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Title: |
Purchase and Sale Agreement |
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Entities: |
Canal Electric Co.; Connecticut Light & Power Co.; FPL Energy Seabrook, LLC; Great Bay Power Corp.; New England Power Co.; North Atlantic Energy Corp.; NSTAR; United Illuminating Co.; Bank of New York; Brown Rudnick Freed & Gesmer; Ropes & Gray |
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Date: |
2002 |
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Size: |
Preview shows 35KB of 415KB total |
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Price: |
$99 |
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ID: |
#263779 |
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PURCHASE AND SALE AGREEMENT
FOR THE
SEABROOK NUCLEAR POWER STATION
by and among
NORTH ATLANTIC ENERGY CORPORATION,
THE UNITED ILLUMINATING COMPANY,
GREAT BAY POWER CORPORATION,
NEW ENGLAND POWER COMPANY,
THE CONNECTICUT LIGHT AND POWER COMPANY,
CANAL ELECTRIC COMPANY,
LITTLE BAY POWER CORPORATION,
and
NEW HAMPSHIRE ELECTRIC COOPERATIVE, INC.
as Sellers
and
NORTH ATLANTIC ENERGY SERVICE CORPORATION
and
FPL ENERGY SEABROOK, LLC
as Buyer
dated
April 13, 2002
{PAGE}
TABLE OF CONTENTS
{TABLE}
{CAPTION}
PAGE
----
{S} {C}
1. Preamble................................................................................................1
2. Acquisition of Assets by Buyer..........................................................................2
2.1. Purchase and Sale of Assets....................................................................2
2.2. Excluded Assets................................................................................6
2.3. Assumption of Liabilities......................................................................7
2.4. Liabilities Not Assumed........................................................................9
2.5. Consideration for Acquired Assets.............................................................11
2.6. Adjustment to Facility Purchase Price and Fuel Purchase Price.................................12
2.7. Payment of Purchase Price Adjustments.........................................................16
2.8. Allocation of Consideration...................................................................16
2.9. Proration.....................................................................................17
2.10. The Closings..................................................................................18
2.11. Deliveries by the Sellers at the Closings.....................................................18
2.12. Deliveries by the Buyer at the Closing Date...................................................22
3. Representations, Warranties and Disclaimers of Each Seller.............................................25
3.1. Organization..................................................................................25
3.2. Authorization, Execution and Enforceability of Transactions...................................25
3.3. Noncontravention..............................................................................26
3.4. Consents and Approvals........................................................................26
3.5. Regulation as a Utility.......................................................................26
3.6. Brokers' Fees.................................................................................27
3.7. Title to Acquired Assets......................................................................27
3.8. Qualified Decommissioning Funds...............................................................27
3.9. Nonqualified Decommissioning Funds............................................................30
3.10. Absence of Certain Changes or Events..........................................................31
3.11. Legal and Other Compliance....................................................................31
3.12. Taxes.........................................................................................31
3.13. Contracts and Leases..........................................................................31
3.14. Insurance.....................................................................................33
3.15. Litigation....................................................................................33
3.16. Employees.....................................................................................33
3.17. Environmental Matters.........................................................................34
3.18. Condemnation..................................................................................34
3.19. Intellectual Property.........................................................................34
3.20. Accounting Methods............................................................................35
3.21. Complete Copies...............................................................................35
3.22. Operability...................................................................................35
3.23. Employee Benefit Programs.....................................................................35
3.24. Zoning........................................................................................36
3.25. Real Property; Plant and Equipment............................................................36
3.26. Disclaimers Regarding Acquired Assets.........................................................36
4. Representations and Warranties of the Buyer............................................................37
4.1. Organization of the Buyer.....................................................................37
4.2. Authority, Execution and Enforceability of Transactions.......................................37
{/TABLE}
-i-
{PAGE}
TABLE OF CONTENTS
(CONTINUED)
{TABLE}
{CAPTION}
PAGE
----
{S} {C}
4.3. Noncontravention..............................................................................38
4.4. Consents and Approvals........................................................................38
4.5. Brokers' Fees.................................................................................38
4.6. Litigation....................................................................................38
4.7. No Knowledge of Seller's Breach...............................................................39
4.8. Qualified Buyer...............................................................................39
4.9. WARN Act......................................................................................39
4.10. No Implied Warranties.........................................................................39
4.11. Absence of Certain Events.....................................................................39
4.12. Availability of Funds.........................................................................39
5. Covenants..............................................................................................40
5.1. General.......................................................................................40
5.2. Notices, Consents and Approvals...............................................................40
5.3. Operation of Business During Interim Period...................................................43
5.4. Access and Investigations During Interim Period...............................................46
5.5. Certain Notices...............................................................................48
5.6. Further Assurances............................................................................49
5.7. Employee Matters..............................................................................51
5.8. Cooperation after Initial Closing Date........................................................54
5.9. NEPOOL........................................................................................58
5.10. Funding of the Decommissioning Trusts.........................................................58
5.11. Risk of Loss..................................................................................61
5.12. Discharge of Environmental Liabilities........................................................63
5.13. Nuclear Insurance.............................................................................63
5.14. Nonwaiver of Third Party Environmental Liabilities............................................63
5.15. Control of Litigation.........................................................................64
5.16. Availability of Funds.........................................................................64
5.17. Department of Energy Decontamination and Decommissioning Fees.................................64
5.18. Cooperation Relating to Insurance and Price-Anderson Act......................................64
5.19. Acceptable Credit Support.....................................................................65
5.20. Private Letter Ruling Requests................................................................65
5.21. Credit Rating of Acceptable Guarantor and Issuing Bank........................................66
5.22. NRC Commitments...............................................................................66
5.23. Decommissioning and Funding Assurance.........................................................66
5.24. Joint Ownership Agreement, Managing Agent Operating Agreement and Disbursing Agent Agreement..66
5.25. Memorandum of Understanding with the Town of Seabrook.........................................66
6. Conditions Precedent to Obligation to Close............................................................67
6.1. Conditions Precedent to Obligation of the Buyer to Close......................................67
6.2. Conditions Precedent to Obligation of the Sellers to Close....................................70
6.3. Initial and Subsequent Closings...............................................................71
7. Confidentiality........................................................................................73
8. Taxes..................................................................................................75
{/TABLE}
-ii-
{PAGE}
TABLE OF CONTENTS
(CONTINUED)
{TABLE}
{CAPTION}
PAGE
----
{S} {C}
9. Non-Survival; Effect of Closing and Indemnification....................................................76
9.1. Survival of Representation and Warranties; Survival of Covenants and Agreements...............76
9.2. Effect of Closing.............................................................................76
9.3. Indemnity by Sellers..........................................................................77
9.4. Indemnity by Buyer............................................................................78
9.5. Exclusive and Limited Remedies................................................................79
9.6. Notice; Defense of Claims.....................................................................79
9.7. Net of Taxes and Insurance....................................................................81
9.8. Release.......................................................................................81
9.9. No Recourse...................................................................................82
10. Termination...........................................................................................82
10.1. Termination of Agreement......................................................................82
10.2. Effect of Termination.........................................................................86
11. Miscellaneous..........................................................................................87
11.1. Press Releases and Public Announcements.......................................................87
11.2. No Third Party Beneficiaries..................................................................87
11.3. Appointment of Seller Representatives as Agent for Sellers....................................87
11.4. No Joint Venture..............................................................................88
11.5. Time of the Essence...........................................................................88
11.6. Entire Agreement..............................................................................88
11.7. Succession and Assignment.....................................................................88
11.8. Counterparts..................................................................................89
11.9. Headings......................................................................................89
11.10. Notices.......................................................................................89
11.11. Governing Law.................................................................................92
11.12. Change in Law.................................................................................92
11.13. Consent to Jurisdiction and Venue.............................................................93
11.14. Amendments and Waivers........................................................................93
11.15. Severability..................................................................................93
11.16. Expenses......................................................................................93
11.17. Construction..................................................................................93
11.18. Incorporation of Exhibits and Schedules.......................................................93
11.19. Specific Performance..........................................................................94
11.20. Dispute Negotiation...........................................................................94
11.21. Good Faith Covenant...........................................................................94
11.22. Set-Off.......................................................................................94
11.23. Bulk Transfer Act.............................................................................94
12. Dispute Resolution.....................................................................................95
13. Definitions............................................................................................95
{/TABLE}
-iii-
{PAGE}
Exhibits
A(i) - Form of Quitclaim Deed for NAEC Real Property
A(ii) - Form of Quitclaim Deed for Jointly Owned Real Property
B - Form of Bill of Sale
C - Form of Asset Demarcation Agreement
D - Form of Assignment and Assumption Agreement
E - Form of Interconnection Agreement
F - Form of Release of Mortgage Indenture
G - Form of FIRPTA Affidavit
H - Form of Acceptable Guaranty**
I - Reserved
J - Form of Interim Services Agreement
K - Form of Owner Trustee Deed and Bill of Sale
L - Reserved
M - Form of Easement Agreement
N - Form of Agreement to Amend Transmission Support Agreement
Schedules
Schedule 1(a) - Sellers' Ownership Shares
Schedule 2.1(a)(i) - NAEC Real Property
Schedule 2.1(a)(ii) - Jointly Owned Real Property
Schedule 2.1(a)(iii)(A),
2.1(a)(iii)(B) - Permitted Encumbrances
Schedule 2.1(b) - Nuclear Materials, Spent Nuclear Fuel and
Other High Level and Low Level Waste
Schedule 2.1(c) - Personal Property
-iv-
{PAGE}
Schedule 2.1(d) - Unit 2
Schedule 2.1(e) - Leases
Schedule 2.1(f) - Transferable Permits
Schedule 2.1(g) - Material Contracts
Schedule 2.1(l) - Nuclear Fuel
Schedule 2.1(m) - Decommissioning Funds
Schedule 2.1(n)(i) - Emergency Preparedness Assets
Schedule 2.1(n)(ii) - Emergency Preparedness Agreements
Schedule 2.1(o) - Vehicles
Schedule 2.1(q) - Owned Intellectual Property
Schedule 2.1(r) - Nuclear Insurance Policies
Schedule 2.1(s) - Agreements for the Sale of Capacity or Energy
Schedule 2.1(v) - Other Related Assets
Schedule 2.1(w) - Emission Reduction Credits
Schedule 2.1(x) - Licensed Intellectual Property
Schedule 2.1(y) - 345 kV Substation
Schedule 2.2(c) - Rights to Sellers' Names
Schedule 2.4(m) - Pollution Control Bonds
Schedule 2.5(b)(i) - Facility Purchase Price Allocation
Schedule 2.5(b)(ii) - Fuel Purchase Price Allocation
Schedule 2.5(b)(iii) - Unit 2 Purchase Price Allocation
Schedule 2.6(a)(x) - Transmission Credit
Schedule 2.11(a)(viii) - Interim Services
Schedule 2.11(a)(xvi) - Matters for Opinion from Counsel to Required
Sellers on Initial Closing Date
-v-
{PAGE}
Schedule 2.11(b)(x) - Matters for Opinion from Counsel to Remaining
Seller(s) on Subsequent Closing Date(s)
Schedule 2.12 - Matters for Opinion from Counsel to Buyer
Schedule 3.1(i) - Proportionate Ownership
Schedule 3.1(ii) - Organization Under Order of Governmental
Authority
Schedule 3.2 - Authorization, Execution and Enforceability of
Transactions
Schedule 3.3 - Matters of Contravention
Schedule 3.5(i) - Regulation as a Utility
Schedule 3.5(ii) - Regulation Under PUHCA
Schedule 3.5(iii) - Regulation by FERC; NRC
Schedule 3.5(iv) - Qualification for First Refusal Rights
Exemption Under Joint Ownership Agreement
Schedule 3.7(i) - Title Commitments
Schedule 3.8 - Qualified Decommissioning Funds
Schedule 3.9 - Nonqualified Decommissioning Funds
Schedule 3.10 - Certain Changes or Events
Schedule 3.11(i) - Compliance with Laws
Schedule 3.11(ii) - Other Permits
Schedule 3.11(iii) - Reporting Compliance
Schedule 3.11(iv) - NRC Commitments
Schedule 3.13(d) - Capacity or Energy Non-Assigned Contracts
Schedule 3.13(e) - Restrictions on Transfer, Options and Other
Rights
Schedule 3.14 - Insurance
Schedule 3.15 - Litigation
Schedule 3.16 - Labor Matters
Schedule 3.17 - Environmental
-vi-
{PAGE}
Schedule 3.18 - Condemnation
Schedule 3.19 - Intellectual Property
Schedule 3.21 - Complete Copies
Schedule 3.22 - Operability
Schedule 3.25 - Conformance with Technical Specifications
Schedule 4.3 - Matters of Contravention
Schedule 5.3 - Pre-Approved Capital Expenditures
Schedule 5.3(a)(iv) - Nuclear Fuel Expenditures
Schedule 5.7(a) - Represented Plant Employees
Schedule 5.7(b)(i) - Non-Represented Plant Employees
Schedule 5.7(b)(ii) - Severance Benefits
Schedule 5.7(b)(iii) - Certain Acquired Assets Employee Benefits and
Severance
Schedule 5.7(c)(iv) - Pension Benefits
Schedule 5.7(d) - Employee Benefits Packages
Schedule 5.8(d) - Pollution Control Facilities
Schedule 5.18 - Insurance and Price-Anderson Act
Schedule 6.1(c) - Buyer Regulatory Approvals
Schedule 6.2(c) - Seller Regulatory Approvals
Schedule 6.2(n) - Seller Shareholder Approval
-vii-
{PAGE}
PURCHASE AND SALE AGREEMENT
1. PREAMBLE.
This Purchase and Sale Agreement (the "Agreement") is entered into on
April 13, 2002, by and among FPL Energy Seabrook, LLC, a Delaware limited
liability company (the "Buyer"), North Atlantic Energy Corporation, a New
Hampshire corporation ("NAEC"), The United Illuminating Company, a Connecticut
corporation ("UI"), Great Bay Power Corporation, a New Hampshire corporation
("GBP"), New England Power Company, a Massachusetts corporation ("NEP"), The
Connecticut Light and Power Company, a Connecticut corporation ("CL&P"), Canal
Electric Company, a Massachusetts corporation ("Canal"), Little Bay Power
Corporation, a New Hampshire corporation ("LBP") and New Hampshire Electric
Cooperative, Inc., a New Hampshire electric cooperative ("NHEC") (NAEC, UI, GBP,
NEP, CL&P, Canal, LBP and NHEC are each individually referred to herein as a
"Seller" and are referred to collectively herein as "Sellers") and North
Atlantic Energy Service Corporation ("NAESCO"). Each of the Sellers and the
Buyer are referred to herein as a "Party" or, collectively, as the "Parties."
Terms used herein in capitalized form shall have the meanings ascribed to them
in Section 13 hereof or as otherwise set forth in this Agreement.
WHEREAS, each Seller owns, as a tenant-in-common, and, in the case of
the Undivided Interest (as hereinafter defined), UI leases, in the percentage
set forth on Schedule 1(a) hereto, an undivided ownership interest in the
Facility (as hereinafter defined) located at Seabrook Station ("Seabrook"), in
Seabrook, New Hampshire, and certain other facilities and assets associated
therewith and ancillary thereto, excepting the portion thereof consisting of the
real property that is owned solely by NAEC (as described in Section 2.1(a)(i)
below);
WHEREAS, the Sellers (other than the Seller Representatives) have
appointed the Seller Representatives (as hereinafter defined) to act as their
agents under this Agreement for purposes of certain of the covenants and
agreements contained herein;
WHEREAS, NAESCO manages the Facility for the Participants in accordance
with the Managing Agent Operating Agreement, and, for that reason, the Sellers
have requested and NAESCO has agreed to join in this Agreement solely for the
purpose of providing certain representations and warranties to the Buyer as
described in Sections 3 and 11.24 hereof, subject in all respects to the terms
and conditions herein, and NAESCO shall not be deemed a Party to this Agreement
for any other purpose; and
WHEREAS, the Buyer desires to purchase and assume, and the Sellers
desire to sell and assign, or cause to be sold or assigned, the Acquired Assets
(as defined in Section 2.1 below) and certain associated liabilities upon the
Initial Closing and each Subsequent Closing as more fully described herein, upon
the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
{PAGE}
2. ACQUISITION OF ASSETS BY BUYER.
2.1. Purchase and Sale of Assets. Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement at the Initial
Closing and each Subsequent Closing, each of the Required Sellers or the
Remaining Sellers, as the case may be, shall sell, assign, convey, transfer and
deliver or cause to be sold, assigned, conveyed, transferred and delivered to
the Buyer, and the Buyer shall purchase, assume and acquire, free and clear of
any Lien (except for Permitted Encumbrances), Sellers' Ownership Shares in the
properties and assets to the extent constituting, or to the extent used in the
operation of, the Facility, including but not limited to the following (the
"Acquired Assets"):
(a) (i) the real property which is owned solely by NAEC,
easements and other rights in real property as described in Schedule 2.1(a)(i)
and all rights arising out of the ownership thereof or appurtenant thereto,
including, without limitation, all related rights of ingress and egress (the
"NAEC Real Property"), subject to the Permitted Encumbrances, including the
matters set forth in Schedule 2.1(a)(iii)(A), and (ii) the real property (other
than the NAEC Real Property), Improvements thereon and Improvements on the NAEC
Real Property, easements and other rights in real property described in Schedule
2.1(a)(ii), and all rights arising out of the ownership thereof or appurtenant
thereto, including, without limitation, all related rights of ingress and egress
(the "Jointly Owned Real Property"), subject to the Permitted Encumbrances,
including the matters set forth in Schedule 2.1(a)(iii)(B) (the NAEC Real
Property and the Jointly Owned Real Property are referred to together as the
"Real Property");
(b) all Nuclear Materials, Spent Nuclear Fuel and other High
Level Waste to which the Sellers have title on the Initial Closing Date and each
Subsequent Closing Date, all of which are identified on Schedule 2.1(b) (which
shall be updated as of the Initial Closing Date and each Subsequent Closing
Date) and all Low Level Waste, including without limitation, those items which
are identified by type and amount on Schedule 2.1(b) (which shall be updated as
of the Initial Closing Date and each Subsequent Closing Date);
(c) all machinery, mobile or otherwise, equipment, computer
hardware and software, communications equipment, tools, spare parts, fixtures,
furniture, furnishings, and other personal property owned by the Sellers and
which is principally used in or principally relates to the operation or
maintenance of the Facility, and the Inventories owned by the Sellers which are
held at or are in transit from or to the Site, including, without limitation,
the items of personal property set forth in Schedule 2.1(c), as well as all
applicable warranties and guaranties existing as of such Closing Date from Third
Parties relating thereto to the extent such warranties and guaranties are
transferable to the Buyer, or to the extent any such items are leased, an
assignment of the applicable leases for such items (as well as all applicable
warranties and guaranties existing as of such Closing Date from Third Parties
relating thereto to the extent transferable to the Buyer);
-2-
{PAGE}
(d) all assets associated with Seabrook Unit 2, including
without limitation, the structures, equipment, components and parts, wherever
located, that were purchased for Unit 2 and not sold, transferred or disposed of
prior to the Initial Closing, to the extent owned by the Sellers as set forth in
Schedule 2.1(d) ("Unit 2");
(e) all of the Sellers' rights with respect to leasehold
interests and subleases and rights thereunder to the extent relating to the Real
Property, including, without limitation, with respect to the leases or Leased
Property, those items which are set forth in Schedule 2.1(e) (the "Leases");
(f) all Permits, which, as of such Closing Date, are
transferable by the Sellers to the Buyer by assignment or otherwise (including,
without limitation, upon request or application to a Governmental Authority, or
which will pass to the Buyer as successor in title to the Acquired Assets by
operation of Law), including, without limitation, those Permits set forth in
Schedule 2.1(f) (the "Transferable Permits");
(g) except as specifically provided in Section 2.2(h), all
rights of the Sellers under the contracts, agreements, purchase orders, the
Joint Ownership Agreement, the Disbursing Agent Agreement, the DOE Standard
Contract (including all rights to any claims of Sellers related to DOE defaults
thereunder), the Nuclear Fuel Contracts, the Transmission Support Agreement, the
Memorandum of Understanding with the Town of Seabrook, and personal property
leases to the extent relating to the operation of the Facility set forth in
Schedule 2.1(g) and, to the extent transferable to the Buyer, all warranties and
guaranties existing as of such Closing Date from Third Parties relating to the
Acquired Assets (the "Material Contracts");
(h) to the extent permitted by applicable Law, and as promptly
as practicable after such Closing and at such locations and in such form (hard
copy, magnetic or electronic) as shall be agreed upon, all documents,
correspondence, books, records, medical records, operating, safety and
maintenance manuals, inspection reports, drawings, models, engineering designs,
blueprints, as-built plans, specifications, procedures, studies, reports,
quality assurance records, purchasing records and equipment repair data, safety,
maintenance or service records relating to the design, construction, licensing,
regulation, operation or Decommissioning of the Facility and the other Acquired
Assets, wherever located, including, without limitation, all drawings, designs,
specifications and other documents owned by a Third Party and licensed to
Sellers which are used in or necessary to the licensing, operation or
Decommissioning of the Facility;
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