<PAGE>
AGREEMENT (this "Agreement"), dated as of November 28, 2000, between
The AES Corporation, a corporation organized under the laws of Delaware ("AES"),
TotalFinaElf, a societe anonyme organized under the laws of France ("Total"),
and Total Gas and Power Ventures, a societe anonyme organized under the laws of
France ("TGPV").
WITNESSETH:
WHEREAS, TGPV entered into a memorandum of understanding with Gener
S.A., a sociedad anonima abierta organized under the laws of the Republic of
Chile ("Gener"), pursuant to which, among other things, TGPV indicated its
intention to acquire an 80% interest in certain assets of Gener in Argentina
(the "Argentine Assets") and to acquire a minority non-controlling 20% interest
in the capital stock of Gener, all in the context of a strategic alliance;
WHEREAS, subsequent to the time of such memorandum of understanding,
AES made offers in the Republic of Chile and the United States to acquire Gener
shares and American Depositary Shares representing in the aggregate
approximately 80% of the outstanding capital stock of Gener in order to acquire
control of Gener (collectively, the "Offer");
WHEREAS, TGPV has independently investigated, analyzed and evaluated
the Offer and the reactions of the shareholders of Gener to the Offer and the
transactions contemplated by the memorandum of understanding and has concluded
that, in light of the Offer, it will not be practicable at this time to
consummate the transactions contemplated by such memorandum of understanding and
has withdrawn its proposal to Gener to acquire such interest in the Argentine
Assets and to enter into the strategic alliance publicly announced by Gener;
WHEREAS, AES has considered that disposition of the Argentine Assets
could be appropriate as a result of its business concentration and antitrust and
competition laws in Argentina;
WHEREAS, TGPV wishes to acquire a 100% interest in the Argentine Assets
and AES wishes to sell a 100% interest in the Argentine Assets; and
WHEREAS, Total, TGPV and AES desire to make certain agreements with
respect to the Argentine Assets and certain other matters, in each case on the
terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements contained herein, and on
the terms and subject to the conditions set forth herein, the parties agree as
follows:
<PAGE>
Section 1. Sale and Purchase of Argentine Electricity Companies.
(a) In the event that AES or any subsidiary or affiliate of AES
acquires (i) beneficial ownership of more than 50% of the issued and outstanding
Voting Securities or (ii) the ability to control, by contract or otherwise, the
exercise of a majority of the voting rights associated with the Voting
Securities ((i) and/or (ii) "Control"), which in the case of (ii) AES shall
promptly notify TGPV, AES shall, in accordance with the provisions of this
Agreement, as promptly as practicable following the date of Control cause to be
duly called a meeting of shareholders of Gener (the "Shareholders Meeting") to
(A) elect persons selected by AES as at least a majority of the Board of
Directors of Gener and (B) approve the sale and purchase of the Acquired
Interests as contemplated in Annex A (the "Purchase and Sale Agreement"). AES
shall vote all Gener shares owned by it (including the Gener shares represented
by American Depositary Shares) or any of its subsidiaries or as to which AES or
any of its subsidiaries has the right to vote in favor of the approval of the
matters set forth in clauses (A) and (B) above. As promptly as practicable
following the Shareholders Meeting, upon the terms and conditions of this
Agreement, AES shall cause Gener to execute and deliver the Purchase and Sale
Agreement and to perform its obligations thereunder, and Total shall cause TGPV
to, or shall cause its designee to, execute and deliver the Purchase and Sale
Agreement and to perform its obligations thereunder. The matters to be voted at
the Shareholders Meeting shall be set forth in shareholders' resolutions, and
the text and substance of all such shareholders' resolutions shall be in form
and substance reasonably satisfactory to TGPV and shall be submitted to TGPV for
comment in advance of their submission to shareholders of Gener. AES agrees to
reflect all reasonable comments of TGPV in respect of such resolutions.
As used in this Agreement, "Voting Securities" means any securities of
Gener outstanding on the date hereof generally entitled to vote in the election
of directors of Gener.
(b) Upon the terms and subject to the conditions of this Agreement, the
Purchase and Sale Agreement shall be executed and delivered by each of Gener and
TGPV as promptly as practicable (but in no event later than 60 days) after the
date (the "Control Date") on which Control of Gener is obtained by AES as set
forth above, which occurrence AES shall promptly notify to Total and TGPV.
Section 2. Representations and Warranties. Each party represents and
warrants to the other parties as follows:
(a) It is duly incorporated and validly existing under the laws of the
jurisdiction of its incorporation.
(b) It has full right, power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.
(c) This Agreement has been duly executed and delivered by it and
constitutes its valid and binding agreement enforceable against it in accordance
with its terms,
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subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(d) The execution, delivery and performance by it of this Agreement
does not and will not (i) require any consent, approval, authorization or other
action by, filing with, submission, application or notification to, any court,
administrative agency or commission or other governmental entity (other than
filings or notices to securities and other regulatory authorities and agencies
and such filings or notices that may be required hereunder or by the Purchase
and Sale Agreement) or (ii) violate any provision of its organizational
documents, or violate or result in a breach of or constitute a default under (A)
any judgment, order, injunction, decree, law, rule, regulation or other
restriction of any court or governmental entity to which it is subject, or (B)
any agreement or other instrument to which it is a party or by which any of its
assets are bound.
(e) It has not entered into any agreement in respect of the Offer,
Gener or the transactions contemplated by this Agreement with any person or
entity, except for such agreements as have been disclosed in writing to the
other party or publicly filed or disclosed prior to the date hereof.
(f) It is not aware of the existence of any fact or condition which
would be reasonably likely to prevent or interfere with the lawful and
contractually permitted execution and delivery of this Agreement or the Purchase
and Sale Agreement and the consummation of the transactions contemplated hereby
and thereby.
Section 3. Condition. In addition to the other conditions set forth
elsewhere in this Agreement, the parties' obligations to perform their
respective agreements and obligations under this Agreement are subject to the
condition that such performance shall not be prohibited as a result of any
applicable law, statute, rule, regulation or any judgment, decree, writ,
injunction or other order (each, "Law").
Section 4. Additional Covenants
(a) Public Announcements. Each party is issuing a press release on the
date of this Agreement in a form that has been reviewed and mutually agreed by
the other party. After the date of this Agreement, any press release or public
announcement made by either party or its affiliates or subsidiaries regarding
the existence of this Agreement or the intended cooperation between the parties
shall be made with the prior coordination and consent of the other party (which
shall not be unreasonably withheld), except for such press releases or public
announcements as may be (i) required by law and contain no information other
than as is legally required and (ii) have been reviewed by the other party in
advance to the extent practicable under the circumstances.
(b) Activities of Gener After Acquisition of Control. At all times on
and after the Control Date, AES (i) shall not, and shall not permit any
subsidiary or affiliate to,
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sell or transfer, or assign, pledge or encumber (except to secure borrowings
made to finance the Offer and which are made on terms which will not prevent or
delay the consummation of the transactions contemplated by this Agreement or the
Purchase and Sale Agreement, including without limitation the acquisition by
TGPV of title to the Acquired Interests, as set forth in the Purchase and Sale
Agreement, and where the secured lender shall confirm to TGPV that the
aforementioned transactions are consistent with the acquisition by TGPV of such
Acquired Interests) any direct or indirect ownership interest in capital
securities of Gener or any of its affiliates or subsidiaries of Gener (other
than in connection with the sale of the Electricity Companies as contemplated by
the Purchase and Sale Agreement) or permit Gener or any subsidiary or affiliate
holding a direct or indirect ownership interest in Gener to enter into any
merger, consolidation, restructuring or similar transaction except for the sale
of assets by Gener other than the Acquired Interests; (ii) shall not take, or
allow Gener to take, directly or indirectly, any action that would frustrate the
purposes of this Agreement or the Purchase and Sale Agreement, or have an
adverse effect on the value of the Acquired Interests; and (iii) shall cause (A)
the Electricity Companies to conduct their operations in the ordinary course of
business consistent with recent past practice, except as otherwise permitted by
the Purchase and Sale Agreement, and (B) Gener not to take any action which
would constitute a violation of any of the interim governance provisions set
forth in Section 5.1 of the Purchase and Sale Agreement (were such Purchase and
Sale Agreement then in effect).
(c) Further Assurances.
(i) Upon the terms and subject to the conditions of this
Agreement, from the date of this Agreement until the date of
termination of this Agreement pursuant to Section 5 hereof, Total shall
not take any action which would frustrate or prevent the consummation
of the Offer which the Parties recognize is required to consummate the
transactions contemplated by this Agreement, and AES, Total and TGPV
shall cooperate and shall use reasonable best efforts to support the
consummation of the transactions contemplated by this Agreement;
provided, however, that nothing contained in this Agreement shall
preclude AES from taking such actions and making such amendments to the
Offer as AES shall determine (subject to the termination rights of TGPV
or Total set forth in Section 5).
Upon the terms and subject to the conditions of this
Agreement, AES shall (A) make such filings and notices with and to
regulatory authorities as shall be necessary or appropriate to effect
the terms of this Agreement and the Purchase and Sale Agreement and the
transactions contemplated hereby and thereby and (B) after the Control
Date (x) cause Gener to execute and deliver such additional documents
and instruments (including any notices to and filings with securities
regulatory authorities) and take such additional actions as may be
necessary or appropriate to give effect to the terms of this Agreement
and the Purchase and Sale Agreement and the transactions contemplated
hereby or thereby and (y) vote all Gener shares owned by it
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in favor of the transactions contemplated by this Agreement and the
Purchase and Sale Agreement.
In the event that AES, Total or TGPV is prohibited by Law from
performing its obligations under this Agreement, or Gener is prohibited
by Law from executing, delivering or performing its obligations under
the Purchase and Sale Agreement, all parties shall cooperate and use
best efforts to find a mutually acceptable solution which most closely
achieves the objectives of the parties pursuant to this Agreement.
In the event that Gener is precluded by any circumstance
applicable to it from executing, delivering or performing the Purchase
and Sale Agreement in accordance with the terms of this Agreement
(other than as contemplated in clause (iii) above or as a result of the
failure of Total or TGPV to obtain any required consent or approval or
as a result of circumstances applicable to Total or TGPV), AES shall,
and shall cause Gener to, take all necessary action to enter into such
other contracts, agreements, understandings or binding arrangements as
shall provide TGPV with the same rights and benefits, and place TGPV in
the same economic position, as would be applicable to TGPV had Gener
executed, delivered and performed the Purchase and Sale Agreement in
the manner contemplated hereby and thereby.
(d) Expenses. Each party shall bear its own costs and expenses in
connection with this Agreement, the Purchase and Sale Agreement and the
transactions contemplated hereby and thereby.
Acquisition by AES of Less than Control. In the event that AES
purchases shares of capital stock pursuant to the Offer which constitute less
than a majority of the Voting Securities of Gener, AES shall use its reasonable
best efforts (including, without limitation, by purchasing Gener ADSs and Gener
shares on the market at their prevailing market prices) following such purchase
of capital stock to obtain Control and to perform its obligations set forth in
this Agreement as if it held Control.
Section 5. Term. This Agreement shall terminate as follows:
(a) unless AES has acquired shares of capital stock of Gener pursuant
to the Offer, by any party upon written notice to the other parties at any time
after April 30, 2001 if the Control Date fails to occur on or prior to such
date;
by TGPV or Total, upon written notice to AES, (i) at any time after the
date on which AES announces its intention to abandon acquiring Control; (ii) in
the event the shareholders of Gener fail to amend the by-laws of Gener as
contemplated by the Offer at the meeting of shareholders currently scheduled for
December 12, 2000, on the 30th calendar day following the date on which such
meeting is held, unless prior to such 30th day a notice has been delivered to
Gener in accordance with Chilean law requesting a second meeting of shareholders
to consider and take action on such matters; (iii) in the event the shareholders
of Gener fail to amend the by-laws of
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Gener as contemplated by the Offer at any such second meeting; or (iv) at any
time after the 10th calendar day following the public announcement by any third
party of an offer to acquire Voting Securities of Gener (a "Competing Offer"),
if AES fails on or prior to such 10th day to amend or reaffirm the Offer such
that, in the written opinion of an international investment bank reasonably
acceptable to Total, the value of the consideration offered in respect of the
Voting Securities pursuant to the Offer as amended or reaffirmed exceeds the
value of the consideration offered in respect of the Voting Securities pursuant
to the Competing Offer;
by Total or TGPV, on the one hand, or by AES, on the other hand, upon
written notice to the other, at any time in the event of a breach of any
material covenant hereof by such other party which has not been cured within 5
days of such notice thereof, if subject to cure, it being understood that being
subject to cure and any shortening of such 5 day period shall not be applicable
in the case of the covenants to cause Gener to take action or to refrain from
taking action prior to the time AES has elected a majority of the directors of
Gener;
by Total or TGPV, upon written notice to AES, in the event that AES has
acquired capital stock of Gener pursuant to the Offer and the Control Date shall
not have occurred on or prior to the date three weeks from the date of such
acquisition;
by AES, on the one hand, or by Total or TGPV, on the other hand, upon
written notice to the other in the event AES shall have terminated the Offer
without the purchase of any Gener shares thereunder;
by Total or TGPV, on the one hand, or by AES, on the other hand, upon
written notice to the other in the event consummation of the transactions
contemplated by this Agreement is prohibited by any injunction, decree, judgment
or other order which shall have become final and non-appealable; or
by AES, upon written notice to Total or TGPV, in the event AES shall
have purchased Gener shares pursuant to the Offer, on the date one year from
such purchase of shares pursuant to the Offer in the event AES shall not have
acquired Control.
In addition this Agreement shall terminate on the termination of the
Purchase and Sale Agreement in accordance with its terms or on the closing of
the sale of the Acquired Interests thereunder. No termination of this Agreement
shall relieve any party of any liability for the breach of its obligations under
this Agreement prior to any such termination. The provisions of Sections 4(a),
13, 14 and 15 shall survive any termination.
Section 6. Amendment and Waiver. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by each other party, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver
6
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thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
Section 7. Assignment. No party hereof may assign any of its rights or
obligations under this Agreement without the prior written consent of each other
party hereto, provided that TGPV may assign any or all of its rights under this
Agreement to a directly or indirectly wholly-owned subsidiary of Total (it being
understood that TGPV will remain liable for performance of all of its
obligations under this Agreement notwithstanding any such assignment).
Section 8. Entire Agreement. This Agreement (including Annex A hereto)
contains the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all other prior agreements and
understandings, oral or written, with respect to such matters, except to the
extent expressly agreed in writing among the parties.
Section 9. Parties in Interest; No Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any person or entity,
other than the parties and their successors or permitted assigns, any rights or
remedies under or by reason of this Agreement.
Section 10. Defined Terms. Unless otherwise specified, capitalized
terms used but not defined in this Agreement shall have the meanings set forth
in the form of Purchase and Sale Agreement.
Section 11. Section Headings. The sections and headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
Section 12. Notices. All notices hereunder shall be deemed given if in
writing and delivered personally or sent by electronic mail (confirmed by
facsimile), by facsimile with a confirmation copy by regular mail or by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other addresses as shall be specified by like
notice).
If to AES, to:
Naveed Ismail
President
AES Andes
Av. Libertador 602, 13th Floor
(1001) Buenos Aires,
Argentina
Phone: (54-11) 4816-1502
Facsimile: (54-11) 4816-6605
7
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With a copy to:
The AES Corporation
1001 N. 19th street
Arlington, Virginia 22209
USA
Attention: Bill Luraschi, Corporate Secretary
Telephone: (703) 522-1315
Facsimile: (703) 528-4510
and:
Michael E. Gizang
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10022
USA
Telephone: (212) 735-2704
Facsimile: (917) 777-2704
If to TGPV, to:
Denis Giorno
Chief Executive Officer
Total Gas and Power Ventures
Tour Michelet
24 cour Michelet
92800 Puteaux
France
Telephone: 331-47-44-26-74
Facsimile: 331-47-44-27-90
With a copy to:
Marc Formery
Tour Coupole
2 place de la Coupole
92078 Paris La Defense Cedex
France
Telephone: 331-47-44-46-52
Facsimile: 331-47-44-48-74
8
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With a copy to:
Richard A. Pollack
Sullivan & Cromwell
125 Broad Street
New York, N.Y. 10004-2498
USA
Telephone: (212) 558-4000
Facsimile: (212) 558-3588
If to TotalFinaElf, to:
Bernard de Combret
Executive Vice President, Trading, Gas and Power
TotalFinaElf
Tour Coupole
2 place de la Coupole
92078 Paris La Defense Cedex
France
Telephone: 331-47-44-26-74
Facsimile: 331-47-44-27-90
With a copy to:
Richard A. Pollack
Sullivan & Cromwell
125 Broad Street
New York, N.Y. 10004-2498
USA
Telephone: (212) 558-4000
Facsimile: (212) 558-3588
Any notice given by mail shall be effective when received.
Section 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF NEW YORK WITHOUT REFERENCE TO THE
CONFLICT OF LAW PRINCIPLES THEREOF EXCEPT AS MAY BE REQUIRED TO GIVE EFFECT TO
THIS SECTION.
Section 14. Consent to Jurisdiction. The parties hereby irrevocably
submit to the jurisdiction of the Federal and State courts located in the County
of New York, State of New York, solely in respect of the interpretation and
enforcement of the provisions of this Agreement, and in respect of the
transactions contemplated hereby, and hereby waive, and agree not to assert, as
a defense in any action, suit or proceeding for the interpretation or
enforcement hereof or of any such document, that
9
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it is not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in said courts or that the venue thereof may not
be appropriate or that this Agreement or any such document may not be enforced
in or by such courts, and the parties hereto irrevocably agree that all claims
with respect to such action or proceeding shall be heard and determined in such
a Federal or State court. The parties hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of such
dispute and agree that mailing of process or other papers in connection with any
such action or proceeding in the manner provided in Section 12 hereof or in such
other manner as may be permitted by law, shall be valid and sufficient service
thereof.
Section 15. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or entity
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
Section 16. Specific Performance. The parties hereto each acknowledge
that, in view of the uniqueness of the subject matter hereof, the parties hereto
would not have an adequate remedy at law for money damages if this Agreement
were not performed in accordance with its terms, and therefore agree that the
parties hereto shall be entitled to specific enforcement of the terms hereof and
thereof in addition to any other remedy to which the parties hereto or thereto
may be entitled at law or in equity. In the event of litigation relating to the
specific enforcement of this Agreement, if a court of competent jurisdiction
determines that either party or any of its officers, directors, employees,
representatives, agents or affiliates has breached this Agreement, such party
shall be liable and shall pay to the other party all costs (including reasonable
fees and expenses of counsel) incurred by the other party in connection with
such litigation, including any appeal therefrom.
Section 17. Counterparts. This Agreement and any amendments hereto may
be executed in two or more counterparts, each of which shall be deemed to be an
original, and all of which shall be considered one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed or caused this Agreement
to be executed as of the date first written above.
THE AES CORPORATION
By: /s/ Naveed Ismail
------------------------------------
Name: Naveed Ismail
Title:Group Manager AES Andes
TOTAL GAS AND POWER VENTURES
By: /s/ Denis Giorno
------------------------------------
Name: Denis Giorno
Title: Chief Executive Officer
TOTALFINAELF
By: /s/ Bernard de Combret
------------------------------------
Name: Bernard de Combret
Title: Executive Vice President,
Trading, Gas and Power
11
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ANNEX A
[Form of Purchase and Sale Agreement]
12
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Annex A
PURCHASE AND SALE AGREEMENT
Dated as of __________, 2001
by and between
TOTAL GAS AND POWER VENTURES
and
GENER S.A.
<PAGE>
Annex A
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS................................................2
ARTICLE II
PURCHASE AND SALE
SECTION 2.1 CERTAIN TRANSACTIONS.......................................2
SECTION 2.2 PURCHASE AND SALE..........................................3
SECTION 2.3 PURCHASE PRICE.............................................4
SECTION 2.4 CLOSING....................................................4
SECTION 2.5 POST-CLOSING ADJUSTMENT....................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 3.1 ORGANIZATION...............................................8
SECTION 3.2 AUTHORITY..................................................8
SECTION 3.3 VALIDITY...................................................8
SECTION 3.4 APPROVALS..................................................8
SECTION 3.5 NON-CONTRAVENTION..........................................9
SECTION 3.6 NO ACTIONS.................................................9
SECTION 3.7 FEES.......................................................9
SECTION 3.8 SOLVENCY...................................................9
SECTION 3.9 ELECTRICITY COMPANY SHARES.................................9
SECTION 3.10 OTHER ACQUIRED INTERESTS..................................10
SECTION 3.11 ELECTRICITY COMPANIES ORGANIZATION........................10
SECTION 3.12 ELECTRICITY COMPANY CHARTER DOCUMENTS.....................11
SECTION 3.13 DISCLOSURE OF MATERIAL INFORMATION........................11
SECTION 3.14 ELECTRICITY COMPANY FINANCIAL STATEMENTS..................11
SECTION 3.15 NO UNDISCLOSED LIABILITIES................................12
SECTION 3.16 MATERIAL AGREEMENTS.......................................12
SECTION 3.17 REGULATORY APPROVALS......................................12
SECTION 3.18 COMPLIANCE WITH LAWS......................................13
SECTION 3.19 INSURANCE.................................................13
SECTION 3.20 LITIGATION................................................14
SECTION 3.21 EMPLOYEE LIABILITIES......................................14
SECTION 3.22 EMPLOYEE BENEFITS.........................................14
SECTION 3.23 ENVIRONMENTAL MATTERS.....................................15
SECTION 3.24 TAXES.....................................................15
SECTION 3.25 ARGENTINA ELECTRICITY OPERATIONS..........................16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
SECTION 4.1 PURCHASER ORGANIZATION....................................16
SECTION 4.2 AUTHORITY.................................................16
SECTION 4.3 VALIDITY..................................................16
(i)
<PAGE>
Annex A
SECTION 4.4 APPROVALS.................................................16
SECTION 4.5 NON-CONTRAVENTION.........................................17
SECTION 4.6 FEES......................................................17
ARTICLE V
COVENANTS
SECTION 5.1 INTERIM OPERATIONS........................................17
SECTION 5.2 DUE DILIGENCE ACCESS......................................20
SECTION 5.3 RETENTION OF EMPLOYEES....................................21
SECTION 5.4 FILINGS; OTHER ACTION.....................................21
SECTION 5.5 NOTIFICATION OF CERTAIN MATTERS...........................21
SECTION 5.6 CERTAIN TAXES.............................................21
SECTION 5.7 PROJECTS UNDER DEVELOPMENT................................21
SECTION 5.8 NEW POWER PURCHASE AGREEMENT..............................22
SECTION 5.9 TERMINATION OF INTERCOMPANY AGREEMENTS....................22
SECTION 5.10 CREDIT SUPPORT............................................22
SECTION 5.11 NO SOLICITATION OF EMPLOYEES..............................23
SECTION 5.12 CONFIDENTIALITY...........................................23
SECTION 5.13 ACCESS TO BOOKS AND RECORDS...............................23
SECTION 5.14 EMPLOYEE MATTERS..........................................23
ARTICLE VI
CONDITIONS
SECTION 6.1 CONDITIONS TO THE OBLIGATIONS OF PURCHASER................24
SECTION 6.2 CONDITIONS TO THE OBLIGATIONS OF SELLER...................25
ARTICLE VII
TERMINATION
SECTION 7.1 COMPLETE TERMINATION......................................26
SECTION 7.2 EFFECT OF COMPLETE TERMINATION............................27
SECTION 7.3 PARTIAL TERMINATION.......................................27
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
SECTION 8.1 SURVIVAL..................................................27
SECTION 8.2 INDEMNIFICATION...........................................28
SECTION 8.3 THIRD PARTY CLAIMS........................................28
SECTION 8.4 OTHER RIGHTS..............................................30
SECTION 8.5 ASSUMPTION OF OBLIGATIONS BY TRANSFEREE...................30
SECTION 8.6 LIMITS ON INDEMNIFICATION.................................30
SECTION 8.7 WAIVER....................................................30
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 FURTHER ASSURANCES........................................31
SECTION 9.2 AMENDMENTS AND WAIVERS....................................31
SECTION 9.3 EXPENSES..................................................31
SECTION 9.4 PUBLIC DISCLOSURE.........................................31
(ii)
<PAGE>
Annex A
SECTION 9.5 ASSIGNMENT................................................31
SECTION 9.6 ENTIRE AGREEMENT..........................................32
SECTION 9.7 PERFORMANCE...............................................32
SECTION 9.8 NO THIRD PARTY BENEFICIARIES..............................32
SECTION 9.9 SPECIFIC PERFORMANCE......................................32
SECTION 9.10 COUNTERPARTS..............................................32
SECTION 9.11 INTERPRETATION; ABSENCE OF PRESUMPTION....................32
SECTION 9.12 SECTION HEADINGS..........................................33
SECTION 9.13 NOTICES...................................................33
SECTION 9.14 GOVERNING LAW.............................................34
SECTION 9.15 SUBMISSION TO JURISDICTION; SELECTION OF FORUM............35
SECTION 9.16 EXCHANGE RATES............................................35
SECTION 9.17 SEVERABILITY..............................................35
APPENDIX A DEFINITIONS..............................................A-1
(iii)
<PAGE>
Annex A
ANNEXES
Annex ___ Management Contracts
Annex ___ Electricity Company Financial Statements
Annex ___-1 Opinion of [__________], New York Counsel to Seller
Annex ___-2 Opinion of [__________], Argentinean Counsel to Seller
Annex ___-3 Opinion of [__________], Chilean Counsel to Seller
(iv)
<PAGE>
Annex A
SCHEDULES
Schedule 2.1 Termoandes/Interandes Indebtedness
Schedule 2.5 Opening Net Worth
Schedule 3.4 Seller Approvals
Schedule 3.6 Actions
Schedule 3.9 Liens and Voting Arrangements
Schedule 3.12 List of Subsidiaries
Schedule 3.16 Material Agreements
Schedule 3.17 Regulatory Approvals
Schedule 3.19 Insurance
Schedule 3.22 Employee Benefit Plans
Schedule 4.4 Purchaser Approvals
(v)
<PAGE>
Annex A
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of
__________, 2001, by and between Total Gas and Power Ventures, a societe anonyme
organized under the Laws of the Republic of France ("Purchaser"), and Gener
S.A., a sociedad anonima abierta organized under the Laws of the Republic of
Chile ("Seller") (each referred to as a "Party" and, collectively, the
"Parties").
WITNESSETH:
WHEREAS, Seller owns, directly or indirectly, (i) 51% of the
outstanding ordinary shares of Hidroneuquen S.A., a sociedad anonima organized
under the Laws of Argentina ("Hidroneuquen"), which in turn owns 59% of
Hidroelectrica Piedra del Aguila S.A., a sociedad anonima organized under the
Laws of Argentina ("HPDA"), (ii) options to acquire up to an additional 19.02%
of the outstanding ordinary shares of Hidroneuquen, (iii) 63.9% of the
outstanding shares of Central Puerto S.A., a sociedad anonima organized under
the Laws of Argentina ("Central Puerto"), (iv) 100% of the outstanding ordinary
shares of Termoandes S.A., a sociedad anonima organized under the Laws of
Argentina ("Termoandes"), and (v) 100% of the outstanding ordinary shares of
Interandes S.A., a sociedad anonima organized under the Laws of Argentina
("Interandes" and, together with Hidroneuquen, Central Puerto and Termoandes,
the "Electricity Companies");
WHEREAS, Seller also holds, directly or indirectly,
subordinated indebtedness of HPDA, is party to the Management Contracts (as
defined herein) with each of the Electricity Companies and is working on certain
Projects Under Development (as defined herein); and
WHEREAS, Seller wishes to sell to Purchaser, and Purchaser
wishes to purchase from Seller, all of Seller's ownership interests in the
Electricity Companies, together with Seller's rights in respect of the
subordinated indebtedness of HPDA, the Management Contracts and the Projects
Under Development.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements contained herein, and on
the terms and subject to the conditions set forth herein, the Parties hereby
agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Defined terms in this Agreement (including its
Recitals) and the Annexes, Schedules and Appendices to this Agreement, which may
be identified by the capitalization of the first letter of each principal word
thereof, have the meanings assigned to them in Appendix A. Terms defined in the
singular have a comparable meaning when used in the plural, and vice versa.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Certain Transactions.
(a) Repayment of Indebtedness. Seller shall (i) cause all Indebtedness
arising under the credit agreements set forth on Schedule 2.1*, together with
any accrued and unpaid interest and any contingent or other obligation to pay
premiums, penalties or fees due in connection therewith (the "Termoandes and
Interandes Indebtedness") to be paid, satisfied and discharged as of the Closing
Date and (ii) deliver to Purchaser a certificate of each holder of Termoandes
and Interandes Indebtedness, in form and substance reasonably acceptable to
Purchaser, stating that such Termoandes and Interandes Indebtedness has been (or
shall be upon receipt of a stated sum certain at Closing) paid, satisfied and
discharged and that the associated security interest of such holder in the
shares of Termoandes and Interandes to be transferred pursuant to Section
2.2(c)(i) has been (or shall be upon receipt of such sum at Closing) released.
Seller may, at its sole option, alternatively satisfy its obligations under this
Section 2.1(a) by depositing with an escrow bank reasonably acceptable to
Purchaser and Seller (i) an amount sufficient to pay, satisfy and discharge all
the Termoandes and Interandes Indebtedness as of the first date after Closing on
which such payment may be made (which amount shall be, upon request of Seller,
deposited by Purchaser on behalf of Seller as partial payment of the Purchaser
Price), (ii) if held by Seller, the certificate(s) representing ordinary shares
of Termoandes and Interandes to be transferred to Purchaser pursuant to Section
2.2(c), which shares may be subject to a security interest in favor of the
holders of the Termoandes and Interandes Indebtedness, and (iii) a release of
all such security interests, conditioned upon payment of the amount deposited,
or such other evidence reasonably satisfactory to Purchaser that all such
security interests will be released by the holders of the Termoandes and
Interandes Indebtedness and the shares received by Purchaser will be free and
clear of any Lien arising in connection with such security interest upon payment
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* To include (a) all Termoandes and Interandes floating rate notes (and
associated hedging obligations) and (b) loans from commercial banks
for the financing of construction-related VAT.
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of the amount deposited, pursuant to an escrow agreement in form and substance
reasonably acceptable to Purchaser and Seller.
(b) Exercise of Hidroneuquen Options; Termination of Usufructo. Seller
agrees that no later than the fifth Business Day prior to the Closing Date,
Seller shall (i) exercise, or cause a Subsidiary to exercise, all options of
Seller and its Subsidiaries to acquire, directly or indirectly, ____ ordinary
shares of Hidroneuquen and cause such shares to be registered in the name of
Seller or a Subsidiary of Seller in the stock register (Registro de Accionistas)
of Hidroneuquen and (ii) take such actions as may be necessary to cause the
termination of the usufructo in favor of Transalta Energy Argentina S.A., a
sociedad anonima organized under the Laws of Argentina ("Transalta") in respect
of 1% of the ordinary shares of Hidroneuquen, as a result of which (i) and (ii)
Seller and its Subsidiaries, together, shall own at the Closing directly 70.02%
of the capital stock of Hidroneuquen (including the right to vote and dispose of
such shares), free and clear of any Lien (other than Liens existing as of the
Control Date on the ordinary shares of Hidroneuquen incurred in connection with
the HPDA Indebtedness).
(c) Termination of Power Purchase Contract. Seller shall cause the
existing power purchase agreement between Seller and Termoandes to be
terminated, effective at Closing, or as soon as commercially reasonable
thereafter, taking into account Seller's power requirements, without further
liability of Seller or Termoandes thereunder after Closing (other than in
respect of periods prior to such termination).
Section 2.2 Purchase and Sale. Upon the terms and subject to the
conditions set forth herein, Seller agrees to sell, transfer and assign, or
cause one or more of its Subsidiaries to sell, transfer and assign, to Purchaser
or its designated Affiliate (which shall be a wholly owned direct or indirect
Subsidiary of TotalFinaElf), and subject to Section 7.3 Purchaser agrees to
purchase, or cause its designated Affiliate to purchase, from Seller, all right
and title to and beneficial, record and other interests in the following
securities, assets, properties and contracts (the "Acquired Interests"), in each
case for the purchase price set forth in Section 2.3, payable in U.S. dollars in
cash in immediately available funds:
(a) (i) ____ ordinary shares of Hidroneuquen, par value ____ Argentine
Pesos, which constitute all shares of capital stock of Hidroneuquen owned by
Seller and its Affiliates and represent not less than 70.02% of the capital
stock of Hidroneuquen outstanding at Closing, together with all preemptive and
other rights provided to the holders of such shares under Argentine Law and all
rights to receive dividends and other distributions declared in respect of such
shares on or after Closing; (ii) all subordinated indebtedness of HPDA owned by
Seller and its Affiliates, together with all rights to receive any accrued and
unpaid interest due as of Closing in connection therewith (the "HPDA
Subordinated Indebtedness"); and (iii) all of the rights and obligations of
Seller and any of its Affiliates under any management contracts with Seller or
any of its Subsidiaries to which Hidroneuquen or HPDA is a party;
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(b) (i) ____ordinary shares of Central Puerto, par value ____ Argentine
Pesos, which constitute all shares of capital stock of Central Puerto owned by
Seller and its Affiliates and represent not less than 63.9% of the capital stock
of Central Puerto outstanding at Closing, together with all preemptive and other
rights provided to the holders of such shares under Argentine Law and all rights
to receive dividends and other distributions declared in respect of such shares
on or after Closing; and (ii) all of the rights and obligations of Seller and
any of its Affiliates under any management contracts with Seller or any of its
Subsidiaries to which Central Puerto is a party;
(c) (i) ____ordinary shares of Termoandes, par value ____ Argentine
Pesos, and ____ ordinary shares of Interandes, par value ___ Argentine Pesos,
representing 100% of the capital stock of Termoandes and Interandes,
respectively, outstanding at Closing, together with all preemptive and other
rights provided to the holders of such shares under Argentine Law and all rights
to receive dividends and other distributions declared in respect of such shares
on or after Closing (the ordinary shares of the Electricity Companies described
in clauses (a)(i), (b)(i), and (c)(i), together, the "Electricity Company
Shares") and (ii) all of the rights and obligations of Seller and any of its
Affiliates under any management contracts with Seller or any of its Subsidiaries
to which Termoandes or Interandes, as the case may be, is a party (the
management contracts described in clauses (a)(iii), (b)(ii) and (c)(ii),
together, the "Management Contracts", a copy of each of which is attached hereto
as Annex ___ ); and
(d) all of the Project Interests of Seller or any of its Affiliates in
(i) the project under study to develop facilities for transmitting electricity
between the Yacyreta region in Argentina and the Sao Paulo region in Brazil and
(ii) any project to develop electricity generation or transmission facilities in
Argentina under study and development (in each of cases (i) and (ii), the
"Projects Under Development").
Section 2.3 Purchase Price. The purchase price for (a) the Acquired
Interests set forth in Section 2.2(a) shall equal the sum of (x) U.S.$72.450
million plus (y) the principal amount of the HPDA Subordinated Indebtedness
outstanding as of Closing plus accrued and unpaid interest as of Closing, (b)
the Acquired Interests set forth in Section 2.2(b) shall equal U.S.$255.0
million, (c) the Acquired Interests set forth in Section 2.2(c) shall equal
U.S.$285.0 million, and (d) the Acquired Interests set forth in Section 2.2(d)
shall equal U.S.$50,000. The aggregate purchase price for the Acquired Interests
to be purchased by the Purchaser (the "Purchase Price"), shall be paid at
Closing in cash in U.S. dollars in immediately available funds without
counterclaim or setoff.
Section 2.4 Closing.
(a) Subject to the terms and conditions of this Agreement, the
consummation of the purchase and sale of the Acquired Interests hereunder (the
"Closing") shall take place at the offices of Perez Alati, Grondona, Benites,
Arnsten & Martinez de Hoz, Suipacha 1111, Piso 18, C1008AAW, Buenos Aires,
Argentina at 10:00 a.m. local time, on the 10th calendar day following written
notice from Purchaser or such later date on
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which all of the conditions set forth in Sections 6.1 and 6.2 have been
satisfied or waived (the "Closing Date"), unless the Parties shall agree to an
alternative date or time or an alternative place.
(b) On the Closing Date, as part of a simultaneous transaction, (i)
Purchaser shall deliver to Seller (A) the Purchase Price in U.S. dollars in
immediately available funds by wire transfer to a bank account of Seller
designated by Seller to Purchaser by written notice at least five Business Days
prior to the Closing Date and (B) the written agreement of it or one or more of
its Subsidiaries, in form and substance reasonably satisfactory to Seller, to be
bound by and perform in the place of Seller all of Seller's obligations under
the Management Agreements, (ii) Seller shall (A) deliver to Purchaser the
certificates, or other evidence, representing the transfer of shares of
Electricity Companies to be acquired by Purchaser (or, in the case of the shares
of Termoandes and Interandes, provide for delivery of such certificates or other
evidence pursuant to the escrow agreement as contemplated by Section 2.1), (B)
notify each Electricity Company of the transfer of such shares to Purchaser, (C)
deliver to Purchaser such evidence as is reasonably satisfactory to Purchaser
that such shares of each Electricity Company have been registered on the Closing
Date in the name of Purchaser in the stock register (Registro de Accionistas) of
each Electricity Company and (D) deliver to Purchaser such evidence as is
reasonably satisfactory to Purchaser that the sales, assignments and transfers
of the other Acquired Interests have become effective as of Closing and (iii)
each Party shall make such other deliveries as are required to be made by it on
or prior to the Closing Date and which have not yet been delivered.
(c) Seller, in cooperation with Purchaser, shall on or prior to the
Closing Date cause a shareholders' meeting of each Electricity Company to be
duly held in accordance with applicable Law, to (i) accept the resignation of
the board of directors and members of the supervisory committee appointed by
Seller (accompanied by a waiver by each such director and member, which Seller
shall use its reasonable best efforts to obtain, and any senior executives of
the Electricity Companies or their Subsidiaries who have ceased to be employees
after the Control Date and prior to Closing, of any claims against the
Electricity Companies or their Subsidiaries, in form and substance reasonably
satisfactory to Purchaser), (ii) approve the performance by the directors of
their duties, (iii) appoint the new board of directors and members of the
supervisory committee as requested by Purchaser (it being understood that such
directors and members shall agree to promptly resign in the event that the
relevant Electricity Company is not acquired by the Purchaser and this Agreement
is terminated) and (iv) revoke all special and general powers of attorney
granted by any of the Electricity Companies or its Subsidiaries that are then in
force and effect.
Section 2.5 Post-Closing Adjustment.
(a) The Net Worth of each Electricity Company as of June 30, 2000 in
U.S. dollars calculated in accordance with Argentine GAAP as agreed by Seller
and Purchaser for the purpose of this Section 2.5 is set forth on Schedule 2.5
(the "Opening Net
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Worth"). It is agreed that the Opening Net Worth of Termoandes and Internades
shall be increased on a pro-forma basis by the aggregate amount of the
Termoandes and Interandes Indebtedness outstanding as of June 30, 2000 as
reflected in the Electricity Company Financial Statements to reflect the
repayment, satisfaction and discharge of such Termoandes and Interandes
Indebtedness. Within 45 days following the Closing, Purchaser shall prepare, or
cause to be prepared, and deliver to Seller a calculation (each, a "Closing Date
Net Worth Statement") of the Net Worth in U.S. dollars of each Electricity
Company as of the Closing Date (the "Closing Date Net Worth"). The Closing Date
Net Worth of each Electricity Company shall be calculated by Purchaser in
accordance with the calculation method and the accounting principles used to
calculate the Opening Net Worth of such Electricity Company. Seller shall
provide Purchaser and its accountants full access to the books and records, any
other information, including working papers of its accountants, and to any
employees to the extent necessary for Purchaser to prepare the Closing Date Net
Worth Statements and to calculate the Closing Date Net Worth of each Electricity
Company. The Opening Net Worth and the Closing Date Net Worth in U.S. Dollars
shall be calculated assuming an exchange rate of one U.S. Dollar to one
Argentine Peso. In the event of a devaluation of the Argentine Peso against the
U.S. Dollar between the date hereof and the Closing Date, for the purpose of
calculating the Opening Net Worth and the Closing Date Net Worth, (i) all U.S.
Dollar denominated assets and liabilities shall be translated to Argentine Pesos
on the basis of one U.S. Dollar to one Argentine Peso and (ii) no Argentine Peso
denominated assets and liabilities shall be restated for inflation between the
date of devaluation and the Closing Date, in each cases of (i) and (ii) not
withstanding any contrary principle of Argentine GAAP.
(b) Seller and Seller's accountants shall, within 30 days after the
delivery by Purchaser of the Closing Date Net Worth Statements, complete their
review of the Closing Date Net Worth reflected on the Closing Date Net Worth
Statement. In the event that Seller determines that the Closing Date Net Worth
of an Electricity Company, as reflected on the Closing Date Net Worth Statement,
has not been determined on the basis set forth in Section 2.5(a) hereof (or has
been determined on the basis of erroneous facts), Seller shall inform Purchaser
in writing (the "Seller Objection"), setting forth a specific description of the
basis for the Seller Objection and the adjustments to the relevant Closing Date
Net Worth which Seller believes should be made, on or before the last day of
such 30-day period. Purchaser shall have 30 days following such 30-day period to
review and respond to the Seller Objection. If Seller and Purchaser are unable
to resolve all of their disagreements with respect to the determination of the
foregoing items within 30 days following the completion of Purchaser's review of
the Seller Objection, the Parties shall refer their remaining differences to an
internationally recognized firm of independent public accounts as to which
Seller and Purchaser mutually agree (the "CPA Firm"), who shall, acting as
experts and not as arbitrators, determine on the basis of the standard set forth
in Section 2.5(a) hereof, and only with respect to the remaining differences so
submitted, whether and to what extent, if any, the Closing Date Net Worth of
such Electricity Company, as reflected on the Closing Date Net Worth Statement,
requires adjustment. The CPA Firm shall deliver its written determination to
Purchaser
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Annex A
and Seller no later than the 20th day after the remaining differences underlying
the Seller Objection are referred to the CPA Firm, or such longer period of time
as the CPA Firm determines is necessary. The CPA Firm's determination shall be
conclusive and binding upon Purchaser and Seller and not subject to any appeal.
The fees and disbursements of the CPA Firm shall be shared equally by Purchaser
and Seller. Purchaser and Seller shall make readily available to the CPA Firm
all relevant books and records and any work papers (including those of the
parties' respective accountants) relating to the calculation of Closing Date Net
Worth and all other items reasonably requested by the CPA Firm. The "Final
Closing Date Net Worth" of an Electricity Company shall be (i) the Closing Date
Net Worth of such Electricity Company in the event that no Seller Objection is
delivered to Purchaser during the 30-day period specified above, (ii) the
Closing Date Net Worth, adjusted in accordance with the Seller Objection in the
event that Purchaser does not respond to Seller Objection within the 30-day
period specified above, or (iii) the Closing Date Net Worth, as adjusted by
either (A) the agreement of Seller and Purchaser or (B) the CPA Firm.
(c) In the event that the adjustment of the Closing Date Net Worth of
an Electricity Company pursuant to Section 2.5(b) discloses that it is
appropriate to include an item in the calculation of the Opening Net Worth of
such Electricity Company that had been omitted from the calculation of the
Opening Net Worth of such Electricity Company or to omit an item in the
calculation of the Opening Net Worth of such Electricity Company that had been
included in the calculation of the Opening Net Worth of such Electricity
Company, Purchaser and Seller shall prepare and agree upon a revised calculation
of the Opening Net Worth of such Electricity Company so that the differences
between the Opening Net Worth and Closing Date Net Worth reflect only the impact
of the passage of time on the balances of the accounts included in the
determination of the Net Worth of such Electricity Company.
(d) Within 10 Business Days following the determination of the Final
Closing Date Net Worth for each Electricity Company, Purchaser or Seller, as the
case may be, shall make an adjustment payment by wire transfer of immediately
available funds in U.S. dollars to a bank account designated by Purchaser or
Seller, as the case may be, in an amount equal to the difference between: (i)
the Opening Net Worth (as adjusted pursuant to Section 2.5(c)) of such
Electricity Company and (ii) the Closing Date Net Worth of such Electricity
Company, multiplied by the percentage interest in such Electricity Company
transferred to Purchaser at Closing. The adjustment payment shall be made by
Seller to Purchaser to the extent that the Final Closing Date Net Worth of an
Electricity Company is less than the Opening Net Worth of such Electricity
Company and by Purchaser to Seller to the extent that the Final Closing Date Net
Worth of an Electricity Company is greater than the Opening Net Worth of such
Electricity Company. All payments due between the Purchaser and Seller hereunder
shall be netted and the net amount payable by the Purchaser or the Seller, as
the case may be, shall be made in a single payment.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby makes the following representations and warranties to
Purchaser, in each case as of the date hereof and as of the Closing Date (unless
such representation or warranty is expressly made as of another time), provided
that the representations and warranties set forth in Section 3.13 through 3.25,
inclusive, shall be made only as of the Closing Date:
Section 3.1 Organization. Seller is duly incorporated and validly
existing under the Laws of the jurisdiction of its incorporation.
Section 3.2 Authority. Seller has the requisite corporate power and
authority to execute and deliver this Agreement and each transaction
contemplated hereby, and perform its obligations hereunder and thereunder.
Section 3.3 Validity. This Agreement has been duly executed and
delivered by Seller and constitutes the legal, valid and binding obligation of
the Seller enforceable against the Seller in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar Laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
Section 3.4 Approvals. The execution, delivery and performance of this
Agreement and the transactions contemplated hereby by Seller do not and will not
require any consent, approval, waiver, authorization or other action by, filing
with, submission, application or notification to, (a) any Governmental Entity or
(b) any Person pursuant to any Material Agreement, in each of cases (a) and (b)
other than (i) the notarization of the deed of transfer of the Electricity
Company Shares, (ii) the consents, approvals, waivers, authorizations, actions,
filings, submissions, applications or notifications set forth on Schedule 3.4
(the "Seller Approvals") and (iii) such consents, approvals, waivers,
authorizations, actions, filings, submissions, applications or notifications the
failure to obtain which could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. As of Closing, all of the Seller
Approvals have been obtained or made and shall be in full force and effect,
except as disclosed in writing to Purchaser prior to the Closing Date.
Section 3.5 Non-Contravention. The execution, delivery and, subject to
all the Seller Approvals being obtained prior to Closing, performance of this
Agreement and the transactions contemplated hereby by Seller does not violate
any provision of the organizational documents of Seller or any of its
Subsidiaries, or violate or result in a breach of or constitute a default under
(a) any judgment, order, injunction, decree or Law to which Seller or any of its
Subsidiaries is subject, or (b) any Material Agreement, in the case of clause
(b) only, except for such breaches, defaults, violations and events as could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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Section 3.6 No Actions. Except as set forth on Schedule 3.6, there is
no action, claim, dispute, proceeding, suit, investigation or appeal pending or,
to the Knowledge of Seller or its Subsidiaries, threatened, against Seller, any
Electricity Company or any of its Subsidiaries which questions or challenges the
validity of this Agreement, or any action taken or proposed to be taken by
Seller or any of its Subsidiaries pursuant to this Agreement hereto or in
connection with the transactions contemplated hereby.
Section 3.7 Fees. No actions by Seller will give rise to any valid
claim by any Person against Purchaser for a finder's fee, brokerage commission
or similar payment.
Section 3.8 Solvency. As of the Closing, the Seller is able to pay its
debts as they come due in the ordinary course.
Section 3.9 Electricity Company Shares
(a) As of the date hereof, Seller holds, directly or indirectly through
one or more of its Subsidiaries, all right and title to and beneficial, record
and other interests in the Electricity Company Shares (other than the
Electricity Company Shares subject to the Hidroneuquen options). The Electricity
Company Shares comprise (i) ____ ordinary shares of Hidroneuquen, nominal par
value ____ Argentinean Pesos, representing 50% of the outstanding shares of
capital stock of Hidroneuquen, (ii) ____ ordinary shares of Central Puerto,
nominal par value ____ Argentinean Pesos, representing 63.9% of the outstanding
shares of capital stock of Central Puerto, (iii) ____ ordinary shares of
Termoandes, nominal par value ____ Argentinean Pesos, representing 100% of the
outstanding shares of capital stock of Termoandes and (iv) ____ ordinary shares
of Interandes, nominal par value ____ Argentinean Pesos, representing 100% of
the outstanding shares of capital stock of Interandes, in each case free and
clear of any Lien other than Liens set forth on Schedule 3.9; all the
Electricity Company Shares are validly issued, fully paid and nonassessable;
there are no convertible securities, options, warrants, calls or other rights,
agreements or commitments of any character obligating the Electricity Companies
to issue, sell, redeem or repurchase shares of their capital stock or, other
than pursuant to this Agreement, obligating Seller or one or more of its
Subsidiaries to sell any Electricity Company Shares; there are no voting trusts,
stockholder agreements, proxies, powers of attorneys or other agreements or
understandings in effect with respect to the voting or transfer of any of the
Electricity Company Shares, other than as set forth in Schedule 3.9; none of the
Electricity Company Shares has been issued in violation of any preferential
right or right to take up unsubscribed shares; no Person has any claim pending
or to the Knowledge of Seller, threatened against any of the Electricity
Companies or their Subsidiaries based on the fact that any issue, exchange,
subscription, cancellation or redemption of share capital did not comply with
law. Upon the consummation of the transfer of the Electricity Company Shares to
Purchaser as contemplated by Section 2.2 (including the escrow arrangements, if
any, contemplated thereby), the Liens (other than Liens on the shares of
Hidroneuquen existing as of the Control Date incurred in connection with the
HPDA Indebtedness), voting trusts, stockholder agreements, proxies, powers of
attorney or other agreements set forth in
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Schedule 3.9 shall have been finally terminated and the Purchaser will transfer
to the Seller good and marketable title to the Electricity Company Shares, free
and clear of any Liens (other than Liens on the shares of Hidroneuquen existing
as of the Control Date incurred in connection with the HPDA Indebtedness).
(b) As of the date hereof, Seller holds an option to acquire ordinary
shares of Hidroneuquen, representing 19.02% of the issued and outstanding
capital stock of Hidroneuquen, from Duke Energy International LLC or one of its
Subsidiaries and has a right to cause the termination of the usufructo in favor
of Transalta.
(c) Hidroneuquen holds all right and title to and beneficial, record
and other interests in _____ ordinary shares of HPDA, nominal par value _____
Argentinean Pesos, representing 59% of the outstanding shares of capital stock
of HPDA (the "HPDA Shares"), free and clear of any Liens (other than Liens
existing as of the Control Date securing the HPDA Indebtedness); all the HPDA
Shares are validly issued, fully paid and nonassessable; there are no
convertible securities, options, warrants, calls or other rights, agreements or
commitments of any character obligating HPDA to issue, sell, redeem or
repurchase shares of its capital stock or, other than pursuant to this
Agreement, obligating any Person to sell any HPDA Shares; there are no voting
trusts, stockholder agreements, proxies, powers of attorneys or other Contracts
in effect with respect to the voting or transfer of any HPDA Shares; none of the
HPDA Shares has been issued in violation of any preferential right or right to
take up unsubscribed shares; all the HPDA Shares entitle Hidroneuquen to all
preemptive and other rights provided to the holders of such shares under
Argentine Law and all rights to receive dividends and other distributions
declared in respect of such shares on or after the Control Date.
Section 3.10 Other Acquired Interests. At Closing, Seller holds all
right and title to and beneficial, record and other interests in the Acquired
Interests (other than the Electricity Company Shares), free and clear of any
Lien; no Person other than Seller has any participation or other direct or
indirect interest in the HPDA Subordinated Indebtedness. Upon consummation of
the purchase and sale of the Acquired Interests (other than the Electricity
Company Shares) as contemplated by this Agreement, the Purchaser will transfer
to the Seller good and marketable title to such interests, free and clear of any
Lien.
Section 3.11 Electricity Companies Organization. Each of the
Electricity Companies and its Subsidiaries (a) is a sociedad anonima duly
incorporated and validly existing under the Laws of Argentina, (b) has full
right, power and authority to own and operate its property, to lease the
property it operates as lessee and to carry on its business as currently
conducted and (c) is duly licensed or qualified to do business in each
jurisdiction in which the properties owned or leased by it or the operation of
its business as currently conducted makes such licensing or qualification
necessary, except, in each of cases (b) and (c) only, such failure to have such
right, power or authority or to be so licensed or qualified, as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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Section 3.12 Electricity Company Charter Documents.
(a) The by-laws (estatutos sociales) and other organizational documents
of each of the Electricity Companies and its Subsidiaries, copies of which
Seller has caused to be made available to Purchaser or its representative prior
to Closing, are unamended and are in full force and effect since their
respective dates. The minute books of each of the Electricity Companies and its
Subsidiaries, copies of which Seller has caused to be made available to
Purchaser or its representatives prior to Closing, accurately reflect in all
material respects the director and shareholder actions approved by each
Electricity Company or Subsidiary, as the case may be, since January 1, 1998 and
through the Closing Date.
(b) Schedule 3.12 contains a true, correct and complete list of all
Persons (i) in which any of the Electricity Companies owns, directly or
indirectly, any material equity interests which are Controlled by such
Electricity Company, directly or indirectly, (ii) of which any Electricity
Company, directly or indirectly, is the managing member or (iii) which are
material whose assets, Liabilities, revenues, costs and expenses are included in
the Electricity Company Financial Statements.
Section 3.13 Disclosure of Material Information. (a) As of the date it
was filed with the U.S. Securities and Exchange Commission, the Seller's Annual
Report on Form 20-F did not include 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 therein, in light of the circumstances under which they were
made, not materially misleading and (b) as of the date filed with the Chilean
Superintendency of Securities and Insurance, the quarterly public reports of
Seller in Chile required to be filed under Chilean law and regulations and filed
during the period commencing on January 1, 2000 and ending as of the Closing
Date complied in all material respects with applicable Chilean law and
regulations as of the date of each such filing.
Section 3.14 Electricity Company Financial Statements. True and
complete copies of (a) the audited consolidated balance sheets of each
Electricity Company as of December 31, 1997, December 31, 1998 and December 31,
1999, and the related audited consolidated statements of income, changes in
stockholders' equity and changes in financial position of each Electricity
Company, together with all related notes and schedules thereto (the "Year End
Financial Statements") have been made available to Purchaser and (b) the
consolidated balance sheets of each Electricity Company as of June 30, 2000 (the
"June Balance Sheet"), and the related consolidated statements of income,
changes in stockholders' equity and changes in financial position of each
Electricity Company, together with all related notes and schedules hereto
(together with the June Balance Sheet, the "Interim Financial Statements", and
the Interim Financial Statements, together with the Year End Financial
Statements, the "Electricity Company Financial Statements") are attached as
Annex ___. Each of the Electricity Company Financial Statements (including any
related notes and schedules) fairly presents in all material respects the
results of operations, changes in stockholders' equity and changes in
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financial position, as the case may be, of each Electricity Company for the
periods set forth therein (subject, in the case of unaudited statements, to
normal year-end and audit adjustments that will not be material in amount or
effect), in each case in accordance with Argentine GAAP consistently applied
during the periods involved, except as may be noted therein. The related notes
reconciling the financial information in the Electricity Company Financial
Statements to U.S. GAAP comply in all material respects with the requirements of
the Securities and Exchange Commission generally applicable to such
reconciliations.
Section 3.15 No Undisclosed Liabilities. None of the Electricity
Companies or its Subsidiaries has any liabilities or obligations of a type
required to be reflected in its financial statements or the notes thereto in
accordance with Argentine GAAP, except as and to the extent of the amounts
specifically reflected or reserved against in the Electricity Company Financial
Statements or in the notes thereto and except for those liabilities and
obligations as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 3.16 Material Agreements.
(a) Schedule 3.16 contains a true, correct and complete list of all
Material Agreements to which each Electricity Company and its Subsidiaries is a
party. Except for such failures to be valid, binding and enforceable, and such
breaches, defaults, violations and events as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, (i) each
Material Agreement is a valid and binding obligation of the relevant Electric
Company or Subsidiary and, to the Knowledge of Seller, the other party thereto,
and is enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar Laws of general applicability relating to or affecting creditors' rights
and to general equity principles, (ii) none of the Electricity Companies or its
Subsidiaries is in violation or breach of, or in default under, any Material
Agreement and, to the Knowledge of Seller, no other party to any Material
Agreement is in violation or breach thereof, or in default thereunder, and (iii)
to the Knowledge of Seller, no event has occurred that, with the passage of time
or the giving of notice or both, would permit the termination of any Material
Agreement.
(b) Seller has caused to be delivered or made available to Purchaser a
true, complete and current copy of each Material Agreement.
Section 3.17 Regulatory Approvals.
(a) Each Electricity Company and its Subsidiaries holds all corporate
requirements and Permits and all powers that are required by any Governmental
Entity to permit any of them to conduct their respective businesses
substantially as conducted as of the date hereof.
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(b) Schedule 3.17 contains a true, correct and complete list of all
material consents and approvals required for the conduct of its business
substantially as conducted on the date hereof (the "Regulatory Approvals"). All
Regulatory Approvals are valid and in full force and effect, and except for such
proceedings as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, there is no proceeding pending or,
to the Knowledge of Seller, threatened, that disputes the validity of any such
Regulatory Approval.
(c) Seller has caused to be delivered or made available to Purchaser a
true, correct, complete and current copy of each material Regulatory Approval.
Section 3.18 Compliance with Laws
(a) Each of the Electricity Companies and its Subsidiaries has
complied, and its businesses, facilities, operations and Contracts comply, with
all Laws and Regulatory Approvals, except for such instances of noncompliance as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(b) No investigation or review by any Governmental Entity with respect
to any Electricity Company or its Subsidiaries is pending or, to the Knowledge
of Seller, threatened, except for investigations and reviews as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(c) None of the Electricity Companies or its Subsidiaries (i) has
received written notice alleging any noncompliance by such Electricity Company
or Subsidiary, as the case may be, with any Law, Regulatory Approval or Permit
that has not been cured or (ii) is subject to any unpaid fine or any continuing
sanction for any such non compliance, except, in either case, for such instances
of non compliance as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(d) None of the Electricity Companies or its Subsidiaries is in
violation of or in default under, and to the Knowledge of Seller, no event has
occurred which, with the lapse of time or the giving of notice or both, would
result in the violation of or default under, the terms of any judgment, decree,
order, injunction or writ of any Governmental Entity, except for such violations
or defaults as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 3.19 Insurance. Schedule 3.19 contains a true, correct and
complete summary of the insurance coverage of the material property, assets or
business Liabilities of each of the Electricity Companies and its Subsidiaries
specifying the type of coverage, the term of the policies or bonds, the limits
and layers of Liability and the annual premiums, and (b) lists any agreements,
arrangements or commitments under which any of the Electricity Companies or its
Subsidiaries indemnifies any other Person or is required to carry insurance for
the benefit of any other Person in each case an amount in excess of
U.S.$1,000,000. The policies and bonds summarized in Schedule 3.19 are in full
force and effect, all premiums due and payable thereon have been paid, no
written
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notice of cancellation or termination has been received with respect to any such
policy, and each of the Electricity Companies and its Subsidiaries has complied
with such policies and bonds in all material respects. Such policies and bonds
will remain in full force and effect through the respective dates set forth in
Schedule 3.19 without the payment of additional premiums, except in the ordinary
course of business, and will not in any way be affected by, terminate, or lapse
by reason of the transactions contemplated by this Agreement.
Section 3.20 Litigation. Except for such matters as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, there are no civil, criminal or administrative actions, suits,
claims, hearings, investigations or proceedings pending or, to the Knowledge of
Seller, threatened against any of the Electricity Companies or its Subsidiaries.
Section 3.21 Employee Liabilities. Except for such matters as could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (a) there are not pending any strikes, work stoppage or like in
any of the Electricity Companies or its Subsidiaries; (b) there are no claims
from present or former employees of any of the Electricity Companies or its
Subsidiaries on account for overtime pay, wages, salaries, vacations,
discrimination or termination of employment, and no claims by any Governmental
Entity in respect of any labor-related charges or social security obligations;
(c) there has been no change in any retention plan in respect of any employee of
any of the Electricity Companies or its Subsidiaries, other than changes
required to be implemented in connection with this Agreement and the
transactions contemplated hereby.
Section 3.22 Employee Benefits
(a) Schedule 3.22 contains a true, correct and complete summary, for
the Electricity Companies or their Subsidiaries, of the employees covered,
amounts payable and material terms of payment under the employment, severance,
bonus, incentive, deferred compensation, pension, profit sharing, stock option,
stock, stock based, death benefit, health, disability and other employee benefit
plans or agreements (the "Electricity Company Employee Benefit Plans")
maintained or contributed to by any of the Electricity Companies or its
Subsidiaries. Seller has delivered to Purchaser true, complete and correct
copies of each Electricity Company Employee Benefit Plan.
(b) Except for such matters as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect: none of the
Electricity Companies or their Subsidiaries is in default under any material
obligation to be performed under any of the Electricity Company Employee Benefit
Plans; each Electricity Company Employee Benefit Plan has been administered in
accordance with its terms and is in compliance with the provisions of applicable
Law; there is no pending or, to the Knowledge of Seller or its Subsidiaries,
threatened litigation relating to any Electricity Company Employee Benefit Plan,
other than routine claims for benefits.
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(c) Except in the case of employees, directors and officers whose
resignation the Seller has been requested by Purchaser to obtain, to the
Knowledge of Seller, the consummation of this Agreement and the transactions
contemplated hereby will not (i) entitle any employee of any of the Electricity
Companies or its Subsidiaries to severance pay or (ii) accelerate or provide any
other rights or credits under, or increase the amount payable or trigger any
other obligation pursuant to, any of the Electricity Company Employee Benefit
Plans.
Section 3.23 Environmental Matters. To the Knowledge of Seller, except
for such instances of noncompliance, as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect: (a) each of
the Electricity Companies and its Subsidiaries has complied at all times with
all applicable Environmental Laws; (b) no property owned or operated by any of
the Electricity Companies or its Subsidiaries has had any release of any
Hazardous Substance into the environment; (c) no property formerly owned or
operated by any of the Electricity Companies or its Subsidiaries has had any
release of any Hazardous Substance into the environment during such period of
ownership or operation; (d) none of the Electricity Companies or its
Subsidiaries is subject to any Liability for any Hazardous Substance disposal or
contamination on any owned or third-party property; (e) none of the Electricity
Companies or its Subsidiaries is subject to any material order, decree,
injunction, directive or investigation by any Governmental Entity or to any
indemnity, Contract or other obligation to any third party relating to material
obligations or material Liability under any Environmental Law; or (f) none of
the properties of any of the Electricity Companies or its Subsidiaries has been
used for the disposal of any Hazardous Substance. Except with respect to
conditions as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, none of the Electricity Companies or
its Subsidiaries has received any written notice, demand, letter, claim or
request for information indicating a potential violation of any Environmental
Law.
Section 3.24 Taxes. All Taxes owed by the Electricity Companies and its
Subsidiaries, whether or not shown on any tax returns due prior to the Closing
Date ("Tax Returns"), have been paid or adequately reserved against on the June
Balance Sheet or any subsequent balance sheet of such Company, or are being
contested in good faith. To the Knowledge of Seller, no claim is pending by a
Governmental Entity in a jurisdiction where an Electricity Company or its
Subsidiaries do not file Tax Returns and that such Person is or may be subject
to taxation in that jurisdiction. To the Knowledge of Seller, there are no Liens
on any of the assets of any Electricity Company or its Subsidiaries arising in
connection with any failure (or alleged failure) to pay any Tax. Each
Electricity Company and its Subsidiaries has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, shareholder or other third
party. None of the Electricity Companies or its Subsidiaries has waived any
statute of limitations in respect of Taxes. There are no pending or, to the
Knowledge of Seller, threatened actions or proceedings for the assessment or
collection of any material amount of Taxes against any Electricity
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Company and its Subsidiaries or any of their respective assets. Except as
disclosed prior to Closing, to the Knowledge of Seller, (i) there are, and have
been, no requests for information from any Governmental Entity that could affect
the Taxes payable by any Electricity Company and its Subsidiaries and (ii) no
issues have been raised and communicated to any Electricity Company and its
Subsidiaries (and none is currently pending), and no adjustments have been
proposed, by any Governmental Entity.
Section 3.25 Argentina Electricity Operations. As of the date hereof,
the Electricity Companies constitute all of Seller's electricity transmission
and generation operations in Argentina other than the Projects Under
Development.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser makes the following representations and warranties for the
benefit of Seller, in each case as of the date hereof and as of Closing (unless
such representation and warranty is expressly made as of another time):
Section 4.1 Purchaser Organization. Purchaser is duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
organization.
Section 4.2 Authority. Purchaser has the requisite corporate power and
authority to (a) purchase the Acquired Interests in accordance with the terms of
this Agreement, and (b) execute and deliver each transaction contemplated hereby
to which it is a party and perform its obligations thereunder.
Section 4.3 Validity. This Agreement has been duly executed and
delivered by Purchaser and constitutes its valid and binding agreement
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar Laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
Section 4.4 Approvals. The execution, delivery and performance of this
Agreement and each transaction contemplated hereby by Purchaser do not and will
not require any consent, approval, waiver, authorization or other action by,
filing with, submission, application or notification to (a) any Governmental
Entity or (b) any Person pursuant to any Material Agreement, in each of cases
(a) and (b) other than the (i) consents, approvals, waivers, authorizations,
actions, filings, submissions, applications or notifications set forth on
Schedule 4.4 (the "Purchaser Approvals") and (ii) such consents, approvals,
waivers, authorizations, actions, filings, submissions, applications or
notifications the failure to obtain which could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on
Purchaser's ability to perform any of its obligations under this Agreement and
the transactions contemplated herein. As of Closing, all of the Purchaser
Approvals have been obtained or made and
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shall continue to be in full force and effect, except as disclosed in writing to
Seller prior to the Closing Date.
Section 4.5 Non-Contravention. The execution, delivery and, subject to
all the Purchaser Approvals being obtained or made, performance of this
Agreement by Purchaser does not and will not violate any provision of
Purchaser's organizational documents, or violate or result in a breach of or
constitute a default under (a) any judgment, order, injunction, decree or Law to
which Purchaser is subject, or (b) any Contract or other instrument to which
Purchaser is a party or by which any of Purchaser's assets are bound, in the
case of clause (b) only, for such breaches, defaults, violations and events as
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on Purchaser's ability to perform any of its obligations
under this Agreement and the transactions contemplated herein.
Section 4.6 Fees. No actions by Purchaser will give rise to any valid
claim by any Person against Seller for a finder's fee, brokerage commission or
similar payment.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations.
(a) Interim Operations of Electricity Companies. Seller covenants and
agrees that, during the period commencing on (and including) the date hereof and
ending at Closing, unless Purchaser shall have previously agreed in writing,
Seller shall cause each Electricity Company and each of their Subsidiaries,
except any Electricity Company (or the Subsidiaries of any Electricity Company)
with respect to which this Agreement has been terminated:
(i) to conduct its businesses only in the ordinary course of
business consistent with recent past practice;
(ii) not to (A) sell, pledge or agree to sell or pledge any
equity securities or ownership interests owned by it in any Person; (B)
amend or violate its certificate of incorporation, by-laws or
comparable governing documents; (C) reclassify, split, subdivide,
combine or reclassify any of its equity securities or ownership
interests; (D) change or recommend any change in its dividend policy or
declare, set aside or pay any dividend or other distribution payable in
securities or property other than cash with respect to any of its
equity securities or ownership interests; or (E) declare, set aside or
pay any cash dividends (except for dividends of Central Puerto in
accordance with its current dividend policy);
(iii) except as necessary to perform Seller's obligations
under this Agreement, not to (A) issue, sell, pledge, dispose of or
encumber any shares of, or
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securities convertible or exchangeable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any of its equity
securities or ownership interests or any of its other securities,
property or assets; (B) transfer, lease, license, guarantee, sell,
mortgage, pledge, dispose of or subject to or permit the imposition of
any Lien, (other than statutory Liens for Taxes not yet due and
payable) on any of its assets or properties, other than in the ordinary
course of business consistent with recent past practice; (C) acquire
directly or indirectly, by purchase, redemption or otherwise any of its
equity securities or ownership interests; (D) incur any indebtedness,
or make any loans or advances, in each case except in the ordinary
course of business consistent with recent past practice; (E) pay,
discharge or satisfy any Liability other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with recent
past practice, of Liabilities reflected on or reserved against the June
Balance Sheet or subsequently incurred in the ordinary course of
business consistent with recent past practice; (F) enter into, amend,
modify, terminate or renew (whether automatically or otherwise) any
Material Agreement (other than amendments and renewals in the ordinary
course of business consistent with recent past practice and the
expiration of agreements in accordance with their current terms); (G)
enter into, amend, renew (whether automatically or otherwise), modify
or terminate any gas supply agreement to which it is a party or by
which it, any of its Subsidiaries or any of their respective properties
is bound, other than the expiration of agreements in accordance with
their current terms; (H) authorize capital expenditures in excess of
U.S.$1,000,000 (or any single expenditure or series of related
expenditures) or make any direct or indirect acquisition of, or
investment in, assets or stock of any other Person; (I) acquire (by
merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other business organization or division
thereof or any interest in any capital stock thereof; or (J) in the
case of HPDA, pay, discharge or satisfy any Liability in respect of the
HPDA Subordinated Indebtedness;
(iv) except as required by law or pursuant to the terms of
agreements existing on the date hereof, not to (A) grant any severance
or termination pay to, or enter into any employment or severance
agreement with, or increase the compensation payable to, any director,
officer or other employee of any Electricity Company; or (B) establish,
adopt, enter into, make any new grants or awards under or amend any
Electricity Company Employee Benefit Plans;
(v) not to settle or compromise any claims or litigation or
waive, assign or release any rights or claims involving Liability or
potential Liability of the Electricity Companies, except in the
ordinary course of business and except for immaterial claims or rights;
(vi) not to change its outside auditors or its material
accounting policies or procedures (except as necessary to comply with
any change in Argentine
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GAAP, provided that no such change shall be taken into account for
purposes of calculating the Closing Date Net Worth);
(vii) not to (A) make any material Tax election or settle or
compromise any material Tax Liability of the Electricity Companies or
permit any insurance policy naming an Electricity Company as a
beneficiary or a loss payable payee to be canceled or terminated,
except, in any such case, in the ordinary course of business consistent
with recent past practice or (B) waive or extend any statute of
limitation period, adjust any material assertion or claim of a
deficiency in Taxes (or interest thereon or penalties in connection
therewith), file any appeal from a material asserted deficiency, or
file or amend any material Tax Return, in each case before furnishing
copies of the applicable documentation to Purchaser and affording
Purchaser the opportunity to consult with respect thereto;
(viii) not to sell, dispose of or otherwise abandon, alter,
write down or write up the book value of (except for amortization,
depreciation and inflation accounting thereof consistent with recent
past practice and in accordance with Argentine GAAP), any item of the
property, plant and equipment reflected on June 30, 2000 balance sheet
contained in the applicable Electricity Company Financial Statements or
on the accounting records of the Electricity Company as of Closing,
except for sales, dispositions, abandonment, alterations, write-downs
or write-ups not exceeding U.S.$100,000 for any single item or series
of related items, except as required by law or accounting principles;
(ix) not to create any Lien on or affecting title to the real
property occupied or used by any Electricity Company, other than Liens
not affecting the use, operation or value of such real property created
in the ordinary course of business, and not to enter into any leases or
subleases for any real or personal property providing for annual
payments greater than U.S.$100,000 for any single lease or sublease or
related leases or subleases;
(x) not to prepay and refinance long-term indebtedness with
the proceeds of short-term indebtedness;
(xi) to pursue actively all filings, notices, consents or
approvals with any Governmental Entity material to the conduct of its
business (including, in the case of Termoandes, approvals and consents
relating to the Electricity Transmission Line and its connection to the
Argentine grid), and not to compromise or settle any claim (A) which
may result in the cancellation or revocation of any Regulatory Approval
or material Permit, (B) arising under any Environmental Law, the result
of which would constitute acceptance of a change in the interpretation
of existing Law which could reasonably be expected to have a Material
Adverse Effect or (C) that related to a material controversy involving
or to be decided by the ENRE or ENARGAS;
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(xii) not to take any action which would cause the
representations and warranties of Seller not to be true and correct in
any material respect on the Closing Date; and
(xiii) not to authorize or enter into a Contract to do any of
the foregoing.
(b) Financial Information. Until the Closing, Seller shall furnish to
Purchaser copies of interim monthly financial statements for each Electricity
Company prepared in accordance with Argentine GAAP and consistent with recent
past practice, as soon as practicable but in any event within 35 days after the
end of each month, together with any information ordinarily prepared in
connection with such financial statements. All such interim financial statements
shall fairly present in all material respects in accordance with Argentine GAAP
the financial position of each Electricity Company covered thereby at the
respective dates thereof, and the results of operations, stockholders' equity
and cash flows for such Electricity Company, subject to year-end adjustments
(consisting of normal recurring accruals) and the omission of explanatory
footnote materials required by Argentine GAAP. Seller shall, and shall cause its
accountants to furnish such information as reasonably requested to assist
Purchaser in translating all financial statements provided pursuant to this
Section 5.1 into U.S. GAAP or French GAAP upon request of Purchaser.
(c) Working Capital. Until Closing, Seller shall cause each Electricity
Company to have sufficient working capital to allow such Electricity Company to
maintain its working capital at prudent levels which are sufficient to support
its continued operations in the ordinary course of its business and consistent
with recent past practices and as required to obtain the Seller Approvals and
the Purchaser Approvals.
Section 5.2 Due Diligence Access. Upon reasonable notice, and except as
may otherwise be required by applicable Law, Seller shall and shall cause, the
Electricity Companies and its Subsidiaries to afford Purchaser and Purchaser's
representatives reasonable access, during normal business hours, to the
properties, books, contracts, records, properties, personnel and such customers,
suppliers and business partners of the Electricity Companies and its
Subsidiaries as Purchaser reasonably requests, provided that the foregoing shall
not require Seller (a) to permit any inspection, or to disclose any information,
that in the reasonable judgment of Seller would violate applicable Law or any of
its obligations with respect to confidentiality owed to, or would result in the
disclosure of any trade secrets of, third parties or (b) to disclose any
materials prepared for use in connection with the negotiation of the
transactions contemplated hereby. Seller agrees to use all reasonable efforts to
obtain the consent of any third party where the same is required to permit such
inspection or disclosure.
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Section 5.3 Retention of Employees. Seller shall cooperate with
Purchaser in developing and implementing an incentive program to retain
employees of the Electricity Companies and their Subsidiaries as reasonably
requested by Purchaser, at no cost or expense to Seller.
Section 5.4 Filings; Other Action. Subject to the terms and conditions
herein provided, Purchaser and Seller shall (a) promptly make their respective
filings required (and shall use reasonable best efforts to cooperate in the
making of filings required to be made by the other Party) to obtain the Seller
Approvals and the Purchaser Approvals and any other regulatory or other filings
with respect to this Agreement and the transactions contemplated hereby; and (b)
use its reasonable best efforts to promptly take, or cause to be taken, all
other action and do, or cause to be done, all other things necessary, proper or
appropriate under applicable Laws and regulations to make and obtain the Seller
Approvals and the Purchaser Approvals and to consummate and make effective this
Agreement and the transactions contemplated hereby as soon as practicable.
Section 5.5 Notification of Certain Matters. From and after the date of
this Agreement and until the Closing Date, each Party shall give prompt notice
to the other of: (a) any matter or event which comes to the Knowledge of such
Party and which (i) makes or will make any representation and warranty made by
such Party in this Agreement untrue or inaccurate in any material respect or
(ii) has or could reasonably be expected to have a material adverse effect on
the ability of such Party to perform its other obligations under this Agreement
or any transaction contemplated hereby, (b) any other communication relating to,
any material claim by any Person against Purchaser or Seller, as the case may
be, relating to this Agreement or any transaction contemplated hereby, (c) any
assertion by any Person, other than a Governmental Entity, that the transactions
contemplated by this Agreement or any transaction contemplated hereby require
the consent or approval of such Person, (d) any material correspondence with any
Governmental Entity or any Person from whom any Seller Approval or Purchaser
Approval is required (including notice that such Seller Approval or Purchaser
Approval, as the case may be, has been made or obtained) concerning the
transactions contemplated by this Agreement or any transaction contemplated
hereby, or (e) any material correspondence with any shareholder, business
partner, customer of or lender to the Electricity Companies or any of their
Subsidiaries.
Section 5.6 Certain Taxes. Seller agrees that it shall pay, and will
hold Purchaser and its Affiliates harmless from and against, any and all
Liability with respect to any transfer, transfer gains, stamp or any other
similar taxes payable in Argentina in connection with the execution and delivery
and performance of this Agreement and the transactions contemplated hereby.
Section 5.7 Projects Under Development. Seller shall make available,
and shall cause its Subsidiaries to make available, for secondment by Purchaser
or its designees (without fee or other consideration payable to Seller or such
Subsidiaries, except as set forth below) until the first anniversary of the
Closing Date such personnel of
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Seller and its Subsidiaries who at the time are employees of Seller or such
Subsidiaries, as the case may be, and have been involved in the study and
development of the Projects Under Development, as Purchaser may reasonably
request. Purchaser agrees that all costs and expenses in respect of such
secondment payable to or for the benefit of such personnel shall be for the
account of Purchaser.
Section 5.8 New Power Purchase Agreement. Following the Closing, the
Parties agree to negotiate in good faith with an aim to enter into a power
purchase agreement in respect of the purchase by Seller of electricity from
Termoandes; provided that such purchases shall be made on terms no less
favorable to Seller or Termoandes than those generally available to Seller or
Termoandes, as the case may be, in the market and shall take into account the
reasonable power requirements of Seller.
Section 5.9 Termination of Intercompany Agreements. The Parties shall
take such actions as may be necessary to terminate (or, at the sole option of
Purchaser, transfer and assign to Purchaser or its designee without further
liability or obligation of Seller or its Subsidiaries, in which case the
Purchaser or its designee shall agree in writing pursuant to an assumption
agreement reasonably satisfactory to Seller to assume and perform in the place
of Seller or its Subsidiary, as the case may be, all obligations of Seller or
its Subsidiaries, as the case may be, thereunder), effective as of the date of
the Closing, all Contracts between Seller or its Subsidiaries, on the one hand,
and any of the Electricity Companies and their Subsidiaries, on the other hand,
except that the provisions of this Section 5.9 shall not apply to the Management
Contracts to be assigned to Purchaser in accordance with Section 2.2 and the
HPDA Subordinated Indebtedness (such agreements to be so assigned or terminated,
the "Argentine Agreements"); provided, however, that to the extent reasonably
requested by Purchaser, the Seller shall cause the Argentine Agreements to
continue in effect for a reasonable period of time not to exceed 12 months
following the Closing, such period to be negotiated in good faith with
Purchaser, to provide services, at the Seller's cost and on such other terms as
may be provided in the Argentine Agreements, which are essential to the
operation of the Electricity Companies and their Subsidiaries to the extent
Purchaser has reasonably determined that such period is necessary or appropriate
in order to arrange to obtain such services from other providers. Nothing in
this Section 5.9 shall terminate or affect any accounts receivable or payable as
of the Closing Date reflected in the Closing Date Net Worth Statement, which
shall be paid in accordance with their terms.
Section 5.10 Credit Support. Purchaser shall provide, or cause to be
provided, letters of credit, guarantees and other similar instruments
(collectively, the "Credit Support Documents") to replace all such Credit
Support Documents to which Seller or any of its Subsidiaries is a party on
behalf of any of the Electricity Companies and their Subsidiaries on the date of
the Closing. Purchaser shall use its reasonable best efforts to ensure that such
replacement Credit Support Documents constitute full and complete novation for
the obligations of Seller under the Credit Support Documents which such Credit
Support Documents replace. Purchaser further agrees that it shall indemnify
Seller and hold it harmless from and against all claims, costs, expenses,
damages and other
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obligations or liabilities to any other party to the Credit Support Documents of
Seller arising in connection with such Credit Support Documents.
Section 5.11 No Solicitation of Employees. During the period from the
Closing to the second anniversary thereof, Seller shall not, and shall cause
each of its Subsidiaries not to, solicit for employment any employee of the
Electricity Companies or any of their Subsidiaries without the prior written
consent of Purchaser (it being understood that Seller shall be free to offer
employment to any such officer or employee who was not actively solicited by
Seller). The term "solicit for employment" shall not include general
solicitations of employment not specifically directed towards employees of the
Electricity Companies or any of their Subsidiaries.
Section 5.12 Confidentiality. In connection with Seller providing
access to Purchaser and its representatives in accordance with Section 5.3
hereof, Purchaser and its representatives may have access to information
(whether oral, written, computer-based or other) which is either non-public,
confidential or proprietary in nature. This information, together with analyses,
compilations, forecasts, studies or other documents prepared by Purchaser and
its representatives which contain or otherwise reflect any such information or
Purchaser's review of, or interest in, Seller or its businesses and the
transactions contemplated hereby, is hereinafter referred to as the
"Information". In consideration of Seller furnishing Purchaser and its
representatives with the Information, Purchaser agrees that the Information will
be kept confidential and shall not, without the prior written consent of Seller,
be disclosed by Purchaser and its representatives in any manner whatsoever, in
whole or in part, and shall not be used by Purchaser or its representatives
other than in connection with the transactions contemplated herein. The
obligations of the Purchaser under this Section 5.12 shall terminate as to any
Information relating to an Electricity Company upon the earlier of (a) the
Closing relating to such Electricity Company, or on (b) the second anniversary
of this Agreement, if such Closing shall not have occurred.
Section 5.13 Access to Books and Records. Following the Closing,
Purchaser shall cause the Electricity Companies to give Seller, Seller's parent
company and their independent auditors and authorized representatives full
access at all reasonable times to the properties, books, records and personnel
of the Electricity Companies relating to periods prior to the Closing for any
reasonable business purpose, including, but not limited to, defense of legal
action.
Section 5.14 Employee Matters. Purchaser agrees that it shall extend,
or cause to be extended, an offer of employment to each employee of Seller who,
immediately prior to November 28, 2000, was engaged in activities primarily
related to the operation or management of the Electricity Companies, their
Subsidiaries and their respective businesses and was at such time a temporary or
permanent resident of Argentina, which offers shall be for employment on terms
which, in the aggregate, are no less favorable than those enjoyed by such
employees immediately prior to November 28, 2000. Purchaser further agrees that
it shall reimburse Seller for all actual out-of-pocket costs
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incurred by it in connection with the transfer of such employees to employment
with Purchaser, including, but not limited to, costs incurred in transferring
medical, dental and other employee welfare benefits and retirement, pension and
other employee security benefits. Purchaser further agrees that it shall
indemnify Seller and hold it harmless from and against all claims, costs,
expenses, damages and other obligations or liabilities arising in connection
with the termination of the employment of any such Seller employee on or after
the Closing Date.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to the Obligations of Purchaser. The obligation
of Purchaser to consummate the transactions to be consummated at Closing is
subject to the satisfaction or waiver of the following conditions:
(a) Each of the representations and warranties of Seller contained in
this Agreement shall be true and correct in all respects when made and as of the
Closing Date, in each case with the same effect and as though such
representations and warranties had been made on and as of the Closing Date
(except that those representations and warranties that address matters only as
of a particular date shall remain true and correct as of such date), and
Purchaser shall have received a certificate executed by a duly authorized senior
officer of Seller to such effect.
(b) Seller shall have performed or complied in all material respects
with all agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Closing Date, and Purchaser shall have
received a certificate executed by a duly authorized senior officer of each of
Seller to such effect.
(c) Seller shall have duly executed and delivered all the documents
relating to each transaction contemplated hereby, which shall each be in full
force and effect as of the Closing Date.
(d) Purchaser shall have received the following legal opinions and
certificates in the English language, dated as of the Closing Date and addressed
to Purchaser:
(i) the opinion of [_________], New York counsel to Seller, as
to the matters set forth on Annex __-1, in form and substance
satisfactory to Purchaser;
(ii) the opinion of [________], Argentinean counsel to Seller,
as to the matters set forth on Annex __-2, in form and substance
satisfactory to Purchaser;
(iii) the opinion of [________], Chilean counsel to Seller, as
to the matters set forth on Annex __-3, in form and substance
satisfactory to Purchaser;
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(iv) a certificate executed by the corporate secretary or
other appropriate duly authorized senior officer of Seller certifying
as to the authorization and incumbency of the Persons signing this
Agreement on behalf of Seller, as the case may be (together with
certified copies of the applicable corporate resolutions authorizing
the execution and delivery of this Agreement on behalf of the Seller).
(e) All the members of the board of directors of each of the
Electricity Companies and its Subsidiaries that have been appointed by Seller
shall have resigned on or prior to the Closing Date.
(f) There shall not have occurred any event or circumstance, including
any event or circumstance beyond the control of Seller, which has had and is
continuing to have a Material Adverse Effect.
(g) Seller shall have delivered to Purchaser (i) a certificate as of
the date immediately prior to the Closing Date issued by the Real Property
Registry of the City of Buenos Aires certifying the absence of restrictions
(inhibiciones) in respect to the real properties of the Electricity Companies
and their respective Subsidiaries; (ii) a certificate issued by the "Registro de
Juicios Universales" of the City of Buenos Aires relating to the absence of
insolvency or bankruptcy proceedings against the Electricity Companies or any of
their respective Subsidiaries and (iii) possession and control of all corporate,
accounting, business and tax records of each of the Electricity Companies and
its Subsidiaries, which shall remain at the offices of the respective
Electricity Companies and Subsidiaries.
(h) No Governmental Entity of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, rule or
regulation, or judgment, decree, injunction or other order which is in effect on
the Closing Date and prohibits the consummation of this Agreement and the
transactions contemplated hereby.
(i) Seller shall have made or obtained all the Seller Approvals and
Purchaser shall have made or obtained all material Purchaser Approvals required
to be obtained from any Governmental Entity.
Section 6.2 Conditions to the Obligations of Seller. The obligations of
Seller to consummate the transactions to be consummated at Closing are subject
to the satisfaction or waiver of the following conditions:
(a) Each of the representations and warranties of Purchaser contained
in this Agreement shall be true and correct in all respects when made and as of
the Closing Date, in each case with the same effect and as though such
representations and warranties had been made on and as of the Closing Date
(except that those representations and warranties that address matters only as
of a particular date shall remain true and correct as of such date), and Seller
shall have received a certificate executed by a duly authorized senior officer
of Purchaser to such effect.
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(b) Purchaser shall have performed or complied in all material respects
will all agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Closing Date, and Seller shall have
received a certificate executed by a duly authorized senior officer of Purchaser
to such effect.
(c) Purchaser shall have duly executed and delivered all the documents
relating to each transaction contemplated hereby, which shall each be in full
force and effect as of the Closing Date.
(d) Seller shall have received a certificate in the English language,
dated as of the Closing Date and addressed to Seller, executed by the corporate
secretary or other appropriate duly authorized senior officer of Purchaser
certifying as to the authorization and incumbency of the person signing this
Agreement on behalf of Purchaser.
(e) No Governmental Entity of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, rule or
regulation, or judgment, decree, injunction or other order which is in effect on
the Closing Date and prohibits the consummation of this Agreement and the
transactions contemplated hereby.
(f) Purchaser shall have made or obtained all the Purchaser Approvals
and Seller shall have obtained all material Seller Approvals required to be made
or obtained from a Governmental Entity.
ARTICLE VII
TERMINATION
Section 7.1 Complete Termination. This Agreement may be terminated, in
whole but not in part, at any time prior to the Closing:
(a) by the mutual written consent of Seller and Purchaser;
(b) by Seller or Purchaser, by giving written notice of such
termination to the other Party, if the other Party shall have breached any of
its material obligations or agreements under this Agreement and such breach
shall be incapable of cure or has not been cured within 30 days following the
giving of written notice of such breach to the breaching party;
(c) by Purchaser, (i) in its sole discretion by giving written notice
to Seller on or prior to the date on which Purchaser delivers notice to Seller
of Closing pursuant to Section 2.4(a) or (ii) by giving written notice to Seller
at any time if there shall have occurred any event or circumstance, including
any event or circumstance beyond the control of Seller or any Electricity
Company, which has had and is continuing to have a Material Adverse Effect;
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(d) by Seller or Purchaser, by giving written notice of such
termination to the other Party, on or after twelve months after signing, if the
Closing shall have failed to occur (unless such failure is due to a breach by
the terminating Party of its obligations under this Agreement); or
(e) by Seller or Purchaser, by giving written notice of such
termination to the other Party, in the event that the purchase, sale or transfer
of all the Acquired Interests is prohibited by any injunction, decree, judgement
or other order which shall have become final and nonappealable.
Section 7.2 Effect of Complete Termination. In the event of the
termination of this Agreement in accordance with Section 7.1, this Agreement
shall thereafter become void and have no effect, and no Party hereto shall have
any Liability to the other Party hereto or their respective officers, directors,
employees, agents or representatives, provided that (a) no such termination
shall relieve any Party of liability for any breach of any of its obligations
under this Agreement prior to any such termination and (b) Section 5.12 and
Article IX shall survive any such termination.
Section 7.3 Partial Termination. Notwithstanding any contrary provision
in this Agreement, the obligation of Purchaser under this Agreement to purchase,
and of Seller under this Agreement to sell, the Acquired Interests described in
any one or more of Sections 2.2(a), 2.2(b), 2.2(c) or 2.2(d) may be terminated
(as to all, but not part, of the Acquired Interests described in each Section
subject to such termination) (a) by Purchaser under any of the circumstances set
forth in Section 7.1(c) above which relate to such Acquired Interests by giving
written notice to Seller, as set forth in Section 9.13 of this Agreement, at any
time prior to Closing or (b) by either Purchaser or Seller, by giving written
notice of such termination to the other Party, in the event that the purchase,
sale or transfer of such Acquired Interests is prohibited by any injunction,
decree, judgement or other order which shall have become final and
nonappealable. Termination of the Parties' obligations under this Agreement in
respect of any Acquired Interests shall not relieve Purchaser or Seller from any
of their other obligations under this Agreement, including their obligation to
purchase or sell, as the case may be, simultaneously as part of a single
transaction at Closing the Acquired Interests not subject to such termination.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
Section 8.1 Survival. Notwithstanding any otherwise applicable statute
of limitations, any provisions of law, this Agreement or any reliance thereon by
Purchaser, the representations and warranties of the Parties shall not survive
the Closing Date, provided that (a) the representations and warranties set forth
in Sections 3.1, 3.2, 3.3, 3.9, 4.1, 4.2 and 4.3 shall survive the Closing
indefinitely, and (b) the representations and warranties set forth in Sections
3.4 through 3.8, inclusive, and 3.10 through 3.12, inclusive, and 4.4, 4.5 and
4.6 shall survive the Closing for the period ending on the fifth
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anniversary of the Closing Date. Neither the period of survival nor the
Liability of any Party with respect to the representations and warranties herein
of such Party shall be reduced by any investigation made at any time by or on
behalf of any other Party hereto. If written notice of a claim has been given
prior to the expiration of the applicable representations and warranties by any
Party hereto to any Party making such representation and warranty, then the
relevant representations and warranties shall survive as to such claim, until
the claim has been finally resolved. All covenants and agreements contained
herein shall survive indefinitely until performed in accordance with their
terms.
Section 8.2 Indemnification.
(a) From and after the Closing, Seller shall indemnify and hold
harmless Purchaser, each of its Affiliates and each of their respective
officers, directors, employees, agents, advisors, and representatives (including
their representatives on the board of or involved in the management of the
Purchaser or any Purchaser Subsidiary) and successors and permitted assigns from
and against the Total Losses arising out of, relating to or resulting from: (i)
any breach of any of the representations and warranties made by Seller in this
Agreement or any other certificate or document delivered pursuant to this
Agreement or (ii) any breach or violation of, or failure to perform fully, any
covenant, agreement, undertaking or obligation of Seller set forth in this
Agreement.
(b) From and after the Closing, Purchaser shall indemnify and hold
harmless Seller, each of its Affiliates and each of their respective officers,
directors, employees, agents, advisors and representatives (including their
representatives on the board of or involved in the management of any Electricity
Company or any Subsidiary thereof) and successors and permitted assigns from and
against the Total Losses arising out of, relating to or resulting from: (i) any
breach of any of the representations and warranties made by Purchaser in this
Agreement or any other certificate or document delivered pursuant to this
Agreement or (ii) any breach or violation of, or failure to perform fully, any
covenant, agreement, undertaking or obligation of Purchaser set forth in this
Agreement.
Section 8.3 Third Party Claims. In the event that a Person seeking
indemnification under this Agreement (an "Indemnified Party") is seeking
indemnification from a Party (the "Indemnifying Party") in respect of any claim
or legal action made or brought by a third party, indemnification shall be
provided in accordance with the following procedures:
(a) Upon receipt by the Indemnified Party of notice of the commencement
of any action by a third party (a "Third Party Claim") against it, such
Indemnified Party shall, if a claim is to be made against the Indemnifying Party
under this Article VIII, give notice to the Indemnifying Party of the
commencement of such Third Party Claim as soon as practicable, but the failure
so to notify the Indemnifying Party shall not relieve the Indemnifying Party of
any Liability that it may have to the Indemnified Party, except
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to the extent that the Indemnifying Party demonstrates that its defense of such
Third Party Claim has been prejudiced by the Indemnified Party's failure to give
such notice in a timely manner.
(b) If a Third Party Claim is brought against the Indemnified Party and
proper notice of the commencement of such Third Party Claim is provided to the
Indemnifying Party, the Indemnifying Party will be entitled, to the extent
permitted by applicable Law [and consistent with the duties of the Indemnified
Party to its public shareholders, if any], to assume the defense of such Third
Party Claim with counsel satisfactory to the Indemnified Party. Following notice
from the Indemnifying Party to the Indemnified Party of its election to assume
the defense of such Third Party Claim, the Indemnifying Party shall not, as long
as the Indemnifying Party actively conducts such defense, be liable to the
Indemnified Party under this Article VIII for any fees of other counsel or any
other expenses with respect to the defense of such Third Party Claim, in each
case subsequently incurred by the Indemnified Party in connection with the
defense of such Third Party Claim.
(c) If the Indemnifying Party assumes the defense of a Third Party
Claim, (i) no compromise or settlement of such Third Party Claim may be effected
by the Indemnifying Party without the Indemnified Party's consent (which consent
shall not be unreasonably withheld or delayed) unless (A) there is no finding or
admission of any violation of Laws, statutes, regulations or any violation of
the rights of any Person, and (B) the sole relief provided is monetary damages
that are paid in full by the Indemnifying Party and (ii) the Indemnified Party
shall use reasonable best efforts to cooperate with the Indemnifying Party in
connection with such defense, and shall provide such documentation or other
information as shall be reasonably requested by the Indemnifying Party in
connection therewith.
(d) In the event that the Indemnifying Party timely defends, contests
or otherwise protects the Indemnified Party against a Third Party Claim, the
Indemnified Party shall nevertheless have the right to, but shall not be
obligated to, participate at its own cost and expense in the defense of the
Third Party Claim with counsel of its own choosing.
In the event the Indemnifying Party fails actively to defend, contest
or otherwise protect against any Third Party Claim in a timely matter, the
Indemnified Party may, but shall not be obligated to, defend, contest or
otherwise protect against the same, and make any compromise or settlement
thereof and shall be entitled to recover the entire cost thereof from the
Indemnifying Party, including reasonable attorneys' fees, disbursements and all
amounts paid as a result of such claim or suit or the compromise or settlement
thereof; provided, however, that if the Indemnifying Party subsequently
undertakes the defense of such matter, the Indemnified Party shall not be
entitled to recover from the Indemnifying Party its costs thereafter incurred in
the defense thereof.
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Section 8.4 Other Rights. The rights of a Party under this Article VIII
shall be the sole and exclusive remedy of a Party after Closing with respect to
the transactions pursuant to this Agreement, provided that nothing in this
Article VIII shall relieve either Party of any liability for fraud or willful
misconduct. The rights of a Party under this Article VIII shall not limit or
restrict any rights that the Parties may have under applicable Law should
Closing not occur.
Section 8.5 Assumption of Obligations by Transferee. Seller shall not
sell, transfer, assign or otherwise dispose of all or substantially all of its
assets and properties (or enter into, or allow any Subsidiary to enter into, any
transaction that would have substantially the same effect as such a
disposition), unless the Person acquiring such assets and properties has
delivered to Purchaser its written agreement, in form and substance reasonably
satisfactory to Purchaser, agreeing to be bound by the obligations of Seller
under this Article VIII as if an original party hereto.
Section 8.6 Limits on Indemnification. Notwithstanding any other
provision of this Agreement to the contrary, (a) the aggregate amount of
liability of the Seller to Purchaser under this Article VIII shall not exceed
the Purchase Price and (b) no Party shall be liable to the other Party under
this Article VIII for indirect, special, consequential or punitive damages.
Section 8.7 Waiver. (a) The waiver by Purchaser of the condition to its
obligations set forth in Section 6.1(i) in respect of any Seller Approval
failing to be obtained or made or be in full force and effect as of the Closing
Date shall constitute waiver of any claim by Purchaser arising out of a breach
of the representations and warranties set forth in Section 3.4 as a result of
such Seller Approval failing to be so obtained or made or to be in such full
force and effect and (b) the waiver by the Seller of the condition to its
obligations set forth in Section 6.2(f) in respect of any Purchaser Approval
failing to be obtained or made or be in full force and effect as of the Closing
Date shall constitute waiver of any such claim by Seller arising out of a breach
of the representations and warranties set forth in Section 4.4 as a result of
such Purchaser Approval failing to be so obtained or made or to be in such full
force and effect, in each of cases (a) and (b) to the extent such failure has
been disclosed in writing prior to the Closing Date, provided, further, that the
consummation of the Closing shall not otherwise constitute a waiver by either
Party of any rights hereunder.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Further Assurances. Each Party shall execute and deliver
such additional instruments and other documents and shall take such further
actions as may be necessary or appropriate to effectuate, carry out and comply
with all of the terms of this Agreement and the transactions contemplated
hereby.
Section 9.2 Amendments and Waivers. Except as set forth in Section 8.7,
any provision of this Agreement may be amended or waived if and only if such
amendment or waiver is in writing and signed, in the case of an amendment, by
each Party, or in the case of a waiver, by the Party waiving compliance. No
waiver by any Party hereto of any of the requirements hereof or any of such
Party's rights hereunder shall release the other Party from full performance of
its remaining obligations stated herein. No failure or delay by either Party in
exercising any right, power or privilege shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege by such Party.
Section 9.3 Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, each Party shall bear and pay its own expenses (including but not
limited to all compensation and expenses of any legal counsel, financial
advisors, consultants, actuaries, accountants, auditors, brokers, finders and
other intermediaries engaged by it) incurred in connection with this Agreement
and the transactions contemplated hereby. All out-of-pocket expenses incurred by
the Electricity Companies on or prior to the Closing in connection with this
Agreement and the transactions contemplated hereby, other than in connection
with Section 5.13, shall be borne and paid by Seller.
Section 9.4 Public Disclosure. Each Party shall consult with the other
Party prior to issuing any press releases or otherwise making public
announcements with respect to this Agreement and the transactions contemplated
hereby and prior to making any filings with any third party and/or any
Governmental Entity (including any national securities exchange) with respect
thereto. Neither Party shall issue any such public announcement or filing
without the consent of the other Party, except as may be required by Law or by
obligations pursuant to any listing agreement with or rules of any national
securities exchange. No such consent shall be unreasonably withheld, delayed or
conditioned.
Section 9.5 Assignment. No Party to this Agreement may assign any of
its rights or obligations under this Agreement without the prior written consent
of the other Party hereto, provided, however, that Purchaser may assign all or
any portion of its rights under this Agreement to one or more Persons directly
or indirectly wholly owned by TotalFinaElf upon prior written notice to Seller.
Any assignment made in violation of
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this Section 9.5 shall be null and void. No such assignment shall relieve the
Purchaser from any of its obligations under this Agreement.
Section 9.6 Entire Agreement. This Agreement (including all Schedules
hereto) constitutes the entire agreement between the Parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters and supersedes all
purportedly contemporaneous oral agreements and understandings with respect to
such matters.
Section 9.7 Performance. Any action or obligation of Purchaser under
this Agreement, which obligation is performed, satisfied or fulfilled by an
Affiliate of Purchaser, shall be deemed to have been performed, satisfied or
fulfilled by Purchaser.
Section 9.8 No Third Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the Parties hereto and their respective
successors and permitted assigns. No provision of this Agreement, express or
implied, is intended to confer upon any Person other than Purchaser, Seller and
their successors or permitted assigns, any rights or remedies under or by reason
of this Agreement or any beneficial interest in this Agreement or any such
rights or remedies.
Section 9.9 Specific Performance. The Parties hereto each acknowledge
that, in view of the uniqueness of the subject matter hereof, the Parties hereto
would not have an adequate remedy at law for money damages if this Agreement
were not performed in accordance with its terms, and therefore agree that the
Parties hereto shall be entitled to specific enforcement of the terms hereof and
thereof in addition to any other remedy to which the Parties hereto or thereto
may be entitled at Law or in equity. In the event of litigation relating to the
specific enforcement of this Agreement, if a court of competent jurisdiction
determines that either Party or any of its officers, directors, employees,
representatives, agents or Affiliates has breached this Agreement, such Party
shall be liable and shall pay to the other Party all costs (including reasonable
fees and expenses of counsel) incurred by the other Party in connection with
such litigation, including any appeal therefrom.
Section 9.10 Counterparts. This Agreement and any amendments hereto may
be executed in counterparts (each of which shall be deemed to be an original,
and all of which together shall be considered one and the same instrument), and
shall become effective when counterparts have been signed by each Party and
delivered to the other Party.
Section 9.11 Interpretation; Absence of Presumption.
(a) In interpreting this Agreement, (i) words in the singular shall be
held to include the plural and vice versa and words of one gender shall be held
to include the other gender as the context requires, (ii) the terms "hereof",
"herein", and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole (including all of the
Schedules, Appendices and Annexes hereto)
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and not to any particular provision of this Agreement, and Article, Section,
paragraph, Appendix, Schedule and Annex references are to the Articles,
Sections, paragraphs, Appendix, Schedules and Annexes to this Agreement unless
otherwise specified, (iii) the word "including" and words of similar import when
used in this Agreement shall mean "including, without limitation," unless
otherwise specified, (iv) the word "or" shall not be exclusive, (v) provisions
shall apply, when appropriate, to successive events and transactions, (vi) all
references to any period of days shall be deemed to be to the relevant number of
calendar days, and (vii) all financial accounting terms shall be interpreted in
accordance with Argentine GAAP.
(b) This Agreement shall be construed without regard to any presumption
or rule requiring construction or interpretation against the Party drafting or
causing any instrument to be drafted.
Section 9.12 Section Headings. The section and paragraph headings and
table of contents contained in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
Section 9.13 Notices. Unless otherwise provided herein, all notices,
requests, consents and other communications hereunder to the other Party shall
be deemed to be sufficient if contained in a written instrument delivered in
person or duly sent by first class, registered, certified or overnight mail,
postage prepaid, or telecopied with a confirmation copy by regular mail,
addressed or telecopied, as the case may be, to such Party at the address or
telecopier number, as the case may be, set forth below or such other address or
telecopier number, as the case may be, as may hereafter be designated in writing
by the addressee to the other Parties.
(a) if to Purchaser, to:
Denis Giorno
CEO
Total Gas and Power Ventures
Tour Michelet
24 cour Michelet
92800 Puteaux
Telephone: (331) 47-44-26-74
Telecopier: (331) 47-44-27-90
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With a copy (which in and of itself shall not
constitute notice) to:
Marc Formery
Tour Coupole
2 place de la Coupole
92078 Paris La Defense Cedex
Telephone: (331) 47-44-46-52
Telecopier: (331) 47-44-48-74
With a copy (which in and of itself shall not
constitute notice) to:
Richard A. Pollack
Sullivan & Cromwell
125 Broad Street
New York, N.Y. 10004-2498
Telephone: (212) 558-4000
Telecopier: (212) 558-3588
Electronic mail: [email protected]
(b) if to Seller, to:
Gener S.A.
Miraflores 222, Piso 7
Santiago, Chile
Attention: _________________
Telephone: _________________
Telecopier: _________________
With a copy (which in and of itself shall not
constitute notice) to:
[Designated Counsel of Seller]
Telephone: _________________
Telecopier: _________________
All notices, requests, consents and other communications delivered pursuant to
this Section 9.13 shall be deemed to have been received: (a) in the case of
personal delivery, on the date of such delivery; (b) in the case of mailing,
upon receipt of such mailing; (c) in the case of overnight mail, on the first
Business Day following the date of such mailing; and (d) in the case of
facsimile transmission, when confirmed by a facsimile machine report.
Section 9.14 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
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THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND WHOLLY TO BE PERFORMED
WITHIN SUCH STATE.
Section 9.15 Submission to Jurisdiction; Selection of Forum. Each Party
hereto agrees that any action or proceeding in respect of any claim arising out
of or related to this Agreement or the transactions contained in or contemplated
by this Agreement, whether in tort or contract or at law or in equity, may be
brought in the state or federal courts in the City of New York ("New York
Courts") and (a) irrevocably submits to the exclusive jurisdiction of New York
Courts, (b) waives any objection to laying venue in any such action or
proceeding in New York Courts, (c) waives any objection that any New York Court
is an inconvenient forum or does not have jurisdiction over either Party hereto
and (d) waives any right that it might have to request a jury trial. Each of
Purchaser and Seller hereby appoints [Purchaser's U.S. Affiliate] and [Seller's
U.S. Agent], respectively, as its authorized agent upon whom process may be
served in any such action arising out of or based on this Agreement or the
transactions contemplated hereby which may be instituted in any New York Court
and waives any other requirements of or objections to personal jurisdiction with
respect to any such action. Such appointment shall be irrevocable and shall
expire upon the termination of the obligation to indemnify pursuant to Section
8.2. Service of process upon [Purchaser's U.S. Affiliate] or [Seller's U.S.
Agent], as the case may be, shall be deemed, in every respect, effective service
of process upon such Party.
Section 9.16 Exchange Rates. For all purposes of this Agreement, the
U.S. dollar equivalent of any amount in another currency shall be calculated on
any day based on the average of the noon buying rates in the City of New York
for cable transfers in such other currency as certified for customs purposes by
the Federal Reserve Bank of New York for the immediately preceding Business Day.
Section 9.17 Severability. It is the intention of the Parties that (a)
the provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof, and (b) if any provision of this
Agreement, or the application thereof to any Person or any circumstance, is
invalid or unenforceable in any jurisdiction, (i) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (ii) the remainder of this Agreement and the application of such
provision to other Persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
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IN WITNESS WHEREOF, this Agreement has been signed on behalf
of each of the Parties hereto as of the date first written above.
TOTAL GAS AND POWER VENTURES
By:
-------------------------------------
Name:
Title:
GENER S.A.
By:
-------------------------------------
Name:
Title:
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APPENDIX A
Definitions
(a) The following terms, as used herein, have the following meanings:
"AES" means The AES Corporation, a company incorporated under the laws
of Delaware.
"Affiliate", as applied to any Person, means any other Person directly
or indirectly Controlling, Controlled by or under common Control with
such Person.
"Argentine GAAP" means generally accepted principles in Argentina.
"Annual Report on Form 20-F" means the most recent annual report of the
Seller filed with the U.S. Securities and Exchange Commission on Form
20-F, as amended from time to time prior to the date of this Agreement.
"Business Day" means any day other than a Saturday, Sunday or day on
which commercial banks in Santiago are authorized or required by
applicable Law to close.
"Contract" means any contract, agreement, understanding or binding
arrangement, whether written or oral, unilateral or reciprocal.
"Control" means (a) the ownership, in the case of a corporation, a
majority or more of the voting stock of the corporation, or, in the
case of any other entity, the ownership of a majority of the beneficial
or voting interest or (b) the power, directly or indirectly, to direct
the management of the Controlled entity, whether through the ownership
of voting securities, by contract or otherwise. The terms "Controls",
"Controlling" and "Controlled" shall have correlative meaning.
"Control Date" shall have the meaning set forth in the agreement dated
November 28, 2000, between AES, TotalFinaElf and Purchaser.
"Electricity Transmission Line" means the electricity transmission line
owned, constructed and operated by Interandes between Termoandes's
Salta generation facility and the grid in Northern Chile.
"ENARGAS" means the Ente Nacional Regulador del Gas.
"ENRE" means Ente Nacional Regulador de la Electricidad.
"Environmental Law" means any multi-national, national, regional or
local Law, regulation, directive, treaty, convention, order, decree,
permit, authorization, civil
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law or government requirement relating to: (a) the protection,
investigation or restoration of the environment, health, safety, or
natural resources, including archeological, paleontological and
cultural resources, (b) the handling, use, emission, discharge,
presence, disposal, release or threatened release of any Hazardous
Substance or waste or (c) noise, odor, indoor air, employee exposure,
wetlands, pollution, contamination or any injury or threat of injury to
persons or property relating to any Hazardous Substance or waste.
"French GAAP" means generally accepted accounting principles in France.
"Governmental Entity" means any court, tribunal, arbitrator,
arbitration panel, or any governmental, administrative, or regulatory
authority, agency, commission, or body or similar entity, whether
national, provincial or municipal.
"Hazardous Substance" means any substance that is: (a) listed,
classified or regulated as hazardous, toxic, or harmful pursuant to any
Environmental Law, (b) any petroleum product, or by-product or waste,
hazardous material, radioactive materials or manufacturing by-product,
and (c) any other hazardous, toxic or harmful substance which is the
subject of regulatory action by any Governmental Entity in connection
with any Environmental Law.
"HPDA Indebtedness" means the Indebtedness for borrowed money from
third-party financial institutions of HPDA outstanding as of the
Control Date, in such principal amount and on such terms as may be in
effect on the Control Date.
"Indebtedness", in respect of any Person, shall mean, whether recourse
is to all or a portion of the assets of such Person and whether or not
contingent, (a) every obligation of such Person for money borrowed, (b)
every obligation of such Person evidenced by bonds, debentures, notes
or other similar instruments, (c) every reimbursement obligation of
such Person, contingent or otherwise, with respect to letters of
credit, bankers' acceptances or similar facilities, whether issued for
the account of such Person or otherwise, (d) every obligation of such
Person incurred or assumed as the deferred purchase price of property
or services (excluding trade accounts payable or accrued Liabilities
arising in the ordinary course of business to the extent subject of a
bona fide dispute), (e) every capital lease obligation of such Person,
(f) any net payment or delivery obligations of such Person under any
swap agreements, option contracts, future contracts, options on future
contracts, spot or forward contracts, caps, floors, collars or other
similar agreements to purchase or sell or any other hedging
arrangements, (g) all declared and unpaid dividends of such Person, (h)
all obligations of such Person in respect of capital securities of such
Person which, by their terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is exchangeable for
Indebtedness, or is redeemable at the option of its holder, in whole or
in part, (i)
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all obligations of such Person under any repurchase agreement or
similar agreement in respect of any of its capital securities and (j)
every obligation of the type referred to in clauses (a) through (i),
inclusive, of another Person and all dividends of another Person, the
payment of which, in either case, such Person has guaranteed or is
responsible or liable for, directly or indirectly, as obligor,
guarantor or otherwise
"Knowledge", in respect of any Person, the best knowledge of such
Person, its Controlled Subsidiaries and their respective directors and
executive officers after reasonable inquiry to confirm the existence or
non-existence of the relevant facts and circumstances.
"Law" means any law, rule, regulation or order of any competent
governmental or regulatory authority, court or security exchange.
"Liabilities" means any liability of any nature, whether accrued,
absolute, fixed, contingent, liquidated or unliquidated or otherwise
and whether due or to become due, and whether or not required to be set
forth on the Electricity Company Financial Statements.
"Lien" means any lien, pledge, security interest, voting trust
arrangement, charge, option, transfer, restriction or similar
encumbrance.
"Losses" means all claims, losses, Liabilities, obligations, payments,
damages, charges, judgments, fines, penalties, amounts paid in
settlement and/or in compliance with enforceable administrative or
judicial orders, costs and expenses (including reasonable out-of-pocket
costs and expenses of investigation and fees and disbursements of
counsel, consultants and other advisors in connection therewith),
together with interest on the amount of such losses from the date
suffered or incurred at an interest rate reflecting the affected
Person's cost of funds.
"Material Adverse Effect" means a material adverse effect on (a) the
property, assets, Liabilities, business, business prospects,
operations, financial condition or general affairs of any Electricity
Company on a consolidated basis or (b) on the ability of Seller or any
of its Affiliates to perform any of its obligations under this
Agreement or any transaction contemplated hereby to which it is a
party.
"Material Agreement" means any agreement, instrument, contract, binding
bid or other arrangement (whether or not subject to conditions
precedent) to which any Electricity Company or Subsidiary of an
Electricity Company is a party or by which it or any of its properties
or assets are bound: (a) which imposes any Lien on any assets or
properties (including any leasehold interest in or license of any
assets or properties) material to the conduct of its business, (b) to
which any of the directors, executive officers, Affiliates or
Subsidiaries of the Seller or the Electricity Companies is also a
party, (c) which contains any provision or
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covenant limiting (i) the ability of any of the Electricity Companies
or its Subsidiaries to engage in any line of business, to compete with
any Person, to do business with any Person or in any location or to
employ any Person or (ii) the ability of any Person to compete with or
obtain products or services from any of the Electricity Companies or
its Subsidiaries, (d) pursuant to which it has made or received, or
could reasonably be expected to make or receive, payments in excess of
U.S.$1,000,000 in any twelve-month period, or (e) which is a fuel
supply agreement which provides for payments in excess of
U.S.$1,000,000 in the aggregate during its term.
"Net Worth" means consolidated assets minus consolidated liabilities or
obligations of an Electricity Company of a type required to be set
forth on a financial statement prepared in accordance with Argentine
GAAP.
"Permit" shall mean any permit, license, concession, franchise,
certificate or authorization issued or granted by a Governmental
Entity.
"Person" means any individual, corporation, partnership, firm, joint
venture, association, joint stock company, trust, unincorporated
organization, governmental or regulatory body or other entity.
"Project Interest" means, in respect of any project under development,
(a) all ownership interests in, or Indebtedness of, any Person formed
in connection with such project, (b) all assets and properties
(personal or real) used primarily in the business of such project, (c)
any Contract or agreement with any Person entered into primarily in
connection with such project, including any (i) development,
concession, license, lease or other contract granting rights to
develop, build or operate such project or any agreement with any
governmental or self-regulatory authority concerning tax, regulatory or
other matters, (ii) any power purchase or marketing agreements, and
(iii) any bid, tender or other agreements in respect of potential
investment opportunities, in each case primarily related to such
project, and (d) any intellectual property developed specifically in
connection with and for such project, including any data, plans,
designs, formulae, know-how, inventions, improvements, procedures,
techniques or practices, together with any patents, trademarks,
copyrights or other intellectual property rights secured in respect
thereof.
"Subsidiary", in respect of any Person, means any corporation,
partnership, firm, joint venture, association, joint stock company,
trust, unincorporated organization, trust or other entity which such
Person directly or indirectly Controls.
"Tax" means all taxes, including without limitation, any federal,
provincial, local or foreign income, gross receipts, windfall profits,
gains, profits, excise, interest, financing, severance, real property,
personal property, asset, vehicle, occupation, occupancy, production,
sales, value added, premium, use, transfer, license, franchise, customs
duties, payroll, employment, unemployment, insurance,
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disability, withholding, estimated, alternative or minimum, capital,
stamp, environmental, turnover, social security, wage or similar taxes,
fees, impositions, assessments or electricity or other royalties of any
type, together with interest, additions or penalties with respect
thereto and any interest in respect of such interest, additions or
penalties, whether disputed or not.
"Total Losses", in respect of an Indemnified Person, means (a) any
Losses suffered or incurred by such Indemnified Person directly, (b)
the decrease in value of such Indemnified Person's ownership interest
in any other Person as a result of such other Person suffering or
incurring any Losses (which for the purposes of this Agreement shall
equal the aggregate amount of Losses suffered by such other Person
multiplied by the percentage of the outstanding ownership interest of
such Person held beneficially (directly or indirectly) by the
Indemnified Person) and (c) any other amounts that may be required to
be paid to the indemnified person to compensate it fully in respect of
Losses described in clauses (a) and (b), including any costs and
expenses incurred in connection with the enforcement of the indemnified
Person's right to indemnity, it being understood that the items set
forth herein are not necessarily intended to be cumulative but are
intended to put the Person who has suffered any Loss in the same
position as such Person would be in absent such Loss.
"TotalFinaElf" means TotalFinaElf, a societe anonyme organized under
the laws of the Republic of France.
"U.S. GAAP" means generally accepted principles in the United States.
(b) As used in this Agreement, the terms set forth below have the
meanings ascribed to them in the Sections of this Agreement indicated below:
Term Section
---- -------
Acquired Interests 2.2
Agreement Preamble
Argentine Agreements 5.9
Central Puerto Recitals
Closing 2.4
Closing Date 2.4
Closing Date Net Worth 2.5
Closing Date Net Worth Statement 2.5
CPA Firm 2.5
Credit Support Documents 5.10
Electricity Companies Recitals
Electricity Company Employee Benefit Plans 3.22
Electricity Company Financial Statements 3.14
Electricity Company Shares 2.2
Final Closing Date Net Worth 2.5
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HDPA Subordinated Indebtedness 2.2
Hidroneuquen Recitals
HPDA Recitals
HPDA Shares 3.9
Indemnified Party 8.3
Indemnifying Party 8.3
Information 5.12
Interandes Recitals
Interim Financial Statements 3.14
June Balance Sheet 3.14
Management Contracts 2.2
New York Courts 9.15
Opening Net Worth 2.5
Party Preamble
Projects Under Development 2.2
Purchase Price 2.3
Purchaser Preamble
Purchaser Approvals 4.4
Regulatory Approvals 3.17
Seller Preamble
Seller Approvals 3.4
Seller Objection 2.5
Tax Returns 3.24
Termoandes Recitals
Termoandes and Interandes Indebtedness 2.1
Third Party Claim 8.3
Transalta 2.1
Year-End Financial Statements 3.14
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