written request for information with respect
thereto, or been notified that it is a potentially responsible party under the
Federal Comprehensive Environmental Response, Compensation, and Liability Act or
any similar state law with respect to any real property included in the Buyer
Real Estate or in any lease forming part of the Auctioned Assets, except for
such matters under such laws as would not, individually or in the aggregate,
create a Material Adverse Effect.
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(c) Except as set forth in Schedule 5.11 or disclosed in the Filed
Seller SEC Documents, with respect to the business and operations of the
Auctioned Assets, Seller is not subject to any outstanding judgment, decree or
judicial order relating to compliance with any Environmental Law or to
investigation or cleanup of Hazardous Substances under any applicable
Environmental Law, except for (i) the Seller Consent Orders and (ii) such
judgments, decrees or judicial orders that would not, individually or in the
aggregate, create a Material Adverse Effect.
(d) Except as set forth in Schedule 5.11 or disclosed in the Filed
Seller SEC Documents, as of the date of this Agreement, there are no claims,
actions, proceedings or investigations pending, or to the knowledge of Seller,
threatened against or relating to Seller, with respect to the exposure at the
Auctioned Assets of any person to Hazardous Substances, which, if adversely
determined, would, individually or in the aggregate, create a Material Adverse
Effect.
SECTION 5.12. Labor Matters. Seller has previously made available to
Buyer copies of all collective bargaining agreements to which Seller is a party
or is subject and which relate to the business or operations of the Auctioned
Assets. With respect to the business and operations of the Auctioned Assets, as
of the date of this Agreement, (a) Seller is in compliance with all applicable
laws regarding employment and employment practices, terms and conditions of
employment and wages and hours, (b) Seller has not received written notice of
any unfair labor practice complaint against Seller pending before the National
Labor Relations Board, (c) there is no labor strike, slowdown or stoppage
actually pending or, to the knowledge of Seller, threatened against or affecting
Seller, (d) Seller has not received notice that any representation petition
respecting the employees of Seller has been filed with the National Labor
Relations Board, (e) no arbitration proceeding arising out of or under
collective bargaining agreements is pending against Seller and (f) Seller has
not experienced any primary work stoppage since at least December 31, 1996,
except, in the case of each of the foregoing clauses (a) through (f), for such
matters as would not, individually or in the aggregate, create a Material
Adverse Effect.
SECTION 5.13. ERISA; Benefit Plans. Schedule 5.13 sets forth a list
of all material deferred compensation, profit-sharing, retirement and pension
plans and all material bonus and other material employee benefit or fringe
benefit plans maintained, or with respect to which contributions have been made,
by Seller with respect to
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current or former employees employed in connection with the power generation
operations of the Generating Plants and the Gas Turbines (collectively,
"Benefit Plans"). Seller and each trade or business (whether or not
incorporated) which are or have ever been under common control, or which are or
have ever been treated as a single employer, with Seller under Section 414 (b),
(c), (m) or (o) of the Code (an "ERISA Affiliate") have fulfilled their
respective obligations under the minimum funding requirements of Section 302 of
ERISA, and Section 412 of the Code, with respect to each Benefit Plan which is
an "employee pension benefit plan" as defined in Section 3 (2) of ERISA and each
such plan is in compliance in all material respects with the presently
applicable provisions of ERISA and the Code, except for such failures to fulfill
such obligations or comply with such provisions which would not, individually or
in the aggregate, create a Material Adverse Effect. Neither Seller nor any ERISA
Affiliate has incurred any liability under Section 4062 (b) of ERISA, or any
withdrawal liability under Section 4201 of ERISA, to the Pension Benefit
Guaranty Corporation in connection with any Benefit Plan which is subject to
Title IV of ERISA which liability remains outstanding, and there has not been
any reportable event (as defined in Section 4043 of ERISA) with respect to any
such Benefit Plan (other than a reportable event with respect to which the
30-day notice requirement has been waived by the PBGC). Neither Seller nor any
ERISA Affiliate or parent corporation, within the meaning of Section 4069(b) or
Section 4212(c) of ERISA, has engaged in any transaction, within the meaning of
Section 4069(b) or Section 4212(c) of ERISA. No Benefit Plan and no "employee
pension benefit plan" (as defined in Section 3(2) of ERISA) maintained by Seller
or any ERISA Affiliate or to which Seller or any ERISA Affiliate has contributed
is a multiemployer plan.
SECTION 5.14. Taxes. With respect to the Auctioned Assets and trades or
businesses associated with the Auctioned Assets, (a) all Tax Returns required to
be filed have been filed and (b) all Taxes shown to be due on such Tax Returns,
and all Taxes otherwise owed, have been paid in full, except to the extent that
any failure to file or any failure to pay any Taxes would not, individually or
in the aggregate, create a Material Adverse Effect. No written notice of
deficiency or assessment has been received from any taxing authority with
respect to liabilities for Taxes of Seller in respect of the Auctioned Assets
which has not been fully paid or finally settled or which is not being contested
in good faith through appropriate proceedings, except for any such notices
regarding Taxes which would not, individually or in the aggregate, create a
Material Adverse Effect. There are no outstanding agreements or waivers
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extending the applicable statutory periods of limitation for Taxes associated
with the Auctioned Assets for any period, except for any such agreements or
waivers which would not, individually or in the aggregate, create a Material
Adverse Effect.
SECTION 5.15. Independent Engineering Assessments; Condition of
Auctioned Assets. (a) Seller has reviewed the 1998 assessments prepared by Stone
& ▇▇▇▇▇▇▇ with respect to the Generating Plants and the Gas Turbines (the
Independent Engineering Assessments"), and, except as set forth on Schedule
5.15(a), to the knowledge of Seller, as of the date of the Independent
Engineering Assessments, there was no untrue statement of a material fact or
omission of any material fact therein that would reasonably suggest that the
condition of the Generating Plants and the Gas Turbines, taken as a whole, as of
such date was materially and adversely different from that described in such
independent Engineering Assessments.
(b) Except as set forth on Schedule 5.15(b), since the date of the
Independent Engineering Assessments, there has not been, subject to ordinary
wear and tear and to routine maintenance, any casualty, physical damage,
destruction or physical loss with respect to, or any adverse change in the
physical condition of, any Generating Plant or Gas Turbine, except for such
casualty, physical damage, destruction, physical loss or adverse change which
would not, individually or in the aggregate, create a Material Adverse Effect.
(c) The condition of the Auctioned Assets is sufficient to permit
compliance in all material respects with the Ancillary Agreements, assuming the
Ancillary Agreements are in full force and effect.
SECTION 5.16. Undisclosed Liabilities. With respect to the
Auctioned Assets, there are no liabilities or obligations of any nature or kind
(absolute, accrued, contingent or otherwise) that would have been required to be
set forth on a balance sheet in respect of the Auctioned Assets or in the notes
thereto prepared in accordance with GAAP, as applied by Seller in connection
with its December 31, 1997 balance sheet, except for any such liabilities or
obligations which (a) are disclosed in or contemplated or permitted by this
Agreement or the Ancillary Agreements (including the Assumed Obligations), (b)
are disclosed in the Offering Memorandum, (c) are disclosed in the Filed Seller
SEC Documents, (d) have been incurred in the ordinary course of business, (e)
are disclosed on
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Schedule 5.16 or (f) which would not, individually or in the aggregate, create a
Material Adverse Effect.
SECTION 5.17. Brokers. No broker, finder or other person is entitled
to any brokerage fees, commissions or finder's fees in connection with the
transaction contemplated hereby by reason of any action taken by Seller, except
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, which is acting for and at the expense of
Seller.
SECTION 5.18. Insurance. Seller carries policies of insurance covering
fire, workers, compensation, property all-risk, comprehensive bodily injury,
property damage liability, automobile liability, product liability, completed
operations, explosion, collapse, contractual liability, personal injury
liability and other forms of insurance relating to the Auctioned Assets, or
otherwise self-insures in accordance with all statutory and regulatory criteria
against any such liabilities, which insurance is in such amounts, has such
deductibles and retentions and is underwritten by such companies as would be
obtained by a reasonably prudent electric power business.
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN
THIS ARTICLE V, THE AUCTIONED ASSETS ARE BEING SOLD AND TRANSFERRED "AS IS,
WHERE IS", AND SELLER IS NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES
WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, CONCERNING SUCH AUCTIONED ASSETS
OR WITH RESPECT TO THIS AGREEMENT OR THE ANCILLARY AGREEMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING, IN PARTICULAR WITH
RESPECT TO THE AUCTIONED ASSETS, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND DISCLAIMED
BY SELLER AND WAIVED BY BUYER. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
SELLER MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO THE INFORMATION SET
FORTH IN, OR CONTEMPLATED BY, THE OFFERING. MEMORANDUM (EXCEPT TO THE EXTENT
EXPRESSLY INCORPORATED BY REFERENCE INTO THIS AGREEMENT)
ARTICLE VI
Representations and Warranties of Buyer
Buyer represents and warrants to Seller as follows:
SECTION 6.01. Organization Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has all
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requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as is now being conducted. Buyer is duly qualified
and licensed to do business as a foreign corporation and is in good standing in
the State of New York.
SECTION 6.02. Authority Relative to This Agreement. Buyer has
all necessary corporate power and authority to execute and deliver this
Agreement and the Ancillary Agreements to which it is party and to consummate
the transactions contemplated hereby and thereby. The execution and delivery by
Buyer of this Agreement and such Ancillary Agreements and the consummation by
Buyer of the transactions contemplated hereby and thereby have been duly and
validly authorized by the Board of Directors of Buyer and no other corporate
proceedings on the part of Buyer are necessary to authorize this Agreement or
such Ancillary Agreements or the consummation of the transactions contemplated
hereby or thereby. This Agreement and such Ancillary Agreements have been duly
and validly executed and delivered by Buyer and, assuming that this Agreement
and the Ancillary Agreements constitute valid and binding agreements of Seller
and each other party thereto, subject to the receipt of the Buyer Required
Regulatory Approvals and the Seller Required Regulatory Approvals, this
Agreement and the Ancillary Agreements constitute valid and binding agreements
of Buyer, enforceable against Buyer in accordance with their respective terms.
SECTION 6.03. Consents and Approvals; No Violations. (a) Subject to
obtaining the Buyer Required Regulatory Approvals and the Seller Required
Regulatory Approvals, neither the execution and delivery of this Agreement or
the Ancillary Agreements to which it is party by Buyer nor the purchase by Buyer
of the Auctioned Assets pursuant to this Agreement will (i) conflict with or
result in any breach of any provision of the Certificate of Incorporation or
By-laws (or other similar governing documents) of Buyer, (ii) result in a
default (or give rise to any right of termination, cancelation or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, agreement, lease or other instrument or obligation to which
Buyer or any of its subsidiaries is a party or by which any of their respective
assets may be bound or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Buyer, or any of its assets, except in
the case of clauses (ii) and (iii) for such failures to obtain a necessary
consent, defaults and violations which would not, individually or in the
aggregate, have a material adverse effect on the ability of Buyer to consummate
the
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transactions contemplated by, and discharge its obligations under, this
Agreement and the Ancillary Agreements (a "Buyer Material Adverse Effect").
(b) Except for (i) approval of the PSC pursuant to ss. 70 of the Public
Service Law of the State of New York, of the transfer to Buyer of the Auctioned
Assets, (ii) the filings by Buyer and Seller required by the HSR Act and the
expiration or earlier termination of all waiting periods under the HSR Act,
(iii) application by Buyer to, and the approval of, FERC under (A) Section 203
of the Federal Power Act with respect to the transfer of Auctioned Assets
constituting jurisdictional assets under the Federal Power Act and (B) Section
205 of the Federal Power Act with respect to (1) each Continuing Site Agreement
and any wholesale power sales agreement to be entered into by Seller and Buyer,
including the Transition Capacity Agreement, and (2) authorization to sell
capacity and energy from Generating Plants and Gas Turbines at market-based
rates (provided, however, that Buyer acknowledges that "market based rates" for
the purpose of this Agreement means rates that are subject to any bid cap, price
limitation or other market power mitigation measure imposed by FERC or PSC in
respect of the New York State or New York City wholesale and retail energy and
capacity electric power markets or any other restriction imposed by FERC or PSC
with respect to the power generation operations and assets of Buyer, including
the FERC Order Accepting Market Power Mitigation Measures dated September 22,
1998, as modified (Docket No. ER98-3169-000) (the "Mitigation Measures")), (iv)
qualification of Buyer, with respect to the Auctioned Assets, as an exempt
wholesale generator under the Energy Policy Act of 1992 and (v) the issuance of
approval by the New York City Department of Buildings and, to the extent
required, the New York City Department of Business Services of the tax lot
subdivision contemplated by this Agreement in a form suitable for submission to
the New York City Department of Finance for the issuance of tax lot numbers
(collectively, the "Buyer Required Regulatory Approvals"), no declaration,
filing or registration with, or notice to, or authorization, consent or approval
of any Governmental Authority is necessary for the consummation by Buyer of the
transactions contemplated hereby or by the Ancillary Agreements, other than such
declarations, filings, registrations, notices, authorizations, consents or
approvals (A) which, if not obtained or made would not, individually or in the
aggregate, have a Buyer Material Adverse Effect or (B) which relate to the
Transferable Permits.
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(c) To the knowledge of Buyer, there is no reason that it should fail
to obtain the Buyer Required Regulatory Approvals.
SECTION 6.04. Brokers. No broker, finder or other person is entitled
to any brokerage fees, commissions or finder's fees in connection with the
transaction contemplated hereby by reason of any action taken by Buyer, except
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., which is acting for and at the expense of Buyer.
ARTICLE VII
Covenants of the Parties
SECTION 7.01. Conduct of Business Relating to the Auctioned Assets.
(a) Except with the prior written consent of Buyer (such consent not to be
unreasonably withheld) or as required to effect the purchase and sale of the
Auctioned Assets and related transactions contemplated by this Agreement, during
the period from the date of this Agreement to the Closing Date, Seller will
operate the Auctioned Assets in the usual, regular and ordinary course and in
accordance with good industry practice and applicable legal requirements, and
continue to pay accounts payable which relate to the Auctioned Assets in a
timely manner, consistent with past practice.
(b) Notwithstanding the foregoing, except as contemplated in this
Agreement or the Ancillary Agreements, prior to the Closing Date, without the
prior written consent of Buyer (such consent not to be unreasonably withheld),
Seller will not:
(i) except for Permitted Exceptions, grant any Encumbrance on the
Auctioned Assets securing any indebtedness for borrowed money or guarantee
or other liability for the obligations of any person;
(ii) make any material change in the levels of fuel inventory and
supplies, materials and spare parts inventory customarily maintained by
Seller with respect to the Auctioned Assets, other than consistent with past
practice (including the use of spare parts in connection with certain power
generation assets of Seller described in the offering Memorandum other than
the Generating Plants or Gas Turbines);
(iii) sell, lease (as lessor), transfer or otherwise dispose of, any
of the Auctioned Assets, other than
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assets (except coal handling equipment) that become obsolete or assets used,
consumed or replaced in the ordinary course of business consistent with past
practice (including the use of spare parts in connection with certain power
generation assets of Seller described in the Offering Memorandum other than
the Generating Plants or Gas Turbines); provided, however, that
notwithstanding any other provision of this Agreement to the contrary,
Seller may sell the VISY Option Parcel to VTSY pursuant to the exercise by
VISY of the option under the VISY option Agreement;
(iv) terminate, materially extend or otherwise materially amend any
of the Contracts (other than in accordance with their respective terms) or
waive any default by, or release, settle or compromise any material claim
against, any other party thereto;
(v) amend any of the Transferable Permits, other than (A)
Transferable Permits not material to the operations of the Auctioned Assets
as currently conducted, (B) as reasonably necessary to complete the transfer
of Permits as contemplated hereby, (C) routine renewals or non-material
modifications or amendments and (D) modifications, alterations and
amendments contemplated by Section 7.03(b);
(vi) enter into any Contract for the purchase, sale or storage of
fuel with respect to the Auctioned Assets (whether commodity or
transportation) with a term in excess of 12 months, if the aggregate future
liability or receivable outstanding on the date for measurement for the
purpose of this covenant for all such Contracts would be in excess of $2
million, not including any such Contract terminable by notice of not more
than 30 days without penalty or cost (other than de minimis administrative
costs); provided, however, that Seller may enter into Contracts for the
storage of fuel with respect to the Auctioned Assets with a term ending not
later than December 31, 2000 and otherwise on terms consistent with Seller's
past practice;
(vii) (A) establish, adopt, enter into or amend any Collective
Bargaining Agreement or Benefits Plans, except (1) if such action would not
create a Material Adverse Effect or (2) as required under applicable law or
under the terms of any Collective Bargaining Agreement or (B) grant to any
Affected Employee any increase in compensation, except (1) in the ordinary
course of business consistent with past practice or (2) to the extent
required by the terms of any
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Collective Bargaining Agreement, employment agreement in effect as of the
date of this Agreement or applicable law;
(viii) enter into any Contract with respect to the Auctioned Assets for
goods or services not addressed in clauses (i) through (vii) with a term in
excess of 12 months, it the aggregate future liability or receivable
outstanding on the date for measurement for the purpose of this covenant for
all such Contracts would be in excess of $2 million, not including any such
Contract terminable by notice of not more than 30 days without penalty or
cost (other than de minimis administrative costs); provided, however, that
notwithstanding any other provision of this Agreement to the contrary,
Seller may (A) enter into any Contract reasonably necessary to effect the
physical, legal or operational separation of the sites on which the
Auctioned Assets are located or to otherwise implement the change of
ownership contemplated hereby, or subdivision, of such sites or implement
the provisions of the Ancillary Agreements and (B) enter into and record the
Declarations of Subdivision Easements; or
(ix) enter into any Contract with respect to the Auctioned Assets
relating to any of the transactions set forth in the foregoing clauses (i)
through (viii).
(c) Without limiting the generality of Sections 7.01(a) and (b), to the
extent Section 7.01(a) or (b) prohibits Seller from entering into any Contract
for goods and services in connection with maintenance or capital expenditures,
Buyer agrees that Seller may request Buyer's consent to enter into such
Contract, such consent not to be unreasonably withheld, and to the extent Buyer
so consents, all liabilities and obligations under such Contract shall
constitute Assumed Obligations and Buyer shall otherwise, reimburse Seller for
all its expenditures thereunder.
(d) Notwithstanding anything in this Section 7.01 to the contrary,
Seller may cake any action, incur any expense or enter into any obligation with
respect to the Auctioned Assets to the extent that (i) all obligations and
liabilities arising with respect thereto do not constitute Assumed Obligations
or (ii) Seller otherwise provides that such obligations and liabilities shall
not be assumed or retained by Buyer.
SECTION 7.02. Access to Information. (a) Between the date of this
Agreement and the Closing Date, Seller will, subject to the Confidentiality
Agreement,
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during ordinary business hours and upon reasonable notice (i) give Buyer and its
representatives reasonable access to all books, records, plants, offices and
other facilities and properties constituting the Auctioned Assets, including for
the purpose of observing the operation by Seller of the Auctioned Assets, (ii)
permit Buyer to make such reasonable inspections thereof as Buyer may reasonably
request, (iii) furnish Buyer with such financial and operating data and other
information with respect to the Auctioned Assets as Buyer may from time to time
reasonably request, (iv) furnish Buyer upon request a copy of each material
report, schedule or other document with respect to the Auctioned Assets filed by
Seller with, or received by Seller from, the PSC or FERC; provided, however
that (A) any such activities shall be conducted in such a manner as not to
interfere unreasonably with the operation of the Auctioned Assets, (B) Seller
shall not be required to take any action which would constitute a waiver of the
attorney-client privilege and (C) Seller need not supply Buyer with (1) any
information or access which Seller is under a legal obligation not to supply or
(2) any information which Seller has previously supplied to Buyer.
Notwithstanding anything in this Section 7.02 to the contrary, (I) Seller will
not be required to provide such information or access to any employee records
other than Transferring Employee Records, (II) Buyer shall not have the right to
perform or conduct any environmental sampling or testing at, in, on, around or
underneath the Auctioned Assets and (III) Seller shall not be required to
provide such access or information with respect to any Retained Asset or
Retained Liabilities.
(b) Unless otherwise agreed to in writing by Buyer, Seller shall, for a
period commencing on the Closing Date and terminating three years after the
Closing Date, keep confidential and shall cause its representatives to keep
confidential all Confidential Information (as defined in the Confidentiality
Agreement) on the terms set forth in the Confidentiality Agreement. Except as
contemplated by the following sentence, Seller shall not release any person from
any confidentiality agreement now existing with respect solely to the Auctioned
Assets or waive or amend any provision thereof. After the Closing Date, upon
reasonable request of Buyer, Seller shall, to the maximum extent permitted by
law and the applicable Bidder Confidentiality Agreement (as defined below),
appoint Buyer to be Seller's representative and agent in respect of confidential
information relating to the Auctioned Assets under the confidentiality
agreements ("Bidder Confidentiality Agreements") between Seller and
prospective purchasers of certain generation assets of Seller of which the
Auctioned Assets form part.
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(c) From and after the Closing Date, Buyer shall retain all Operating
Records (whether in electronic form or otherwise) relating to the Auctioned
Assets on or prior to the Closing Date. Buyer also agrees that, from and after
the Closing Date, Seller shall have the right, upon reasonable request to Buyer,
to receive from Buyer copies of any Operating Records or other information in
Buyer's possession relating to the Auctioned Assets on or prior to the Closing
Date and required by Seller in order to comply with applicable law. Seller shall
reimburse Buyer for its reasonable costs and expenses incurred in connection
with the foregoing sentence.
SECTION 7.03. Consents and Approvals; Transferable Permits. (a) Seller
and Buyer shall cooperate with each other and (i) prepare and file (or otherwise
effect) as soon as practicable all applications, notices, petitions and filings
with respect to and (ii) use their reasonable best efforts (including
negotiating in good faith modifications and amendments to this Agreement and the
Ancillary Agreements) to obtain (A) the Seller Required Regulatory Approvals and
the Buyer Required Regulatory Approvals and (B) any other consents, approvals or
authorizations of any other Governmental Authorities or third parties that are
necessary to consummate the transactions contemplated by this Agreement or the
Ancillary Agreements. Without limiting the generality of the foregoing, (1) each
Party agrees to, upon the other Party's request, support such other Party's
applications for regulatory approvals of the purchase and sale of the Auctioned
Assets contemplated by this Agreement, (2) Buyer agrees not to seek any relief
from, or modifications or amendments in respect of, any bid cap, price
limitation or other market power mitigation measure or other restriction with
respect to any power generation operations and assets described in or
contemplated by Section 6. 03 (b) (iii) (B) (2) until after the Closing Date and
(3) Buyer and Seller agree to defend any lawsuits or other legal proceedings,
whether judicial or administrative, challenging this Agreement or the Ancillary
Agreements, or the consummation of the transactions contemplated hereby or
thereby, including seeking to have any stay or temporary restraining order
entered by any Governmental Authority vacated or reversed.
(b) Upon execution of this Agreement, Seller shall commence the process
of transferring to Buyer the Transferable Permits, including completing and
filing applications and related documents with the appropriate Governmental
Authorities. Seller hereby reserves the right to modify, alter or amend any
Transferable Permit or to refuse to correct violations or deficiencies in
respect of
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any Transferable Permit as long as such modification, alteration, amendment or
refusal would not, individually or in the aggregate, create a Material Adverse
Effect. Seller shall use its reasonable best efforts to give notice to Buyer of
any modification, alteration or amendment to any Transferable Permit.
(c) Seller shall use its reasonable best efforts to cooperate with
Buyer in the transfer of Transferable Permits to Buyer by Closing. If the
transfer of any Transferable Permit cannot be completed by Closing, Buyer is
hereby authorized, but not required, to act as Seller's representative and agent
in respect of such Transferable Permit and to do all things necessary for
effecting transfer of such Transferable Permit as soon after the Closing as is
practicable, with Seller remaining the Transferable Permit "holder of record" in
such case until such transfer is completed, In the case of each such
Transferable Permit, Seller shall, to the maximum extent permitted by law and
such Transferable Permit, enter into such reasonable arrangements with Buyer as
are necessary to provide Buyer with the benefits and obligations of such
Transferable Permit. It Buyer is able to complete the transfer of any
Transferable Permit after Closing without the occurrence of any event that, if
such event had occurred between the execution of this Agreement and the Closing,
would have created, individually or in the aggregate, a Material Adverse Effect,
Seller may substitute Buyer in its place and stead as the Party responsible for
completing the transfer of such Transferable Permit.
SECTION 7.04. Further Assurances. (a) Subject to the terms and
conditions of this Agreement, each of the Parties will use its reasonable best
efforts to take, or cause to be taken, as soon as possible, all action, and to
do, or cause to be done, as soon as possible, all things necessary, proper or
advisable under applicable laws and regulations to consummate the sale of the
Auctioned Assets pursuant to this Agreement as soon as possible, including using
its reasonable best efforts to ensure satisfaction of the conditions precedent
to each Party's obligations hereunder. Prior to Buyer's submission of any
application with a Governmental Authority for a regulatory approval, Buyer shall
submit such application to Seller for review and comment and Buyer shall
incorporate into such application any revisions reasonably requested by Seller.
Neither of the Parties will, without prior written consent of the other Party,
take or fail to take, or permit their respective Affiliates to take or fail to
take, any action, which would reasonably be expected to prevent or materially
impede, interfere with or delay the consummation, as soon as
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possible, of the transactions contemplated by this Agreement or the Ancillary
Agreements. Without limiting the generality of the foregoing, each of the
Parties shall use its reasonable best efforts to negotiate in good faith as soon
as possible after the date of this Agreement, and enter into (i) the A-11
License, the terms of which shall be substantially as set forth in Exhibit F,
(ii) the NYPA Assignment, the terms of which shall be reasonably satisfactory to
Buyer and Seller, (iii) to the extent required to achieve subdivision of the
Astoria site, one or more contracts, agreements or other arrangements
satisfactory to the New York City Fire Department regarding fire prevention at
the Astoria site and (iv) any other agreement reasonably necessary to consummate
the sale of the Auctioned Assets pursuant to this Agreement as soon as possible.
(b) From time to time after the date hereof, without further
consideration and at its own expense, (i) Seller will execute and deliver such
instruments of assignment or conveyance as Buyer may reasonably request to more
effectively vest in Buyer Seller's title to the Auctioned Assets (subject to
Permitted Exceptions and the other terms of this Agreement) and (ii) Buyer will
execute and deliver such instruments of assumption as Seller may reasonably
request in order to more effectively consummate the sale of the Auctioned Assets
and the assumption of the Assumed Obligations pursuant to this Agreement.
(c) Seller shall not sponsor or support any recommendation or
application to effect prior to April 1, 2002 (i) a reduction in the locational
generation capacity requirement that 80% of New York City peak electric loads
must be met with in-City generation capacity, as in effect as of the date of
this Agreement, unless such reduction is justified by a significant change in
the transmission import capability into New York City whether as a result of
actions by Seller or others, (ii) a reduction in the $105/kW-year bid and price
cap in respect of capacity under the Mitigation Measures, as in affect as of the
date of this Agreement, or (iii) a change in the method of determining required
system capability set forth in NYPP Billing Procedure 4-11 (Installed Reserve
Requirements), as in effect as of the date of this Agreement that would reduce
the installed reserve requirements for the winter capability period applicable
to summer peaking systems if such reduction would also reduce the annual price
for installed capacity that Buyer could otherwise obtain,
(d) Seller shall join or support Buyers application to the PSC for the
certification required under
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Section 32(c) of the Public Utility Holding Company Act of 1935 in order for
Buyer to obtain qualification, with respect to the Auctioned Assets, as an
exempt wholesale generator under the Energy Policy Act of 1992.
(e) Seller and Buyer shall cooperate in good faith to establish a
transition committee to consider operational and business issues related to the
purchase and sale of the Auctioned Assets.
(f) Prior to the Closing Date, Seller shall cooperate in good faith
with Buyer to enable Buyer to obtain insurance in respect of the Auctioned
Assets comparable to that maintained by Seller as of the date of this Agreement.
(g) Seller and Buyer shall cooperate in good faith to enable Buyer to
obtain fuel storage capacity with respect to the Auctioned Assets.
SECTION 7.05. Public Statement. The Parties shall consult with each
other prior to issuing any public announcement, statement or other disclosure
with respect to this Agreement, the Ancillary Agreements or the transactions
contemplated hereby or thereby, including any statement appearing in any filing
contemplated hereby or thereby, and shall not issue any such public
announcement, statement or other disclosure prior to such consultation, except
as may be required by law.
SECTION 7.06. Tax Matters. (a) All transfer and sales taxes (including
any petroleum business taxes and similar excise taxes on sales of petroleum
based products) incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by Buyer. Buyer shall prepare and file in a
timely manner any and all Tax Returns or other documentation relating to such
taxes; provided, however, that, to the extent required by applicable law, Seller
will join in the execution of any such Tax Returns or other documentation
relating to any such taxes. Buyer shall provide to Seller copies of each Tax
Return described in the proviso in the preceding sentence at least 30 days prior
to the date such Tax Return is required to be filed.
(b) At Seller's election, but on no less than 10 Business Days' notice
to Buyer, the transfer of the Auctioned Assets and the receipt of the Purchase
Price shall be made through a qualified intermediary in a manner satisfying the
requirements of Treasury Regulation Section 1.1031(k)-1(g), so long as such
election by Seller does not create a Material Adverse Effect and Seller
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indemnifies Buyer for its additional costs and expenses incurred by reason of
such election.
(c) 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, any audit or other examination by any taxing
authority, or any judicial or administrative proceedings relating to liability
for Taxes, and each Party shall retain and provide the other Party with any
records or information which may be relevant to such return, audit, examination
or proceedings. Any information obtained pursuant to this Section 7.06 (c) or
pursuant to any other Section hereof providing for the sharing of information or
review of any Tax Return or other instrument relating to Taxes shall be kept
confidential by the parties hereto.
(d) if either Buyer or Seller receives a refund of Taxes in respect of
the Auctioned Assets for a taxable period including the Closing Date, Buyer
shall pay to Seller the portion of any such refund attributable to the portion
of such taxable period prior to the Closing Date, and Seller shall pay to Buyer
the portion of any such refund attributable to the portion of such taxable
period on and after the Closing Date.
SECTION 7.07. Bulk Sales or Transfer Laws. Buyer acknowledges that
Seller will not comply with the provisions of any bulk sales or transfer laws of
any jurisdiction in connection with the transactions contemplated by this
Agreement. Buyer hereby waives compliance by Seller with the provisions of the
bulk sales or transfer laws of all applicable jurisdictions.
SECTION 7.08. Storage. Seller shall store for Buyer the Auctioned
Assets described in the second sentence of Section 2.01 until the date that is
six months after the Closing Date or, in respect of all or a portion of such
Auctioned Assets, until one or more earlier dates proposed by Buyer with
reasonable advance notice, which schedule shall be reasonably acceptable to
Seller. Buyer agrees to reimburse Seller for its reasonable costs and expenses
in connection with such storage. Buyer agrees that Seller shall have no
responsibility or liability for the actual removal of such Auctioned Assets from
the actual storage location, and that Buyer shall have sole responsibility
therefor. Notwithstanding the provisions of Section 10.01, Buyer agrees that
Seller shall have no liability for loss or damage with respect to the matters
contemplated by this Section 7.08 or such Auctioned Assets, and Buyer agrees to
hold each Seller Indemnitee harmless from and against all
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loss or damage or Indemnifiable Losses, and to indemnify each Seller Indemnitee
from and against all loss or damage or Indemnifiable Losses incurred, asserted
against or suffered as a result of any storage or other services provided by
Seller pursuant to this Section 7.08, in each case, except to the extent any
such loss or damage or Indemnifiable Loss results in whole or in part from the
gross negligence or wilful or wanton acts or omissions to act of any Seller
Indemnitee (or any contractor or subcontractor of Seller).
SECTION 7.09, Information Resources. From the Closing Date until the
date that is three months thereafter, Seller shall provide Buyer with access to
Seller's mainframe computer only to the extent reasonably necessary to enable
Buyer to use the PPMIS and MMS (in read only mode) systems and applications
solely in connection with the Auctioned Assets. Buyer agrees that it will not
use any such access for any purpose other than for the use of the PPMIS and MMS
systems and applications solely in connection with the Auctioned Assets. Buyer
acknowledges that, as long as it retains access to Seller's mainframe computer,
Seller, its employees and third parties may have access to Buyer's information
resources systems and applications (including the PPMIS and MMS systems and
applications served by Seller's mainframe computer). Notwithstanding the
provisions of Section 10.01, Buyer agrees that Seller shall have no liability or
obligation whatsoever with respect to the matters contemplated by this Section
7.09, and Buyer agrees to hold each Seller Indemnitee harmless from and against
all loss or damage or Indemnifiable Losses, and to indemnify each Seller
Indemnitee from and against all loss or damage or Indemnifiable Losses incurred,
asserted against or suffered as a result of Buyer's access to Seller's mainframe
computer pursuant to this Section 7.09, in each case, except to the extent any
such loss or damage or Indemnifiable Loss results in whole or in part from the
gross negligence or wilful or wanton acts or omissions to act of any Seller
Indemnitee (or any contractor or subcontractor of Seller).
SECTION 7.10. WITNESS SERVICES. At all times from and after the Closing
Date, each Party shall use reasonable best efforts to make available to the
other Party, upon reasonable written request, its and its subsidiaries' then
current or former officers, directors, employees (including former employees of
Seller) and agents as witnesses to the extent that (i) such persons may
reasonably be required by such requesting Party in connection with any claim,
action, proceeding or investigation in which such requesting Party may be
involved
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and (ii) there is no conflict between Buyer and Seller in such claim, action,
proceeding or investigation. Such other Party shall be entitled to receive from
such requesting Party, upon the presentation of invoices for such witness
services, payments for such amounts, relating to supplies, disbursements and
other out-of-pocket expenses and direct and indirect costs of employees who are
witnesses, as may be reasonably incurred in providing such witness services.
SECTION 7.11. Consent Orders. Buyer and Seller agree to cooperate with
each other and NYSDEC to facilitate the entry of a consent order between NYSDEC
and Buyer, wherein Buyer will agree to assume and perform the Assumed Consent
Order Obligations.
SECTION 7.12. Nitrogen Oxide Allowances. Seller agrees to negotiate in
good faith with NYSDEC for nitrogen oxide allowances to be allocated to the
Auctioned Assets for any period subsequent to the year 2002.
SECTION 7.13. Trade Names. Seller shall not object to the use by Buyer
of any trade names, trademarks, service marks or logos (and any rights to and in
the same, including any right to use the same) primarily relating to the
Generating Facilities that contain the words "▇▇▇▇▇▇ Kill", "Astoria Gas
Turbine" or "Astoria Gas Turbines"; provided, however, that Buyer shall not use
any trade names, trademarks, service marks or logos containing the word
"Astoria" unless in each case immediately followed by the words "Gas Turbine" or
"Gas Turbines".
ARTICLE VIII
Conditions
SECTION 8.01. Conditions Precedent to Each Party's Obligation to Effect
the Purchase and Sale. The respective obligations of each Party to effect the
purchase and sale of the Auctioned Assets shall be subject to the satisfaction
or waiver by such Party on or prior to the Closing Date of the following
conditions, unless, in the case of Section 8.01(c) below, the PSC determines
that such condition need not be included or complied with:
(a) the Seller Required Regulatory Approvals and Buyer Required
Regulatory Approvals shall have been obtained and all conditions to
effectiveness prescribed therein or otherwise by law, regulation or order
shall have been satisfied; provided, however, that if at the time any
Seller Required Regulatory Approval or Buyer
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Required Regulatory Approval is obtained, a Party reasonably expects a
request for rehearing or a challenge thereto to be filed or if a request
for rehearing or a challenge thereto has been filed, in each case, which,
if successful, would cause such Seller Required Regulatory Approval or
Buyer Required Regulatory Approval, as the case may be, to be reversed,
stayed, enjoined, set aside, annulled, suspended or substantially modified,
then such Party may by notice to the other Party within five Business Days
after receipt of such Seller Required Regulatory Approval or Buyer Required
Regulatory Approval, as the case may be, delay the Closing until the time
for requesting rehearing has expired or until such challenge is decided, in
each case, whether or not any appeal thereof is pending; provided
further, however, that if the Closing is delayed pursuant to the
foregoing provision, the Termination Date shall be automatically extended
for a period of time equal to the period of such delay;
(b) no preliminary or permanent injunction or other order or decree by
any Federal or state court of competent jurisdiction and no statute or
regulation enacted by any Governmental Authority prohibiting the
consummation of the purchase and sale of the Auctioned Assets
(collectively, "Restraints") shall be in effect;
(c) the ISO shall have become operational to the extent reasonably
necessary to monitor market power in respect of the Auctioned Assets;
(d) delivery of each Continuing Site Agreement, each Declaration of
Easements Agreement, each Declaration of Subdivision Easements and each
Zoning Lot Development Agreement to the Title Company for recording; and
(e) execution and delivery by NYPA of the NYPA Assignment.
SECTION 8.02. Conditions Precedent to Obligation of Buyer To Effect the
Purchase and Sale. The obligation of Buyer to effect the purchase and sale of
the Auctioned Assets contemplated by this Agreement shall be subject to the
satisfaction or waiver by Buyer on or prior to the Closing Date of the following
additional conditions:
(a) Seller shall have performed in all material respects its covenants
and agreements contained in this
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Agreement which are required to be performed on or prior to the Closing
Date;
(b) the representations and warranties of Seller which are set forth in
this Agreement shall be true and correct as of the date of this Agreement
and as of the Closing Date, as it made at and as of such time (except to
the extent expressly made as of an earlier date, in which case as of such
date), except where the failure of such representations and warranties to
be so true and correct (without giving effect to any limitation as to
"materiality" or "Material Adverse Effect" set forth therein) would not,
individually or in the aggregate, create a Material Adverse Effect;
(c) Buyer shall have received a certificate from an authorized officer
of Seller, dated the Closing Date, to the effect that, to the best of such
officer's knowledge, the conditions set forth in Sections 8.02(a) and (b)
have been satisfied;
(d) all material Permits and Environmental Permits required for Buyer
to conduct the business and operations of the Auctioned Assets as currently
conducted shall have been transferred or will be transferable to Buyer, or
shall have been obtained or will be obtainable by Buyer, or shall have been
made available to Buyer in accordance with section 7.03(c), on, prior to or
within a reasonable period of time after the Closing Date;
(e) Buyer shall have received (i) the deeds of conveyance substantially
in the form of Exhibits B-1 and B-2, respectively, (ii) a Foreign
investment in Real Property Tax Act Certification and Affidavit
substantially in the form of Exhibit C and (iii) an opinion from ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq., General Counsel of Seller or other counsel reasonably
acceptable to Buyer, dated the Closing Date, substantially in the form set
forth in Exhibit D;
(f) execution and delivery by Seller of each of (i) the Transition
Capacity Agreement and the Zoning Lot Development Agreements, (ii) the A-11
License in a form reasonably satisfactory to Buyer and (iii) the NYPA
Assignment, in a form and on terms reasonably satisfactory to Buyer;
(g) the Title Company shall be willing to issue to Buyer a New York
form of ALTA (1992) Owner's Title Insurance Policy insuring fee title to
the Buyer Real
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Estate in an amount equal to that portion of the Purchase Price properly
allocable to Buyer Real Estate, subject only to the Permitted Exceptions;
and
(h) Buyer shall have received originals of the ALTA/ACSM Land Title
Surveys which include the Buyer Real Estate in addition to other property,
signed by the surveyor with Buyer's name and the name of not more than one
other Party designated by Buyer added to the certification set forth
thereon.
SECTION 8.03. Conditions Precedent to Obligation of Seller To Effect
the Purchase and Sale. The obligation of Seller to effect the purchase and the
sale of the Auctioned Assets contemplated by this Agreement shall be subject to
the satisfaction or waiver by Seller on or prior to the Closing Date of the
following additional conditions;
(a) Buyer shall have performed in all material respects its covenants
and agreements contained in this Agreement which are required to be
performed on or prior to the Closing Date;
(b) the representations and warranties of Buyer which are set forth in
this Agreement shall be true and correct as of the date of this Agreement
and as of the Closing Date, as if made at and as of such time (except to
the extent expressly made as of an earlier date, in which case as of such
date), except where the failure of such representations and warranties to
be so true and correct (without giving effect to any limitation as to
"materiality" or "Buyer Material Adverse Effect" set forth therein) would
not, individually or in the aggregate, create a Buyer Material Adverse
Effect;
(c) Seller shall have received a certificate from an authorized officer
of Buyer, dated the Closing Date, to the effect that, to the best of such
officer's knowledge, the conditions set forth in Sections 8.03(a) and (b)
have been satisfied;
(d) Seller shall have received an opinion substantially in the form of
Exhibit E dated as of the Closing Date and from counsel reasonably
acceptable to Seller;
(e) execution and delivery by Buyer of each of (i) the Transition
Capacity Agreement, the ▇▇▇▇▇▇ Kill Zoning Lot Development Agreement and,
unless executed and delivered prior to the Closing Date, the Astoria Zoning
Lot Development Agreement, (ii) the A-11 License
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in a form reasonably satisfactory to Seller and (iii) the NYPA Assignment,
in a form and on terms reasonably satisfactory to Seller;
(f) Buyer shall have provided evidence in form and substance reasonably
satisfactory to Seller of compliance by Buyer with its obligations under
Article IX; and
(g) if Buyer has assigned its rights, interests and obligations under
this Agreement in accordance with the terms hereof,
(i) Buyer and Seller shall have executed and delivered the
Guarantee Agreement;
(ii) Guarantor shall have performed in all material respects its
covenants and agreements contained in the Guarantee Agreement which are
required to be performed on or prior to the Closing Date;
(iii) the representations and warranties of Guarantor which are
set forth in the Guarantee Agreement shall be true and correct as of
the date of the Guarantee Agreement and as of the Closing Date, as if
made at and as of such time (except to the extent expressly made as of
an earlier date, in which case as of such date), except where the
failure of such representations and warranties to be so true and
correct (without giving effect to any limitation as to "materiality" or
"Guarantor Material Adverse Effect" set forth therein) would not,
individually or in the aggregate, create a Guarantor Material Adverse
Effect (as defined therein);
(iv) Seller shall have received a certificate from an authorized
officer of Guarantor, dated the Closing Date, to the effect that, to
the best of such officer's knowledge, the conditions set forth in
Sections 8, 03(g) (ii) and (iii) have been satisfied; and
(v) Seller shall have received an opinion substantially in the
form of Exhibit K dated the Closing Date and from counsel reasonably
acceptable to Seller.
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ARTICLE IX
Employee Matters
SECTION 9.01. Employee Matters. (a) Buyer shall offer equivalent
employment at the Auctioned Assets to those employees of Seller regularly
assigned by Seller to work at the Auctioned Assets on the Closing Date in the
job titles and facilities listed in Schedule 9.01(a)(all such employees
described above and those individuals described in the following sentence being
hereinafter referred to as "Affected Employees"). Affected Employees include
each such employee of Seller who is not actively at work on the Closing Date due
solely to a temporary short-term absence, whether paid or unpaid, in accordance
with applicable policies of Seller, including as a result of vacation, holiday,
personal time, leave of absence, union leave, short- or long-term disability
leave, military leave or jury duty. Affected Employees shall cease to be
employees of Seller on the Closing Date and their period of employment by Buyer
shall begin on the Closing Date. Seller shall be responsible for any obligation
to provide employee benefits to an Affected Employee prior to such employee's
period of employment by Buyer.
All such offers of employment will be made (i) in accordance with all
applicable laws and regulations, and (ii) for employees represented by Utility
Workers' Union of America AFL-CIO and its Local Union 1-2 ("Local 1-2"), in
accordance with the Local 1-2 Collective Bargaining Agreement (as defined in
Schedule 9.01(b)) and (iii) for employees represented by Local Union No. 3 of
the International Brotherhood of Electrical Workers, AFL-CIO ("Local 3") in
accordance with the Local 3 Collective Bargaining Agreement (as defined in
Schedule 9.01(b)). Each Affected Employee who becomes employed by Buyer pursuant
to this Section 9.01(a) shall be referred to herein as a "Continued Employee".
Buyer may commence discussions concerning offers for employment
beginning on the Closing Date to Affected Employees at any time following the
date of this Agreement.
(b) Schedule 9.01(b) sets forth the collective bargaining agreements,
and amendments thereto, to which Seller is a party in connection with the
Auctioned Assets (the "Collective Bargaining Agreements"). Affected employees
who are included in the collective bargaining units covered by the Collective
Bargaining Agreements are referred to herein as "Affected Union Employees". Each
Continued Employee who is an Affected Union Employee shall
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be referred to herein as a "Continued Union Employee". On the Closing Date,
Buyer will assume the terms and conditions of the Collective Bargaining
Agreements, except as set forth in Section 9.02(b) below, as they relate to
Affected Union Employees until the respective expiration dates of the Collective
Bargaining Agreements. Buyer will comply with its legal obligations with respect
to collective bargaining under Federal labor law for the employees at the
Auctioned Assets in the job titles or related work responsibilities of the
Affected Union Employees, and Buyer will comply with all applicable obligations
thereunder as the new owner of the Auctioned Assets. Buyer shall recognize Local
1-2 and Local 3 as the exclusive collective bargaining representatives of the
employees at the Auctioned Assets in the job titles or related work
responsibilities of the Affected Union Employees and Buyer agrees that, should
any other business entity (regardless of its relationship to Buyer) acquire all
or a portion of the Auctioned Assets from Buyer prior to the expiration date of
the respective Collective Bargaining Agreements, Buyer will require such
business entity to (i) offer employment to Affected Union Employees employed by
Buyer at the Auctioned Assets immediately prior to the change in ownership, (ii)
recognize Local 1-2 and Local 3 as the exclusive collective bargaining
representatives of Buyer's employees at the Auctioned Assets in the job titles
and work responsibilities of the Affected Union Employees, and (iii) assume the
terms and conditions of the Collective Bargaining Agreements as they relate to
Affected Union Employees from the date of such acquisition through the
expiration date of the Collective Bargaining Agreements.
SECTION 9.02. Continuation of Equivalent Benefit Plans/Credited
Service (a) For not less than three years following the Closing Date, Buyer
shall maintain compensation (including base pay and bonus compensation) and
employee benefits and employee benefit plans and arrangements for each Continued
Employee who is not a Continued Union Employee (a "Continued Non-Union
Employee") which are at least equivalent to those provided pursuant to the
compensation, employee benefits and employee benefit plans and arrangements in
effect on the Closing Date for the Affected Employees who are not Affected Union
Employees. Such total compensation shall be based upon (x) such employee's
existing individual base pay, (y) such employee's authorized overtime, if
applicable, and (z) the average bonus and benefit component for such employee's
salary plan level, as consistently applied by Seller, apportioned according to
such employee's base pay. No provision of this Agreement shall affect any
Continued Non-Union Employee's status as an employee-at-will.
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(b) From the Closing Date until the expiration date of the applicable
Collective Bargaining Agreement, Buyer shall provide to each Continued Union
Employee benefits and employee benefit plans and arrangements which are
equivalent to those provided under such Collective Bargaining Agreement or any
other collective bargaining agreement entered into between Buyer and the
applicable collective bargaining representatives for the employees at the
Auctioned Assets in effect from time to time after the Closing Date. Such
benefits, plans and arrangements include the following: (i) hospital, medical,
dental, vision care and prescription drug benefits (including employee
contributions to be made on a pre-tax basis), (ii) health care and dependent
care flexible spending accounts; (iii) employer-provided basic group term life
and accidental death and dismemberment insurance; (iv) employee-paid group
universal life and spousal and dependent child life insurance; (v) sick
allowance (short term disability) and long term disability benefits; (vi)
business travel accident insurance and crime protection insurance; (vii)
occupational accidental death insurance; (viii) adoption benefits and child care
and elder care referral benefits; (ix)) tuition aid benefits (x) vacation and
holidays; (xi) employee stock purchase plan (including employer matching
contributions) and (xii) defined benefit pension and 401(k) plan benefits. In
providing such benefits, Buyer shall have the right, subject to any applicable
laws, to use different providers from those used by Seller and to establish
Buyer's own benefit plans or use Buyer's existing benefit plans. For purposes
hereof, except as provided in Section 9.04(b), Buyer shall have no obligation to
maintain a fund holding or measured by common stock of Seller's parent under any
of Buyer's plans or arrangements, notwithstanding any such fund maintained by
Seller under its plans and arrangements.
(c) Continued Employees shall be given credit by Buyer for all service
with Seller and its Affiliates under all existing or future employee benefit and
fringe benefit plans, programs and arrangements of the Buyer ("Buyer Benefit
Plans") in which they become participants. The service credit given by Buyer
shall be for purposes of eligibility, vesting, eligibility for early retirement
and early retirement subsidies, benefit accrual and service related level of
benefits. Buyer shall assume and honor all vacation, sick and personal days
accrued and unused by Continued Employees through the Closing Date in accordance
with Seller's applicable policies and arrangements.
SECTION 9.03. Pension Plan (a) Effective as of the Closing Date, Buyer
shall have in effect defined benefit pension plans ("Buyer's Pension Plans")
intended to be
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(i) qualified pursuant to Section 401(a) of the Code and (ii) nonqualified, in
order to provide for benefits which would otherwise be payable under the
applicable qualified plan but for the application of Sections 401 (a) (17) and
415 of the Code, providing benefits as of the Closing Date identical in all
material respects (except for such changes as may be required by law) to the
benefits provided to them under Seller's Pension Plans (as defined below), in
particular (x) for Continued Non-Union Employees, such Buyer's Pension Plans to
provide benefits identical in all material respects to those benefits provided
under Seller's Retirement Plan for Management Employees and Seller's
Supplemental Retirement Income Plan, and (y) for Continued Union Employees, such
Buyer's Pension Plans to provide benefits identical in all material respects to
those provided under Seller's Pension and Benefits Plan (collectively, "Seller's
Pension Plans"), in each case, as of the Closing Date. Buyer acknowledges and
agrees that one such material respect is to count age after termination of
employment for purposes of satisfying requirements for early retirement
eligibility and early retirement subsidies.
(b) Continued Employees participating in Seller's Pension Plans
immediately prior to the Closing Date shall become participants in Buyer's
Pension Plans as of the Closing Date. Without limiting the generality of Section
9.02 (c), Continued Employees shall receive credit for all compensation and
service with Seller (subject to the terms of Seller's Pension Plans) for
purposes of eligibility for participation, vesting, eligibility for early
retirement and early retirement subsidies and benefit accrual under Buyer's
Pension Plans. Seller shall be responsible for Continued Employees' pension
benefits accrued up to the Closing Date, and Buyer shall be responsible for
pension benefits accrued by such Continued Employees on and after the Closing
Date as provided herein. Buyer may offset against the accrued benefits
determined under Buyer's Pension Plans the accrued benefits determined under
Seller's Pension Plans. For the purpose of this Section 9.03 (b), "accrued
benefit" means the amount that would be paid as a life annuity at normal
retirement age irrespective of the date of actual distribution from either
Seller's or Buyer's Pension Plans. Seller shall make pension distributions to
Continued Employees of the vested portion of their accrued benefits in
accordance with the terms of Seller's Pension Plans as in effect from time to
time. As soon as reasonably practicable following the Closing Date, Seller shall
provide Buyer a list showing, as of the Closing Date, the accrued benefit of
each Continued Employee under Seller's Pension Plans.
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(c) In the event that any other business entity (regardless of its
relationship to Buyer) acquires all or a portion of the Auctioned Assets from
Buyer at any time prior to the third anniversary of the Closing Date in the case
of Continued Non-Union Employees and prior to the expiration date of the
applicable Collective Bargaining Agreement in the case of Continued Union
Employees, Buyer will require such entity to maintain the defined benefit plans,
provide the benefits and recognize compensation and service with Seller and
Buyer to the same extent as Buyer is required under Sections 9.03(a) and (b)
above.
SECTION 9.04. 401(k) Plan (a) Effective as of the Closing Date, Buyer
shall have in effect tax-qualified defined contribution plans that include a
qualified cash or deferred arrangement within the meaning of Section 401(k) of
the Code ("Buyer's 401(k) Plans") that will provide benefits that are identical
in all material respects (except for such changes as may be required by law) to
those provided by (i) Seller's Thrift Savings Plan for Management Employees, in
the case of Continued Non-Union Employees, and (ii) Seller's Retirement Income
Savings Plan for Weekly Employees, in the case of Continued Union Employees
(such Seller plans herein referred to collectively as "Seller's 401(k) Plans"),
in each case, as of the Closing Date. Each Continued Employee participating in
Seller's 401(k) Plans immediately prior to the Closing Date shall become a
participant in Buyer's 401(k) Plans as of the Closing Date. Continued Employees
shall receive credit for all service with Seller for purposes of eligibility and
vesting under Buyer's 401(k) Plans.
(b) At such time after the Closing Date as Seller is reasonably
satisfied that Buyer's 401(k) Plans meet the requirements for qualification
under Section 401(a) of the Code, Seller shall cause to be transferred to
Buyer's 401(k) Plans in a trust-to-trust transfer in common stock of Seller's
parent (as provided in the following sentence) and cash (or other property
reasonably acceptable to BUYER) an amount equal to the value of the assets held
in the accounts of all Continued Employees (including any outstanding loan
balances of Continued Employees in Seller's 401(k) Plans), subject to any
qualified domestic relations orders. In connection therewith, Buyer shall
establish an investment fund under Buyer's 401(k) Plans to which shall be
transferred the shares of common stock of Seller's parent (or any successor
thereto) which, as of the date of transfer, are credited to the accounts of the
Continued Employees under Seller's 401(k) Plans. After the Closing Date and
prior to any such transfer, Buyer shall cooperate with Seller in the
administration of distributions to and
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loan repayments by Continued Employees. Prior to such transfer of assets, Seller
shall vest any unvested benefits of Continued Employees under Seller's 401(k)
Plans. Following any such transfer of assets, Buyer shall assume all obligations
and liabilities of Seller under Seller's 401(k) Plans with respect to such
Continued Employees, and Seller shall have no further liability to Buyer or any
Continued Employee with respect thereto.
SECTION 9.05. Welfare Plans. (a) Continued Employees and their
dependents who are eligible to participate in Seller's current welfare benefits
plans, programs or arrangements shall be eligible to participate in the welfare
benefits plans, programs or arrangements maintained or established by Buyer
("Buyer's Welfare P1ans"), effective as of the Closing Date. Effective as of the
Closing Date, any and all limitations as to pre-existing conditions and
actively-at-work exclusions and waiting periods under Buyer's Welfare Plans
shall be waived by Buyer with respect to Continued Employees and their eligible
dependents to the extent satisfied under Seller's applicable Welfare Plans. in
addition, effective as of the Closing Date, Buyer shall cause Buyer's Welfare
Plans to recognize any out-of-pocket health care expenses incurred by Continued
Employees and their eligible dependents prior to the Closing Date and during the
calendar year in which such Closing Date occurs for purposes of determining
their deductibles and out-of-pocket maximums under Buyer's Welfare Plans.
Seller shall retain responsibility under Seller's welfare plans for claims
relating to expenses incurred by Continued Employees and their eligible
dependents prior to the Closing Date. Buyer shall have responsibility under
Buyer's Welfare Plans for claims relating to expenses incurred by Continued
Employees and their eligible dependents on and after the Closing Date.
(b) Effective as of the Closing Date, Buyer shall have in effect health
care and dependent care reimbursement account plans for the benefit of each
Continued Employee, the terms of which shall (i) be identical in all material
respects to the Flexible Reimbursement Account Plans for Management and Weekly
Employees of Seller ("Seller's Reimbursement Account Plans") as in effect on the
Closing Date and (ii) give full effect to, and continue in effect, salary
reduction elections made under Seller's Reimbursement Account Plans. Prior to
the Closing Date, Seller shall cause the accounts of Continued Employees under
Seller's Reimbursement Account Plans to be segregated into separate health care
and dependent care reimbursement accounts (the "Segregated Reimbursement
Accounts"), and such Segregated
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Reimbursement Accounts shall be transferred to and assumed by Buyer as of the
Closing Date.
(c) Buyer shall, subject to any applicable laws, provide a retiree
health program identical in all material respects to Seller's retiree health
program as in effect on the Closing Date to each Continued Employee who
terminates his employment with Buyer within three years after the Closing Date,
in the case of a Continued Non-Union Employee, and on or prior to the expiration
date of the applicable Collective Bargaining Agreement, in the case of a
Continued Union Employee, and, in each case, who at the time of such termination
of employment satisfies the eligibility requirements for such retiree health
program provided by Buyer; provided, however, that Seller shall remain liable,
pursuant to Seller's retiree health program, for all Continued Employees who
satisfy, as of the Closing Date, the eligibility requirements then in effect for
Seller's retiree health program.
SECTION 9.06. Short- and Long-Term Disability. Effective as of the
Closing Date, Buyer shall have in effect short- and long-term disability plans
for the benefit of Continued Employees, the cost of which to Continued Employees
shall be the same as under, and the terms of which are identical in all material
respects to, Seller's applicable plans as in effect as of the Closing Date. Any
and all waiting periods and pre-existing condition clauses shall be waived under
Buyer's short- and long-term disability plans with respect to Continued
Employees.
SECTION 9.07. Life Insurance and Accidental Death and Dismemberment
Insurance. Effective as of the Closing Date, Buyer shall have in effect group
term life insurance, group universal life insurance, accidental death and
dismemberment insurance, occupational accidental death insurance, business
travel accident insurance and crime protection insurance plans for the benefit
of Continued Employees, the cost of which to Continued Employees shall be the
same as under, and terms of which are identical in all material respects to,
Seller's applicable plans that provide such benefits to Continued Employees
immediately prior to the Closing Date.
SECTION 9.08. Severance. (a) Effective as of the Closing Date, Buyer
shall have in effect a severance plan covering Continued Non-Union Employees
that contains terms identical in all material respects to those under Seller's
Severance Pay Plan for Management Employees as of the Closing Date.
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(b) Buyer shall, subject to any applicable laws, provide a special
separation allowance for any Continued Employee whose employment with Buyer is
terminated involuntarily by Buyer other than for cause on or prior to, in the
case of Continued Non-Union Employees, three years after the Closing Date and,
in the case of Continued Union Employees, the expiration date of the applicable
Collective Bargaining Agreement. Such allowance shall be not less than the sum
of four weeks pay plus one week pay for each completed year of service (as
determined by aggregating each affected individual's respective service with
Seller and Buyer) and shall be payable by Buyer in a lump sum within 30 days
after termination of employment. In addition, in the case of each Continued
Non-Union Employee described in the first sentence of this Section 9.08(b),
Buyer shall pay the Continued Non-Union Employee a lump sum equal to the excess
of (i) the actuarial equivalent of the Employee's "potential benefit" under the
applicable Buyer's Pension Plans, which such Employee would receive if such
Employee's employment continued until three years after the Closing Date and
such Employee's base and incentive compensation for such deemed additional
period was the same as in effect on the date of such Employee's termination of
employment with Buyer, over (ii) the actuarial equivalent of such Employee's
"actual benefit under the applicable Buyer's Pension Plans, as of the date of
such Employee's termination of employment from Buyer. For the purpose of the
foregoing sentence, (i) the term "potential benefit" shall refer to the monthly
pension that would have been payable to the applicable Employee commencing on
the first day of the month following the latest of (A) the last day of the
deemed additional period, (B) Employee's attainment of age 55, or (C) the
earlier of (1) the first date as of which the sum of such Employee's age and
years of service, as taken into account in determining the actuarial reduction
for commencement prior to normal retirement age that is to be applied to his
accrued benefit under the applicable Buyer's Pension Plans, equals 75 or (2)
such Employee's attainment of age 65, (ii) the term "actual benefit" shall refer
to the monthly pension payable to such Employee under the applicable Buyer's
Pension Plans commencing as of the date determined in accordance with clause (i)
of this sentence, and (iii) the actuarial equivalent of the "potential benefit"
and the "actual benefit" shall each be a lump sum payable as of the date of such
Employee's termination of employment from Buyer, determined on the basis of the
interest rate used to determine the amount of lump sum distributions and, to the
extent applicable, other actuarial assumptions then in effect under the
applicable Buyer's Pension Plans. Buyer shall also provide outplacement services
to such terminated Continued Non-Union Employee appropriate to the level of the
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Employee's position and job responsibilities. Buyer shall also continue to
provide or cause to be provided to any such terminated Continued Employee health
insurance coverage and group term and universal life insurance coverage at the
same rates as for active Continued Employees for a period equal to the number of
weeks of separation allowance which any such terminated Continued Employee is
entitled to from Buyer. Buyer shall have the right to require a release in form
reasonably satisfactory to Buyer as a condition for eligibility to receive such
separation allowance. The allowance shall not apply to Continued Employees whose
employment is terminated due to death or expiration of sick allowance or other
authorized leave of absence or who terminate employment voluntarily. If at any
time during the three-year period following the Closing Date, Buyer shall assign
a Continued Non-Union Employee to work on a regular basis at a location that is
more than fifty miles from the location to which such Employee is assigned as of
the Closing Date, Buyer shall offer such Employee the option to terminate
employment and receive the severance benefits set forth in this Section 9.08(b)
in lieu of the reassignment.
SECTION 9.09. Workers Compensation. Effective as of the Closing Date,
Buyer shall have in effect a workers compensation program for Continued
Employees that shall provide coverage identical in all material respects to
Seller's workers compensation program as of the Closing Date.
ARTICLE X
Indemnification and Dispute Resolution
SECTION 10.01. Indemnification. (a) Seller will indemnify and hold
harmless Buyer and its Affiliates and their respective directors, officers,
employees and agents (collectively with Buyer and its Affiliates, the "Buyer
Indemnitees") from and against any and all claims, demands or suits by any
person, and all losses, liabilities, damages, obligations, payments, costs and
expenses (including reasonable legal fees and expenses and including costs and
expenses incurred in connection with investigations and settlement proceedings)
(each, an "Indemnifiable Loss"), as incurred, asserted against or suffered by
any Buyer Indemnitee relating to, resulting from or arising out of:
(i) any breach by Seller of any covenant or agreement of Seller
contained in this Agreement or, prior to their expiration in accordance
with Section 12.03, the
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representations and warranties contained in Sections 5.01, 5.02, 5.03 and
5.17;
(ii) the Retained Liabilities;
(iii) noncompliance by Seller with any bulk sales or transfer laws as
provided in Section 7.07; or
(iv) any breach by Seller of any Ancillary Agreement.
(b) Buyer will indemnify and hold harmless Seller and its Affiliates
and their respective directors, officers, trustees, employees and agents
(collectively with Seller and its Affiliates, the "Seller Indemnitees") from and
against any and all Indemnifiable Losses, as incurred, asserted against or
suffered by any Seller Indemnitee relating to, resulting from or arising out of:
(i) any breach by Buyer of any covenant or agreement of Buyer contained
in this Agreement or, prior to their expiration in accordance with Section
12.03, the representations and warranties contained in Sections 6.01, 6.02,
6.03 and 6.04;
(ii) the Assumed Obligations;
(iii) any obligation resulting from any action or inaction of Buyer (A)
under any Contract or warranty pursuant to Section 2.04(b) (whether acting
as principal or representative and agent for Seller pursuant to Section
2.04(b) or otherwise) or (B) pursuant to any Transferable Permit in respect
of which Seller remains the holder of record after the Closing Date
pursuant to Section 7.03(c); or
(iv) any breach by Buyer of any Ancillary Agreement.
(c) The amount of any Indemnifiable Loss shall be reduced to the extent
that the relevant Buyer Indemnitee or Seller Indemnitee (each, an "Indemnitee")
receives any insurance proceeds with respect to an Indemnifiable Loss and shall
be (i) increased to take account of any Tax Cost incurred by the Indemnitee
arising from the receipt of indemnity payments hereunder (grossed up for such
increase) and (ii) reduced to take account of any Tax Benefit realized by the
Indemnitee arising from the incurrence or payment of any such Indemnifiable
Loss. If the amount of any Indemnifiable Loss, at any time subsequent to the
making of an indemnity payment in respect thereof, is reduced by
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recovery, settlement or otherwise under or pursuant to any insurance coverage,
or pursuant to any claim, recovery, settlement or payment by or against any
other person, the amount of such reduction, less any costs, expenses or premiums
incurred in connection therewith, will promptly be repaid by the Indemnitee to
the Party required to provide indemnification hereunder (the "Indemnifying
Party") with respect to such Indemnifiable Loss.
(d) To the fullest extent permitted by law, neither Party nor any Buyer
Indemnitee or any Seller Indemnitee shall be liable to the other Party or any
other Buyer Indemnitee or Seller Indemnitee for any claims, demands or suits for
consequential, incidental, special, exemplary, punitive, indirect or multiple
damages connected with or resulting from any breach after the Closing Date of
this Agreement or the Ancillary Agreements (other than breach of this Article
X), or any actions undertaken in connection with or related hereto or thereto,
including any such damages which are based upon breach of contract, tort
(including negligence and misrepresentation), breach of warranty, strict
liability, statute, operation of law or any other theory of recovery.
(e) The rights and remedies of Seller and Buyer under this Article X
are, solely as between Seller and Buyer, exclusive and in lieu of any and all
other rights and remedies which Seller and Buyer may have under this Agreement,
the Ancillary Agreements (except as expressly provided in either Continuing Site
Agreement or either Declaration of Easements Agreement) or otherwise for
monetary relief with respect to (i) any breach of, or failure to perform, any
covenant or agreement set forth in this Agreement or the Ancillary Agreements by
Seller or Buyer, (ii) any breach of any representation or warranty by Seller or
Buyer, (iii) the Assumed Obligations or the Retained Liabilities, (iv)
noncompliance by Seller with any bulk sales or transfer laws and (v) any
obligation in respect of Section 2.04 or Section 7.03. Each Party agrees that
the previous sentence shall not limit or otherwise affect any non-monetary right
or remedy which either Party may have under this Agreement or the Ancillary
Agreements or otherwise limit or affect either Party's right to seek equitable
relief, including the remedy of specific performance,
(f) Buyer and Seller agree that, notwithstanding Section 10.01(e),
each Party shall retain, subject to the other provisions of this Agreement,
including Sections 10.01(d) and 12.03, all remedies at law or in equity with
respect to (i) fraud or wilful or intentional
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breaches of this Agreement or the Ancillary Agreements and (ii) gross negligence
or wilful or wanton acts or omissions to act of any Indemnitee (or any
contractor or subcontractor thereof) on or after the Closing Date.
SECTION 10.02. Third Party Claims Procedures, (a) If any Indemnitee
receives notice of the assertion of any claim or of the commencement of any
claim, action, or proceeding made or brought by any person who is not a Party or
an Affiliate of a Party (a "Third Party Claim") with respect to which
indemnification is to be sought from an Indemnifying Party, the Indemnitee will
give such Indemnifying Party reasonably prompt written notice thereof, but in
any event not later than 20 Business Days after the Indemnitee's receipt of
notice of such Third Party Claim; provided, however, that a failure to give
timely notice will not affect the rights or obligations of any Indemnitee except
if, and only to the extent that, as a result of such failure, the Indemnifying
Party was actually prejudiced. Such notice shall describe the nature of the
Third Party Claim in reasonable detail and will indicate the estimated amount,
if practicable, of the Indemnifiable Loss that has been or may be sustained by
the Indemnitee.
(b) If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party will be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided, however, that such counsel is not reasonably
objected to by the Indemnitee; and provided further that the Indemnifying Party
first admits in writing its liability to the Indemnitee with respect to all
material elements of such claim. Should the Indemnifying Party so elect to
assume the defense of a Third Party Claim, the Indemnifying Party will not be
liable to the Indemnitee for any legal expenses subsequently incurred by the
Indemnitee in connection with the defense thereof. If the Indemnifying Party
elects to assume the defense of a Third Party Claim, the Indemnitee will (i)
cooperate in all reasonable respects with the Indemnifying Party in connection
with such defense, (ii) not admit any liability with respect to, or settle,
compromise or discharge, any Third Party Claim without the Indemnifying Party's
prior written consent and (iii) agree to any settlement, compromise or discharge
of a Third Party Claim which the Indemnifying Party may recommend and which by
its terms obligates the Indemnifying Party to pay the full amount of the
liability in connection with such Third Party Claim and releases the Indemnitee
completely in connection with such Third Party Claim. In the event the
Indemnifying Party shall assume the defense of any Third Party Claim, the
Indemnitee shall be entitled to participate
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in (but not control) such defense with its own counsel at its own expense. It
the Indemnifying Party does not assume the defense of any such Third Party
Claim, the Indemnitee may defend the same in such manner as it may deem
appropriate, including settling such claim or litigation after giving notice to
the Indemnifying Party of the terms of the proposed settlement and the
Indemnifying Party will promptly reimburse the Indemnitee upon written request.
Anything contained in this Agreement to the contrary notwithstanding, no
Indemnifying Party shall be entitled to assume the defense of any Third Party
Claim if such Third Party Claim seeks an order, injunction or other equitable
relief or relief for other than monetary damages against the Indemnitee which,
if successful, would materially adversely affect the business of the Indemnitee.
ARTICLE XI
Termination
SECTION 11.01. Termination. (a) This Agreement may be terminated at any
time prior to the Closing by an instrument in writing signed on behalf of each
of the Parties.
(b) This Agreement may be terminated by Seller or Buyer if the Closing
shall not have occurred on or before the date that is 12 months from the date of
this Agreement (the "Termination Date"); provided, however, that the right to
terminate this Agreement pursuant to this Section 11.01(b) shall not be
available to any Party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Closing to
occur on or before such date.
(c) This Agreement may be terminated by either Seller or Buyer if any
Restraint having any of the effects set forth in Section 8.01(b) shall be in
effect and shall have become final and nonappealable; provided, however, that
the Party seeking to terminate this Agreement pursuant to this Section 11-01(c)
shall have used its reasonable best efforts to prevent the entry of and to
remove such Restraint.
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ARTICLE XII
Miscellaneous Provisions
SECTION 12.01. Expenses. Except to the extent specifically provided
herein, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be borne by the Party incurring such
costs and expenses, whether or not the transactions contemplated hereby are
consummated.
SECTION 12.02. Amendment and Modification; Extension; Waiver. This
Agreement may be amended, modified or supplemented only by an instrument in
writing signed on behalf of each of the Parties. Either Party may (i) extend the
time for the performance of any of the obligations or other acts of the other
Party, (ii) waive any inaccuracies in the representations and warranties of the
other Party contained in this Agreement or (iii) waive compliance by the other
Party with any of the agreements or conditions contained in this Agreement. Any
agreement on the part of a Party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such Party.
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 12.03. No Survival of Representations or Warranties. Each and
every representation and warranty contained in this Agreement, other than the
representations and warranties contained in Sections 5.01, 5.02, 5.03 and 5.17
and 6,01, 6.02, 6.03 and 6.04 (which representations and warranties shall
survive for 18 months from the Closing Date), shall expire with, and be
terminated and extinguished by the Closing and no such representation or
warranty shall survive the Closing Date. From and after the Closing Date, none
of Seller, Buyer or any officer, director, trustee or Affiliate of any of them
shall have any liability whatsoever with respect to any such representation or
warranty. The expiration of the representations and warranties contained in
Sections 5.01, 5.02, 5.03 and 5.17 and 6.01, 6.02, 6.03 and 6.04 shall not
affect the Parties' obligations under Article X if the Indemnitee provided the
Indemnifying Party with proper notice of the claim or event for which
indemnification is sought prior to such expiration.
SECTION 12.04. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given (as of the time of delivery or, in
the case of a telecopied communication, of confirmation) if delivered
personally, telecopied (which is confirmed) or sent by
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overnight courier (providing proof of delivery) to the Parties at the following
addresses (or at such other address for a Party as shall be specified by like
notice):
if to Seller, to:
Consolidated Edison Company of New York, Inc.
▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy on or prior to the Closing Date to:
Cravath, Swaine & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
if to Buyer, to:
NRG Energy, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
NRG North America
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President & CEO
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Pillsbury Center South
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
SECTION 12.05. Assignment; No Third Party Beneficiaries (a) This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the Parties and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned
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by any Party, including by operation of law, without the prior written consent
of the other Party, except (i) in the case of Seller (A) to an Affiliate of
Seller or a third party in connection with the transfer of the Transmission
System to such Affiliate or third party or (B) to a lending institution or
trustee in connection with a pledge or granting of a security interest in all or
any part of the Transmission System and this Agreement and (ii) in the case of
Buyer (A) to an Affiliate of Buyer in connection with the transfer of the
Auctioned Assets to such Affiliate and (B) to a lending institution or trustee
in connection with a pledge or granting of a security interest in the Auctioned
Assets and this Agreement; provided, however, that no assignment or transfer of
rights or obligations by either Party shall relieve it from the full liabilities
and the full financial responsibility, as provided for under this Agreement,
unless and until the transferee or assignee shall agree in writing to assume
such obligations and duties and the other Party has consented in writing to such
assumption.
(b) Nothing in this Agreement is intended to confer upon any other
person except the Parties any rights or remedies hereunder or shall create any
third party beneficiary rights in any person, including, with respect to
continued or resumed employment, any employee or former employee of Seller
(including any beneficiary or dependent thereof). No provision of this Agreement
shall create any rights in any such persons in respect of any benefits that may
be provided, directly or indirectly, under any employee benefit plan or
arrangement except as expressly provided for thereunder.
SECTION 12.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law).
SECTION 12.07. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 12.08. Interpretation. When a reference is made in this
Agreement to an Article, Section, Schedule or Exhibit, such reference shall be
to an Article or Section of, or Schedule or Exhibit to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words
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"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation" or equivalent words. The
words "hereof", "herein" and "hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All terms defined in this Agreement
shall have the defined meanings when used in the Ancillary Agreements and any
certificate or other document made or delivered pursuant hereto or thereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term, Any
agreement, instrument, 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, 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. References to a person are also to its permitted
successors and assigns.
SECTION 12.09. Jurisdiction and Enforcement. (a) Each of the Parties
irrevocably submits to the exclusive jurisdiction of (i) the Supreme Court of
the State of New York, New York County and (ii) the United States District Court
for the Southern District of New York, for the purposes of any suit, action or
other proceeding arising out of this Agreement or any transaction contemplated
hereby. Each of the Parties agrees to commence any action, suit or proceeding
relating hereto either in the United States District Court for the Southern
District of New York or, if such suit, action or proceeding may not be brought
in such court for jurisdictional reasons, in the Supreme Court of the State of
New York, New York County. Each of the Parties further agrees that service of
process, summons, notice or document by hand delivery or U.S. registered mail at
the address specified for such Party in Section 12.04 (or such other address
specified by such Party from time to time pursuant to Section 12.04) shall be
effective service of process for any action, suit or proceeding brought against
such Party in any such court. Each of the Parties irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in (i) the Supreme Court of the State of New York, New York County, or
(ii) the United States District Court
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for the Southern District of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
(b) The Parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement or any Ancillary Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement or any Ancillary Agreement and
to enforce specifically the terms and provisions of this Agreement or any
Ancillary Agreement, this being in addition to any other remedy to which they
are entitled at law or in equity.
SECTION 12.10. Entire Agreement. This Agreement, the Confidentiality
Agreement and the Ancillary Agreements including the Exhibits, Schedules,
documents, certificates and instruments referred to herein or therein and other
contracts, agreements and instruments contemplated hereby or thereby, embody the
entire agreement and understanding of the Parties in respect of the transactions
contemplated by this Agreement. There are no restrictions, promises,
representations, warranties, covenants or undertakings other than those
expressly set forth or referred to herein or therein. This Agreement and the
Ancillary Agreements supersede all prior agreements and understandings between
the Parties with respect to the transactions contemplated by this Agreement
other than the Confidentiality Agreement.
SECTION 12.11. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. 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 to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
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SECTION 12.12. Conflicts. Except as expressly otherwise provided herein
or therein, in the event of any conflict or inconsistency between the terms of
this Agreement and the terms of any Ancillary Agreement, the terms of this
Agreement shall prevail.
IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.
CONSOLIDATED EDISON COMPANY OF
NEW YORK, INC.,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President & CFO
NRG ENERGY, INC.,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Name. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS.:
COUNTY OF NEW YORK )
On this 27th day of January 1999, before me personally appeared ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that she executed the same in her capacity, and that her
signature on the instrument, the individual, or the corporation upon behalf of
which the individual acted, executed the instrument.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
NOTARY PUBLIC, STATE OF NEW YORK
NO. 02BA4973207
QUALIFIED IN WESTCHESTER COUNTY
COMMISSION EXPIRES: OCTOBER 15, 2000
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Section 12.12. Conflicts. Except as expressly otherwise provided
herein or therein, in the event of any conflict or inconsistency between the
terms of this Agreement and the terms of any Ancillary Agreement, the terms of
this Agreement shall prevail.
IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.
CONSOLIDATED EDISON COMPANY OF
NEW YORK, INC.,
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STATE OF MINNESOTA )
) SS.:
COUNTY OF HENNEPIN )
On this 27th day of January 1999, before me personally appeared ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that she executed the same in her capacity, and that her
signature on the instrument, the individual, or the corporation upon behalf of
which the individual acted, executed the instrument.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
NOTARY PUBLIC
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
NOTARY PUBLIC-MINNESOTA
MY COMMISSION EXPIRES JAN. 31, 2000