Agreement of Merger
by and among
Consolidated Hydro Maine, Inc.,
CHI Universal, Inc.,
Consolidated Hydro, Inc.,
Ridgewood Maine Hydro Corporation
and
Ridgewood Maine Hydro Partners, L.P.
Dated as of
July 1, 1996
EVENFOOTER:
ODDFOOTER:
Table of Contents
Article # Description Page #
Article I Definitions and Interpretations 1
Article II The Merger and Merger Consideration 7
Article III Closing Date and Actions at Closing 9
Article IV Certain Representations and Warranties
Relating to Parent, Universal and CHI
Maine 12
Article V Certain Representations and Warranties
Relating to CHI Maine and the Projects 14
Article VI Representations and Warranties of the
General Partner and the Partnership 22
Article VII Conditions Precedent to the Obligations of
the General Partner and the Partnership 26
Article VIII Conditions Precedent to the Obligations of
Parent, Universal and CHI Maine 28
Article IX Indemnification 30
Article X Covenants 31
Article XI Tax Matters 35
Article XII Miscellaneous 37
Article XIII Execution Clause 42
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER (this "Agreement") is made and
entered into as of July 1, 1996 between and among Consolidated
Hydro Maine, Inc., a Delaware Corporation ("CHI Maine"), CHI
Universal, Inc., a Delaware Corporation ("Universal"),
Consolidated Hydro, Inc., a Delaware Corporation ("Parent"),
Ridgewood Maine Hydro Corporation, a Delaware corporation (the
"General Partner") and Ridgewood Maine Hydro Partners, L.P., a
Delaware limited partnership (the "Partnership").
RECITALS
A. CHI Maine owns and operates all the assets of 14
separate hydroelectric generating facilities located in the State
of Maine which collectively have a nameplate generating capacity
of 11.32 megawatts and which sell electricity pursuant to Power
Purchase Agreements (as defined below) (individually, a "Project"
and collectively the "Projects").
B. CHI Maine is a wholly owned subsidiary of Universal,
and Universal is a wholly owned subsidiary of the Parent.
C. Subject to the terms and conditions of this Agreement,
and in accordance with the General Corporation Law and Limited
Partnership Act (as each is defined below), the parties hereto
desire that CHI Maine be merged with and into the Partnership
(the "Merger").
D. The Merger has been approved by the Board of Directors
of CHI Maine, by Universal, as sole shareholder of CHI Maine, by
Parent, as sole shareholder of Universal, and by each of the
general and limited partners of Partnership.
NOW, THEREFORE, in consideration of the foregoing premises
and the mutual covenants set forth below, the parties intending
to be legally bound, hereby agree as follows:
ARTICLE 1
Definitions and
Interpretations
1.1 Defined Terms. Capitalized terms used in this
Agreement without other definition shall have the meanings
specified in this Section 1.1, unless the context requires
otherwise.
"Additional Consents and Notices" has the meaning set forth
in Section 4.6.
"Adjusted Cash Consideration Statement" has the meaning set
forth in Section 3.3.1.
"Affiliate" of a specified Person means any other Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the
Person specified. For purposes of the foregoing, "control,"
"controlled by" and "under common control with," with respect to
any Person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
"Agreement" means this Agreement of Merger, including all
Exhibits and Schedules.
"Amended Partnership Agreement" means the amended and
restated Agreement of Limited Partnership of the Partnership in
the form of Exhibit A.
"Balance Sheet" means the balance sheet of CHI Maine
prepared in accordance with GAAP as of the Effective Date, but
excluding as assets of CHI Maine any accounts receivable or other
assets receivable from Affiliates of Parent or Universal.
"Bangor Hydro" means Bangor Hydro-Electric Company, a Maine
Corporation.
"Cash Consideration" has the meaning set forth in Section
3.2.4, as the same may be adjusted pursuant to Section 3.3.
"Certificate of Merger" means a Certificate of Merger
between CHI Maine and the Partnership in the form of Exhibit B.
"CHI Maine" has the meaning set forth in the Recitals.
"CHI Maine Assets" means all the assets and rights of any
kind or character owned or leased or otherwise benefiting CHI
Maine, including (i) the Sites, and all easements, rights of way
and other similar rights in which CHI Maine has any interest,
(ii) the approximately 11.32 megawatt nameplate capacity
hydroelectric generating facilities and related fixtures,
improvements, equipment and other assets located on the Sites,
(iii) the Power Purchase Agreements and all of the other Project
Documents, (iv) all of the other tangible and intangible,
personal, real, mixed and other property and assets of any kind
owned or leased by CHI Maine or in which CHI Maine has any rights
or interests.
"CHI Maine Shares" has the meaning set forth in Section 5.1.
"Closing" has the meaning given in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Closing Documents" means, collectively, this Agreement, the
Certificate of Merger, the Amended Partnership Agreement, the
Option Agreement and the O&M Agreement.
"CMP" means Central Maine Power Company, a Maine
Corporation.
"Code" means the Internal Revenue Code of 1986, as amended,
and all rules and regulations adopted thereunder.
"Current Assets" means, collectively, the CHI Maine Assets
shown or required to be shown as current assets on the Balance
Sheet.
"Current Liabilities" means, collectively, all liabilities
of CHI Maine shown or required to be shown as current liabilities
on the Balance Sheet.
"Default" means, when used with reference to any agreement
without other reference, any event or circumstance that, with the
giving of notice or lapse of time, or both, would, unless cured
or waived, become an Event of Default under such agreement.
"Delaware Laws" means, collectively, the General Corporation
Law and the Limited Partnership Act.
"Effective Date" means 12:01 a.m. July 1, 1996.
"Environmental Laws" means, collectively, all federal,
state, local and other laws, statutes and regulations, and any
other rule, guidance, guideline or common law, which in any way
relates to health, safety or the environment, including the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. 9601 et seq.; the Solid
Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976, as amended by the Solid and Hazardous Waste
Amendments of 1984, 42 U.S.C. 6901 et seq.; the Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977,
33 U.S.C. 1251 et seq.; the Toxic Substances Control Act of
1976, 15 U.S.C. 2601 et seq.; the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. 11001 et seq.;
the Clean Air Act of 1966, as amended, 42 U.S.C. 7401 et seq.;
the National Environmental Policy Act of 1975, 42 U.S.C. 4231;
the Rivers and Harbours Act of 1899, 33 U.S.C. 401 et seq.; the
Endangered Species Act of 1973, as amended, 16 U.S.C. 1531 et
seq.; the Occupational Safety and Health Act of 1970, as amended,
29 U.S.C. 651 et seq.; the Safe Drinking Water Act of 1974, as
amended, 42 U.S.C. 300(f) et seq.; the Hazardous Materials
Transportation Act, 42 U.S.C. 1471, 1472, 1655, 1801 et seq.;
the Federal Insecticide, Fungicide & Rodenticide Act, 7 U.S.C.
136 et seq.; and the Atomic Energy Act, 42 U.S.C. 3011 et seq.
"Event of Default" means, when used with reference to any
agreement without other reference, an event of default or other
similar event as defined in, or pursuant to, the terms of such
agreement.
"FERC" means the Federal Energy Regulatory Commission and
its successors.
"Financial Statements" has the meaning set forth in Section
5.4.
"FPA" means the Federal Power Act, as amended, and all rules
and regulations adopted thereunder.
"GAAP" means generally accepted accounting principles in
effect in the United States from time to time, applied on a
consistent basis by the accounting entity to which they refer.
"General Corporation Law" means the General Corporation Law
of the State of Delaware (as amended).
"General Partner" has the meaning set forth in the Preamble
of this Agreement.
"Governmental Approval" means any applicable authorization,
approval, consent, license, lease, ruling, permit, tariff,
certification, exemption, filing or registration by or with any
Governmental Person.
"Governmental Consents and Notices" has the meaning set
forth in Section 4.5.
"Governmental Filing" shall mean any filings, reports,
registrations, notices or other submissions made to any federal,
state or local Governmental Person.
"Governmental Person" means any federal, state, local or
other government, any political subdivision or any governmental,
judicial, public or statutory instrumentality, tribunal, agency
(including those pertaining to health, safety or the
environment), authority, body or entity, or other regulatory
bureau, authority, body or entity having legal jurisdiction over
the matter or Person in question.
"Governmental Rule" means any applicable federal, state,
local or other law, statute, treaty, rule, regulation, ordinance,
order, code, judgment, decree, directive, injunction, writ or
similar action or decision duly implementing any of the foregoing
by any Governmental Person, but does not include Governmental
Approvals.
"Hazardous Substance" shall mean any "hazardous substance"
as defined under Section 101(14) of CERCLA or the regulations
adopted pursuant thereto, or any "hazardous substance" as defined
under any similar statute, rule or regulation of Maine.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and all of the rules and regulations
thereunder.
"Knowledge", "known" and "knows", whether or not capitalized
herein and when used with respect to matters covered by a
representation, warranty, covenant or other provision of this
Agreement applicable to the Projects, CHI Maine, Universal or the
Parent, means the knowledge and beliefs of each of Xxxxxx X.
Xxxxx, Xxxxxx X. Xxxxx and Xxxx Xxxxxx.
"Lien" means any lien, mortgage, encumbrance, charge,
pledge, lease, security interest, claim, option or right of any
kind (including any conditional sale or other title retention
agreement) which constitutes an interest in or claim against
property.
"Limited Partnership Act" means the Limited Partnership Act
as adopted by the State of Delaware (as amended).
"Merger" has the meaning set forth in the Recitals.
"Merger Effective Time" has the meaning set forth in Section
2.2.
"Merger Securities" has the meaning set forth in Section
3.2.5.
"Net Working Capital Amount" means the amount by which
Current Assets exceed (or are less than) the Current Liabilities.
"O&M Agreement" means the Operations, Maintenance and
Administration Agreement in the form of Exhibit C.
"Option Agreement" shall mean the Option and Escrow
Agreement in the form of Exhibit D attached hereto.
"Parent" has the meaning set forth in the Recitals.
"Partnership" has the meaning set forth in the preamble of
this Agreement.
"Permitted Liens" means (i) any Lien for real estate or
similar taxes which are not yet due and payable, (ii) the Liens
created under the Power Purchase Agreements and (iii) Liens on
record at the land records office in local jurisdiction in which
any Project is located.
"Person" means any individual, corporation, partnership,
trust, joint venture, unincorporated association, limited
liability company, Governmental Person or other entity.
"Power Purchase Agreements" means the Power Purchase
Agreements between CHI Maine and Bangor Hydro CMP, as the case
may be, with respect to each Project as more fully described on
Schedule 1.1 attached hereto.
"Project" has the meaning set forth in the Recitals.
"Project Documents" has the meaning set forth in Section
5.8.
"Projections" means the financial projections for the
Projects attached hereto as Exhibit E.
"PUC" means the Public Utilities Commission of the State of
Maine.
"PUHCA" means the Public Utility Holding Company Act of
1935, as amended, and all rules and regulations adopted
thereunder as in effect from time to time.
"PURPA" means the Public Utility Regulatory Policies Act of
1978, as amended, and all rules and regulations adopted
thereunder as in effect from time to time.
"Qualifying Facility" means a "qualifying facility" within
the meaning of PURPA.
"Regulated Substance" means (a) asbestos, PCBs, petroleum or
petroleum products, and (b) any "hazardous substances",
"hazardous waste", "hazardous materials", "extremely hazardous
substances", "regulated substances", "industrial waste",
"residual waste", "solid waste", "toxic substances", "toxic
pollutants", "contaminants" or "pollutants" as any of those terms
is currently defined in or for the purpose of any applicable
Environmental Law.
"Release or Discharge" shall mean, whether or not
capitalized, any spill, leak, emission, dumping, discharge,
injection, escape, or disposal of any substance into the
environment, including any surface water, groundwater, land
surface, subsurface strata or air.
"Securities Act" means the Securities Act of 1933, as
amended, and all rules and regulations adopted thereunder.
"Site" means with respect to each Project, the land upon
which such project is located, as more fully described on
Schedule 5.7.1 attached hereto.
"Trust" means Ridgewood Electric Power Trust IV, a Delaware
business Trust.
1.2 Interpretations. For purposes of this Agreement,
except where otherwise expressly provided or unless the context
otherwise necessarily requires:
1.2.1 the terms "herein," "herewith" and "hereof"
are references to this Agreement, taken as a whole;
1.2.2 the terms "include," "includes" and
"including" shall mean "including, without limitation";
1.2.3 references to a "Section," "Article,"
"Exhibit" or "Schedule" shall mean a Section, Article, Exhibit or
Schedule of this Agreement, as the case may be;
1.2.4 references to a given agreement, instrument
or other document shall be a reference to that agreement,
instrument or other document as modified, amended, supplemented
and restated through the date as of which such reference is made;
1.2.5 references to a Person include its permitted
successors and permitted assigns;
1.2.6 the singular shall include the plural and the
masculine shall include the feminine and neuter, and vice versa;
1.2.7 reference to a given Governmental Rule is a
reference to that Governmental Rule as amended, modified,
supplemented or restated as of the date on which the reference is
made; and
1.2.8 accounting terms have the meanings given to
them by GAAP.
ARTICLE 2
The Merger and Merger
Consideration
2.1 The Merger. Subject to the terms and conditions of
this Agreement, at the Merger Effective Time, CHI Maine shall be
merged with and into the Partnership, in accordance with the
Delaware Laws and the Certificate of Merger. At the Merger
Effective Time, the separate corporate existence of CHI Maine
shall cease, the rights of Universal, as sole holder of the CHI
Maine Shares, shall be converted into the right to receive the
Cash Consideration and the Merger Securities, and the
Partnership, as the surviving entity, shall continue its limited
partnership existence, all in accordance with the provisions of
the Delaware Laws and the Certificate of Merger.
2.2 Merger Effective Time. As soon as practicable after
the satisfaction or waiver of all of the conditions to the
Closing of the transaction contemplated by this Agreement, the
parties shall cause the Merger to be consummated by causing the
Certificate of Merger to be executed and filed with the Secretary
of State of the State of Delaware in accordance with the
applicable provisions of the Delaware Laws. The Merger shall
become effective (the "Merger Effective Time") at the time of
such filing with the Secretary of State of Delaware of the
Certificate of Merger is completed, or at such later time, if
any, as is specified in the Certificate of Merger.
2.3 General Effect of Merger. The Merger shall have the
effects set forth in the Delaware Laws. Without limiting the
generality of the foregoing, and subject thereto, at the Merger
Effective Time, the CHI Maine Assets, shall vest in the
Partnership, and all debts, liabilities and duties of CHI Maine
shall become the debts, liabilities and duties of the Partnership
in the same manner as if the Partnership had itself incurred
them. All rights of creditors and all liens upon the property of
CHI Maine shall thereafter be preserved unimpaired.
2.4 Effect of Merger on Partners, Partnership Agreement and
Universal. The General Partner, the sole general partner of the
Partnership immediately prior to the Merger Effective Time, shall
remain the sole general partner of the Partnership after the
Merger Effective Time, the Trust, the sole limited partner of the
Partnership immediately prior to the Merger Effective Time, shall
remain as a limited partner of the Partnership after the Merger
Effective Time and at the Merger Effective Time, Universal shall
be admitted as an additional limited partner of the Partnership
and each of the General Partner, the Trust and Universal shall
thereafter continue as partners of the Partnership in accordance
with the Amended Partnership Agreement, until such time
thereafter as one or more of such partners ceases to be a partner
in the Partnership or a new partner is admitted to the
Partnership in accordance with the provisions of the Amended
Partnership Agreement and applicable law. At the Merger
Effective Time, the limited partnership agreement of the
Partnership as in effect immediately prior to the Merger
Effective Time shall be amended and restated in its entirety in
the form of the Amended Partnership Agreement and shall
thereafter remain in full force and effect until thereafter
amended in accordance with the provisions thereof and applicable
law.
2.5 Merger Consideration, Manner of Payment. The
Partnership shall pay to Universal the Cash Consideration and
deliver to Universal the Merger Securities in the manner
specified in Article 3.
ARTICLE 3
Closing Date and Actions at
Closing
3.1 Closing Date. Subject to the other provisions of this
Agreement, the closing of the transactions contemplated by this
Agreement (the "Closing") shall be held at the offices of Xxxxxx
Xxxxxxx Xxxxxxx Broder & Micoleau Limited Liability Company,
P.A., Xxx Xxxxx Xxxxx, Xxxxxxxx, Xxxxx 00000-0000, at 10 a.m.,
local time, on October 3, 1996, or if later, on a date which is
three business days after the closing conditions set forth in
Articles 7 and 8 below have been satisfied or waived. The date
of the Closing is sometimes referred to herein as the "Closing
Date." The parties hereto contemplate that the Closing will
occur contemporaneously with the Merger Effective Time.
3.2 Actions at Closing. Subject to the satisfaction of the
Closing conditions set forth in Articles 7 and 8 hereof, in
addition to and without limiting any other provision of this
Agreement, each of CHI Maine, Universal and Parent, on the one
hand, and the Partnership, on the other hand, agrees to take the
following actions or to cause the following actions to be taken
at the Closing on the Closing Date:
3.2.1 Certificate of Merger. CHI Maine shall
execute and deliver to the Partnership the Certificate of Merger.
The Partnership shall execute the Certificate of Merger and cause
it to be delivered to the Secretary of State of the State of
Delaware and shall thereafter take such further actions as may be
required under this Agreement to cause the Certificate of Merger
to become effective as quickly as possible.
3.2.2 CHI Maine Shares. Universal shall deliver to
the Partnership for cancellation certificates representing all of
the CHI Maine Shares, together with a stock powers endorsed in
blank with signatures guaranteed.
3.2.3 Amended Partnership Agreement. Universal
shall execute and deliver to the Partnership the Amended
Partnership Agreement, and the Partnership shall cause the
General Partner and the Trust to execute the Amended Partnership
Agreement.
3.2.4 Cash Consideration. As the cash portion of
the consideration for the Merger, the Partnership shall pay or
cause to be paid to Universal, by wire transfer or other credit
of immediately available funds to an account designated by
Universal, an amount, determined as follows (the "Cash
Consideration"):
(a) Five Million Six Hundred Twenty-Five Thousand
Dollars ($5,625,000); plus (or minus)
(b) Fifty percent (50%) of the Net Working
Capital Amount; minus
(c) Fifty percent (50%) of the amount of any
liabilities of CHI Maine (other than Current
Liabilities and other than the non-Current
Liabilities for long-term lease obligations in an
amount not to exceed $1,102,000) shown on the
Balance Sheet; plus
(d) An amount in lieu of interest computed on the
sum of the amounts described in Section 3.2.4 (a),
(b) and (c) above at the rate of 6% per annum from
and after the Effective Date through and including
July 31, 1996, and at the rate of 8.5% per annum
for the period from and after August 1, 1996
through the Closing Date;
provided, however, that the aggregate amount of the Cash
Consideration shall not exceed Six Million Five Hundred Thousand
Dollars ($6,500,000).
In order to expedite the Closing, the parties agree
that at the Closing, the Partnership shall pay to
Universal the sum of Six Million One Hundred Fifty Five
Thousand Ninety Four Dollars ($6,155,094), which amount
represents the parties' current estimate of the Cash
Consideration. After the Closing, the amount of such
estimated Cash Consideration shall be adjusted as
provided in Section 3.3 below.
3.2.5 Merger Securities. At the Merger Effective
Time, the Partnership shall deliver to Universal (i) a fully
executed original of the Amended Partnership Agreement and (ii)
stock certificates for 500 shares of the common stock of the
General Partner (collectively, the "Merger Securities").
3.2.6 O&M Agreement. Parent shall cause CHI
Operations, Inc., a Delaware corporation and Affiliate of
Universal, to execute and deliver to the Partnership, and the
Partnership shall execute and deliver to Parent, the O&M
Agreement.
3.3 Post Closing Adjustment of Cash Consideration .
3.3.1 Procedure. On or before the later of October
31, 1996 or 90 days after the Closing Date, Parent shall cause to
be prepared and delivered to the Partnership a written statement
setting forth the proposed increase or decrease of the Cash
Consideration (the "Adjusted Cash Consideration Statement") which
statement shall be accompanied by a Balance Sheet and
computations of the Net Working Capital Amount. For a period of
30 days after the delivery of such Adjusted Cash Consideration
Statement and accompanying documents, Parent shall give, and
shall cause its Affiliates to give, reasonable access to the
books and records of Parent and its Affiliates, and CHI Maine (to
the extent retained after the Closing), to representatives of the
Partnership for the purpose of determining the accuracy of the
Adjusted Cash Consideration Statement. Unless within such 30 day
period the Partnership shall provide to Parent written notice
that the Partnership disputes the Adjusted Cash Consideration
Statement (in which case Section 3.3.2 below shall apply), the
Adjusted Cash Consideration Statement shall become final and the
Parent shall immediately pay, or cause its Affiliates to pay, to
the Partnership, or the Partnership shall immediately pay to
Universal, as the case may be, any amounts due in accordance with
such Adjusted Cash Consideration Statement.
3.3.2 Disputes. In the event that the Partnership
disputes the Adjusted Cash Consideration Statement, the
Partnership shall notify Parent of such dispute within
the 30 day period described in Section 3.3.1 above by
sending to Parent written notice specifying in
reasonable detail the nature of the dispute. If the
Partnership and Parent cannot resolve such dispute with
10 days after receipt by Parent of such notice, then
the Partnership and Parent shall submit the dispute to
any one of the "Big Six" nationally recognized
accounting firms selected by the Partnership which has
an office in Portland, Maine and which does not
represent any of the parties. Parent shall deliver to
such firm the Adjusted Cash Consideration Statement and
all work papers and other supporting documentation,
books and records, used in the preparation thereof.
Such accounting firm shall, within 30 days of the date
of its retention, consider only the disputed matter
and promptly resolve the disputed matter and render its
decision in writing, which decision shall be final and
binding on the parties. Universal and the Partnership
shall provide to the such accounting firm such
additional information as the such accounting firm may
reasonably request within five days of receipt of such
request. The costs and expenses of the such accounting
firm shall be borne equally by Universal and the
Partnership. The parties agree that any determination
of such accounting firm may be enforced in any court
located in the State of Maine and that the parties
hereby consent to the jurisdiction and venue in any
such court for the purpose of any enforcement
proceeding.
3.4 Parties' Intent. The parties intend that the economic
effects of the closing of the transactions contemplated by this
Merger Agreement, the Option Agreement and the O&M Agreement
relate back to the Effective Date (notwithstanding the actual
Closing Date), and the parties are adopting the approach set
forth herein so that upon the Closing, the economic burdens and
benefits of ownership of the Projects under each of such
agreements shall be for the account of the Partnership from and
after the Effective Date.
3.5 Possession and Control of Projects. Notwithstanding
any subsequent Merger Effective Time, upon the Closing, the
Partnership shall assume management and control of all aspects of
all of the Projects, to the same extent as if the Merger
Effective Time has occurred simultaneously with the Closing, in
each case, subject to the terms and conditions contained in the
O&M Agreement.
3.6 Additional Actions. Universal and the Partnership
shall, on request, on and after the Closing Date, take such
further actions as may be requested pursuant to Section 10.4.
ARTICLE 4
Certain Representations and
Warranties
Relating to Parent, Universal
and CHI Maine
Parent and Universal hereby jointly and severally represent
and warrant to the Partnership (regardless of any examinations,
inspections, audits or other investigations Partnership has
heretofore made or may hereafter make with respect to such
representations and warranties) as of the Closing Date as
follows:
4.1 Due Organization. Each of Parent, Universal and CHI
Maine are corporations duly organized, validly existing and in
good standing under the laws of Delaware, and each is qualified
to transact business in all jurisdictions where the ownership of
its properties or its operations require such qualification.
4.2 Power and Authority. Each of Parent, Universal and CHI
Maine has full corporate power and authority to enter into and
perform its obligations hereunder and under the Closing Documents
to which it is or will be a party and to consummate the
transactions herein and therein contemplated in accordance with
the terms, provisions and conditions hereof and thereof. All
corporate proceedings required to be taken by each of Parent,
Universal and CHI Maine to authorize it to execute, deliver and
perform this Agreement and the other Closing Documents to which
it is or will be a party have been duly and validly taken.
4.3 Valid, Binding and Enforceable Obligations. Each of
this Agreement and the other Closing Documents to which any of
Parent, Universal or CHI Maine is or will be a party has been, or
will be on the Closing Date, as the case may be, duly and validly
executed by Parent, Universal and/or CHI Maine and constitutes,
or will constitute when executed, a valid, binding and
enforceable obligation, enforceable against such Person in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights and the
enforcement of debtors' obligations generally and by general
principles of equity, regardless of whether enforcement is
pursuant to a proceeding in equity or at law.
4.4 No Violations. Assuming the consents and notices
described in Section 4.5 and 4.6 have been obtained or made, the
execution and delivery by Parent, Universal or CHI Maine, as the
case may be, of this Agreement and the other Closing Documents to
which it is or will be a party, and the consummation by Parent,
Universal or CHI Maine, as the case may be, of the transactions
contemplated hereby and thereby will not (a) violate or be in
conflict with the charter documents of Parent, Universal or CHI
Maine, (b) violate, be in conflict with, or constitute a Default
or Event of Default under, or cause or permit the acceleration of
the maturity of, or give rise to any right of termination,
cancellation, imposition of fees or penalties under, any Project
Document or any other debt, obligation, contract, commitment of
fees or other agreement to which Parent, Universal or CHI Maine
is a party or by which any of their respective properties or
assets is or may be bound, (c) result in the creation or
imposition of any Lien upon any of the property or assets of
Parent, Universal or CHI Maine under any Project Document or any
other debt, obligation, contract, commitment or other agreement
to which Parent, Universal or CHI Maine is a party or by which
any of their respective properties or assets is or may be bound
or (d) violate any Governmental Rule.
4.5 Governmental Consents and Notices. Except for the
Governmental Approvals set forth on Schedule 4.5 (collectively,
the "Governmental Consents and Notices"), no Governmental
Approval is necessary in connection with the execution and
delivery by Parent, Universal or CHI Maine of this Agreement and
the other Closing Documents to which either of them is or will be
a party, or the consummation of the transactions contemplated
hereby and thereby, including the full, valid and effective
consummation of the Merger. Except as expressly described on
Schedule 4.5, all of the Governmental Consents and Notices have
been duly obtained or made and none has been revoked or rescinded
or has expired.
4.6 Additional Consents and Notices. Except for the
consents, notices and other items set forth on Schedule 4.6
(collectively, the "Additional Consents and Notices"), no filing,
registration, qualification, notice, consent, approval or
authorization to, with or from any Person (excluding Governmental
Persons) is necessary in connection with the execution and
delivery by Parent, Universal or CHI Maine of this Agreement and
the other Closing Documents to which any of them is or will be a
party, or the consummation of the transactions contemplated
hereby and thereby, including the full, valid and effective
consummation of the Merger. Except as expressly described on
Schedule 4.6, all of the Additional Consents and Notices have
been duly obtained or made and none has been revoked or rescinded
or has expired.
4.7 No Litigation. Except as set forth on Schedule 4.7,
there are no actions, suits or proceedings of any type pending
or, to the knowledge of Parent or Universal threatened, against
Parent (with respect to any Project), Universal or CHI Maine or
any of their respective properties or business, whether at law or
in equity, before or by any Governmental Person. Neither Parent
nor Universal has any knowledge of any state of facts or
contemplated event which may reasonably be expected to give rise
to any such action, suit or proceeding. Neither Parent (with
respect to any Project), Universal nor CHI Maine is operating
under, or subject to, or in default with respect to, any order,
writ, injunction or decree of any Governmental Person.
4.8 Bankruptcy. Neither Parent, Universal nor CHI Maine
has filed any voluntary petition in bankruptcy or been
adjudicated a bankrupt or insolvent, filed any petition or answer
seeking any reorganization, liquidation, dissolution or similar
relief under any bankruptcy, insolvency, or other debtor relief
law, or sought or consented to or acquiesced in the appointment
of any trustee, receiver, conservator or liquidator of all or any
substantial part of its properties. No court of competent
jurisdiction has entered an order, judgment or decree approving a
petition filed against Parent, Universal or CHI Maine seeking any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any federal
bankruptcy act, or other debtor relief law, and no other
liquidator has been appointed of Parent, Universal or CHI Maine
or of all or any substantial part of their respective properties.
Each of Parent, Universal and CHI Maine are solvent and are able
to meet their respective obligations as they become due. Parent
has delivered to the General Partner a copy of the Parent's
latest audited financial statements.
4.9 PUHCA, FPA, Etc. Neither Parent, Universal nor CHI
Maine is a "public utility company," an "electric utility
company," a "holding company," a "subsidiary company," an
"associate company" or an "affiliate" within the meaning of
PUHCA, the FPA, PURPA or under any applicable state laws relating
to the regulation of electric utilities.
4.10 Ownership. Parent owns all of the issued and
outstanding stock of Universal, free and clear of all claims,
liabilities, pledges, liens, charges and encumbrances of any
kind.
ARTICLE 5
Certain Representations and
Warranties
Relating to CHI Maine and the
Projects
Parent and Universal hereby jointly and severally represent
and warrant to the Partnership, each for itself and on behalf of
CHI Maine and the Projects (regardless of any examinations,
inspections, audits or other investigations the Partnership has
heretofore made or may hereafter make with respect to such
representations and warranties) as follows:
5.1 Capitalization of CHI Maine. The total authorized
stock of CHI Maine consists of 1,000 shares of common stock, $1
par value per share, of which 100 shares are validly issued and
outstanding, fully paid and non-assessable (the "CHI Maine
Shares"). The CHI Maine Shares are all held by Universal without
violation of any preemptive rights. There are no outstanding
options, warrants, calls, commitments, arrangements, rights or
agreements of any character to purchase or otherwise acquire from
CHI Maine, at any time or upon the happening of any stated event,
any shares of the capital stock of CHI Maine. None of the CHI
Maine Shares are held by CHI Maine as treasury shares. Universal
has the right to sell and transfer to the Partnership valid title
to all the CHI Maine Shares, free and clear of all claims,
liabilities, pledges, liens, charges and encumbrances of any
kind.
5.2 Business of CHI Maine. CHI Maine is not engaged in any
business or activities other than the development, ownership,
operation and maintenance of the Projects and matters incidental
thereto. Without limiting the generality of the foregoing, CHI
Maine does not (a) own any capital stock, partnership interest or
other interest of any type, directly or indirectly, in any other
corporation, partnership or other Person, (b) has not conducted
any business other than the business contemplated by the Project
Documents to which it is a party, (c) is not a party to or bound
by any contract, agreement, instrument or other document other
than the Project Documents to which it is a party and (d) has no
outstanding debt or other liability of any type other than
pursuant to the Project Documents to which it is a party or as
otherwise disclosed on the Financial Statements.
5.3 Qualifying Facility Matters. Except as set forth on
Schedule 5.3, each of the Projects is a hydro-electric generating
facility licensed by FERC to operate through the date sets forth
with respect to such Project on such Schedule 5.3. Each Project
is, and during all applicable period has been, a Qualifying
Facility in compliance in all respects with all technical and
ownership requirements contained in all applicable FERC rules and
regulations. CHI Maine has provided to the appropriate utility
under each of the Power Purchase Agreements, all documents,
information and other data requested or required by such utility
in accordance with policies and procedures for monitoring the
compliance of Qualifying Facilities with applicable FERC rules
and regulations. Except as disclosed on Schedule 5.3, no Project
has ever been placed on "probation" pursuant to such policies and
procedures and has ever had any payment from such utility
reduced, delayed or withheld in connection with such policies and
procedures, and no Person (including such utility, the PUC, and
the FERC, or any agent or representative of any of such Persons)
has ever provided notice to the effect, or otherwise asserted or
alleged, that any Project has failed or may fail to comply in any
respect with any applicable FERC rule or regulation relating to
maintaining their status as Qualifying Facilities or any
procedures or policies of such utility relating thereto.
5.4 Financial Statements; Books of Account. Attached as
Schedule 5.4 are (i) true and complete copies of the unaudited
financial statements of each Project and the unaudited financial
statements of CHI Maine, for the periods ending as of June 30,
1993, 1994 and 1995, (ii) the unaudited financial statements for
each of the Projects and CHI Maine for the nine month period
ended March 31, 1996 and (iii) the Summary and Financial Analysis
dated March 18, 1996 and the kilowatt hour production by Project
for the past five fiscal years ending June 30, 1995 and for the
nine month period ending March 31, 1996 (collectively, the
"Financial Statements"). The items described in (i) and (ii)
above have been prepared in accordance with GAAP and present
fairly the financial position and results of operations of each
of the Projects and CHI Maine at the dates and for the period
indicated therein, subject, with respect to interim periods, to
normal year end adjustments. The items described in (iii) above
are accurate summaries of the operations of the Projects as
recorded on the books and records of CHI Maine with respect to
the items described therein. Neither CHI Maine nor any Project
has engaged in any transaction, maintained any bank accounts or
obtained or used any funds which have not been reflected in the
Financial Statements.
5.5 Absence of Certain Changes. Since March 31, 1996:
5.5.1 Neither CHI Maine nor any Project has entered
into any transaction which was not in the ordinary course of its
business (other than execution of this Agreement);
5.5.2 There has been no materially adverse change
in the business, operations, finances, assets or liabilities of
CHI Maine or any Project;
5.5.3 There has been no material damage to, or
destruction or loss of, any of the CHI Maine assets;
5.5.4 Neither CHI Maine nor any Project has
declared, paid or set aside for payment any amounts for
distribution to Universal or its Affiliates (other than CHI
Maine) or any other Person, and
5.5.5 Neither CHI Maine nor any Project has made
any change in any method of accounting or accounting practice or
any change in depreciation or amortization policies or rates
theretofore adopted.
5.6 No Undisclosed Liabilities. As of the date of the this
Agreement, neither CHI Maine nor any Project has any material
liabilities or obligations of any nature (whether accrued,
absolute, fixed or unfixed, known or unknown, asserted or
unasserted, contingent, by guaranty, surety or assumption or
otherwise), except for the liabilities disclosed on the most
recent balance sheet of CHI Maine included in the Financial
Statements, and except for Current Liabilities to unaffiliated
third parties which are normal and usual in amount and which have
been incurred since the date of the most recent balance sheet of
CHI Maine included in the Financial Statements in the ordinary
course of business.
5.7 CHI Maine Assets.
5.7.1 Real Property Rights; Title Insurance.
Schedule 5.7.1 is a complete and accurate list, broken down by
Project, of (i) all real property owned or leased by CHI Maine,
and of all easements, rights of way, rights of interconnection
and other similar agreements in which CHI Maine has any rights
and (ii) all title insurance policies and similar insurance
policies issued to CHI Maine or any of its Affiliates relating to
any of the property described in preceding clause (i) or relating
to the fixtures and improvements listed on Schedule 5.7.2.
5.7.2 Fixtures and Improvements. Schedule 5.7.2 is
a compete and accurate list, broken down by Project, of all
buildings, fixtures and other improvements having a value in
excess of $10,000 which are owned by CHI Maine and located on a
Site or elsewhere.
5.7.3 Equipment and Other Personal Property. To
the extent not included on Schedule 5.7.2, Schedule 5.7.3 is a
complete and accurate list, broken down by Project, of all
equipment, plant, machinery, installations, tools, spare parts,
furniture, supplies, vehicles and other personal property which
are owned by CHI Maine and which have a value in excess of
$10,000 and Schedule 5.7.3 specifically indicates any such item
of property which is not located on or at a Site and identifies
the location thereof.
5.7.4 Title to CHI Maine Assets. Except at
disclosed on Schedule 5.7.4, CHI Maine has good, indefeasible and
insurable ownership or leasehold title to each of the Sites, free
and clear of all Liens, and CHI Maine has good and indefeasible
title to the remainder of the other CHI Maine Assets, free and
clear of all Liens, in each case subject to customary and routine
exceptions normally found in title insurance policies. Subject
to requirements of proper operation and maintenance, the CHI
Maine Assets constitute all of the assets necessary for the
lawful operation and use of each of the Projects in the ordinary
course (including all easements, rights of way, rights of
interconnection and other similar rights and agreements required
for the operation of such Project) and such assets include all
assets required by the Project Documents.
5.8 Project Documents.
5.8.1 Set forth on Schedule 5.8 is a true, correct
and compete list and brief description, broken down by Project,
of all material agreements, contracts, instruments and
franchises, including all amendments thereto relating to such
Project, or to which any of the Projects is subject (collectively
the "Project Documents"). A true, correct and complete copy of
each of the Project Documents, including all amendments,
supplements, exhibits and schedules, if any, thereto, has been
made available to the Partnership.
5.8.2 None of the Power Purchase Agreements has
been modified, supplemented, amended, waived or terminated in any
way whatsoever, and none of the other Project Documents has been
modified, supplemented amended, waived or terminated in any
material respect, in any such case whether orally or in writing,
except by means of another Project Document.
5.8.3 Each of the Project Documents constituting an
agreement, contract, instrument or other similar document
(including each Power Purchase Agreement) has been duly
authorized, executed and delivered by CHI Maine and to the
knowledge of Parent and Universal, by each of the other parties
thereto, and is in full force and effect and is valid and
enforceable in accordance with its terms.
5.8.4 There are no uncured Defaults or Events of
Default on the part of Parent, Universal or CHI Maine under any
Project Document (including any Power Purchase Agreement) and
neither Parent, Universal nor CHI Maine has received notice, oral
or written, that a Default or Event of Default on the part of any
other Person has occurred thereunder or that any Person has
alleged or asserted any such Default or Event of Default by any
Person.
5.9 No Employees, Etc. During the preceding five years,
CHI Maine has had no employees and has no existing or contingent
liabilities or obligations for any compensation, bonus, health,
sick pay, disability, vacation pay, group-term life insurance,
severance, employee welfare, pension, profit sharing, retirement
or other employee benefit plans, funds, programs or arrangements.
5.10 Governmental Approvals. The Governmental Approvals
listed on Schedule 5.10 constitute all of the Governmental
Approvals which are necessary in connection with the ownership,
use, operation and maintenance of the Projects, and the conduct
of CHI Maine's business and activities. Each Governmental
Approval has been duly and validly issued, or transferred, to CHI
Maine, and is in full force and effect, and all rights and
entitlements thereunder are vested exclusively in CHI Maine. CHI
Maine has not committed any act or failed to act in any manner or
under any circumstances which could result in the revocation or
suspension of any Governmental Approval or in any other
disciplinary action relating thereto. No Person has claimed, and
neither Parent, Universal nor CHI Maine has received any notice,
that CHI Maine has committed any such act or failed to so act.
The consummation of the Merger and the other transactions
provided for in this Agreement and the other Closing Documents
will not impair or adversely affect any of the rights, powers, or
privileges granted pursuant to any Governmental Approval, and
upon such consummation, all the rights and privileges of CHI
Maine under each Governmental Approval will be fully, validly and
effectively vested in the Partnership by operation of law.
Neither Parent nor Universal has any reason to believe that any
Governmental Approval will not be renewed upon its natural
expiration in the ordinary course of business upon compliance
with normal and customary renewal procedures applicable to such
Governmental Approval.
5.11 General Legal Compliance. Except as disclosed on
Schedule 5.11, or 5.12, to the knowledge of Parent and Universal,
(a) CHI Maine and each of the Projects have at all times fully
complied in all material respects with all Governmental Rules
applicable to CHI Maine and such Project and with all
Governmental Approvals, including all Governmental Rules
applicable to the conduct of CHI Maine's business and activities
and to the construction, ownership, operation, maintenance and
use of the Projects.
5.12 Environmental Legal Compliance. Without limiting the
generality of Section 5.11, except for prior violations which
have been properly reported to the appropriate authority and
fully resolved without any potential future liability of any
Project or CHI Maine, and except as disclosed on Schedule 5.12:
(a) To the knowledge of Parent and Universal, CHI Maine
and each of the Projects and the Sites have each complied with,
and are in compliance with: (x) the terms and conditions of all
Governmental Approvals, Governmental Filings and Governmental
Rules issued or required pursuant to any Environmental Law, and
(y) all other limitations, restrictions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in
any Environmental Law, or in any notice, order or demand letter
issued, entered, promulgated or approved pursuant to any
Environmental Law:
(b) To the knowledge of Parent and Universal, neither
CHI Maine nor any Project or Site (i) has been or is alleged to
have been in violation of any Environmental Law, (ii) has
received any notice of violation or other notification from any
Governmental Person or any third party alleging that CHI Maine,
such Project or such Site are in violation of any Environmental
Law or (iii) are subject to, or have been subject to, any
administrative or judicial proceedings or investigations pursuant
to any Environmental Law;
(c) To the knowledge of Parent and Universal, neither
CHI Maine nor any Project has caused or permitted the Release of
any polychlorinated biphenyls, asbestos containing material or
urea formaldehyde insulation at any Site;
(d) To the knowledge of Parent and Universal, there are
not now, and there have not been previously, any underground
storage tanks owned or installed by CHI Maine or any Project on
any Site;
(e) To the knowledge of Parent and Universal, no Site
or other real property now or previously owned or leased by CHI
Maine or any Project contains any Regulated Substance that, under
any Environmental Law currently in effect, (i) impose or could
reasonably be expected to impose on Parent, Universal, CHI Maine
or any Project a liability for removal, remediation, or other
cleanup, or damage to natural resources; (ii) could have a
material adverse affect on the value of any Project or the CHI
Maine Assets; or (iii) could reasonably be expected to result in
the imposition of a Lien on the Project or any of the other CHI
Maine Assets;
(f) None of CHI Maine, Parent or Universal or their
respective Affiliates has received any request for information
from any Governmental Person or any other Person which request is
related to any location (including any Site) which is, or may be,
subject to actions for removal, response, remediation or cleanup
of Regulated Substances, including but not limited to any
information request pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA") or
any similar State statute, rule or regulation and which may
subject CHI Maine or any Project to any obligation for removal,
response, remediation or cleanup of Regulated Substances at such
location;
(g) None of the CHI Maine, Parent or Universal or their
respective Affiliates has received any notice of violation or
order, demand, or other claim (i) for removal, response,
remediation or cleanup of any Regulated Substances at any
location (including any Site); (ii) for damage to natural
resources; or (iii) for personal injury or property damage
related to the release or discharge of Regulated Substances;
(h) To the knowledge of Parent and Universal, neither
CHI Maine nor any Project has, except in compliance with all
applicable rules, regulations and permits:
(i) disposed, discharged or released any Hazardous
Substance or Regulated Substance at;
(ii) arranged for the disposal of any Hazardous
Substance or Regulated Substance at;
(iii) transported any Hazardous Substance or
Regulated Substance to; or
(iv) owned or operated,
any location or facility (including any Site) that is listed or
proposed for listing on the National Priority List under CERCLA
or any similar State remedial action priority list, or which has
been proposed for removal or remedial action under any
Environmental Law;
(i) To the knowledge of Parent and Universal, CHI Maine
has obtained and complied with all required Governmental
Approvals for the disposal or beneficial use of all wastes
generated by any Project. Schedule 5.12 sets forth a full and
complete list of all sites and facilities where wastes generated
by CHI Maine or any Project have been stored, treated, processed
or disposed;
(j) To the knowledge of Parent and Universal, all
facilities and sites to which waste materials generated by CHI
Maine or any Project have been sent for storage, treatment,
processing, or disposal are in compliance with all applicable
Environmental Laws;
(k) None of the Parent, Universal or CHI Maine has made
or is currently obligated to make, any report or notification to
any Governmental Person regarding the release or discharge of any
Regulated Substance, and
(l) To the knowledge of Parent and Universal, there has
not been, whether prior to or in connection with the construction
and operation of any Project (including any activities or
processes relating to such Project) any release or discharge by
CHI Maine or any Project of any Regulated Substance at or to any
Site (whether onto or into the ground, soil, subsurface, surface
water, ground water, air or otherwise), and other than those
which (i) are permitted under all applicable Environmental Laws
and Governmental Approvals and (ii) occur only in the ordinary
course of the operation of such Project.
5.13 Insurance. Schedule 5.13 contains a list and
description of all insurance policies of any type which are held
by CHI Maine or its Affiliates with respect to the Projects,
specifying the insurer, amount of coverage, type of insurance,
policy number and any pending claims thereunder. Except as
disclosed on Schedule 4.7, no claim of any type has been made
under any of such policies with respect to the Projects within
the preceding five years.
5.14 Utilities. All utility services necessary for the
operation of each Project are available at the boundaries of the
Site.
5.15 Project Construction and Condition. To the knowledge
of Parent and Universal, each Project is operating substantially
as designed, all of the CHI Maine Assets are in good operating
condition, maintenance and repair considering their age, and
there are no material design or other material defects in any
Project or any CHI Maine Asset. Schedule 5.15 lists all
engineering reports and surveys prepared by or on behalf of
Parent, Universal or their Affiliates with respect to the
Projects, and true, correct and complete copies of the same have
been made available to the Partnership.
5.16 Securities Laws. Based upon and provided that the
representations of the Partnership in Sections 6.7 and 6.8 are
true and correct, the acquisition of CHI Maine contemplated by
this Agreement is not required to be registered pursuant to the
Securities Act, or applicable state securities laws or
regulations.
5.17 Brokers' Fees, Prospective Purchaser, Etc. Neither
this Agreement nor the consummation of the transactions
contemplated hereby was induced by or procured through any Person
acting on behalf of, or representing, Parent, Universal, CHI
Maine, or any of their respective Affiliates as a broker, finder,
investment banker, financial advisor or in any similar capacity,
and no Person (other than the Purchaser and its Affiliates)
currently has any right or option of any type to acquire,
directly or indirectly, any interest in any Project or CHI Maine.
5.18 Tax Matters.
5.18.1 Elections. Neither Parent, Universal nor
their Affiliates have made any elections which would cause CHI
Maine to be subject to Section 341(f) (relating to collapsible
corporations) or Section 338 (relating to stepped-up basis) of
the code.
5.18.2 Property Taxes. Schedule 5.18.2 sets forth
the current assessment and annual property taxes payable with
respect to each Project.
5.19 Bank Accounts. All financial transactions on behalf of
CHI Maine and all the Projects are handled directly by Parent
and/or Universal, and neither CHI Maine nor any Project maintains
accounts of any nature or safe deposit boxes at any bank, trust
company, savings and loan or other financial institution. No
Person holds any general or specific powers of attorney from CHI
Maine or any Project.
5.20 Projections. The Projections were prepared in good
faith by Parent and Universal and are consistent with the terms
of the Project Documents and the prior operating history of the
Projects.
5.21 Condition of Dams. Except as set forth in Schedule
5.21, to the knowledge of Parent and Universal and taking into
consideration the age of the Projects and the dams, the dams (a)
which impound water for the Projects, (b) any other dam for which
the responsibility of maintenance is conveyed as part of the CHI
Maine Assets and (c) any other dam included as part of the
Projects under applicable FERC licenses or exemptions, are all in
good and safe condition. Except as set forth in Schedule
5.21(a), neither CHI Maine, Parent nor Universal has received any
notice or otherwise obtained any information, formal or informal,
that would indicate the likelihood of any future requirements
pertaining to the condition of such dams other than routine
maintenance and repairs.
5.22 Full Disclosure of Material Facts. This Agreement and
the Exhibits and Schedules hereto disclose all facts which are
material to CHI Maine's business and the transactions
contemplated hereunder.
5.23 Accredited Investor. Each of Parent and Universal is
an "accredited investor" as defined in Section 501 of the
Securities Act and is a sophisticated investor with the
capability of evaluating the merits and risks of entering into
this Agreement and the Option Agreement.
ARTICLE 6
Representations and Warranties
of the General Partner and the
Partnership
The General Partner and the Partnership hereby jointly and
severally represent and warrant to Parent and Universal
(regardless of any examinations, inspections, audits or other
investigations Parent and Universal has heretofore made or may
hereafter make with respect to such representations and
warranties) as follows:
6.1 Due Organization. The General Partner is a corporation
and the Partnership is a limited partnership, and each is duly
organized and validly existing under the laws of the State of
Delaware and is qualified to transact business in all
jurisdictions where the ownership of its respective properties or
operations require such qualification (except where the failure
to so qualify would not have a material adverse effect on its
financial conditions, its ability to own its properties or
transact its business, or to carry out the transactions
contemplated hereby). Prior to the Effective Time, the General
Partner is the sole general partner of the Partnership holding a
1% partner interest in the Partnership, and the sole limited
partner of the Partnership is the Trust, holding a 99% partner
interest in the Partnership. The total authorized stock of the
General Partner consists of 1,000 shares of common stock, $0.01
par value per share, of which 1,000 shares are validly issued and
outstanding, fully paid and non-assessable, with 500 of such
shares being held by the Trust without violation of pre-emptive
rights, and with the remaining 500 shares having been contributed
by the Trust to the Partnership so that such shares may be issued
to Universal upon the closing of the transactions contemplated by
this Agreement. There are no outstanding options, warrants,
calls, commitments, arrangements, rights or agreements of any
character to purchase or otherwise acquire from the General
Partner, the Partnership or the Trust, at any time or upon the
happening of any stated event, any shares of the capital stock of
the General Partner or any interest in the Partnership (other
than as set forth in this Agreement and the Option Agreement).
At the Merger Effective Time, the Merger Securities delivered to
Universal shall be free and clear of all claims, liabilities,
pledges, liens and encumbrances of any kind (other than under
this Agreement and the Option Agreement).
6.2 Business of the General Partner and the Partnership.
Each of the General Partner and the Partnership are entities
newly organized for the purpose of consummating the transactions
contemplated by this Agreement and the Option Agreement and have
not engaged in any business or activities other than their
organization and capitalization and the other activities in
connection with this Agreement and the Option Agreement and other
matters related thereto. Without limiting the generality of the
foregoing, except as described in this Agreement, neither the
General Partner nor the Partnership (a) owns any capital stock,
partnership interest or other interest of any type, directly or
indirectly, in any other corporation, partnership or any other
person and (b) is not or has no outstanding debt or liability of
any type other than pursuant to this Agreement and the
transactions contemplated hereby. The Partnership has been
capitalized by cash equity contributions from the General Partner
and the Trust in an amount in excess of the parties' estimate of
the Cash Consideration described in Section 3.2.4 above.
6.3 Power and Authority. The General Partner and
Partnership each have full power and authority to enter into and
perform its obligations hereunder and under the other Closing
Documents to which it is or will be a party and to consummate the
transactions herein and therein contemplated in accordance with
the terms, provisions and conditions hereof and thereof. All
proceedings required to be taken by the Partnership and its
partners to authorize the Partnership to execute, deliver and
perform the terms of this Agreement and the other Closing
Documents to which it is or will be a party have been duly and
validly taken.
6.4 Valid, Binding and Enforceable Obligations. Each of
this Agreement and the other Closing Documents to which the
General Partner or the Partnership is or will be a party has
been, or will be on the Closing Date, duly and validly executed
by the General Partner or the Partnership, as the case may be,
and constitutes, or will when executed constitute, a valid and
binding obligation, enforceable against such Person in accordance
with its terms, excepts as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights and the enforcement of
debtors' obligations generally and by general principles of
equity, regardless of whether enforcement is pursuant to a
proceeding in equity or at law.
6.5 No Violations. The execution and delivery by the
Partnership of this Agreement and the other Closing Documents to
which either of them is or will be a party, and the consummation
of the transactions contemplated hereby and thereby will not (a)
violate or be in conflict with the organizational documents of
the General Partner or the Partnership, (b) violate, be in
conflict with, or constitute a Default or Event of Default under,
or cause or permit the acceleration of the maturity of, or give
rise to any right of termination, cancellation, imposition of
fees or penalties under, any debt, obligation, contract,
commitment of fees or other agreement to which the General
Partner or the Partnership is a party or by which any of its
properties or assets is or may be bound, (c) result in the
creation or imposition of any Lien upon any of the property or
assets of the General Partner or the Partnership under any debt,
obligation, contract, commitment or other agreement to which the
General Partner or the Partnership is a party or by which any of
their respective properties or assets is or may be bound or (d)
violate any Governmental Rule.
6.6 Bankruptcy. Neither the Partnership nor its partners
has filed any voluntary petition in bankruptcy or been
adjudicated a bankrupt or insolvent, filed any petition or answer
seeking any reorganization, liquidation, dissolution or similar
relief under any bankruptcy, insolvency, or other debtor relief
law, or sought or consented to or acquiesced in the appointment
of any trustee, receiver, conservator or liquidator of all or any
substantial part of their respective properties. No court of
competent jurisdiction has entered an order, judgment or decree
approving a petition filed against either the Partnership or its
partners seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under
any federal bankruptcy act or other debtor relief law, and no
other liquidator has been appointed of the Partnership or its
partners or of all or any substantial part of their respective
properties. Each of the General Partner and the Partnership are
solvent and are able to meet their respective obligations as they
become due.
6.7 No Litigation. There are no actions, suits or
proceedings of any type pending or, to the knowledge of the
General Partner or the Partnership, threatened against either the
General Partner or the Partnership or any of their respective
properties or business, whether at law or in equity, before or by
any Governmental Person. Neither the General Partner nor the
Partnership has any knowledge of any state of facts or
contemplated event which may reasonably be expected to give rise
to any such actions, suit or proceeding. Neither the General
Partner nor the Partnership is operating under, or subject to, or
in default with respect to, any order, writ, injunction, or
decree of any Governmental Person.
6.8 Investment Intent. The Partnership is acquiring
interests in CHI Maine as contemplated by this Agreement solely
for the purpose of investment and not with a view to, or for sale
in connection with, any distribution thereof. The Partnership
acknowledges that the interests in CHI Maine are not registered
under the Securities Act and that such interests may not be
transferred or sold except in compliance with the registration
provisions of the Securities Act or pursuant to an applicable
exemption therefrom and in compliance with applicable state
securities laws and regulations.
6.9 Accredited Investor. The Partnership and each of its
partners is an "accredited investor" as defined in rule 501 of
the Securities Act and is a sophisticated investor with the
capability of evaluating the merits and risks of entering into
this Agreement.
6.10 Brokers' Fees. Neither this Agreement nor the
consummation of the transactions contemplated hereby was induced
by or procured through any Person acting on behalf of, or
representing the Partnership or any of its partners or Affiliates
as a broker, finder, investment banker, financial advisor or in
any similar capacity.
6.11 Governmental Consents and Notices. Except for
approvals required under the HSR Act, no Governmental Approval is
necessary or appropriate in connection with the execution and
delivery by the Partnership of this Agreement and the other
Closing Documents to which either of them is or will be a party,
or the consummation of the transactions contemplated hereby and
thereby, including the full, valid and effective consummation of
the Merger.
6.12 Accuracy of Representations and Warranties of Parent
and Universal. Neither the General Partner nor the Partnership
is currently aware of any facts or circumstances which has led
either of them to conclude that any of the representations or
warranties contained in Articles 4 and 5 hereof are untrue in any
material respect.
ARTICLE 7
Conditions Precedent to the
Obligations of the General
Partner and the Partnership
The obligation of the General Partner and the Partnership to
consummate the transactions contemplated hereby shall be subject
to the fulfillment to the satisfaction of, or waiver by, the
General Partner and Partnership in their sole discretion, of each
of the following conditions on or prior to the Closing:
7.1 No Termination. This Agreement shall not have been
terminated pursuant to Section 10.5 hereof.
7.2 Representations True and Correct; Certificate. The
representations and warranties of Parent and Universal contained
in this Agreement shall be true and correct in all material
respect on and as of the Closing Date with the same force and
effect as if made on and as of the Closing Date, and Parent and
Universal shall have executed and delivered to the Partnership an
officer's certificate confirming the same.
7.3 Compliance and Covenants; Certificate. Parent,
Universal and CHI Maine shall have performed and complied with
all covenants, agreement and conditions required by this
Agreement to be performed or complied with by any of them prior
to or on the Closing Date, and Parent and Universal shall have
executed and delivered to the Partnership an officer's
certificate confirming the same.
7.4 No Adverse Proceedings. On the Closing Date, no action
or proceeding shall be pending by any public authority or private
individual or entity before any court or administrative body to
restrain, enjoin or otherwise prevent the consummation of this
Agreement or the transactions contemplated hereby or to recover
any damages or obtain other relief as a result of the
transactions proposed hereby.
7.5 Proceedings Satisfactory. All proceedings to be taken
in connection with the consummation of the transactions
contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to the
General Partner and the Partnership and their counsel, and, the
General Partner and the Partnership and their counsel shall have
received copies of such documents as the General Partner and the
Partnership and their counsel may reasonably request in
connection therewith. The Closing of this Agreement is
conditioned upon the delivery of a fully executed copy of each of
the Option Agreement, the Amended Partnership Agreement and the
O&M Agreement to each party which is a signatory to such
agreements and the performance by the respective parties thereto
of all their respective obligations under such agreements which
are required to be performed on or before the Closing Date.
7.6 No Adverse Changes. Between the Date of this Agreement
and the Closing Date, there shall have been no materially adverse
changes in the position, financial or otherwise, or the assets,
liabilities or results of operations of CHI Maine or any Project
other than as permitted or contemplated by this Agreement, nor
shall the business, assets and properties of CHI Maine have been
materially and adversely affected in any way as a result of fire,
explosion, earthquake, disaster, accident, flood, riot, civil
disturbance, uprising, activity of armed forces, or act of God or
public enemy, whether or not covered by applicable insurance.
7.7 Consents and Notices. All Governmental Consents and
Notices, Additional Consents and Notices and other consents or
notices required to be obtained from or made to any Person shall
have been duly obtained, made or provided, as the case may be,
and shall be in full force and effect.
7.8 Legal Opinion. The General Partner and the Partnership
shall have received from counsel to CHI Maine, Universal and
Parent a legal opinion substantially in the form of Exhibit F
attached hereto.
7.9 Execution and Delivery of Closing Documents. This
Agreement and each of the other Closing Documents shall have been
duly authorized, executed and delivered by the parties thereto
and shall be in full force and effect on the Closing Date without
any material Default or Event of Default having occurred and be
continuing thereunder or material breach thereof or circumstances
which would give any party thereto the right to terminate any
such Closing Document.
7.10 No Violations. The consummation of the transactions
contemplated hereby and by the other Closing Documents shall not
violate any Governmental Rule.
7.11 Closing Actions. Each of the actions required to be
taken by Universal, Parent and CHI Maine pursuant to Section 3.2
or otherwise to effect the transactions contemplated hereby shall
have been duly performed and complied with, and the General
Partner and the Partnership shall have received satisfactory
evidence of any and all such actions.
7.12 CHI Maine Documents. The Partnership shall have
received (i) the originals of the certificate of incorporation,
by-laws, minute books, stock books, and other organizational
records of CHI Maine, (ii) certificates representing all the CHI
Maine Shares, together with stock powers endorsed in blank with
signatures guaranteed and (iii) evidence as to the good standing
of CHI Maine in the State of Maine.
7.13 Due Diligence. Subject to the provisions of Section
10.5.4, the General Partner and the Partnership shall have
completed its due diligence investigation of the assets and the
financial, operating and business affairs and prospects of CHI
Maine and the Projects, and shall be satisfied, in their absolute
and sole discretion, with all of their findings, including any
and all such findings relating to the compliance by the Projects
and the Sites with all Environmental Laws.
7.14 Utility Confirmation. The General Partner and the
Partnership shall have received written confirmation from CMP or
Bangor Hydro, as the case may be, in form and substance
satisfactory to the General Partner and the Partnership, that no
consent or approval of either of such utilities is required under
any of the Power Purchase Agreements with respect to the
consummation of the transaction contemplated by this Agreement.
ARTICLE 8
Conditions Precedent to the
Obligations of Parent,
Universal and CHI Maine
The obligations of Parent, Universal and CHI Maine to
consummate the transactions contemplated hereby shall be subject
to the fulfillment to the satisfaction of, or waiver by, Parent,
Universal and CHI Maine, in their sole discretion, of each of the
following conditions on or prior to the Closing:
8.1 No Termination. This Agreement shall not have been
terminated pursuant to Section 10.5 hereof.
8.2 Representations True and Correct; Certificate. The
representations and warranties of the General Partner and the
Partnership contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date with, the
same force and effect as if made on and as of the Closing Date,
and the General Partner and the Partnership shall have executed
and delivered to Parent, Universal and CHI Maine an officer's
certificate confirming the same.
8.3 Compliance with Covenants; Certificates. The General
Partner and the Partnership shall have performed and complied
with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by them prior to or on
the Closing Date, and the General Partner and the Partnership
shall have executed and delivered to Parent, Universal and CHI
Maine an officer's certificate confirming the same.
8.4 No Adverse Proceedings. On the Closing Date, no action
or proceeding shall be pending by any public authority or private
individual or entity before any court or administrative body to
restrain, enjoin or otherwise prevent the consummation of this
Agreement or the transactions contemplated hereby or to recover
any damages or obtain other relief as a result of the
transactions proposed hereby.
8.5 Proceedings Satisfactory. All proceedings to be taken
in connection with the consummation of the transactions
contemplated by this Agreement and all documents incident
thereto, shall be reasonably satisfactory in form and substance
to Parent, Universal and CHI Maine and their counsel, and
Universal and CHI Maine and their counsel shall have received
copies of such documents as Parent, Universal and CHI Maine and
their counsel may reasonably request in connection therewith.
The Closing of this Agreement is conditioned upon the delivery of
a fully executed copy of each of the Option Agreement, the
Amended Partnership Agreement and the O&M Agreement to each party
which is a signatory to such agreements and the performance by
the respective parties thereto of all their respective
obligations under such agreements which are required to be
performed on or before the Closing Date.
8.6 Consents and Notices. All Governmental Consents and
Notices, Additional Consents and Notices and other consents or
notices required to be obtained from or made to any Person shall
have been duly obtained, made or provided, as the case may be,
and shall be in full force and effect.
8.7 Legal Opinion. Universal shall have received from the
Partnership's counsel a legal opinion in the form of Exhibit G.
8.8 Execution and Delivery of Closing Documents. This
Agreement and each of the other Closing Documents shall have been
duly authorized, executed and delivered by the parties thereto
and shall be in full force and effect on the Closing Date without
any material Default or Event of Default having occurred or
existing thereunder or material breach thereof or circumstance
which would give any party thereto the right to terminate any
such Closing Document.
8.9 No Violations. The consummation of the transactions
contemplated hereby and by the other Closing Documents shall not
violate any Governmental Rule.
8.10 Closing Actions. Each of the actions required to be
taken by the General Partner and the Partnership pursuant to
Section 3.2 or otherwise to effect the transaction contemplated
hereby, including the payment of the Cash Consideration, shall
have been duly performed and complied with, and Parent and
Universal shall have received satisfactory evidence of any and
all such actions.
8.11 Insurance. The Partnership shall have delivered to
Parent and Universal an insurance certificate confirming that the
Partnership had secured insurance for the Partnership which is
substantially similar to the insurance described in Section 5.13.
8.12 Letters of Credit. The Partnership shall have assumed
all of the obligations of Parent and Universal with respect to
the letters of credit described on Schedule 8.12 and shall have
provided cash collateral or other credit support reasonably
satisfactory to Parent and Universal to assure the subsequent
replacement of such letters of credit and the termination of any
ongoing liability of Parent or Universal with respect thereto.
8.13 Utility Confirmation. Parent and Universal shall have
received written confirmation from CMP or Bangor Hydro, as the
case may be, in form and substance satisfactory to Parent and
Universal, that no consent or approval of either of such
utilities is required under a Power Purchase Agreement with
respect to the consummation of the transaction contemplated by
this Agreement.
ARTICLE 9
Indemnification
9.1 Indemnification By Parent and Universal. Subject to
the limitations of Section 9.3 below, and as the sole monetary
remedy of the General Partner and the Partnership for any breach
of this Agreement by Parent, Universal or CHI Maine, (other than
the specific obligations of Article 11 hereof), Parent and
Universal shall jointly and severally to the maximum extent not
prohibited by law, indemnify, defend and hold harmless the
General Partner, the Partnership and all of their respective
Affiliates, shareholders, partners, members, investors,
directors, officers, employees, agents and assignees, from and
against any and all losses, liabilities, damages, claims or
expenses (including reasonable attorneys' fees and expenses)
suffered or incurred by any such party by reason of or resulting
from the inaccuracy of any representation or warranty or the
breach, nonfulfillments or nonperformance of any covenant or
agreement of either Parent, Universal or CHI Maine under this
Agreement or any other Closing Document. Notwithstanding the
foregoing, the obligation of Parent and Universal to indemnify
pursuant to this Section 9.1 with respect to the incorrectness or
breach of any of its representations, warranties or covenants set
forth herein (other than in Article 11) shall be limited to an
aggregate amount equal to the Cash Consideration, and shall not
be asserted unless the applicable indemnified party has notified
Parent and Universal in writing of such claim no later than 15
calendar months after the Closing Date. The General Partner and
the Partnership agree that they will assert no claims for
indemnification under this Section 9.1 unless and until the total
amount of indemnification sought under this Agreement exceeds a
threshold amount of One Hundred Twelve Thousand Five Hundred
Dollars ($112,500) (net of any insurance proceeds received);
provided, however, if such threshold amount is exceeded, then the
General Partner and the Partnership may seek to recover the
entire amount of any such indemnification claims.
9.2 Indemnification by the General Partner and the
Partnership. As the sole monetary remedy by Parent and Universal
for any breach of this Agreement by the General Partner or
Partnership, the General Partner and the Partnership shall
jointly and severally to the maximum extent not prohibited by
law, indemnify, defend and hold harmless Parent, Universal and
all of its Affiliates, shareholders, partners, members,
investors, directors, officers, employees, agents and assignees,
from and against any and all losses, liabilities, damages, claims
or expenses (including reasonable attorneys' fees and expenses)
suffered or incurred by any such party by reason of or resulting
from the inaccuracy of any representation or warranty or the
breach, nonfulfillment or nonperformance of any covenant or
agreement of the General Partner and the Partnership under this
Agreement or any other Closing Document or resulting from the
use, ownership, or operations of CHI Maine or the Projects after
the Closing Date.
9.3 Procedure for Claims. Any Person entitled to
indemnification hereunder shall give prompt, written notice to
the indemnifying party setting forth the circumstances giving
rise to such claim as well as the amount sought. The
indemnifying party shall have the right, but not the obligation,
to defend against, negotiate, settle or otherwise deal with such
claim, at its own expense and represented by counsel of its
choice, which right shall be exercised within 15 days after
receipt of notice of the claim; provided, however, that if the
indemnifying party exercises such right, the Person seeking
indemnification nevertheless may participate in any proceeding at
its expense with counsel of its choice, and provided, further,
that the indemnifying party may not enter into a settlement with
respect to such claim without the consent of the Person seeking
indemnification unless such settlement is limited to a payment of
money for which the Person seeking indemnification is fully
indemnified by the indemnifying party. If the indemnifying party
does not elect to deal with any claim, the such indemnifying
party shall have no liability with respect to any compromise or
settlement thereof undertaken without its consent. The parties
will cooperate fully with one another in connection with the
defense, negotiation or settlement of any claim.
ARTICLE 10
Covenants
10.1 Pre-Closing Covenants of Parent and Universal. Until
the Closing Date, Parent shall, and shall cause Universal and CHI
Maine to, unless the Partnership shall otherwise agree in
writing, do the following:
10.1.1 Full Access. Permit the Partnership and
its representatives, agents, counsel and accountants to have full
access to all properties, books, accounts, records, contracts,
files, correspondence, tax records and documents of or relating
to the Projects, CHI Maine and the CHI Maine Assets, and permit
the Partnership to cause its agents to conduct such reviews,
inspections, surveys, tests and investigations of the Projects,
CHI Maine and CHI Maine Assets as the Partnership deems necessary
or advisable.
10.1.2 Furnishing Information. Promptly
furnish or cause to be furnished, at its sole cost and expense,
to the Partnership and its representatives originals or copies of
all Project Documents and other documents, records, data and
information concerning such businesses, assets, finances and
properties of or relating to the Projects, CHI Maine, and CHI
Maine Assets that may be requested, including copies of all
environmental reports, and plans and specifications pertaining to
all or any portion of any Project or any Site.
10.1.3 Consultation with Accountants. Permit
the Partnership to consult with the accountants for CHI Maine and
said accountants are hereby authorized to disclose all
information in its possession to the Partnership with respect to
CHI Maine.
10.1.4 Discussions with Project Participants.
Upon reasonable prior notice from the Partnership to Parent and
Universal, permit the Partnership and its representatives and
agents to discuss the acquisition of CHI Maine as contemplated by
this Agreement with any of the parties to the Project Documents
or any other Person who has any relationship to any Project.
10.1.5 Representations and Warranties. Refrain
from doing, or causing to be done, anything which would cause the
representations and warranties set forth in Articles 4 or 5
hereof from being true, complete and accurate on the Closing Date
as if made on such date.
10.1.6 Conduct of Business. Except as
expressly contemplated hereby, carry on the Projects and the
business of CHI Maine in the ordinary course, and not sell,
transfer or otherwise dispose of any CHI Maine Asset, and
continue to use, operate, maintain and repair the Projects and
all CHI Maine Assets in accordance with all Governmental
Approvals, all Project Documents and all applicable Governmental
Rules and otherwise in accordance with CHI Maine's prior
practices; provided, however, that CHI Maine may dispose of
surplus or non-operating assets which are not material to the
ongoing operations of the Projects. Pending the Closing, the
Partnership agrees and consents that CHI Maine may proceed with
the implementation of the capital expenditure projects described
in Schedule 10.1.6 hereof.
10.1.7 Preservation of Assets, Relationships,
Etc. Preserve CHI Maine's business organization and the Projects
and CHI Maine Assets intact, and preserve CHI Maine's present
relationships with all other parties to the Project Documents and
others involved with or having any relationship to any Project.
10.1.8 New Obligations. Not enter into any
material contract, agreement or instrument of any type, whether
written or oral, or otherwise incur any new liabilities, whether
contingent or otherwise, except in the ordinary course of
business.
10.1.9 No Defaults or Events of Default.
Refrain from doing any act or omitting to do any act, or
permitting any act or omission to act, which will cause a Default
of Event of Default under any Project Document.
10.1.10 No Solicitations, Etc. Refrain from
soliciting or encouraging (by way of furnishing information, or
otherwise) any inquiries or proposals for the acquisition of
Universal or CHI Maine or any Project or any CHI Maine Assets.
10.1.11 Notification. Promptly notify the
Partnership in writing of any event, circumstance or condition
that results or, with the passage of time or notice, or both,
would reasonably be likely to result, in (a) any representation
or warranty of Parent or Universal under this Agreement being
false in any material respect at any time, or (b) any condition
to Closing for the benefit of the Partnership being unable to be
satisfied or (c) the inability of Parent or Universal to perform
any of their respective obligations hereunder.
10.1.12 Spare Parts. Contribute or cause to be
contributed to CHI Maine free and clear of any Liens and at no
obligation to CHI Maine, any and all spare parts or other assets
solely relating to the Projects (if any) which are held or owned
by Affiliates of CHI Maine.
10.2 Filings and Consents. Each of the parties, as promptly
as practicable, shall use its reasonable, good faith and diligent
efforts to make, or cause to be made, all such filings and
submissions and obtain or cause to be obtained all such consents
and approvals applicable to it, in order to consummate the
transactions contemplated by this Agreement in accordance with
the terms hereof. Each party will supply the other parties with
copies of all correspondence, filings and communications with any
Governmental Person with respect to the transactions contemplated
by this Agreement.
10.3 Provision of Information. The originals of all books
and records, accounts, contracts and other documents held by
Parent, Universal or its Affiliates and relating to CHI Maine or
the Projects (other than documents wholly internal to Parent,
Universal or their Affiliates and not reasonably necessary to the
proper operation and management of any Project) shall be
delivered by such parties to the Partnership at the Closing or
promptly after the Closing Date, but in no event later than 15
days after the Closing Date.
10.4 Further Assurances. Parent, Universal, the General
Partner and the Partnership shall, on request, cooperate with
each other by furnishing any additional information, executing
and delivering any additional documents and/or instruments and
doing any and all such other things as may be reasonably
requested by any of the parties or its counsel to consummate or
otherwise further implement or effectuate the transactions
contemplated by this Agreement and the other Closing Documents,
including, without limitation, such affidavits or other documents
which may be necessary to permit the Partnership to obtain a
"non-imputation" clause in the title insurance covering the
Sites.
10.5 Termination. This Agreement may be terminated at any
time prior to the Closing as follows, and in no other manner.
10.5.1 By Mutual Agreement. By the mutual
agreement of all of the parties in writing.
10.5.2 By the General Partner and the Partnership.
By written notice from the General Partner and the Partnership to
Parent and Universal if (a) any condition set forth herein for
the benefit of the General Partner and the Partnership shall not
have been timely satisfied, (b) Parent, Universal or CHI Maine
fails to perform any obligation hereunder in a timely manner and
fails to cure the same promptly after written notice thereof from
the General Partner and the Partnership to Parent and Universal
or (c) any representation or warranty of Parent or Universal
hereunder proves to be false in any material respect and is not
promptly cured after written notice thereof from the General
Partner and the Partnership to Parent and Universal.
10.5.3 By Parent, Universal and CHI Maine. By
written notice from Parent, Universal and CHI Maine to the
General Partner and the Partnership if (a) any condition set
forth herein for the benefit of Parent or Universal shall not
have been timely satisfied, (b) the General Partner and the
Partnership fails to perform any obligation hereunder in a timely
manner and fails to sure the same promptly after written notice
thereof from Parent and Universal to the Partnership or (c) any
representation or warranty of the General Partner and the
Partnership hereunder proves to be false in any material respect
and is not promptly cured after written notice thereof from
Parent and Universal to the General Partners and the Partnership.
10.5.4 By Any Party. By written notice from any
party to the other parties if the Closing contemplated hereunder
has not taken place on or before October 15, 1996 (other than as
a result of the failure of any party to cause the satisfaction of
a closing condition which is under such party's control);
provided, however, that the General Partner and the Partnership
may extend such date to a date not later than October 31, 1996 by
delivery of written notice to Parent and Universal which (i) sets
forth the extended date, (ii) expressly waives the closing
condition set forth in Section 7.13 above. and (iii) confirms
that the General Partner and the Partnership are currently in
compliance with all of its obligations under this Agreement.
ARTICLE 11
Tax Matters
11.1 Sales and Transfer Taxes. All transfer, sales, use,
documentary transfer, stamp or excise taxes, or other similar
taxes of any type payable in connection with the Merger or
otherwise in connection with the consummation of the transaction
contemplated by this Agreement and the other Closing Documents
(including filing fees, if any, under the HSR Act), shall be
borne 50% by the Trust and 50% by Parent pursuant to a separate
agreement executed contemporaneously herewith.
11.2 Other Taxes and Tax Returns.
11.2.1 Parent and Universal's Responsibility.
Parent, Universal and their Affiliates shall cause to be prepared
and filed, and shall pay any and all taxes, interest or penalties
associated therewith, any and all tax returns, reports and forms
relating to taxes which are required to be filed for, by, on
behalf of, or with respect to CHI Maine, the CHI Maine Assets,
the Projects or the Sites on or before the Merger Effective Time,
or after the Merger Effective Time and relating to any taxable
period or portion thereof ending on or before the Merger
Effective Time, except to the extent that such taxes were
included in the determination of Current Liabilities. Parent and
Universal shall indemnify the Partnership and its Affiliates and
hold the Partnership and its Affiliates harmless from any an all
liabilities associated with the failure by Parent, Universal or
any of their Affiliates to comply with the obligations set forth
in the preceding sentence.
11.2.2 Partnership's Responsibility. The
Partnership and its Affiliates shall cause to be prepared and
filed, and shall pay any and all taxes, interest or penalties
associated therewith, each tax return, report, or form (other
than any tax return, report or form described in Section 11.2.1)
which is required to be filed for, by, on behalf of or with
respect to CHI Maine, the CHI Maine Assets, the Projects or the
Sites for all periods commencing after the Merger Effective Time.
The Partnership shall indemnify Parent, Universal and their
Affiliates and hold Parent, Universal and their Affiliates
harmless from any and all liabilities associated with the failure
by the Partnership or any Affiliates thereof to comply with the
obligations set forth in the preceding sentence.
11.3. Cooperation and Exchange of Information. The
Partnership, Parent and Universal shall furnish or cause to be
furnished to each other (at reasonable times) upon request and
as promptly as practicable, such information (including, without
limitation, access to personnel and books and records) pertinent
to tax matters to which this Agreement relates and assistance
relating to such tax matters as is reasonably necessary for the
preparation, review, audit and filing of any tax return, the
preparation for any tax audit, or the defense or prosecution of
any assessment or other similar claim or any administrative or
court proceeding. The party requesting information shall
reimburse the other for the third party costs of providing such
information. Any information obtained by a party hereto or its
Affiliates from another party hereto or its Affiliates in
connection with any tax matters to which this Agreement relates
shall be kept confidential, except as may be otherwise necessary
in connection with the filing of tax returns or claims or refund
or in conducting an audit or other proceeding.
11.4 Tax Proceedings. The Partnership shall give reasonably
prompt written notice to Parent and Universal upon receipt by
either the Partnership or any of its Affiliates of written notice
of any audit of, assessment against, or administrative, court or
other proceeding relating to CHI Maine, the CHI Maine Assets, any
Project or any Site with respect to which Parent and Universal is
required to indemnify, defend, and hold the Partnership harmless
under Section 11.2.1 or which may otherwise affect the
determination of taxes for which Parent and Universal is
obligated to indemnify, defend and hold harmless under this
Agreement. Parent and Universal shall give reasonably prompt
written notice to the Partnership upon receipt by Parent or
Universal or any of their Affiliates of written notice of any
audit of, assessment against, or, administrative, court or other
proceeding relating to CHI Maine, the CHI Maine Assets, any
Project or any Site with respect to which Parent and Universal or
the Partnership is required to indemnify, defend and hold
harmless the other under Section 11.2.1 or Section 11.2.2,
respectively, or which may affect the determination of taxes for
which Parent, Universal or the Partnership is obligated to
indemnify, defend and hold harmless under this Agreement.
11.5 Treatment of Merger. The parties agree that for
federal and state income tax purposes the parties shall treat the
Merger as a cash merger in which the Partnership is acquiring the
CHI Maine Assets from CHI Maine to the extent of the Cash
Consideration, as the same may be adjusted pursuant to the terms
hereof.
11.6 Survival. Notwithstanding anything contained in this
Agreement to the contrary, each of the parties' representations,
warranties, covenants, agreements, rights, and obligations with
respect to any tax covered by this Agreement shall survive the
Merger Effective Time and shall not terminate until 45 calendar
days after the expiration of all statutes of limitation
(including any and all extensions thereof) applicable to such tax
or the assessment thereof.
ARTICLE 12
Miscellaneous
12.1 Transaction Costs. Except as otherwise expressly
provided herein, the General Partner and the Partnership, on the
one hand, and Parent and Universal, for themselves and on behalf
of CHI Maine, on the other hand, shall pay all of their own costs
and expenses (including attorneys' fees and other legal costs and
expenses and accountants' fees and other accounting costs and
expenses) incurred in connection with this Agreement and the
transactions contemplated hereby.
12.2 Entire Agreement. This Agreement represents the entire
understanding and agreement among the parties with respect to the
subject matter hereof, and supersedes all other negotiations,
understandings and representations (if any) made by and among
such parties.
12.3 Amendments. The provisions of this Agreement may not
be amended, supplemented, waived or changed orally, but only by a
writing signed by each of the parties hereto.
12.4 Assignments. No party shall assign its rights and/or
obligations hereunder without the prior written consent of each
other party to this Agreement.
12.5 Binding Effect. All of the terms and provisions of
this Agreement, whether so expressed or not, shall be binding
upon, inure to the benefit of, and be enforceable by the parties
and their respective administrators, executors, legal
representatives, heirs, successors and permitted assigns.
Notwithstanding the preceding sentence or any other provision of
this Agreement, all of the representations and warranties made by
or on behalf of CHI Maine herein, and all of the covenants and
obligations herein of CHI Maine, which in any such case are for
the benefit of the General Partner and the Partnership, shall, on
and after the Merger Effective Time, and without further action
of the parties, automatically be deemed to be assumed by Parent
and Universal for the benefit of the General Partner and the
Partnership as if made by Parent and Universal in the first
instance.
12.6 Headings. This headings contained in this Agreement
are for convenience of reference only, are not to be considered a
part hereof and shall not limit or otherwise affect in any way
the meaning or interpretation of this Agreement.
12.7 Notices. All notices, requests, consents and other
communications required or permitted under this Agreement shall
be in writing and shall be (as elected by the person giving such
notice) hand delivered by messenger or courier service,
telefaxed, or mailed by registered or certified mail (postage
prepaid), return receipt requested, addressed to:
To the General Partner and the Partnership and to CHI Maine
(Post-Closing)
With a copy to:
c/o Ridgewood Power Corporation De Forest & Xxxx
000 Xxxxxxx Xxxxxx 00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: President Attn: Xxx Xxxxx
To Parent, Universal and to CHI Maine
(Pre-Closing)
With a copy to:
Consolidated Hydro, Inc. Consolidated Hydro, Inc.
Stamford Towers Andover Business Park
000 Xxxxxxxxxx Xxxxxxxxx 000 Xxxxxxxx Xxxxx
0xx Xxxxx Xxxxxxx, XX 00000
Xxxxxxxx, XX 00000 Attn: Xxxxxx X. Xxxxx
Attn: Xxxxxx X. Xxxxx
Xxxxxx Xxxxxxx Xxxxxxx Broder
& Micoleau Limited Liability
Company, P.A.
Xxx Xxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx
or to such other address as any party may designate by notice
complying with the terms of this Section 12.7. Each such notice
shall be deemed delivered (a) on the date actually delivered if
by messenger or courier service; (b) on the date of confirmed
answer-back if by telefax and (c) on the date upon which the
return receipt is signed or delivery is refused or the notice is
designated by the postal authorities as not deliverable, as the
case may be, if mailed.
12.8 Severability. If any provision of this Agreement or
any other Agreement entered into pursuant hereto is contrary to,
prohibited by or deemed invalid under applicable law or
regulation, such provision shall be inapplicable and deemed
omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be
given full force and effect so far as possible. If any provision
of this Agreement may be construed in two or more ways, one of
which would render the provision invalid or otherwise voidable or
unenforceable and another of which would render the provision
valid and enforceable, such provision shall have the meaning
which renders it valid and enforceable.
12.9 Waivers. The failure or delay of any party at any time
to require performance by another party of any provision of this
Agreement, even if known, shall not affect the right of such
party to require performance of that provision or to exercise any
right, power or remedy hereunder. Any waiver by any party of any
breach of any provision of this Agreement should not be construed
as a waiver of any continuing or succeeding breach of such
provision, a waiver of the provision itself, or a waiver of any
right, power or remedy under this Agreement. No notice to or
demand on any party in any case shall, of itself, entitle such
party to any other or further notice or demand in similar or
other circumstances.
12.10 Enforcement Costs. If any legal action or other
proceeding is brought for the enforcement of this Agreement or
any other Closing Document, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees,
sales and use taxes, court costs and all expenses even if not
taxable as court costs (including, without limitation, all such
fees, taxes, costs and expenses incident to arbitration,
appellate, bankruptcy and post-judgment proceedings), incurred in
that action or proceeding, in addition to any other relief to
which such party or parties may be entitled. Attorney's fees
shall include, without limitation, paralegal fees, investigative
fees, administrative costs, sales and use taxes and all other
charges billed by the attorney to the prevailing party.
12.11 Remedies Cumulative. Except as otherwise
expressly provided herein, no remedy herein conferred upon any
party is intended to be exclusive of any other remedy, and each
and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or
hereafter existing at law or inequity or by statute or otherwise.
No single or partial exercise by any party of any right, power or
remedy hereunder shall preclude any other or further exercise
thereof.
12.12 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument. Confirmation of execution by telefax of a
signature page shall be binding upon any party so confirming.
12.13 Governing Law. This Agreement and all
transactions contemplated by this Agreement shall be governed by,
and construed and enforced in accordance with, the internal laws
of the State of Delaware without regard to principles of
conflicts of laws.
12.14 Preparation of Agreement. This Agreement shall
not be construed more strongly against any party regardless of
who is responsible for its preparation. The parties acknowledge
each contributed and is equally responsible for its preparation.
12.15 Survival. All representations, warranties,
covenants and agreements made herein or otherwise referenced
herein shall survive the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby for
the time periods herein provided.
12.16 Materiality. As used in this Agreement the word
"material" shall refer to materiality with respect to the subject
matter of the particular representation, warranty or covenant in
questions, and not materiality in relation to the purchase price
or transactions contemplated hereby as taken as a whole.
12.17 Inducement to Transaction. All representations
and warranties made by any party in this Agreement shall be
deemed made for the purpose of inducing the other party of enter
into this Agreement.
12.18 Receipt of Monies, Etc. Any monies, checks,
drafts, money orders, postal notes and other instruments received
after the Closing Date by Parent or Universal or their Affiliates
in payment of any amounts due to CHI Maine or the Partnership
after the Closing Date shall be promptly delivered to the
Partnership.
12.19 Arbitration. Any controversy or claim arising out
of or relating to this Agreement, or the breach thereof, shall be
settled by arbitration administered by the American Arbitration
Association in accordance with the Commercial Rules of the
American Arbitration Association then pertaining, and judgement
on the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. Arbitration hearings shall be
held in the City of Portland, Maine.
12.20 Confidentiality and Communications. Because of
the highly sensitive nature of this transaction and Parent and
Universal's concerns with the impact that the transaction may
have on their employees, the General Partner and the Partnership
agree that they shall initiate all transaction related due
diligence and shall arrange all site visits and communications
with employees of CHI Maine through Xxxxxx X. Xxxxx or Xxxxxx X.
Xxxxx. The General Partner and the Partnership agree to keep
confidential, and to cause their Affiliates, employees, counsel,
accountants, consultants, advisors, lenders, and representatives
(collectively their "Agents") to keep confidential any
information provided by Parent, Universal or CHI Maine to the
General Partner and the Partnership to be used by the General
Partner and the Partnership or their Agents in connection with
their investigation of CHI Maine, the Projects or the Sites, and
to return to Parent and Universal, on their written request, any
and all documents or other written information so obtained,
together with all copies thereof; provided, that nothing herein
shall limit the disclosure of such information to the extent
required by applicable law or judicial process or to the extent
determined by Affiliates of the General Partner and the
Partnership as being necessary or appropriate for disclosure to
direct or indirect investors in the General Partner and the
Partnership. The confidentiality requirement of this paragraph
shall not apply to any information that is or becomes generally
available to the public, is or becomes available to the General
Partner and the Partnership and their Agents from a non-
confidential source, or that is required to be disclosed by law.
The General Partner and the Partnership agree to advise their
Agents of the confidential nature of the information and of the
obligation of such Agents to comply with the provisions of this
Agreement with respect thereto. The General Partner and the
Partnership shall use and cause their Agents to use information
supplied or obtained hereunder in good faith and only for
purposes of evaluating and proceeding with the transaction
anticipated by this Agreement.
ARTICLE 13
Execution Clause
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of July 1, 1996.
The Partnership:
CHI Maine: Ridgewood Maine Hydro Partners, L.P.
Consolidated Hydro
Maine, Inc.
By: Ridgewood Maine Hydro Corporation,
general partner
By: __________________ By: ________________________
Name: __________________ Name: ________________________
Title: __________________ Title: ________________________
Universal: The General Partner:
CHI Universal, Inc. Ridgewood Maine Hydro Corporation
By: _____________ By: _____________________
Name: _____________ Name: _____________________
Title: _____________ Title: _____________________
Parent:
Consolidated Hydro, Inc.
By: _________________
Name: _________________
Title: _________________
