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Purchase and Sale Agreement

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Title:

Purchase and Sale Agreement

Entities:

Duquesne Light Holdings Inc.; Pepco Holdings, Inc.; Bank of New York; Blank Rome LLP

Date:

2005

Size:

Preview shows 35KB of 358KB total

Price:

$94

ID:

#938728

► Purchase & Sale ► Purchase & Sale Agreements
► Financial ► Money Center Banks
► Utilities ► Electric Utilities
► Services ► Legal

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PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

ATLANTIC CITY ELECTRIC COMPANY

and

DUQUESNE LIGHT HOLDINGS, INC.

Dated as of November 14 , 2005

Jointly Owned Stations

______________________________________________________________________________

LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A	Form of Assignment and Assumption Agreement
Exhibit B	Form of Bill of Sale
Exhibit C	Form of FIRPTA Affidavit
Exhibit D	Form of Deed- Conemaugh
Exhibit E	Form of Deed- Keystone
Exhibit F	Form of Seller's Legal Opinion
Exhibit G	Form of Buyer's Legal Opinion
SCHEDULES
1.1(28)	Description of Conemaugh Station
1.1(63)	Description of Keystone Station
1.1(77)	Permitted Encumbrances
2.1(d)	Electrical Transmission Facilities
2.1(f)	Emission Allowances to be Transferred to Buyer
2.6	Inventories
4.3(a)	Seller's Defaults and Violations
4.3(b)	Seller's Required Regulatory Approvals
4.6	Environmental Matters
4.7	Real Property
4.9(a)	Seller's Agreements
4.9(b)	Seller's Agreements Exceptions
4.9(c)	Seller's Agreements Defaults and Violations
4.10	Legal Proceedings
i ______________________________________________________________________________
4.12	Brokers; Finders
5.3(a)	Buyer's Defaults and Violations
5.3(b)	Buyer's Required Regulatory Approvals
5.9	Environmental Site Assessments
7.1(c)	Certain Buyer's Required Regulatory Approvals
7.2(c)	Certain Seller's Required Regulatory Approvals
ii ______________________________________________________________________________

	TABLE OF CONTENTS
		Page
	ARTICLE I DEFINITIONS
1.1.	Definitions	1
1.2.	Construction	12
1.3.	U.S. Dollars	13
1.4.	Seller's Interests in Jointly Owned Stations	13
	ARTICLE II PURCHASE AND SALE
2.1.	Transfer of Assets	13
2.2.	Excluded Assets	14
2.3.	Assumed Liabilities	16
2.4.	Excluded Liabilities	17
2.5.	Control of Litigation	18
2.6.	Inventories	18
	ARTICLE III THE CLOSING
3.1.	Closing	18
3.2.	Payment of Purchase Price	18
3.3.	Adjustment to Purchase Price	19
3.4.	Tax Reporting and Allocation of Purchase Price	20
3.5.	Prorations	21
3.6.	Deliveries by Seller	22
3.7.	Deliveries by Buyer	23
3.8.	Post-Closing Excluded Asset Deliveries	23
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER
4.1.	Organization; Qualification	24
4.2.	Authority	24
4.3.	Consents and Approvals; No Violation	24
4.4.	Insurance	25
4.5.	Title and Related Matters	25
4.6.	Environmental Matters	25
4.7.	Real Property	26
4.8.	Condemnation	26
4.9.	Contracts and Leases	26
iii ______________________________________________________________________________
4.10.	Legal Proceedings	26
4.11.	Seller's Permits	27
4.12.	Brokers; Finders	27
4.13.	Special Purpose Financial Statements	27
4.14.	Employees	27
4.15.	Disclosures	27
4.16.	Taxes	27
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER
5.1.	Organization; Qualification	28
5.2.	Authority	28
5.3.	Consents and Approvals; No Violation	28
5.4.	Buyer's Permits	29
5.5.	Availability of Funds	29
5.6.	Financial Statements	29
5.7.	Legal Proceedings	29
5.8.	No Knowledge of Seller's Breach	30
5.9.	Inspections	30
5.10.	Regulations as a Utility	30
5.11.	Brokers; Finders	30
	ARTICLE VI COVENANTS OF THE PARTIES
6.1.	Access to Information	30
6.2.	Public Statements	32
6.3.	Further Assurances	32
6.4.	Consents and Approvals	33
6.5.	Certain Tax Matters	34
6.6.	Advice of Changes	35
6.7.	Risk of Loss	36
6.8.	PJM; MAAC	36
6.9.	Emission Allowances	36
6.10.	Certain Covenants	37
6.11.	Exclusivity	37
	ARTICLE VII CONDITIONS
7.1.	Conditions to Obligation of Buyer	38
7.2.	Conditions to Obligation of Seller	39
7.3.	Separate Closings	40
iv ______________________________________________________________________________
	ARTICLE VIII INDEMNIFICATION AND ARBITRATION
8.1.	Indemnification	41
8.2.	Defense of Claims	43
8.3.	Arbitration	44
	ARTICLE IX TERMINATION
9.1.	Termination	45
9.2.	Effect of Termination	46
	ARTICLE X MISCELLANEOUS PROVISIONS
10.1.	Amendment and Modification	47
10.2.	Expenses	47
10.3.	Fees and Commissions	47
10.4.	Bulk Sales Laws	47
10.5.	Waiver of Compliance; Consents	47
10.6.	Survival	47
10.7.	Disclaimers	48
10.8.	Notices	49
10.9.	Assignment	50
10.10.	Governing Law; Forum; Service of Process	50
10.11.	Counterparts	51
10.12.	Interpretation	51
10.13.	Schedules and Exhibits	51
10.14.	Disclosure	51
10.15.	Entire Agreement	51
v ______________________________________________________________________________

PURCHASE AND SALE AGREEMENT

PURCHASE AND SALE AGREEMENT, dated as of November 14 , 2005 (this "Agreement"), by and between Atlantic City Electric Company, a New Jersey corporation ("ACE" or "Seller"), and Duquesne Light Holdings, Inc., a Pennsylvania corporation ("Buyer"). Seller and Buyer may each be referred to herein individually as a "Party," and together as the "Parties."

W I T N E S S E T H

WHEREAS, Seller owns minority interests in two fossil fuel-fired electric generating stations, and certain properties and assets associated therewith and ancillary thereto; and

WHEREAS, Seller possesses certain Emission Allowances (as defined below); and

WHEREAS, Buyer desires to purchase and assume, and Seller desires to sell and assign, or cause to be sold and assigned, the Purchased Assets (as defined below) and certain associated Liabilities (as defined below), upon the terms and conditions hereinafter set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants, representations, warranties and agreements set forth herein, and intending to be legally bound hereby, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1. Definitions. As used in this Agreement, the following capitalized terms have the meanings specified in this Section 1.1.

(1) "ACE" has the meaning set forth in the preamble to this Agreement.

(2) "Additional Agreements" means the Special Warranty Deeds, the Assignment and Assumption Agreements and the Bills of Sale.

(3) "Affiliate" has the meaning set forth in Rule 12b-2 of the General Rules and Regulations promulgated under the Exchange Act .

(4) "Agreement" means this Purchase and Sale Agreement together with the Schedules and Exhibits hereto.

(5)"Assignment and Assumption Agreements" means the assignment and assumption agreements between Seller and Buyer, to be delivered at the Closing, substantially in the form of Exhibit A hereto, pursuant to which Seller shall assign the Seller's Agreements,

______________________________________________________________________________

certain intangible assets and certain other Purchased Assets to Buyer, and Buyer shall accept such assignment and assume the Assumed Liabilities.

(6) "Assumed Liabilities" has the meaning set forth in Section 2.3.

(7) "Authorized Agent" has the meaning set forth in Section 10.10.

(8) "Bills of Sale" means the bills of sale of Seller, to be delivered at the Closing, substantially in the form of Exhibit B hereto.

(9) "Book Value" means, as of any date, original cost (including related capital improvements, freight, commodity and handling (other than on-site handling)) less applicable depreciation and amortization, as reflected on Seller's books and records or the books and records of Conemaugh Fuels, LLC or Keystone Fuels, LLC, in each case, through such date.

(10) "Business Day" means any day other than Saturday, Sunday and any day on which banking institutions in the State of New York are authorized or required by Law to close.

(11) "Buyer" has the meaning set forth in the preamble to this Agreement.

(12) "Buyer Material Adverse Effect" has the meaning set forth in Section 5.3(a).

(13) "Buyer's Financial Statements" has the meaning set forth in Section 5.6.

(14) "Buyer's Indemnitee" has the meaning set forth in Section 8.1(b).

(15) "Buyer's Permits" has the meaning set forth in Section 5.4.

(16) "Buyer's Required Regulatory Approvals" has the meaning set forth in Section 5.3(b).

(17) "Capital Expenditures" means the total amount of funds paid by Seller, or Liabilities incurred and subsequently paid by Seller in a manner consistent with the Jointly Owned Stations Operating Agreements, in respect of the period commencing on September 1, 2005 and ending on the Closing Date for those capital projects identified from time to time in (a) the General Ledger for each of Conemaugh Station and Keystone Station and (b) the Monthly Work Order Status Reports for each of Conemaugh Station and Keystone Station.

(18) "CERCLA" means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.

(19) "Closing" has the meaning set forth in Section 3.1.

(20) "Closing Adjustment Amount" means an amount equal to the amount by which (a) the sum of (i) the Book Value of Seller's right, title and interest in and to the Inventories

______________________________________________________________________________

(which, for purposes of clarity, the Parties acknowledge to include, for purposes of this definition, Inventories of Conemaugh Fuels, LLC and Keystone Fuels, LLC, to the extent of the Seller's Interests therein), as of the Closing Date, determined in a manner consistent with the determination of the Target Adjustment Amount, plus (ii) Capital Expenditures exceeds (b) the Electricity Sales Reimbursement Amount.

(21) "Closing Date" has the meaning set forth in Section 3.1.

(22) "Closing Payment" has the meaning set forth in Section 3.2(d).

(23) "Closing Statement" has the meaning set forth in Section 3.3(a).

(24) "Code" means the Internal Revenue Code of 1986, as amended.

(25) "Commercial Arbitration Rules" has the meaning set forth in Section 8.3(c).

(26) "Commercially Reasonable Efforts" means efforts which are reasonably within the contemplation of the Parties at the time of entering into this Agreement and which do not require the performing Party to expend funds other than expenditures which 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 hereunder.

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