ED » Topics » PURCHASE AND SALE AND CLOSING

These excerpts taken from the ED 8-K filed Dec 14, 2007.

PURCHASE AND SALE AND CLOSING

Section 2.1 Purchase and Sale. On the terms and subject to the conditions set forth in this Agreement:

(a) Seller agrees to cause Newington Energy to exercise the Sale Right so as to become entitled to purchase the Project in accordance with Section 13 of the Lease on the first Basic Rent Payment Date in 2008.

(b) Simultaneously with the Project Purchase, Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase and accept from Seller, all of the Membership Interests. In exchange for the Membership Interests, Buyer shall pay the Purchase Price, as contemplated below.

Section 2.2 Purchase Price. The purchase price (the “Purchase Price”) for the Membership Interests shall be an amount equal to:

(a) $736,000,000.00 (the “Base Purchase Price”); plus

(b) the Net Working Capital Adjustment Amount (whether a positive or a negative amount); minus

(c) adjustments under Section 6.9 or 6.10.

 

12


Section 2.3 Closing.

(a) Seller shall inform Buyer no later than 12 noon New York City time on the fifth Business Day before the expected Closing Date of any scheduled commitments to dispatch the Project on or following the expected Closing Date and any known potential limitations, restrictions or outages affecting the Project for the two weeks following such notification. Seller shall promptly update such information and inform Buyer to the extent Seller becomes aware of any material changes to such information prior to the Closing. To the extent the Project has not been committed to dispatch on the expected Closing Date, then, by not later than 12 noon on the day before the expected Closing Date, Buyer shall provide Seller its preliminary hourly schedule for energy for dispatch the following day at the Project (which schedule shall include designation of quantity and time), and Seller shall cause the Project to be dispatched on the Closing Date in accordance with this day-ahead schedule.

(b) The Closing shall take place at the offices of Shearman & Sterling LLP at 10:00 A.M. local time, on the fifth Business Day after the conditions to Closing set forth in Articles VII and VIII (other than actions to be taken or items to be delivered at Closing) have been satisfied (or waived by the Party entitled to waive such condition), or on such other date and at such other time and place as Buyer and Seller mutually agree in writing. All actions listed in Section 7.9 or 8.6 that occur on the Closing Date shall be deemed to occur simultaneously at the Closing. The Closing shall be deemed effective as of 12:01 A.M. (Eastern time) on the Closing Date.

Section 2.4 Net Working Capital Adjustment.

(a) At least 10 Business Days prior to the expected Closing Date, Seller will deliver to Buyer a worksheet setting forth Seller’s good faith reasonable estimate of the expected Net Working Capital Adjustment Amount as of the expected Closing Date (the “Estimated Net Working Capital Adjustment Amount”), as well as a computation thereof. If the Estimated Net Working Capital Adjustment Amount is a positive number, the Base Purchase Price payable at Closing will be increased by an amount equal to such Estimated Net Working Capital Adjustment Amount. If the Estimated Net Working Capital Adjustment Amount is a negative number, the Base Purchase Price payable at Closing will be decreased by an amount equal to such Estimated Net Working Capital Adjustment Amount.

(b) Within 60 days after the Closing, Seller will prepare and deliver to Buyer (i) an unaudited consolidated balance sheet of Newington Energy (the “Closing Balance Sheet”), prepared in accordance with GAAP applied on a basis consistent with the past practices of Seller, together with all work papers relating thereto, and (ii) a statement (the “Closing Statement”) setting forth a computation of the actual Net Working Capital Adjustment Amount as of the Closing Date and all other amounts to be determined under Section 2.2 (collectively, the “Actual Net Working Capital Adjustment Amount”). If within 60 days following delivery of the Closing Balance Sheet and the Closing Statement Buyer does not object in writing thereto to Seller, then the Actual Net Working Capital Adjustment Amount shall be as reflected on the Closing Statement. If within such 60 days Buyer objects to Seller in writing to such computation, then Seller and Buyer shall negotiate in good faith and attempt to resolve their

 

13


disagreement. Should such negotiations not result in an agreement within 20 days after receipt by Seller of such written objection from Buyer, then the matter shall be submitted to the Independent Accounting Firm. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm will be borne equally by Buyer and Seller. The Independent Accounting Firm will deliver to Buyer and Seller a written determination of the Actual Net Working Capital Adjustment Amount (such determination to include a worksheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Independent Accounting Firm by Buyer and Seller or their Affiliates) within 30 days of the submission of the dispute to the Independent Accounting Firm, which determination will be final, binding and conclusive on the Parties (absent manifest error). If, following the determination of the Actual Net Working Capital Adjustment Amount (as agreed between the Parties or as determined by the Independent Accounting Firm), the Estimated Net Working Capital Adjustment Amount less the Actual Net Working Capital Adjustment Amount is a positive number, then Seller shall be obligated to pay Buyer a cash payment equal to such positive number. If the Estimated Net Working Capital Adjustment Amount less the Actual Net Working Capital Adjustment Amount is a negative number, then Buyer shall be obligated to pay Seller a cash payment equal to the absolute value of such negative number. Any such payment, together with interest thereon at the rate of five percent (5%) per annum from the Closing Date through the date of payment, will be due and payable within 15 days after the Actual Net Working Capital Adjustment Amount is finally determined as provided in this Section 2.4(b) and will be payable by wire transfer of immediately available funds to such account or accounts as shall be specified by Buyer or Seller, as applicable.

(c) Following the Closing, Seller and Buyer shall cooperate and provide each other and, if applicable the Independent Accounting Firm, reasonable access to such books, records (including those of Newington Energy) and such employees of Seller or its Affiliates as are reasonably requested in connection with the matters addressed in Section 2.4 (b).

Section 2.5 Allocation of Purchase Price. Seller shall prepare and provide to Buyer within 60 days after the Closing, a schedule allocating the Purchase Price among the Purchased Assets (the “Purchase Price Allocation Schedule”). The Purchase Price Allocation Schedule shall be prepared in good faith and in accordance with applicable provisions of the Code. Buyer shall have reasonable opportunity to review and comment on the Purchase Price Allocation Schedule. Seller shall make such revisions to the Purchase Price Allocation Schedule as may be reasonably requested by Buyer and approved by Seller. After consideration of Buyer’s comments, Seller’s Purchase Price Allocation Schedule shall be binding on both Seller and Buyer for all federal income tax purposes; provided, that if upon the advice of tax counsel reasonably acceptable to Seller, Buyer believes that the Purchase Price Allocation Schedule (or any portion thereof) is materially incorrect, the Independent Accounting Firm shall determine whether the Purchase Price Allocation Schedule or such portion is materially incorrect and the determination of such Independent Accounting Firm shall be final. If the Independent Accounting Firm determines that the Purchase Price Allocation Schedule or such portion is not materially incorrect, Seller and Buyer shall be bound by the Purchase Price Allocation Schedule. If the Independent Accounting Firm determines that the Purchase Price Allocation Schedule (or

 

14


any portion thereof) is materially incorrect, Seller and Buyer shall be bound by the Purchase Price Allocation Schedule as adjusted by such Independent Accounting Firm. Neither Buyer nor Seller shall agree to any proposed adjustment to the Purchase Price Allocation Schedule by any taxing authority without first giving the other prior written notice and the opportunity to challenge such proposed adjustment. Seller and Buyer each shall prepare a mutually acceptable and substantially identical IRS Form 8594 “Asset Acquisition Statement Under Section 1060” consistent with the Purchase Price Allocation Schedule which the Parties shall use to report the transactions contemplated by this Agreement to the applicable taxing authorities. The Purchase Price Allocation Schedule shall be revised to take into account subsequent adjustments to the Purchase Price, including any indemnification payments (which shall be treated for Tax purposes as adjustments to the Purchase Price), in accordance with the provisions of Section 1060 of the Code and the Treasury Regulations thereunder.

PURCHASE AND SALE AND CLOSING

Section 2.1 Purchase and Sale. On the terms and subject to the conditions set forth in this Agreement, Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase and accept from Seller, all of the Purchased Interests. In exchange for the Purchased Interests, Buyer shall pay the Purchase Price, as contemplated below.

Section 2.2 Purchase Price. The purchase price (the “Purchase Price”) for the Purchased Interests shall be an amount equal to:

(a) $741,000,000.00 (the “Base Purchase Price”); plus

(b) the Aggregate Net Working Capital Adjustment Amount (whether a positive or a negative amount); minus

(c) adjustments under Section 6.10 and/or Section 6.11.

 

15


Section 2.3 Closing.

(a) Seller shall inform Buyer no later than 12 noon New York City time on the fifth Business Day before the expected Closing Date of any scheduled commitments to dispatch a Project on or following the expected Closing Date and any known potential limitations, restrictions or outages affecting any Project for the two weeks following such notification. Seller shall promptly update such information and inform Buyer to the extent Seller becomes aware of any material changes to such information prior to the Closing. To the extent any Project has not been committed to dispatch on the expected Closing Date, then, by not later than 12 noon on the day before the expected Closing Date, Buyer shall provide Seller its preliminary hourly schedule for energy for dispatch the following day at such Project (which schedule shall include designation of quantity and time), and Seller shall cause such Project to be dispatched on the Closing Date in accordance with this day-ahead schedule.

(b) The Closing shall take place at the offices of Shearman & Sterling LLP at 10:00 A.M. local time, on the fifth Business Day after the conditions to Closing set forth in Articles VII and VIII (other than actions to be taken or items to be delivered at Closing) have been satisfied (or waived by the Party entitled to waive such condition), or on such other date and at such other time and place as Buyer and Seller mutually agree in writing. All actions listed in Section 7.8 or 8.6 that occur on the Closing Date shall be deemed to occur simultaneously at the Closing. The Closing shall be deemed effective as of 12:01 A.M. (Eastern time) on the Closing Date.

Section 2.4 Aggregate Net Working Capital Adjustment.

(a) At least 10 Business Days prior to the expected Closing Date, Seller will deliver to Buyer a worksheet setting forth Seller’s good faith reasonable estimate of the expected Aggregate Net Working Capital Adjustment Amount as of the expected Closing Date (the “Estimated Aggregate Net Working Capital Adjustment Amount”), as well as a computation thereof. If the Estimated Aggregate Net Working Capital Adjustment Amount is a positive number, the Base Purchase Price payable at Closing will be increased by an amount equal to such Estimated Aggregate Net Working Capital Adjustment Amount. If the Estimated Aggregate Net Working Capital Adjustment Amount is a negative number, the Base Purchase Price payable at Closing will be decreased by an amount equal to such Estimated Aggregate Net Working Capital Adjustment Amount.

(b) Within 60 days after the Closing, Seller will prepare and deliver to Buyer (i) an unaudited consolidated balance sheet of the Companies (the “Closing Balance Sheet”), prepared in accordance with GAAP applied on a basis consistent with the past practices of Seller, together with all work papers relating thereto, and (ii) a statement (the “Closing Statement”) setting forth a computation of the actual Aggregate Net Working Capital Adjustment Amount as of the Closing Date and all other amounts to be determined under Section 2.2 (collectively, the “Actual Aggregate Net Working Capital Adjustment Amount”). If within 60 days following delivery of the Closing Balance Sheet and the Closing Statement Buyer does

 

16


not object in writing thereto to Seller, then the Actual Aggregate Net Working Capital Adjustment Amount shall be as reflected on the Closing Statement. If within such 60 days Buyer objects to Seller in writing to such computation, then Buyer and Seller shall negotiate in good faith and attempt to resolve their disagreement. Should such negotiations not result in an agreement within 20 days after receipt by Seller of such written objection from Buyer, then the matter shall be submitted to the Independent Accounting Firm. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm will be borne equally by Buyer and Seller. The Independent Accounting Firm will deliver to Buyer and Seller a written determination of the Actual Aggregate Net Working Capital Adjustment Amount (such determination to include a worksheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Independent Accounting Firm by Buyer and Seller or their Affiliates) within 30 days of the submission of the dispute to the Independent Accounting Firm, which determination will be final, binding and conclusive on the Parties (absent manifest error). If, following the determination of the Actual Aggregate Net Working Capital Adjustment Amount (as agreed between the Parties or as determined by the Independent Accounting Firm), the Estimated Aggregate Net Working Capital Adjustment Amount less the Actual Aggregate Net Working Capital Adjustment Amount is a positive number, then Seller shall be obligated to pay Buyer a cash payment equal to such positive number. If the Estimated Aggregate Net Working Capital Adjustment Amount less the Actual Aggregate Net Working Capital Adjustment Amount is a negative number, then Buyer shall be obligated to pay Seller a cash payment equal to the absolute value of such negative number. Any such payment, together with interest thereon at the rate of five percent (5%) per annum from the Closing Date through the date of payment, will be due and payable within 15 days after the Actual Aggregate Net Working Capital Adjustment Amount is finally determined as provided in this Section 2.4(b) and will be payable by wire transfer of immediately available funds to such account or accounts as shall be specified by Buyer or Seller, as applicable.

(c) Following the Closing, Seller and Buyer shall cooperate and provide each other and, if applicable the Independent Accounting Firm, reasonable access to such books, records and employees (including those of the Project Companies) as are reasonably requested in connection with the matters addressed in Section 2.4 (b).

Section 2.5 Allocation of Purchase Price. Seller shall prepare and provide to Buyer within 60 days after the Closing, a schedule allocating the Purchase Price among the Purchased Interests (the “Purchase Price Allocation Schedule”). The Purchase Price Allocation Schedule shall be prepared in good faith and in accordance with applicable provisions of the Code. Buyer shall have reasonable opportunity to review and comment on the Purchase Price Allocation Schedule. Seller shall make such revisions to the Purchase Price Allocation Schedule as may be reasonably requested by Buyer and approved by Seller. After consideration of Buyer’s comments, Seller’s Purchase Price Allocation Schedule shall be binding on both Seller and Buyer for all federal income tax purposes; provided, that if upon the advice of tax counsel reasonably acceptable to Seller, Buyer believes that the Purchase Price Allocation Schedule (or any portion thereof) is materially incorrect, the Independent Accounting Firm shall determine whether the Purchase Price Allocation Schedule or such portion is materially incorrect and the

 

17


determination of such Independent Accounting Firm shall be final. If the Independent Accounting Firm determines that the Purchase Price Allocation Schedule or such portion is not materially incorrect, Seller and Buyer shall be bound by the Purchase Price Allocation Schedule. If the Independent Accounting Firm determines that the Purchase Price Allocation Schedule (or any portion thereof) is materially incorrect, Seller and Buyer shall be bound by the Purchase Price Allocation Schedule as adjusted by such Independent Accounting Firm. Neither Buyer nor Seller shall agree to any proposed adjustment to the Purchase Price Allocation Schedule by any taxing authority without first giving the other prior written notice and the opportunity to challenge such proposed adjustment. Seller and Buyer each shall prepare mutually acceptable and substantially identical IRS Forms 8594 “Asset Acquisition Statement Under Section 1060” and IRS Forms 8883 (with respect to the acquisition of the Section 338 Companies) consistent with the Purchase Price Allocation Schedule which the Parties shall use to report the transactions contemplated by this Agreement to the applicable taxing authorities. Each of Seller and Buyer agrees to provide the other promptly with any other information required to complete Forms 8594 and 8883. The Purchase Price Allocation Schedule shall be revised to take into account subsequent adjustments to the Purchase Price, including any indemnification payments (which shall be treated for Tax purposes as adjustments to the Purchase Price), in accordance with the provisions of Section 1060 of the Code and the Treasury Regulations thereunder.

EXCERPTS ON THIS PAGE:

8-K (2 sections)
Dec 14, 2007
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki