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STOCK PURCHASE AND SALE AGREEMENT

Purchase and Sale Agreement

STOCK PURCHASE AND SALE AGREEMENT | Document Parties: TECO ENERGY INC | PSEG Americas Inc | TIE NEWCO Holdings, LLC You are currently viewing:
This Purchase and Sale Agreement involves

TECO ENERGY INC | PSEG Americas Inc | TIE NEWCO Holdings, LLC

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Title: STOCK PURCHASE AND SALE AGREEMENT
Governing Law: Delaware     Date: 3/15/2005

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Exhibit 2.1.1

 

EXECUTION VERSION

 

Confidential treatment has been requested as to certain portions of this document. Each such portion, which has been omitted herein and replaced with an asterisk [***], has been filed separately with the Securities and Exchange Commission.

 

STOCK PURCHASE AND SALE AGREEMENT

 

THIS STOCK PURCHASE AND SALE AGREEMENT effective as of July 1, 2004 (this “ Agreement ”) is by and among PSEG Americas Inc. (“the Purchaser ”), and TIE NEWCO Holdings, LLC (the “ Seller ”), a Delaware limited liability company. The Purchaser and the Seller are collectively referred to herein as the “ Parties ” (each of the Purchaser and the Seller being a “ Party ”).

 

RECITALS

 

A. A limited partnership named Texas Independent Energy, LP (“ TIE ” or the “ Partnership ”) was formed under and pursuant to the Revised Uniform Limited Partnership Act of the State of Delaware in 1999 and a Third Amended and Restated Partnership Agreement was entered into among the partners of TIE on September 19, 2003 (the “ Partnership Agreement ”).

 

B. A Standstill Letter Agreement; Notice of Contribution (a copy of which is attached as Exhibit A) was entered into by all the partners of TIE on July 1, 2004 (the “ Standstill Agreement ”) providing that the Contribution (as defined in the Standstill Agreement) would be postponed to allow this Agreement to be implemented.

 

C. The Seller owns all of the 100 issued and outstanding shares (the “ TPS II Shares ”) of TPS Holdings II, Inc. (“ TPS II ”), a Florida corporation.

 

D. TPS II owns a 0.5% general partnership interest in the Partnership (the “ GP Interest ”) and a 49.5% limited partnership interest in the Partnership (the “ LP Interest ”). The GP Interest and the LP Interest are collectively referred to herein as the “ Partnership Interests .”

 

E. The Seller wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Seller, the TPS II Shares.

 

F. Prior to the execution of this Agreement, TPS II owned the Partnership Interests indirectly through an alternative ownership structure. Under that structure, TPS II owned all of the outstanding membership interests in PLC Development Holdings, LLC (“ PLC ”), a Delaware limited liability company, which in turn owned all of the outstanding membership interests of (i) Panda Texas Generating I, LLC (“ Panda I ”), a Delaware limited liability company which owned the GP Interest, and (ii) Panda Texas Generating II, LLC (“ Panda II ”), a Delaware limited liability company which owned the LP Interest. In anticipation of and as a condition to the willingness of the Parties to enter into this Agreement, the ownership structure with respect to the Partnership Interests has been reorganized (the “ Reorganization ”) such that TPS II now owns directly both the GP Interest and the LP Interest and the Seller now owns both (i) all of the outstanding membership interests in PLC (the “ PLC Membership Interests ”), which in turn continues to own all of the outstanding membership interests in both Panda I and Panda II, and (ii) all of the outstanding shares of capital stock of TPS II.


NOW, THEREFORE, in consideration of the mutual covenants contained herein, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1)

Contribution . In order to accomplish the consummation of the Transaction, the Contribution shall not be effected before the earlier of (a) the Consummation and (b) the Termination Date.

 

2)

Purchase and Sale; Purchase Price . The Seller will sell to the Purchaser, free and clear of any Liens, and the Purchaser will purchase from the Seller, the TPS II Shares (the “ Transaction ”), for a purchase price of five hundred thousand dollars ($500,000) (the “ Purchase Price ”).

 

3)

Sale Procedure . Promptly after the execution hereof, the Seller shall deliver to the Seller’s counsel in Boston, Massachusetts (with a copy delivered to the Purchaser), good and sufficient instruments of sale, transfer, assignment and conveyance, in form reasonably satisfactory to the Purchaser, selling, transferring, assigning and conveying to the Purchaser good and valid title to the TPS II Shares (the “ Transfer Instruments ”). Upon written notification from the Seller (the “ Seller Satisfaction Notice ”) to the Purchaser that the conditions contained in Section 10 hereof have been satisfied or waived by the Seller, the Purchaser shall, promptly after the conditions set forth in Section 11 have been satisfied or waived by the Purchaser, wire transfer the Purchase Price to the Seller’s bank account (such bank account to be designated by the Seller prior to Consummation (as defined below)). Upon the Seller’s receipt of the Purchase Price in the aforementioned bank account in immediately available funds, title to the TPS II shares shall transfer from the Seller to the Purchaser and the Seller shall promptly thereafter cause the Seller’s counsel to deliver the Transfer Instruments to the Purchaser (such delivery, the “ Consummation ”).

 

4)

Representations and Warranties of the Seller . The Seller represents and warrants to the Purchaser, with respect to itself and TPS II, that as of the date of the Consummation:

 

 

a)

Organization; Good Standing . The Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to own its properties, including the TPS II Shares, and to enter into this Agreement and consummate the Transaction. TPS II is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida, and has all requisite power to conduct its business as currently conducted and authority to own its properties, including the Partnership Interests.

 

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b)

Title to TPS II Shares; Title to Partnership Interests . (i) The Seller has good and valid title to the TPS II Shares which constitute all of the issued and outstanding capital stock of TPS II and (ii) TPS II has good and valid title to the Partnership Interests, in both cases above free and clear of any and all liens, charges, encumbrances or adverse claims (“ Liens ”) other than those Liens in favor of the Purchaser. The TPS II Shares are fully paid and non-assessable. Except as provided in the Partnership Agreement or as contemplated by this Agreement, no Person has any right, agreement or understanding (whether by option, subscription, warrant, call, commitment, conversion, exchange, plan or otherwise) with respect to the acquisition, purchase, sale, transfer or assignment of any of the capital stock of TPS II or the Partnership Interests.

 

 

c)

Noncontravention and Authorization . The consummation of the Transaction will not violate or result in a default under the articles of incorporation or by-laws of the Seller or TPS II, or any instrument or other agreement to which either of them is a party. The Seller has taken all action required by law, its operating agreement or otherwise to authorize the execution and delivery of this Agreement and the Transaction, and this Agreement is the valid and binding agreement of the Seller enforceable against it in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws now or hereafter in effect relating to creditor’s rights and by general principles of equity.

 

 

d)

Scope of Activities . Since its inception, the Seller has engaged in no business other than the ownership of the TPS II Shares and the Partnership Interests owned by it indirectly through its ownership of TPS II. Since its inception, TPS II has engaged in no business except as related to (i) the investment in TIE, either directly or through one or more wholly-owned subsidiary entities and (ii) service as Trustee for TPS Trust I Irrevocable Trust of 2001 and TPS Trust I Irrevocable Trust of 2002, the sole activity of each of which was to hold for a temporary period notes issued by both (A) TECO Panda Generating Company, L.P. and (B) PLC in favor of TECO Power Services Corporation. Other than the PLC Membership Interests, the Seller does not currently own, lease, license or otherwise hold (collectively, “Hold”) nor has it ever Held any property other than the TPS II Shares. TPS II does not currently (i) Hold any property other than the Partnership Interests, nor has it ever Held any property other than assets employed or useful in connection with its investment in TIE or (ii) have and has never had, any employees or benefit plans.

 

 

e)

Disclosure of Contracts . All contracts, agreements or arrangements to which TPS II is a party and which are (i) currently in effect or (ii) have terminated or expired but have surviving provisions, are listed in Exhibit B .

 

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f)

Disclosure of Liabilities . The unaudited balance sheet of TPS II as of June 30, 2004 attached hereto as Exhibit C (the “ June 30 Balance Sheet ”) is true, correct and complete and has been prepared in accordance with generally accepted accounting principles in the United States (“ GAAP ”), except for the omission of footnotes and customary year-end adjustments. Except as disclosed on Exhibit D hereto, the June 30 Balance Sheet discloses all debts, liabilities, commitments and contingencies of TPS II as of June 30, 2004 that are required to be disclosed on a balance sheet (or noted in a footnote) prepared in accordance with GAAP.

 

 

g)

Disregarded Entities . To the knowledge of the Seller and its Affiliates (other than Panda I, Panda II and PLC), each of Panda I, Panda II and PLC constitutes a “disregarded entity” within the meaning of Treasury Regulation Section 301.7701-3(b)(1)(ii).

 

5)

Representations and Warranties of the Purchaser . The Purchaser represents and warrants to the Seller with respect to itself as follows:

 

 

a)

Organization; Good Standing . The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority to enter into this Agreement and consummate the Transaction.

 

 

b)

Noncontravention and Authorization . The acquisition of the TPS II Shares by the Purchaser will not violate or result in a default under its charter or by-laws or any instrument or other agreement to which it is a party. The Purchaser has taken all actions required by law, its charter, by-laws or otherwise to authorize the execution and delivery of this Agreement and the transactions contemplated hereby, and this Agreement is the valid and binding agreement of such Purchaser enforceable against it in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws now or hereafter in effect relating to creditor’s rights and by general principles of equity.

 

 

c)

Power . The Purchaser has the power to act on behalf of all of its Affiliates in connection with the releases granted and waivers made under Section 8(b) and the agreements set forth in Section 9.

 

6)

As Is” Sale .

 

 

a)

EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES OF THE SELLER SET FORTH IN SECTION 4 AND THE SELLER’S OFFICER’S CERTIFICATE (AS DEFINED IN SECTION 11(A) BELOW), THE PURCHASER UNDERSTANDS AND AGREES THAT THE TPS II SHARES AND THE PARTNERSHIP INTERESTS (THE “ EQUITY” ) ACQUIRED BY THE PURCHASER

 

4


 

PURSUANT TO THE TRANSACTION ARE BEING SOLD AND ACQUIRED WITHOUT ANY WARRANTY OR REPRESENTATION OF ANY KIND WHATSOEVER, AND THAT THE PURCHASER IS RELYING ON ITS OWN EXAMINATION OF THE EQUITY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING AND EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 4 AND THE SELLER’S OFFICER’S CERTIFICATE, THE PURCHASER UNDERSTANDS AND AGREES THAT THE SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATIONS AND WARRANTIES WITH REGARD TO THE EQUITY, INCLUDING THE VALUE, PROSPECTS AND RISKS ASSOCIATED WITH THE EQUITY. THE PURCHASER AGREES THAT NO INFORMATION OR MATERIAL PROVIDED BY OR COMMUNICATION MADE BY THE SELLER OR ANY REPRESENTATIVE OF THE SELLER IN CONNECTION WITH THIS TRANSACTION OTHER THAN AS CONTAINED IN SECTION 4 AND THE SELLER’S OFFICER’S CERTIFICATE (REGARDLESS OF WHEN ANY SUCH MATERIAL OR COMMUNICATION MAY HAVE BEEN PROVIDED OR MADE) WILL CONSTITUTE, CREATE OR OTHERWISE CAUSE TO EXIST ANY REPRESENTATION OR WARRANTY.

 

 

b)

EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE SELLER SET FORTH IN SECTION 4 AND THE SELLER’S OFFICER’S CERTIFICATE, THE PURCHASER UNDERSTANDS AND AGREES THAT THE PERSONALITY, REAL PROPERTY AND INTANGIBLE ASSETS OF TIE, GPP AND OEPP (INCLUDING WITHOUT LIMITATION THE TIE ASSETS) (THE “ TIE PROPERTY ”) INDIRECTLY SOLD AND ACQUIRED BY THE PURCHASER AS A RESULT OF THE TRANSACTION, ARE BEING SOLD AND ACQUIRED AS SUCH EXIST ON THE CONSUMMATION, AND IN THEIR CONDITION ON THE CONSUMMATION “WITH ANY FAULTS THAT MAY EXIST THEREON”, AND THAT THE PURCHASER IS RELYING ON ITS OWN EXAMINATION OF THE TIE PROPERTY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING AND EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 4 AND THE SELLER’S OFFICER’S CERTIFICATE, THE PURCHASER UNDERSTANDS AND AGREES THAT THE SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATIONS AND WARRANTIES WITH REGARD TO LIABILITIES, OPERATION OF THE TIE PROPERTY, INCLUDING THE TITLE, CONDITION, VALUE, QUALITY AND PROSPECTS OF THE TIE PROPERTY OR THE BUSINESS, CONDITION (FINANCIAL OR OTHERWISE), OR PROSPECTS OF TIE AND ITS AFFILIATES, RISKS ASSOCIATED WITH THE TIE PROPERTY AND ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR

 

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ANY PARTICULAR PURPOSE WITH RESPECT TO THE TIE PROPERTY OR ANY PART THEREOF. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES OF THE SELLER SET FORTH IN SECTION 4 AND THE SELLER’S OFFICER’S CERTIFICATE, THE PURCHASER FURTHER AGREES THAT NO INFORMATION OR MATERIAL PROVIDED BY OR COMMUNICATION MADE BY THE SELLER OR ANY REPRESENTATIVE OF THE SELLER IN CONNECTION WITH THIS TRANSACTION OTHER THAN AS CONTAINED IN SECTION 4 AND THE SELLER’S OFFICER’S CERTIFICATE, (REGARDLESS OF WHEN ANY SUCH MATERIAL OR COMMUNICATION MAY HAVE BEEN PROVIDED OR MADE) WILL CONSTITUTE, CREATE OR OTHERWISE CAUSE TO EXIST ANY REPRESENTATION OR WARRANTY.

 

7)

Covenants of the Seller .

 

 

a)

Efforts . The Seller covenants and agrees, on behalf of itself and TPS II, that it shall use all commercially reasonable efforts to perform and fulfill all conditions and obligations to be performed and fulfilled by it under this Agreement and, subject to satisfaction or waiver of the conditions set forth in Section 10, to cause the Transaction to be consummated, and, without limiting the generality of the foregoing, to obtain all consents and authorizations of third parties and to make promptly all filings with and give all notices to third parties required to be made or given by Seller which may be necessary or reasonably required in order to effect the Transaction. The Seller shall cooperate with the Purchaser to the extent commercially reasonable in order to aid the Purchaser in obtaining any consents or making any filing required of the Purchaser in connection with the Transaction.

 

 

b)

Conduct . Prior to Consummation or the termination or expiration of this Agreement pursuant to its terms, unless the Purchaser shall otherwise consent in writing, which consent shall not be unreasonably withheld or delayed, and except as required in order to comply with applicable law, or in connection with any emergency or other force majeure event, each of the Seller and TPS II shall:

 

 

i)

operate and maintain its business in all material respects in accordance with the ordinary course of business consistent with past practices;

 

 

ii)

not take any action or enter into any commitment with respect to or in contemplation of any liquidation, dissolution, recapitalization, reorganization or other winding up of its business or operations;

 

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Confidential treatment has been requested as to certain portions of this document. Each such portion, which has been omitted herein and replaced with an asterisk [***], has been filed separately with the Securities and Exchange Commission.

 

 

iii)

not grant any express encumbrance on any of its assets, or the Partnership Interests;

 

 

iv)

not take any action that would cause the aggregate liabilities of TPS II to exceed at Consummation $10,000;

 

 

v)

take any action required to eliminate liabilities of TPS II to any of the Seller Post Consummation Affiliates; and

 

 

vi)

not take any action which would cause any of the Seller’s representations and warranties set forth in Section 4 or the Seller’s Officer’s Certificate to be incorrect in any material respect as of the Consummation;

 

provided that nothing in this Section shall preclude the Seller or TPS II from taking any action required to insure compliance with the terms of the Partnership Agreement.

 

 

c)

Release . Except with respect to:

 

 

(i)

claims by Persons that are not Panda Parties or that are not Affiliates of the Seller as of July 1, 2004 (excluding TIE, GPP and OEPP and any Person controlled by any of them but not excluding Seller) against the Seller or against any of the Seller’s Affiliates arising in connection with or related to (a) Purchaser Intentional Misconduct, (b) TIE Intentional Misconduct [***];

 

 

(ii)

claims by Panda Parties against the Seller or any of the Seller’s Affiliates arising from or related to any claims brought by any Person who is not the Seller or one of the Seller Post Consummation Affiliates against any of the Panda Parties in connection with or related to (a) Purchaser Intentional Misconduct, (b) TIE Intentional Misconduct [***]; and

 

 

(iii)

the Purchaser’s obligations hereunder, including, without limitation, the Purchaser’s obligations under Section 12 as the result of the breach of any provision hereof;

 

as to which matters no release is given hereunder, effective upon the Consummation the Seller on behalf of itself and each Person that was an Affiliate of the Seller on July 1, 2004 (other than TIE, GPP and OEPP or any Person controlled by any of them) and on behalf of each of its and their successors and assigns, hereby releases and waives its right to recover from the Purchaser, its agents or any of their respective Affiliates (including, without limitation, TPS II, TIE, GPP and OEPP) and forever releases and discharges the Purchaser, any of its Affiliates (including, without limitation, TPS II, TIE, GPP and OEPP) and/or agents, from any and all damages, claims, losses, liabilities, penalties, fines, liens,

 

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judgments, costs or expenses whatsoever (including, without limitation, attorneys’ fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that may have arisen or may arise on account of or in any way be connected with TPS II, TIE or any of the TIE Assets or the TIE Property, including, without limitation, (w) all liabilities or obligations under or related to environmental laws or relating to any claim in respect of environmental conditions or hazardous substances arising under applicable law, including environmental laws, (x) all liabilities that in any way arise out of or are related to or associated with the Purchaser’s ownership, possession, use or operation (whether directly or indirectly) of the Partnership Interests, TPS II, TIE or any TIE Assets or the TIE Property, before or after the Consummation, (y) all liabilities that in any way arise out of or are related to or associated with the Seller’s service as a Trustee referred to Section 4(d) above, and (z) all liabilities that in any way arise out of or are related to or associated with the amounts listed as payable to any Seller Post Consummation Affiliate on the June 30 Balance Sheet. In this regard, effective upon the Consummation the Seller, on behalf of itself and each of its Seller Post Consummation Affiliates and each of its and their successors and assigns expressly releases and waives any and all rights and benefits that it now has or they now have, or in the future may have, conferred upon it or them by virtue of any statute or common law principle which provides that a general release does not extend to claims which a party does not know or suspect to exist in its favor at the time of executing the release, if knowledge of such claims would have materially affected such party’s settlement with the obligor. The Seller, on behalf of itself and each of its Seller Post Consummation Affiliates and each of its and their successors and assigns hereby further acknowledges that it is aware that factual matters now unknown to it or them may have given or may hereafter give rise to claims, losses and liabilities that are presently unknown, unanticipated and unsuspected, that the release contained herein has been negotiated and agreed upon in light of such awareness, and that it nevertheless hereby intends to be bound and to bind each of its Seller Post Consummation Affiliates and each of its and their successors and assigns, to the release set forth above.

 

8)

Covenants of the Purchaser .

 

 

a)

Efforts . The Purchaser covenants and agrees that prior to the Consummation the Purchaser shall use all commercially reasonable efforts to perform and fulfill all conditions and obligations to be performed and fulfilled by it under this Agreement and, subject to satisfaction or waiver of the conditions set forth in Section 11, to cause the Transaction to be consummated by the Purchaser, and, without limiting the generality of the foregoing, agrees to make promptly all filings with and give all notices to third parties which may be necessary for it or reasonably required by it in order to effect the Transaction; provided that the Purchaser’s only obligation with respect to Section 11(f) shall be submission of the Transaction for consideration of the board of managers of PSEG Global L.L.C. (“PSEG Global”). The Purchaser will cooperate with the Seller to

 

8


Confidential treatment has been requested as to certain portions of this document. Each such portion, which has been omitted herein and replaced with an asterisk [***], has been filed separately with the Securities and Exchange Commission.

 

the extent necessary to aid the Seller in obtaining any consents or making any filing required of the Seller in connection with the Transaction, provided the Purchaser is not required to make any disbursements (other than payment of the filing fee required under the HSR Act) in connection therewith unless the Seller has agreed in writing to reimburse such disbursements.

 

 

b)

Release . Except with respect to:

 

(i) claims by Persons who are not Panda Parties or not Affiliates of the Purchaser against the Purchaser or against any of the Purchaser’s Affiliates arising in connection with or related to (a) Seller Intentional Misconduct [***];

 

(ii) claims by Panda Parties against the Purchaser or any of the Purchaser’s Affiliates arising from or related to any claims brought against any of the Panda Parties by a Person who is not the Purchaser or an Affiliate of the Purchaser in connection with or related to (a) Seller Intentional Misconduct, (b) TIE Intentional Misconduct [***]; and

 

(iii) the Seller’s obligations hereunder, including, without limitation, the Seller’s obligations under Section 12 as the result of the breach of any provision hereof;

 

as to which matters no release is given hereunder, effective upon the Consummation the Purchaser, on behalf of itself and Persons that are Affiliates of the Purchaser as of July 1, 2004 and each of their and its successors and assigns, hereby does release and waive and the Purchaser will cause TPS II, TIE, GPP and OEPP, their Affiliates and their successors and assigns to release and waive immediately following Consummation any right to recover from the Seller, its agents or any of their respective Affiliates and forever release and discharge the Seller, and any of its Affiliates and/or any of their respective agents, from any and all damages, claims, losses, liabilities, penalties, fines, liens, judgments, costs or expenses whatsoever (including, without limitation, attorneys’ fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that may have arisen or may arise on account of or in any way be connected with TPS II, TIE or any of the TIE Assets or TIE Property, including, without limitation, (y) all liabilities or obligations under or related to environmental laws or relating to any claim in respect of environmental conditions or hazardous substances arising under applicable law, including environmental laws, and (z) all liabilities that in any way arise out of or are related to or associated with the Seller’s ownership, possession, use or operation (whether directly or indirectly) of the Partnership Interests, TPS II, TIE or any TIE Assets or TIE Property, before or after the Consummation. In this regard, effective upon the

 

9


Consummation the Purchaser, on behalf of itself and each of its Affiliates and each of its and their successors and assigns expressly releases and waives and the Purchaser will cause each of TIE, GPP and OEPP, their Affiliates and each of their successors and assigns to expressly release and waive immediately following Consummation any and all rights and benefits that it now has or they now have, or in the future may have, conferred upon it or them by virtue of any statute or common law principle which provides that a general release does not extend to claims which a party does not know or suspect to exist in its favor at the time of execution of such release, if knowledge of such claims would have materially affected such party’s settlement with the obligor. The Purchaser, on behalf of itself and each of its Affiliates and each of its and their successors and assigns hereby further acknowledges and will cause each of TIE, GPP and OEPP, their Affiliates and each of their respective successors and assigns to further acknowledge immediately following Consummation that it and they are is aware that factual matters now unknown to it or them may have given or may hereafter give rise to claims, losses and liabilities that are presently unknown, unanticipated and unsuspected, that the release contained herein has been negotiated and agreed upon in light of such awareness, and that it nevertheless hereby intends to be bound and to bind each of its parent, subsidiary and sister entities and each of its and their successors and assigns, to the release set forth above.

 

 

c)

Inspection and Due Diligence . The Purchaser acknowledges that, prior to its execution of this Agreement, (i) it or its agents or representatives have been afforded access to and the opportunity to inspect all books and records and other materials it or they have received in connection with the Seller, TPS II, TIE and the TIE Assets (other than written and electronic materials used by the Seller and its Affiliates in connection with the marketing of the Partnership Interests to potential buyers) and have had the opportunity to conduct all such due diligence investigations as it or they deemed necessary or advisable in connection with entering into this Agreement and the Transaction, and (ii) it is relying upon the Seller’s representations and warranties expressly contained herein as to the matters covered thereby and is relying on its own inspections and investigation in order to satisfy itself as to the condition and suitability of the Transaction. In addition, but in no way in limitation of the foregoing acknowledgement by the Purchaser, to the extent the Purchaser reasonably requests prior to Consummation, the Seller agrees that it will expend commercially reasonable efforts to cooperate with the Purchaser with respect to any additional inquiries or information and promptly respond to such inquiries or provide such requested information; provided that the Purchaser acknowledges that neither the Seller nor any of its Affiliates will provide access to or copies of any Tax sharing agreement to which TPS II is party.

 

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9)

Mutual Covenants . The Seller hereby covenants to the Purchaser and the Purchaser hereby covenants to the Seller as follows:

 

 

a)

Tax Matters .

 

 

i)

All Transfer Taxes incurred as a result of or in connection with this Agreement or the Transaction (whether imposed on the Seller or the Purchaser) shall be paid by the Purchaser if and when due. The Purchaser will file, to the extent required by applicable law, all necessary Tax Returns and other documentation with respect to all such Transfer Taxes and the Seller will be entitled to review such returns in advance and such Tax Returns shall be subject to approval by the Seller (which shall not be unreasonably withheld or delayed). To the extent required by applicable law, but subject to such review and approval, the Seller or any of its Affiliates will join in the execution of any such Tax Returns or other documentation.

 

 

ii)

The Purchaser and the Seller agree to allocate all items of income, gain, loss, deduction, and credit with respect to TPS II’s indirect interest in TIE to the separate taxable years of TPS II created by the purchase and sale of the TPS II Shares hereunder pursuant to Treasury Regulation Section 1.1502-76(b)(2)(vi) based upon an interim closing of the books of TIE and the operation of the TIE Assets as of the Consummation of the sale of the TPS II Shares hereunder, determined in accordance with Section 3.2(c)(2) of the Partnership Agreement. The Purchaser and Seller shall each cause TIE to prepare its information returns for the 2004 calendar year (including, without limitation, its U.S. Federal Form K-1s for such year) in a manner consistent with the foregoing and which provides the Purchaser and t


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