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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
THE DAYTON POWER AND LIGHT COMPANY,
INDIANA ENERGY, INC.
AND
NUMBER-3CHK, INC.
December 14, 1999
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TABLE OF CONTENTS
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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
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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
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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
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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
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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_ 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.
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"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.
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"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
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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
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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
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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.]
1) Each of the following terms has the meaning specified in the Section set
forth opposite such term:
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Term Section
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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
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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)
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ARTICLE I
PURCHASE AND SALE
I.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
<PAGE>
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");
2) 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;
(f) 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;
3) 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;
(g) any assets purchased or to be purchased by the
Seller pursuant to Section 7.4(d); and
4) 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.
I.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;
<PAGE>
(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.
I.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;
5) all liabilities and obligations relating to any
customer deposits and customer advances of the Business;
<PAGE>
(b) 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);
(c) 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
(d) 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
<PAGE>
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.
I.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;
6) any liabilities or obligations in
respect of indebtedness for borrowed money;
(b) 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);
(c) 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;
(d) 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
<PAGE>
imposition of punitive damages irrespective of when any claims
relating thereto may arise;
(e) any payment obligations of the Seller for goods
delivered or services rendered prior to the Closing;
7) 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;
8) 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;
9) 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;
10) any Environmental Liabilities other than Buyer
Environmental Liabilities; and
(f) any liabilities or obligations of the Seller
under this Agreement.
ARTICLE II
PURCHASE PRICE
II.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.
II.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
<PAGE>
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.
II.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
<PAGE>
assistance in the event of an examination, audit or other proceeding
regarding the agreed upon allocation of the Purchase Price.
II.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;
11) any permit, license, registration, compliance
assurance fees or other fees with respect to any Transferable Permits;
and
12) 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).
13) 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.
14) 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.
<PAGE>
15) 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 III
THE CLOSING
III.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."
III.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.
III.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;
16) a certificate (as contemplated by Section 8.2);
(c) 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);
<PAGE>
(d) 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;
17) 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;
18) all terminations and releases of Encumbrances on the
Purchased Assets other than the Permitted Encumbrances;
(e) 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;
19) 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;
20) 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
(f) 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.
III.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;
21) a certificate (as contemplated by Section 8.3);
(c) 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;
22) if required by Section 4.3(j), a counterpart of the
License Agreement duly executed by Buyer and Parent; and
<PAGE>
(d) 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").
III.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 IV
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:
IV.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.
IV.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.
<PAGE>
IV.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.
IV.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.
IV.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
<PAGE>
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.
IV.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.
IV.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.
<PAGE>
IV.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.
IV.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;
23) 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
24) 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.
IV.10_ LABOR MATTERS. The Seller has previously delivered to the
Buyer copies of all collective bargaining agreements to which the Seller is a
<PAGE>
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.
IV.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.
IV.12_ CERTAIN CONTRACTS AND ARRANGEMENTS. Except for contracts,
agreements, personal property leases, commitments, understandings or
<PAGE>
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.
IV.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.
IV.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.
IV.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.
IV.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
<PAGE>
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.
IV.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.
YEAR 2000 COMPLIANT. The Year 2000 Problem will not
materially affect the provision of transition services to Buyer as provided
in Section 7.13.
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.
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 V
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:
V.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.
V.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
<PAGE>
or relating to enforcement of creditors' rights generally or general
principles of equity.
V.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.
V.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.
V.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 VI
COVENANTS OF THE PARTIES
VI.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
<PAGE>
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;
25) assume, guarantee, endorse or otherwise
become directly liable or responsible (whether directly or indirectly,
contingently or otherwise) for the obligations of any Person;
(ii) 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;
(iii) sell, lease (as lessor), transfer or otherwise
dispose of, any of the Purchased Assets, other than in the ordinary course of
business;
26) 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;
27) 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;
28) 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;
29) 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;
30) 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));
31) 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;
(iv) 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);
<PAGE>
32) 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
33) 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.
VI.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
<PAGE>
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
<PAGE>
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.
VI.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.
VI.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
<PAGE>
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.
VI.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.
VI.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
<PAGE>
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.
VI.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.
VI.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.
<PAGE>
(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.
VI.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.
VI.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
<PAGE>
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.
34) 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.
(d) 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.
VI.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)
<PAGE>
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.
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).
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.
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.
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.
<PAGE>
ARTICLE VII
CONDITIONS TO CLOSING
VII.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
35) 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.
VII.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;
<PAGE>
(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
36) Buyer shall have received the other items to be delivered
pursuant to Section 4.3.
VII.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
37) Seller shall have received the other items to be delivered
pursuant to Section 4.4.
ARTICLE VIII
INDEMNIFICATION
<PAGE>
VIII.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.
VIII.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,
<PAGE>
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
<PAGE>
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.
38) 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).
<PAGE>
(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 IX
TERMINATION AND ABANDONMENT
IX.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.
<PAGE>
IX.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 X
MISCELLANEOUS PROVISIONS
X.1_ AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by written agreement of the Seller and the Buyer.
X.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.
X.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.
<PAGE>
X.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
39) 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
<PAGE>
X.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.
X.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.
X.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.
<PAGE>
X.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.
X.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.
X.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.
X.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]
<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.
