_________________________________________________________________
_________________________________________________________________
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
Date of Report (Date of earliest event reported)
December 14, 1999
VECTREN CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 333-90763 35-2086905
(State of incorporation)(Commission File Number)(I.R.S. Employer
Identification No.)
20 N.W. Fourth Street 47741
Evansville, Indiana (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code (317) 926-3351
_________________________________________________________________
_________________________________________________________________
Item 5. Other Events.
On December 14, 1999, Indiana Energy, Inc., Dayton Power and Light
Company, and Number-3CHK, Inc. signed an Asset Pursuant Agreement.
Subsequently on December 16, 1999, Indiana Energy, Inc., and Merrill
Lynch Capital Corporation executed a commitment letter pertaining to a
364-Day Revolving Credit Facility. Pursuant to General Instruction F
to Form 8-K, the Asset Purchase Agreement and the Commitment Letter are
incorporated herein by reference and is attached hereto.
Item 7. Exhibits.
(c) Exhibits.
The following exhibits are filed as a part of this report:
Exhibit
Number Description
2 Asset Purchase Agreement by and between Indiana
Energy, Inc., Dayton Power and Light Company, and
Number-3CHK dated December 14, 1999
99.1 Commitment Letter between Indiana Energy, Inc. and
Merrill Lynch Capital Corporation for a 364-Day
Revolving Credit Facility dated December 16, 1999
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.
VECTREN CORPORATION
Dated: December 22, 1999
By: /s/ Niel C. Ellerbrook
___________________________
Niel C. Ellerbrook
President
EXHIBIT LIST
Exhibit
Number Description Page
2 Asset Purchase Agreement by and
between Indiana Energy, Inc.,
Dayton Power and Light Company,
and Number-3CHK dated December 14,
1999
99.1 Commitment Letter between Indiana
Energy, Inc. and Merrill Lynch
Capital Corporation for a 364-Day
Revolving Credit Facility dated
December 16, 1999
_________________________________________________________________
_________________________________________________________________
ASSET PURCHASE AGREEMENT
by and between
THE DAYTON POWER AND LIGHT COMPANY,
INDIANA ENERGY, INC.
and
NUMBER-3CHK, INC.
December 14, 1999
_________________________________________________________________
_________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Definitions . . . . . . . . . . . . . . . . . . .1
ARTICLE II
PURCHASE AND SALE. . . . . . . . . . . . . . . . . . . . . . . .8
2.1 The Sale. . . . . . . . . . . . . . . . . . . . .8
2.2 Excluded Assets . . . . . . . . . . . . . . . . 10
2.3 Assumed Obligations . . . . . . . . . . . . . . 10
2.4 Excluded Liabilities. . . . . . . . . . . . . . 12
ARTICLE III
PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . 14
3.1 Purchase Price. . . . . . . . . . . . . . . . . 14
3.2 Purchase Price Adjustment . . . . . . . . . . . 14
3.3 Allocation of Purchase Price. . . . . . . . . . 15
3.4 Proration . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV
THE CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.1 Time and Place of Closing . . . . . . . . . . . 17
4.2 Payment of Purchase Price . . . . . . . . . . . 17
4.3 Deliveries by the Seller. . . . . . . . . . . . 17
4.4 Deliveries by the Buyer . . . . . . . . . . . . 18
4.5 Covenant by Parent. . . . . . . . . . . . . . . 19
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . . . . 19
5.1 Organization; Qualification . . . . . . . . . . 19
5.2 Authority Relative to this Agreement. . . . . . 19
5.3 Consents and Approvals; No Violation. . . . . . 20
5.4 Reports . . . . . . . . . . . . . . . . . . . . 21
5.5 Seller Reports; Financial Statements. . . . . . 21
5.6 No Material Adverse Effect. . . . . . . . . . . 21
5.7 Title to Assets . . . . . . . . . . . . . . . . 22
5.8 Leases. . . . . . . . . . . . . . . . . . . . . 22
5.9 Environmental Matters . . . . . . . . . . . . . 22
5.10 Labor Matters . . . . . . . . . . . . . . . . . 23
5.11 ERISA; Benefit Plans. . . . . . . . . . . . . . 23
5.12 Certain Contracts and Arrangements. . . . . . . 24
5.13 Legal Proceedings and Judgments . . . . . . . . 25
5.14 Permits . . . . . . . . . . . . . . . . . . . . 25
5.15 Compliance with Laws. . . . . . . . . . . . . . 25
5.16 Taxes . . . . . . . . . . . . . . . . . . . . . 25
5.17 Regulation as a Utility . . . . . . . . . . . . 25
5.18 Year 2000 Compliant.. . . . . . . . . . . . . . 25
5.19 Inventory.. . . . . . . . . . . . . . . . . . . 25
5.20 Business Financial Statements . . . . . . . . . 26
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND BUYER . . . . 26
6.1 Organization. . . . . . . . . . . . . . . . . . 26
6.2 Authority Relative to this Agreement. . . . . . 26
6.3 Consents and Approvals; No Violation. . . . . . 26
6.4 Regulation as a Utility . . . . . . . . . . . . 27
6.5 Availability of Funds . . . . . . . . . . . . . 27
ARTICLE VII
COVENANTS OF THE PARTIES . . . . . . . . . . . . . . . . . . . 27
7.1 Conduct of Business . . . . . . . . . . . . . . 27
7.2 Access to Information . . . . . . . . . . . . . 29
7.3 Expenses. . . . . . . . . . . . . . . . . . . . 31
7.4 Further Assurances. . . . . . . . . . . . . . . 31
7.5 Public Statements . . . . . . . . . . . . . . . 32
7.6 Consents and Approvals. . . . . . . . . . . . . 33
7.7 Fees and Commissions. . . . . . . . . . . . . . 33
7.8 Tax Matters . . . . . . . . . . . . . . . . . . 34
7.9 Supplements to Schedules. . . . . . . . . . . . 34
7.10 Employees . . . . . . . . . . . . . . . . . . . 35
7.11 Risk of Loss. . . . . . . . . . . . . . . . . . 36
7.12 Litigation Support. . . . . . . . . . . . . . . 36
7.13 Transition Services . . . . . . . . . . . . . . 36
7.14 Financing Commitment. . . . . . . . . . . . . . 37
7.15 Notification. . . . . . . . . . . . . . . . . . 37
ARTICLE VIII
CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . . . 37
8.1 Conditions to Each Party's Obligations to Effect
the Closing . . . . . . . . . . . . . . . 37
8.2 Conditions to Obligations of the Buyer. . . . . 38
8.3 Conditions to Obligations of the Seller . . . . 38
ARTICLE IX
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 39
9.1 Indemnification . . . . . . . . . . . . . . . . 39
9.2 Defense of Claims . . . . . . . . . . . . . . . 40
ARTICLE X
TERMINATION AND ABANDONMENT. . . . . . . . . . . . . . . . . . 43
10.1 Termination . . . . . . . . . . . . . . . . . . 43
10.2 Procedure and Effect of Termination . . . . . . 43
ARTICLE XI
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . 44
11.1 Amendment and Modification. . . . . . . . . . . 44
11.2 Waiver of Compliance; Consents. . . . . . . . . 44
11.3 No Survival . . . . . . . . . . . . . . . . . . 44
11.4 Notices . . . . . . . . . . . . . . . . . . . . 45
11.5 Assignment. . . . . . . . . . . . . . . . . . . 46
11.6 Governing Law . . . . . . . . . . . . . . . . . 47
11.7 Counterparts. . . . . . . . . . . . . . . . . . 47
11.8 Interpretation. . . . . . . . . . . . . . . . . 47
11.9 Schedules and Exhibits. . . . . . . . . . . . . 47
11.10 Entire Agreement . . . . . . . . . . . . . 47
11.11 Bulk Sales or Transfer Laws. . . . . . . . 47
EXHIBITS AND SCHEDULES
Exhibit A - Form of Bill of Sale
Exhibit B - Form of Instrument of Assumption
Exhibit C - Form of Limited Warranty Deed
Exhibit D - Material Terms of Noncompetition Agreement
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement"), is made as
of December 14, 1999 by and between The Dayton Power and Light
Company, an Ohio corporation (the "Seller"), Indiana Energy, Inc.,
an Indiana corporation ("Parent"), and Number-3CHK, Inc., an Ohio
corporation (the "Buyer").
WHEREAS, the Buyer desires to purchase, and the Seller
desires to sell, the Purchased Assets (as hereinafter defined) upon
the terms and conditions hereinafter set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth,
and intending to be legally bound hereby, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. (a) As used in this Agreement, the
following terms have the meanings specified in this Section 1.1(a).
"Affiliate" has the meaning set forth in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.
"Balance Sheet" means the June 30, 1999 balance sheet of the
Business as set forth on Schedule 1.1(a)(1).
"Bill of Sale" means the Bill of Sale to be executed and
delivered by the Seller at the Closing, substantially in the form
of Exhibit A hereto.
"Book Value" means amounts recorded on the books and records
of Seller prepared in accordance with generally accepted accounting
principles and consistent with the Balance Sheet.
"Business" means the Natural Gas Distribution Business.
"Business Day" means any day other than Saturday, Sunday and
any day which is a legal holiday or a day on which banking
institutions in Dayton, Ohio are authorized by law or other
governmental action to close.
"Buyer Representatives" means the Parent's and Buyer's
accountants, employees, counsel, environmental consultants,
financial advisors and other authorized representatives.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, as amended.
"COBRA" means the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collective Bargaining Agreements" means those collective
bargaining agreements listed on Schedule 1.1(a)(2).
"Confidentiality Agreement" means the Confidentiality
Agreement, dated September 14, 1999 between Seller's agent and
Parent.
"Electric Business" means the activities carried on by the
Seller for the purpose of generating electric energy and
transmitting and distributing electric energy to, or on behalf of,
wholesale and retail customers.
"Encumbrances" means any mortgages, pledges, liens, claims,
charges, security interests, conditional and installment sale
agreements, activity and use limitations, conservation easements,
deed restrictions, encumbrances and charges of any kind.
"Environmental Laws" means all federal, state and local laws,
statutes, regulations, rules, rules of common law, ordinances,
codes, decrees, judgments, directives, or judicial or
administrative orders relating to pollution or protection of the
environment, natural resources or human health and safety,
including, without limitation, CERCLA and laws relating to Releases
or threatened Releases of Hazardous Substances (including, without
limitation, into ambient air, surface water, groundwater, land,
surface and subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
Release, transport or handling of Hazardous Substances.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Estimated Adjustment Amount" means the Seller's good faith
reasonable estimate of the Adjustment Amount for the Closing, which
estimate shall be provided to the Buyer no later than five Business
Days before the Closing together with a detailed accounting of
Seller's estimated calculations.
"Evaluation Material" has the meaning specified in the
Confidentiality Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"FERC" means the Federal Energy Regulatory Commission.
"Gas Inventory Adjustment Amount" means the Book Value of all
natural gas in storage as of the Closing Date in quantities as
reported by the applicable natural gas storage operators calculated
in the same manner as reflected on the Balance Sheet minus the
amount of natural gas in storage recorded on the Balance Sheet.
"Good Utility Practice" means any of the practices, methods
and acts required of the Person to whom Good Utility Practices is
being applied that are required by PUCO or engaged in or approved
by a significant portion of the natural gas distribution industry,
or any of the practices, methods or acts that, in the exercise of
reasonable judgment in light of the facts known at the time the
decision was made, could have been expected to accomplish the
desired result at a reasonable cost consistent with good business
practices, reliability, safety and expedition. Good Utility
Practices is not intended to be limited to the optimum practice,
method or act to the exclusion of all others, but rather to be
acceptable practices, methods or acts generally accepted in the
region.
"Governmental Entity" means any Federal, state or local
governmental or regulatory authority, department, agency,
commission, body or other governmental entity.
"Hazardous Substances" means (a) any petrochemical or
petroleum products, oil, coal tar, or coal ash, radioactive
materials, radon gas, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation or other equipment that
contains dielectric fluid which may contain levels of
polychlorinated biphenyls; (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous
substances," "solid wastes," "hazardous wastes," "hazardous
materials," "restricted hazardous materials," "extremely hazardous
substances," "toxic substances," "contaminants" or "pollutants"
under any applicable Environmental Law or words of similar meaning
and regulatory effect; or (c) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by
any applicable Environmental Law.
"Holding Company Act" means the Public Utility Holding Company
Act of 1935, as amended.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Income Tax" means any federal, state, local or foreign Tax
(a) based upon, measured by or calculated with respect to net
income, profits or receipts (including, without limitation, capital
gains Taxes and minimum Taxes) or (b) based upon, measured by or
calculated with respect to multiple bases (including, without
limitation, corporate franchise taxes) if one or more of the bases
on which such Tax may be based, measured by or calculated with
respect to, is described in clause (a), in each case together with
any interest, penalties, or additions to such Tax.
"Indenture" means the Indenture dated as of October 1, 1935
between the Company and The Bank of New York, as trustee, as
thereafter supplemented from time to time.
"Independent Accounting Firm" means any independent accounting
firm of national reputation mutually appointed by the Seller and
the Buyer.
"Instrument of Assumption" means the Instrument of Assumption
to be executed and delivered by the Buyer at Closing, substantially
in the form of Exhibit B hereto.
"Limited Warranty Deed" means the limited warranty deed to be
executed and delivered by the Seller at the Closing, substantially
in the form of Exhibit C attached hereto.
"Material Adverse Effect" means any change or changes in, or
effect on, the Business and the Purchased Assets that is
individually, or in the aggregate are, reasonably likely to be
materially adverse to the business, assets, operations or financial
condition of the Business and the Purchased Assets, taken as a
whole, other than (a) any change or effect resulting from changes
in the international, national, regional or local wholesale or
retail markets for natural gas, (b) any change or effect resulting
from changes in the North American, national, regional or local
natural gas pipeline or distribution system markets, (c) any change
or effect resulting from changes in law, rules, regulations, orders
or other binding directives issued by any Governmental Entity or
any change in the amount or structure of rates or tariffs
applicable to the Business, (d) any change or effect in any way
resulting from or arising in connection with this Agreement or the
transactions contemplated hereby (including any announcement with
respect to this Agreement or the transactions contemplated hereby),
(e) changes in economic, regulatory or political conditions
generally, (f) changes in weather conditions affecting the
Business, or (g) any materially adverse change in or effect on the
Purchased Assets or the Business which is cured (including by the
payment of money) by the Seller before the Termination Date.
"Material and Supply Adjustment Amount" means the Book Value
of the materials and supplies relating to the Business as of the
Closing Date calculated in the same manner as reflected on the
Balance Sheet minus the amount of the materials and supplies
recorded on the Balance Sheet.
"Natural Gas Distribution Business" means the activities
carried on by the Seller for the purpose of receiving natural gas
or propane and distributing it to, or on behalf of, wholesale and
retail customers in the state of Ohio.
"Parent" means Indiana Energy, Inc. and, upon closing of
Indiana Energy, Inc.'s pending business combination with SIGCORP,
Inc., Vectren Corporation.
"Permitted Encumbrances" means (a) those Encumbrances set
forth in Schedule 1.1(a)(3); (b) those exceptions to title to the
Purchased Assets listed in Schedule 5.7; (c) with respect to any
date before the Closing Date, Encumbrances created by the
Indenture; (d) statutory liens for current taxes or assessments not
yet due or delinquent or the validity or amount of which is being
contested in good faith by appropriate proceedings, none of which
contested matters is material; (e) mechanics', carriers', workers',
repairers' and other similar liens arising or incurred in the
ordinary course of business relating to obligations as to which
there is no default on the part of the Seller or the validity or
amount of which are being contested in good faith by appropriate
proceedings, none of which contested matters is material, or
pledges, deposits or other liens securing the performance of bids,
trade contracts, leases or statutory obligations (including
workers' compensation, unemployment insurance or other social
security legislation); (f) zoning, entitlement, conservation
restriction and other land use and environmental regulations by
governmental authorities which do not materially interfere with the
present use of the Purchased Assets; (g) all exceptions,
restrictions, easements, charges, rights of way and other
Encumbrances set forth in any State, local or municipal franchise
under which the Business is conducted which do not materially
interfere with the present use of the Purchased Assets; and (h)
such other liens, imperfections in or failure of title, charges,
easements, rights-of-way, encroachments, exceptions, restrictions
and encumbrances which do not materially interfere with the present
use of the Purchased Assets and neither secure indebtedness or the
payment of the deferred purchase price of property, nor
individually or in the aggregate create a Material Adverse Effect.
"Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated
organization or any Governmental Entity.
"Prime Rate" means, for any day, the per annum rate of
interest quoted as the "Bank Prime Rate" rate for the most recent
weekday for which such rate is quoted in the statistical release
designated as H.15(519), or any successor publication, published
from time to time by the Board of Governors of the Federal Reserve
System.
"Propane Adjustment Amount" means the Book Value of the
propane relating to the Business as of the Closing Date calculated
in the same manner as reflected on the Balance Sheet minus the
amount of the propane recorded on the Balance Sheet.
"PUCO" means the Public Utilities Commission of Ohio.
"Regulatory Adjustment Amount" means the net amount of the
Book Value of the Regulatory Assets over the Book Value of the
Regulatory Liabilities relating to the Business as of the Closing
Date (in each case calculated in a manner consistent with the
preparation of Schedule 1.1(a)(1)) minus the net amount of the Book
Value of the Regulatory Assets over the Book Value of the
Regulatory Liabilities recorded on Schedule 1.1(a)(1).
"Regulatory Assets" means those assets set forth on Schedule
1.1(a)(1).
"Regulatory Liabilities" means those liabilities set forth on
Schedule 1.1(a)(1).
"Release" means release, spill, leak, discharge, dispose of,
pump, pour, emit, empty, inject, leach, dump or allow to escape
into or through the environment.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller's Agreements" means any contract, agreement, real or
personal property lease, commitment, understanding or instrument to
which the Seller is a party or by which it is bound which relates
exclusively to the Business or the Purchased Assets and which
either (i) is listed or described on Schedule 2.1, Schedule 5.8 or
Schedule 5.12 (including the Transportation Agreements), (ii) has
been entered into, renewed, extended or otherwise amended in the
ordinary course of business and does not involve obligations in
excess of $500,000 individually or (iii) is otherwise entered into,
renewed, extended or otherwise amended after the date hereof
consistent with the terms of this Agreement, in each case, as the
same may exist as of the Closing.
"Seller's Knowledge" means the actual knowledge of any officer
of the Seller who performs a policy making function, or who is in
charge of a principal business unit (including the Business). An
individual will be deemed to have "Knowledge" or "Know" or have
"Known" of a particular fact or other matter if such individual is
actually aware of such fact or other matter.
"Seller's Representatives" means the Seller's accountants,
employees, counsel, environmental consultants, financial advisors
and other authorized representatives.
"Subsidiary," when used in reference to any other Person,
means any Person of which outstanding securities having ordinary
voting power to elect a majority of the board of directors or other
Persons performing similar functions of such Person are owned
directly or indirectly by such other Person.
"Tax Affiliate" means, with respect to any Person, any other
Person that is a member of an affiliated group of corporations
(within the meaning of section 1504(a) of the Code) filing a
consolidated U.S. federal income Tax Return, and a group of
corporations filing a consolidated or combined Tax Return for
state, local or foreign purposes (each a "Consolidated Group"), if
the first Person could be held liable for the Taxes of such other
Person or Consolidated Group.
"Tax" and "Taxes" means all taxes, charges, fees, levies,
penalties or other assessments imposed by any United States
federal, state or local taxing authority, including, but not
limited to, income, excise, property, sales, transfer, franchise,
payroll, withholding, social security or other taxes, including any
interest, penalties or additions attributable thereto.
"Tax Return" means any return, report, information return or
other document (including any related or supporting information)
required to be supplied to any Governmental Entity with respect to
Taxes.
"Transferring Employee Records" means all personnel files
related to the Business Employees who will become employees of the
Buyer to the extent such files pertain to (i) skill and development
training and resumes, (ii) seniority histories, (iii) salary and
benefit information, (iv) Occupational, Safety and Health
Administration medical reports, (v) active medical restriction
forms and (vi) job performance reviews and applications.
"Transportation Agreements" means the agreements which are
listed on Schedule 5.12 under the heading "Transportation
Agreements".
"WARN Act" means the Worker Adjustment Retraining and
Notification Act of 1988, as amended.
"Year 2000 Problem" means the risk that computer applications
used by, or operated within the custody or control of a Person may
be unable to recognize or properly perform date-sensitive functions
involving certain dates prior to, and any date after, December 31,
1999.]
(b) Each of the following terms has the meaning
specified in the Section set forth opposite such term:
Term Section
------ ---------
Adjustment Amount 3.2(a)
Adjustment Statement 3.2(a)
Assumed Obligations 2.3
Base Price 3.1
Benefit Plans 5.11(a)
Business Employees 7.10(a)
Buyer Environmental Liabilities 2.3(e)
Buyer Material Adverse Effect 4.4(f)
Buyer Required Regulatory Approvals 6.3(b)
Closing 4.1
Closing Date 4.1
Direct Claim 9.2(c)
Environmental Liabilities 2.3(e)
Environmental Permits 5.9(a)
ERISA Affiliate 2.4(d)
ERISA Affiliate Plan 2.4(d)
Estimated Purchase Price 4.2
Excluded Assets 2.2
Excluded Liabilities 2.4
Final Order 8.1(c)
GAAP 5.5
Gas Easements 7.4(b)
Indemnifiable Loss 9.1(a)
Indemnifying Party 9.1(d)
Indemnitee 9.1(c)
Latest Form 10-Q 5.6
License Agreement 4.3(j)
New Buyer Employees 7.10(a)
Non-Union Employees 7.10(c)
Permits 5.14
Prepaid Excise Taxes 3.4(a)
Purchased Assets 2.1
Purchase Price 3.1
Real Estate 2.1(a)
Seller Reports 5.5
Seller Required Regulatory Approvals 5.3(b)
Shared Easements 7.4(b)
Summary 7.13
Termination Date 10.1(b)
Third Party Claim 9.2(a)
Transferable Permits 2.1(e)
Transition Committee 7.1(b)
Transition Services 7.13
Union Employees 7.10(b)
ARTICLE II
PURCHASE AND SALE
2.1 The Sale. Upon the terms and subject to the satisfaction
of the conditions contained in this Agreement, at the Closing, the
Seller will sell, assign, convey, transfer and deliver to the
Buyer, and the Buyer will purchase and acquire from Seller on a
going concern basis, free and clear of all Encumbrances (except for
Permitted Encumbrances), all of the Seller's right, title and
interest in, to and under the real and personal property, tangible
or intangible described below, other than the Excluded Assets
(collectively, the "Purchased Assets"):
(a) the real property, leaseholds and subleaseholds
therein, buildings, structures and other improvements
(including gas pipes and pipelines, empty downtown ducts in
the City of Dayton, meters and related equipment, and all
facilities used for storing and delivering propane), fixtures
and fittings thereon, easements, license agreements, leases,
rights of way and other real property interests described on
Schedule 2.1 or to be conveyed pursuant to Section 7.4(b) (the
"Real Estate");
(b) all inventories of natural gas, fuels, propane,
supplies, materials and critical spares used exclusively in
connection with the Business and located on, in storage for,
or in transit to or from the Real Estate on the Closing Date;
(c) the machinery, equipment, vehicles, furniture
and other tangible personal property used exclusively in
connection with the Business, including the items of tangible
personal property listed on Schedule 2.1, and all warranties
against manufacturers or vendors relating thereto, to the
extent that such warranties are freely transferable;
(d) the Seller's Agreements, in each case, to the
extent the same are assignable;
(e) the Permits and Environmental Permits listed on
Schedule 5.14 in each case, to the extent the same are
assignable (the "Transferable Permits");
(f) all processes, trade secrets, customer data,
know-how and other proprietary or confidential information
used exclusively in connection with the Business and all
confidentiality, noncompete or nondisclosure agreements
executed by employees of Seller relating to the Business;
(g) originals or copies of all Transferring
Employee Records, books, operating records, operating, safety
and maintenance manuals, engineering design plans, blueprints
and as-built plans, specifications, procedures and similar
items of the Seller relating specifically to the Purchased
Assets including books of account, all customer lists, billing
records and other customer correspondence relating to the
Business, all regulatory filings and other books and records
relating to the rates and services provided by Seller in
connection with the operation of the Business;
(h) all of the rights, claims or causes of action
of Seller against a third party exclusively related to the
Purchased Assets, the operation of the Business or the Assumed
Obligations arising out of transactions occurring prior to the
Closing Date, except where such rights, claims or causes of
action relate to Excluded Liabilities; to the extent such
rights, claims or causes of action relate to both Assumed
Obligations and Excluded Liabilities, Buyer and Seller shall
share such rights, claims or causes of action in the same
proportion as their respective liabilities bear to the total
liability relating to those rights, claims or causes of
action;
(i) any assets purchased or to be purchased by the
Seller pursuant to Section 7.4(d); and
(j) to the extent assignable, the experience rating
and applicable rate for Ohio State unemployment tax purposes
with respect to the Business and the New Buyer Employees
pursuant to Section 4141-17 of the Ohio Administrative Code;
provided, however, that the experience rating and the
applicable rate is more favorable to Buyer than the experience
rating and the applicable rate would be for a new Ohio
business.
2.2 Excluded Assets. Notwithstanding any provision herein to
the contrary, the Purchased Assets shall not include the following
property or assets, or any property or assets not described in
Section 2.1, of the Seller (the "Excluded Assets"):
(a) cash, cash equivalents, customer deposits and
advances, bank deposits and accounts receivable;
(b) certificates of deposit, shares of stock,
securities, bonds, debentures, evidences of indebtedness,
interests in any Person owned by Seller, including but not
limited to Miami Valley Market Hub, Inc., Market Hub Partners,
L.P., Market Hub Partners, Inc. and Miami Valley Resources,
Inc.;
(c) except as provided in Section 4.3(j), the name
"Dayton Power and Light Company" or any derivative thereof
(including, without limitation, DPL and DP&L) or any related,
similar or other trade names, trademarks, service marks or
logos of the Seller;
(d) properties and assets used in the conduct of
the Electric Business;
(e) subject to Section 3.4 hereof, any refund or
credit (i) related to real or personal property Taxes paid
prior to the Closing Date in respect of the Purchased Assets,
whether such refund is received as a payment or as a credit
against future real or personal property Taxes payable, or
(ii) arising under the Seller's Agreements and relating to a
period before the Closing Date;
(f) any surcharge that the Seller or the Buyer is
authorized by a Governmental Authority to impose on customers
of the Business for periods prior to the Closing Date;
provided, however, such surcharge is not related to an Assumed
Obligation;
(g) subject to Section 7.2, any books, records or
the like of the Seller other than those books, records, and
the like specifically described in Section 2.1(g);
(h) certain interests in natural gas pipeline
facilities and contract rights used to supply natural gas to
the facilities comprising the Seller's Electric Business
described or referred to in Schedule 2.2; and
(i) the rights of the Seller under this Agreement.
2.3 Assumed Obligations. On the Closing Date, the Buyer
shall deliver to the Seller the Instrument of Assumption pursuant
to which the Buyer shall assume and agree to discharge all of the
liabilities and obligations of the Seller, direct or indirect,
known or unknown, absolute or contingent, which relate exclusively
to the Purchased Assets or the Business, other than Excluded
Liabilities (the "Assumed Obligations"), in accordance with the
respective terms and subject to the respective conditions thereof,
including, without limitation, the following liabilities and
obligations:
(a) all liabilities and obligations of the Seller
under the Seller's Agreements and the Transferable Permits in
accordance with the terms thereof, except, in each case, to
the extent such liabilities and obligations, but for a breach
or default by the Seller, would have been paid, performed or
otherwise discharged on or prior to the Closing Date or to the
extent the same arise out of any such breach or default by the
Seller prior to the Closing;
(b) all liabilities and obligations relating to any
customer deposits and customer advances of the Business;
(c) all liabilities and obligations associated with
the Purchased Assets or the Business in respect of Taxes for
which the Buyer is liable pursuant to Section 3.4 or 7.8(a);
(d) all liabilities and obligations with respect to
the New Buyer Employees to be employed by the Buyer in the
conduct of the Business after the Closing Date for which the
Buyer is responsible pursuant to Section 7.10; and
(e) except as otherwise provided in Section 2.4,
any liability, obligation or responsibility under or related
to former, current or future Environmental Laws, whether such
liability or obligation or responsibility is known or unknown,
contingent or accrued, arising as a result of or in connection
with (i) any violation or alleged violation of Environmental
Law, prior to, at or after the Closing Date, with respect to
the ownership of the Purchased Assets or the operation of the
Business; (ii) loss of life, injury to persons or property or
damage to natural resources (whether or not such loss, injury
or damage arose or was made manifest before the Closing Date
or arises or becomes manifest after the Closing Date), caused
(or allegedly caused) by the (A) off-site disposal, storage,
transportation, discharge, recycling, or the arrangement for
such activities, of Hazardous Substances, prior to, at or
after the Closing Date, in connection with the ownership of
the Purchased Assets or the operation of the Business, or (B)
the presence or Release of Hazardous Substances at, on, in,
under, adjacent to or migrating from any of the Purchased
Assets prior to, at or after the Closing Date, including, but
not limited to, Hazardous Substances contained in building
materials in any of the Purchased Assets or in the soil,
surface water, sediments, groundwater, landfill cells, or in
other environmental media at, on, in, under, adjacent to or
migrating from any of the Purchased Assets; (iii) the
investigation or remediation (whether or not such
investigation or remediation commenced before the Closing Date
or commences after the Closing Date) of Hazardous Substances
that are present or have been Released prior to, at or after
the Closing Date at, on, in, under, adjacent to or migrating
from the Purchased Assets, including, but not limited to,
Hazardous Substances contained in building materials in any of
the Purchased Assets or in the soil, surface water,
sediments, groundwater, landfill cells, or in other
environmental media at, on, in, under, adjacent to or
migrating from any of the Purchased Assets; or (iv) the
matters listed on Schedule 5.9 ("Environmental Liabilities");
provided, however, that Buyer only assumes the first
$10,000,000 in Environmental Liabilities in the aggregate to
be expended in the five years from the date of Closing arising
from Seller's operation of the Business, or the ownership,
operation, use or environmental condition of the Purchased
Assets prior to the Closing, and provided further that, as
between Buyer and Seller, Buyer shall assume all Environmental
Liabilities resulting from its operation of the Business or
the ownership, operation or use of the Purchased Assets, or
environmental conditions thereon caused or exacerbated, after
the Closing and all Environmental Liabilities arising after
the fifth anniversary of the Closing regardless of who
operated the Business giving rise to such liabilities ( the
"Buyer Environmental Liabilities").
In addition, in the event there are any liabilities or obligations
relating to both the Business and the Purchased Assets and to
Seller's other businesses, Buyer and Seller shall share such
liabilities and obligations based upon the benefits to each of the
Business and the Purchased Assets, on the one hand, and Seller's
other businesses, on the other hand, arising from the creation or
occurrence of such liabilities or obligations.
2.4 Excluded Liabilities. The Buyer shall not assume or be
obligated to pay, perform or otherwise discharge any of the
following liabilities or obligations (collectively, the "Excluded
Liabilities"):
(a) any liabilities or obligations of the Seller in
respect of any Excluded Assets or other assets of the Seller
which are not Purchased Assets or related to the Business;
(b) any liabilities or obligations in respect of
indebtedness for borrowed money;
(c) any liabilities or obligations in respect of
Taxes of the Seller, any Tax Affiliate of the Seller, or
attributable to the Business or the Purchased Assets for
taxable periods ending on or before the Closing, except for
Taxes for which the Buyer is liable pursuant to Section 3.4 or
Section 7.8(a);
(d) any liabilities, obligations or
responsibilities relating to any employment, severance or
change in control agreement to which Seller or any ERISA
Affiliate (as defined herein) is a party, any "employee
benefit plan" (as defined in section 3(3) of ERISA) whether or
not subject to ERISA or any "employee pension benefit plan"
(as defined in section 3(2) of ERISA) whether or not subject
to ERISA maintained by the Seller and any trade or business
(whether or not incorporated) which are or have ever been
under common control, or which are or have ever been treated
as a single employer, with the Seller under section 414(b),
(c), (m) or (o) of the Code ("ERISA Affiliate") or to which
the Seller and any ERISA Affiliate contributed thereunder (the
"ERISA Affiliate Plans"), including any multiemployer plan,
maintained by, contributed to, or with respect to which there
is or has been an obligation to contribute to, at any time, by
the Seller or any ERISA Affiliate, including, without
limitation, any liability (A) to the Pension Benefit Guaranty
Corporation under Title IV of ERISA; (B) relating to a
multiemployer plan; (C) with respect to noncompliance with the
notice and benefit continuation requirements of COBRA; (D)
with respect to any noncompliance with ERISA, the Code or any
other applicable laws; or (E) with respect to any suit,
proceeding or claim which is brought against the Buyer, any
Benefit Plan, ERISA Affiliate Plan, any fiduciary or former
fiduciary of any such Benefit Plan or ERISA Affiliate Plan;
(e) any liabilities or obligations arising from
conduct prior to the Closing relating to (x) any claim made or
cause of action filed on or before the time of the Closing,
including without limitation, those relating to economic harm,
personal injury, discrimination, property damage, death,
health and safety, worker's compensation, wrongful discharge
or unfair labor practices, (y) any incidents or occurrences
that could reasonably be expected to lead to any claim made or
cause of action filed before or after the Closing, including
without limitation, those relating to economic harm, personal
injury, discrimination, property damage, death, health and
safety, worker's compensation, wrongful discharge or unfair
labor practices, in each case only to the extent that Seller
has knowledge of such incidents or occurrences before Closing
or (z) intentional torts or fraudulent acts or acts or
omissions involving gross negligence or resulting in the
imposition of punitive damages irrespective of when any claims
relating thereto may arise;
(f) any payment obligations of the Seller for goods
delivered or services rendered prior to the Closing;
(g) any liabilities or obligations relating to any
manufactured gas plant sites or manufactured gas plant
operations of Seller or its predecessors, and the Cardington
Road Landfill (located at 1855 Cardington Road, Moraine,
Ohio), the North Sanitary Landfill (located at 200 Valley
Crest Drive, Dayton, Ohio), the United Scrap Lead site in
Miami County, Ohio, and the Powell Road Landfill in Huber
Heights, Montgomery County, Ohio superfund sites;
(h) subject to Section 3.4, any accounts payable or
accrued expenses, in each case in accordance with GAAP, of the
Business as of the Closing;
(i) subject to Section 7.10, any liability or
obligation under any deferred compensation arrangement or
severance policy or any obligation to make any parachute
payment;
(j) any Environmental Liabilities other than Buyer
Environmental Liabilities; and
(k) any liabilities or obligations of the Seller
under this Agreement.
ARTICLE III
PURCHASE PRICE
3.1 Purchase Price. The purchase price for the Purchased
Assets shall be an amount equal to the sum of (a) $425,000,000 (the
"Base Price"), plus or minus (b) the Adjustment Amount (the
"Purchase Price"). Notwithstanding the foregoing, if the Closing
takes place after December 31, 2000 due to the failure to obtain
any governmental consent or approval required to be obtained
pursuant to Section 8.1(c) or other regulatory reasons (other than
solely as a result of Seller's breach of Section 7.6(b)), the Base
Price shall be increased by an amount equal to the product of
(i)(x) the Purchase Price as determined before this increase, less
(y), the adjusted basis of the Purchased Assets for federal income
tax purposes, less (z),the "Book-Tax Differential" with respect to
the Purchased Assets as defined in Ohio Revised Code Sec.
5733.0510(A)(5), and (ii) 5.6666%. This increase is intended to
make Seller whole for Ohio Franchise Tax which may apply if the
Closing is after December 31, 2000; provided that if the Seller may
minimize this franchise tax without, in its reasonable opinion, a
material cost or disadvantage to itself, whether economic,
regulatory, or otherwise, it shall take such commercially
reasonable measures or actions which it deems appropriate to do so,
and the Purchase Price shall be adjusted accordingly.
3.2 Purchase Price Adjustment. (a) Within 60 days after the
Closing, the Seller shall prepare and deliver to the Buyer a
statement (the "Adjustment Statement") which reflects (i) the Gas
Inventory Adjustment Amount, (ii) the Material and Supply
Adjustment Amount, (iii) the Propane Adjustment Amount, (iv) the
Regulatory Adjustment Amount and (v) all amounts paid by the Seller
pursuant to Section 7.4(d) hereof, together with a detailed
accounting of each proposed adjustment to the Purchase Price. The
sum of the Gas Inventory Adjustment Amount, the Material and Supply
Adjustment Amount, the Propane Adjustment Amount, the Regulatory
Adjustment Amount and the amounts paid by the Seller pursuant to
Section 7.4(d) hereof as of the Closing is referred to as the
"Adjustment Amount." The Buyer agrees to cooperate with the Seller
in connection with the preparation of the Adjustment Statement and
related information, and shall provide the Seller with access to
its books, records and information and access to employees as may
be reasonably requested from time to time.
(b) The Buyer may dispute the Adjustment Amount;
provided, however, that the Buyer shall notify the Seller in
writing of the disputed amount, and the basis of such dispute,
within 10 Business Days of the Buyer's receipt of the applicable
Adjustment Statement. In the event of a dispute with respect to
any part of an Adjustment Amount, the Buyer and the Seller shall
attempt to reconcile their differences and any resolution by them
as to any disputed amounts shall be final, binding and conclusive
on the parties. If the Buyer and the Seller are unable to reach a
resolution of such differences within 30 days of receipt of the
Buyer's written notice of dispute to the Seller, the Buyer and the
Seller shall submit the amounts remaining in dispute for
determination and resolution to the Independent Accounting Firm,
which shall be instructed to determine and report to the parties,
within 30 days after such submission, upon such remaining disputed
amounts, and such report shall be final, binding and conclusive on
the parties hereto with respect to the amounts disputed. The fees
and disbursements of the Independent Accounting Firm shall be
allocated between the Buyer and the Seller so that the Buyer's
share of such fees and disbursements shall be in the same
proportion that the aggregate amount of such remaining disputed
amounts so submitted by the Buyer to the Independent Accounting
Firm that is unsuccessfully disputed by the Buyer (as finally
determined by the Independent Accounting Firm) bears to the total
amount of such remaining disputed amounts so submitted by the Buyer
to the Independent Accounting Firm.
(c) Within 10 Business Days after the Buyer's receipt of
an Adjustment Statement, the Buyer shall pay all undisputed
amounts, or if there is a dispute with respect to any amount on
such Adjustment Statement within five Business Days after the final
determination of any amounts on such Adjustment Statement, the
Buyer shall pay to Seller an amount equal to the disputed
Adjustment Amount as finally determined to be payable with respect
to such Adjustment Statement. All Adjustment Statement payments
shall be less the Estimated Adjustment Amount; provided, however,
that if such amount shall be less than zero then the Seller will
pay to the Buyer the amount by which such amount is less than zero.
Any amount paid under this Section 3.2(c) shall be paid with
interest for the period commencing on the Closing Date through the
date of payment, calculated at the Prime Rate in effect on the
Closing Date, and in cash by federal or other wire transfer of
immediately available funds.
3.3 Allocation of Purchase Price. The Buyer and the Seller
agree upon the allocation among the Purchased Assets of the sum of
the Purchase Price and the Assumed Obligations set forth on
Schedule 3.3, which is consistent with Section 1060 of the Code and
the Treasury Regulations thereunder. Each of the Buyer and the
Seller shall report the transactions contemplated by the Agreement
for federal Income Tax and all other tax purposes in a manner
consistent with the allocation determined pursuant to this Section
3.3. Each of the Buyer and the Seller agree to provide the other
promptly with any other information required to complete Form 8594.
Each of the Buyer and the Seller shall notify and provide the other
with reasonable assistance in the event of an examination, audit or
other proceeding regarding the agreed upon allocation of the
Purchase Price.
3.4 Proration. (a) The Buyer and the Seller agree that all
of the items normally prorated, including those listed below,
relating to the Business or the Purchased Assets will be prorated
as of the Closing Date, with the Seller liable to the extent such
items relate to any time period through the Closing Date, and the
Buyer liable to the extent such items relate to periods subsequent
to the Closing Date:
(i) personal property, real estate, occupancy,
sewerage and water taxes, assessments and other similar charges,
including sewer rents and charges for water, telephone, electricity
and other utilities;
(ii) the amount of any agricultural tax savings
accrued as of the Closing Date which would be subject to recoupment
if the Real Estate were converted to a non-agricultural use
(whether or not such conversion actually occurs);
(iii) all other items payable by or to the
Seller under any of the Seller' s Agreements assigned to and
assumed by the Buyer hereunder;
(iv) any permit, license, registration, compliance
assurance fees or other fees with respect to any Transferable
Permits; and
(v) rent under any leases of real or personal
property.
Parent or its designee shall pay Seller at the Closing an amount
equal to the present value as at the Closing Date, computed by
using a discount rate of 8.5%, of the 15-year benefit to the Buyer
of the October 1999, March 2000, and June 2000 payments of excise
taxes that Seller has made on the gross receipts of the Business
(the "Prepaid Excise Taxes") to the extent that those taxes have
not been applied as a credit against the excise tax for periods on
or after May 1, 2000 pursuant to Section 5727.29(B) of the Ohio
Revised Code; notwithstanding the foregoing, the Seller shall not
receive such amount with respect to Prepaid Excise Taxes which are
refundable to Seller and not creditable under Section 5727.29(B).
(b) In connection with any real estate tax prorations
including special assessments, Seller shall credit to Buyer an
amount equal to the amount of the next real estate tax installment
multiplied by the number of days from the date of the immediately
preceding semi-annual installment (June 30 or December 31) to the
Closing Date. In connection with any other prorations, in the
event that actual figures are not available at the Closing Date,
the proration shall be based upon the actual valuations or fees for
the preceding year (or appropriate period) for which actual
valuations or fees are available. All prorations shall be based
upon the most recent available tax rates, assessments and
valuations.
(c) Such taxes, assessments, valuations or fees
shall be reprorated upon request of either the Seller or the Buyer
made within 60 days of the date that the actual amounts become
available. The Seller and the Buyer agree to furnish each other
with such documents and other records as may be reasonably
requested in order to confirm all adjustment and proration
calculations made pursuant to this Section 3.4.
(d) If and to the extent the provisions of this Section
3.4 (other than the provisions of the last sentence of Section
3.4(a))do not result in Seller being responsible for taxes
attributable to the period of time through the Closing Date, or in
Buyer being responsible for taxes attributable to the period after
the Closing Date, then, in that event, Seller and Buyer agree that
Seller will be responsible for taxes attributable to periods
through the Closing Date, and Buyer will be responsible for taxes
attributable to periods after the Closing Date, and Seller and
Buyer will indemnify and hold each other harmless with respect to
those amounts.
ARTICLE IV
THE CLOSING
4.1 Time and Place of Closing. Upon the terms and subject to
the satisfaction of the conditions contained in Article VIII of
this Agreement, the closing of the sale of the Purchased Assets
contemplated by this Agreement (the "Closing") will take place at
such place as is mutually agreeable to the parties beginning at
10:00 A.M. (local time) on the last Business Day of the month
following the day that is 5 Business Days after the date on which
the conditions set forth in Article VIII have been satisfied or
waived; or at such other place or time as the parties may agree.
The date and time at which the Closing actually occurs is
hereinafter referred to as the "Closing Date."
4.2 Payment of Purchase Price. Upon the terms and subject to
the satisfaction of the conditions contained in this Agreement, in
consideration of the aforesaid sale, assignment, conveyance,
transfer and delivery of the Purchased Assets, the Buyer will pay
or cause to be paid to the Seller at the Closing an amount (the
"Estimated Purchase Price") in United States dollars equal to the
sum of (a) the Base Price, plus or minus (b) the Estimated
Adjustment Amount, by wire transfer of immediately available funds
or by such other means as are agreed upon by the Seller and the
Buyer. Seller and Buyer shall cooperate to reconcile any
differences and shall mutually agree upon the calculation of the
Estimated Purchase Price within two Business Days prior to Closing.
4.3 Deliveries by the Seller. At or prior to the Closing,
the Seller will deliver the following to the Buyer:
(a) the Bill of Sale, duly executed by the Seller for
the personal property included in the Purchased Assets;
(b) all consents, waivers or approvals obtained by the
Seller with respect to the Purchased Assets, the transfer of any
Transferable Permit, or the consummation of the transactions
connected to the sale of the Purchased Assets, contemplated by this
Agreement, to the extent specifically required hereunder;
(c) a certificate (as contemplated by Section 8.2);
(d) one or more deeds of conveyance of the Real Estate
consisting of fee interests, to the Buyer, in substantially the
form of the Limited Warranty Deed, duly executed and acknowledged
by the Seller and in recordable form and one or more instruments of
assignment or conveyance as shall be necessary to transfer the Gas
Easements and the Shared Easements pursuant to Section 7.4(b);
(e) all such other instruments of assignment or
conveyance as shall, in the reasonable opinion of the Buyer and its
counsel, be necessary to transfer to the Buyer the Purchased
Assets, in accordance with this Agreement;
(f) certificates of title for certificated motor
vehicles or other titled Purchased Assets, or other evidences of
the right to use Purchased Assets, duly executed by Seller and in
form reasonably satisfactory to Buyer;
(g) all terminations and releases of Encumbrances on the
Purchased Assets other than the Permitted Encumbrances;
(h) a Noncompetition Agreement limited to the natural
gas distribution business, duly executed by Seller and in form and
substance reasonably satisfactory to Buyer and Seller containing
the terms set forth in Exhibit D hereto;
(i) a list of the customer deposits and customer
advances of the Business to be assumed by Buyer as Assumed
Obligations under this Agreement as of a date reasonably near the
Closing Date to be agreed upon by Buyer and Seller, certified as
being true and complete by the Chief Financial Officer of Seller;
(j) to the extent permitted by law, a trademark license
duly executed by Seller for transitional use in form and substance
reasonably satisfactory to Buyer and Seller, in tandem with Number-
3CHK, Inc.'s name, of the names of "Dayton Power and Light
Company," any other trade names used in the Business or derivatives
thereof (including without limitation "DPL" and "DP&L"), subject to
the right of Seller to approve the form and content of such use,
for a period ending no sooner than the later of three months
following the Closing and December 31, 2000, for the purpose of
limiting customer confusion (the "License Agreement") ; and
(k) such other agreements, documents, instruments and
writings as are required to be delivered by the Seller at or prior
to the Closing Date pursuant to this Agreement, except where
failure to provide such documents would not have a Material Adverse
Effect.
4.4 Deliveries by the Buyer. At or prior to the Closing, the
Buyer will deliver the following to the Seller:
(a) the Estimated Purchase Price by wire transfer of
immediately available funds or such other means as are agreed upon
by the Seller and the Buyer;
(b) the Instrument of Assumption with respect to the
Assumed Obligations, duly executed by the Buyer;
(c) a certificate (as contemplated by Section 8.3);
(d) all such other instruments of assumption as shall,
in the reasonable opinion of the Seller and its counsel, be
necessary for the Buyer to assume the Assumed Obligations in
accordance with this Agreement;
(e) if required by Section 4.3(j), a counterpart of
the License Agreement duly executed by Buyer and Parent; and
(f) such other agreements, documents, instruments and
writings as are required to be delivered by the Buyer at or prior
to the Closing Date pursuant to this Agreement, except where the
failure to deliver such agreements, documents, instruments and
writings would not materially affect Buyer's ability to consummate
the transactions contemplated hereby (a "Buyer Material Adverse
Effect").
4.5 Covenant by Parent. Parent guarantees Buyer's
performance of its obligations under this Agreement. This guaranty
shall be enforceable without Seller having to proceed first against
Buyer before proceeding against Parent, and shall be effective
regardless of the solvency or insolvency of Buyer, any
reorganization, merger or consolidation of Buyer, or any change in
the ownership, composition, nature, personnel or location of Buyer.
In any proceeding regarding this guaranty, Parent shall be entitled
to all defenses available to Buyer under this Agreement. This
guaranty shall be irrevocable, absolute and unconditional and shall
remain in full force and effect as to Parent until such time as
Buyer's obligations shall have been performed and satisfied in full
and notwithstanding (i) any extension, renewal, settlement,
compromise, waiver or release in respect of obligations of Buyer
under this Agreement, by operation of law or otherwise, or (ii) any
modification or amendments or supplement to this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, the Seller
represents and warrants to the Buyer as follows:
5.1 Organization; Qualification. Seller is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Ohio and has all requisite corporate power and
authority to own, lease, and operate the Purchased Assets and to
carry on the Business as is now being conducted. As related to the
operation of the Business, the Seller is duly qualified or licensed
to do business as a foreign corporation and is in good standing in
each jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such
qualification necessary, except in each case in those jurisdictions
where the failure to be so duly qualified or licensed and in good
standing would not have a Material Adverse Effect.
5.2 Authority Relative to this Agreement. The Seller has all
corporate power and authority necessary to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of the Seller and no other
corporate proceedings on the part of the Seller are necessary to
authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Seller, and assuming that this
Agreement constitutes a valid and binding agreement of the Buyer,
and subject to the receipt of the governmental consents and
approvals required to be obtained pursuant to Section 8.1(c),
constitutes a valid and binding agreement of the Seller,
enforceable against the Seller in accordance with its terms, except
that such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally or general principles
of equity.
5.3 Consents and Approvals; No Violation. (a) Except as set
forth in Schedule 5.3, and other than obtaining the governmental
consents and approvals required to be obtained pursuant to Section
8.1(c), neither the execution and delivery of this Agreement by the
Seller nor the sale by the Seller of the Purchased Assets pursuant
to this Agreement will (i) conflict with or result in any breach of
any provision of the Articles of Incorporation or Code of
Regulation of the Seller, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any
Governmental Entity, except (A) where the failure to obtain such
consent, approval, authorization or permit, or to make such filing
or notification, would not, individually or in the aggregate, have
a Material Adverse Effect or prevent or materially delay the
consummation of the transactions contemplated by this Agreement or
(B) for those requirements which become applicable to the Seller as
a result of the specific regulatory status of the Buyer (or any of
its Affiliates) or as a result of any other facts that specifically
relate to the business or activities in which the Buyer (or any of
its Affiliates) is or proposes to be engaged; (iii) result in a
default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which the Seller is a party or by which
the Seller or any of the Purchased Assets may be bound, except for
such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been
obtained or which would not, individually or in the aggregate, have
a Material Adverse Effect or prevent or materially delay the
consummation of the transactions contemplated by this Agreement; or
(iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Seller, or any of its assets, which
violation, individually or in the aggregate, would have a Material
Adverse Effect.
(b) Except as set forth in Schedule 5.3 and except for
(i) any required approvals by the PUCO, (ii) the approval, if
required, of the SEC pursuant to the Holding Company Act and (iii)
the filings by the Seller and the Buyer required by the HSR Act and
the expiration or earlier termination of all waiting periods under
the HSR Act (the filings and approvals referred to in clauses (i)
through (iii) are collectively referred to as the "Seller Required
Regulatory Approvals"), no declaration, filing or registration
with, or notice to, or authorization, consent or approval of any
Governmental Entity is necessary for the consummation by the Seller
of the transactions contemplated hereby, other than such
declarations, filings, registrations, notices, authorizations,
consents or approvals which, if not obtained or made, will not,
individually or in the aggregate, have a Material Adverse Effect or
prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
5.4 Reports. Since January 1, 1998, the Seller has filed or
caused to be filed with the SEC and PUCO all material forms,
statements, reports and documents (including all exhibits,
amendments and supplements thereto) required to be filed by it with
respect to the business and operations of the Seller as it relates
to the Business and the Purchased Assets under each of the
Securities Act, the Exchange Act, the applicable Ohio public
utility laws, and the Holding Company Act and the respective rules
and regulations thereunder, all of which complied in all material
respects with all applicable requirements of the appropriate act
and the rules and regulations thereunder in effect on the date each
such report was filed.
5.5 Seller Reports; Financial Statements. The Seller has
delivered to the Buyer (a) the Company's Annual Report on Form 10-K
for the year ended December 31, 1998 and (b) the Company's
Quarterly Reports on Form 10-Q filed with the SEC for any quarterly
period ending subsequent to December 31, 1998 and prior to the date
hereof, each in the form (including exhibits, annexes and any
amendments thereto) filed with the SEC (collectively, including any
amendments to such reports, the "Seller Reports"). As of their
respective dates (or, if amended, as of the date of such
amendment), insofar as the Seller Reports relate to the Business or
the Purchased Assets, the Seller Reports did not, contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which
they were made, not misleading. With respect to the financial
information expressly identified as relating to the Business or the
Purchased Assets, each of the consolidated balance sheets included
in or incorporated by reference into the Seller Reports (including
any related notes and schedules) has been prepared in accordance
with generally accepted accounting principles, consistently applied
("GAAP"), and fairly presents the consolidated financial position
of the Seller and its subsidiaries as of its date and each of the
consolidated statements of income and cash flow included in or
incorporated by reference into the Seller Reports (including any
related notes and schedules) has been prepared in accordance with
GAAP and fairly presents the results of operations, retained
earnings and cash flow, as the case may be, of the Seller and its
subsidiaries for the periods set forth therein (subject, in the
case of unaudited statements, to notes and normal year-end audit
adjustments), in each case in accordance with generally accepted
accounting principles consistently applied during the periods
involved, except as may be noted therein.
5.6 No Material Adverse Effect. Except as set forth in
Schedule 5.6 or in the Seller Reports, or as otherwise contemplated
by this Agreement, since the end of the quarter for which the
Company's most recent Form 10-Q (the "Latest Form 10-Q") has been
filed prior to the date hereof and until the date hereof, there has
been no fact, circumstance or event existing or occurring which,
either individually or in the aggregate, has had a Material Adverse
Effect and, except as otherwise disclosed herein or set forth in
Schedule 5.6 (i) the Business has been operated in the ordinary
course of business consistent with past practice, (ii) except in a
manner consistent with the gas capital forecast which has been
provided to Buyer, Seller has not made any material capital
expenditures or commitments therefor with respect to the Purchased
Assets and (iii) there has not been any liability created or
incurred which Buyer will assume under the Instrument of Assumption
other than liabilities created or incurred in the ordinary course
of business and in amounts not unusual in respect of the Business
as customarily conducted.
5.7 Title to Assets. Except as set forth in Schedule 5.7 and
except for Permitted Encumbrances, the Seller has good and
marketable title to all Purchased Assets used in and material to
the operation of the Business which it purports to own that are
reflected in the Latest Form 10-Q (other than those which have been
disposed of since the date thereof in the ordinary course of
business), free and clear of all Encumbrances. The Purchased
Assets together with the easements and similar assets to be
conveyed and shared as provided in Section 7.4(b) and together with
the access to other assets of Seller through the provision of
transition services as provided in Section 7.13 and access to the
books and records as provided in Section 7.2 and the License
Agreement constitute all of the assets necessary to continue the
operations of the Business after Closing as is presently conducted,
except for those described in Schedule 5.7. Except as would not
have a Material Adverse Effect, all of the tangible Purchased
Assets are in good and operable condition, normal wear and tear
excepted.
5.8 Leases. Schedule 5.8 lists, as of the date of this
Agreement, all real property leases under which the Seller is a
lessee or lessor and which (a) are to be transferred and assigned
to the Buyer on the Closing Date and (b) which relate exclusively
to the Business or the Purchased Assets and either (i) provide for
annual payments of more than $500,000 or (ii) are material to the
business, operations or financial condition of the Business or the
Purchased Assets taken as a whole, and, except as set forth in
Schedule 5.8, all such leases are valid, binding and enforceable in
accordance with their terms, and are in full force and effect.
5.9 Environmental Matters. Except as disclosed in Schedule
5.9 or in any of the Seller's Reports:
(a) The Seller holds, and is, and has been, in
compliance with, all material permits, licenses and governmental
authorizations required for the Seller to conduct the Business
under applicable Environmental Laws ("Environmental Permits"), and
the Seller is otherwise in compliance with applicable Environmental
Laws with respect to the Business and the Purchased Assets except
for such failures to hold or comply with required Environmental
Permits, or such failures to be in compliance with applicable
Environmental Laws, which, individually or in the aggregate, would
not have a Material Adverse Effect and to the Seller's Knowledge
there is no condition that would reasonably be expected to
materially prevent or interfere with such compliance in the future;
(b) The Seller has not received any written request for
information, or been notified that it is a potentially responsible
party, under CERCLA or any similar State law with respect to the
Business or the Purchased Assets, except for such liability under
such laws as would not, individually or in the aggregate, have a
Material Adverse Effect;
(c) The Seller has not entered into or agreed to any
consent decree or order, or other binding agreement and is not
subject to any outstanding judgment, decree, or judicial or
administrative order relating to compliance with or liability under
any Environmental Law or to investigation or cleanup of Hazardous
Substances under any Environmental Law relating to the Business or
the Purchased Assets where any of the foregoing would, individually
or in the aggregate, have a Material Adverse Effect;
(d) There are no claims, actions, proceedings or
investigations under or relating to Environmental Laws pending or,
to the Seller's Knowledge, threatened against or relating to the
Seller, the Purchased Assets, or the Business which would not,
individually or in the aggregate have a Material Adverse Effect;
and
(e) Except as would not, individually or in the
aggregate, have a Material Adverse Effect, Hazardous Substances
have not been generated, transported, treated, stored, disposed of,
arranged to be disposed of Released or threatened to be Released
at, on, from or under any of the Purchased Assets or otherwise in
connection with the Business, in violation of, or in a manner or to
a location that would give rise to liability under or relating to
any Environmental Laws.
The representations and warranties made in this Section 5.9 are the
Seller's exclusive representations and warranties relating to
environmental matters.
5.10 Labor Matters. The Seller has previously delivered
to the Buyer copies of all collective bargaining agreements to
which the Seller is a party or is subject as of the date hereof and
which relate to the operation of the Business. Except to the
extent set forth in Schedule 5.10 and except for such matters as
will not, individually or in the aggregate, have a Material Adverse
Effect, (a) the Seller is in compliance with all laws applicable to
the Business Employees respecting employment and employment
practices, terms and conditions of employment and wages and hours;
(b) the Seller has not received written notice of any unfair labor
practice complaint against the Seller pending before the National
Labor Relations Board with respect to any of the Business
Employees; (c) the Seller has not received notice that any
representation petition respecting the Business Employees has been
filed with the National Labor Relations Board; and (d) no
arbitration proceeding arising out of or under the Collective
Bargaining Agreement is pending against the Seller. Except as
provided in Section 7.10, there are no employment, severance or
change in control agreements or contracts with any Business
Employee (as such term is defined in Section 7.10(a)) for which
Buyer would have any liability.
5.11 ERISA; Benefit Plans. (a) Schedule 5.11 lists each
employee benefit plan (as such term is defined in section 3(3) of
ERISA) and each other material employee benefit plan, program or
arrangement maintained, contributed to, or required to be
contributed to, by the Seller as of the date hereof on account of
current or former employees of the Business (each, a "Benefit
Plan").
(b) Each Benefit Plan that is intended to be qualified
under section 401(a) of the Code has received a determination from
the Internal Revenue Service that such Benefit Plan is so
qualified, and nothing has occurred since the date of such
determination that would adversely affect the qualified status of
such Benefit Plan.
(c) Each Benefit Plan has been maintained, funded, and
administered in material compliance with its terms, the terms of
any applicable collective bargaining agreements, and all applicable
laws including, but not limited to, ERISA and the Code. There is
no "accumulated funding deficiency" within the meaning of section
412 of the Code with respect to any Benefit Plan which is an
"employee pension benefit plan" as defined in section 3(2) of
ERISA. Seller has no obligation to contribute to or any other
liability under or with respect to any multiemployer plan (as such
term is defined in section 3(37) of ERISA) with respect to any
employee of the Business. Neither Seller nor any ERISA Affiliate
has any liability or potential liability under Title IV of ERISA or
to the Pension Benefit Guaranty Corporation that could become a
liability of the Buyer.
(d) Except as set forth on Schedule 5.11, Seller has no
obligation to provide medical or life insurance benefits to any
current or future retired or former employee of the Business other
than pursuant to Part 6 of Subtitle B of Title I of ERISA.
(e) Neither Seller nor any ERISA Affiliate maintains a
plan which would be reasonably likely to result in the payment to
any employee or former employee of Seller by Buyer of any money or
other property or rights or accelerate or provide any other rights
or benefits to any employee or former employee of the Company as a
result of the transactions contemplated by this Agreement, whether
or not such payment would constitute a parachute payment within the
meaning of Section 280G of the Code.
5.12 Certain Contracts and Arrangements. Except for
contracts, agreements, personal property leases, commitments,
understandings or instruments which (a) are listed in Schedule 5.8
or Schedule 5.12, or (b) have been entered into in the ordinary
course of business and do not involve obligations in excess of
$500,000 individually, the Seller is not, as of the date hereof, a
party to any written contract, agreement, personal property lease,
commitment, understanding or instrument which is material to the
Business or the Purchased Assets. Except as disclosed in
Schedule 5.12, each of the Transportation Agreements and each
material Seller's Agreement constitutes a valid and binding
obligation of Seller and constitutes a valid and binding obligation
of the other parties thereto, is in full force and effect, and may
be transferred to the Buyer pursuant to this Agreement and will
continue in full force and effect thereafter, in each case without
breaching the terms thereof or resulting in the forfeiture or
impairment of any rights thereunder, except in those instances
where the failure to transfer the same to the Buyer pursuant to
this Agreement would not, individually or in the aggregate, have a
Material Adverse Effect (without giving effect to clause (d)
thereof). Seller has fulfilled and performed its obligations under
each such Transportation Agreements and each material Seller's
Agreement, and is not in breach or default under, and has not
received notice that it is in breach or default under, any of such
agreement, except for such breaches of defaults as to which
requisite waivers or consents have been obtained or which would not
have a Material Adverse Effect or prevent or materially delay the
consummation of the transactions contemplated by this Agreement.
Except as set forth in Schedule 5.12, (i) no Transportation
Agreement and (ii) no Seller's Agreement involving obligations in
excess of $500,000 has been modified or otherwise amended or, other
than pursuant to its terms, terminated, extended or renewed since
the date such agreement was made available to Parent and Buyer for
inspection in the data room or otherwise in connection with the
transactions contemplated by this Agreement and up to the date
hereof.
5.13 Legal Proceedings and Judgments. Except as set
forth in Schedule 5.13 or in the Seller's Reports, there are no
claims, actions, proceedings or investigations pending or
threatened against or relating to the Seller before any court or
other Governmental Entity acting in an adjudicative capacity, which
individually or in the aggregate would have a Material Adverse
Effect. Except as set forth in Schedule 5.13 or in the Seller's
Reports, the Seller is not subject to any outstanding judgment,
rule, order, writ, injunction or decree of any court or other
Governmental Entity which, individually or in the aggregate, would
have a Material Adverse Effect.
5.14 Permits. The Seller has all permits, licenses,
franchises and other governmental authorizations, consents and
approvals, other than with respect to Environmental Laws which are
addressed in Section 5.9 (collectively, "Permits") necessary for
the operation of the Business as presently conducted, except where
the failure to have such Permits would not, individually or in the
aggregate, have a Material Adverse Effect. Schedule 5.14 sets
forth a list of all material Permits and Environmental Permits held
by Seller as of the date hereof and necessary for the operation of
the Business as presently conducted.
5.15 Compliance with Laws. The Seller is in compliance
with all Permits, laws, statutes, orders, rules, regulations,
ordinances, or judgments of any Governmental Entity applicable to
it, except for violations which, individually or in the aggregate,
do not have a Material Adverse Effect.
5.16 Taxes. All material Tax Returns relating to the
Business or the Purchased Assets required to be filed by or on
behalf of the Seller have been filed in a timely manner, and all
material Taxes shown to be due on such Tax Returns have been paid
in full, except to the extent being contested in good faith by
appropriate proceedings. None of the Purchased Assets is (A) an
asset or property that is or will be required to be treated as
described in Section 168(f)(8) of the Internal Revenue Code of 1954
as in effect immediately before the enactment of the Tax Reform Act
of 1986, or (B) tax-exempt use property within the meaning of
Section 168(h)(1) of the Code.
5.17 Regulation as a Utility. Except as set forth on
Schedule 5.17, the Seller is not subject to regulation as a public
utility or public service company (or similar designation) by the
United States, any state of the United States, any foreign country
or any municipality or any political subdivision of the foregoing.
5.18 Year 2000 Compliant. The Year 2000 Problem will not
materially affect the provision of transition services to Buyer as
provided in Section 7.13.
5.19 Inventory. All inventory of Seller reflected on the
Balance Sheet or acquired since June 30, 1999, was acquired and has
been maintained in the ordinary course of Business.
5.20 Business Financial Statements. Seller has delivered
to Buyer the Balance Sheet, which has been prepared by the
financial and accounting staff of Seller. The Balance Sheet
presents fairly, in all material respects, the Purchased Assets and
Assumed Obligations as of June 30, 1999.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND BUYER
As an inducement to Seller to enter this Agreement and to
consummate the transactions contemplated hereby, the Parent and the
Buyer represents and warrants to the Seller as follows:
6.1 Organization. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Ohio and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as is
now being conducted. Parent is a corporation duly organized and
validly existing under the laws of the State of Indiana and has all
requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as is now being
conducted.
6.2 Authority Relative to this Agreement. The Buyer and
Parent have full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of the
Buyer and Parent and no other corporate proceedings on the part of
the Buyer or Parent are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by the Parent and
Buyer, and assuming that this Agreement constitutes a valid and
binding agreement of the Seller, and subject to the receipt of the
governmental consents and approvals required to be obtained
pursuant to Section 8.1(c), constitutes a valid and binding
agreement of the Parent and Buyer, enforceable against the Parent
and Buyer in accordance with its terms, except that such
enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally or general principles of
equity.
6.3 Consents and Approvals; No Violation. (a) Except as set
forth in Schedule 6.3, and other than obtaining the governmental
consents and approvals required to be obtained pursuant to Section
8.1(c), neither the execution and delivery of this Agreement by the
Buyer and Parent nor the purchase by the Buyer of the Purchased
Assets and the assumption by the Buyer of the Assumed Obligations
pursuant to this Agreement will (i) conflict with or result in any
breach of any provision of the Articles of Incorporation or By-Laws
(or other similar governing documents) of the Buyer or Parent, (ii)
require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity, (iii)
result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any material note, bond, mortgage, indenture,
agreement, lease or other instrument or obligation to which the
Buyer, Parent or any of its other Subsidiaries is a party or by
which any of their respective assets may be bound, except for such
defaults (or rights of termination, cancellation or acceleration)
as to which requisite waivers or consents have been obtained, and
except for such breaches or defaults that would not have a Buyer
Material Adverse Effect.
(b) Except as set forth in Schedule 6.3 and except for
(i) PUCO approval necessary for the Seller to transfer the
Purchased Assets and for the Buyer to purchase the Purchased
Assets, (ii) the approval, if required, of the SEC pursuant to the
Holding Company Act and (iii) the filings by the Buyer, Parent and
the Seller required by the HSR Act (the filings and approvals
referred to in clauses (i)through (iii) are collectively referred
to as the "Buyer Required Regulatory Approvals"), no declaration,
filing or registration with, or notice to, or authorization,
consent or approval of any Governmental Entity is necessary for the
consummation by the Buyer and Parent of the transactions
contemplated hereby, except for such consents, approval, orders or
authorizations, licenses or permits, filings or notices the failure
of which to obtain or make would not have a Buyer Material Adverse
Effect.
6.4 Regulation as a Utility. Except as set forth in Schedule
6.4, neither the Buyer nor Parent is subject to regulation as a
public utility or public service company by the United States, any
State of the United States, any foreign country or any municipality
or any political subdivision of the foregoing.
6.5 Availability of Funds. Upon receipt of the commitment
referred to in Section 7.14, the Buyer will have sufficient funds
available to it on the Closing Date to pay the Purchase Price.
ARTICLE VII
COVENANTS OF THE PARTIES
7.1 Conduct of Business. (a) Except as described in Schedule
7.1, during the period from the date of this Agreement to the
Closing Date, the Seller will operate the Purchased Assets and the
Business in the usual, regular and ordinary course consistent with
Good Utility Practice and shall use all commercially reasonable
efforts to preserve intact the Business, and endeavor to preserve
the goodwill and relationships with customers, suppliers and others
having business dealings with the Business. Without limiting the
generality of the foregoing, and, except as contemplated in this
Agreement or as described in Schedule 7.1, prior to the Closing
Date, without the prior written consent of the Buyer, which shall
not be unreasonably withheld, the Seller will not with respect to
the Purchased Assets or the Business:
(i) except for Permitted Encumbrances, create,
incur, assume or suffer to exist any Encumbrance upon the Purchased
Assets;
(ii) assume, guarantee, endorse or otherwise become
directly liable or responsible (whether directly or indirectly,
contingently or otherwise) for the obligations of any Person;
(iii) make any material change in the levels of
storage inventory customarily maintained by the Seller with respect
to the Business, other than consistent with Good Utility Practice;
(iv) sell, lease (as lessor), transfer or otherwise
dispose of, any of the Purchased Assets, other than in the ordinary
course of business;
(v) other than in the ordinary course of business
and except as provided in Subsections 7.1(a)(xii) and 7.1(a)(xiii),
terminate, extend, renew or otherwise amend any of the
Transportation Agreements and material Seller's Agreements or waive
any material default by, or release, settle or compromise any
material claim against, any other party thereto;
(vi) grant severance or termination pay to any
present or former director, officer or employee primarily engaged
in the Business which would be the responsibility of the Buyer;
(vii) make any filing with any Governmental
Entity to change its rates or contracts relating to the Business or
consent to any change by any Governmental Entity in the methodology
used to compute any purchased gas adjustment applied in the normal
course consistent with prior practice if doing so would have a
Material Adverse Effect;
(viii) enter into any collective bargaining
agreement in which the terms and conditions applicable to New Buyer
Employees materially differ from those applicable to Seller
employees, except where such differences are appropriate based upon
job classifications or seniority;
(ix) grant any increase in the compensation of
or grant or agree to any bonus for officers or employees not
covered by collective bargaining who will become New Buyer
Employees, except for increases and bonuses (A) in the ordinary
course of business and consistent with past practice, or (B) as
required by any Benefit Plan (as defined in Section 5.11(a));
(x) consistent with Good Utility Practice, deviate
materially from prior experience and Seller's gas capital forecast
provided to Buyer in making expenditures for capital investments
relating to the Business;
(xi) enter into any written or oral contract,
agreement, commitment or arrangement with respect to any of the
transactions set forth in the foregoing paragraphs (i) through
(xi);
(xii) terminate, modify, extend, renew or
otherwise amend, or permit pursuant to its terms to be amended,
terminated, extended or renewed, any Transportation Agreement set
forth under the heading "Transportation Agreements/Firm" on
Schedule 5.12; provided, that, if such action is taken with the
consent of Parent and the Buyer, then all of the benefits and
obligations arising from that action will be apportioned equitably
between Seller and Buyer such that the benefits and obligations
attributable to Buyer and Seller relate to the period of time that
the Business is owned by Buyer or Seller during the time that such
Transportation Agreement, as modified, extended, renewed or
otherwise amended, is in effect; or
(xiii) modify, extend, renew or otherwise amend
the Egan Firm Storage Service Agreement dated September 1, 1997 set
forth on Schedule 5.12 under the heading "Transportation
Agreements", except that Seller may renew this agreement for a term
not in excess of one year from the date of such extension and at
such prices and on such terms and conditions that are substantially
comparable to the existing prices, terms and conditions of such
agreement.
(b) A committee comprised of one Person designated by
the Seller and one Person designated by the Buyer, and such
additional Persons as may be appointed by the Persons originally
appointed to such committee (the "Transition Committee") will be
established as soon after execution of this Agreement as is
practicable to examine the transition issues affecting the
Purchased Assets and the Business after the date hereof, giving
emphasis to cooperation between the Buyer and the Seller after the
execution of this Agreement. From time to time, the Transition
Committee shall report its findings to the senior management of
each of the Seller and the Buyer.
7.2 Access to Information. (a) Between the date of this
Agreement and the Closing Date, the Seller will, during ordinary
business hours and upon reasonable notice (i) give the Buyer and
the Buyer Representatives reasonable access to all books, records,
plants, offices and other facilities and properties constituting
the Purchased Assets to which the Buyer is not denied access by
law; (ii) permit the Buyer to make such reasonable inspections
thereof as the Buyer may reasonably request; (iii) furnish the
Buyer with such financial and operating data and other information
with respect to the Business as the Buyer may from time to time
reasonably request; (iv) furnish the Buyer a copy of each material
report, schedule or other document filed or received by the Seller
with respect to the Business with the SEC or PUCO; provided,
however, that (A) any such investigation shall be conducted in such
a manner as not to interfere unreasonably with the operation of the
Business, (B) the Seller shall not be required to take any action
which would constitute a waiver of the attorney-client privilege
and (C) the Seller need not supply the Buyer with any information
which the Seller is under a legal obligation not to supply.
Notwithstanding anything in this Section 7.2 to the contrary, (i)
the Buyer shall not have access to Transferring Employee Records
and personnel and medical records, which in the Seller's good faith
judgment is sensitive or the disclosure of which could subject the
Seller to risk of liability and (ii) the Buyer shall not have the
right to perform or conduct any environmental sampling or testing
at, in, on, or underneath any of the Purchased Assets.
(b) The Buyer, Parent and Seller acknowledge that each
is subject to the Confidentiality Agreement. All information
furnished to or obtained by the Buyer or Parent and the Buyer
Representatives pursuant to this Section 7.2 shall be subject to
the provisions of the Confidentiality Agreement and shall be
treated as Evaluation Material for all purposes of the
Confidentiality Agreement.
(c) For a period of ten years after the Closing Date,
each party and their representatives shall have reasonable access
to all of the books and records relating to the Business or the
Purchased Assets, including all Transferring Employee Records or
other personnel and medical records required by law, legal process
or subpoena, in the possession of the other party to the extent
that such access may reasonably be required by such party in
connection with the Assumed Obligations or the Excluded
Liabilities, or other matters relating to or affected by the
operation of the Business and the Purchased Assets. Such access
shall be afforded by the party in possession of such books and
records upon receipt of reasonable advance notice and during normal
business hours; provided, however, that (A) any such investigation
shall be conducted in such a manner as not to interfere
unreasonably with the operation of the business of any party or its
affiliates, (B) no party shall be required to take any action which
would constitute a waiver of the attorney-client privilege and (C)
no party need supply the other party with any information which
such party is under a legal obligation not to supply. The party
exercising this right of access shall be solely responsible for any
costs or expenses incurred by it pursuant to this Section 7.2(c).
If the party in possession of such books and records shall desire
to dispose of any such books and records upon or prior to the
expiration of such ten-year period, such party shall, prior to such
disposition, give the other party a reasonable opportunity at such
other party's expense, to segregate and remove such books and
records as such other party may select.
(d) The Seller agrees to use commercially reasonable
efforts not to release any Person (other than the Buyer) from any
confidentiality agreement now existing with respect to the
Purchased Assets, or waive or amend any provision thereof.
(e) Except as required by law or legal process, unless
otherwise agreed to in writing by the Buyer, for a period
commencing on the Closing Date and terminating three years after
such date, the Seller shall agree (i) to keep all Evaluation
Material relating exclusively to the Business or the Purchased
Assets confidential and not disclose or reveal any such Evaluation
Material to any Person other than Seller's Representatives who are
actively and directly participating in the transactions
contemplated hereby or who otherwise need to know such Evaluation
Material for such purpose and to cause those Persons to observe the
terms of this Section 7.2(e) and (ii) not to use Evaluation
Material relating exclusively to the Business or the Purchased
Assets for any purpose other than consistent with the terms of this
Agreement or in connection with its other business operations. The
Seller shall continue to hold all Evaluation Material relating
exclusively to the Business or the Purchased Assets according to
the same internal security procedures and with the same degree of
care regarding its secrecy and confidentiality as currently
applicable thereto. The Seller shall notify the Buyer of any
unauthorized disclosure of any Evaluation Material relating
exclusively to the Business or the Purchased Assets to third
parties that it discovers, and shall endeavor to prevent any
further such disclosures. The Seller shall be responsible for any
breach of the terms of this Section 7.2(e) by the Seller or the
Seller's Representatives. After the Closing Date, in the event
that the Seller is requested pursuant to, or required by,
applicable law or regulation or by legal process to disclose any
Evaluation Material relating exclusively to the Business or the
Purchased Assets, or any other information concerning the Business
or the Purchased Assets, or the transactions contemplated hereby,
the Seller shall provide the Buyer with prompt notice of such
request or requirement in order to enable the Buyer to seek an
appropriate protective order or other remedy, to consult with the
Seller with respect to taking steps to resist or narrow the scope
of such request or legal process (it being understood that any such
efforts to seek a protective order or other remedy or to resist or
narrow the scope of such request or legal process shall be at the
sole cost and expense of the Buyer), or to waive compliance, in
whole or in part, with the terms of this Section 7.2(e). The
Seller agrees not to oppose any action by the Buyer to obtain any
such protective order or other appropriate remedy after the Closing
Date. In the event that no such protective order or other remedy
is obtained, or that the Buyer waives compliance with the terms of
this Section 7.2(e), the Seller shall furnish only that portion of
the Evaluation Material relating exclusively to the Business or the
Purchased Assets which the Seller is advised by its counsel is
legally required. In any such event the Seller shall use its
commercially reasonable efforts to ensure that all such Evaluation
Material and other information that is so disclosed will be
accorded confidential treatment.
7.3 Expenses. Except to the extent specifically provided
herein, whether or not the transactions contemplated hereby are
consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be
borne by the party incurring such costs and expenses.
7.4 Further Assurances. (a) Subject to the terms and
conditions of this Agreement, each of the parties hereto will use
commercially reasonable efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the sale of the Purchased Assets
pursuant to this Agreement, including without limitation using
commercially reasonable efforts to ensure satisfaction of the
conditions precedent to each party's obligations hereunder.
Neither of the parties hereto will, without prior written consent
of the other party, take any action which would reasonably be
expected to prevent or materially impede, interfere with or delay
the transactions contemplated by this Agreement. From time to time
on or after the Closing Date, the Seller will, at its own expense,
execute and deliver such documents to the Buyer as the Buyer may
reasonably request in order to more effectively vest in the Buyer
the Seller's title to the Purchased Assets subject to Permitted
Encumbrances and Schedule 5.7. From time to time after the date
hereof, the Buyer will, at its own expense, execute and deliver
such documents to the Seller as the Seller may reasonably request
in order to more effectively consummate the sale of the Purchased
Assets and the assumption of the Assumed Obligations pursuant to
this Agreement.
(b) In the event that any Purchased Asset shall not have
been conveyed to the Buyer at the Closing, the Seller shall,
subject to Section 7.4(c), use commercially reasonable efforts to
convey such asset to the Buyer as promptly as is practicable after
the Closing. Seller has easements, license agreements, rights of
way and leases for rights of way, some of which relate solely to
the Business and Purchased Assets ("Gas Easements") and others of
which relate to both the Business and Purchased Assets and Seller's
other businesses ("Shared Easements"). At the Closing, Seller will
convey and assign to Buyer by appropriate instrument, subject to
the obtaining of any necessary consents, all Gas Easements and
rights under the Shared Easements to permit the Buyer to use the
same in the Business on an exclusive basis and for other purposes
on a nonexclusive basis. Buyer shall not use or permit others to
use it rights under any Shared Easement for the transmission or
distribution of electric energy or any use that adversely affects
Seller's, it affiliates', successors' or assigns' ability to use
the easement for the transmission or distribution of electric
energy. In the event that any such asset required by Seller for
operation of its Electric Business or other businesses and not
required by Buyer for the operation of the Business shall not have
been retained by the Seller after the Closing, the Buyer shall use
its commercially reasonable efforts to convey the use of such asset
to the Seller as promptly as is practicable after the Closing.
(c) To the extent that the Seller's rights under any
Seller's Agreement may not be assigned without the consent of
another Person which consent has not been obtained, this Agreement
shall not constitute an agreement to assign the same if an
attempted assignment would constitute a breach thereof or be
unlawful and the Seller shall use its commercially reasonable
efforts (without being required to make any payment to any third
party or to incur any economic burden) to obtain any such required
consent(s) as promptly as possible unless failure to obtain such
consent would individually or in the aggregate not have a Material
Adverse Effect, and the Buyer agrees to cooperate with the Seller
in its efforts to obtain any such consent (including the submission
of such financial or other information concerning the Buyer and the
execution of any assumption agreements or similar documents
reasonably requested by a third party) without being required to
make any payment to any third party or to incur any economic
burden. The Seller and the Buyer agree that if any consent to an
assignment of any Seller's Agreement shall not be obtained or if
any attempted assignment would be ineffective or would impair the
Buyer's rights and obligations under the Seller's Agreement in
question so that the Buyer would not in effect acquire the benefit
of all such rights and obligations, the Seller, to the maximum
extent permitted by law and such Seller's Agreement, shall after
the Closing, unless the Seller elects to comply with Section 7.4(d)
hereof, appoint the Buyer to be the Seller's representative and
agent with respect to such Seller's Agreement, and the Seller
shall, to the maximum extent permitted by law and such Seller's
Agreement, enter into such reasonable arrangements with the Buyer
as are necessary to provide the Buyer with the benefits and
obligations of such Seller's Agreement. The Seller and the Buyer
shall cooperate and shall each use their commercially reasonable
efforts after the Closing to obtain an assignment of such Seller's
Agreement to the Buyer.
(d) To the extent that any personal property lease,
relating to any assets which constitute a portion of the Purchased
Assets cannot be assigned to the Buyer or are not subject to
arrangements described in Section 7.4(c), the Seller will use its
commercially reasonable efforts to acquire the assets relating to
such lease and to include them in the Purchased Assets before the
Closing Date.
7.5 Public Statements. The parties shall consult with each
other prior to issuing any public announcement, statement or other
disclosure with respect to this Agreement or the transactions
contemplated hereby and shall not issue any such public
announcement, statement or other disclosure prior to such
consultation, except as may be required by law or stock exchange
rules and except that the parties may make public announcements,
statements or other disclosures with respect to this Agreement and
the transactions contemplated hereby to the extent and under the
circumstances in which the parties are expressly permitted by the
Confidentiality Agreement to make disclosures of Evaluation
Material.
7.6 Consents and Approvals. (a) The Seller, Parent and the
Buyer shall each file or cause to be filed with the Federal Trade
Commission and the United States Department of Justice any
notifications required to be filed under the HSR Act and the rules
and regulations promulgated thereunder with respect to the
transactions contemplated hereby. The parties shall consult with
each other as to the appropriate time of filing such notifications
and shall use their best efforts to make such filings at the agreed
upon time, to respond promptly to any requests for additional
information made by either of such agencies, and to cause the
waiting periods under the HSR Act to terminate or expire at the
earliest possible date after the date of filing.
(b) The Seller, Parent and the Buyer shall cooperate
with each other and use commercially reasonable efforts to (i)
promptly prepare and file all necessary documentation, (ii) effect
all necessary applications, notices, petitions and filings and
execute all agreements and documents, (iii) obtain the transfer or
reissuance to the Buyer of all necessary Transferable Permits,
consents, approvals and authorizations of all Governmental Entities
including but not limited to taking all structural corporate
actions necessary to consummate the transaction in a timely manner
and (iv) obtain all necessary consents, approvals and
authorizations of all other parties, in the case of each of the
foregoing clauses (i), (ii), (iii) and (iv), necessary or advisable
to consummate the transactions contemplated by this Agreement
(including, without limitation, the Seller Required Regulatory
Approvals and the Buyer Required Regulatory Approvals) or required
by the terms of any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, contract, lease or other
instrument to which the Seller or the Buyer is a party or by which
any of them is bound. The Seller and the Buyer each shall have the
right to review in advance all characterizations of the information
relating to it or the transactions contemplated by this Agreement
which appear in any filing made in connection with the transactions
contemplated hereby.
(c) The Seller, Parent and the Buyer shall cooperate
with each other and promptly prepare and file notifications with,
and request Tax clearances from, state and local taxing authorities
in jurisdictions in which a portion of the Purchase Price may be
required to be withheld or in which the Buyer would otherwise be
liable for any Tax liabilities of the Seller pursuant to such state
and local Tax law.
7.7 Fees and Commissions. The Seller, Parent and the Buyer
each represent and warrant to the other that, except for Credit
Suisse First Boston, which is acting for and at the expense of the
Seller, and Merrill Lynch, Pierce, Fenner & Smith Incorporated,
which is acting for and at the expense of the Buyer, no broker,
finder or other Person is entitled to any brokerage fees,
commissions or finder's fees in connection with the transaction
contemplated hereby by reason of any action taken by the party
making such representation. The Seller and the Buyer will pay to
the other or otherwise discharge, and will indemnify and hold the
other harmless from and against, any and all claims or liabilities
for all brokerage fees, commissions and finder's fees (other than
the fees, commissions and finder's fees payable to the parties
listed above) incurred by reason of any action taken by such party.
7.8 Tax Matters. (a) All transfer and sales taxes,
including, but not limited to, real property conveyance taxes,
incurred in connection with this Agreement and the transactions
contemplated hereby shall be shared equally by the Buyer and Seller
(50/50), and each party, at its 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, and, if required by applicable law, the other party will
join in the execution of any such Tax Returns or other
documentation.
(b) With respect to Taxes to be prorated in accordance
with Section 3.4 of this Agreement only, the Buyer shall prepare
and timely file all Tax Returns required to be filed after the
Closing with respect to the Purchased Assets, if any, and shall
duly and timely pay all such Taxes shown to be due on such Tax
Returns. The Buyer's preparation of any such Tax Returns shall be
subject to the Seller's approval, which approval shall not be
unreasonably withheld. The Buyer shall make such Tax Returns
available for the Seller's review and approval no later than 15
Business Days prior to the due date for filing such Tax Return.
Within 10 Business Days after receipt of such Tax Return, the
Seller shall pay to the Buyer its proportionate share of the amount
shown as due on such Tax Return determined in accordance with
Section 3.4 of this Agreement.
(c) The Buyer and the Seller 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. Any information
obtained pursuant to this Section 7.8(c) or pursuant to any other
Section hereof providing for the sharing of information or review
of any Tax Return or other schedule relating to Taxes shall be kept
confidential by the parties hereto.
(d) The Seller will reimburse the Buyer for a percentage
of payments with respect to liabilities for real or personal
property Taxes under agreements entered into by the Seller and
local governments, as set forth in Schedule 7.8 hereof, within 30
days following delivery to Seller of evidence of such payments.
With respect to real or personal property Taxes payable in
jurisdictions in which no such Tax agreements are operative and in
which both Buyer and Seller have property which is or is
potentially subject to property Tax, Buyer and Seller will
cooperate in the filing of property Tax Returns with the objective
of maximizing Tax and administrative efficiency to the benefit of
both parties.
7.9 Supplements to Schedules. Prior to the Closing Date, the
Seller may supplement or amend the Schedules furnished by it
pursuant to Article V with respect to any matter relating to the
Purchased Assets or the Business. In the event such supplements
and amendments are reasonably anticipated by the parties to give
rise to adverse economic consequences to the Business or the
Purchased Assets, the Buyer may either terminate this Agreement
without liability or close the transaction (in which event any
breach of any representation or warranty made by the Seller which
would otherwise exist absent such supplements and amendments shall
be deemed cured for all purposes of this Agreement); provided,
however, that the Buyer may not terminate this Agreement if such
adverse economic consequences would not, individually or in the
aggregate, have a Material Adverse Effect.
7.10 Employees. (a) The Buyer shall offer employment with
substantially the same pay and benefits, effective as of the
Closing Date, to those employees of the Seller whose job
classification or function are listed on Schedule 7.10
(collectively, the "Business Employees"). Each person who becomes
employed by the Buyer pursuant to this Section 7.10 shall be
referred to herein as a "New Buyer Employee"; provided, however,
that it is understood and agreed that all such employees are and
will remain employees-at-will and Buyer shall not be obligated to
retain any such employees in the employment of Buyer for any
specified period of time from and after the Closing Date, other
than the employment of employees who are represented by Local No.
175 of the Utility Workers Union of America, who shall continue in
accordance with the terms and conditions of the Collective
Bargaining Agreements or any replacements thereof; and provided
further that no person providing transition services shall be a
"New Buyer Employee".
(b) With respect to New Buyer Employees who are included
in the collective bargaining units covered by the Collective
Bargaining Agreements (the "Union Employees"), on the Closing Date
and subject to Section 7.1(a)(viii), as well as approval by the
affected collective bargaining units, the Buyer will assume the
Collective Bargaining Agreements as they relate to the Union
Employees and comply with all applicable obligations thereunder.
(c) Effective as of the Closing Date, the Seller's
401(K) Savings Plan shall be amended to provide that effective as
of the Closing Date, all New Buyer Employees (including such
employees on disability, layoff, approved leave of absence or
vacation) as of the Closing Date who have account balances in the
Seller's 401(K) Savings Plan as of the Closing Date to be fully
vested in such account balance as of the Closing Date. To the
extent allowable by law, the Buyer shall take any and all necessary
action to cause the trustee of a defined contribution plan of the
Buyer or one of its Affiliates, if requested to do so by a New
Buyer Employee who is not a Union Employee ("Non-Union Employee"),
to accept a direct "rollover" of all or a portion of said
employee's distribution (excluding securities) from the Seller's
401(k) Savings Plan unless the plan includes a joint and survivor
annuity distribution option.
(d) The Buyer shall pay to each New Buyer Employee whose
employment is terminated by the Buyer or one of its Affiliates
without cause within eighteen months of the Closing Date a
severance benefit package equivalent to that which would have been
provided to such individual upon such termination by the Seller or
its Affiliates under the Seller's severance plan had such
individual remained continuously employed by the Seller or its
Affiliates and had been eligible under, and covered by, such plan
on the date of such termination.
(e) The Seller agrees to timely perform and discharge
all requirements under the WARN Act to the extent applicable and
under applicable state and local laws and regulations for the
notification of its employees arising from the sale of the
Purchased Assets to the Buyer up to and including the Closing Date
for those employees who will become New Buyer Employees effective
as of the Closing Date. After the Closing Date, the Buyer shall be
responsible for performing and discharging all requirements under
the WARN Act and under applicable state and local laws and
regulations for the notification of its employees with respect to
the Purchased Assets and the Business.
7.11 Risk of Loss. (a) From the date hereof through the
Closing Date, all risk of loss or damage to the property included
in the Purchased Assets shall be borne by the Seller.
(b) If, before the Closing Date all or any portion of
the Purchased Assets are taken by eminent domain or is the subject
of a pending or (to the Seller's Knowledge) contemplated taking
which has not been consummated, the Seller shall notify the Buyer
promptly in writing of such fact. If any such taking, individually
or in the aggregate, would create a Material Adverse Effect, the
Buyer and the Seller shall negotiate in good faith to settle the
loss resulting from such taking (including, without limitation, by
making a fair and equitable adjustment to the Purchase Price) and,
upon such settlement, consummate the transaction contemplated by
this Agreement pursuant to the terms of this Agreement.
(c) If, before the Closing Date all or any portion of
the Purchased Assets are damaged or destroyed by fire or other
casualty, the Seller shall notify the Buyer promptly in writing of
such fact. If such damage or destruction, individually or in the
aggregate, would create a Material Adverse Effect and the Seller
has not notified the Buyer of its intention to cure such damage or
destruction within 15 days after its occurrence, the Buyer and the
Seller shall negotiate in good faith to settle the loss resulting
from such casualty (including, without limitation, by making a fair
and equitable adjustment to the Purchase Price) and, upon such
settlement, consummate the transactions contemplated by this
Agreement pursuant to the terms of this Agreement.
7.12 Litigation Support. In the event and for so long as
any party is actively contesting or defending against any action,
suit, proceeding, hearing, investigation, charge, complaint, claim,
or demand in connection with (i) any transaction contemplated under
this Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction on or prior to the Closing
Date involving the Seller, the other party will cooperate with the
contesting or defending party and its counsel in the contest or
defense, make available its personnel, and provide such testimony
and access to its books and records as shall be reasonably
necessary in connection with the contest or defense, all at the
sole cost and expense of the contesting or defending party (unless
the contesting or defending party is entitled to indemnification
therefor under Section 9.1 hereof).
7.13 Transition Services. The Seller will provide and
the Buyer will be obligated to take the Transition Services (the
"Transition Services")as described in the Summary of Transition
Services (the "Summary"), which is attached hereto as Schedule
7.13. The final terms and conditions for the Transition Services
will be set forth in a definitive agreement negotiated by the
parties in good faith and will be consistent with those described
in the Summary.
7.14 Financing Commitment. Within three days after the
date hereof, Parent will deliver to Seller a financing commitment
of Merrill Lynch, Price, Fenner & Smith Incorporated reasonably
satisfactory to Seller to provide the financing required by Buyer
and Parent to consummate the transactions contemplated hereby.
7.15 Notification. Seller shall notify Buyer and keep it
advised of the occurrence, to Seller's knowledge of (i) any
litigation or administrative proceeding pending or, to the best
knowledge of Seller, threatened against Seller which could, if
adversely determined, have a Material Adverse Effect; (ii) any
material damage or destruction of any of the Purchased Assets; and
(iii) any material adverse change in the financial condition,
results of operations, assets, business or prospects of the
Business. Parent or Buyer shall notify Seller and keep it advised
of the occurrences, to the knowledge of Parent's executive
officers, of any Buyer Material Adverse Change or any material
adverse change in the financial condition, result of operations,
assets, business or prospects of Parent.
ARTICLE VIII
CONDITIONS TO CLOSING
8.1 Conditions to Each Party's Obligations to Effect the
Closing. The respective obligations of each party to effect the
sale and purchase of the Purchased Assets shall be subject to the
fulfillment at or prior to the Closing Date of the following
conditions:
(a) The waiting period under the HSR Act applicable to
the consummation of the sale of the Purchased Assets contemplated
hereby shall have expired or been terminated;
(b) No preliminary or permanent injunction or other
order or decree by any federal or state court which prevents the
consummation of the sale of a material part of the Purchased Assets
contemplated hereby shall have been issued and remain in effect
(each party agreeing to use its reasonable best efforts to have any
such injunction, order or decree lifted) and no statute, rule or
regulation shall have been enacted by any State or Federal
government or governmental agency in the United States which
prohibits the consummation of the sale of the Purchased Assets;
(c) All Federal, State and local government consents and
approvals required for the consummation of the sale of the
Purchased Assets, the operation of the Business by Buyer, the
Seller Required Regulatory Approvals and the Buyer Required
Regulatory Approvals, shall have been obtained or become final
orders (a "Final Order") which for all purposes of this Agreement
means a final order (whether or not any rehearing or appeal thereof
is pending, unless such appeal is a bona fide challenge alleging,
and with a reasonable probability of success, that the consummation
of the sale of the Purchased Assets is illegal and could not be
made legal regardless of any actions taken by Seller, Buyer or
Parent) that has not been revised, stayed, enjoined, set aside,
annulled or suspended, with respect to which any required waiting
period has expired; and as to which all conditions to effectiveness
prescribed therein or otherwise by law, regulation or order have
been satisfied), unless the failure to obtain the required consents
and approvals would not, in the aggregate, create a Material
Adverse Effect. It shall not be a condition that such Final Orders
not impose adverse terms or conditions.
(d) All consents and approvals for the consummation of
the sale of the Purchased Assets contemplated hereby required under
the terms of any note, bond, mortgage, indenture, contract or other
agreement to which the Seller or the Buyer, or any of its
subsidiaries, is a party shall have been obtained, other than those
which if not obtained, would not, in the aggregate, create a
Material Adverse Effect; and
(e) The Purchased Assets shall have been released from
all Encumbrances under the Indenture and there shall be no
Encumbrances on the Purchased Assets other than the Permitted
Encumbrances.
8.2 Conditions to Obligations of the Buyer. The obligation
of the Parent and Buyer to effect the purchase of the Purchased
Assets contemplated by this Agreement shall be subject to the
fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) There shall not have occurred and be continuing a
Material Adverse Effect;
(b) The Seller shall have performed and complied with in
all material respects the covenants and agreements contained in
this Agreement which are required to be performed and complied with
by the Seller on or prior to the Closing Date and the
representations and warranties of the Seller which are set forth in
this Agreement shall be true and correct in all material respect
(except that where any statement in a representation or warranty
expressly includes a standard of materiality, such statements shall
be true and correct in all respects) as of the date of this
Agreement and as of the Closing Date as though made at and as of
the Closing Date (except to the extent that any such representation
or warranty speaks as of a particular date, in which case such
representation and warranty shall be true and correct as of such
date);
(c) The Buyer shall have received certificates from
authorized officers of the Seller, dated the Closing Date, to the
effect that, to the best of such officers' knowledge, the
conditions set forth in Sections 8.2(a) and (b) have been
satisfied; and
(d) Buyer shall have received the other items to be
delivered pursuant to Section 4.3.
8.3 Conditions to Obligations of the Seller. The obligation
of the Seller to effect the sale of the Purchased Assets
contemplated by this Agreement shall be subject to the fulfillment
at or prior to the Closing Date of the following additional
conditions:
(a) Each of Parent and the Buyer shall have performed in
all material respects its covenants and agreements contained in
this Agreement which are required to be performed on or prior to
the Closing Date;
(b) The Parent and Buyer shall have performed and
complied with in all material respects the covenants and agreements
contained in this Agreement which are required to be performed and
complied with by the Seller on or prior to the Closing Date and the
representations and warranties of the Seller which are set forth in
this Agreement shall be true and correct in all material respect
(except that where any statement in a representation or warranty
expressly includes a standard of materiality, such statements shall
be true and correct in all respects) as of the date of this
Agreement and as of the Closing Date as though made at and as of
the Closing Date (except to the extent that any such representation
or warranty speaks as of a particular date, in which case such
representation and warranty shall be true and correct as of such
date);
(c) The Seller shall have received certificates from
authorized officers of Parent and the Buyer, dated the Closing
Date, to the effect that, to the best of such officers' knowledge,
the conditions set forth in Sections 8.3(a) and (b) have been
satisfied; and
(d) Seller shall have received the other items to be
delivered pursuant to Section 4.4.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification. (a) From and after the Closing, the
Seller will indemnify, defend and hold harmless Parent and the
Buyer from and against any and all claims, demands or suits (by any
Person), losses, liabilities, damages, obligations, payments, costs
and expenses (including, without limitation, the costs and expenses
of any and all actions, suits, proceedings, assessments, judgments,
settlements and compromises relating thereto and reasonable
attorneys' fees and reasonable disbursements in connection
therewith) (each, an "Indemnifiable Loss"), asserted against or
suffered by the Buyer relating to, resulting from or arising out of
(i) any breach by the Seller of any covenant or agreement of the
Seller contained in this Agreement or the representations and
warranties of Seller contained in Sections 5.1, 5.2 or 5.3 hereof,
(ii) the Excluded Liabilities, (iii) or noncompliance by the Seller
with any bulk sales or transfer laws as provided in Section 11.11.
(b) From and after the Closing, the Buyer will
indemnify, defend and hold harmless the Seller from and against any
and all Indemnifiable Losses asserted against or suffered by the
Seller relating to, resulting from or arising out of (i) any breach
by the Buyer of any covenant or agreement of the Buyer contained in
this Agreement or the representations and warranties of the Buyer
contained in this Agreement, (ii) the Assumed Obligations or (iii)
any liabilities or obligations of the Business incurred after
Closing.
(c) Any Person entitled to receive indemnification under
this Agreement (an "Indemnitee") having a claim under these
indemnification provisions shall make a good faith effort to
recover all losses, damages, costs and expenses from insurers of
such Indemnitee under applicable insurance policies so as to reduce
the amount of any Indemnifiable Loss hereunder. The amount of any
Indemnifiable Loss shall be reduced (i) to the extent that
Indemnitee receives any insurance proceeds with respect to an
Indemnifiable Loss and (ii) to take into account any net Tax
benefit recognized by the Indemnitee arising from the recognition
of the Indemnifiable Loss and any payment actually received with
respect to an Indemnifiable Loss.
(d) The expiration, termination or extinguishment of any
covenant or agreement shall not affect the parties' obligations
under this Section 9.1 if the Indemnitee provided the Person
required to provide indemnification under this Agreement (the
"Indemnifying Party") with proper notice of the claim or event for
which indemnification is sought prior to such expiration,
termination or extinguishment.
(e) The rights and remedies of the Seller, Parent and
the Buyer under this Article IX are exclusive and in lieu of any
and all other rights and remedies which the Seller and the Buyer
may have under this Agreement or otherwise for damages or monetary
relief with respect to (i) any breach or failure to perform any
covenant or agreement set forth in this Agreement, (ii) any breach
of any representation or warranty set forth in this Agreement or
(iii) the Assumed Obligations or the Excluded Liabilities, as the
case may be; provided, however, that nothing in this Agreement
shall relieve any party from asserting any rights and remedies as
a result of fraudulent action.
(f) No Indemnitee shall be entitled to recover any
special, consequential or exemplary damages under this Article IX.
9.2 Defense of Claims. (a) If any Indemnitee receives notice
of the assertion of any claim or of the commencement of any claim,
action, or proceeding made or brought by any Person who is not a
party to this Agreement or any Affiliate of a party to this
Agreement (a "Third Party Claim") with respect to which
indemnification is to be sought from an Indemnifying Party, the
Indemnitee will give such Indemnifying Party reasonably prompt
written notice thereof, but in any event not later than 10 calendar
days after the Indemnitee's receipt of notice of such Third Party
Claim, or within 10 calendar days prior to the date on which an
answer or reply, if any, to such claim is due, whichever is
earlier. Such notice shall describe the nature of the Third Party
Claim in reasonable detail and will indicate the estimated amount,
if practicable, of the Indemnifiable Loss that has been or may be
sustained by the Indemnitee. The Indemnifying Party will have the
right to participate in or, by giving written notice to the
Indemnitee, to elect to assume the defense of any Third Party Claim
at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, and the Indemnitee will cooperate in good
faith in such defense at such Indemnitee's own expense.
(b) If within 10 calendar days after an Indemnitee
provides written notice to the Indemnifying Party of any Third
Party Claim the Indemnitee receives written notice from the
Indemnifying Party that such Indemnifying Party has elected to
assume the defense of such Third Party Claim as provided in the
last sentence of Section 9.2(a), the Indemnifying Party will not be
liable for any legal expenses subsequently incurred by the
Indemnitee in connection with the defense thereof; provided,
however, that if the Indemnifying Party fails to take reasonable
steps necessary to defend diligently such Third Party Claim within
20 calendar days after receiving notice from the Indemnitee that
the Indemnitee believes the Indemnifying Party has failed to take
such steps, the Indemnitee may assume its own defense, and the
Indemnifying Party will be liable for all reasonable expenses
thereof. Without the prior written consent of the Indemnitee, the
Indemnifying Party will not enter into any settlement of any Third
Party Claim (other than a settlement involving only the payment of
money). If a firm offer is made to settle a Third Party Claim
which the Indemnifying Party desires to accept and which acceptance
requires the consent of the Indemnitee pursuant to the immediately
preceding sentence, the Indemnifying Party will give written notice
to the Indemnitee to that effect. If the Indemnitee fails to
consent to such firm offer within 10 calendar days after its
receipt of such notice, the Indemnitee may continue to contest or
defend such Third Party Claim and, in such event, the maximum
liability of the Indemnifying Party as to such Third Party Claim
will be the amount of such settlement offer, plus reasonable costs
and expenses paid or incurred by the Indemnitee up to the date of
such notice for which the Indemnifying Party is otherwise liable.
(c) Any claim by an Indemnitee on account of an
Indemnifiable Loss which does not result from a Third Party Claim
(a "Direct Claim") will be asserted by giving the Indemnifying
Party reasonably prompt written notice thereof, stating the nature
of such claim in reasonable detail and indicating the estimated
amount, if practicable, but in any event not later than 20 calendar
days after the Indemnitee becomes aware of such Direct Claim, and
the Indemnifying Party will have a period of 20 calendar days
within which to respond to such Direct Claim. If the Indemnifying
Party does not respond within such 20 calendar day period, the
Indemnifying Party will be deemed to have accepted such claim. If
the Indemnifying Party rejects such claim, the Indemnitee will be
free to seek enforcement of its rights to indemnification under
this Agreement.
(d) If the amount of any Indemnifiable Loss, at any time
subsequent to the making of an indemnity payment in respect
thereof, is reduced by recovery, settlement or otherwise under or
pursuant to any insurance coverage, or pursuant to any claim,
recovery, settlement or payment by or against any other Person, the
amount of such reduction, less any costs, expenses or premiums
incurred in connection therewith (together with interest thereon
from the date of payment thereof at the Prime Rate then in effect),
will promptly be repaid by the Indemnitee to the Indemnifying
Party. Upon making any indemnity payment, the Indemnifying Party
will, to the extent of such indemnity payment, be subrogated to all
rights of the Indemnitee against any third party in respect of the
Indemnifiable Loss to which the indemnity payment relates;
provided, however, that (i) the Indemnifying Party will then be in
compliance with its obligations under this Agreement in respect of
such Indemnifiable Loss and (ii) until the Indemnitee recovers full
payment of its Indemnifiable Loss, any and all claims of the
Indemnifying Party against any such third party on account of said
indemnity payment is hereby made expressly subordinated and
subjected in right of payment to the Indemnitee's rights against
such third party. Without limiting the generality or effect of any
other provision hereof, each such Indemnitee and Indemnifying Party
will duly execute upon request all instruments reasonably necessary
to evidence and perfect the above described subrogation and
subordination rights, and otherwise cooperate in the prosecution of
such claims at the direction of the Indemnifying Party. Nothing in
this Section 9.2(d) shall be construed to require any party hereto
to obtain or maintain any insurance coverage.
(e) A failure to give timely notice as provided in this
Section 9.2 will not affect the rights or obligations of any party
hereunder except if, and only to the extent that, as a result of
such failure, the party which was entitled to receive such notice
was actually prejudiced as a result of such failure.
(f) With respect to any claim (or potential claim) for
indemnification hereunder which involves, or is alleged to involve,
the conduct of environmental investigatory, corrective or remedial
action, the following additional procedures shall apply:
(i) The party bearing financial responsibility with
respect to a particular investigatory, corrective or remedial
action (or, in the case of a matter as to which such
responsibility is shared, the party bearing, or alleged to
bear, the larger share of such responsibility) shall have the
right, at its option, to undertake principal control over such
matter (including, without limitation, retention of
consultants, selection of remedial measures and negotiations
and agreements with interested government agencies and third
parties), subject to such party's obligation to (A) reasonably
consult with the other party in connection therewith, (B)
provide the other party with a reasonable opportunity to
review material documents concerning and participate in
material meetings and discussions concerning, and (C) obtain
the other party's approval (not to be unreasonably withheld or
delayed) of any material decisions or actions with respect
thereto.
(ii) In connection with any matter governed
hereunder, each party agrees to provide the other with
reasonable access to relevant facilities, documents and
personnel. The parties shall keep one another apprised of
major developments and shall, subject to applicable legal
privileges, make all final reports, filings, and other
documents relating to such matter available for inspection by
one another. The parties agree to reasonably cooperate with
one another in connection with any matter governed hereunder
and to generally conduct themselves in a good faith and cost
effective manner with respect thereto (including without
limitation limiting corrective and remedial action to the
lowest cost measures required by Environmental Laws or by
administrative or judicial authorities having jurisdiction
thereunder).
(iii) The Seller shall have no obligation to
provide indemnification with respect to any investigatory,
corrective or remedial action unless, and then only to the
extent that, investigation or remediation is required by
Environmental Laws, is lawfully required by governmental
authorities having jurisdiction thereunder, or would be
undertaken by a prudent environmental manager, without regard
to the existence of any indemnity, in light of facts
indicating a potentially significant risk to human health or
the environment.
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 Termination. (a) This Agreement may be terminated at
any time prior to the Closing Date by mutual written consent of the
Seller and the Buyer.
(b) This Agreement may be terminated by the Seller or
the Buyer if the Closing contemplated hereby shall have not
occurred on or before the first anniversary of the date of this
Agreement (the "Termination Date"); provided that the right to
terminate this Agreement under this Section 10.1(b) shall not be
available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date; and
provided, further, that if on the first anniversary of the date of
this Agreement the conditions to the Closing set forth in Section
8.1(c) shall not have been fulfilled but all other conditions to
the Closing shall be fulfilled or shall be capable of being
fulfilled, then the Termination Date shall be the day which is
eighteen months from the date of this Agreement.
(c) This Agreement may be terminated by either the
Seller or the Buyer if (i) any Governmental Entity, the consent of
which is a condition to the obligations of the Seller and the Buyer
to consummate the Closing shall have determined not to grant its
consent and all appeals of such determination shall have been taken
and have been unsuccessful, (ii) one or more courts of competent
jurisdiction in the United States or any State shall have issued an
order, judgment or decree permanently restraining, enjoining or
otherwise prohibiting the Closing, and such order, judgment or
decree shall have become final and nonappealable or (iii) any
statute, rule or regulation shall have been enacted by any State or
Federal government or governmental agency in the United States
which prohibits the consummation of the Closing.
(d) This Agreement may be terminated by the Parent or
Buyer, if there has been a material violation or breach by the
Seller of any agreement, representation or warranty made by it
contained in this Agreement which has prevented the satisfaction of
any condition to the obligations of the Buyer and Parent to effect
the Closing and such violation or breach has not been cured by the
Seller or waived by the Buyer.
(e) This Agreement may be terminated by the Seller, if
there has been a material violation or breach by the Buyer or
Parent of any agreement, representation or warranty made by it
contained in this Agreement which has prevented the satisfaction of
any condition to the obligations of the Seller to effect the
Closing and such violation or breach has not been cured by the
Buyer or Parent or waived by the Seller.
10.2 Procedure and Effect of Termination. In the event
of termination of this Agreement and abandonment of the
transactions contemplated hereby by either or both of the parties
pursuant to Section 10.1, written notice thereof shall forthwith be
given by the terminating party to the other party and this
Agreement shall terminate and the transactions contemplated hereby
shall be abandoned, without further action by any of the parties
hereto. If this Agreement is terminated as provided herein:
(a) said termination shall be the sole remedy of the
parties hereto with respect to breaches of any agreement,
representation or warranty contained in this Agreement and none of
the parties hereto nor any of their respective trustees, directors,
officers or Affiliates, as the case may be, shall have any
liability or further obligation to the other party or any of their
respective trustees, directors, officers or Affiliates, as the case
may be, pursuant to this Agreement, except in each case as stated
in this Section 10.2 and in Sections 7.2(b), 7.3, 7.5 and 7.7, and
upon a willful breach by a party in which case the non-breaching
party shall have all rights and remedies existing at law or in
equity;
(b) all filings, applications and other submissions made
pursuant to this Agreement, to the extent practicable, shall be
withdrawn from the agency or other Person to which they were made.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 Amendment and Modification. This Agreement may be
amended, modified or supplemented only by written agreement of the
Seller and the Buyer.
11.2 Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to
comply with any obligation, covenant, agreement or condition herein
may be waived by the party entitled to the benefits thereof only by
a written instrument signed by the party granting such waiver, but
such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as
a waiver of, or estoppel with respect to, any subsequent or other
failure.
11.3 No Survival. Subject to the provisions of Section
9.2, each and every representation, warranty and covenant contained
in this Agreement (other than the covenants contained in Sections
3.2, 3.3, 3.4, 4.5, 7.2(b), (c), (d), and (e), 7.3, 7.4, 7.5, 7.7,
7.8, 7.10, 7.12, and 7.13 and in Articles IX and XI and the
obligations of the Buyer with respect to the Assumed Obligations
and the Seller with respect to the Excluded Liabilities (which
covenants and obligations shall survive in accordance with their
terms) and other than the representations and warranties contained
in Sections 5.1, 5.2, 5.3, 6.1, 6.2 and 6.3 and claims for breaches
of the covenants contained in Section 7.1(a) (which representations,
warranties and claims shall survive for twelve months from the Closing))
shall expire with, and be terminated and extinguished by the
consummation of the sale of the Purchased Assets and the transfer
of the Assumed Obligations pursuant to this Agreement and such
representations, warranties and covenants shall not survive the
Closing Date, and neither of the Seller, the Buyer nor any officer,
director, trustee or Affiliate of any of them shall be under any
liability whatsoever with respect to any such representation,
warranty or covenant notwithstanding the provisions of Article IX.
11.4 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally or by facsimile transmission, telexed or
mailed by overnight courier or registered or certified mail (return
receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall
be specified by like notice; provided that notices of a change of
address shall be effective only upon receipt thereof):
(a) If to the Seller, to:
The Dayton Power and Light Company
1065 Woodman Drive
Dayton, Ohio 45432
Facsimile: (937) 259-7386
Attention: Steven F. Koziar, Jr., Esquire
with a copy to:
Kirkland & Ellis
200 E. Randolph Drive
Chicago, Illinois 60601
Facsimile: (312) 861-2200
Attention: Carter W. Emerson, P.C.
(b) If to Parent, to:
Indiana Energy, Inc.
1630 North Meridian Street
Indianapolis, Indiana 46202-1496
Facsimile: (317) 321-0747
Attention: Ronald E. Christian, Esquire
(c) if to the Buyer, to:
Number-3CHK, Inc.
1630 North Meridian Street
Indianapolis, Indiana 46202-1496
Facsimile: (317) 321-0747
Attention: Ronald E. Christian, Esquire
with copies in each case to:
Sommer & Barnard, PC
111 Monument Circle
Suite 4000, Bank One Tower
Indianapolis, Indiana 46204
Facsimile: (317) 236-9802
Attention: James A. Strain, Esquire
and
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10007
Facsimile: (212) 455-2502
Attention: James M. Cotter, Esquire
11.5 Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted
assigns including without limitation, Vectren Corporation as
successor to Indiana Energy, Inc. and with respect to Seller, any
entity that may succeed to substantially all the assets of Seller,
but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party hereto,
including by operation of law without the prior written consent of
the other party, nor is this Agreement intended to confer upon any
other Person except the parties hereto any rights or remedies
hereunder; provided, however that New Buyer Employees may have
claims under Sections 2.3(c) and 7.10. Notwithstanding the
foregoing, no provision of this Agreement shall create any third
party beneficiary rights in any employee or former employee of the
Seller (including any beneficiary or dependent thereof) in respect
of continued employment or resumed employment, and no provision of
this Agreement shall create any rights in any such Persons in
respect of any benefits that may be provided, directly or
indirectly, under any employee benefit plan or arrangement except
as expressly provided for thereunder. Notwithstanding the
foregoing, (a) the Buyer may assign all of its rights and
obligations hereunder to any wholly owned Subsidiary (direct or
indirect) of Parent or Buyer upon the Seller's receipt of notice
from Parent or Buyer of any such assignment and the Buyer, but not
Parent, will be released from all liabilities and obligations
hereunder, accrued and unaccrued, such assignee will be deemed to
have assumed, ratified, agreed to be bound by and perform all such
liabilities and obligations, and all references herein to "Buyer"
shall thereafter be deemed references to such assignee, in each
case without the necessity for further act or evidence by the
parties hereto or such assignee; provided, however, that no such
assignment and assumption shall release the Buyer from its
liabilities and obligations hereunder unless the assignee shall
have acquired all or substantially all of the Buyer's assets; and
(b) the Buyer or its permitted assignee may assign, transfer,
pledge or otherwise dispose of its rights and interests hereunder
to a trustee or lending institution(s) for the purposes of
financing or refinancing the Purchased Assets, including upon or
pursuant to the exercise of remedies under such financing or
refinancing, or by way of assignments, transfers, conveyances or
dispositions in lieu thereof; provided, however, that no such
assignment or disposition shall relieve or in any way discharge the
Buyer or such assignee from the performance of its duties and
obligations under this Agreement. The Seller agrees to execute and
deliver such documents as may be reasonably necessary to accomplish
any such assignment, transfer, conveyance, pledge or disposition of
rights hereunder so long as the Seller's rights under this
Agreement are not thereby altered, amended, diminished or otherwise
impaired. Notwithstanding the foregoing, Seller may, at its sole
expense, assign all of its rights, but not its obligations,
hereunder to a Qualified Intermediary as provided by Income Tax
Regulation Section 1.1031(k) - 1(g)(4) for the purpose of exchanging all
or a portion of the Purchased Assets for other property of a like
kind within the meaning of Section 1031 of the Code.
11.6 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio
(regardless of the laws that might otherwise govern under
applicable Ohio principles of conflicts of law) as to all matters,
including but not limited to matters of validity, construction,
effect, performance and remedies.
11.7 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
11.8 Interpretation. The article and section headings
contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall
not in any way affect the meaning or interpretation of this
Agreement.
11.9 Schedules and Exhibits. All Exhibits and Schedules
referred to herein are intended to be and hereby are specifically
made a part of this Agreement.
11.10 Entire Agreement. This Agreement, the
Confidentiality Agreement and the Exhibits, Schedules, documents,
certificates and instruments referred to herein or therein, embody
the entire agreement and understanding of the parties hereto in
respect of the transactions contemplated by this Agreement. There
are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or
referred to herein or therein. It is expressly acknowledged and
agreed that there are no restrictions, promises, representations,
warranties, covenants or undertakings contained in any material
made available to the Buyer pursuant to the terms of the
Confidentiality Agreement. This Agreement supersedes all prior
agreements and understandings between the parties with respect to
such transactions other than the Confidentiality Agreement.
11.11 Bulk Sales or Transfer Laws. The Buyer acknowledges
that the Seller will not comply with the provision of any bulk
sales or transfer laws of any jurisdiction in connection with the
transactions contemplated by this Agreement. The Buyer hereby
waives compliance by the Seller with the provisions of the bulk
sales or transfer laws of all applicable jurisdictions.
[END OF PAGE]
IN WITNESS WHEREOF, the Seller, Parent and the Buyer have
caused this agreement to be signed by their respective duly
authorized officers as of the date first above written.
THE DAYTON POWER AND LIGHT COMPANY
By: _______________________________
Name: Allen M. Hill
Title: President and Chief
Executive Officer
INDIANA ENERGY, INC.
By: _______________________________
Name: Niel C. Ellerbrook
Title: President and Chief
Executive Officer
NUMBER-3CHK, INC.
By: _______________________________
Name: Niel C. Ellerbrook
Title: President
December 16, 1999
Indiana Energy, Inc.
1630 North Meridian Street
Indianapolis, Indiana 46202-1496
Attention: Carl L. Chapman
Re: Project Mars 364-Day Revolving Credit Facility
Commitment Letter
Ladies and Gentlemen:
Indiana Energy, Inc. ("you" or "Parent") has advised Merrill
Lynch Capital Corporation ("Merrill Lynch" or "we" or "us") that
(i) you or one of your affiliates have entered into an
acquisition agreement (the "Acquisition Agreement") to acquire
(the "Acquisition") certain gas utility assets ("Gas Utility") of
Dayton Power & Light ("Seller"); and (ii) in connection with the
consummation of the Acquisition, Parent or a wholly-owned
subsidiary thereof ("Borrower") will enter into the senior
unsecured 364-day revolving credit facility (the "Credit
Facility") described herein.
The sources and uses of the funds necessary to consummate
the Acquisition and the other transactions contemplated hereby
are set forth on Annex I to this Commitment Letter.
The Acquisition, the entering into and borrowings under the
Credit Facility by Borrower and the other transactions
contemplated hereby entered into and consummated in connection
with the Acquisition are herein referred to as the
"Transactions". You have advised us that you intend to refinance
the Credit Facility (or replace commitments thereunder in full)
as soon as practicable with the proceeds of unsecured public or
private debt securities or other public or private securities
issued by Parent or its subsidiaries (the "Take-Out Securities").
You have requested that Merrill Lynch commit to provide to
Borrower up to $435.0 million aggregate principal amount under
the Credit Facility to finance the Acquisition or to backstop,
replace or refinance commercial paper or other sources of funding
used to effect the Acquisition and to pay certain related fees
and expenses.
Accordingly, subject to the terms and conditions set forth
below, Merrill Lynch hereby agrees with you as follows:
1. Commitment. Merrill Lynch hereby commits to provide to
Borrower the Credit Facility upon the terms and subject to the
conditions set forth or referred to herein, in the 364-Day
Revolving Credit Facility Fee Letter (the "Fee Letter") dated the
date hereof and delivered to you, and in the 364-Day Revolving
Credit Facility Summary of Terms and Conditions attached hereto
(and incorporated by reference herein) as Exhibit A (the "Term
Sheet").
2. Syndication. We reserve the right and intend, prior to
or after the execution of the definitive documentation for the
Credit Facility (the "Credit Documents"), to syndicate all or a
portion of our commitments to one or more financial institutions
(together with Merrill Lynch, the "Lenders"). Our commitment
hereunder is subject to Merrill Lynch (or one of its affiliates)
acting as sole and exclusive lead arranger and book-running
manager of and sole and exclusive syndication agent for the
Credit Facility. We (or one of our affiliates) will manage all
aspects of the syndication (in consultation with you), including
decisions as to the selection of potential Lenders to be approached
and when they will be approached, when their commitments will be
accepted, which Lenders will participate and the final allocations
of the commitments among the Lenders, and we will exclusively
perform all functions and exercise all authority as customarily
performed and exercised in such capacities, including selecting
counsel for the Lenders and negotiating the Credit Documents.
Any agent or arranger titles (including co-agents) awarded to
other Lenders are subject to our prior approval and shall not
entail any role with respect to the matters referred to in this
paragraph without our prior consent. You agree that no Lender
will receive compensation outside the terms contained herein and in
the Fee Letter in order to obtain its commitment to participate in
the Credit Facility. We may select (with your consent, not to be
unreasonably withheld, delayed or conditioned) a Lender to act as
an administrative agent (the "Administrative Agent") for the
Credit Facility to perform such ministerial and administrative
functions as we shall reasonably designate.
You understand that we intend to commence the
syndication of the Credit Facility promptly, and you agree
actively to assist us in achieving a timely syndication that is
reasonably satisfactory to us in consultation with you. The
syndication efforts will be accomplished by a variety of means,
including direct contact during the syndication between senior
management, advisors and affiliates of Parent on the one hand and
the proposed Lenders on the other hand and Parent hosting, with
Merrill Lynch, at least one meeting with prospective Lenders at
such times and places as we may reasonably request. You agree
to, upon our request, (a) provide, and cause your affiliates and
advisors to provide, to us all information reasonably requested
by us to successfully complete the syndication, including the
information and projections (including updated projections)
contemplated hereby, and (b) assist, and cause your affiliates
and advisors to assist, us in the preparation of a Confidential
Information Memorandum and other marketing materials (the
contents of which you shall be solely responsible for) to be used
in connection with the syndication, including making available
representatives of Parent. You also agree to use your best
efforts to ensure that our syndication efforts benefit materially
from your (and your affiliates') existing lending relationships.
3. Fees. As consideration for our commitment hereunder
and our agreement to arrange, manage, structure and syndicate the
Credit Facility, you agree to pay or cause to be paid to us the
fees as set forth in the Fee Letter.
4. Conditions. Merrill Lynch's commitment hereunder is
subject to the conditions set forth elsewhere herein and in the
Term Sheet. For purposes of this Commitment Letter and the Term
Sheet, the "subsidiaries" of Borrower shall be deemed to include
those who will become subsidiaries of Borrower in connection with
the Transactions.
Our commitment hereunder is also subject to (a) no
material disruption or material adverse change (or development that
could reasonably be expected to result in a material adverse
change) having occurred and being continuing in or affecting the
loan syndication or financial, banking or capital market conditions
generally from those in effect on the date hereof that,
individually or in the aggregate in our reasonable judgment,
materially adversely affects our ability to syndicate the Credit
Facility; (b) we shall be satisfied that, after the date hereof and
prior to and during the syndication of the Credit Facility, none of
Parent, Borrower or any of their respective subsidiaries or
affiliates shall have syndicated or issued, attempted to syndicate
or issue, announced or authorized the announcement of, or engaged
in discussions concerning the imminent syndication or issuance of
any debt facility or debt security of any of them, including
renewals thereof, other than the Credit Facility and the Take-Out
Securities and others which would not in our reasonable judgment
reasonably be expected to have a material adverse effect upon the
syndication of the Credit Facility; (c) Parent's long-term, senior
unsecured, non-credit-enhanced indebtedness shall be rated no lower
than Baa1 by Moody's or BBB+ by S&P; (d) Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLPF&S") shall have been retained by
you as sole and exclusive underwriter, placement agent or initial
purchaser with respect to any refinancing of amounts outstanding or
commitments under the Credit Facility pursuant to an engagement
letter (the "Engagement Letter") in form and substance reasonably
satisfactory to MLPF&S and such Engagement Letter shall be in full
force and effect and you shall not be in breach thereof; and
(e) none of the Information and Projections (each as defined in
Section 5 hereof) shall be misleading or incorrect in any material
respect taken as a whole, in light of the circumstances under which
such statements were made.
5. Information and Investigations. You hereby represent
and covenant that (a) all information and data (excluding
financial projections) that have been or will be made available
by you or any of your affiliates, representatives or advisors to
us or any Lender (whether prior to or on or after the date
hereof) in connection with the Transactions, taken as a whole
(the "Information"), is and will be complete and correct in all
material respects and does not and will not, taken as a whole,
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances
under which such statements are made, and (b) all financial
projections concerning, Parent, Borrower, Gas Utility and their
respective subsidiaries and the transactions contemplated hereby
(the "Projections") that have been made or will be prepared by or
on behalf of you or any of your affiliates, representatives or
advisors and that have been or will be made available to us or
any Lender in connection with the transactions contemplated
hereby have been and will be prepared in good faith based upon
assumptions believed by you to be reasonable. You agree to
supplement the Information and the Projections from time to time
until the Closing Date and, if requested by us, for a reasonable
period thereafter (not to exceed 60 days) necessary to complete the
syndication of the Credit Facility so that the representation and
covenant in the preceding sentence remain correct in all material
respects. In syndicating the Credit Facility we will be entitled
to use and rely primarily on the Information and the Projections
without responsibility for independent check or verification
thereof.
6. Indemnification. You agree (i) to indemnify and hold
harmless Merrill Lynch and each of the other Lenders and their
respective officers, directors, employees, affiliates, agents and
controlling persons (Merrill Lynch and each such other person being
an "Indemnified Party") from and against any and all losses,
claims, damages, costs, expenses and liabilities, joint or several,
to which any Indemnified Party may become subject under any
applicable law, or to the extent related to or arising out of or in
connection with this Commitment Letter, the Fee Letter, the Term
Sheet, the Credit Facility, the loans under the Credit Facility,
the use of proceeds of any such loan, any of the Transactions or
any related transaction and the performance by any Indemnified
Party of the services contemplated hereby and will reimburse each
Indemnified Party for any and all reasonable expenses (including
reasonable counsel fees and expenses) as they are incurred in
connection with the investigation of or preparation for or defense
of any pending or threatened claim or any action or proceeding
arising therefrom, whether or not such Indemnified Party is a party
and whether or not such claim, action or proceeding is initiated or
brought by or on behalf of you, Borrower, Seller, or any of your or
their respective affiliates and whether or not any of the
Transactions are consummated or this Commitment Letter is
terminated, except to the extent resulting from such Indemnified
Party's bad faith, gross negligence or willful misconduct and
(ii) not to assert any claim against any Indemnified Party for
consequential, punitive or exemplary damages on any theory of
liability in connection in any way with the transactions described
in or contemplated by this Commitment Letter.
You agree that, without our prior written consent,
neither you nor any of your affiliates or subsidiaries will settle,
compromise or consent to the entry of any judgment in any pending
or threatened claim, action or proceeding in respect of which
indemnification has been or could be sought under the
indemnification provisions hereof (whether or not any other
Indemnified Party is an actual or potential party to such claim,
action or proceeding), unless such settlement, compromise or
consent (i) includes an unconditional written release in form and
substance satisfactory to the Indemnified Parties of each
Indemnified Party from all liability arising out of such claim,
action or proceeding and (ii) does not include any statement as to
or an admission of fault, culpability or failure to act by or on
behalf of any Indemnified Party.
In the event that an Indemnified Party is requested or
required to appear as a witness in any action brought by or on
behalf of or against you or any of your subsidiaries or affiliates
in which such Indemnified Party is not named as a defendant, you
agree to reimburse such Indemnified Party for all reasonable out-
of-pocket expenses incurred by it in connection with such
Indemnified Party's appearing and preparing to appear as such a
witness, including, without limitation, the reasonable fees and
expenses of its legal counsel.
7. Expenses. You agree to reimburse us and our affiliates
for our and their reasonable expenses upon our request made from
time to time (including, without limitation, all reasonable due
diligence investigation expenses, fees of consultants engaged with
your consent (not to be unreasonably withheld), syndication
expenses (including printing, distribution, and bank meetings),
appraisal and valuation fees and expenses, travel expenses,
duplication fees and expenses, audit fees, search fees, filing and
recording fees and the reasonable fees, disbursements and other
charges of counsel (and any local counsel) and any sales, use or
similar taxes (and any additions to such taxes) related to any of
the foregoing) incurred in connection with the negotiation,
preparation, execution and delivery, waiver or modification,
collection and enforcement of this Commitment Letter, the Term
Sheet, the Fee Letter and the Credit Documents and whether or not
such fees and expenses are incurred before or after the date hereof
or any loan documentation is entered into or the Transactions are
consummated or any extensions of credit are made under the Credit
Facility or this Commitment Letter is terminated or expires.
8. Confidentiality. This Commitment Letter, the Term
Sheet the contents of any of the foregoing and our and/or our
affiliates' activities pursuant hereto or thereto are
confidential and shall not be disclosed by or on behalf of you or
any of your affiliates to any person without our prior written
consent, except that you may disclose this Commitment Letter and
the Term Sheet (i) to your and Seller's respective officers,
directors, employees and advisors, and then only in connection
with the Transactions and on a confidential need-to-know basis
and (ii) as you are required to make by applicable law or
compulsory legal process (based on the advice of legal counsel);
provided that such confidentiality obligations shall terminate
upon your acceptance hereof. You agree that you will permit us
to review and approve any reference to any of us or any of our
affiliates in connection with the Credit Facility or the
transactions contemplated hereby contained in any press release
or similar public disclosure prior to public release; provided
that we shall not unreasonably withhold or delay our approval.
You agree that we and our affiliates may share information
concerning you, Seller and your and its respective subsidiaries
and affiliates among ourselves solely in connection with the
performance of our services hereunder and the evaluation and
consummation of financings and Transactions contemplated hereby.
9. Termination. Our commitments hereunder are based upon
the financial and other information regarding Parent, Borrower
and Gas Utility previously provided to us. In the event that by
means of continuing review or otherwise we become aware of or
discover new information or developments concerning conditions or
events previously disclosed to us that is inconsistent in any
material adverse respect with the Projections or the Information
provided to us prior to the date hereof, or if any event or
condition has occurred or become known that in our judgment has
had or would reasonably be expected to have a material adverse
effect on the business, results of operations or financial
condition of Parent and its subsidiaries taken as a whole (after
giving effect to the Transactions) since September 30, 1999, this
Commitment Letter and Merrill Lynch's commitment hereunder shall
terminate upon written notice by Merrill Lynch. In addition,
Merrill Lynch's commitment hereunder shall terminate in its
entirety (A) on July 1, 2000 if the Credit Documents are not
executed and delivered by Borrower and the Lenders by such date
(subject to extension if such delay is due to failure to obtain
all necessary regulatory approvals to October 1, 2000, with the
consent of the Lead Arranger in its sole discretion) and (B) on
the date of execution and delivery of the Credit Documents by
Borrower and the Lenders. Notwithstanding the foregoing, the
provisions of Sections 6, 7, 8 and 11 hereof shall survive any
termination pursuant to this Section 9.
10. Assignment; etc. This Commitment Letter and our
commitment hereunder shall not be assignable by any party hereto
without the prior written consent of the other parties hereto,
and any attempted assignment shall be void and of no effect;
provided, however, that nothing contained in this Section 10
shall prohibit us (in our sole discretion) from (i) performing
any of our duties hereunder through any of our affiliates (who
will be bound by the provisions hereof applicable to Merrill
Lynch), and you will owe any related duties (including those set
forth in Section 2 above) to any such affiliate, and
(ii) granting (in consultation with you) participations in, or
selling (in consultation with you) assignments of all or a
portion of, the commitments or the loans under the Credit
Facility pursuant to arrangements satisfactory to us. This
Commitment Letter is solely for the benefit of the parties hereto
and does not confer any benefits upon, or create any rights in
favor of, any other person. It is understood and agreed that
your merger with and into Vectren Corporation shall not affect
our obligations hereunder and that, upon the consummation of such
merger, Vectren Corporation will succeed to your rights and
obligations hereunder.
11. Governing Law; Waiver of Jury Trial. This Commitment
Letter shall be governed by, and construed in accordance with,
the laws of the State of New York. Each of the parties hereto
waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise)
related to or arising out of any of the Transactions or the other
transactions contemplated hereby, or the performance by us or any
of our affiliates of the services contemplated hereby.
12. Amendments; Counterparts; etc. No amendment or waiver
of any provision hereof or of the Term Sheet shall be effective
unless in writing and signed by the parties hereto and then only
in the specific instance and for the specific purpose for which
given. This Commitment Letter, the Engagement Letter, the Term
Sheet and the Fee Letter are the only agreements between the
parties hereto with respect to the matters contemplated hereby
and thereby and set forth the entire understanding of the parties
with respect thereto. This Commitment Letter may be executed in
any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed
counterpart by telecopier shall be effective as delivery of a
manually executed counterpart.
13. Public Announcements; Notices. We may, subject to your
prior consent (not to be unreasonably withheld, delayed or
conditioned) at our expense, publicly announce as we may choose
the capacities in which we or our affiliates have acted
hereunder. Any notice given pursuant hereto shall be mailed or
hand delivered in writing, if to (i) you, at your address set
forth on page one hereof, with a copy to Ronald E. Christian,
Esq., at 1630 North Meridian Street, Indianapolis, Indiana 46202;
and (ii) Merrill Lynch, at World Financial Center, North Tower,
250 Vesey Street, New York, New York 10281, Attention:
Christopher K. Stout, with a copy to Michael E. Michetti, Esq.,
at Cahill Gordon & Reindel, 80 Pine Street, New York, New York
10005.
(Signature Page Follows)
Please confirm that the foregoing correctly sets forth our
agreement of the terms hereof and the Fee Letter by signing and
returning to Merrill Lynch the duplicate copy of this letter and
the Fee Letter enclosed herewith. Unless we receive your executed
duplicate copies hereof and thereof by 5:00 p.m., New York City
time, on December 17, 1999, our commitment hereunder will expire at
such time.
We are pleased to have this opportunity and we look forward to
working with you on this transaction.
Very truly yours,
MERRILL LYNCH CAPITAL CORPORATION
By: ______________________________
Name:
Title:
Accepted and agreed to as of
the date first written above:
INDIANA ENERGY, INC.
By: ______________________________
Name:
Title:
Annex 1
Sources and Uses of Funds
(in millions)
Sources Uses
--------- -----
Commercial paper issuance Cash purchase price of
or drawings under Credit Gas Utility 425.0
Facility 433.0
Estimated fees and
expenses 8.0
------ ------
Total Sources 433.0 Total Uses 433.0
====== ======
CONFIDENTIAL EXHIBIT A
364-DAY REVOLVING CREDIT FACILITY
SUMMARY OF TERMS AND CONDITIONS*
Borrower: Indiana Energy, Inc. ("Parent") or a
wholly-owned subsidiary thereof (Parent or
such subsidiary, "Borrower").
Sole Lead Arranger, Book-
running Manager and
Syndication Agent: Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLPF&S") will
act as sole and exclusive lead arranger,
book-running manager and syndication agent
(the "Lead Arranger").
Administrative Agent:A Lender or other financial institution to
be selected by the Lead Arranger with the
consent (not to be unreasonably withheld)
of Borrower (the "Administrative Agent").
Lenders: Merrill Lynch Capital Corporation (or one
of its affiliates) and a syndicate of
financial institutions (the "Lenders")
arranged by the Lead Arranger in
consultation with Borrower.
Credit Facility: Senior Unsecured 364-Day Revolving Credit
Facility (the "Credit Facility"; loans
thereunder, "Revolving Loans").
Principal Amount: Up to $435.0 million.
Documentation: Usual and customary for facilities and
transactions of this type and reasonably
acceptable to Borrower and the Lenders.
The documentation for the Credit Facility
will include, among others, a credit
agreement (the "Credit Agreement") and
other appropriate documents (collectively,
the "Credit Documents").
Transactions: As described in the Commitment Letter.
Availability/Purpose:To finance (or to backstop, replace or
refinance commercial paper or other funding
sources used to effect) the Acquisition and
to pay related fees and expenses and for
working capital and general corporate
purposes on a fully revolving basis,
subject to the terms and conditions set
forth in the Credit Documents, until the
date that is 364 days after the Closing
Date (the "Commitment Termination Date").
Term-out Option: Borrower shall have the right to convert on
the Commitment Termination Date outstanding
Revolving Loans to term loans (the "Term
Loans", the Revolving Loans and the Term
Loans, "Loans") in an amount not to exceed
50% of the commitments then in effect
maturing on the second anniversary of the
Closing Date, subject to no Default being
continuing after giving effect thereto,
payment of a fee to the Lenders on the
aggregate principal amount extended to be
agreed upon between Borrower and the Lead
Arranger and customary notice provisions.
Maturity: Outstanding Revolving Loans not converted
to Term Loans shall mature on the
Commitment Termination Date; Term Loans
shall mature on the second anniversary of
the Closing Date.
Interest Rates and Fees:
Interest rates and fees in connection with
the Credit Facility will be as specified on
Annex I attached hereto.
Default Rate: Overdue principal, interest and other
amounts shall bear interest at a rate per
annum equal to 2% in excess of the
applicable interest rate (including
applicable margin).
Guarantee: If Borrower is a subsidiary of Parent, the
Credit Facility will be unconditionally and
irrevocably guaranteed on a senior
unsecured basis by Parent.
Ranking: The Credit Facility will be a senior
obligation of Borrower ranking pari passu
with other senior unsecured indebtedness of
Borrower, and senior to all subordinated
indebtedness of Borrower.
Optional Prepayments and
Commitment Reductions:
The Credit Facility will be prepayable at
par at any time at Borrower's option, in
whole or in part, plus accrued and unpaid
interest. Breakage costs, if any, will be
paid by Borrower. Borrower shall have the
right to terminate, in whole or in part (in
minimum amounts to be agreed upon), the
undrawn commitments at any time and from
time to time upon written notice.
Conditions to Effectiveness and
to Initial Loans: The effectiveness of the Credit Agreement
and the making of the loans thereunder
shall be subject to the conditions
precedent specified in the Commitment
Letter and the following additional
conditions: execution and delivery by
Borrower of the Credit Documents acceptable
in form and substance to the Lenders;
delivery of satisfactory borrowing
certificates and other customary closing
certificates; absence of default or event
of default under any of the Credit
Documents; accuracy of all representations
and warranties; absence of defaults,
prepayment events or creation of liens
under debt instruments or other agreements
as a result of the transactions
contemplated hereby; absence of material
litigation; evidence of authority;
compliance with applicable laws and
regulations (including but not limited to
ERISA, margin regulations, bank regulatory
limitations and environmental laws); and
delivery of satisfactory legal opinions.
In addition, the making of the initial
loans under the Credit Facility will be
subject to the following conditions:
(A) Parent's long-term, senior unsecured,
non-credit-enhanced indebtedness shall
be rated no lower than Baa1 by Moody's
or BBB+ by S&P.
(B) The Lead Arranger shall be reasonably
satisfied with the corporate structure
and pro forma capitalization of Parent,
Borrower and their respective
subsidiaries on a pro forma basis after
giving effect to the Transactions.
(C) The Transactions and the financing
therefor shall be in compliance with all
material laws and regulations, or the
Lead Arranger shall have determined such
to be inapplicable to the Transactions.
(D) Simultaneously with the making of the
initial loans under the Credit Facility,
the Acquisition shall have been
consummated in all material respects in
accordance with the terms of the
Acquisition Agreement.
(E) No law or regulation shall be applicable
in the reasonable judgment of the Lead
Arranger that restrains, prevents or
imposes material adverse conditions upon
any material component of the
Transactions.
(F) There shall not have occurred or become
known any material adverse change or any
condition or event that could reasonably
be expected to result in a material
adverse change in the business, results
of operations or financial condition
(each, a "Material Adverse Change") of
Parent and its subsidiaries taken as a
whole (after giving effect to the
Transactions) since September 30, 1999.
(G) All requisite governmental authorities
and third parties shall have approved or
consented to the Transactions to the
extent required (without the imposition
of any materially burdensome condition
or qualification in the reasonable
judgment of the Lead Arranger) and all
such approvals shall be in full force
and effect, and there shall be no
governmental or judicial action, actual
or threatened, that has or could have a
reasonable likelihood of restraining,
preventing or imposing materially
burdensome conditions on any of the
Transactions.
(H) All accrued fees and expenses (including
the reasonable fees and expenses of
counsel to the Lead Arranger) of the
Lenders and the Lead Arranger in
connection with the Credit Documents
shall have been paid.
(I) The Lenders shall have received such
other legal opinions, corporate
documents and other instruments and/or
certificates as they may reasonably
request.
Conditions to All Extensions
of Credit: Each extension of credit under the Credit
Facility will be subject to customary
conditions, including the (i) absence of
any Default or Event of Default (to be
defined), and (ii) continued accuracy of
representations and warranties in all
material respects (which materiality
exception will not apply to representations
and warranties qualified by materiality
standards).
Representations and Warranties:
Usual and customary for transactions of
this type and similar to Existing Credit
Facility (as defined below), and such other
representations and warranties as may be
reasonably required by the Lead Arranger.
"Existing Credit Facility" shall mean the
364-day Credit Facility among a subsidiary
of Parent, First Chicago Capital Markets,
Inc. and the lenders party thereto dated
March 1999.
Affirmative, Negative and Financial
Covenants: Usual and customary for transactions of
this type and similar to Existing Credit
Facility and such other affirmative
covenants as may be reasonably required by
the Lead Arranger.
Events of Default: Usual and customary for transactions of
this type and similar to Existing Credit
Facility, and such others as may be
reasonably required by the Lead Arranger.
Yield Protection and
Increased Costs: Usual and customary for transactions of
this type and similar to Existing Credit
Facility.
Required Lenders: Usual and customary for transactions of
this type and similar to Existing Credit
Facility.
Assignments and
Participations: Usual and customary for transactions of
this type and similar to Existing Credit
Facility.
Expenses and
Indemnification: Usual and customary for transactions of
this type.
Governing Law
and Forum: New York.
Waiver of Jury Trial: All parties to the Credit Documents waive
the right to trial by jury.
Special Counsel for
Lead Arranger: Cahill Gordon & Reindel (and such local
counsel as may be selected by the Lead
Arranger).
Interest Rates and
Fees: Loans shall bear interest at a rate per
annum equal to LIBOR plus the Applicable
Margin. The initial "Applicable Margin"
prior to the receipt of ratings will be
0.30% per annum.
A facility fee (the "Facility Fee") accrues
on each Lender's commitment in effect from
time to time (whether or not utilized),
commencing on the date of the execution and
delivery of the Credit Documents. The
initial Facility Fee prior to the receipt
of ratings will be 0.08% per annum.
A utilization fee (the "Utilization Fee")
accrues on the daily average outstanding
loans of each Lender so long as the
aggregate average outstanding loans are
greater than 33.3% of the committed amount
of the Credit Facility. The initial
Utilization Fee prior to the receipt of
ratings will be 0.10% per annum.
The Applicable Margin, the Facility Fee and
the Utilization Fee (collectively, the
"Margins") shall be subject to adjustment
based on the grid below in the event
Parent's long-term, senior unsecured, non-
credit-enhanced indebtedness is rated lower
than A3 by Moody's and A- by S&P.
Borrower may select interest periods of
one, two, three or six months for LIBOR
borrowings. Interest will be payable in
arrears at the end of each interest period,
and in the case of interest periods longer
than three months, no less frequently than
every three months. All Facility Fees and
Utilization Fees will be payable in arrears
at the end of each quarter and upon any
termination of any commitment, in each case
for the actual number of days elapsed over
a 360-day year.
Applicable Facility Utilization
Teir Rating Margin Fee Fee
---- -------- -------- -------- --------
I > or = A / A2 0.270% 0.080% 0.100%
II A- / A3 0.300% 0.100% 0.100%
III BBB+ / Baa1 0.450% 0.125% 0.125%
IV BBB / Baa2 0.600% 0.150% 0.125%
V BBB- / Baa3 0.700% 0.175% 0.250%
VI <BBB- / Baa3 0.800% 0.200% 0.250%
In the case of a split rating, the higher
rating will apply; provided that if any rating
falls in a Tier that is two or more Tiers below
the other rating, the applicable Tier shall be
the one immediately below the Tier with the
highest rating.
