ASSET PURCHASE AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

1.1.            Transfer of Acquired Assets .  At the Closing, and upon the terms and conditions herein set forth, Seller shall sell to Buyer, and Buyer shall acquire from Seller, all of Seller’s right, title and interest in, to and under the Acquired Assets free and clear of all Liens, claims and other interests (except for Permitted Liens and Assumed Liabilities) pursuant to sections 105, 363 and 365 of the Bankruptcy Code. “ Acquired Assets ” shall mean solely the following property, but shall exclude the Excluded Assets:

 

(a)   the real property owned by Seller and listed on Schedule   1.1(a)   of the disclosure schedules accompanying this Agreement (the “ Disclosure Schedules ”), together with any Improvements owned by Seller erected thereon (the “ Owned Real Property ”);

 

(b)   all of Seller’s rights under the leases of real property (the “ Real Estate Leases ”) listed on Schedule   1.1 (b)   of the Disclosure Schedules (the real property leased by Seller pursuant to the Real Estate Leases, the “ Leased Real Property ”);

 

(c)   all of Seller’s rights under the easements, rights of way, real property licenses, and other real property entitlements listed on Schedule   1.1 (c) of the Disclosure Schedules (the “ Entitled Real Property ” and, together with the Owned Real Property and the Leased Real Property, the “ Real Property ”);

 

(d)   all of (i) Seller’s owned equipment , spare parts, machinery, furniture, fixtures, and other personal property used exclusively in the Power Plant, located on the Real Property or listed on Schedule 1.1 (d) (the “ Equipment ”); and (ii) any rights of Seller, to the extent transferable, to the warranties and licenses received from manufacturers and sellers of the Equipment (if any);

 

(e)   all of Seller’s rights under outstanding purchase orders or other similar Contracts used exclusively in connection with the Power Plant entered into by Seller with any supplier that are listed on Schedule 1.1 (e) of the Disclosure Schedules (“ Supplier Contracts ”);

 

(f)   all of Seller’s rights under the Contracts (including rights to transmission credits, if any), and Contracts with respect to the development of the Power Plant that are listed on Schedule   1.1 (f) of the Disclosure Schedules (the “ Other Contracts ” and, together with the Real Estate Leases, and the Supplier Contracts, the “ Assigned Contracts ”);

 

(g)   all (i) inventories of chemicals and gases, supplies, materials and spares located at or in transit to the Real Property and owned by Seller on the Closing Date that are used exclusively for the Power Plant or as listed on Schedule   1.1 (g)   (the “ Inventory ” ) and (ii) any rights of Seller, to the extent transferable, to the warranties received from suppliers with respect to such Inventory;

 

(h)   any computer software or systems located at the Owned Real Property and owned exclusively by Seller and licenses held exclusively by Seller including, but not limited to, Seller’s Target Solutions inventory control software, solely to the extent transferable, in each case that pertain solely to the Power Plant;

 

(i)   to the extent transferable under applicable Law, all rights of Seller under the permits , authorizations, approvals, registrations, and licenses relating exclusively to the Power Plant issued by any Government (and pending applications for the foregoing) listed on Schedule 1.1 (i) of the Disclosure Schedules (“ Permits ”);

 

(j)   copies, including copies in electronic form, of all Business Records, including engineering plans and contracts for the development of the Power Plant;  documents, blueprints, as built plans, specifications, quality assurance records, inventory records, purchasing reports, and equipment repair, maintenance and service records of Seller relating to the design, construction, licensing or operation of the Power Plant, operating safety and maintenance manuals, inspection reports and environmental assessments.

 

(k)   rights to and goodwill represented by the name Fremont Energy Center; provided, that nothing in this Section 1.1 (k) will give Buyer any rights to any name that includes a Calpine Mark;

 

(l)   all assets to be acquired by Buyer pursuant to this Agreement.

 

(m)    the Power Plant, and

 

(n)    if any, Seller’s rights to any Emissions Allowances relating to the Power Plant.

 

1.2.                      Excluded Assets .  Notwithstanding anything to the contrary in this Agreement, the Acquired Assets are the only properties and assets transferred to Buyer under this Agreement.  Without limiting the generality of the foregoing, the Acquired Assets do not include (i) any right, title or interest of any Person other than Seller in any property or asset, and (ii) the properties and assets of Seller listed or described in this Section 1.2 (all properties and assets not being acquired by Buyer are herein referred to as the “ Excluded Assets ”):

 

(a)   all of Seller’s cash and cash equivalents, marketable securities, prepaid expenses, advance payments, surety accounts, deposits and other similar prepaid items (including for the purchase of natural gas);

 

(b)   all of Seller’s accounts and notes receivable as of 11:59 p.m. (local time) on the Closing Date, if any (the “ Accounts Receivable “);

 

(c)   assets, property and other rights held or owned by Calpine and its Affiliates that is (i) not located on the Real Property and (ii) is not used exclusively by Seller in the development or   operation of the Power Plant;

 

(d)   forecasts, financial information or financial statements and proprietary manuals (except rights to use manuals specific to and necessary for the operation of the Power Plant) prepared by or used by Seller or its Affiliates to the extent not relating exclusively to the Power Plant;

 

(e)   all of Seller’s rights under Contracts that are not Assigned Contracts;

 

(f)   all rights to Claims, refunds or adjustments, and all other refunds or adjustments with respect to Excluded Assets relating to any proceeding before any Government relating to the period prior to the Closing and all rights to insurance proceeds or other insurance recoveries (i) that relate to, or are reimbursement for, Seller’s or Seller’s Affiliate’s expenditures made prior to the Closing Date or (ii) to the extent relating to Excluded Assets or Excluded Liabilities;

 

(g)   any asset of Seller that would constitute an Acquired Asset (if owned by Seller on the Closing Date) that is conveyed or otherwise disposed of during the period from the date hereof until the Closing Date either (i) at the direction of the Bankruptcy Court or (ii) as otherwise permitted by the terms of this Agreement;

 

(h)   all losses, loss carry forwards and rights to receive refunds, credits and loss carry forwards with respect to any and all Taxes of Seller incurred or accrued on or prior to the Closing Date, including interest receivable with respect thereto;

 

(i)   any and all rights, demands, claims, credits, allowances, rebates, causes of action, known or unknown, pending or threatened (including all causes of action arising under sections 510, 544 through 551 and 553 of the Bankruptcy Code or under similar state Laws including fraudulent conveyance claims, and all other causes of action of a trustee and debtor-in-possession under the Bankruptcy Code) or rights of set-off (collectively, “ Claims ”), of Seller or any Affiliate of Seller arising out of or relating to events prior to the Closing Date (except to the extent relating to the Assumed Liabilities), including but not limited to Claims arising out of or relating in any way to the Chapter 11 Case or any of the transactions contemplated thereby or entered into as a consequence thereof, including any claims (as defined in section 101(5) of the Bankruptcy Code) filed, scheduled or otherwise arising in the Chapter 11 Case;

 

(j)   all shares of capital stock or other equity interests of Seller and all Affiliates of Seller;

 

(k)   all rights of Seller arising under this Agreement and under any other agreement between Seller and Buyer entered into in connection with this Agreement;

 

(l)   all rights to or goodwill represented by or pertaining to all names, marks, trade names, trademarks and service marks incorporating the name Calpine or any other name set forth on Schedule 1.2(l) ( the “ Calpine Marks ”) and any brand names or derivatives thereof no matter how used, whether as a corporate name, domain name or otherwise and including the corporate design logo associated with any Calpine Mark or variant of any Calpine Mark other than Fremont Energy Center;

 

(m)    all rights under any Contract, except an Assigned Contract, that has been guaranteed by Seller or an Affiliate of Seller or to which Seller is a party;

 

(n)   all rights under any Contract, except an Assigned Contract, that is, at the time of Closing, secured by any collateral owned by Seller’s Affiliates, Excluded Assets, or letters of credit;

 

(o)   all Retained Books and Records;

 

(p)   all of Seller’s rights to recovery of collateral given to obtain letters of credit and rights to recover amounts drawn or paid on letters of credit;

 

(q)   all amounts due to Seller from any Affiliate of Seller and all rights and Claims of Seller against any Affiliate of Seller; and

 

(r)   any assets set forth on Schedule   1.2(r)   of the Disclosure Schedules.

 

1.3.                   Assumption of Liabilities .  At the Closing, Buyer shall assume, and Buyer shall hereafter pay, perform and discharge when due, the liabilities and obligations of Seller related to the Power Plant as listed below (collectively, the “ Assumed Liabilities ”):

 

(a)   all liabilities and obligations of Seller under the Assigned Contracts arising after the Closing Date and the cure costs for such Assigned Contracts as set forth on Schedule 7.4 ;

 

(b)   all liabilities and obligations of Seller under the Permits arising after the Closing Date;

 

(c)   to the extent provided in Article 10, all liabilities and obligations of Seller for Transaction Taxes payable in connection with the transactions contemplated by this Agreement;

 

(d)   to the extent provided in Article 10, all liabilities and obligations for real estate Taxes and assessments with respect to the Acquired Assets that are not yet due and payable and all liabilities and obligations for any Taxes relating to the Acquired Assets for periods after the Closing Date;

 

(e)   all liabilities and obligations of Seller, any of its Affiliates or any of their respective Related Persons arising under or relating to any environmental, health or safety matter (including any liability or obligation arising under any Environmental Law) relating to the Power Plant and the Acquired Assets arising after the Closing Date; and

 

(f)   all liabilities and obligations relating to or arising from the completion of construction or the ownership of the Power Plant and the Acquired Assets after the Closing Date.

 

1.4.                    Excluded Liabilities shall retain the following liabilities (the “ Excluded Liabilities ”) (i) all liabilities and obligations with respect to accounts payable (other than those under the Assigned Contracts) arising in connection with the Acquired Assets and in existence at 11:59 p.m. (local time) on the Closing Date (the “Accounts Payable”), (ii) liabilities directly and solely arising in connection with Excluded Assets, (iii) liabilities related to employees and former employees (except as provided in Section 7.7), (iv) liabilities which are not Assumed Liabilities, and (v) those listed on Schedule 1.4 of the Disclosure Schedules.

 

1.5.                   Non-Assignment of Assigned Contracts .  Anything contained herein to the contrary notwithstanding, (i) this Agreement shall not constitute an agreement to assign any Assigned Contract if, after giving effect to the provisions of sections 363 and 365 of the Bankruptcy Code, an attempted assignment thereof, without obtaining a Consent, would constitute a breach thereof or in any way negatively affect the rights of Seller or Buyer, as the assignee of such Assigned Contract and (ii) no breach of this Agreement shall have occurred by virtue of such nonassignment.  If, after giving effect to the provisions of sections 363 and 365 of the Bankruptcy Code, such Consent is required but not obtained, Seller shall, at Buyer’s sole cost and expense, cooperate with Buyer in any reasonable arrangement, including Buyer’s provision of credit support, designed to provide for Buyer the benefits and obligations of or under any such Assigned Contract, including enforcement for the benefit of Buyer of any and all rights of Seller against a third party thereto arising out of the breach or cancellation thereof by such third party; provided, that nothing in this Section 1.5 shall (x) require Seller to make any significant expenditure or incur any significant obligation on its own or on Buyer’s behalf or (y) prohibit Seller from ceasing operations or winding up its affairs following the Closing.  Any assignment to Buyer of any Assigned Contract that shall, after giving effect to the provisions of sections 363 and 365 of the Bankruptcy Code, require the Consent of any third party for such assignment as aforesaid shall be made subject to such Consent being obtained.  Any contract that would be an Assigned Contract but is not assigned in accordance with the terms of this Section 1.5 shall not be considered an “Assigned Contract” for purposes hereof unless and until such contract is assigned to Buyer following the Closing Date upon receipt of the requisite consents to assignment and Bankruptcy Court approval.

 

 

 

2.1.            Consideration .  The aggregate consideration for the sale and transfer of the Acquired Assets shall be (a) $253,600,000 in cash (the “ Purchase Price ”), which price is payable and deliverable at the Closing in accordance with Section 3.3   and (b) the assumption by Buyer of the Assumed Liabilities.

 

2.2.            Deposits .  Buyer and Seller have executed and delivered the Purchase Notice, and Buyer has deposited with the Escrow Agent $12,400,000 (the “ Deposit ”).  The Deposit shall be held and disbursed pursuant to the terms of the Master Escrow Agreement, the Purchase Notice, and this Agreement.

 

2.3.            Guaranty .  On the date hereof, the Guarantor has executed and delivered to Seller the Guaranty substantially in the form of Exhibit A hereto.

 

 

 

3.1.            Closing .  The consummation of the transactions contemplated hereby (the “ Closing ”) shall take place at the offices of Kirkland & Ellis LLP, 153 East 53rd Street, New York, New York at 10:00 a.m. EST on the third Business Day following the satisfaction or waiver by the appropriate party of all the conditions contained in Article 11 hereof, or on such other date or at such other place and time as may be agreed to by the parties hereto (the “ Closing Date ”).  The Closing will be deemed to be effective at 11:59 p.m. (local time) on the Closing Date.

 

3.2.            Seller’s Deliveries

 

(a)   The sale, transfer, assignment and delivery by Seller of the Acquired Assets to Buyer, as herein provided, shall be effected on the Closing Date.  At the Closing, Seller shall deliver to Buyer the following documents which shall be consistent with the terms of this Agreement:

 

(i)   a bill of sale with respect to the Acquired Assets (other than the Assigned Contracts, Permits, Real Property and assets set forth in Sections 1.1(d)(ii) and 1.1(g)(ii)), duly executed by Seller and in the form of Exhibit B-1 hereto

 

(ii)   an assignment and assumption agreement with respect to the Assigned Contracts and Assumed Liabilities, duly executed by Seller and in the form of Exhibit B-2 hereto;

 

(iii)   the Business Records (it being understood that any Business Records located at the Power Plant need not be physically delivered, but shall be deemed delivered at the Closing), provided that, for any Business Records not located at the Power Plant, Seller shall be entitled to deliver such Business Records to Buyer promptly after the Closing Date;

 

 

(iv)   the deeds with respect to the Owned Real Property, duly executed by Seller and in the form of Exhibit B-3 hereto;

 

(v)   an assignment and conveyance agreement with regard to the Real Estate Leases, duly executed by Seller and in the form of Exhibit B-4 hereto;

 

(vi)   a secretary’s certificate certifying as to the resolutions of the board of directors of Seller approving and authorizing this Agreement and the transactions contemplated by this Agreement and in the form of Exhibit B-5 hereto;

 

(vii)   an affidavit of non-foreign status that complies with section 1445 of the Code, duly executed by Seller and in the form of Exhibit B-6 hereto.  

 

(b)   Notwithstanding anything in this Agreement or any Ancillary Agreement to the contrary, Seller’s obligation to convey to Buyer all rights of Seller under the Permits listed on Schedule 1.1(i) shall consist of providing: (i) if required by Law, notices of intent to transfer the Permit to Buyer in accordance with the Government regulations governing such Permit transfer, (ii) information as required by the Government regulations governing such Permit transfer and (iii) assistance to Buyer in obtaining the transfer of such Permits in accordance with Section 6.7 .

 

3.3.            Buyer’s Deliveries .  On the Closing Date, in payment for the Acquired Assets:

 

(a)   the Escrow Agent shall pay to Seller the Deposit in accordance with the terms of the Master Escrow Agreement and the Purchase Notice, by wire transfer of immediately available funds to a bank account designated by Seller in writing to Buyer (the “ Seller’s Account ”);

 

(b)   Buyer shall pay to Seller the Purchase Price, reduced by the amount of the Deposit paid pursuant to Section   3.3 (a) , by wire transfer of immediately available funds to Seller’s Account;

 

(c)   Buyer shall execute and deliver to Seller an instrument of assumption of liabilities with respect to the Assumed Liabilities substantially in the form of the Assumption Agreement attached as Exhibit B-2 hereto; and

 

(d)   Buyer shall execute and deliver to Seller an assignment and conveyance agreement with regard to the Real Estate Leases, in the form of Exhibit B-4 hereto.

 

 

 

 

4.1.             Corporate Organization .  Seller is duly organized and validly existing under the Laws of the jurisdiction of its organization.  Subject to any necessary authority from the Bankruptcy Court, Seller has all requisite power and authority to own its properties and assets and to conduct its business as now conducted and to perform all of its obligations under this Agreement.

 

4.2.            Authorization and Validity .  Subject to the Bankruptcy Court’s entry of the Sale Order and the receipt of the Consents set forth on Schedule  4.4 of the Disclosure Schedules, Seller has all requisite power and authority to enter into this Agreement and the Purchase Notice to which it is or will be a party and, to carry out its obligations hereunder and thereunder.  Subject to the entry of the Sale Order, the execution and delivery of this Agreement and the Purchase Notice and the performance by Seller of its obligations hereunder and thereunder have been duly authorized by all necessary action by the board of directors of Seller, and no other proceedings on the part of Seller are necessary to authorize such execution, delivery and performance.  This Agreement and the Purchase Notice have been duly executed by Seller and, subject to the Bankruptcy Court’s entry of the Sale Order, constitutes its valid and binding obligation, enforceable against it in accordance with the terms herein and therein.

 

4.3.            No Conflict or Violation .  Subject to (a) the receipt of all Consents set forth on Schedule  4.4 of the Disclosure Schedules and (b) the Bankruptcy Court’s entry of the Sale Order, the execution, delivery and performance by Seller of this Agreement do not and will not (i) violate or conflict with any provision of the bylaws or certificate of incorporation (or equivalent organizational documents) (collectively, the “ Organizational Documents ”) of Seller, (ii) violate any provision of law, regulation, rule or other legal requirement of any Government (“ Law ”) or any order, judgment or decree of any court or Government (“ Order ”) applicable to Seller, or (iii) violate or result in a breach of or constitute (with due notice or lapse of time or both) a default under any Assigned Contract, which violation, conflict, breach or default in any such case would reasonably be expected to have a Material Adverse Effect.  

 

4.4.            Governmental Consents and Approvals .   Schedule  4.4  of the Disclosure Schedules sets forth a true and complete list of each Consent and each declaration to or filing or registration with any Government that is required in connection with the execution and delivery of this Agreement and the Purchase Notice by Seller or the performance by Seller of its obligations hereunder or thereunder, the failure of which to obtain would reasonably be expected to have a Material Adverse Effect.

 

 

4.6                                 L itigation .  As of the date of this Agreement and except as set forth on Schedules  4.6  or 4.9   of the Disclosure Schedules, there are no Claims, suits or proceedings pending or, to the Knowledge of Seller, threatened in writing, before any Government brought by or against Seller that, if adversely determined, could reasonably be expected to have a Material Adverse Effect or materially impair the ability of Seller to consummate the transactions contemplated by this Agreement.

 

                 4.7.            Material Contracts

4.8.            Permits .   Schedule  4.8 (a) of the Disclosure Schedules sets forth a complete and correct list of all material Permits and all pending applications therefor obtained by Seller in connection with the Power Plant or the Acquired Assets.  As of the date of this Agreement, except as set forth on Schedule 4.8 (b) and as would not reasonably be expected to have a Material Adverse Effect, each such Permit is valid and in full force and effect, and is not subject to any pending or, to Seller’s Knowledge, threatened administrative or judicial proceeding to revoke, cancel, suspend or declare such Permit invalid in any respect.

 

 

 

 

 

4.10.                             Owned Real Property .   Schedule  1.1(a)  of the Disclosure Schedules sets forth a complete and correct list of all material real property owned in whole or in part (and states the ownership percentage of all partially owned real property) by Seller and used in connection with the operation of the Power Plant.  Seller has made available to Buyer, to the extent within Seller’s possession or control, a copy of all certificates of occupancy for the Owned Real Property and a copy of any variance granted with respect to the Owned Real Property pursuant to applicable zoning laws or ordinances, all of which documents are true and complete copies thereof.  Seller has made available to Buyer all material existing surveys or topographical maps for the Owned Real Property, title policies , engineering reports and Environmental Reports in Seller’s possession or control.

 

4.11.                             Employee Benefits .  Set forth on Schedule 4.11 of the Disclosure Schedules is a list of all Employee Benefit Plans which Seller maintains or to which Seller contributes for the Employee.

 

4.12.                       Insurance .  All material policies of property, damage, fire, liability, workers’ compensation and other forms of insurance owned or held by Seller and insuring the Acquired Assets are in full force and effect, all premiums with respect thereto covering the periods up to the date as of which this representation is being made have been paid, and no written notice of cancellation, non-renewal or termination has been received with respect to any such policy which has not replaced on substantially similar terms prior to the date of such cancellation.

 

4.13.                             Utilities .  Seller has no Knowledge of and has not received any notice of the curtailment of any utility service supplied to the Real Property.  Except as set forth on Schedule 4.13, to Seller’s Knowledge, all water and all electrical, telecommunication, sanitary and storm sewer and drainage lines, systems and hook ups located upon, under, at or adjacent to the Real Property necessary for the operation of the facilities as currently contemplated and for construction of the Power Plant are installed and connected under valid permits.

 

 

 

 

5.1.            Corporate Organization .  Buyer is an Ohio corporation, duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation, and has all requisite power and authority to own its properties and assets and to conduct its business as now conducted.

 

5.2.                    Authorization and Validity .  Buyer has all requisite power and authority to enter into this Agreement and to execute and deliver the Purchase Notice and to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement and the Purchase Notice and the performance of Buyer’s obligations hereunder and thereunder have been duly authorized by all necessary action by the board of directors of Buyer, and no other proceedings on the part of Buyer are necessary to authorize such execution, delivery and performance.  This Agreement and the Purchase Notice have been duly executed by Buyer and constitutes its valid and binding obligation, enforceable against it in accordance with the terms herein and therein, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting or relating to the enforcement of creditors’ rights generally and subject, as to enforceability, to general principles of equity.

 

5.3.            No Conflict or Violation .  The execution, delivery and performance by Buyer of this Agreement and the execution and delivery of the Purchase Notice does not and will not violate or conflict with any provision of the Organizational Documents of Buyer and does not and will not violate any provision of Law, or any Order applicable to Buyer, nor will it result in a breach of or constitute (with due notice or lapse of time or both) a default under any Material Contract to which Buyer is a party or by which it is bound or to which any of its properties or assets is subject.

 

5.4.            Consents, Approvals and Notifications .  The execution, delivery and performance of this Agreement and the Purchase Notice by Buyer does not require the Consent of, or filing with or notification of, any Government or any other Person except:  (a) for the Regulatory Approvals listed on Schedule 11.1(b) of the Disclosure Schedules; (b) for entry of the Sale Order by the Bankruptcy Court; or (c) for such Consents and filings, the failure to obtain or make would not reasonably be expected to have a material adverse effect on the ability of Buyer to consummate the transactions contemplated hereby.

 

5.5.            Availability of Funds .  Buyer (a) has, and on the Closing Date will have, sufficient funds available to finance and consummate the transactions contemplated by this Agreement.

 

5.6.                    Adequate Assurances Regarding Assigned Contracts .  Buyer is and will be capable of satisfying the conditions contained in sections 365(f)(2)(B) of the Bankruptcy Code with respect to the Assigned Contracts.

 

5.7.                                Licenses, Permits, etc.   Buyer has, or will have as of the Closing Date, all licenses, permits, franchises and authority, whether from a Government or otherwise, including Regulatory Approvals, and has provided any requisite notice to customers necessary to purchase the Acquired Assets and to assume the Assumed Liabilities.

 

5.8.                                Investigation by Buyer .  Buyer has conducted its own independent review and analysis of (i) the Acquired Assets and the Power Plant (including the business, operations, technology, financial condition and prospects related to the operation of the Acquired Assets and the Power Plant), (ii) the Assumed Liabilities and (iii) the value of such Acquired Assets. Buyer acknowledges that Seller has provided Buyer with access to the personnel, properties, premises and records of the Acquired Assets for this purpose.  Buyer has conducted its own independent review of all Orders of, and all motions, pleadings, and other submissions to, the Bankruptcy Court in connection with the Chapter 11 Case.  Buyer acknowledges that the price being paid under this Agreement for the Acquired Assets is the fair value for acquiring the Acquired Assets under the circumstances and that such value, rather than replacement cost, is the appropriate measure of damages if and to the extent Buyer may have had any recourse for any failure to deliver the Acquired Assets in accordance with the terms of this Agreement.  In entering into this Agreement, Buyer has relied solely upon its own investigation and analysis, and Buyer acknowledges that (a) neither Seller nor any of its Related Persons or Affiliates makes or has made any representation or warranty, either express or implied, as to the accuracy or completeness of any of the information provided or made available to Buyer or any of its Related Persons or Affiliates, except as and only to the extent expressly set forth in Article 4  (which are subject to the limitations and restrictions contained in this Agreement), and (b) to the fullest extent permitted by Law, neither Seller nor any of its Related Persons or Affiliates shall have any liability or responsibility whatsoever to Buyer or its Related Persons or Affiliates on any basis (including in contract or tort, under securities Laws or otherwise) based upon any information provided or made available, or statements made, to Buyer or Related Persons or Affiliates (or any omissions therefrom), including in respect of the specific representations and warranties of Seller set forth in this Agreement, except, with regard to Seller, as and only to the extent expressly set forth in Article 4  (which are subject to the limitations and restrictions contained in this Agreement).  Buyer has no knowledge of any condition, event or circumstance that constitutes a breach of any representation, warranty or covenant of Seller in this Agreement.

 

 

 

 

6.1.             Actions Before Closing .  Seller shall use commercially reasonable efforts to perform and satisfy all conditions to Buyer’s obligations to consummate the transactions contemplated by this Agreement that are to be performed or satisfied by Seller under this Agreement.

 

6.2.            Maintenance of Assets Before the Closing Date

 

                      (a)   Without the prior written consent of Buyer or the authorization of the Bankruptcy Court, after notice and a hearing, between the date hereof and the Closing Date, Seller shall not, except as required or expressly permitted pursuant to the terms hereof or of any Ancillary Agreement, (i) make any material change in the Acquired Assets, taken as a whole, or (ii) enter into any material transaction other than in the Ordinary Course of Business consistent with past practices.  Without limitation of the foregoing, except as may be required by the Bankruptcy Court, from the date hereof until the Closing, Seller shall use commercially reasonable efforts to maintain the Acquired Assets in substantially the same manner as conducted by Seller in the Ordinary Course of Business, taking into account business exigencies arising as a result of Seller’s financial condition and status as a filer under Chapter 11 of the Bankruptcy Code.

 

                                      (b)   Without limiting the generality of Section 6.2(a), prior to the Closing Seller shall not, and shall not permit its Affiliates to, without the prior written consent of Buyer: (i) sell, lease or transfer any of the Acquired Assets or parts thereof, (ii) amend, modify, terminate or change in any material respects any Assigned Contract, (iii) fail to maintain in full force and effect insurance policies covering the Acquired Assets, in form and amount consistent with past practice or (iv) grant a consensual Lien (other than a Permitted Lien) on the Acquired Assets.

 

                               (c)   In the event Seller is directed by the Bankruptcy Court to convey or dispose of an asset that would be an Acquired Asset, Calpine shall either provide the proceeds of such asset conveyance to Buyer or reduce the Purchase Price by the fair market value of such asset.

 

6.3.            Sale Order .  Seller shall use commercially reasonable efforts to obtain entry by the Bankruptcy Court of an Order in the form of Exhibit D hereto (the “ Sale Order ”).

 

6.4.            Consents and Approvals .  Seller shall use commercially reasonable efforts to obtain all necessary material consents, waivers, authorizations and approvals of all Governments, and of all other Persons, required to be obtained by Seller in connection with the execution, delivery and performance by them of this Agreement.

 

6.5.             Access to Properties and Records; Confidentiality .  Seller shall afford to Buyer, and to the accountants, counsel and representatives of Buyer, reasonable access during normal business hours throughout the period prior to the Closing Date (or the earlier termination of this Agreement pursuant to Article 12 ) to all books and records of Seller relating to the Acquired Assets and the Power Plant if (w) permitted under Law (x) such books and records are not subject to confidentiality agreements, (y) disclosing such books and records would not adversely affect any attorney client, work product or similar privilege and (z) such books and records do not relate to any confidential proprietary models or other information of Seller or any of its Affiliates pertaining to energy project evaluation, energy or natural gas price curves or projections or other economic or other predictive models.  Upon reasonable prior notice, Seller shall also afford Buyer reasonable access, during normal business hours, to all Acquired Assets throughout the period prior to the Closing Date.  The rights of access contained in this Section  6.5  are granted subject to, and on, the following terms and conditions:  (A) any such investigation shall not include physical testing or samplings; (B) during the period from the date hereof to the Closing Date, all information provided to Buyer or its agents or representatives by or on behalf of Seller or their agents or representatives (whether pursuant to this Section 6.5  or otherwise) shall be governed by and subject to the Confidentiality Agreement, dated as of May 24, 2007, by and among Buyer and  Seller (the “ Confidentiality Agreement ”); (C) such rights of access shall not affect or modify the conditions set forth in Article 11  in any way; and (D) all such rights of access shall be at Buyer’s sole cost, expense and risk; and Buyer shall indemnify Seller for any damages, suits, claims, proceedings, fines, judgments, costs or expenses (including attorneys’ fees and incidental, consequential or punitive damages (collectively, “ Losses ”)) that Seller or any third party may suffer as a result of Buyer’s exercise of its rights under this Section 6.5 ; and (E) Buyer shall comply with and adhere to all of Seller’s safety policies and procedures.

 

6.6.                           Rejection of Assigned Contracts .  Seller shall not reject any Assigned Contracts pursuant to the Chapter 11 Case without the prior written consent of Buyer.

 

6.7.            Further Assurances .  Upon the request and at the sole expense of Buyer at any time before or after the Closing Date, Seller shall execute and deliver such documents and take such actions as Buyer or its counsel may reasonably request to