UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
February 17, 1999
- --------------------------------------------------------------------------------
Date of Report (Date of earliest event reported)
PANDA GLOBAL HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-29005-01 75-2697755
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4100 Spring Valley, Suite 1001, Dallas, Texas 75244
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (972) 980-7159
Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
1
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets
On February 16, 1999, the Registrant disposed of a 99% indirect
interest in Panda Paris Power, L.P. ("Panda Paris LP") to certain subsidiaries
of FPL Energy, Inc. ("FPL") for approximately $160.5 million, consisting of
approximately $95 million in cash, plus an additional approximate $48 million to
repay certain indebtedness incurred by Panda Paris LP (as described below) and
approximately $17.5 million in reimbursement of other development costs. Panda
Paris LP is developing a 1,000 megawatt natural gas-fired electric generating
facility to be located at Paris, Texas.
Panda Paris I, LLC, a wholly-owned indirect subsidiary of the
Registrant and sole general partner of Panda Paris, L.P., sold its 1% general
partnership interest to FPL Energy Paris GP, Inc., a wholly-owned subsidiary of
FPL, and Panda Paris II, LLC, a wholly-owned indirect subsidiary of the
Registrant and sole limited partner of Panda Paris, L.P., sold a 98% limited
partnership interest to FPL Energy Paris LP, LLC, a wholly-owned subsidiary of
FPL. Panda Paris II retains a 1% limited partnership interest in Panda Paris LP.
Since December 1998, Panda Paris LP has borrowed approximately $48
million from MES Financial Corp. ("MES"), an affiliate of FPL, which funds were
used to make payments to various vendors of Panda Paris LP. On the date of the
disposition, Panda Paris I and Panda Paris II caused Panda Paris LP to repay the
principal of and interest on such borrowings simultaneously out of proceeds from
the disposition.
A portion of the cash consideration equal to $10 million will be
held in escrow and returned to FPL in reduction of the purchase price, but only
to the extent that costs are incurred by Panda Paris LP in regard to certain
contingencies after the date of the disposition. Such distributions to FPL from
escrow shall be reduced to the extent of liquidated damages under the applicable
construction contract and cost underruns. All amounts remaining in escrow shall
be distributed to the sellers after the facility commences commercial
operations.
The Registrant currently intends to use some of the proceeds from
the sale to fund the further development of international and domestic power
projects. The Registrant also may use a portion of the proceeds from the sale to
purchase or reduce outstanding indebtedness of subsidiaries of the Registrant;
however, there can be no assurance that any such purchase or reduction will be
effectuated by the Registrant in this manner.
2
<PAGE>
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
2.1 Partnership Interest Purchase and Sale Agreement, dated
as of February 17, 1999, among Panda Paris I, LLC, Panda
Paris II, LLC, FPL Energy Paris GP, Inc. and FPL Energy
Paris LP, LLC. (the Registrant agrees to furnish
supplementally, a copy of any omitted schedule or
exhibit to this agreement as the Commission may
request).
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PANDA GLOBAL HOLDINGS, INC.
Date: 2/17/1999 By: /s/ BRYAN J. URBAN
Name: Bryan J. Urban
Title: Vice President -- Finance
4
EXHIBIT 2.1
PANDA PARIS POWER, L.P.
PARTNERSHIP INTEREST
PURCHASE AND SALE AGREEMENT
AMONG
PANDA PARIS I, LLC
AND
PANDA PARIS II, LLC
AS SELLERS,
AND
FPL ENERGY PARIS GP, INC.
AND
FPL ENERGY PARIS LP, LLC
AS PURCHASERS
DATED AS OF FEBRUARY 16, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I. INTERPRETATION................................................1
ARTICLE II. PURCHASE AND SALE.............................................1
2.1 The Sale.........................................................1
2.2 Purchase Price...................................................2
2.3 Payment of Purchase Price........................................2
2.4 Closing..........................................................2
2.5 Deliveries at Closing............................................2
2.6 Escrow Deposit...................................................3
ARTICLE III. REPRESENTATIONS AND WARRANTIES................................4
3.1 Representations and Warranties of Sellers........................4
3.2 Representations and Warranties of Purchasers.....................8
3.3 Disclosure Schedules.............................................9
ARTICLE IV. ADDITIONAL AGREEMENTS.........................................9
4.1 Books and Records................................................9
4.2 Purchase Price Allocations......................................10
4.3 Further Assurances..............................................10
4.4 Access..........................................................10
4.5 Agreements to be Assigned.......................................10
4.6 Title Policy and Survey Completion..............................10
4.7 Payment of Development Costs....................................11
4.8 Certain Post-Closing Matters....................................11
ARTICLE V. INDEMNIFICATION..............................................12
5.1 INDEMNIFICATION BY SELLERS......................................12
5.2 INDEMNIFICATION BY PURCHASERS...................................12
5.3 Procedure for Indemnification...................................13
5.4 Taxes...........................................................13
5.5 Mitigation......................................................14
ARTICLE VI. MISCELLANEOUS................................................14
6.1 Modification or Amendment; Waiver...............................14
6.2 Governing Law...................................................14
6.3 Notices.........................................................14
6.4 Entire Agreement................................................15
6.5 Waiver of Trial by Jury.........................................15
-1-
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
6.6 Interpretation..................................................15
6.7 Parties in Interest; Assignment.................................16
6.8 Severability....................................................16
6.9 Headings........................................................16
6.10 Counterparts....................................................16
EXHIBITS
Exhibit 2.5(a)(i) - Form of Assignment Agreements
Exhibit 2.5(a)(ii) - Partnership Agreement
Exhibit 2.5(a)(iv) - Opinions of Sellers' Counsel
Exhibit 2.5(a)(v) - Escrow Agreement
Exhibit 2.5(b) - Opinions of Purchasers' Counsel
Exhibit 2.6 - Project Budget
SCHEDULES
Schedule 1.1 - Definitions/Rules of Interpretation
Schedule 1.1(a) - Easements
Schedule 1.1(b) - Surface Use Agreements
Schedule 3.1(a) - Sellers' Subsidiaries, Officers, Directors and Partners
Schedule 3.1(b) - Sellers' Consents
Schedule 3.1(d)(1) - Exceptions to Enforceability of Project Agreements
Schedule 3.1(d)(2) - Certain Project Agreement Issues
Schedule 3.1(d)(3) - Amendments to Project Agreements Since December 23, 1998
Schedule 3.1(d)(4) - Real Estate Interests other than Real Estate Documents
Schedule 3.1(e) - Permits
Schedule 3.1(j) - Material Changes to Financial Statements
Schedule 3.1(k) - Employee Matters
Schedule 3.1(m) - Bank Accounts
Schedule 3.2(a) - Purchasers' Subsidiaries, Officers, Directors and Members
Schedule 4.5 - Agreements to be Assigned
-2-
<PAGE>
PARTNERSHIP INTEREST PURCHASE AND SALE AGREEMENT
This PARTNERSHIP INTEREST PURCHASE AND SALE AGREEMENT (this
"AGREEMENT") is made as of February 16, 1999, among PANDA PARIS I, LLC, a
Delaware limited liability company ("PPI"), PANDA PARIS II, LLC, a Delaware
limited liability company ("PPII", and together with PPI, the "SELLERS"), FPL
ENERGY PARIS GP, INC., a Florida corporation ("FPL1"), and FPL ENERGY PARIS LP,
LLC, a Delaware limited liability company ("FPL2", and together with FPL1, the
"PURCHASERS").
PPI desires to sell to FPL1, and FPL1 desires to purchase from PPI,
its general partnership interest in Panda Paris Power, L.P., a Delaware limited
partnership (the "PARTNERSHIP"), which includes a 1% interest in profits and
capital of the Partnership (the "GENERAL PARTNERSHIP INTEREST"), on the terms
and conditions set forth in this Agreement. PPII desires to sell to FPL2, and
FPL2 desires to purchase from PPII, a limited partnership interest in the
Partnership, which interest includes a 98% interest in profits and capital (the
"LIMITED PARTNERSHIP INTEREST", and together with the General Partnership
Interest, the "PARTNERSHIP INTERESTS"), on the terms and conditions set forth in
this Agreement.
Subject to the terms and conditions of this Agreement and in
reliance upon the representations, warranties, covenants and agreements of the
parties contained in this Agreement, the parties hereto agree as follows:
ARTICLE I.
INTERPRETATION
Unless otherwise indicated in this Agreement, each term set forth in
SCHEDULE 1.1 shall have the respective meaning given to that term in SCHEDULE
1.1 or in the provision of this Agreement. The rules of interpretation set forth
in SCHEDULE 1.1 shall apply to this Agreement.
ARTICLE II.
PURCHASE AND SALE
2.1 THE SALE. PPI hereby agrees to sell and FPL1 hereby agrees to
purchase all of PPI's right, title and interest in and to the General
Partnership Interest on the terms and subject to the conditions set forth in
this Agreement, and PPII hereby agrees to sell and FPL2 hereby agrees to
purchase all of PPII's right, title and interest in and to the Limited
Partnership Interest on the terms and subject to the conditions set forth in
this Agreement. PPII shall continue to own a 1% "carried" or "profits" interest.
Upon the consummation of such transactions, the interests in Partnership profit,
loss and capital shall be owned as follows:
FPL1 1% (general partnership interest)
FPL2 98%(limited partnership interest)
PPII 1% (limited partnership interest)
<PAGE>
2.2 PURCHASE PRICE. The purchase price for the Partnership Interests
shall be (i) $160,503,059, which includes $65,503,0591 paid in reimbursement of
development and construction costs (the "Purchase Price"), less (ii) the Net
Purchase Price Reduction, if any. The Purchase Price shall be allocated with
1.01% payable to PPI and 98.99% payable to PPII.
2.3 PAYMENT OF PURCHASE PRICE. At the Closing, Purchasers shall make
a wire transfer of immediately available funds of the Initial Payment to Sellers
or to such Persons as Seller may designate in written payment instructions. The
Initial Payment shall be paid to Sellers to an account in New York City
designated by Sellers in a notice to Purchasers (except that Sellers hereby
direct Purchasers to pay a portion of the Initial Payment equal to the amounts
due and payable under the Bridge Financing Agreement directly to MES Financial
Corp.).
2.4 CLOSING. The closing of the purchase and sale of the Partnership
Interests (the "CLOSING") will take place concurrently with the execution and
delivery of this Agreement. The Closing will take place at the offices of
Orrick, Herrington & Sutcliffe LLP, 666 Fifth Avenue, New York, New York 10103
(unless another place is agreed to in writing by Purchasers and Sellers).
2.5 DELIVERIES AT CLOSING.
(a) DELIVERIES BY SELLERS. At the Closing, Sellers shall
deliver to Purchasers the following documents, each of which (i) shall be in
form and substance reasonably satisfactory to Purchasers, and (ii) shall have
been duly authorized, executed and delivered by the parties thereto:
(i) An Assignment of Partnership Interests, in the form
attached hereto as EXHIBIT 2.5(A)(I), together with evidence satisfactory to
Purchasers of the withdrawal of PPI as the general partner of the Partnership,
the admission of FPL1 as the general partner and the admission of FPL2 as a
limited partner;
(ii) An Amended and Restated Partnership Agreement of
the Partnership, substantially in the form of EXHIBIT 2.5(A)(II);
(iii) Certified copies of Sellers' Charter Documents,
and resolutions authorizing the Transaction;
(iv) Legal opinions from Haynes and Boone, LLP, counsel
to Sellers and Partnership, and Tiemann Law Offices and Chadbourne & Parke LLP,
regulatory counsel to Partnership, substantially in the forms of EXHIBIT
2.5(A)(IV); and
(v) an Escrow Agreement, in the form of Exhibit
2.5(a)(v), with such changes to such form as may be reasonably requested by the
Escrow Agent;
(vi) confirmation from Chase Securities, Inc. that the
Partnership is not subject to any contractual arrangements entered into with
such Persons;
- --------------
(1) These figures assume payments of $3,406,059 to D/FD and $1,647,000 as cash
collateral for the establishment of a letter of credit to TU by the Partnership
prior to Closing.
2
<PAGE>
(vii) evidence reasonably satisfactory to Purchasers of
the termination of the Operation and Management Agreement between Partnership
and Panda Global Services, Inc.; and
(viii) Such other resolutions, certificates, consents or
other documents of authority as may be otherwise necessary under applicable law
to convey and transfer the Partnership Interests to Purchasers, and all other
statements, certificates, instruments, documents or information that Purchasers
may reasonably request in order to assure sufficient transfer of the Partnership
Interests to Purchasers, FPL1's replacement of PPI as general partner of
Partnership, or compliance with the terms and conditions of this Agreement.
(b) DELIVERIES BY PURCHASERS. At the Closing, Purchasers (i)
shall make the payments provided in SECTION 2.3, and (ii) shall deliver to
Sellers the following documents, each of which (A) shall be in form and
substance reasonably satisfactory to Sellers and (B) shall have been duly
authorized, executed and delivered by the parties thereto:
(i) Certified copies of Purchasers' Charter Documents
and resolutions authorizing the Transaction;
(ii) Legal opinions of Orrick, Herrington & Sutcliffe
LLP and Ed Tancer, Esq., counsel to Purchasers, substantially in the forms of
EXHIBIT 2.5(B);
(iii) An Amended and Restated Partnership Agreement of
the Partnership, substantially in the form of EXHIBIT 2.5(A)(II);
(iv) An Amended Certificate of Limited Partnership; and
(v) an Escrow Agreement, in the form of Exhibit
2.5(a)(v), with such changes to such form as may be reasonably requested by the
Escrow Agent;
(c) PARTNERSHIP DELIVERIES. Immediately prior to or
concurrently with the Closing, Sellers shall cause Partnership to repay any debt
owed by Partnership to MES Financial Corp. under the terms of the Bridge
Financing Agreement.
2.6 ESCROW DEPOSIT. At the Closing, a portion of the Purchase Price
equal to the Escrow Amount shall be deposited by the Purchasers into the Escrow
Account. The Escrow Amount shall be held by the Escrow Agent pursuant to the
terms of the Escrow Agreement. If the Purchasers determine that there is a Net
Purchase Price Reduction, an amount equal to such Net Purchase Price Reduction
(but not exceeding the Escrow Amount) shall be available to the Purchasers by
delivery of a certificate to the Escrow Agent in accordance with the terms of
the Escrow Agreement prior to the Escrow Termination Date. The distribution of
such amounts to Purchasers shall constitute a reduction of the Purchase Price.
All interest on funds deposited to the Escrow Account shall accrue for the
account of the Sellers and shall be paid quarterly to the Sellers in accordance
with the terms of the Escrow Agreement. On the day following the Escrow
Termination Date, all amounts remaining in the Escrow Account shall be
distributed to the Sellers in accordance with the terms of the Escrow Agreement.
3
<PAGE>
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers hereby
represent and warrant to Purchasers as of the date hereof as follows:
(a) DUE ORGANIZATION; QUALIFICATION, ETC. Each Seller is a
limited liability company duly organized, validly existing and in good standing
under the laws of Delaware. Partnership is a limited partnership duly organized,
validly existing and in good standing under the laws of Delaware. Partnership
has full power and authority to carry on its business, as and where it is now
being conducted and as it is proposed to be conducted. Sellers and Partnership
are duly qualified, authorized or licensed and in good standing in each of the
jurisdictions where the nature of or the character of the Project requires such
qualification, authorization or licensing. Sellers have delivered to Purchasers
true, complete and correct copies of (i) their Charter Documents and (ii) the
Partnership Agreement and Certificate of Limited Partnership of Partnership, as
in effect on the date of this Agreement. SCHEDULE 3.1(A) lists all of the
subsidiaries, directors, officers, members and partners, as applicable, of
Sellers and Partnership.
(b) BINDING AGREEMENT. Subject to obtaining the consents set
forth in SCHEDULE 3.1(B), Sellers have full right, power and authority to
execute and deliver this Agreement and to perform Sellers' obligations relating
to the sale of the Partnership Interests and change in partners contemplated
hereby. This Agreement has been duly authorized by all necessary action by
Sellers and constitutes a valid and legally binding agreement of Sellers
enforceable in accordance with its terms, except as enforceability may be
subject to or limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting the rights of
creditors generally.
(c) NO CONSENTS. Except as set forth on SCHEDULE 3.1(B), no
consent or approval (i) under any Governmental Authorization or Governmental
Rule to which Sellers or Partnership or any of their respective properties is
subject, (ii) of any party to any agreement, indenture or instrument of Sellers
or Partnership or to which Sellers or Partnership or any of their respective
properties is subject (including without limitation the Project Agreements), or
(iii) of any other Person, including without limitation the members of Sellers,
is required for the execution, and delivery of this Agreement and the sale of
the Partnership Interests and change in partners contemplated hereby.
(d) CONTRACTS AND AGREEMENTS. Except for the Project
Agreements, there is no agreement or instrument entered into by Sellers or
Partnership which defines any of Partnership's rights or obligations with
respect to the Project other than easements that have been obtained for
alternative routing purposes or option agreements for alternative plant sites,
which easements and option agreements are listed in SCHEDULE 1.1(A) for
disclosure purposes. Sellers have delivered to Purchasers a true, correct and
complete copy of each of the Project Agreements. Except as set forth in SCHEDULE
3.1(D)(1), all of the Project Agreements are valid and binding agreements
enforceable in accordance with their terms, except as enforceability may be
subject to or limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium or
4
<PAGE>
other similar laws relating to or affecting the rights of creditors generally.
All obligations of Partnership under the Project Agreements have been duly
performed in a timely manner, and neither Partnership nor any of its Affiliates
has received any claim or notice that Partnership has not fully performed such
obligations satisfactorily. Except as set forth in SCHEDULE 3.1(D)(2), each of
the executed Project Agreements is in full force and effect in accordance with
its terms and no waiver, amendment, default or event, which with the giving of
notice or the lapse of any period of time or both would become a default, or
dispute exists with respect to any of the Project Agreements. Except as set
forth in SCHEDULE 3.1(D)(3), since December 23, 1998, Partnership has not
entered into any Project Agreement nor any amendment or modification of any
Project Agreement without, in any such case, the prior written approval of
Purchasers or an Affiliate thereof.
Except as set forth in SCHEDULE 3.1(D)(4), the Real
Property Documents constitute all of the real property interests of Partnership
(other than easements that have been obtained for alternative routing purposes
or option agreements for alternative plant sites) and, upon exercise of the
options granted under the Real Property Documents, no other fee ownership,
lease, right of way, easement, site license or other license, or other right in
real property, will be necessary in order for Partnership to construct, own,
maintain and operate the Project as presently proposed to be operated under
current Governmental Rules. The Title Insurance Commitment and SCHEDULE
3.1(D)(4) include any exceptions of which Sellers are aware as to the adequacy
of title to fee properties, leases, site leases, rights of way, water rights,
easements for installation and maintenance of power lines, easements for access,
roads, power plants, and other ancillary real property rights necessary for the
construction, use and operation of the Project as presently proposed to be
constructed, used and operated, which exceptions shall not prevent or restrict
in any material respect the construction, use and operation of the Project as
presently proposed to be constructed, used and operated.
To the best of Sellers' Knowledge, each party to the
Project Agreements is willing to continue its business relationship with
Partnership and will not terminate such relationship as a result of the
consummation of the transactions contemplated hereby, to the extent it has any
right to do so pursuant to the Project Agreement to which it is a party. Sellers
note that no notice of the transactions contemplated hereby has been given to
counterparties to the Project Agreements, no such notice being required (other
than as may be required with respect to the Permits).
(e) COMPLIANCE WITH LAWS; PERMITS. Neither Sellers nor
Partnership is in violation of any Requirement of Law except as will not have an
adverse effect on the Project or upon the transfer of Partnership Interests
contemplated herein. The Permits listed on SCHEDULE 3.1(E) constitute all
Governmental Authorizations necessary for Partnership to construct, own,
maintain and operate the Project at the Project Site as presently proposed to be
operated under current Governmental Rules, each of which was validly obtained
and is in full force and effect (except for those listed as not obtained).
Sellers have no Knowledge of any impediments to obtaining any of the Permits
listed as not obtained on SCHEDULE 3.1(E). Partnership is in material compliance
with the obtained Permits through the date hereof, and, except as disclosed in
SCHEDULE 3.1(B) and SCHEDULE 3.1(E), no filing or declaration with any
Governmental Authority is necessary or advisable in connection with the sale of
the Partnership Interests and change in partners contemplated hereby.
Partnership has made in a timely manner
5
<PAGE>
all required filings and reports with all Governmental Authorities required
through the date hereof, and all such filings and reports were complete and
accurate as of the date of such filings. Except for the transfer of the
Partnership Interests and the change of the partners resulting from such
transfer as contemplated herein, there has been no material change in the facts
set forth in any such filing or report or in the application for any Permit.
(f) PROCEEDINGS. There is no litigation, action, suit or
proceeding pending or, to the best of Sellers' Knowledge, threatened by or
against Partnership or Sellers which could reasonably be anticipated to
adversely affect the Partnership or the Project or enjoin or restrict Sellers'
ability to sell the Partnership Interests. To the best of Sellers' Knowledge,
there is no reasonable basis for any claims against Partnership.
(g) NO BROKERS. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on by Sellers
directly with Purchasers without the intervention of any other Person as the
result of any act of Sellers and without the intervention of any other Person
who may be deemed to be acting on behalf of Sellers in such a manner as to give
rise to any valid claim against any of the parties hereto for a brokerage
commission, finder's fee or other like payment.
(h) TITLE TO ASSETS. PPI is the sole general partner and
holder of a one percent (1%) general partnership interest in Partnership, which
interest contains a 1% interest in profits and capital, and PPII is the sole
limited partner and holder of a ninety-nine percent (99%) limited partnership
interest in Partnership, which interest contains a 99% interest in profits and
capital. Sellers own the Partnership Interests free and clear of any
Encumbrances (except for Encumbrances created for the benefit of MES Financial
Corp. in connection with the Bridge Financing Agreement or contained in the
Partnership Agreement or the Amended Partnership Agreement). Sellers have not
conveyed to any Person any right or option to acquire any portion of the
Partnership Interests (except for Encumbrances created for the benefit of MES
Financial Corp. in connection with the Bridge Financing Agreement or contained
in the Amended Partnership Agreement). Other than Sellers, Sellers have no
Knowledge of any Person who owns any interest in Partnership or any option or
other right to acquire any interest in Partnership. Partnership owns the Project
Agreements free and clear of any Encumbrances (except for Encumbrances created
for the benefit of MES Financial Corp. in connection with the Bridge Financing
Agreement). Partnership owns no assets other than the Project Agreements.
(i) AGREEMENT WILL NOT CAUSE BREACH. Except as set forth in
SCHEDULE 3.1(b), the execution and delivery of this Agreement and the
consummation of the sale of Partnership Interests and change of partners hereby
will not result in or constitute any of the following: (i) a default, breach or
violation or an event that, with notice or lapse of time or both, would be a
default, breach or violation of any of Sellers' or Partnership's Charter
Documents or any Contractual Obligation or Governmental Authorization to which
any of Sellers or Partnership is a party or by which any of Sellers or
Partnership is bound (including, without limitation, the Project Agreements);
(ii) an event that would permit any party to terminate any Contractual
Obligation of Sellers or Partnership or to accelerate the maturity of any
indebtedness or other Contractual Obligation of Sellers or Partnership; or (iii)
the creation or imposition of any lien on any or all of the Project or the
Project Agreements.
6
<PAGE>
(j) FINANCIAL STATEMENTS. Sellers have delivered to Purchasers
true and complete copies of Partnership's unaudited financial statements as of
December 31, 1998, (the "FINANCIAL STATEMENTS"). The Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistent with prior periods except that the Financial Statements contain no
notes. The Financial Statements accurately reflect the books, records and
accounts of the Sellers and Partnership in all material respects and present
fairly the financial condition and results of operations of the Sellers and
Partnership as at and for the periods indicated. Except as disclosed in SCHEDULE
3.1(J), there are no material changes to the assets and liabilities of
Partnership from those disclosed in the Financial Statements of Partnership
dated December 31, 1998.
(k) EMPLOYEE MATTERS. Except as set forth in SCHEDULE 3.1(K),
neither Sellers nor Partnership have or have had any employees. There are no
benefit plans, contracts or arrangements (whether funded or unfunded) covering
employees or former employees of Sellers or Partnership (including "employee
benefit plans" under Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), and neither Sellers nor Partnership is subject to
any existing or contingent liability with respect to any employee benefit plan
maintained by Sellers or Partnership or any Person who is (together with either
Seller or Partnership) treated as a single employer under Section 414(b), (c) or
(m) of the Internal Revenue Code of 1986, as amended.
(l) TAXES. All federal, state and local Tax Returns, reports
and statements required to be filed with respect to the Project (including the
assets and properties relating thereto) or Partnership and the operations of
Partnership and Sellers have been properly and accurately completed and timely
filed with the appropriate Governmental Authorities in all jurisdictions in
which such returns, reports and statements are required to be filed, except as
will not have an adverse effect on the Partnership or the Project. All taxes and
assessments in respect of the Project (including the assets and properties
relating thereto) or Partnership (whether or not requiring the filing of
returns), including any interest, penalties and additions thereto, due and
payable have been timely paid in full. Neither Partnership nor Sellers is a
party to any pending or, to the best of Seller's Knowledge, threatened action or
proceeding for assessment or collection of taxes with respect to taxes payable
in connection with or with respect to the Project (including the assets and
properties relating thereto) or Partnership, and no claim for assessment or
collection of any such taxes has been asserted against Partnership or Sellers.
Neither Partnership nor Sellers have agreed to any extension of the statute of
limitations with respect to taxes payable in connection with or with respect to
the Project (including the assets and properties relating thereto) or
Partnership. The Partnership is and has always been treated as non-existent for
Federal income tax purposes, and has not made any election under Section 7701 of
the Code or any comparable State provision to be classified as a corporation for
Federal income tax purposes. The Partnership has not made an election under
Section 754 of the Code. None of the assets of the Partnership constitute
tax-exempt use property or tax-exempt bond financed property within the meaning
of Section 168(h) and 168(g)(5) of the Code, respectively.
(m) BANK ACCOUNTS. SCHEDULE 3.1(M) sets forth (a) the names
and locations of all banks, trust companies, savings and loan associations and
other financial institutions at which Partnership maintains, or at any time
prior to the date hereof maintained, accounts of any nature or safe deposit
boxes relating thereto and the names of all persons
7
<PAGE>
authorized to draw thereon, make withdrawals therefrom or to have access
thereto; and (b) the names of all persons, firms, associations, corporations or
business organizations holding general or specific powers of attorney from
Partnership relating thereto, its assets or business and a summary of the terms
thereof.
(n) LIABILITIES Partnership does not have any liability or
obligation, fixed, contingent, or otherwise, other than liabilities and
obligations disclosed in the Financial Statements or incurred pursuant to the
Project Agreements, the Bridge Financing Agreement and the promissory note
issued pursuant to the Bridge Financing Agreement.
(o) MATERIAL FACTS. No representation or warranty made by
Sellers in this Agreement, including the schedules hereto, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein not misleading.
3.2 REPRESENTATIONS AND WARRANTIES OF PURCHASERS. Purchasers hereby
represent and warrant to Sellers as of the date hereof that:
(a) DUE ORGANIZATION. FPL1 is a corporation duly organized,
validly existing and in good standing under the laws of Florida. FPL2 is a
limited liability company duly organized, validly existing and in good standing
under the laws of Delaware. Each Purchaser has full power and authority to carry
on its business, as and where it is now being conducted and as it is proposed to
be conducted. Purchasers have delivered to Sellers true, complete and correct
copies of their Charter Documents, as in effect on the date of this Agreement.
SCHEDULE 3.2(A) lists all of the subsidiaries, directors, officers, shareholders
and members (as applicable) of Purchasers.
(b) BINDING AGREEMENT. Purchasers have full right, power and
authority to execute and deliver this Agreement and to perform Purchasers'
obligations and to consummate the transactions contemplated hereby. Purchasers
have taken all required action to execute, deliver and perform their obligations
under this Agreement. This Agreement has been duly authorized by all necessary
action by Purchasers and constitutes a valid and legally binding agreement of
Purchasers enforceable against Purchasers in accordance with its terms, except
as enforceability may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to or
affecting the rights of creditors generally.
(c) NO BROKERS. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on by Purchasers
directly with Sellers without the intervention of any other Person as the result
of any act of Purchasers and without the intervention of any other Person who
may be deemed to be acting on behalf of Purchasers in such a manner as to give
rise to any valid claim against any of the parties hereto for a brokerage
commission, finder's fee or other like payment.
(d) NO CONSENTS. No consent or approval (i) under any federal
or Florida Governmental Authorization or federal or Florida Governmental Rule to
which Purchasers or any of their respective properties is subject, (ii) of any
party to any agreement,
8
<PAGE>
indenture or instrument of Purchasers or to which Purchasers or any of their
respective properties is subject, or (iii) of any other Person, including
without limitation the direct and indirect shareholders of Purchasers, is
required for the execution and delivery of this Agreement and the purchase of
the Partnership Interests and change in partners contemplated hereby, except any
approvals obtained prior to the date hereof.
(e) COMPLIANCE WITH LAWS; PERMITS. Purchasers are not in
violation of any Requirement of Law of the United States or the State of Florida
through the date hereof, except as will not have a material adverse effect on
the Purchasers. No material Governmental Authorizations of the United States or
the State of Florida are necessary for Purchasers to consummate the transactions
contemplated herein.
(f) PROCEEDINGS. There is no litigation, action, suit or
proceeding pending or, to the best of Purchasers' Knowledge, threatened by or
against Purchasers which could reasonably be anticipated to materially adversely
affect the Purchasers or enjoin or restrict Purchasers' ability to purchase the
Partnership Interests. To the best of Purchasers' Knowledge, there is no
reasonable basis for any material claims against Purchasers.
(g) AGREEMENT WILL NOT CAUSE BREACH. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby will not result in or constitute any of the following: (i) a material
default, breach or violation or an event that, with notice or lapse of time or
both, would be a material default, breach or violation of any of Purchasers'
Charter Documents or any Contractual Obligation or Governmental Authorization to
which either of Purchasers is a party or by which either of Purchasers is bound;
or (ii) an event that would permit any party to terminate any material
Contractual Obligation of Purchasers or to accelerate the maturity of any
indebtedness or other Contractual Obligation of Purchasers.
3.3 DISCLOSURE SCHEDULES. Nothing in any disclosure schedule
attached hereto shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the disclosure schedule identifies
the exception with particularity and discloses any relevant facts necessary to
make the disclosure meaningful (in this regard Purchasers acknowledge that no
facts need to be disclosed in order to make item 1 of Schedule 3.1(d)(1)
meaningful). Without limiting the generality of the foregoing, the mere listing
(or inclusion of a copy) of a document or other item shall not be deemed
adequate to disclose an exception to a representation or warranty made herein
(unless the representation or warranty has to do with the existence of the
document or other item itself).
ARTICLE IV.
ADDITIONAL AGREEMENTS
4.1 BOOKS AND RECORDS.
(a) POSSESSION. Sellers acknowledge and agree that from and
after the Closing, Purchasers will be entitled to own and possess all documents,
books and records, agreements and financial data of any sort relating to the
Partnership. Sellers agree to deliver to
9
<PAGE>
Purchasers at or prior to the Closing all such documents, books and records,
agreements and financial data. Seller may retain copies thereof.
(b) FUTURE COOPERATION. If, in order to prepare Purchasers' or
Partnership's financial statements or documents required to be filed with any
Governmental Authority, it is necessary that Partnership, Purchasers or any
successors be furnished with additional information relating to Sellers, the
Partnership or the Project, and such information is in the possession of Sellers
or their Affiliates, Sellers shall and shall cause their Affiliates to use their
reasonable best efforts to furnish such information to Purchasers, at the cost
and expense of Partnership for a period of twelve months after Closing.
4.2 PURCHASE PRICE ALLOCATIONS. Sellers and Purchasers acknowledge
that, for Federal income tax purposes, Purchasers' acquisition of the
Partnership Interests shall be treated as an acquisition of 99% of the assets of
the Partnership, followed by a contribution to the Partnership (a) by
Purchasers, of the assets so acquired and (b) by Sellers, of the 1% of the
assets not acquired by Purchasers. Purchasers shall allocate its Purchase Price
among the assets of the Partnership acquired by it (as aforesaid) in a manner
which Purchasers reasonably determine is consistent with Section 1060 of the
Code. Purchasers and Sellers agree to file all Tax Returns in a manner
consistent with the allocations made by Purchasers. Sellers shall provide the
Partnership, as soon as possible following the Closing Date and in all events no
later than 30 days subsequent to the Closing Date, with information regarding
its adjusted tax basis as of the Closing Date in the 1% of the assets not sold
to Purchasers (as aforesaid) so as to enable the Partnership to make the
calculations required under Section 704(c) of the Code..
4.3 FURTHER ASSURANCES. After the Closing, and for no further
consideration but at the expense of Partnership, Sellers shall (a) perform all
acts, or cause such acts to be performed, to replace PPI as general partner of
Partnership, and (b) execute, acknowledge and deliver such assignments,
transfers, consents and other documents and instruments as Purchasers may
reasonably request, in each case, to vest in Purchasers, and protect Purchasers'
right, title and interest in, and enjoyment of, the Partnership Interests and to
carry out the full purposes of this Agreement. Following the Closing, Sellers
shall refer to Purchasers, as promptly as practicable, any telephone calls,
letters, orders, notices, requests, inquiries and other communications relating
to the Partnership Interests, the Project or the Project Agreements.
4.4 ACCESS. Purchasers agree that Sellers and their representatives
may attend periodic site progress meetings between the Partnership and D/FD and
visit the Project construction site during normal business hours and upon
reasonable advance notice, provided that such attendance and visits do not
disrupt or delay the normal construction-related operations of the Partnership
or any of its contractors, subcontractors or suppliers.
4.5 AGREEMENTS TO BE ASSIGNED. Attached hereto as SCHEDULE 4.5 is a
list of agreements that will be assigned by PEI (or its Affiliates) to the
Partnership at Closing.
4.6 TITLE POLICY AND SURVEY COMPLETION. Within sixty (60) days after
Closing, Sellers agree to provide, at their cost, a surveyor certified single
metes and bounds description for the waterline and pipeline easement parcels
which shall be incorporated into and insured by the title policy to be issued as
set forth herein. After Closing, Purchasers agree to
10
<PAGE>
cause Partnership to obtain an Owner's Policy of Title Insurance from the
underwriters of the Title Insurance Commitment, insuring the Partnership in
accordance with the Title Insurance Commitment, as modified by the provisions of
this Agreement, in an amount not less than $400,000,000, except that such amount
of title insurance to be purchased may be obtained in increments, in the
discretion of Partnership, based upon such factors as the extent of the
improvements actually constructed on the property to be insured at any time, the
premium costs for obtaining such insurance including the costs for survey
updates and any other costs associated with periodic updates of such insurance,
the requirements of any construction lender, and such other similar factors as
may affect such determination. Notwithstanding the foregoing, Purchasers shall
not be obligated to cause Partnership to purchase additional amounts of title
insurance in the event that the construction of the Project is abandoned prior
to completion.
4.7 PAYMENT OF DEVELOPMENT COSTS. Sellers agree to be responsible
for the payment of all fees and expenses for services performed under the
Consultant Agreements prior to the Closing and, to the extent not previously
paid, all other development costs of Panda Paris or its Affiliates (other than
costs under the Project Agreements including without limitation, invoices
received prior to closing from General Electric Company, Hayter Engineering and
D/FD which have not been paid as of Closing) for the period prior to the
Closing. Except for the foregoing costs to be paid by Sellers, the Partnership
will be responsible for the payment of all costs under the Project Agreements
and any fees and expenses for services performed under the Consultant Agreements
subsequent to Closing.
4.8 CERTAIN POST-CLOSING MATTERS. Sellers agree, at their cost and
expense, to perform the following acts to the reasonable satisfaction of
Purchasers as soon as practicable but in any event not later than thirty days
after Closing,:
(i) Obtain a surveyor certified single metes and bounds
legal description for the Union Pacific Railroad parcels which are to be
incorporated into and insured by the title policy to be issued in connection
with the Title Insurance Commitment;
(ii) Obtain Subordination Agreements from existing
lienholders on Tract 25 (Campbell Soup) and Tract 26 (Kiamichi Railroad);
(iii) Obtain a release of Supplemental Indenture dated
January 1, 1997 between Union Pacific Railroad Company and The Boatman's Bank of
St. Louis, recorded in Volume 671, Page 233 and release of Supplemental
Indenture dated January 1, 1997 between Union Pacific Railroad Company and The
Chase Manhattan Bank, recorded in Volume 671, Page 238;
(iv) Obtain evidence confirming the amount of unpaid
taxes due on the parcels to be acquired from the Union Pacific Railroad,
including evidence that no rollback taxes shall be applicable, and provision for
payment of such taxes;
(v) Obtain evidence as to payment and release of record
of outstanding Abstract of Judgment filed February 4, 1998, styled Dennis Wiley
vs. George Henderson in Cause #C2247 for $2,995.00 plus costs etc. recorded in
Volume 17, page 741, Lamar County Abstract of Judgment Records; and
11
<PAGE>
(vi) Obtain agreements with an affiliate of Enron in
replacement of the existing Fuel Transportation Contracts with Black Marlin
Pipeline Company, together with any interconnection agreements required
therewith.
Purchasers agree that if the Title Insurance Commitment is revised
to reflect the foregoing items (i) through (v) or to remove such items as
exceptions, as appropriate, such revision shall constitute satisfactory evidence
thereof.
ARTICLE V.
INDEMNIFICATION
5.1 INDEMNIFICATION BY SELLERS. SELLERS SHALL INDEMNIFY (1)
PURCHASERS, (2) TO THE EXTENT PERSONS OTHER THAN PURCHASERS OR THEIR AFFILIATES
ASSERT CLAIMS AGAINST THE FOLLOWING PERSONS, THE PURCHASERS' RESPECTIVE
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, AND (3) THE PARTNERSHIP
(THE "PURCHASER INDEMNIFIED PARTIES") AND HOLD EACH OF THEM HARMLESS FROM ANY
AND ALL CLAIMS, LIABILITIES, LOSSES, DAMAGES (INCLUDING CONSEQUENTIAL DAMAGES),
INJURIES, PENALTIES, COSTS AND EXPENSES, (INCLUDING REASONABLE ATTORNEYS' FEES
AND DISBURSEMENTS) SUFFERED OR INCURRED BY THEM, CALCULATED ON AN AFTER TAX
BASIS (HEREINAFTER A "PURCHASER LOSS"), ARISING OUT OF OR RESULTING FROM THE
BREACH OF ANY REPRESENTATION OR WARRANTY OR THE BREACH OF ANY COVENANT OR
AGREEMENT OF SELLERS CONTAINED IN THIS AGREEMENT, PROVIDED (I) THAT ANY CLAIM
FOR INDEMNIFICATION BY A PURCHASER INDEMNIFIED PARTY FOR BREACH OF A
REPRESENTATION OR WARRANTY MUST BE ASSERTED WITHIN TWENTY-FOUR MONTHS AFTER THE
DATE HEREOF, EXCEPT A CLAIM FOR BREACH OF SECTION 3.1(L) OR SECTION 5.4 WHICH
CAN BE ASSERTED UNTIL SUCH TIME AS THE STATUTE OF LIMITATIONS PERIOD FOR PAYMENT
OF ANY TAXES RESULTING FROM SUCH BREACH HAS EXPIRED; (II) THAT THE SELLERS SHALL
NOT BE LIABLE FOR ANY PURCHASER LOSS ARISING OUT OF OR RESULTING FROM ANY BREACH
OF A REPRESENTATION OR WARRANTY UNLESS THE AGGREGATE DOLLAR AMOUNT OF ALL SUCH
PURCHASER LOSSES EXCEEDS $2,000,000; AND (III) THAT THE AGGREGATE LIABILITY OF
THE SELLERS UNDER THIS SECTION 5.1 SHALL NOT IN ANY EVENT EXCEED $85,000,000
PLUS THE AMOUNT OF ANY DISTRIBUTIONS TO SELLERS FROM THE ESCROW ACCOUNT.
5.2 INDEMNIFICATION BY PURCHASERS. PURCHASERS SHALL INDEMNIFY
SELLERS AND THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES AND
AGENTS (THE "SELLER INDEMNIFIED PARTIES") AND HOLD EACH OF THEM HARMLESS FROM
ANY AND ALL CLAIMS, LIABILITIES, LOSSES, DAMAGES (INCLUDING CONSEQUENTIAL
DAMAGES), INJURIES, PENALTIES, COSTS AND EXPENSES, (INCLUDING REASONABLE
ATTORNEYS' FEES AND DISBURSEMENTS) SUFFERED OR INCURRED BY THEM,
12
<PAGE>
CALCULATED ON AN AFTER TAX BASIS (HEREINAFTER A "SELLER LOSS"), ARISING OUT OF
OR RESULTING FROM THE BREACH OF ANY REPRESENTATION OR WARRANTY OR THE BREACH OF
ANY COVENANT OR AGREEMENT OF PURCHASERS CONTAINED IN THIS AGREEMENT, PROVIDED
THAT ANY CLAIM FOR INDEMNIFICATION BY A SELLER INDEMNIFIED PARTY FOR BREACH OF A
REPRESENTATION OR WARRANTY MUST BE ASSERTED WITHIN TWENTY-FOUR MONTHS AFTER THE
DATE HEREOF.
5.3 PROCEDURE FOR INDEMNIFICATION. If there is asserted any claim,
liability or obligation that in the judgment of a party indemnified above
("INDEMNIFIED PARTY") may give rise to any Purchaser Loss or Seller Loss
(collectively, "INDEMNIFIED LOSS"), or if such Indemnified Party determines the
existence of the foregoing, whether or not the same shall have been asserted,
such Indemnified Party shall give the party from whom indemnity is sought
("INDEMNITOR") notice (including reasonable detail of the facts giving rise to
same) within thirty (30) Business Days of the assertion of any claim, liability
or obligation, or within ten (10) Business Days of receipt of notice of the
filing of any lawsuit based upon such assertion, or, with respect to a claim not
yet asserted against Indemnified Party, promptly upon the determination by
Indemnified Party of the existence of the same. Indemnitor shall have the right
to assume the defense of such claim, liability or obligation provided that
Indemnitor retains experienced counsel reasonably satisfactory to Indemnified
Party and provided that Indemnitor is reasonably able to meet its likely
indemnification obligations; PROVIDED, Indemnified Party shall cooperate with
Indemnitor in any such defense which Indemnitor assumes in the event Indemnitor
makes such request to Indemnified Party and such request is reasonable.
Indemnified Party shall have the right to participate in such defense, PROVIDED,
HOWEVER, that if Indemnified Party retains separate counsel, Indemnified Party
shall assume the expense of the separate counsel. No settlement or adjustment
shall be made without Indemnified Party's prior written consent (which consent
shall not be unreasonably withheld) and, provided that Indemnitor is reasonably
able to meet its likely indemnification obligations, Indemnitor's prior written
consent (which consent shall not be unreasonably withheld). Failure by
Indemnified Party to give timely notice pursuant to this SECTION 5.3 shall not
relieve Indemnitor of its obligations, except to the extent that Indemnitor is
actually prejudiced by such failure to give timely notice. If Indemnitor elects
not to assume the defense of any such claim, liability or obligation,
Indemnified Party shall conduct such defense or settle such claim, and following
conclusion of such claim Indemnified Party may claim against Indemnitor
hereunder.
5.4 TAXES.
(a) All transfer and sales taxes (excluding Florida taxes, if
any) incurred in connection with this purchase and sale of Partnership
Interests, if any, shall be borne by the Sellers, and the Sellers at their own
expense will file, to the extent required by applicable law, all necessary Tax
Returns and other documentation with respect to all such transfer or sales
taxes.
(b) SELLERS SHALL INDEMNIFY AND HOLD THE PARTNERSHIP AND
PURCHASERS HARMLESS, ON AN AFTER TAX BASIS, FROM AND AGAINST ANY INCOME TAXES
IMPOSED ON THE SELLERS RESULTING FROM THE SALE OF THE PARTNERSHIP INTERESTS TO
THE PURCHASERS.
13
<PAGE>
(c) Each of the Purchasers and Sellers shall provide the other
with such assistance as may reasonably be requested by the other party in
connection with the preparation of any Tax Return, any audit or other
examination by any taxing authority, or any judicial or administrative
proceedings relating to liability for Taxes, and each will retain and provide
the requesting party with any records or information which may be relevant to
such return, audit or examination, proceedings or determination. Each party will
take any and all commercially reasonable steps, act in good faith, and cooperate
fully, to permit the other party to comply with its obligations and secure its
right to indemnification hereunder.
(d) The obligations of Purchasers and Sellers under this
SECTION 5.4 shall survive the Closing and shall continue until the expiration of
the applicable statute of limitations.
5.5 MITIGATION. Each Indemnified Party shall use commercially
reasonable efforts to mitigate damages relating to any Indemnified Loss,
including, without limitation, collection of available insurance proceeds and
the pursuit of available remedies against the other parties to the Project
Agreements. The amount of any Purchaser Loss shall be reduced to take account of
the net benefit (calculated on an After Tax basis) of any distributions made to
Purchasers from the Escrow Account.
ARTICLE VI.
MISCELLANEOUS
6.1 MODIFICATION OR AMENDMENT; WAIVER. This Agreement shall not be
modified or amended except pursuant to an instrument in writing executed and
delivered on behalf of each of Purchasers and Sellers. No waiver of any of the
provisions of this Agreement shall be deemed to or shall constitute a waiver of
any other provision hereof (whether or not similar). No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof.
6.2 GOVERNING LAW. This Agreement shall be governed by, interpreted
under and construed and enforced in accordance with the laws of the State of New
York without giving effect to the principles of conflict of laws thereof.
6.3 NOTICES. Any notice, request, instruction or other document to
be given by any party to another party shall be in writing and addressed as
follows:
If to Purchasers:
FPL Energy Paris GP, Inc.
c/o FPL Energy, Inc.
700 Universe Boulevard
Juno Beach, FL 33408-2683
Attention: Glenn E. Smith
Fax: (561) 691-7177
14
<PAGE>
FPL Energy Paris LP, LLC
c/o FPL Energy, Inc.
700 Universe Boulevard
Juno Beach, FL 33408-2683
Attention: Glenn E. Smith
Fax: (561) 691-7177
with a copy to:
Orrick, Herrington & Sutcliffe LLP
666 Fifth Avenue
New York, New York 10103
Attention: Daniel A. Mathews
Fax: (212) 506-5151
If to Sellers:
Panda Paris I, LLC
4100 Spring Valley, Suite 1001
Dallas, Texas 75244
Attention: General Counsel
Fax: (972) 980-6815
Panda Paris II, LLC
919 Market Street, Suite 200
Wilmington, Delaware 19801
Attention: Barry Crozier
Fax: (302) 658-0468
or to such other Persons or addresses as may be designated in writing by the
party to receive such notice. Failure to accept a copy of a notice shall not
constitute failure to give notice hereunder. A notice is given (i) three
Business Days after it is deposited in the United States mails, postage prepaid,
by registered or certified mail, or (ii) the next Business Day after it is
deposited with a reputable overnight courier for overnight delivery, or (iii)
upon receipt of delivery confirmation by the Person giving the notice by
electronic means to the Person to whom notice is given, whichever first occurs.
6.4 ENTIRE AGREEMENT . This Agreement constitutes the entire
agreement, and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof,
including the Letter of Intent.
6.5 WAIVER OF TRIAL BY JURY.. Each party hereto waives its right to
a trial by jury in any judicial action arising out of the transactions
contemplated by this Agreement.
6.6 INTERPRETATION. Each party and its counsel have reviewed this
Agreement and accordingly the rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement.
15
<PAGE>
6.7 PARTIES IN INTEREST; ASSIGNMENT. All of the terms and provisions
of this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and permitted assigns of the parties
hereto. Nothing in this Agreement, expressed or implied, is intended to confer
on any Person other than the parties hereto and their respective successors and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement. Sellers shall not assign, convey, transfer, encumber, mortgage
or otherwise dispose of this Agreement, or any rights created hereunder without
Purchasers' prior written consent (which consent shall not be unreasonably
withheld). Purchasers shall not assign, convey, transfer, encumber, mortgage or
otherwise dispose of all or any part of its rights, remedies, obligations or
liabilities under this Agreement without Sellers' prior written consent (which
consent shall not be unreasonably withheld) other than to any Affiliate of
Purchasers, PROVIDED that following any such assignment Purchasers shall
continue to be liable for their obligations and liabilities under this
Agreement. Notwithstanding the foregoing, any party hereto may assign its rights
hereunder to any permitted transferee of such party's partnership interest in
Partnership pursuant to the terms of the Amended Partnership Agreement.
6.8 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
6.9 HEADINGS. Headings in this Agreement are for convenience of
reference only and are not part of the substance hereof or thereof.
6.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first set forth above.
SELLERS
PANDA PARIS I, LLC,
a Delaware limited liability company
By:_______________________________________
Name:_____________________________________
Title:____________________________________
PANDA PARIS II, LLC,
a Delaware limited liability company
By:_______________________________________
Name:_____________________________________
Title:____________________________________
PURCHASERS:
FPL ENERGY PARIS GP, INC.,
a Florida corporation
By:________________________________________
Name: Glenn E. Smith
Title: Vice President
FPL ENERGY PARIS LP, LLC, a Delaware limited
liability company By: ESI Energy, Inc., its
sole Member and Manager
By:______________________________________
Name: Glenn E. Smith
Title: Vice President
17
<PAGE>
SCHEDULE 1.1
DEFINITIONS/RULES OF INTERPRETATION
DEFINITIONS
"AFFILIATE" means, as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, a Person shall be deemed to
be "controlled by" another Person if such other Person possesses, directly or
indirectly, power either to (a) vote 50% or more of the securities having
ordinary voting power for the election of directors of such Person or (b) direct
or cause the direction of the management and policies of such Person, whether by
contract or otherwise.
"AFTER TAX" shall mean, in the case of any amounts payable to or on
behalf of any Indemnified Party, that such amount shall be increased so that,
after deduction of the net amount of all Taxes required to be paid by such
Indemnified Party with respect to the receipt or accrual by it of such amount
and the additional amount received or accrued by reason of a payment being made
on an After Tax basis and after taking into account the amount of deductions, if
any, available to the Indemnified Party with respect to the indemnified matter
(computed in each instance at the highest marginal Federal, State and local tax
rates applicable to corporations in the year in which the indemnity is paid, and
with the payor of the indemnity indemnifying the Indemnified Party against any
loss or disallowance of any deductions taken into account in the computation of
the After Tax amount), the remaining amount shall be equal to the amount
otherwise payable.
"AGREEMENT" means this Partnership Interest Purchase and Sale
Agreement, including all schedules, appendices and exhibits to this Agreement
which are hereby incorporated by reference.
"AMENDED PARTNERSHIP AGREEMENT" means the Amended and Restated
Agreement of Limited Partnership of the Partnership dated the Closing date.
"BRIDGE FINANCING AGREEMENT" means the Amended and Restated Bridge
Financing Agreement dated as of February 10, 1999 between Partnership and MES
Financial Corp.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which commercial banks are authorized to be closed in New York.
"CHARTER DOCUMENTS" means a Person's articles of incorporation and
bylaws, partnership agreement and certificate of limited partnership,
certificate of limited liability company, limited liability company agreement or
equivalent documents.
"CLOSING" has the meaning specified in SECTION 2.4.
"CODE" means the Internal Revenue Code of 1986, as amended.
Exh1.1-1
<PAGE>
"CONSULTANT AGREEMENTS" means the following Agreements but does not
include the studies, reports, memoranda, and work product resulting from or
authorized by such Agreements: (i) Agreement for Professional Engineering
Services for Merchant Plant Projects with Burns & McDonnell Engineering Company,
Inc. dated June 5, 1998; (ii) Authorization No. 3 for Professional Engineering
Services dated June 5, 1998 with Burns & McDonnell Engineering Company, Inc. in
accordance with the preceding Agreement; (iii) Consulting Services Agreement
dated August 6, 1998 with CC Pace Consulting, LLC; (iv) Professional Services
Agreement dated February 27, 1998 with Henwood Energy Services, Inc.; (v) Letter
Agreement Amendment dated August 28, 1998 with Henwood Energy Services, Inc.;
(vi) Letter Agreement to Perform a Facility Study - Generation Interconnection
Request - 00INR0008 dated July 17, 1998 with Texas Utilities Electric Company;
(vii) Agreement to Perform a Security Study - Generation Interconnection Request
- - 00INR0008 with TU Electric Company dated April 1, 1998; (viii) Agreement for
Professional Services dated October 19, 1998 with Hayter Engineering for Design
and Construction Review of the Raw Water Transmission Facility; (ix) a Limited
Notice to Proceed with Hayter Engineering dated December 11, 1998; (x) Letter
dated as of January 14, 1999 from Panda Paris Power, L.P. to Hayter Engineering
(increasing authorized expenditures under the Limited Notice to Proceed to
$130,000); (xi) Letter Agreement to Hayter Engineering dated as of February 2,
1999 (increasing the authorized expenditures under the Limited Notice to Proceed
to $200,000); (xii) Geotechnical Services Agreement No. G8-191 dated June 22,
1998 with Terracon, which is in the name of Panda Paris Power, LLC (renamed
Panda Paris I, LLC) and is to be assigned to the Partnership; (xiii)
Geotechnical Services Agreement No. G8-271 dated September 22, 1998 with
Terracon, which is in the name of Panda Paris Power, LLC (renamed Panda Paris I,
LLC) and is to be assigned to the Partnership (xiv) Environmental Services
Agreement No. 5498169 dated June 22, 1998 with Terracon, which is in the name of
Panda Paris Power, LLC (renamed Panda Paris I, LLC) and is to be assigned to the
Partnership; and (xv) Environmental Services Agreement No. 5498235 dated
September 10, 1998 with Terracon, which is in the name of Panda Paris Power, LLC
(renamed Panda Paris I, LLC) and is to be assigned to the Partnership.
"CONSULTING ENGINEER" means (i) as to engineering matters, the
engineering firm retained by construction lenders (or a trustee acting on their
behalf) to review and report on the construction of the Project or, if no such
firm has been retained, Black & Veatsch or such other nationally recognized
engineering firm selected by the Partnership with the consent of PEI (which
consent shall not be unreasonably withheld) and (ii) as to energy pricing
matters, the consultant retained by construction lenders (or a trustee acting on
their behalf) to advise as to energy pricing issues or, if no such consultant
has been retained, Hagler Bailly or such other nationally recognized consultant
as to energy pricing selected by the Partnership with the consent of PEI (which
consent shall not be unreasonably withheld).
"CONTINUING INTEREST" means the 1% "carried" or "profits" limited
partnership interest retained by PPII, as more fully described in the Amended
Partnership Agreement.
"CONTRACTUAL OBLIGATION" of any Person means any indenture, note,
security, deed of trust, mortgage, security agreement, lease, guaranty,
instrument, contract, agreement or other form of contractual obligation or
undertaking to which such Person is a party or by which such Person or any of
its property is bound.
Exh1.1-2
<PAGE>
"D/FD" means Duke/Fluor Daniel.
"D/FD EPC CONTRACT" means the Turnkey Engineering, Procurement and
Construction Agreement for Combined-Cycle Generation Facility dated as of
October 3, 1998 between Partnership and D/FD, including all change orders, the
Limited Notice to Proceed dated December 22, 1998, the Letter Agreement dated as
of January 27, 1999 (amending the Limited Notice to Proceed by extending the
expiration date of the Limited Notice from January 31, 1999 to February 28, 1999
and increasing the authorized expenditures to $3,000,000), and the Parent
Guaranty dated December 23, 1998 from Panda Energy International, Inc. in favor
of Duke/Fluor Daniel for such Limited Notice to Proceed.
"DOLLARS" or "$" means the lawful currency of the United States
of America.
"EASEMENTS" means collectively the easement estates described in
SCHEDULE 1.1(A) hereto.
"ENCUMBRANCE" means any security interest, pledge, mortgage, lien,
easement, right of way, license, or encumbrance of any kind, whether created by
law or in equity, including, but not limited to, any such restriction on the
use, voting, transfer, receipt of income or other exercise of any attributes of
ownership.
"EPC CONTRACTS" means (i) the D/FD EPC Contract; (ii) the Turnkey
Engineering, Procurement and Construction Agreement for 345kv Double Circuit
Electric Transmission Line dated as of October 6, 1998 between Partnership and
Scarborough Engineering, Inc., including all change orders, the Limited Notice
to Proceed dated December 16, 1998, and the Letter Agreement dated as of
February 2, 1999 with Scarborough Engineering, Inc. (increasing the authorized
expenditure limit to $65,000); (iii) Turnkey Natural Gas Pipeline Engineering,
Procurement and Construction Agreement dated as of September 30, 1998 between
Partnership and Universal ENSCO, Inc., including all change orders, the Limited
Authorization to Proceed dated December 16, 1998, and the Letter Agreement dated
as of February 2, 1999 (amending Limited Notice to Proceed by increasing
authorized expenditures to $100,000); (iv) the Water Pipeline Construction
Agreement dated as of September 29, 1998 between Partnership and Hoot Johnson
Construction, Inc., including all change orders, the Limited Notice to Proceed
dated as of January 15, 1999, and the Parent Guaranty dated January 22, 1998
from Panda Energy International, Inc. in favor of Hoot Johnson for such Limited
Notice to Proceed; (v) the Switchyard Construction Agreement dated as of October
2, 1998 between Partnership and Dashiell Corporation, including all change
orders, the Limited Notice to Proceed dated January 5, 1999, the Letter
Agreement dated as of February 2, 1999 (increasing the authorized expenditures
to $150,000), and the Parent Guaranty dated January 18, 1999 from Panda Energy
International, Inc. in favor of Dashiell for such Limited Notice to Proceed;
(vi) the Interconnect and Operating Agreement dated as of December 11, 1998,
between Partnership and Black Marlin Pipeline Company, including all change
orders; (vii) the Interconnect Agreement dated December 10, 1998 between the
Partnership and Natural Gas Pipeline Company of America, including all change
orders; and (viii) the Interconnection Agreement dated as of September 22, 1998
between Partnership and Texas Utilities Electric Company, including the e-mail
notice dated as of January 15, 1999 from Texas Utilities Electric Company
agreeing that the notice to proceed and letter of credit may be delayed to early
to mid-February, 1999.
Exh1.1-3
<PAGE>
"ESCROW ACCOUNT" means has the meaning specified in the Escrow
Agreement.
"ESCROW AGENT" means The Bank of New York or any permitted successor
pursuant to the terms of the Escrow Agreement.
"ESCROW AGREEMENT" means the escrow agreement dated the date hereof
among the Sellers, the Purchasers and the Escrow Agent.
"ESCROW AMOUNT" means $10,000,000.
"ESCROW TERMINATION DATE" means the date occurring thirty days after
the Phase II Commercial Operation Date.
"FINANCIAL STATEMENTS" has the meaning specified in SECTION
3.1(j).
"FUEL SUPPLY CONTRACTS" means (i) the Base Contract for Short-Term
Sale and Purchase of Natural Gas dated as of September 8, 1998 between
Partnership and Noble Gas Marketing, Inc. (as amended and supplemented), and the
related Transaction Confirmation dated as of September 8, 1998 for Firm
Purchases (60,000 MMBtu's/day variable monthly; 50,000 MMBtu's/day - variable
daily) and a Transaction Confirmation dated September 8, 1998 for Interruptible
Purchases (100,000 MMBtu's/day) and (ii) the Base Contract for Short-Term Sale
and Purchase of Natural Gas dated as of September 1, 1998 between Partnership
and Producers Energy Marketing, LLC (as amended and supplemented) and the
related Transaction Confirmation dated as of September 1, 1998, for Firm
Purchases (60,000 MMBtu's/day) and Transaction Confirmation dated as of
September 1, 1998 for Interruptible Purchases (100,000 MMBtu's/day).
"FUEL TRANSPORTATION CONTRACTS" means (i) the Transportation Rate
Schedule FTS Agreement No. 114670 dated as of January 6, 1999 between
Partnership and Natural Gas Pipeline Company of America; (ii) the Firm
Transportation Rate Discount Agreement No. 114675 dated as of January 8, 1999
between Partnership and Natural Gas Pipeline Company; (iii) Transportation Rate
Schedule - ITS Agreement No. 114408 dated as of November 3, 1998 between
Partnership and Natural Gas Pipeline Company of America; (iv) Interruptible Rate
Discount Agreement No. 114677 dated as of January 8, 1999 between Partnership
and Natural Gas Pipeline Company of America; (v) the Transportation Service
Agreement Rate Schedule FTS No. 22653 dated as of November 1, 1998 between
Partnership and Black Marlin Pipeline Company, as amended by Letter Agreement
dated as of November 3, 1998 (discount); Letter Agreement dated as of November
3, 1998 (amendment) and by Letter Agreement dated as of January 18, 1999
(creditworthiness compliance period extended to May 1, 1999); and (vi) the
Transportation Service Agreement ITS No. 22652 dated as of November 1, 1998
between Partnership and Black Marlin Pipeline Company as amended by Letter
Agreement dated as of November 3, 1998.
"GE PURCHASE ORDER" means Purchase Order No. 226775-4-0301-01 dated
as of October 16, 1998 between Partnership and General Electric Company,
pursuant to which Partnership and General Electric Company have agreed to
purchase and sell four PG7241 gas turbine units and two TC2F30 steam turbine
units for installation at the Project.
Exh1.1-4
<PAGE>
"GOVERNMENTAL AUTHORITY" means any Federal, state, municipal or
local government, regulatory or administrative agency, commission, department,
board, bureau, agency or instrumentality, court, tribunal, arbitrator or
arbitral body or other governmental authority.
"GOVERNMENTAL AUTHORIZATIONS" means any authorization, consent,
approval, license, ruling, permit, waiver, exemption, filing, registration or
notice by or with any Governmental Authority.
"GOVERNMENTAL RULE" means any law, rule, writ, injunction,
regulation, ordinance, order, code, judgment, decree, or similar form of
decision of any Governmental Authority.
"INDEMNIFIED LOSSES" has the meaning specified in SECTION 5.3.
"INDEMNIFIED PARTY" has the meaning specified in SECTION 5.3.
"INDEMNITOR" has the meaning specified in SECTION 5.3.
"INITIAL PAYMENT" means the Purchase Price less the Escrow Amount.
"LETTER OF INTENT" means that certain letter from FPL Energy,
Inc. to Sellers, dated as of December 23, 1998 and signed by Sellers,
relating to the Transaction.
"MW" means megawatts (1,000 watts).
"NET PURCHASE PRICE REDUCTION" means an amount (if a positive
number) equal to the sum of (i) costs incurred by the Partnership to acquire
electric energy from resources other than the Project as a result of, and other
reasonable costs incurred by the Partnership in an attempt to mitigate losses,
damages and costs resulting from, the failure to achieve the Plant Commercial
Operations Date (as such term is defined in the TU PPA) by July 1, 2000, (ii)
costs incurred by the Partnership to acquire electric energy from resources
other than the Project as a result of, and other reasonable costs incurred by
the Partnership in an attempt to mitigate losses, damages and costs resulting
from, the failure to achieve the Commencement Hour (as such term is defined in
the T-NM PPA) to have occurred by July 1, 2000, (iii) costs incurred by the
Partnership prior to July 1, 2000 in an attempt to mitigate threatened losses,
damages and costs that would result from the failure to achieve either the Plant
Commercial Operations Date or the Commencement Hour by July 1, 2000, (iv) if
either the Phase I Commercial Operation Date has not been achieved by June 30,
2000 or the Phase II Commercial Operation Date has not been achieved by August
31, 2000, interest accrued on construction debt during the period commencing on
June 30, 2000 as to Phase I (as such term is defined in the D/FD EPC Contract)
and August 31, 2000 as to Phase II (as such term is defined in the D/FD EPC
Contract) and ending on the Phase I Commercial Operation Date or the Phase II
Commercial Operation Date, as applicable, and (v) if the City of Paris and the
Partnership fail to reach an agreement for the City of Paris to take the
industrial waste water from the Project, costs associated with the construction
of pipelines or facilities for the disposal of industrial waste water (including
without limitation permitting costs and construction costs of any treatment
facility), LESS (a) in the case of the foregoing clauses (i), (ii), (iii) and
(iv), the amount of any Schedule Liquidated Damages (as defined in the D/FD EPC
Contract) paid by D/FD, LESS (b) the amount (if a positive number)
Exh1.1-5
<PAGE>
obtained by subtracting (1) aggregate actual project costs for the development
and construction of the Project from (2) the sum of the projected project costs
and the contingency specified in the Project Budget; PROVIDED, that none of the
costs referred to in the forgoing clauses (i), (ii), (iii) and (v) shall be
included in the calculation of "Net Purchase Price Reduction" unless the
appropriate Consulting Engineer has determined in writing that in its opinion
such costs are reasonable under the circumstances and, to the extent that such
costs are incurred pursuant to a change order to any EPC Contract, that such
change order was reasonably necessary to mitigate costs. Notwithstanding any of
the foregoing, the Net Purchase Price Reduction, if any, shall be paid solely
out of the Escrow Amount (before interest thereon) and shall not in any event
exceed $10,000,000.
"O&M AGREEMENTS" means (i) the Fuel Management Agreement dated as of
September 8, 1998 between Partnership and Noble Gas Marketing, Inc., (ii) the
Operation & Maintenance Agreement for 9 Mile 24" Gas Pipeline in Lamar County,
Texas dated as of November 18, 1998 between Partnership and Gulf Coast
Operations, a division of Enron Operations Corp., and (iii) the Power Manager
Agreement dated as of November 19, 1998 between Partnership and Sempra Energy
Trading Corp.
"OPTION AGREEMENTS" means collectively, (i) the Real Property Option
Agreement dated effective as of March 27, 1998, by and between H-W Investments,
a General Partnership, and Panda Development Corporation, a Delaware
corporation, as may be modified, amended, supplemented, assigned, or restated
from time to time, (ii) the Real Property Option Agreement dated effective as of
March 11, 1998, by and between Kenneth J. & Dorothy N. Wofford, and Panda
Development Corporation, a Delaware corporation, as assigned by the Assignment
and Assumption Agreement executed and delivered on November 3, 1998 between
Panda Merchant Power Holding, LLC, formerly PAN Development, LLC, and Panda
Paris Power, L.P., as assigned to Partnership November 3, 1998, and three lien
releases from Southwestern Bell Telephone Company, and a Letter Agreement dated
January 4, 1999 allowing the Partnership to have early access to the Project
Site, Real Property Option Agreement dated as of February 2, 1999 by and between
Kenneth J. Wofford and Anna Lee Wofford (Sellers) and the Partnership (Buyer)
for the purchase of a residence and 1.517 acre tract near Paris, Texas for
$275,000; and (iii) the Letter of Understanding dated September 17, 1998, from
Tony K. Love, Director - Real Estate, Union Pacific Railroad Company, accepted
and approved on September 18, 1998 by Panda Paris Power, L.P., as amended on
January 11, 1999; Escrow Agreement dated January 29, 1999 between Ticor Land
Title Company, Panda Paris Power, L.P. and Union Pacific Railroad Company
providing for the payment into escrow of the balance of the purchase price.
"PARTNERSHIP" means Panda Paris Power, L.P., a Delaware limited
partnership.
"PARTNERSHIP AGREEMENT" means the Limited Partnership Agreement
of the Partnership.
"PEI" means Panda Energy International, Inc.
"PERMITS" means the applications, certificates, approvals, consents,
waivers, exemptions, variances, franchises, orders, permits, authorizations,
rights or licenses listed on SCHEDULE 3.1(E) hereto.
Exh1.1-6
<PAGE>
"PERSON" includes any individual, trustee, firm, corporation,
partnership, limited liability company, Governmental Authority or other entity,
whether acting in an individual, fiduciary or any other capacity.
"PHASE I COMMERCIAL OPERATION DATE" shall have the meaning specified
in the D/FD EPC Contract.
"PHASE II COMMERCIAL OPERATION DATE" shall have the meaning
specified in the D/FD EPC Contract.
"POWER PURCHASE DOCUMENTS" means (i) the T-NM PPA, (ii) the Power
Purchase Agreement dated as of November 12, 1998 between Partnership and
Constellation Power Source, Inc., and (iii) the TU PPA.
"PROJECT" means the proposed 1000 MW natural gas-fired electrical
generating facility to be located at or near Paris, Texas, commonly known as the
Panda Paris Project, including the transmission lines and the proposed natural
gas, water and waste lines related thereto.
"PROJECT AGREEMENTS" means the Partnership Agreement, the Power
Purchase Documents, the Real Property Documents, the O&M Agreements, the EPC
Contracts, the Fuel Supply Contracts, the Fuel Transportation Contracts, the
Water Supply Agreement, the GE Purchase Order, the Permits, the Tax Abatement
Agreements, the Title Insurance Commitment, and the Consultant Agreements.
"PROJECT BUDGET" means the project budget attached hereto as
Exhibit 2.6.
"PROJECT SITE" means the property on which the proposed 1,000 MW
natural gas-fired electrical generating facility will be constructed and is
currently anticipated to be the property subject to and described in the Real
Property Option Agreement dated as of March 11, 1998 by and between the
Partnership and Kenneth J. and Dorothy N. Wofford.
"PURCHASE PRICE" has the meaning specified in SECTION 2.2.
"PURCHASERS" has the meaning specified in the first paragraph
hereof.
"PURCHASERS' KNOWLEDGE" means facts or information known to any
executive officer or managerial level employee of FPL Energy, Inc. or an
Affiliate thereof (including any attorney or engineer).
"PURCHASER INDEMNIFIED PARTIES" has the meaning specified in
SECTION 5.1.
"PURCHASER LOSS" has the meaning specified in SECTION 5.1.
"REAL PROPERTY DOCUMENTS" means the Option Agreements, the Easements
and the Surface Use Agreements, other than easements that have been obtained for
alternative routing purposes, option agreements for alternative plant sites or
easements which need to be
Exh1.1-7
<PAGE>
obtained, which easements, option agreements and easements which need to be
obtained are listed in SCHEDULE 1.1(A) for disclosure purposes.
"REQUIREMENT OF LAW" as to any Person means (a) the Charter
Documents or other organizational or governing documents of such Person, (b) any
Governmental Rule applicable to such Person (except any present or future
Governmental Rule, policy or rule of common law in effect, relating to the
environment, health, safety or any hazardous substance, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. ss.ss. 9601 ET SEQ.; the Superfund Amendment
and Reauthorization Act of 1986, 42 U.S.C. ss.ss. 6291 ET SEQ.; the Resource
Conservation and Recovery Act, 42 U.S.C. ss.ss. 6901 ET SEQ.; the Hazardous
Materials Transportation Act, 49 U.S.C. ss.ss. 6901 ET SEQ.; the Clean Water
Act, 33 U.S. C. ss.ss. 1251 ET SEQ.; the Clean Air Act, 42 U.S.C. ss.ss. 7401 ET
SEQ.; the Safe Drinking Water Act, 42 U.S.C. ss.ss. 300f ET SEQ. the Atomic
Energy Act, 42 U.S.C. ss.ss. 2011 ET SEQ.; the Federal Insecticide, Fungicide
and RodenticIde Act, 7 U.S.C. ss.ss. 136 ET SEQ.; the Occupational Safety and
Health Act, 29 U.S.C. ss.ss. ET SEQ.; and any similar state and local
Governmental Rule now or hereafter adopted, published and/or promulgated
pursuant thereto), (c) any license, permit, approval or other authorization
granted by any Governmental Authority to or for the benefit of such Person and
(d) any judgment, decision or determination of any Governmental Authority or
arbitrator, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"SELLER INDEMNIFIED PARTIES" has the meaning specified in
SECTION 5.2.
"SELLERS" has the meaning specified in the first paragraph hereof.
"SELLERS' KNOWLEDGE" means facts or information known to (i) any
executive officer or managerial level employee of PEI or an Affiliate thereof
(including any attorney or engineer) or (ii) any employee of PEI or an Affiliate
thereof who devoted a significant portion of his or her time and attention
during calendar year 1998 to the development of the Project.
"SELLER LOSS" has the meaning specified in SECTION 5.2.
"SURFACE USE AGREEMENTS" means the Surface Use Agreements listed on
SCHEDULE 1.1(B) hereto.
"TAX ABATEMENT AGREEMENTS" means collectively (i) the Tax Abatement
Agreement dated as of June 8, 1998 between the City of Paris, Texas and Panda
Paris Power, LLC, (ii) the Tax Abatement Agreement dated as of June 8, 1998
between the County of Lamar, Texas and Panda Paris Power, LLC, and (iii) the Tax
Abatement Agreement dated as of June 29, 1998 between Paris Junior College and
Panda Paris Power, LLC.
"TAX RETURN" means any return, report, information return or other
document (including any related or supporting information) required to be
supplied to any authority with respect to Taxes.
"TAXES" means all taxes, charges, fees, levies, penalties or other
assessments imposed by any federal, state, local or foreign taxing authority
including, but not limited to,
Exh1.1-8
<PAGE>
income, excise, property, sales, transfer, franchise, payroll, withholding,
social security or other taxes, including any interest, penalties or additions
to tax attributable thereto.
"TITLE INSURANCE COMMITMENT" means the Commitment for Title
Insurance Commitment No. 44-903-80-1016400B, dated effective October 21, 1998,
issued by Land Title Company d/b/a/ TICOR Land Title Company, a Texas
corporation, as agent for Ticor Title Insurance Company, a California
corporation, as underwriter.
"T-NM PPA" means the Power Purchase Agreement dated as of October 7,
1998 between Partnership and Texas New Mexico Power Company.
"TRANSACTION" means the purchase and sale of the Partnership
Interests pursuant to the Agreement.
"TU PPA" means the Power Purchase Agreement dated as of September
25, 1998 between Partnership and Texas Utilities Electric Company, as amended
December 17, 1998 and February 9, 1999.
"WATER SUPPLY AGREEMENT" means the Water Supply Agreement dated as
of September 16, 1998 between Partnership and the City of Paris, Texas, as
interpreted by Letter Agreement dated December 18, 1998 and amended by Addendum
Number One to Water Supply Agreement, executed December 14, 1998.
Exh1.1-9
<PAGE>
RULES OF INTERPRETATION
All terms defined in the Agreement in the singular form shall have
comparable meanings in the plural form and vice versa.
The word "or" is not exclusive.
A reference to a Governmental Rule in effect at the date hereof
includes any amendment or modification to such Governmental Rule.
A reference to a Person includes such Person's permitted successors
and permitted assigns.
The words "include," "includes" and "including" and words of similar
import are not limiting or exclusive.
A reference in this Agreement to an Article, Section, Exhibit,
Schedule, Annex, Attachment or Appendix is to the Article, Section, Exhibit,
Schedule, Annex, Attachment or Appendix of this Agreement unless otherwise
indicated. Exhibits, Schedules, Annexes, Attachments or Appendices to any
document shall be deemed incorporated by reference in such document.
References to any document, instrument or agreement (a) shall
include all exhibits, schedules and other attachments thereto, (b) shall include
all documents, instruments or agreements issued or executed in replacement
thereof, and (c) shall mean such document, instrument or agreement, or
replacement or predecessor thereto, as amended, modified and supplemented from
time to time and in effect at any given time.
The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of such document.
References to "days" shall mean calendar days, unless the term
"Business Days" is used. References to a time of day shall mean such time in
Delaware unless otherwise specified.
Exh1.1-10
<PAGE>
EXHIBIT 2.5(A)(I)
FORM OF ASSIGNMENT AGREEMENTS
THIS ASSIGNMENT is made as of the [__] day of February 1999 by PANDA PARIS
I, LLC ("Assignor") to FPL ENERGY PARIS GP, INC. ("Assignee").
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Assignor hereby assigns, transfers and conveys to
Assignee, its successors and assigns, Assignor's general partnership interest
(the "Partnership Interest") in Panda Paris Power, L.P., a Delaware limited
partnership (the "Partnership"), which Partnership Interest includes a one
percent (1%) interest in profits and capital of the Partnership.
This Assignment (i) shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors and assigns, (ii) shall be
governed by and construed in accordance with the laws of the State of New York,
and (iii) may not be modified or terminated orally.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as
of the day and year first above written.
ASSIGNOR:
PANDA PARIS I, LLC
By:___________________________
Name:
Title:
ASSIGNEE:
FPL ENERGY PARIS GP, INC.
By: ________________________
Name:
Title:
18
<PAGE>
ASSIGNMENT OF PARTNERSHIP INTEREST
(PANDA PARIS POWER, L.P.)
THIS ASSIGNMENT is made as of the [__] day of February 1999 by PANDA PARIS
II, LLC ("Assignor") to FPL ENERGY PARIS LP, LLC ("Assignee").
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Assignor hereby assigns, transfers and conveys to
Assignee, its successors and assigns, a portion of Assignor's limited
partnership interest (the "Partnership Interest") in Panda Paris Power, L.P., a
Delaware limited partnership (the "Partnership"), which Partnership Interest
includes a ninety-eight percent (98%) interest in profits and capital of the
Partnership.
This Assignment (i) shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors and assigns, (ii) shall be
governed by and construed in accordance with the laws of the State of New York,
and (iii) may not be modified or terminated orally.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as
of the day and year first above written.
ASSIGNOR:
PANDA PARIS II, LLC
By:___________________________
Name:
Title:
ASSIGNEE:
FPL ENERGY PARIS LP, LLC
By: ________________________
Name:
Title:
