EX-10. ASSET PURCHASE AGREEMENTAsset Purchase Agreement |
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CINERGY CORP | PSI ENERGY, INC. | THE CINCINNATI GAS & ELECTRIC COMPANY | ALLEGHENY ENERGY SUPPLY COMPANY, LLC | ALLEGHENY ENERGY SUPPLY WHEATLAND | GENERATING FACILITY, LLC | LAKE ACQUISITION COMPANY, L.L.C.. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.kkkk
EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND AMONG
PSI ENERGY, INC.
AND
THE CINCINNATI GAS & ELECTRIC COMPANY
(AS BUYERS)
AND
ALLEGHENY ENERGY SUPPLY COMPANY, LLC,
ALLEGHENY ENERGY SUPPLY WHEATLAND
GENERATING FACILITY, LLC
AND
LAKE ACQUISITION COMPANY, L.L.C.
(AS SELLER PARTIES)
DATED AS OF MAY 6, 2005
TABLE OF CONTENTS
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SCHEDULES
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this “ Agreement ”), dated as of May 6, 2005, by and among PSI Energy, Inc., an Indiana corporation (“ PSI Energy ”), and The Cincinnati Gas & Electric Company, an Ohio corporation (“ CG&E ” and, together with PSI Energy, collectively, the “ Buyers ”), and Allegheny Energy Supply Wheatland Generating Facility, LLC, a Delaware limited liability company and a wholly owned subsidiary of AESC (“ Wheatland LLC ”), Lake Acquisition Company, L.L.C., a Delaware limited liability company and a wholly owned subsidiary of AESC (“ Lake LLC ” and, together with Wheatland LLC, each, individually, a “ Seller ” and, collectively, the “ Sellers ”), and Allegheny Energy Supply Company, LLC, a Delaware limited liability company (“ AESC ” and, together with the Sellers, the “ Seller Parties ”).
W I T N E S S E T H
WHEREAS, Wheatland LLC owns, among other things, a 508-MW (nominal rating) natural gas-fired generating facility located in Wheatland, Indiana (the “ Wheatland Facility ”) and certain other assets associated therewith, and Lake LLC owns certain real property relating to the Wheatland Facility; and
WHEREAS, the Buyers desire to purchase and assume, and the Sellers desire to sell and convey, certain assets and liabilities relating to the Wheatland Facility, upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, representations, warranties and agreements hereinafter set forth, the parties hereto agree as follows:
(a) As used in this Agreement, the following terms have the meanings specified in this Section 1.1(a). For capitalized terms used in this Agreement but not defined in this subsection (a), see subsection (b).(1) “ Affiliate ” has the meaning set forth in Rule 12b-2 of the General Rules and Regulations promulgated under the Exchange Act.(2) “ Allegheny Marks ” means the names and marks “Allegheny Energy” and “Allegheny” together with all derivations and variations thereof, and the Allegheny Energy, Inc. corporate logo, together with all derivations or variations thereof.(3) “ Ancillary Agreements ” means the Deeds, the Bill of Sale, the Assignment and Assumption Agreement, the Sellers Confidentiality Agreement and any other instruments of sale, transfer, conveyance, assignment or assumption as may be required to convey the Acquired Assets in accordance with this Agreement.
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(4) “ Assignment and Assumption Agreement ” means the agreement between the Buyers and the Seller Parties pursuant to which, among other things, the Seller Parties shall assign, and the Buyers shall assume, the Assumed Contracts, in substantially the form attached hereto as Exhibit A .(5) “ Bill of Sale ” means the bill of sale by which the title to the personal property included in the Acquired Assets shall be conveyed by the Sellers to the Buyers, in substantially the form attached hereto as Exhibit B .(6) “ Business Day ” means any day other than Saturday, Sunday and any day that is a legal holiday or a day on which banking institutions in New York City are authorized by Law or other governmental action to close.(7) “ Buyers’ Representatives ” means the accountants, employees, officers, directors, counsel, environmental consultants, financial advisors and other authorized representatives of the Buyers and their Affiliates.(8) “ COBRA ” means the Consolidated Omnibus Reconciliation Act of 1985, as amended, and any similar applicable state Law.(9) “ Code ” means the Internal Revenue Code of 1986, as amended.(10) “ Commercially Reasonable Efforts ” means efforts that are reasonable for a prudent business enterprise in circumstances similar to those of the performing party, but that do not require the performing party to expend funds other than expenditures that are customary and reasonable in transactions of the kind and nature contemplated by this Agreement in order for the performing party to satisfy its obligations under this Agreement.(11) “ Confidentiality Agreement ” means that certain Confidentiality Agreement dated as of October 6, 2004, between Cinergy Corp. and AESC, including any amendments or waivers thereto.(12) “ Credit Agreement ” means that certain Amended and Restated Credit Agreement dated as of October 28, 2004, among AESC, the Lenders and Loan Parties referred to therein, Citicorp North America, Inc., as Administrative Agent, and Citibank, N.A., as Collateral Agent and Intercreditor Agent.(13) “ Deeds ” means special warranty deeds, duly executed by Wheatland LLC and Lake LLC and duly acknowledged, which convey to the Buyers (i) fee simple title to the Owned Real Property and (ii) all of the right, title and interest of the Sellers in and to the Other Real Property Interests, subject, in each case, only to the Permitted Encumbrances, and which shall be in substantially the form attached hereto as Exhibit C and otherwise in a form suitable for recording.(14) “ Due Diligence Materials ” means (i) all due diligence materials provided for review or distributed in written or digital form by the Seller Parties or the Seller Parties’ Representatives to the Buyers or the Buyers’ Representatives, (ii) all written, oral or electronic answers to questions provided by the Seller Parties or the Seller Parties’ Representatives to the
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Buyers or the Buyers’ Representatives, and (iii) all materials contained in data rooms or privately-accessible internet sites established by the Seller Parties for purposes of providing due diligence materials to the Buyers or the Buyers’ Representatives.(15) “ Emission Allowances ” means (i) “Allowance,” as that term is defined in 40 CFR § 72.2, and (ii) “NO x Allowance,” as that term is defined in 326 Indiana Administrative Code § 10-4-2(37), in each case, as such terms are defined as of the date hereof.(16) “ Encumbrances ” means any mortgages, pledges, liens, security interests, conditional and installment sale agreements, charges, restrictions on transfer, proxies and voting or other similar agreements, claims and other legal and equitable encumbrances, limitations, title or survey matters and restrictions of any nature whatsoever.(17) “ Environmental Laws ” means all Laws that relate to pollution or protection of the environment (including, without limitation, ambient air, surface water, groundwater, land, surface and subsurface strata) or human health and safety relating to Hazardous Substance exposure including, without limitation, Laws which relate to Releases or threatened Releases of Hazardous Substances or otherwise relate to the manufacture, processing, distribution, use, treatment, storage, Release, transport or handling of Hazardous Substances.(18) “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.(19) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.(20) “ Existing Debt Documents ” means, collectively, (i) the Credit Agreement dated as of March 8, 2004, among Allegheny Energy, Inc., the Lenders and the Lender Parties referred to therein, and Citicorp North America, Inc., as Administrative Agent, (ii) the Credit Agreement, (iii) the Amendment Agreement dated as of October 28, 2004, among AESC, the other Grantors referred to therein, Citibank, N.A., as Collateral Agent, Intercreditor Agent and Depository Bank, and Citicorp North America, Inc., as Administrative Agent, (iv) the Amendment Agreement dated as of March 8, 2004, among AESC, the other Grantors referred to therein, Citibank, N.A., as Collateral Agent, Intercreditor Agent and Depository Bank, and Citicorp North America, Inc., as Administrative Agent, (v) the Security and Intercreditor Agreement, (vi) the Refinancing Indenture referred to in the Security and Intercreditor Agreement, and (vii) other documents, instruments and agreements executed and delivered in connection with or otherwise relating to the foregoing agreements, including any mortgages, deeds of trust, security agreements, financing statements, pledge agreements and other documents creating or evidencing Encumbrances securing the indebtedness or other obligations under the foregoing.(21) “ Extraordinary Capital Expenditures ” means the aggregate amount of all funds actually expended or Liabilities actually incurred (other than such as constitute Assumed Liabilities) by the Seller Parties on capital expenditures associated with the Wheatland Facility or the Site during the period beginning on the date hereof and ending on the Closing Date, but only to the extent such funds were expended, in whole or in part, as required by any change in
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Law or as required by any Governmental Entity or quasi regulatory agency, including, without limitation, any independent system operator.(22) “ FERC ” means the Federal Energy Regulatory Commission.(23) “ Federal Power Act ” means the Federal Power Act, as amended, and the rules and regulations promulgated thereunder.(24) “ Final Order ” shall mean action by the relevant Governmental Entity which has not been reversed, stayed, enjoined, set aside, annulled or suspended (without regard to any waiting period prescribed by Law other than waiting periods under the HSR Act).(25) “ FIRPTA Affidavit ” means the Foreign Investment in Real Property Tax Act Certification and Affidavit, in substantially the form attached hereto as Exhibit D .(26) “ Good Utility Practice ” means any of the practices, methods and acts engaged in and approved by a significant portion of the independent electric power generation industry during the relevant time period that, in the exercise of reasonable judgment in light of the applicable manufacturer’s recommendations and the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice is intended to consist of practices, methods or acts generally accepted in the region where the Wheatland Facility is located, and is not intended to be limited to optimum practices, methods or acts to the exclusion of all others.(27) “ Governmental Entity ” means any federal, state or local court, governmental or regulatory authority, agency, commission, body or other governmental entity.(28) “ Hazardous Substances ” means any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “restricted hazardous materials,” “extremely hazardous substances,” “toxic substances,” “contaminants” or “pollutants” or words of similar meaning or substance found in any Environmental Law, or any petroleum and all derivatives thereof or synthetic substitutes therefor, and any asbestos or asbestos-containing material.(29) “ Holding Company Act ” means the Public Utility Holding Company Act of 1935, as amended, and the rules and regulations promulgated thereunder.(30) “ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.(31) “ Improvements ” means all buildings, structures (including all step-up transformers, transmission facilities and lines and gas handling and storage facilities), improvements, machinery, equipment, fixtures and construction in progress, including all piping, cables and similar equipment forming part of the mechanical, electrical, plumbing or HVAC infrastructure of any building, structure or equipment, located on the Site, including all generating units located on and affixed to the Wheatland Facility.
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(32) “ Income Tax Return ” means a Tax Return for any Tax based upon or calculated in whole or in part with respect to net income, gain or profits.(33) “ Indebtedness ” means (i) all indebtedness for borrowed money or for the deferred purchase price of property or services (other than current trade Liabilities incurred in the ordinary course of business and payable in accordance with customary practices), (ii) any other indebtedness that is evidenced by a note, bond, debenture or similar instrument, (iii) all obligations under financing leases, (iv) all obligations in respect of acceptances issued or created, (v) all Liabilities secured by any lien on any property, and (vi) all guarantee obligations.(34) “ Independent Accounting Firm ” means an independent accounting firm (which may not be the auditors of any party hereto or any of their Affiliates) of national or regional reputation mutually appointed by the Seller Parties and the Buyers.(35) “ Information Memorandum ” means that certain Information Memorandum regarding the Facility, dated September, 2004, and any supplements or amendments thereto to the extent provided to the Buyers or the Buyers’ Representatives.(36) “ Inventories ” means any fuel inventories, materials, spare parts, consumable supplies and chemical and gas inventories located at the Wheatland Facility, in transit to the Wheatland Facility, owned by the Sellers or held by the Sellers.(37) “ Knowledge ” means, with respect to an individual, that, with respect to a particular fact or other matter, such individual is actually aware of such fact or other matter. With respect to the Seller Parties, “Knowledge” means the Knowledge of any of the Persons listed on Schedule 1.1(a)(37)(A) (and any individual who, after the date hereof, replaces any such person’s employment position). With respect to the Buyers, “Knowledge” means the Knowledge of any of the Persons listed on Schedule 1.1(a)(37)(B) (and any individuals who, after the date hereof, replaces any such person’s employment position).(38) “ Lake Owned Real Property ” means the real property described in Schedule 5.8 and designated therein as the “Lake Real Property”, together with all rights, privileges, interests, easements and appurtenances now or hereafter belonging or in any way pertaining to such real property (including, without limitation, any mineral rights) and any Improvements located thereon.(39) “ Laws ” means any applicable federal, state or local law, common law, statute, code, ordinance, rule, regulation, judgment, order, injunction, decree, arbitration award, agency requirement, license or permit of any Governmental Entity.(40) “ Liabilities ” means any debts, liabilities, commitments or obligations of any kind, character or nature whatsoever.(41) “ Maintenance Expenditures ” means those maintenance expenditures that are identified on Schedule 7.1(a)(xiii) .(42) “ Material Adverse Effect ” means (i) any change or changes in, or effect on, the Wheatland Facility (excluding the Excluded Assets and the Excluded Liabilities) that is,
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or in the aggregate are, materially adverse to the business, assets, operations or conditions (financial or otherwise) of the Wheatland Facility, or (ii) any change or changes in, or effect on, the Sellers (excluding the Excluded Assets and the Excluded Liabilities), taken as a whole, that is, or in the aggregate are, reasonably likely to prevent, materially delay or impair any of the Seller Parties’ ability to consummate the transactions contemplated by this Agreement. “ Material Adverse Effect ”, however, does not include any effect that is attributable to any of the following: (a) any change or effect generally affecting the international, national or regional electric generating, transmission or distribution industry as a whole, (b) any change or effect resulting from changes in the international, national or regional wholesale or retail markets for electric power, (c) any change or effect resulting from changes in the national or regional markets for the type of fuel used at the Wheatland Facility, (d) any change or effect resulting from changes in the international, national or regional electric transmission or distribution systems, (e) any change or effect resulting from changes in the general national or regional economic or financial conditions, (f) any change or effect resulting from changes in Laws or in industry standards, or (g) any change or effect that is cured to the reasonable satisfaction of the Buyers before the earlier of the Closing or the termination of this Agreement pursuant to Section 10.1; except, in the cases of clauses (a) through (f) above, for such changes or events which materially disproportionately impact the Sellers or the Acquired Assets.(43) “ Off-Site Location ” means any location other than the Owned Real Property.(44) “ Other Real Property Interests ” means the easements, rights-of-way and other interests in real property identified in Schedule 5.8 and designated therein as the “Other Real Property Interests.”(45) “ Owned Real Property ” means, collectively, the Wheatland Owned Real Property and the Lake Owned Real Property.(46) “ Permitted Encumbrances ” means (i) those exceptions to title listed in Schedule 5.8 as of the date hereof, (ii) liens for Taxes or other governmental charges or assessments not yet due and delinquent or the validity of which is being contested in good faith by appropriate proceedings, (iii) mechanics’, carriers’, workers’, repairers’ and other similar liens and rights arising or incurred in the ordinary course of business for amounts not yet due and payable or the validity of which is being contested in good faith by appropriate proceedings, (iv) zoning, entitlement, conservation restrictions and other land use and environmental regulations by any Governmental Entities, and (v) such other Encumbrances which would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.(47) “ Person ” means an individual, a partnership, a limited liability company, a joint venture, a corporation, a trust, an unincorporated organization, an association, a joint stock company, any other business entity, and a Governmental Entity or a department or agency thereof.(48) “ Release ” means a release, spill, leak, discharge, disposal of, pumping, pouring, emitting, emptying, injecting, leaching, dumping or escape into or through the environment.
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(49) “ Response Actions ” means those activities defined in section 101(25) of the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. § 9601(25).(50) “ Retained Environmental Liabilities ” means the following Liabilities: (i) Liabilities for Response Actions to the extent required to address the Release of Hazardous Substances occurring at or from the Owned Real Property on or before the Closing Date; (ii) Liabilities for loss of life, injury to persons or property, or damage to natural resources to the extent arising in connection with the Release of Hazardous Substances on, at or from the Owned Real Property on or before the Closing Date; (iii) Liabilities arising in connection with any Hazardous Substances that were disposed of at, or transported by or on behalf of either of the Sellers to, any Off-Site Location on or before the Closing Date; or (iv) Liabilities for any violation or alleged violation of or noncompliance with any Environmental Law by the Sellers or their Affiliates or predecessor owners of the Wheatland Facility or the Owned Real Property on or prior to the Closing Date, including any fines and penalties and the costs of correcting such violations or non-compliance with applicable Environmental Law. “ Retained Environmental Liabilities ” shall not include any of the following Liabilities: (a) Liabilities for Response Actions arising in connection with Releases of Hazardous Substances at or from the Wheatland Facility or the Owned Real Property specifically authorized by, and in compliance with, any Environmental Permits; (b) any costs for decommissioning of any equipment or facilities; (c) costs for upgrades to pollution control or other equipment required by changes in applicable Environmental Laws that impose compliance deadlines after the Closing Date; (d) Liabilities arising in connection with any Releases of Hazardous Substances, or the disposal of Hazardous Substances, on, at or from the Owned Real Property, initially occurring after the Closing Date; (e) Liabilities arising in connection with any transportation or disposal of Hazardous Substances from the Wheatland Facility or the Owned Real Property to any Off-Site Location which occurs after the Closing Date; or (f) Liabilities for any violation or alleged violation of or noncompliance with any Environmental Law by the Buyers or their Affiliates, in connection with the ownership or operation of the Acquired Assets, which occurs after the Closing Date.(51) “ SEC ” means the Securities and Exchange Commission.(52) “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.(53) “ Security and Intercreditor Agreement ” means that certain Amended and Restated Security and Intercreditor Agreement among AESC, the other Grantors referred to therein, Citibank, N.A., as Collateral Agent, Intercreditor Agent and Depository Bank, Citicorp North America, Inc., as Administrative Agent, and Law Debenture Trust Company of New York, as Indenture Trustee, dated February 21, 2003, as amended and restated in its entirety on March 8, 2004, and as further amended and restated in its entirety on October 28, 2004.(54) “ Seller Parties’ Representatives ” means the accountants, employees, officers, directors, counsel, environmental consultants, financial advisors and other authorized representatives of any of the Seller Parties and their Affiliates.
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(55) “ Site ” means, collectively, the Owned Real Property and the Other Real Property Interests.(56) “ Subsidiary ” means any corporation, partnership, limited liability company or other entity in which any Person has direct or indirect equity or ownership interest that represents fifty percent (50%) or more of the aggregate equity or ownership interest in such entity, or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors or governors.(57) “ Taxes ” means all taxes, charges, fees, levies, duties, customs, tariffs, imports, penalties, assessments or other obligations of the same or of a similar nature to any of the foregoing imposed by any federal, state or local or foreign taxing authority, including, without limitation, income or profits, excise, property, sales, transfer, franchise, payroll, withholding, unemployment, severance, use, ad valorem, gross receipts, business license, occupation, stamp, environmental, workers’ compensation, social security or other taxes, including any interest, penalties or additions attributable thereto, whether disputed or not.(58) “ Tax Return ” means any return, declaration, claim for refund, report, information return or other document (including any related or supporting information) supplied to or required to be filed with any taxing authority with respect to Taxes.(59) “ Transferring Employee Records ” means all personnel files related to the Sellers’ Employees that pertain to (i) seniority histories and (ii) salary and benefit information, but only to the extent disclosure of such information is permitted by Law.(60) “ Wheatland Owned Real Property ” means the real property described in Schedule 5.8 and designated therein as the “Wheatland Real Property”, together with all rights, privileges, interests, easements and appurtenances now or hereafter belonging or in any way pertaining to such real property (including, without limitation, any mineral rights) and any Improvements located thereon.(b) Each of the following terms has the meaning specified in the Section set forth opposite such term:
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(c) Unless otherwise specified, any period measured in days shall be measured in calendar days rather than Business Days.
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(a) Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, AESC will sell, transfer, convey, assign and deliver to the Buyers, and the Buyers will purchase, acquire and assume from AESC, (i) all of the rights of AESC under the contracts and Leases identified in Schedule 2.1(a)(i) to the extent they pertain to the Wheatland Facility, including, without limitation, any right to receive payment, any right to receive goods and services and any right to assert claims and take other rightful actions in respect of breaches, defaults and other violations of such contracts and Leases, and (ii) the vehicles identified on Schedule 2.1(a)(ii) (collectively, the “ AESC Transferred Assets ”).(b) Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, the Sellers will sell, transfer, convey, assign and deliver to the Buyers, and the Buyers will purchase, acquire and assume from the Sellers, all of the Sellers’ right, title and interest in and to the properties and assets that are owned by the Sellers (tangible or intangible, including goodwill), wherever located, including, without limitation, the Sellers’ right, title and interest in and to the following assets (collectively, together with the AESC Transferred Assets, the “ Acquired Assets ”):(i) the Site and the Wheatland Facility;(ii) the machinery, equipment, Inventories, furniture, boats, vehicles and other personal property owned by the Sellers and located at or in transit to the Wheatland Facility (including, without limitation, the step-up transformers and the items of personal property described in Schedule 2.1(b)(ii) and all applicable warranties against manufacturers or vendors, to the extent that such warranties are transferable without further action by the Sellers, and all items of personal property due under applicable warranties), in each case as in existence on the Closing Date;(iii) to the extent transferable, all Permits and Environmental Permits set forth in Schedule 2.1(b)(iii) ;(iv) all of the rights of the Sellers under the Material Contracts and Leases set forth in Schedule 2.1(b)(iv) and any similar contracts or leases entered into, in accordance with Section 7.1(a), after the date hereof and prior to the Closing Date (collectively, together with the contracts and Leases included within the definition of AESC Transferred Assets, the “ Assumed Contracts ”), including, without limitation, any right to receive payment, any right to receive goods and services and any right to assert claims and take other rightful actions in respect of breaches, defaults and other violations of the Assumed Contracts;(v) all books, records, manuals, regulatory documents, real estate documents, engineering designs, blueprints, as-built plans, specifications, procedures, studies, reports and equipment repair, safety, maintenance or service records, lists of present and former
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suppliers, lists of present and former customers, and other such materials (in any form or medium) of the Sellers, including the Transferring Employee Records;(vi) all rights in and to any causes of action, lawsuits, judgments, claims and demands of any nature available to or being pursued by or on behalf of the Sellers, whether arising by way of counterclaim or otherwise;(vii) except for prepaid expenses and deposits of the Sellers attributable to any Excluded Assets or Excluded Liabilities, all prepaid expenses, progress payments and deposits of or by the Sellers, rights to receive a prepaid expense, deposit or progress payment, and cash in transit that constitutes a prepaid expense, progress payment or deposit, relating to any Acquired Asset or Assumed Liability;(viii) subject to Section 7.1(a)(xvi), all Emission Allowances set forth on Schedule 2.1(b)(viii) , all Emissions Allowances specifically issued or allocated to the Wheatland Facility by environmental agencies of the United States of America or the State of Indiana with a vintage year of 2005 or later (to the extent not already identified on Schedule 2.1(b)(viii) ), and any Emissions Allowance purchased by the Sellers specifically for the Wheatland Facility on or before the date hereof;(ix) all Intellectual Property and associated licenses, including rights to sue for and remedies against past, present and future infringements thereof, and rights of priority and protection of interests therein under the laws of any jurisdiction worldwide and all tangible embodiments thereof; and(x) all other assets, rights and interests of the Sellers;provided, however , that the Acquired Assets shall not include the Excluded Assets.2.2. Excluded Assets. Notwithstanding any provision herein to the contrary, the Acquired Assets shall exclude the following assets (collectively, the “ Excluded Assets ”):
(a) all cash, cash equivalents, bank deposits, accounts receivable of the Sellers or with respect to the Wheatland Facility as of the Closing and any Tax receivables of the Sellers;(b) any refund or credit of Taxes paid by the Seller Parties in respect of the Sellers or the Acquired Assets or for which the Seller Parties are required to reimburse the Buyers, whether such payment is actually received as a refund or as a credit against Taxes payable;(c) all interests in and to the Allegheny Marks, and the Maximo software license (it being understood that the database information, including historical information, related to the Wheatland Facility used with the Maximo software shall be an Acquired Asset);(d) all personnel, medical and benefits records of the Seller Parties or their Affiliates, other than Transferring Employee Records;
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(e) any amount received after the Closing Date for electricity sold and delivered on or prior to the Closing Date;(f) those contracts and Leases listed on Schedule 2.2(f) ;(g) any asset sold, transferred or otherwise disposed of in accordance with Section 7.1(a)(v); and(h) all properties and assets of AESC other than the AESC Transferred Assets.2.3. Assumed Liabilities. On the terms and subject to the conditions set forth herein, from and after the Closing, the Buyers shall assume and satisfy or perform all of the Liabilities of the Seller Parties that relate directly or indirectly to, in respect of, or otherwise arising from the ownership, use or operation of the Acquired Assets (collectively, the “ Assumed Liabilities ”), including, without limitation, the following Liabilities:
(a) all Liabilities of the Seller Parties arising under the Assumed Contracts in accordance with the terms thereof (other than Liabilities attributable to any failure by any of the Seller Parties prior to or on the Closing Date to comply with the terms thereof);(b) all Liabilities relating to any Environmental Law other than Retained Environmental Liabilities; and(c) all Liabilities in respect of Taxes attributable to the Acquired Assets for taxable periods, or portions thereof, beginning after the Closing Date (as prorated under Section 3.4(a)(i) for Taxes described therein), and all Liabilities for Transfer Taxes pursuant to Section 7.9(a);provided, however , that the Assumed Liabilities shall not include the Excluded Liabilities.2.4. Excluded Liabilities. Notwithstanding the provisions of Section 2.3, the Buyers shall not assume the following Liabilities (collectively, the “ Excluded Liabilities ”), which shall remain the exclusive responsibility of the Seller Parties or their Affiliates:
(a) the Retained Environmental Liabilities;(b) any Liability of the Seller Parties or their Affiliates and predecessors in respect of or otherwise arising from the Excluded Assets, except to the extent caused by the acts or omissions of the Buyers or the Buyers’ Representatives or by the Buyers’ ownership, lease, maintenance or operation of the Acquired Assets;(c) any Liability of the Seller Parties or their Affiliates and predecessors arising from the execution, delivery or performance of this Agreement or any Ancillary Agreement or the transactions contemplated hereby or thereby;(d) any Liability of the Seller Parties or their Affiliates and predecessors under contracts or Leases which are not Assumed Contracts, except to the extent caused by the
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acts or omissions of the Buyer or the Buyers’ Representatives or by the Buyers’ ownership, lease, maintenance or operation of the Acquired Assets;(e) any Liability of the Seller Parties or their Affiliates and predecessors for any fines or penalties imposed by a Governmental Entity resulting from any (i) investigation or proceeding by a Governmental Entity pending on or prior to the Closing Date or (ii) acts or omissions of the Seller Parties or their Affiliates and predecessors on or prior to the Closing Date;(f) any Liability in respect of Taxes attributable to the Acquired Assets for taxable periods, or portions thereof, ending on or before the Closing Date (as prorated under Section 3.4(a)(i) for Taxes described therein), except for Transfer Taxes pursuant to Section 7.9(a);(g) any Liability of the Seller Parties or their Affiliates arising from the breach or default by the Seller Parties or their Affiliates, prior to the Closing Date, of any Assumed Contracts or any other contract, license, agreement or personal property lease entered into by any of the Seller Parties or their Affiliates with respect to the Purchased Assets;(h) any Liability of the Seller Parties or their Affiliates and predecessors relating to any cause of action pending, or threatened in writing, prior to the Closing Date against the Seller Parties or their Affiliates and predecessors or their assets;(i) any Liabilities relating to any matters identified on Schedule 2.4(i) ; and(j) all Liabilities of the Seller Parties for Indebtedness incurred on or prior to the Closing.2.5. Procedures for Acquired Assets Not Transferable. If any consent required to transfer or assign any of the Assumed Contracts, Permits, Environmental Permits or any other property or rights included in the Acquired Assets cannot be obtained prior to the Closing Date and the Closing occurs, or, if an attempted assignment thereof would be ineffective or would adversely affect the rights of any of the Seller Parties thereunder so that the Buyers would not in fact receive all such rights, this Agreement and the related instruments of transfer shall not constitute an assignment or transfer thereof and the Buyers shall not assume the Seller Parties’ obligations with respect thereto. In the event any such consent is not obtained on or prior to the Closing Date, the Seller Parties shall continue to use Commercially Reasonable Efforts to obtain any such consent after the Closing Date until such consent has been obtained. If such efforts are unsuccessful, the Seller Parties and the Buyers will cooperate to achieve a mutually agreeable arrangement under which the Buyers would obtain the benefits and assume the obligations from and after the Closing Date in accordance with this Agreement, including subcontracting, sublicensing or subleasing to the Buyers, or under which the Seller Parties would enforce for the benefit of the Buyers any and all rights of the Seller Parties against a third party thereto, in any case with the Buyers assuming the Seller Parties’ obligations to the extent such obligations would have constituted an Assumed Liability if such assignment had occurred on the Closing Date. Each Seller will pay promptly to the Buyers when received all monies received by such Seller after the Closing Date under any such contracts for any claim or right or any benefit
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arising thereunder to the extent that the Buyers would be entitled thereto pursuant hereto. Nothing in this Section 2.5 shall be deemed to (a) constitute an agreement to exclude from the Acquired Assets any assets described in Section 2.1 or (b) alter the rights or obligations of the Buyers pursuant to Section 7.6 or Section 8.1(c).
3.1. Purchase Price. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, in exchange for the Acquired Assets, the Buyers shall pay to the Sellers an amount equal to One Hundred Million Dollars ($100,000,000) (the “ Purchase Price ”) and shall assume the Assumed Liabilities. The parties acknowledge that the Final Extraordinary Capital Expenditures Amount, if any, shall be treated as a post-Closing adjustment to the Purchase Price.
3.2. Possible Purchase Price Adjustment.
(a) Before expending any funds for an Extraordinary Capital Expenditure, (i) the Seller Parties shall give the Buyers written notice of such proposed Extraordinary Capital Expenditure, including supplementary materials explaining the proposed Extraordinary Capital Expenditure and, if applicable, diagrams or technical drawings, and, if requested by the Buyers, reasonable supporting materials supporting the Seller Parties’ conclusion that the Extraordinary Capital Expenditure is required by a change in Law or by any Governmental Entity or quasi regulatory agency, at least 10 Business Days prior to the date of the proposed Extraordinary Capital Expenditure, (ii) the Sellers shall consider in good faith the Buyers’ reasonable comments on the proposed Extraordinary Capital Expenditure, and (iii) the parties shall have attempted in good faith to agree on the appropriate response to the circumstance that requires the Extraordinary Capital Expenditure. The amount of Extraordinary Capital Expenditures, if any, to be included in the Capital Expenditures Statement and the Final Extraordinary Capital Expenditures Amount shall be reduced, in an amount to be mutually agreed upon by the parties in good faith, to account for the ownership and usage of any project or addition funded by an Extraordinary Capital Expenditure (including, if appropriate, the fair depreciation of such project or addition under United States generally accepted accounting principles (“ GAAP ”) allocable to the period in which the Seller Parties owned the project) by the Seller Parties prior to the Closing Date.(b) In the event the Seller Parties have incurred an Extraordinary Capital Expenditure in accordance with Section 3.2(a), then within 30 days after the Closing, the Seller Parties will prepare and deliver to the Buyers a statement (the “ Capital Expenditures Statement ”) setting forth the Extraordinary Capital Expenditures, if any, including detailed supporting material. The Buyers agree to cooperate with the Seller Parties in connection with the preparation of the Capital Expenditures Statement and related information, and shall provide to the Seller Parties such books, records and information as may be reasonably requested from time to time.
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(c) During the 30-day period following the delivery by the Seller Parties of the Capital Expenditures Statement, the Buyers and the Buyers’ Representatives may review such statement. The Seller Parties agree to cooperate with the Buyers in such review and to provide the Buyers with the information used to prepare the Capital Expenditures Statement and any other related information as reasonably requested by the Buyers. The Buyers shall provide any comments or objections they have with respect to the Capital Expenditures Statement to the Seller Parties in writing within such 30-day period (the “ Notice of Disagreement ”). The Buyers and the Seller Parties shall attempt in good faith to resolve any differences and issues as set forth in the Notice of Disagreement. If no Notice of Disagreement is delivered or the matters set forth in the Notice of Disagreement are so resolved, then the Capital Expenditures Statement, as adjusted for any changes as are agreed upon by the Buyers and the Seller Parties, shall be final and binding upon the Buyers and the Seller Parties and shall constitute the “ Final Extraordinary Capital Expenditures Amount .” If the matters raised by the Buyers in the Notice of Disagreement cannot be resolved between the Buyers and the Seller Parties within 15 days following delivery by the Buyers of the Notice of Disagreement, the question or questions in dispute shall be promptly submitted to the Independent Accounting Firm, which shall be instructed to determine and report to the parties, within 30 days after receiving such submission, upon such remaining disputed amounts, and such report shall be final, binding and conclusive on the parties hereto with respect to the amounts disputed. Any amount (i) mutually agreed to in writing by the Seller Parties and the Buyers with respect to an amount that was disputed by the Buyers or (ii) finally determined by the Independent Accounting Firm shall be the “ Final Extraordinary Capital Expenditures Amount .” The fees and disbursements of the Independent Accounting Firm shall be borne equally by the Buyers and the Seller Parties. Notwithstanding any other provision of this Agreement, in no event shall the Final Extraordinary Capital Expenditures Amount exceed $2,000,000.(d) Within five Business Days after the final determination of the Final Extraordinary Capital Expenditures Amount, if any, the Buyers shall pay to the Seller Parties an amount equal to the Final Extraordinary Capital Expenditures Amount. Any amount paid under this Section 3.2(d) shall be paid with interest for the period commencing on the Closing Date through the date of payment, calculated at the 90-day U.S. treasury bill rate as published in The Wall Street Journal in the “Money Rates” section on the Closing Date, and in cash by federal or other wire transfer of immediately available funds to the bank account or accounts designated by the Seller Parties in writing.3.3. Allocation of Purchase Price. The Buyers and the Seller Parties shall use Commercially Reasonable Efforts to agree upon an allocation among the Acquired Assets of the portion of the Purchase Price set forth in Section 3.1, together with Assumed Liabilities, consistent with section 1060 of the Code and the treasury regulations thereunder within 180 days of the date of this Agreement but in no event less than 30 days prior to the Closing. Any post-Closing adjustments with respect to the Purchase Price for purchase price allocation purposes shall be jointly made and agreed to within 30 days following the determination of the Final Extraordinary Capital Expenditures Amount in a manner consistent with the allocation determined pursuant to this Section 3.3. In the event the parties are unable to agree upon such an allocation, then the matter shall be resolved in accordance with Section 7.9(f). Each of the Buyers and the Seller
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Parties agree to file IRS Form 8594, and all federal, state, local and foreign Tax Returns, in accordance with such agreed allocation. Each of the Buyers and the Seller Parties shall report the transactions contemplated by this Agreement for Tax purposes in a manner consistent with the allocation determined pursuant to this Section 3.3. Each of the Buyers and the Seller Parties agrees to provide each other promptly with any other information reasonably required to complete Form 8594. Each of the Buyers and the Seller Parties shall notify each other in the event of an examination, audit or other proceeding regarding the agreed upon allocation of the Purchase Price.
(a) The Buyers and the Seller Parties agree that those items listed below, to the extent they relate to the Acquired Assets, will be prorated as of the Closing Date, with the Seller Parties liable to the extent such items relate to any time period through the Closing Date, and the Buyers liable to the extent such items relate to periods subsequent to the Closing Date:(i) any ad valorem taxes imposed on tangible or intangible property (“ Property Taxes ”) shall be prorated based on the number of days in such taxable period up to and including the Closing Date, and on the number of days in such taxable period after the Closing Date, provided that, for purposes of this Agreement, the taxable period of any Property Tax shall be the calendar year during which the statutory assessment date falls (for the avoidance of doubt, the items listed in this Section 3.4(a)(i) include, without limitation, any Property Taxes with respect to the taxable period including the Closing Date, and all prior taxable periods, for which the Seller Parties have not (A) received from the county treasurer a statement of current and delinquent taxes and special assessments, or (B) paid the amount shown as due on such statement);(ii) any permit, license, registration, or compliance assurance fees with respect to any Permit;(iii) sewer rents and charges for water, telephone, electricity and other utilities and similar charges of the Sellers; and(iv) any payment obligations for goods purchased or delivered, or services rendered, including rent under any Leases or leases of personal property that are Assumed Contracts by which either Seller is bound.(b) In connection with the prorations referred to in (a) above, in the event that actual figures are not available at the Closing Date, the proration shall be based upon the actual Taxes or fees for the preceding year (or appropriate period) for which actual Taxes or fees are available and such Taxes or fees shall be reprorated upon request of either the Seller Parties or the Buyers made within 30 days of the date that the actual amounts become available. The Buyers shall cooperate with the Seller Parties in the prosecution of tax proceedings which have not been completed by the Closing Date. The Seller Parties and the Buyers agree to furnish each other with such documents and other records as may be reasonably requested in order to confirm all adjustment and proration calculations made pursuant to this Section 3.4.
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4.1. Time and Place of Closing. Upon the terms and subject to the satisfaction of the conditions contained in Article VIII of this Agreement, the closing of the purchase and sale of the Acquired Assets contemplated by this Agreement (the “ Closing ”) will take place at Skadden, Arps, Slate, Meagher & Flom LLP, 1440 New York Avenue, N.W., Washington, D.C., at 10:00 A.M. (local time) on such date as the parties may agree, which date is as soon as practicable, but no later than five Business Days following the date on which all of the conditions contained in Article VIII have been satisfied or waived (except for those conditions which by their nature can only be satisfied at the Closing); or at such other place or time as the parties may agree. The date and time at which the Closing actually occurs is hereinafter referred to as the “ Closing Date .”
4.2. Payment of Purchase Price. The Buyers shall pay to the Sellers at the Closing an amount in United States dollars in the aggregate equal to the Purchase Price, by wire transfer of immediately available funds to the bank account or accounts designated by the Sellers, in writing, on or prior to the 2 nd Business Day immediately preceding the Closing Date.
4.3. Deliveries by the Sellers. At the Closing, the Seller Parties will deliver the following to the Buyers:
(a) the Deeds;(b) the Bill of Sale, duly executed by the applicable Seller Parties;(c) the Assignment and Assumption Agreement, duly executed by the applicable Seller Parties, in recordable form if necessary;(d) each other Ancillary Agreement required to be delivered under this Agreement, duly executed by the applicable Seller Parties;(e) the FIRPTA Affidavit, duly executed by AESC;(f) certificates of title for the vehicles and boats which are part of the Acquired Assets, duly executed by the applicable Seller Parties;(g) all attornment agreements, notices and other documents and instruments required for the assignment or other transfer of any of the Assumed Contracts from the applicable Seller Parties to the Buyers, duly executed by the applicable Seller Parties and, in the case of any leases, upon the reasonable request of the Buyers, in recordable form;(h) Uniform Commercial Code and other Encumbrance searches with respect to the Acquired Assets, and such duly executed UCC-3 Termination or Partial Release Statements and other releases as may be required to convey the Acquired Assets free and clear of all Encumbrances (except for Permitted Encumbrances) in accordance with this Agreement;(i) copies of all consents, waivers or approvals obtained by the Sellers with respect to the transfer of the Acquired Assets or the consummation of the transactions
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contemplated by this Agreement and the Ancillary Agreements, to the extent required under this Agreement or the Ancillary Agreements;(j) all of the books, records and other materials of the Sellers set forth in Section 2.1(b)(v);(k) a certificate from an authorized officer of each of the Seller Parties in accordance with Section 8.2(e);(l) any amounts for which the Seller Parties are liable pursuant to Section 3.4;(m) any disclosure document required to be delivered in accordance with the Indiana Responsible Transfer Property Law (Ind. Code § 13-251-3-1 et seq. );(n) an ALTA (Form B-1992) Owner Policy of Title Insurance, with an endorsement providing “extended coverage” over the standard exceptions contained in such form of Owner Policy of Title Insurance and such other endorsements as are reasonably requested by the Buyers (the “ Title Policy ”), issued by Chicago Title Insurance Company (the “ Title Company ”), in the amount of $100,000,000, and insuring that (i) good and marketable title to the Owned Real Property and (ii) valid easement interests in the Other Real Property Interests are vested in the Buyers, subject to no exceptions to title other than the Permitted Encumbrances;(o) a survey of the Site (the “ Survey ”) prepared by a surveyor licensed in the State of Indiana, (i) certified to the Seller Parties, the Buyers and the Title Company in accordance with a form of certification which is reasonably acceptable to the Buyers, such certification to include a statement that the survey has been prepared in accordance with “Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys” jointly adopted by ALTA, ACSM and NSPS in 1999 and including Items 1, 4, 6, 7(a), 7(b)(1), 7(c), 8-10, 11(b) and 13-16, (ii) showing no gaps, gores, encroachments or other matters which are not Permitted Encumbrances, (iii) showing that the easements created by (A) that certain Easement Agreement, dated March 10, 2000, between West Fork Land Development Company, L.L.C. and Larry B. Murray and (B) that certain Easement Agreement, dated March 10, 2000, between West Fork Land Development Company, L.L.C. and Charles L. Murray and Barbara Nell Murray, constitute a continuous easement corridor between the fee parcels owned by Wheatland LLC and the fee parcels owned by Lake LLC and (iv) plotting the location of the water pipeline, gas transmission pipeline and electrical transmission poles and lines serving the Wheatland Facility and confirming that such pipelines, poles and lines lie wholly within the Owned Real Property or the Other Real Property Interests; and(p) such real estate transfer declarations, disclosures or forms and such other documents, instruments or agreements, if any, as shall have been reasonably requested by the Title Company in order to issue the Title Policy to the Buyers and to consummate the Closing.4.4. Deliveries by the Buyers. At the Closing, the Buyers will deliver the following to the Seller Parties:
(a) the Purchase Price by wire transfer of immediately available funds, together with any amounts for which the Buyers are liable pursuant to Section 3.4;
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(b) the Assignment and Assumption Agreement, duly executed by the Buyers and in recordable form if necessary;(c) each other Ancillary Agreement required to be delivered under this Agreement, duly executed by the Buyers as applicable;(d) a certificate from an authorized officer of each of the Buyers referred to in Section 8.3(d); and(e) such other agreements, documents, instruments and writings as are required to be delivered by the Buyers at or prior to the Closing Date pursuant to this Agreement or otherwise required in connection herewith. ARTICLE V
The Seller Parties jointly and severally represent and warrant to the Buyers, except as set forth on the corresponding sections of the Seller Parties’ Schedules, as follows:
5.1. Organization; Qualification. Each of the Seller Parties is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Each of the Sellers has all requisite limited liability company power and authority to own, lease and operate its respective properties and to carry out its respective business as is now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its assets and properties makes such qualification necessary (including Indiana, as applicable), except where the failure to have such power and authority, or to be so qualified or in good standing, would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. The Sellers have made available to the Buyers complete and correct copies of the Sellers’ respective Certificates of Formation and Limited Liability Company Agreements, each as currently in effect.
5.2. Authority Relative to this Agreement. Each of the Seller Parties has full limited liability company power and authority to execute and deliver this Agreement and, as of the Closing, will have full limited liability company power and authority to execute and deliver the Ancillary Agreements, as applicable, and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been, and, as of the Closing, the execution and delivery of the Ancillary Agreements and the consummation of the transactions contemplated thereby will have been, duly and validly authorized by the Boards of Managers of each of the Seller Parties, and no other limited liability company proceedings on the part of the Seller Parties are necessary to authorize this Agreement or, as of the Closing, the Ancillary Agreements, as applicable, or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and, as of the Closing, the Ancillary Agreements, as applicable, will be, duly and validly executed and delivered by the Seller Parties, as applicable. Assuming that this Agreement and, as of the Closing, the Ancillary Agreements constitute valid and binding agreements of the respective Buyers, subject to receipt of the Sellers Required Regulatory Approvals and the Buyers Regulatory Required Approvals, this Agreement constitutes, and the Ancillary Agreements will
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constitute, valid and binding agreements of the Seller Parties, enforceable against the Seller Parties in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles (the “ Bankruptcy and Equity Exception ”).
5.3. Capitalization and Other Matters. AESC owns, beneficially and of record, all of the issued and outstanding limited liability company interests in the Sellers, free and clear of all Encumbrances, other than Encumbrances pursuant to the Existing Debt Documents. Neither of the Sellers has any equity or other investment interest in any other Person.
5.4. Consents and Approvals; No Violation.
(a) Other than obtaining the Sellers Required Regulatory Approvals and the Buyers Required Regulatory Approvals, and except as set forth on Schedule 5.4(a) , neither the execution and delivery of this Agreement and, on the Closing Date, the Ancillary Agreements, as applicable, by the Seller Parties nor the sale by the Sellers of the Acquired Assets pursuant to this Agreement or performance by the Seller Parties under this Agreement or the Ancillary Agreements, as applicable, will (i) conflict with or result in any breach of any provision of the respective Certificates of Formation or Limited Liability Company Agreements of the Seller Parties; (ii) require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity, except (A) where the failure to obtain such consent, approval, authorization or permit, or to make such filing or notification, would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect or (B) for those requirements which become applicable to the Sellers as a result of the specific regulatory status of the Buyers (or any of their Affiliates) or as a result of any other facts that specifically relate to the business or the activities in which either of the Buyers (or any of their Affiliates) is or proposes to be engaged; (iii) require any consent, approval or notice, or result in a default (with or without notice or lapse of time or both) (or give rise to any right of termination, cancellation or acceleration), under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which any of the Seller Parties is a party, other than the Existing Debt Documents, or by which any of the Seller Parties may be bound, except for such defaults (or rights of termination, cancellation or acceleration) as to which requisite waivers or consents have been obtained or which would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect; or (iv) violate any Law or Permit applicable to any of the Seller Parties, or their respective assets, which violation would, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect; and without limiting the generality of the foregoing, the transactions contemplated by this Agreement comply with the provisions of the Existing Debt Documents and the Seller Parties have obtained the board approval and the appraisal required under Section 5.02(e)(v) of the Credit Agreement.(b) Except for (i) any filings or approvals required under the Federal Power Act, (ii) the filings by the Seller Parties required by the HSR Act and the expiration or earlier termination of all waiting periods under the HSR Act, and (iii) the required approvals from the Indiana Utility Regulatory Commission (the “ IURC ”) (the filings and approvals referred to in clauses (i) through (iii) are collectively referred to as the “ Sellers Required Regulatory Approvals ”), no declaration, filing or registration with, or notice to, or authorization, consent or
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approval of any Governmental Entity is necessary for the consummation by the Seller Parties of the transactions contemplated hereby or by the Ancillary Agreements, other than such declarations, filings, registrations, notices, authorizations, consents or approvals which, if not obtained or made, would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.5.5. Reports. Except as set forth in Schedule 5.5 , since January 1, 2004, each of the Seller Parties has filed or caused to be timely filed with the SEC (limited to filings on Form 10-K and Form 10-Q, and any amendments thereof, with respect to filings under the Exchange Act) and the Federal Energy Regulatory Commission (the “ FERC ”), as the case may be, all material forms, statements, reports and documents (including all exhibits, amendments and supplements required to be filed by them) with respect to the business and operations of the Sellers under each of the Federal Power Act and the Holding Company Act and the respective rules and regulations thereunder, all of which complied in all material respects with all applicable requirements of the appropriate act and the rules and regulations thereunder in effect on the date each such report was filed, and there are no material misstatements or omissions in respect of such reports.
5.6. Absence of Certain Changes or Events; No Undisclosed Liabilities.
(a) Except as disclosed in Schedule 5.6(a) , since December 31, 2004, each of the Sellers has conducted its business only in the ordinary course of business consistent with past practice and Good Utility Practice and there has not been: (i) any Material Adverse Effect; (ii) any damage, destruction or casualty loss with respect to the Acquired Assets, whether covered by insurance or not, which would, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect; (iii) any entry into any agreement, commitment or transaction (including, without limitation, any Indebtedness, capital expenditure or capital financing) by any of the Seller Parties, which is material to the business or operations of the Sellers; (iv) any change in financial or Tax accounting methods, principles or practices, of the Sellers, or with respect to any of the Acquired Assets, except as required under GAAP; (v) any election, revocation, or amendment of any Tax election of the Sellers or with respect to any of the Acquired Assets; (vi) any filing of any amended Tax Return of the Sellers or with respect to any of the Acquired Assets; (vii) an entry into any closing agreement affecting any Tax liability or refund of the Sellers or with respect to any of the Acquired Assets; or (viii) a settlement or compromise of any Tax liability or refund of the Sellers or with respect to any of the Acquired Assets.(b) There are no Liabilities of the Seller Parties relating to the Wheatland Facility or the Site of a nature that would be required to be accrued in accordance with GAAP on a balance sheet of any Seller Party if such Seller Party had prepared such a balance sheet.5.7. Indebtedness of the Sellers. Except for Indebtedness pursuant to the Existing Debt Documents, neither Seller has any Indebtedness.
5.8. Real Property and Related Matters.(a) Except as set forth in Schedule 5.8(a) and except for Permitted Encumbrances, (i) Wheatland LLC holds (A) good, valid and marketable title in fee simple to
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each parcel included in the Wheatland Owned Real Property and (B) a valid perpetual easement to each parcel subject to the Other Real Property Interests that are appurtenant to the Wheatland Owned Real Property and (ii) Lake LLC holds (A) good, valid and marketable title in fee simple to each parcel included in the Lake Owned Real Property and (B) a valid perpetual easement to each parcel subject to the Other Real Property Interests that are appurtenant to the Lake Owned Real Property. The Other Real Property Interests are in full force and effect. The Owned Real Property is the only real property owned by the Sellers, and the Other Real Property Interests constitute all easements, rights-of-way or other rights of the Sellers to use real property owned by Persons other than the Sellers. The Site is the only real property necessary for the use and operation of the Wheatland Facility as currently used and operated. No other Person has, directly or indirectly, any interest in the Site (whether legal or equitable), except for Permitted Encumbrances, and no other Person has any contract, option, right of first refusal or other agreement to purchase the Site or any part thereof.(b) To the Seller Parties’ Knowledge, each of the Wheatland Owned Real Property and the Lake Owned Real Property is an independent property that does not rely on any facilities, Improvements or easements (other than public facilities and public roads) located on any property other than the Site to fulfill any requirement of any Governmental Entity, for the furnishing to the Wheatland Owned Real Property or the Lake Owned Real Property of any access, essential building systems or utilities or for the use or operation of the Wheatland Facility.(c) Each of the Wheatland Owned Real Property and the Lake Owned Real Property is a separate real estate tax parcel, separate and apart from any property other than the Owned Real Property. The Seller Parties have not received any notice of any real property special tax assessments or reassessment of the Site. There are no unpaid charges, debts, Liabilities or claims arising from the construction, occupancy, use or operation of the Site which could give rise to any mechanic’s or materialman’s or other statutory lien against the Site other than charges incurred in the ordinary course of business and which shall be timely paid.(d) To the Seller Parties’ Knowledge, true and accurate copies of the existing owner’s title insurance policy with respect to the Site issued to Wheatland LLC and Lake LLC and the lender’s title insurance policy issued to Citibank, N.A., as Collateral Agent, are attached hereto as Schedule 5.8(d) .(e) There are no tax proceedings pending in respect of the Site.(f) Schedule 5.8(f) describes all of the leases, licenses and occupancy agreements affecting the Site and to which either of the Seller Parties is a party, whether as lessor or lessee (the “ Leases ”). No third party has any occupancy or use rights with respect to the Owned Real Property except pursuant to the Leases. All Leases are in full force and effect. All material obligations of the Seller Parties under the Leases and, to the Seller Parties’ Knowledge, all material obligations of the other parties to the Leases under such Leases, in each case, to be performed through the date hereof have been performed in full. The Seller Parties have not received any notice of default by either of the Sellers under any of the Leases.
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(g) There are no surface conditions, and to the Seller Parties’ Knowledge, there are no subsurface conditions, upon the Site which constitute, or which with the passing of time may constitute, a public nuisance. To the Seller Parties’ Knowledge, the Site does not contain any archeological artifacts, human remains or other historical or archeological materials which are regulated under any Laws.(h) To the Seller Parties’ Knowledge, there are no public improvements pending, contemplated or proposed relating to the Site. None of the Seller Parties have commenced any improvements upon the Owned Real Property, nor to the Seller Parties’ Knowledge, are any such improvements contemplated or proposed to be commenced upon the Owned Real Property.(i) The Site is served by public electric, telephone and utility services which are made available to the Site from public utility easements, appurtenant insured easements or public rights-of-way. All such utilities are adequate and have sufficient capacity for operation and use of the Wheatland Facility as currently operated and used and for compliance with the Assumed Contracts.(j) (i) The obligations of the Sellers with regard to all applicable covenants, easements and restrictions affecting the Site have been and are being performed in a proper and timely manner by the Sellers, except for such matters which would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect, (ii) the Sellers are not currently in default under any agreement, order, judgment or decree relating to the Site, and no conditions or circumstances exist which, with the giving of notice or passage of time, would constitute a default or breach with respect to any such agreement, order, judgment or decree, except for such default or breach which would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect, (iii) the Sellers have received no notice of, and are not otherwise aware of, any claims, causes of action, lawsuits or legal proceedings pending or threatened regarding the ownership, use or possession of the Site including, without limitation, condemnation or similar proceedings and (iv) the Sellers have received no notice of any violation of any zoning, subdivision, platting, building, fire, insurance, safety, health, environmental or other applicable laws, ordinances or regulations (whether related to the Site or the occupancy thereof).(k) The Wheatland Facility is located entirely on the Owned Real Property (other than improvements required to connect the Wheatland Facility with the electric transmission grid, natural gas pipelines and water reserves, which are properly located on real property subject to the Other Real Property Interests).5.9. Insurance. All material policies of fire, liability, worker’s compensation and other forms of insurance owned or held by the Seller Parties or their Affiliates that insure any of the Acquired Assets are in full force and effect, subject to the terms of each policy, all premiums with respect thereto have been paid (other than retroactive premiums which may be payable with respect to comprehensive general liability and worker’s compensation insurance policies), and no notice of cancellation or termination has been received with respect to any such policy which was not replaced on substantially similar terms prior to the date of such cancellation. During the past 12 months, the Seller Parties or their Affiliates have not been refused any insurance with
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respect to the Acquired Assets nor has such coverage been limited by any insurance carrier to which Seller Parties or their Affiliates has applied for any such insurance or with which it has carried insurance.
(a) Except as set forth in Schedule 5.10(a) , and except for such matters that would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect:(i) The Sellers have obtained all permits, licenses, registrations, exemptions and other authorizations which are required under the Environmental Laws for the ownership, use and operation of the Wheatland Facility and the Owned Real Property as presently operated (“ Environmental Permits ”). All such Environmental Permits are in effect, and, to the Seller Parties’ Knowledge, no appeal or any other action is pending to revoke any such Environmental Permits. The Sellers have filed (or will have filed by the Closing Date) all applications necessary to renew any necessary Environmental Permits in a timely fashion.(ii) The Sellers have been and are in compliance with applicable Environmental Laws and Environmental Permits. To the Seller Parties’ Knowledge, predecessor owners and operators of the Wheatland Facility and the Owned Real Property were in compliance with applicable Environmental Laws and Environmental Permits.(iii) The Sellers have made available to the Buyers complete copies of all the environmental studies on the Wheatland Facility or the Owned Real Property in their possession, including, without limitation, environmental audit reports and Phase I or Phase II environmental assessments, if any.(iv) There is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter existing or pending that has not been resolved with no further obligations on the part of the Sellers or, to the Seller Parties’ Knowledge, threatened, relating to the Wheatland Facility or the Site pursuant to any Environmental Laws or relating Hazardous Substances, including, without limitation, claims for personal or bodily injury with respect to exposure to Hazardous Substances.(v) The Sellers have not, and, to the Seller Parties’ Knowledge, no other Person has Released any Hazardous Substances on, beneath or adjacent to the Site, except for Releases of Hazardous Substances that are not likely to result in a claim against the Sellers. To the Seller Parties’ Knowledge, there are no Hazardous Substances present on, beneath or adjacent to the Site, except for such Hazardous Substances that are not likely to result in a claim against the Sellers.(vi) To the Seller Parties’ Knowledge, no Release or Response Action has occurred at the Site that could reasonably be expected to result in the assertion or creation of an Encumbrance on the Site by any Governmental Entity with respect thereto, nor has
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any such assertion of an Encumbrance been made by any Governmental Entity with respect thereto.(vii) Neither of the Sellers has entered into or agreed to any outstanding consent decree or order, or is subject to any outstanding judgment, judicial or administrative decree or judicial or administrative order relating to compliance with any Environmental Law or to Response Actions to address a Release or threatened Release of Hazardous Substances under any Environmental Law.(b) The Seller Parties have listed the current Environmental Permits in Schedule 5.10(b) , and have made available to the Buyers a complete copy of each Environmental Permit.(c) Schedule 5.10(c) lists all Emission Allowances for 2005 and future years that have been (i) issued or allocated by the U.S. Environmental Protection Agency or the Indiana Department of Environmental Management specifically for the Wheatland Facility or (ii) purchased by the Sellers specifically for the Wheatland Facility on or before the date hereof.(d) The representations and warranties made in this Section 5.10 are the exclusive representations and warranties of the Seller Parties relating to Environmental Laws, Environmental Permits or other environmental matters, and no other provision of this Agreement shall be deemed to constitute, directly or indirectly, a representation or warranty with respect to such matters.5.11. Labor and Employment Matters. With respect to the business or operations of the Sellers, except for such matters that would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect: (a) each of the Seller Parties is in compliance with all applicable Laws respecting employment and employment practices, terms and conditions of employment, health and safety, and wages and hours; (b) none of the Seller Parties has received notice of any charge or complaint against it pending before the Equal Employment Opportunity Commission, the National Labor Relations Board or any other Governmental Entity regarding an unlawful employment practice; (c) there is no labor strike, slowdown or work stoppage actually pending or, to the Seller Parties’ Knowledge, threatened against or affecting the Seller Parties and none of the Seller Parties has experienced any strike, slowdown or work stoppage in the past 5 years; (d) none of the Seller Parties has received notice that any representation petition respecting the employees of the Seller Parties has been filed with the National Labor Relations Board, no union claims to represent any of the employees of the Seller Parties, and there has been no labor union, prior to the date hereof, organizing or attempting to organize any employees of the Seller Parties into one or more collective bargaining units; (e) there are no complaints, lawsuits, arbitrations or other proceedings pending or, to the Seller Parties’ Knowledge, threatened by or on behalf of any present or former employee of the Seller Parties arising out of or relating in any way to any present or former employee’s hiring by, employment with or separation from the Seller Parties, specifically including, without limitation, any claim for breach of any express or implied contract of employment, wrongful termination or infliction of emotional distress, or any claim under any applicable Law respecting employment, employment practices, terms and conditions of employment, health and safety, and wages and hours; and (f) to the Seller Parties’ Knowledge, no Sellers’ Employee, during the course of and
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as part of his or her employment with the Sellers or their Affiliates, has been exposed to Hazardous Substances exceeding permissible exposure limits established by applicable Law. Schedule 5.11 lists the three employees of the Seller Parties or their Affiliates who provide services on a full time basis for the Wheatland Facility as of the date hereof (collectively, the “ Sellers’ Employees ”) and identifies the employer of each such Sellers’ Employee.
5.12. ERISA; Employee Benefit Plans.
(a) Schedule 5.12(a) lists all deferred compensation, incentive compensation, bonus, vacation, equity compensation and equity based or ownership plans, policies, programs, agreements and arrangements, all other “employee benefit plans,” within the meaning of section 3(3) of ERISA and all employment, retention, consulting, change in control, termination or severance agreements, programs, plans, policies or arrangements, covering the Sellers’ Employees, including such policies of any Person that is considered a single employer with any of the Seller Parties under section 4001 of ERISA or section 414 of the Code (each, an “ ERISA Affiliate ”) (collectively, the “ Benefit Plans ”). True and complete copies of all Benefit Plans (or if the Benefit Plan is not a written plan, a description thereof), any related trust or other funding vehicle, the latest version of any reports or summaries required under ERISA or the Code including, without limitation, summary plan descriptions and summary material modifications, a copy of the three most recent annual reports and actuarial reports, to the extent required by ERISA or the Code, and the most recent determination letter received from the Internal Revenue Service (the “ IRS ”) with respect to each Benefit Plan intended to qualify under section 401 of the Code have been provided or made available to the Buyers. The Sellers have had no employees and do not sponsor, maintain or contribute to Benefit Plans on behalf of the Sellers’ Employees.
(b) All Benefit Plans that are subject to ERISA, other than “multiemployer plans” within the meaning of sections 3(37) or 4001(a)(3) of ERISA, are in compliance with their terms, and in material compliance with all applicable Laws, including, without limitation, the Code and ERISA. Each Benefit Plan intended to be qualified within the meaning of section 401(a) of the Code has received a current favorable IRS determination letter with respect to such qualifications. None of the Seller Parties or, to the Seller Parties’ Knowledge, any ERISA Affiliate has engaged in a transaction with respect to any Benefit Plan that could subject any of the Seller Parties to a tax or penalty imposed by either sections 4975 or 4976 of the Code or section 409 or 502(i) of ERISA in an amount that would be material.
(c) There has been no amendment to, or announcement or other communication by the Seller Parties or, to the Seller Parties’ Knowledge, any ERISA Affiliate regarding any change in employee participation or coverage under, any Benefit Plan which would increase materially the benefits provided to the Sellers’ Employees under such plan above the level of the benefits provided thereunder for the most recent fiscal year. Neither the execution of this Agreement nor the consummation of any of the transactions contemplated hereby or the termination of employment after the date hereof will entitle any Sellers’ Employees to severance pay or other payments (but not including any payments made pursuant to any tax-qualified retirement plan), any increase in severance pay or other payments, or any acceleration of vesting of any payment or benefit, or would result in any funding of any payment or benefit by the Seller Parties.
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(d) Neither the Seller Parties nor any ERISA Affiliate (i) has failed to fulfill its obligations under the minimum funding requirements of section 302 of ERISA, to the extent applicable; or (ii) has any actual or potential withdrawal liability resulting from a complete or partial withdrawal (as defined in sections 4203 and 4205 of ERISA) from any multiemployer plan (as defined in sections 3(37) and 4001(a)(3) of ERISA). No Liability under Title IV of ERISA has been incurred by the Seller Parties or any ERISA Affiliate that has not been satisfied in full as of the date of this Agreement. No event has occurred in connection with any of the employee benefit plan of the Seller Parties or any ERISA Affiliate that has, will or may result in any Liability for which any transferee of assets of the Sellers may be responsible, whether by operation of Law, by contract or otherwise. The transactions contemplated by this Agreement will not, either alone or in combination with any other event or events, cause the Buyers to incur any Liabilities under Title IV of ERISA or section 4980B of the Code.
(e) To the Seller Parties’ Knowledge, none of the Seller Parties nor any ERISA Affiliate has used the services of workers provided by third party contract labor suppliers, temporary employees, “leased employees” (as that term is defined in section 414(n) of the Code), or independent contractors to an extent that would reasonably be expected to result in the disqualification of any of the Benefit Plans or the imposition of penalties or excise taxes with respect to the Benefit Plans by the IRS, the Department of Labor, or the Pension Benefit Guaranty Corporation.
(f) Except as set forth in Schedule 5.12(f) , there are no pending or threatened claims by or on behalf of any Benefit Plan, by any employee, beneficiary or alternate payee against any such Benefit Plan, or otherwise involving any such Benefit Plan (other than routine claims for benefits) against the Seller Parties or any ERISA Affiliate.
(a) Schedule 5.13(a) lists the following agreements and contracts to which any of the Seller Parties (limited in the case of AESC, to the extent such agreements or contracts are included in the definition of AESC Transferred Assets) is a party or by which either of the Sellers or the Wheatland Facility is bound (the “ Material Contracts ”):
(i) gas pipeline interconnection agreements, gas supply agreements, gas purchase and sale agreements, and gas transportation agreements;
(ii) power purchase agreements, electricity transmission agreements, and electricity interconnection agreements;
(iii) swap, exchange, commodity option or hedging agreements;
(iv) material operating and maintenance agreements;
(v) material equipment lease, purchase and sale contracts;
(vi) any contract (i) requiring known or liquidated expenditures or payments by any of the Seller Parties in excess of $100,000 in any calendar year or (ii) that cannot
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be terminated without penalty by the Seller Party that is a party to such contract upon 90 days’ notice or less;
(vii) any pending sale or lease of real property of either Seller or any pending sale or lease of personal property of either Seller (other than sales of electric energy in the ordinary course of business) in excess of $100,000;
(viii) any contract that contains a covenant not to compete applicable to any Seller Party;
(ix) any other agreement material to either Seller, the Acquired Assets or the Wheatland Facility; and
(x) any amendment relating to any of the foregoing.
(b) The Seller Parties have provided or made available to the Buyers true, correct and complete copies of all the Material Contracts.
(c) Each of the Material Contracts (i) constitutes a valid and binding obligation of the respective Seller Parties and, to the Seller Parties’ Knowledge, constitutes a valid and binding obligation of the other parties thereto, (ii) is in full force and effect, and (iii) except as set forth in Schedule 5.13(c) , may be transferred to the Buyers pursuant to this Agreement, without the consent of, or notice to, any third party.
(d) No Seller Party and, to the Seller Parties’ Knowledge, no other party to any of the Material Contracts, is in breach or default under, and, to the Seller Parties’ Knowledge, no event has occurred that, with notice or lapse of time, would constitute a breach or default or permit termination, modification or acceleration | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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