EXHIBIT B1
STOCK PURCHASE AGREEMENT
THIS AGREEMENT, dated as of the ___ day of November, 1999,
by and between ALLEGHENY ENERGY, INC., a Maryland corporation,
(the "Buyer"), and ENERGY CORPORATION OF AMERICA, a West Virginia
corporation ("ECA") and EASTERN SYSTEMS CORPORATION, a West
Virginia corporation ("ESC"), (hereinafter ECA and ESC are
sometimes collectively referred to as the "Seller").
W I T N E S S E T H:
WHEREAS, the Buyer is a public utility holding company whose
subsidiaries generate, distribute and provide electric service to
customers in the State of West Virginia and elsewhere; and
WHEREAS, the Seller is the owner of one hundred percent
(100%) of the outstanding stock of Mountaineer Gas Company, a
West Virginia corporation and its subsidiaries ("Mountaineer"),
and,
WHEREAS, Mountaineer is engaged in the distribution and
sale of natural gas in West Virginia, and
WHEREAS, the Seller desires to sell, and the Buyer desires
to purchase, all of the outstanding stock of Mountaineer (the
"Shares") upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the respective
representations, warranties and covenants contained herein, the
Buyer and the Seller hereby agree as follows:
ARTICLE I - DEFINITIONS
1.01 Adjustment Date
The last day of the month following the Closing Date.
1.02 Adjustment Period
The period commencing on the Effective Date and ending on
the Adjustment Date.
1.03 Agreed Capital Investment
Six Million Dollars ($6,000,000.00).
1.04 Agreement
This Stock Purchase Agreement, including all Schedules and
Exhibits, hereto, dated as of the date first written above.
1.05 Benefit Plans
All benefit and compensation plans, contracts, policies or
arrangements covering current or former Employees, including, but
not limited to, "employee benefit plans" within the meaning of
Section 3(3) of ERISA, and deferred compensation, stock option,
stock purchase, stock appreciation rights, stock based, incentive
and bonus plans.
1.06 Buyer
Allegheny Energy, Inc., or any subsidiary or affiliate
existing or hereafter created to purchase the Shares.
1.07 Closing
The closing of the purchase and sale of the Shares.
1.08 Closing Date
The date of the Closing, which shall be on the 10th business
day after all conditions precedent set forth in Article 8 have
been
met, or such other date as the Parties may agree upon.
1.09 Code
The Internal Revenue Code of 1986, as amended and the rules
and regulations promulgated thereunder.
1.10 ▇▇▇▇▇▇▇ Deposit
Shall have the meaning assigned to it in Article III.
1.11 Effective Date
November 30, 1999.
1.12 Employee(s)
Those persons actively employed by Mountaineer in the
conduct of Mountaineer's business who are participants in any
plans and not laid off or on long term disability immediately
prior to Closing.
1.13 ERISA
The Employee Retirement Income Security Act of 1974, as
amended.
1.14 Environmental Law
Any federal, state, local or foreign statute, law,
regulation, order, decree, permit, authorization, opinion, common
law or agency requirement relating to: (A) the protection,
investigation or restoration of the environment, health, safety,
or natural resources, (B) the handling, use, presence, disposal,
release or threatened release of any Hazardous Substance or (C)
noise, odor, indoor air, employee exposure, wetlands, pollution,
contamination or any injury or threat of injury to persons or
property relating to any Hazardous Substance.
1.15 Hazardous Substance
(A) Any substance that is listed, classified or regulated
pursuant to any Environmental Law; (B) any petroleum or coal
product or by-product, any waste or ash, asbestos-containing
material, lead-containing paint or plumbing, polychlorinated
biphenyls, radioactive material or radon; and (C) any other
substance which is regulated by any government entity in
connection with any Environmental Law.
1.16 Intellectual Property
The trade names and other intellectual property set forth on
Exhibit 1.16.
1.17 Interest Rate
The then current prime or base rate of Citibank as
established from time to time.
1.18 Interim Period
The period from the date of this Agreement until the Closing
Date.
1.19 Legal Requirements
Any and all applicable (i) federal, state, local and foreign
laws, statutes, ordinances, rules and regulations, (ii)
judgments, orders, writs, injunctions, decrees and (iii)
contracts or agreements with any federal, state or foreign court,
arbitrator or administrative or governmental authority, bureau or
agency relating to compliance with matters described in (i) and
(ii).
1.20 Material Adverse Effect or Material Adverse Change
With respect to any person or persons, a Material Adverse
Effect on, or a Material Adverse Change in, the financial
condition, properties, business, results of operations or
prospects of such person or persons; provided, however, that the
Material Adverse Effect or a Material Adverse Change shall not
include performance results attributable to weather condition,
nor any general economic and market changes including, without
limitation (i) any general suspension of trading in, or
limitations on prices for, or material change in prices of,
securities generally on any national securities exchange or in
the over-the-counter markets, (ii) the declaration of a banking
moratorium or any suspension of payments in respect of banks in
the United States, (iii) the commencement or continuation of a
war, armed hostilities or other international or nation calamity
directly or indirectly involving the United States; (iv) any
limitation (whether or not mandatory) by any U.S. governmental
authority or agency on the extension of credit by banks other
financial institutions; (v) any general decline in economic
conditions in the gas utility industry as a whole or in general
economic conditions in any geographic region of the United
States; and (vi) in the case of any of the events described in
the foregoing clauses (i) through (v), a material acceleration or
worsening thereof.
1.21 Parties
The Buyer and the Seller.
1.22 Party
The Buyer or the Seller, as the case may be.
1.23 Permits
Any and all permits, authorizations, certificates,
approvals, registrations, variances, rights of way, franchises,
orders or other approvals and licenses material to the Operation
of Mountaineer (i) under any (x) federal, state, local or foreign
laws, statutes, ordinances, rules or regulations or (y) judgment
or contract with any federal, state, local or foreign court,
arbitrator or administrative or governmental authority, bureau or
agency relating to compliance with matters described in this
section, or (ii) granted by any federal, state, local or foreign
administrative or governmental authority, bureau or agency.
1.24 Purchase Price
Shall have the meaning assigned to it in Article III.
1.25 Seller
ECA and ESC.
1.26 Seller's Disclosure Schedule
That schedule attached hereto as Exhibit 1.26.
1.27 Taxes
All federal, state, local or foreign taxes, including
income, gross receipts, windfall profits, customs duties, value
added, severance, property, trade, consumption, solidarity
surcharge, capital, production, estimated sales, use, license,
excise, franchise, employment, withholding or other taxes of any
kind, together with any interest, additions or penalties with
respect thereto and any interest in respect of such additions or
penalties, payable by Seller in connection with the operation of
Mountaineer.
1.28 Tax Returns
All reports and returns required to be filed with respect to
Taxes.
1.29 West Virginia PSC
The Public Service Commission of West Virginia.
1.30 Working Capital
The difference between the total current assets of
Mountaineer as reflected on the unaudited financial statements of
Mountaineer as of November 30, 1999 and the total current
liabilities of Mountaineer as reflected on the unaudited
financial statements of Mountaineer as of November 30, 1999.
1.31 Year 2000 Problem
The material inability of any hardware, software or process
to recognize and correctly calculate dates on and after January
1, 2000, or the failure of computer systems, products or services
to perform any of their intended functions in a proper manner in
connection with data containing any date on or after January 1,
2000.
ARTICLE II - AGREEMENTS OF PURCHASE AND SALE
2.01 Sale and Purchase of Shares
On the Closing Date, subject to the terms and conditions of
this Agreement, the Buyer shall purchase the Shares and ESC shall
sell, transfer, assign, convey and deliver the Shares to the
Buyer for the Purchase Price paid in accordance with Article III
hereof.
ARTICLE III - PURCHASE PRICE
3.01 Purchase Price
Buyer agrees to pay and deliver to ECA the sum of Three
Hundred Eight Million Dollars ($308,000,000), less an amount
equal to Mountaineer's Long Term Debt, as defined in Article VI
below, existing on the Closing Date, (the "Purchase Price").
Upon execution of this Agreement, Buyer shall pay Ten Million
Dollars ($10,000,000) of the Purchase Price to ECA as an ▇▇▇▇▇▇▇
Deposit. The remainder of the Purchase Price shall be paid to
ECA by wire transfer on the Closing Date.
3.02 Post Closing Adjustments to Purchase Price
(a) Calculation of Adjustments to Purchase Price for Working
Capital.
1) Decrease. In the event Working Capital decreases
more than $100,000 during the Adjustment Period, ECA
shall pay to Allegheny an amount equal to such
decrease.
2) Increase. In the event Working Capital increases
more than $100,000 during the Adjustment Period,
Allegheny shall pay to ECA an amount equal to such
increase.
(b) Calculation of Adjustments to Purchase Price for actual
capital investment.
1) Lower Investment. In the event the actual capital
investment made by Seller in Mountaineer during the
Adjustment Period is less than the Agreed Capital
Investment, ECA shall pay such difference to Allegheny.
2) Higher Investment. In the event the actual capital
investment made by Seller in Mountaineer during the
Adjustment Period is more than the Agreed Capital
Investment, Allegheny shall pay such difference to ECA.
The adjustments required by this 3.02, plus the Purchase
Price, constitute the Adjusted Purchase Price.
(c) Estimate of Post Closing Adjustments.
Within thirty (30) days of the Adjustment Date,
Seller shall prepare and deliver to Buyer an estimate
of the adjustments to the Purchase Price to be made
pursuant to this 3.02. Such estimate shall be
accompanied by a worksheet setting forth in reasonable
detail each of the adjustments required by 3.02 and
the amount of the net adjustment. The Purchase Price
as adjusted in accordance with such estimate is
hereinafter referred to as the "Estimated Purchase
Price."
(d) Settlement Statement
1) Within sixty (60) days following the Adjustment
Date, or as soon thereafter as possible, Buyer and
Seller shall jointly prepare a statement (the
"Settlement Statement") setting forth adjustments to be
made to the Purchase Price pursuant to 3.02.
2) If Buyer and Seller shall be unable to agree on
the Settlement Statement within such sixty (60) day
period, a nationally recognized public accounting firm
mutually acceptable to Buyer and Seller shall be
engaged to make its determination of the amount in
dispute (and only such amount). Each party shall bear
and pay one-half of the fees and other costs charged by
such accounting firm.
3) If any accounting firm is so engaged Seller
and Buyer agree to provide such accounting firm with
all books, records and other information relevant to
the determination of the amount in dispute. Such
accounting firm shall be instructed to use a
materiality standard as such firm may determine to be
reasonable under the circumstances, in light of the
cost to be incurred and the amount in issue. Such
accounting firm shall be instructed to make such
determination in accordance with the provisions of this
Agreement as soon as practicable. The final
determination by the accounting firm of any dispute
adjustments to the Purchase Price made pursuant to this
3.02 shall be binding on the parties hereto.
4) The amount of the difference between the
Purchase Price paid by Buyer at the closing and the
Adjusted Purchase Price, together with interest thereon
at a rate of ten percent (10%) per annum from the
Closing Date to the date of payment thereof, shall be
paid by the appropriate party to the party to whom it
is owed within five (5) business days after its final
determination in immediately available funds.
3.03 Allocation of Purchase Price.
Seller and Buyer agree that the Adjusted Purchase Price
shall be allocated among the assets as determined by agreement of
the parties and shall be set forth in a Price Allocation Schedule
signed by each of the parties following the determination of the
Adjusted Purchase Price.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer that, as of
the date hereof, except as set forth in Seller's Disclosure
Schedule:
4.01 Corporate Status and Authority
Each of ECA, ESC and Mountaineer is a corporation duly
organized, validly existing and in good standing under the laws
of the State of West Virginia. Mountaineer has all the requisite
corporate power and authority under all applicable federal and
state laws to carry on its business as it now is being conducted
and to own or lease and to operate its assets as and in the
places where Mountaineer's business is now conducted or where its
assets are now owned or leased and now operated. Each of ECA and
ESC has all requisite corporate power and authority and has taken
all corporate action necessary in order to execute and deliver
this Agreement and, subject to any governmental authorizations
required by the provisions of this Agreement, to perform its
obligations hereunder.
4.02 Power to Transfer; Duly Executed
(a) Subject to any required governmental authorization
referred to in Section 7.03(a) hereof, the Seller has full right,
power and authority to enter into this Agreement and to assign,
transfer and deliver the Shares hereunder.
(b) This Agreement has been duly executed and delivered on
behalf of the Seller and subject to any required governmental
authorizations referred to in Section 7.03(a) hereof, constitutes
a legal, valid and binding obligation of the Seller enforceable
in accordance with its terms (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws affecting creditors' rights generally from
time to time in effect and to general principles of equity,
regardless of whether in a proceeding at equity or at law).
4.03 Qualification
Each of ECA, ESC and Mountaineer is duly qualified, and is
in good standing, to do business in West Virginia as a
corporation.
4.04 Authorized Capital of Mountaineer.
The authorized capital stock of Mountaineer consists of
2,000,000 shares, $25.00 par value of which 1,831,687 shares were
outstanding as of June 30, 1999 and no shares were held in
treasury. All of the Shares have been duly authorized, and are
validly issued, fully paid and nonassessable. Each of the
outstanding shares of capital stock of each of Mountaineer's
subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and owned, either directly or indirectly, by
Mountaineer, free and clear of all liens, pledges, security
interests, claims or other encumbrances. Except as set forth
above, there are no shares of capital stock of Mountaineer
authorized, issued or outstanding and there are no preemptive
rights nor any outstanding subscriptions, options, warrants,
rights, convertible or exchangeable securities or other
agreements or commitments of any character relating to the issued
or unissued capital stock or other securities of Mountaineer or
any of its subsidiaries.
Seller has good and marketable title to the Shares and on
the Closing Date will transfer and convey the Shares to Buyer
free and clear of all mortgages, liens, pledges, charges, title
retention or security agreements, claims, restrictions, leases,
options, rights of first offer or first refusal, or other
encumbrances or rights of others. Each of Mountaineer and its
subsidiaries has good and marketable title to its properties and
assets except for such defects in title that, individually or in
the aggregate, have not and are not reasonably likely to have a
Material Adverse Effect.
4.05 Compliance with Instruments
Subject to any required governmental approvals referred to
in Section 7.03(a) hereof, the execution, delivery and
performance of this Agreement by the Seller and the consummation
by the Seller of the transactions contemplated hereby will not
conflict with or result in any breach or violation of or default
under the Articles of Incorporation or Bylaws of the Seller, or
any conflict with or result in any breach or violation of any
rights or obligations of any party under, or default under, the
acceleration of any obligations or the creation of a lien,
pledge, security interest or other encumbrance on the assets of
Mountaineer (with or without notice, lapse of time or both)
pursuant to any agreement, lease, contract, note, indenture,
mortgage, lease, or, to the Seller's knowledge, other material
agreement or instrument applicable to Mountaineer's business to
which Mountaineer is a party.
4.06 Disclosure Statement
Seller is obligated to, and represents that it has, fully
and completely included all information required under the
Disclosure Statement of Exhibit 1.26 and that it is true and
accurate to the best of its knowledge and belief, and that said
Exhibit 1.26 is hereby incorporated as part of this Agreement.
4.07 Changes, Etc.
Since June 30, 1999,
(a) there has been no Material Adverse Change in
Mountaineer's business nor any material damage, destruction or
loss adversely affecting Mountaineer's assets (whether or not
covered by insurance);
(b) Mountaineer has conducted its business in ordinary
course;
(c) Mountaineer's assets have not been mortgaged, pledged,
or subjected to any lien, security interest, or to the Seller's
knowledge, any other encumbrance, which mortgage, pledge, lien,
security interest or encumbrance shall be released on or before
the Closing Date;
(d) except as otherwise disclosed in writing to the Buyer
or as incurred in the ordinary course of business, no liability,
contractual, or otherwise, has been incurred (whether absolute,
accrued, contingent or otherwise) by the Seller or Mountaineer in
connection with Mountaineer's business that has not been fully
paid, released or otherwise provided for; and
(e) there has not been any incurrence, assumption or
guarantee by Seller of any indebtedness for borrowed money that
would adversely impact Mountaineer's business.
4.08 Compliance with Laws; Governmental Authorizations
(a) Each of ECA, ESC and Mountaineer is in compliance in
all material respects with all Legal Requirements and Permits
applicable to Mountaineer's business. Mountaineer has not
received any written notice or communication of any material
noncompliance with any Legal Requirement or Permit that has not
been cured as of the date hereof.
(b) The Seller's Disclosure Schedule lists all Permits held
by Mountaineer on the date hereof in connection with
Mountaineer's business. To the Seller's knowledge, Mountaineer
has, or in due course reasonably anticipates to obtain, all
Permits necessary to own, operate, use and maintain Mountaineer's
assets, in the manner in which they are now being maintained and
operated and to conduct Mountaineer's business as now being
conducted. All Permits of Mountaineer relating to its business
are in full force and effect and there are no proceedings pending
or, to the knowledge of the Seller or Mountaineer, threatened
that seek the revocation, cancellation, suspension or any adverse
modification of any such Permits. Subject to obtaining the
consents and approvals contemplated hereby, the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in any such
revocation, cancellation, suspension or modification of such
Permits.
(c) To Seller's and Mountaineer's knowledge (i)
Mountaineer's business is in material compliance with all
applicable Environmental Laws; (ii) no property currently owned
or operated by Mountaineer in its business (including soils,
groundwater, surface water, buildings or other structures) is
contaminated with any Hazardous Substance which could reasonably
be expected to result in material liability under any
Environmental Law; (iii) Mountaineer's business has not been
involved in any release or threat of release of any Hazardous
Substance which could reasonably be expected to result in
material liability under any Environmental Law; (iv) Mountaineer
has not received any written notice, demand, letter, claim or
request for information alleging that Mountaineer may be in
violation of or subject to liability under any Environmental Law;
(v) Mountaineer is not subject to any order, decree, injunction
or other arrangement with any governmental entity or any
indemnity or other agreement with any third party relating to
liability under any Environmental Law or relating to Hazardous
Substances in connection with its business; (vi) there are no
other circumstances or conditions involving Mountaineer that
could reasonably be expected to result in any material claim,
liability, investigation, cost or restriction on the ownership,
use, or transfer of any property pursuant to any Environmental
Law; and (vii) Seller has delivered to Buyer copies of all
environmental reports, studies, assessments, sampling data and
other environmental information in its possession relating to
Mountaineer's business that would indicate whether any material
environmental liability or issue exists.
4.09 Public Service Commission of West Virginia
(a) The Seller's Disclosure Schedule includes all currently
effective certificates, permits and authorizations heretofore
issued by the West Virginia PSC to Mountaineer and presently in
effect in connection with Mountaineer's business.
(b) The Seller's Disclosure Schedule lists all of the
currently operative rules, regulations and tariffs heretofore
authorized and approved by the West Virginia PSC applicable to
Mountaineer's business and all of the currently pending rate,
certificate or other filings heretofore made by Mountaineer
before the West Virginia PSC and the status of each such filing
on the date hereof.
(c) All currently effective filings heretofore made by
Mountaineer with the West Virginia PSC were made in substantial
compliance with Legal Requirements then applicable thereto and
the information contained therein was true and correct in all
material respects as of the respective dates of such filings.
4.10 Contracts
(a) The Seller's Disclosure Schedule contains a complete
and correct list of all Mountaineer's material contracts relating
to Mountaineer's business as of the date hereof. There are no
defaults under any such contracts which, individually or in the
aggregate, could adversely impair Mountaineer's business. Based
upon reasonable inquiry, Mountaineer has no knowledge of any
facts which would suggest that any such contract may be
cancelled.
(b) Each contract required to be disclosed pursuant to this
Section is a valid and binding agreement of Mountaineer and is in
full force and effect except to the extent such contract has
expired by its own terms without penalty, and none of Mountaineer
or, to the knowledge of Mountaineer, any other party thereto is
in default or breach under the terms of any such contracts and,
to the knowledge of Mountaineer, no event or circumstance has
occurred that, with notice or lapse of time or both, would
constitute any event of default thereunder other than in each
case defaults or breaches that are not reasonably likely to have
a Material Adverse Effect on Mountaineer's business.
4.11 Rights-of-Way and Real Property
Mountaineer owns or possesses all rights-of-way necessary
for the conduct of its business, as now being conducted, without
any known conflict with the rights of others. There are no
outstanding options or rights of first refusal to purchase any
real property owned by Mountaineer or interests, or portions
thereof.
4.12 Condemnation Proceedings
Mountaineer has received no written notice that (i) the
whole or any part of the real property or rights leased, used or
occupied by Mountaineer in connection with the ownership or
operation of its assets is subject to any pending suit for
condemnation or other taking by any public authority or any other
person, or (ii) such condemnation or other taking has been
threatened.
4.13 Employment Agreements and Benefits, Etc.
(a) Employment Agreements
The Seller's Disclosure Schedule lists all currently
effective employment, management, consultant or similar
agreements and all currently effective labor contracts and
collective bargaining agreements heretofore entered into by
Mountaineer with respect to its business. Except as disclosed
therein, Mountaineer has no employment, management, severance,
consultant or other similar agreement with any Employees.
(b) Employee Relations
There are not occurring on the date hereof any slow downs,
pickets, work stoppages, labor strikes or disputes, walk-outs,
lock-outs or other similar disruptive labor activities on the
part of the Employees. To Mountaineer's knowledge, no grievance,
unfair labor practice charge or any arbitration proceeding
exists, is pending or is threatened on the date hereof, nor does
Mountaineer have any knowledge of any organized effort presently
being made or threatened by or on behalf of any labor union to
represent Mountaineer's employees except under existing
collective bargaining agreements.
(c) Employment Benefit Plans
As applicable to Mountaineer
(i) All Benefit Plans are listed in Seller's Disclosure
Schedule. True and complete copies of all such Benefit Plans,
including, but not limited to, any trust instruments and
insurance contracts forming a part of any Benefit Plans, and all
amendments thereto have been provided or made available to Buyer.
(ii) All Benefit Plans covering Employees, to the extent
subject to ERISA, are in substantial compliance with ERISA. Each
Benefit Plan which is an "employee pension benefit plan" within
the meaning of Section 3(2) of ERISA ("Pension Plan") and which
is intended to be qualified under Section 401 (a) of the Code,
has received a favorable determination letter from the Internal
Revenue Service with respect to "TRA" (as defined in Section 1 of
Rev. Proc. 9339), and Mountaineer is not aware of any
circumstances likely to result in revocation of any such
favorable determination letter. There is no material pending or,
to the knowledge of Mountaineer, threatened litigation relating
to the Benefit Plans. Mountaineer has not engaged in a
transaction with respect to any Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof,
could subject Mountaineer to a tax penalty imposed by either
Section 4975 of the Code or Section 502(i) of ERISA in an amount
which would be material.
(iii) No liability under Subtitle C or D of Title IV of
ERISA has been or is expected to be incurred by Mountaineer with
respect to any ongoing, frozen or terminated "single-employer
plan", within the meaning of Section 4001 (a)(15) of ERISA,
currently or formerly maintained by any of them, or the single-
employer plan of any entity which is considered one employer with
the Seller under Section 4001 of ERISA or Section 414 of the Code
(an "ERISA Affiliate"). Neither Mountaineer nor any ERISA
Affiliate has contributed to a "multi-employer plan", within the
meaning of Section 3(37) of ERISA, at any time on or after
September 26, 1980. No notice of a "reportable event", within
the meaning of Section 4043 of ERISA for which the 30-day
reporting requirement has not been waived, has been required to
be filed for any Pension Plan or by any ERISA Affiliate within
the 12-month period ending on the date hereof (or will be
required to be filed in connection with the transactions
contemplated by this Agreement).
(iv) All contributions required to be made under the terms
of any Benefit Plan have been timely made or provisions made
therefor. Neither any Pension Plan nor any single employer plan
of an ERISA Affiliate has an "accumulated funding deficiency"
(whether or not waived) within the meaning of Section 412 of the
Code or Section 302 of ERISA and no ERISA Affiliate has an
outstanding funding waiver. Mountaineer has not provided, nor is
required to provide, security to any Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section
401 (a)(29) of the Code.
(v) Under each Pension Plan which is a single-employer plan
and which is subject to Title IV or ERISA, as determined by the
July 1, 1998 Actuarial Valuation Report prepared by ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Incorporated, the present value of all "benefits
liabilities", within the meaning of Section 4001 (a)(16) of
ERISA, did not exceed the then current value of the assets of
such Plan by more than $6 Million Dollars, and there has been no
Material Adverse Change in the financial condition of such Plan
subsequent to such report.
(vi) Mountaineer has no obligation to any Employee for
retiree health and life benefits under any Benefit Plan.
(vii) The consummation of the transactions contemplated
by this Agreement will not (x) entitle any Employees to severance
pay, (y) accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of
compensation or benefits under, increase the amount payable or
trigger any other material obligation to any Employee under any
of the Benefit Plans or (z) result in any payments to any
Employee under any of the Benefit Plans which would not be
deductible under Section 162(ml or Section 280G of the Code.
4.14 Insurance
Mountaineer has insurance covering its assets, or otherwise
relating to its business as shown on Exhibit 4.14.
4.15 Intellectual Property
(a) Mountaineer owns (free and clear of any and all liens,
claims or encumbrances), or is licensed or otherwise possesses
sufficient legally enforceable rights to use, the Intellectual
Property.
(b) To Mountaineer's knowledge, Mountaineer's use of the
Intellectual Property does not conflict with, infringe upon, or
violate any intellectual property right of any other person.
Mountaineer has not received written notice of any material claim
that any Intellectual Property Right is invalid or conflicts with
the asserted right of any other person.
4.16 Litigation; Claims; Citations
(a) The Seller's Disclosure Schedule lists all actions,
suits, workers compensation claims, proceedings or governmental
investigations pending, or to the knowledge of Mountaineer,
threatened in writing against or affecting Mountaineer's business
or its assets. None of Mountaineer's assets is subject to any
order, writ, judgment, award, injunction, or decree of any
governmental or regulatory authority, any court of competent
jurisdiction or any arbitrator or arbitrators.
(b) To Mountaineer's knowledge, no citations, fines or
penalties have been assessed, threatened or asserted against in
connection with the conduct of Mountaineer's business under any
Environmental Law which have not been fully resolved as of the
date of this Agreement.
4.17 Brokers
All negotiations relating to this Agreement and the
transactions contemplated hereby
have been carried out without the intervention of any person
acting on behalf of the Seller or any of its affiliates in such
manner as to give rise to any valid claim against the Buyer for
any broker's or finder's commission, fee or similar compensation.
4.18 Personal Property
All items of personal property and fixtures constituting a
part of Mountaineer's assets have been maintained by Mountaineer
in all material respects in good operating condition and repair
(normal wear and tear excepted). To Mountaineer's knowledge, all
such personal property and fixtures are suitable for the purposes
for which they are presently used in the ordinary conduct of its
business.
4.19 Material Facts
No representation or warranty by the Seller or Mountaineer
in this Agreement or any statement or certificate furnished or to
be furnished to the Buyer by the Seller or Mountaineer pursuant
to the Agreement, or in connection with the transactions
contemplated hereby, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained therein
not materially misleading.
4.20 Y2K (Year 2000)
Mountaineer has initiated a review and assessment of the
Year 2000 Problem, has developed a plan for addressing the Year
2000 Problem on a timely basis and has to date implemented such
plan, except where Mountaineer's failure to do so is not
reasonably likely to have a Material Adverse Effect on
Mountaineer's business. To the knowledge of Mountaineer, none of
the system-critical assets or equipment owned or utilized by
Mountaineer in its business will fail to perform because of, or
due in any way to, a Year 2000 Problem. To the knowledge of
Mountaineer, no vendor, supplier or customer of Mountaineer will
experience a Year 2000 Problem that, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect on Mountaineer's business.
4.21 Financial Statements.
ECA has delivered to Buyer true and complete copies of the
audited financial statements of Mountaineer for the period ended
June 30, 1999. Such financial statements, including the related
notes, fairly present the financial position, assets and
liabilities (whether accrued, absolute, contingent or otherwise)
of Mountaineer at the date indicated and such statements of
income, cash flow and changes in shareholder's equity fairly
present the results of operations, cash flow and changes in
shareholders' equity of Mountaineer for the periods indicated.
4.22 Taxes
(a) All Tax Returns that are required to be filed on or
before the date of this Agreement (taking into account applicable
extensions) have been filed;
(b) All Taxes due and payable have been timely paid, other
than Taxes which are not yet due or which, if due, are not
delinquent, are being contested in good faith, or have not been
finally determined and for which appropriate reserves therefore
have been established
(c) There are no pending or, to the knowledge of Seller or
Mountaineer, threatened actions or proceedings for the assessment
or collection of Taxes against Mountaineer;
(d) All Taxes required to be withheld from payments to
employees have been withheld and paid to the proper taxing
authority in a timely fashion;
(e) To the knowledge of Seller or Mountaineer, no taxing
authorities are presently conducting any audits or other
examinations of any Tax Returns referred to in clause (a) or
Taxes referred to in clause (b);
(f) There are no liens for unpaid Taxes on Mountaineer's
assets.
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller that:
5.01 Corporate Status and Authority
The Buyer is a corporation duly organized, validly existing
in Maryland and in good
standing under the laws of the State of West Virginia. Buyer has
all requisite corporate power and authority and has taken all
corporate action necessary in order to execute and deliver this
Agreement and, subject to any governmental authorizations
required by the provisions of this Agreement, to perform its
obligations hereunder.
5.02 Duly Executed
This Agreement has been duly executed and delivered on
behalf of the Buyer and, subject to any required governmental
authorization referred to in Section 7.03(a) hereof, constitutes
a legal, valid and binding obligation of the Buyer enforceable in
accordance with its terms.
5.03 Qualification
The Buyer is duly qualified to do business and is in good
standing, through its subsidiaries, in the State of West
Virginia.
5.04 Power; Governmental Consent
Subject to the obtaining of any governmental approvals
necessary for the Agreement,
as more fully explained under Section 7.03(a), no consent,
waiver, approval or authorization of or designation, declaration
or filing with any governmental authority is or has, been
required on the part of the Buyer in connection with the
execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby.
5.05 Brokers
All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried out without
the intervention of any person acting on behalf of the Buyer in
such manner as to give rise to any valid claim against the Seller
or any of its affiliates for any brokerage or finder's
commission, fee or similar compensation.
5.06 Litigation
There are no actions, suits, proceedings or governmental
investigations pending, or to the knowledge of the Buyer,
threatened against the Buyer or any of its subsidiaries that
challenge the validity of this Agreement or seek to enjoin or
otherwise prohibit or limit the transactions contemplated herein.
5.07 Compliance with Instruments
Subject to any required governmental approvals referred to
in Section 7.03(a) hereof, the execution, delivery and
performance of this Agreement by the Buyer and the consummation
by the Buyer of the transactions contemplated hereby will not
result in any conflict with or breach or violation of or default
under the Articles of Incorporation or Bylaws of the Buyer, or
any material conflict with or breach or violation of or change
any rights or obligations of any party under, or default under,
the acceleration of any obligations or the creation of a lien,
pledge, security interest or other encumbrance on the assets of
the Buyer (with or without notice, lapse of time or both)
pursuant to, any agreement, lease, contract, note, indenture,
mortgage, lease, other than as would not, individually or in the
aggregate, materially impair or delay Buyer's ability to perform
its obligations hereunder.
ARTICLE VI - ASSUMPTION OF LIABILITIES
6.01 The Buyer's Assumption of Liabilities
Except as set forth herein, the Buyer shall, from and after
the Closing Date, assume, carry out, perform, indemnify and hold
Seller harmless against all obligations of Mountaineer.
a. Long Term Debt. On the Closing Date,
Mountaineer's Long Term Debt shall not exceed the amounts
designated on Schedule 6.01(a). For purposes of this Agreement,
Long Term Debt shall mean indebtedness having a final maturity of
one year or more from the date of incurrence thereof (or which is
renewable or extendable at the option of the obligor for a period
or periods of one year or more than one year from the date of
incurrence).
b. Short Term Lines of Credit. On the Closing Date,
Mountaineer's outstanding borrowings under its Short Term Lines
of Credit shall not exceed the amounts designated on Schedule
6.01(b). For purposes of this Agreement, Short Term Debt shall
mean indebtedness which is payable on demand or within one year
from the date of incurrence thereof except i) any indebtedness
which is renewable or extendable at the option of the obligor to
a date more than one year from date of its incurrence, and ii)
indebtedness which, although payable within one year, constitutes
principal payments on indebtedness expressed to mature more than
one year from the date of its incurrence.
ARTICLE VII - COVENANTS AND CERTAIN ACTIONS OF THE PARTIES
7.01 Obligations of the Seller
(a) Conduct of Mountaineer business, Etc.
During the Interim Period the Seller shall:
(i) except as permitted by this Agreement and except
as the Buyer may otherwise consent, carry on Mountaineer's
business in the ordinary course, in substantially the same manner
in which it is presently being conducted, and to the extent
consistent with such business and with Mountaineer's employment
policies and practices, use reasonable best efforts to preserve
the present business organization, keep available the services of
the Employees on terms and conditions no less favorable to
Mountaineer than those on which such employees are presently
employed, and preserve its relationship with customers, suppliers
and others having business dealings with Mountaineer business;
(ii) to the extent within the control of Mountaineer,
maintain all qualifications of Mountaineer which are required for
it to carry on its business as set forth in clause (i) above;
(iii) maintain Mountaineer's assets in accordance
with its normal repair and maintenance practices,
(iv) not enter into or amend in any material respect
(A) any bonus, incentive compensation, deferred compensation,
profit sharing, retirement, pension, group insurance, death
benefit or other fringe benefit plan, trust agreement, or
arrangement applicable to the Employees except as may be
implemented for Mountaineer's employees generally or (B) any
compensation, severance or consulting agreement with any such
Employee, other than in the ordinary and usual course of business
or as required by law;
(v) except as the Buyer may otherwise consent, refrain
from disposing, leasing, making any contract, or subject to lien
any material portion of Mountaineer's assets;
(vi) maintain the insurance coverage shown on Exhibit
4.14;
(vii) to the extent within the control of
Mountaineer, refrain from doing any act or omitting to do any act
that is reasonably likely to cause a breach of any contract or
material Permit held by Mountaineer and necessary for the conduct
of its business as it is presently conducted, or which is
reasonably likely to cause any of the representations and
warranties of the Seller or Mountaineer contained herein not to
be true and correct in any material respect;
(viii) to the extent within the control of
Mountaineer, use reasonable best efforts to maintain all Permits
held by Mountaineer, and necessary for the conduct of its
business as it is presently conducted;
(ix) advise and consult with the Buyer in advance of
any material actions (including, without limitation, rate
filings) to be taken with respect to regulatory matters or other
contested matters which the Seller believes may have a Material
Adverse Effect on Mountaineer's business;
(x) not without Buyer's consent, make or authorize (A)
any capital expenditures which are in excess of $1,000,000 or (B)
any commitments for expenditures beyond fiscal year 2000 which,
individually or in the aggregate, are in excess of $1,000,000
(excluding therefrom those arising as a result of an emergency
and necessary to insure the safety of the public or as may be
ordered by regulatory authorities);
(xi) use best efforts to comply in all respects with
all Legal Requirements applicable to Mountaineer;
(xii) maintain with respect to Mountaineer's
business, books of account and records in the usual, regular and
ordinary manner, on a consistent basis and in accordance with all
applicable accounting and legal requirements;
(xiii) use reasonable best efforts to obtain any
consent of third parties necessary to complete the transactions
contemplated by this Agreement;
(xiv) except (A) as permitted by this Agreement,
(B) as required by applicable
Legal Requirements or (C) as the Buyer shall otherwise consent,
not (I) enter into any material contract relating to
Mountaineer's business or assets, (II) modify, amend, or
terminate any material contract, (III) waive, release, relinquish
or assign any material contract, right or claim, provided that,
in each case, Mountaineer may do any of the foregoing in the
ordinary course of business consistent with past practice;
(xv) not knowingly acknowledge the validity of any
material claim asserted against the Seller or Mountaineer by a
third party adverse to the interests of the Seller or Mountaineer
with respect to the Shares or Mountaineer's business unless
required by applicable Legal Requirements or settle any material
claim relating thereto;
(xvi) maintain and administer the employee benefits
in the ordinary and usual course of business consistent with past
practices, including but not limited to complying with all Legal
Requirements related to the Plans.
(b) Access and Information
During the Interim Period and after the Closing Date,
the Seller shall (i) give, or shall cause to be given, to the
Buyer and its employees, agents and representatives full access
at all reasonable times to specified officers of Mountaineer and
to the financial and operating data, properties, books, files,
records, and property records of the Seller or Mountaineer
relating solely to Mountaineer's assets and business and will
furnish or shall cause to be furnished, all information and
documents relating to Mountaineer's business as the Buyer may
reasonably request, (ii) permit the Buyer to contact and meet
with the employees of Mountaineer and others having business
relations with such, at such place or places and at such times as
reasonably designated by the Buyer and acceptable to the Seller,
provided, that such investigation shall not interfere in any
material respect with Mountaineer's business, or relationships
with Employees, and provided further, that such investigation
shall not affect the representations and warranties hereunder of
the Seller or Mountaineer. The Seller shall permit the Buyer to
make copies of such information relating solely to Mountaineer's
business contained in the books, files and records of the Seller
or Mountaineer and to enter such information as Buyer may deem
appropriate into Buyer's accounting records.
(c) Material Change
If, during the Interim Period, the Seller shall become
aware of the occurrence, change or event (other than one
generally known to the public or to those in the gas utility
industry and other than general economic or weather conditions)
which is reasonably likely to have a Material Adverse Effect on
Mountaineer's business, the Seller shall promptly advise the
Buyer of such occurrence, change or event. Seller shall give
prompt notice to Buyer of the occurrence or non-occurrence of any
fact or event which is reasonably likely to cause any
representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect or any covenant,
condition or agreement under this Agreement not to be complied
with or satisfied in any material respect.
7.02 Obligations of the Buyer
(a) Material Change
If during the Interim Period, the Buyer shall become
aware of the occurrence of any change in the financial condition
of the Buyer and its subsidiaries, taken as a whole, or any
development, occurrence or event (other than one generally known
to the public or known generally to those in the electric or gas
utility industry and other than general economic or weather
conditions) which is reasonably likely to have a Material Adverse
Effect on the ability of the Buyer to consummate the transactions
contemplated herein, the Buyer shall promptly advise the Seller
of such change, development, occurrence or event. Buyer shall
give prompt notice to Seller of the occurrence or non-occurrence
of any fact or event which is reasonably likely to cause any
representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect or any covenant,
condition or agreement under this Agreement not to be complied
with or satisfied in any material respect.
(b) Other Obligations of the Buyer
(i) During the Interim Period and to the extent within
its control, the Buyer shall refrain from doing any act or
omitting to do any act which is reasonably likely to cause any of
the representations and warranties of the Buyer contained herein
not to be true and correct in any material respect.
(ii) During the Interim Period, the Buyer shall use
reasonable best efforts to obtain any consent of third parties
necessary to complete the transactions contemplated by this
Agreement.
7.03 Joint Obligations
(a) Regulatory Filings
The Parties agree to cooperate and diligently prosecute
all applications for, and shall use their reasonable efforts
promptly to obtain, such approvals or forbearances from all
applicable federal, state and local authorities, including,
without limitation, the West Virginia PSC, the Securities
and Exchange Commission, the Federal Trade Commission,
and such other governmental authorities as shall be
necessary to permit the consummation of the transactions
contemplated by this Agreement and shall use reasonable efforts
to bring about the satisfaction as soon as practicable of all the
conditions contained in Article VIII and otherwise to effect the
consummation as soon as practicable of the transactions
contemplated by this Agreement.
In the event such authorizations, approvals, orders,
permits or decrees related to this Agreement shall contain any
material condition or requirement that would have a Material
Adverse Effect on the Seller or the Buyer, then such Party shall
have the right, at its expense, to seek administrative or
judicial rehearing or review of such authorizations, approvals,
orders, permits or decrees. Should either the Seller or the
Buyer elect to seek such administrative or judicial rehearing or
review, then the Buyer and the Seller will diligently pursue such
rehearing or review and will cooperate with each other in
connection with such rehearing or review.
(b) Public Disclosure
During the Interim Period, neither the Buyer nor the
Seller shall make, nor permit any of their respective affiliates
or representatives to make, any news release or other public
disclosure pertaining to this Agreement or the transactions
contemplated hereby without the prior approval, unless
impracticable to obtain under the circumstances, of the other as
to both form and content, which approval shall not be
unreasonably withheld. Notwithstanding the foregoing, either
Party may make such news release or other public disclosure
which, in the opinion of such Party's counsel, is required to be
made by such Party pursuant to applicable law, including the
federal securities laws, or as may be required by any national
securities exchange.
(c) Purchase by Buyer's Subsidiary or Affiliate
The parties acknowledge that Buyer itself may not
purchase the Shares, but that a subsidiary or an affiliate of
Buyer may purchase the Shares. It shall be Buyer's obligation
and cost to so establish and/or designate the corporate entity to
purchase the Shares. ESC agrees to sell the Shares to said
corporate entity.
(d) Further Assurances
Subject to the terms and conditions of this Agreement,
each of the Parties hereto will use its best efforts to take, or
cause to be taken, all action, and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the sale of the
Shares pursuant to this Agreement, including without limitation
using its best efforts to ensure satisfaction of the conditions
precedent to each party's obligations hereunder. Neither of the
Parties hereto will, without prior written consent of the other
party, take or fail to take any action, which would reasonably be
expected to prevent or materially impede, interfere with or delay
the transactions contemplated by this Agreement. From time to
time after the date hereof, the Buyer will, at its own expense,
execute and deliver such documents to the Seller as the Seller
may reasonably request in order to consummate more effectively
the sale of the Shares pursuant to this Agreement.
ARTICLE VIII - CONDITIONS PRECEDENT
8.01 Preamble
The respective obligations set forth herein of the Seller
and the Buyer to consummate the transactions contemplated hereby
shall be subject to the fulfillment, on or before the Closing
Date, of the conditions set forth in Section 8.02, in the case of
the Seller, and of the conditions set forth in Section 8.03, in
the case of the Buyer. Any of the following conditions may be
waived in whole or in part by the Party who is to receive the
benefit of the obligation to be performed.
8.02 Conditions to Obligations of the Seller
(a) Representations and Warranties of the Buyer
The representations and warranties of the Buyer in
Article V shall be true and correct when made and shall be true
and correct at and as of the Closing with the same effect as
though made at and as of the Closing. The Buyer shall have duly
performed and complied with all agreements and covenants
contained herein required to be performed or complied with by it
at or before the Closing.
(b) Officer's Certificate
The Buyer shall have delivered to the Seller a
certificate dated as of the Closing Date and signed by its
Chairman, President or a Vice President as to the fulfillment of
the conditions set forth in Section 8.02 hereof.
(c) Opinion of Counsel
The Seller shall have received from counsel for the
Buyer an opinion substantially in the form attached hereto as
Exhibit 8.02(c).
(d) Regulatory Approval
All regulatory authorizations, including those recited
in Section 7.03(a) hereof,
required for the consummation of the transactions contemplated by
this Agreement shall have been received and shall be final
(appeal period expired).
(e) Consents
Any and all consents, permits, approvals and other
actions of any person,
jurisdiction or authority required for the lawful transfer to the
Buyer of the Shares shall have been obtained, and shall be in
full force and effect.
(f) Absence of Litigation
No order, stay, judgment or decree shall have been
issued and be in effect by any court restraining or prohibiting
the Closing and no action, suit or proceeding shall
be pending (or threatened by any governmental or
regulatory body) seeking to restrain or prohibit (or
questioning the validity or legality of the consummation of
the transactions, contemplated by this Agreement or seeking
damages in connection therewith, provided that before making any
determination that this condition is not satisfied, Seller shall
use its reasonable best efforts at its own expense to have such
order, stay, judgment or decree lifted or dismissed and any such
suit, action or proceeding dismissed or terminated, all on the
condition that such are not reasonably likely to have a Material
Adverse Effect on the transaction.
8.03 Conditions to Obligations of the Buyer
(a) Representations and Warranties of the Seller
The representations and warranties of the Seller in
Article IV shall be true and correct when made and shall be true
and correct at and as of the Closing with the same effect as
though made at and as of the Closing. The Seller shall have
duly performed and complied with all agreements and covenants
contained herein required to be performed or complied with by
it at or before the Closing.
(b) Officer's Certificate
The Seller shall have delivered to the Buyer a
certificate, dated the Closing Date and signed by its Chairman,
President or any Vice President, as to the fulfillment of the
conditions set forth in Section 8.03 hereof.
(c) Opinion of Counsel
The Buyer shall have received from counsel for the
Seller an opinion substantially in the form attached hereto as
Exhibit 8.03(c).
(d) Regulatory Approval
All regulatory authorizations, including those recited
in Section 7.03(a) hereof,
required for the consummation of the transactions contemplated by
this Agreement shall have been received and shall be final
(appeal period expired).
(e) Consents
Any and all consents, permits, approvals and other
actions of any person, jurisdiction or authority required for the
lawful transfer to the Buyer of the Shares shall have been
obtained and final, and shall be in full force and effect.
(f) Absence of Litigation
No order, stay, judgment or decree shall have been
issued and be in effect by any court restraining or prohibiting
the Closing; and no action, suit or proceeding shall be
pending (or threatened by any governmental or regulatory body)
seeking to restrain or prohibit or question the validity or
legality of the consummation of the transactions contemplated
by this Agreement or seeking material damages in connection
therewith, provided that before making any determination that
this condition is not satisfied, Buyer shall use its
reasonable best efforts at its own expense to have such
order, stay, judgment or decree lifted or dismissed and any such
suit, action or proceeding dismissed or terminated, all on the
condition that such are not reasonably likely to have a Material
Adverse Effect on the transaction.
ARTICLE IX - CLOSING AND SETTLEMENT
9.01 Closing
The Closing will take place at a mutually agreeable location
on the Closing Date. At the Closing the following events shall
occur, each event being deemed to have occurred simultaneously
with the other events and none of the events being deemed to
occur until all such events occur:
(a) The Buyer will pay the Purchase Price to the Seller by
wire transfer in lawful money of the United States of America to
such account as the Seller shall have designated by notice to the
Buyer; and
(b) The Seller shall endorse and deliver all certificates
representing the Shares.
ARTICLE X - TERMINATION
10.01 Termination
This Agreement and the transactions contemplated hereby may
be terminated and abandoned upon the occurrence of any of the
following:
(a) At any time prior to the Closing Date by mutual consent
of the Buyer and the Seller; or
(b) By the Buyer or the Seller at any time after 18 months
after the date of this Agreement if Closing has not occurred; or
(c) By the adversely affected Party at any time after an
order previously issued by any regulatory agency having
jurisdiction has become final and non-appealable, if such order,
when it becomes final and non-appealable, disapproves the
transactions contemplated by this Agreement; or
(d) By an adversely affected Party, at any time after
eighteen (18) months following the issuance of any order relating
to the transactions contemplated by this Agreement by a
regulatory agency having jurisdiction, if such order has not
become final or if any appeal taken against such order remains
pending; or
(e) By the adversely affected Party, at any time after the
date two (2) months following the issuance of the last regulatory
authorization required for the consummation of the transactions
contemplated by this Agreement to occur at Closing, if one or
more conditions precedent to the terminating Party's obligations
as set forth in Section VIII, other than the obtaining of
required regulatory authorizations, shall have been and remains
unfulfilled; or
(f) By Buyer upon the occurrence prior to Closing of a
Material Adverse Change.
The power of termination and abandonment of the transactions
contemplated by this Agreement pursuant to this Section 10.01 may
be exercised by the Seller only after authorization by the Board
of Directors of the Seller or by the Buyer only after
authorization by the Board of Directors of the Buyer, and will be
effective only after written notice thereof, signed on behalf of
the Party for which it is given by a duly authorized officer,
shall have been given to the other Party hereto. In the event
this Agreement is terminated, through no fault of Buyer, pursuant
to this Section 10.01, Seller shall, within ten (10) business
days, refund the ▇▇▇▇▇▇▇ Deposit, together with Interest thereon
accrued at the Interest Rate and compounded annually, to Buyer.
10.02 Limitation on Right to Terminate; Effect of Termination
(a) A Party shall not be allowed to exercise any right of
termination pursuant to Section 10.01 if the event giving rise to
the termination right shall be due to the failure of such Party
seeking to terminate this Agreement to perform or observe in any
material respect any of the covenants or agreements hereof to be
performed or observed by such Party.
(b) If this Agreement is terminated as permitted under
Section 10.01 hereof, this Agreement shall thereafter become void
and have no effect and no Party shall have liability to any
Party, or any shareholder, director, officer, employee, agent,
servant, consultant or representative of such Party except for
the obligations of the parties hereto contained in this Section
10.02(b), 10.02(c), 13.03; provided, however, that if such
termination shall result from the failure of any Party to fulfill
a condition to the Closing or to perform a covenant of this
Agreement or from a breach of this Agreement by any Party
thereto, then such Party shall be fully liable for any and all
direct and indirect costs, not including consequential damages,
sustained or incurred by the other Party, provided, however that
if a Party elects to terminate this Agreement pursuant to Section
10.01 (c), such Party shall reimburse the other Party for its out
of pocket costs.
ARTICLE XI - MISCELLANEOUS
11.01 Modification; Waiver
This Agreement may be modified, amended or supplemented only by a
written instrument executed by the Buyer and the Seller. The
failure of either Party to enforce or insist upon compliance with
any of the terms or conditions of this Agreement shall not
constitute a general waiver or relinquishment of any such terms
or conditions, but the same shall be and remain at all times in
full force and effect.
11.02 Entire Agreement
This Agreement, including the Schedules and Exhibits hereto,
constitute the entire agreement of the Parties hereto with
respect to the subject matter hereof and supersedes
any and all other prior understandings, contracts or
agreements, representations or warranties, oral or
written, among the Parties hereto in respect of the subject
matter of this Agreement.
11.03 Expenses
Whether or not the transactions contemplated herein shall be
consummated, each Party shall (except as otherwise specifically
provided herein) pay its own expenses incident to the preparation
and performance of this Agreement, including broker's fees and
commissions.
11.04 Rights and Remedies
The rights and remedies granted under this Agreement shall
not be exclusive rights and remedies, but shall be in addition to
all other rights and remedies available at law or in equity.
11.05 Further Actions
Each Party shall execute and deliver such other
certificates, agreements, conveyances, certificates of title
and other documents and take such other actions as may
reasonably be requested by the other Party in order to
consummate or implement the transaction contemplated by
this Agreement.
11.06 Notices
All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed, registered mail, first-class
postage paid,
If to the Seller:
▇▇. ▇▇▇▇ ▇▇▇▇, President
Energy Corporation of America
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ , ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Copies to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ , ▇▇ ▇▇▇▇▇
If to the Buyer:
Allegheny Energy, Inc.
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Director
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Copies to:
Allegheny Power
Attn: ▇▇▇▇ ▇. ▇▇▇▇, Senior Attorney
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
11.07 Assignment
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, by operation of law or
otherwise, by any Party hereto without the prior written consent
of the other Party, except as set forth in Section 7.03(c). This
Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the Parties hereto and their
respective successors and permitted assigns. Except as
aforesaid, nothing in this Agreement, express or implied, is
intended to confer upon any person other than the Parties hereto
and their said successors and assigns, any rights, remedies or
obligations under or by reason of this Agreement.
11.08 Severability
If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions
contemplated hereby is not affected in any adverse manner to
either Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the
Parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as
closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent
possible.
11.09 Counterparts
This Agreement may be executed in one or more counterparts,
all of which shall constitute one and the same instrument.
11.10 Headings
The article and section headings in this Agreement are for
convenience of reference only and shall not be deemed to alter or
affect the meaning or interpretation of any provisions hereof.
11.11 Governing Law; Waiver of Jury Trial
This Agreement shall be construed, performed and enforced in
accordance with the laws of the State of West Virginia.
11.12 Construction
The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any item disclosed in Seller's
Disclosure Schedule under any specific Section number thereof or
disclosed in reference to any specific Section hereof, shall be
deemed to have been disclosed by Seller for all purposes of this
Agreement in response to other Sections of the Seller's
Disclosure Schedule to the extent that such disclosure is
specifically cross-referenced to such other Section(s).
11.13 Section 338 (h)(10) Election
(a) Seller is a member of an "affiliated group" of
corporations (as defined in 1504(a) of the Code), which includes
Seller and Mountaineer. Such "affiliated group" of corporations
is referred to herein as the "Seller Group" and ECA is the common
parent (as also defined in 1504(a) of the Code.)
(b) The Seller and Buyer will make a joint election pursuant to
338 (h)(10) of the Code and analogous provisions of state income
tax law for both federal and state income tax (where permissible)
purposes with respect to the purchase of the shares whereby (i)
Mountaineer will be treated as having sold all of its assets in a
single transaction as of the close of business on the Closing
Date while a member of the Seller Group; and (ii) no gain or loss
will be recognized to the Seller with respect to the sale of the
shares. The election will include the execution and subsequent
filing of Internal Revenue Service Form 8023 and the analogous
state income tax forms pursuant to the requirements stated
therein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
Attest: SELLER
ENERGY CORPORATION OF AMERICA
By: By:
Its: Its:
SELLER
EASTERN SYSTEMS CORPORATION
By: By:
Its: Its:
BUYER
ALLEGHENY ENERGY, INC.
By: By:
Its: Its: